Thryv Raises SaaS Revenue Guidance for 2021 and Reports Fourth Quarter and Fiscal Year 2020 Audited Financial Results

March 25, 2021 7:30 AM EDT

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Company looks forward to full integration of Sensis, its recent Australian acquisition

DALLAS--(BUSINESS WIRE)-- Thryv Holdings, Inc. (NASDAQ: THRY) (“Thryv” or the “Company”), the provider of Thryv® software, the end-to-end client experience platform for growing small businesses, announced audited financial results for the fourth quarter and fiscal year 2020 consistent with the previously released preliminary and unaudited results. The Company has also raised its 2021 outlook for its SaaS segment.

“We’re pleased with our performance in 2020 as it confirms healthy growth and profitability, and strongly positions Thryv as a SaaS category leader,” said Joe Walsh, CEO of Thryv. “As a result, we are raising our guidance for 2021.”

“In addition, our recent acquisition of Sensis in Australia is a notable milestone in our journey to help small businesses globally to better manage and modernize their operations.”

Fourth Quarter 2020 Financial Highlights:

  • SaaS revenue was $34.9 million, an 8% increase year-over-year. Our guidance was $33 million
  • Marketing Services revenue was $212.1 million. Our guidance range was $190-$200 million
  • Total revenue was $246.9 million. Our guidance range was $223-$233 million
  • Net income was $109.8 million
  • Adjusted EBITDA was $71.6 million. Our guidance range was $58-$63 million

Fiscal Year 2020 Financial Highlights:

  • SaaS revenue was $129.8 million. Our guidance was $128 million.
  • Marketing Services revenue was $979.6 million. Our guidance range was $955-$965 million.
  • Total revenue was $1,109.4 million. Our guidance range was $1,083-$1,093 million.
  • Net income was $149.2 million.
  • Adjusted EBITDA was $371.8 million. Our guidance range was $358-$363 million.

Additional Business Highlights:

  • SaaS ARPU increased to $293 in the fourth quarter of 2020, up from $260 in the third quarter of 2020.
  • Total SaaS clients ending the fourth quarter of 2020 was 44.0 thousand, flat when compared to the third quarter of 2020.
  • SaaS monthly churn improved to 2.4% in the fourth quarter of 2020, down from 2.7% in the third quarter of 2020.
  • Leverage Ratio (as defined in the Company’s credit agreement) was 1.3x in the fourth quarter of 2020
  • Total Debt repayment was $186.1 million for fiscal year 2020. Term loan and ABL ending balances for the fourth quarter of 2020 were $449.6 million and $79.2 million, respectively.

Outlook:

The Company is updating guidance for fiscal year 2021 as indicated below.

  • SaaS revenue guidance range raised to $140 – $145 million, up from the previously announced $139 - $143 million
  • Marketing Services revenue range maintained at $740 – $760 million

The above guidance excludes the impact of the Sensis acquisition.

These statements are forward-looking and actual results may materially differ. Refer to the “Forward-Looking Statements” section below for information on the factors that could cause our actual results to materially differ from these forward-looking statements.

Earnings Conference Call Information

Thryv will host a conference call on Thursday, March 25, 2021 at 8:30 a.m. (Eastern Time) to discuss the Company's fourth quarter and annual 2020 results. The conference call will be available via the Internet at www.thryv.com. There will be several slides accompanying the webcast. Please go to the website at least 15 minutes prior to the call to register, download and install any necessary software. The recorded webcast will also be available on the Company's website.

If you are unable to participate in the conference call, a replay will be available. To access the replay, please dial (800) 585-8367 or (416) 621-4642 and enter "6411279."

Final Audited Results

Thryv Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

 

Three Months Ended
December 31,

 

 

Years Ended
December 31,

 

2020

 

2019

 

 

2020

 

2019

Revenue

$

246,928

 

 

$

345,130

 

 

$

1,109,435

 

 

$

1,421,374

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services (exclusive of depreciation and amortization)

87,755

 

 

111,482

 

 

366,696

 

 

476,355

 

Sales and marketing

61,067

 

 

86,097

 

 

263,006

 

 

352,740

 

General and administrative

39,563

 

 

43,559

 

 

156,286

 

 

174,286

 

Depreciation and amortization

35,640

 

 

50,985

 

 

146,523

 

 

206,270

 

Impairment charges

5,497

 

 

611

 

 

24,911

 

 

5,670

 

Total operating expenses

229,522

 

 

292,734

 

 

957,422

 

 

1,215,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

17,406

 

 

52,396

 

 

152,013

 

 

206,053

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

(11,889

)

 

(16,183

)

 

(51,537

)

 

(68,181

)

Interest expense, related party

(3,099

)

 

(5,700

)

 

(17,002

)

 

(24,770

)

Other components of net periodic pension cost

(10,924

)

 

(33,364

)

 

(42,236

)

 

(53,161

)

Loss on early extinguishment of debt

 

 

 

 

 

 

(6,375

)

(Loss) income before benefit (provision) for income taxes

(8,506

)

 

(2,851

)

 

41,238

 

 

53,566

 

Benefit (provision) for income taxes

118,306

 

 

798

 

 

107,983

 

 

(18,062

)

Net income (loss)

$

109,800

 

 

$

(2,053

)

 

$

149,221

 

 

$

35,504

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

3.52

 

 

$

(0.06

)

 

$

4.73

 

 

$

0.87

 

Diluted

$

3.31

 

 

$

(0.06

)

 

$

4.42

 

 

$

0.82

 

Weighted-average shares used in computing basic and diluted net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

31,230,392

 

 

32,185,535

 

 

31,522,845

 

 

40,845,128

 

Diluted

33,212,192

 

 

32,185,535

 

 

33,795,594

 

 

43,465,998

 

Thryv Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share data)

 

December
31, 2020

 

December
31, 2019

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

2,406

 

 

$

1,912

 

Accounts receivable, net of allowance of $33,030 and $26,828

296,570

 

 

369,690

 

Contract assets, net of allowance of $338 and $0

10,975

 

 

11,682

 

Taxes receivable

9,229

 

 

37,460

 

Prepaid expenses and other current assets

26,172

 

 

28,036

 

Indemnification asset

24,346

 

 

29,789

 

Total current assets

369,698

 

 

478,569

 

Fixed assets and capitalized software, net

89,044

 

 

101,512

 

Goodwill

609,457

 

 

609,457

 

Intangible assets, net

31,777

 

 

147,480

 

Deferred tax assets

93,099

 

 

 

Other assets

21,902

 

 

51,274

 

Total assets

$

1,214,977

 

 

$

1,388,292

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

8,927

 

 

$

16,067

 

Accrued liabilities

139,613

 

 

140,261

 

Current portion of unrecognized tax benefits

30,022

 

 

53,111

 

Contract liabilities

18,942

 

 

24,679

 

Other current liabilities

9,896

 

 

23,323

 

Total current liabilities

207,400

 

 

257,441

 

Senior Term Loan, net of debt issuance costs of $445 and $593

335,683

 

 

420,036

 

Senior Term Loan, related party

113,482

 

 

189,371

 

ABL Facility

79,238

 

 

104,985

 

Leaseback obligations

54,798

 

 

55,537

 

Pension obligations, net

190,827

 

 

193,533

 

Deferred tax liabilities

508

 

 

54,738

 

Other liabilities

36,266

 

 

85,391

 

Total long-term liabilities

810,802

 

 

1,103,591

 

Commitments and contingencies

 

 

 

Stockholders' equity

 

 

 

Common stock - $0.01 par value, 250,000,000 shares authorized; 59,590,422, shares issued and 32,912,012 shares outstanding as of December 31, 2020; and 57,443,282 shares issued and 33,490,526 shares outstanding as of December 31, 2019

596

 

 

574

 

Additional paid-in capital

1,059,624

 

 

1,008,701

 

Treasury stock - 26,678,410 shares as of December 31, 2020 and 23,952,756 shares as of December 31, 2019

(468,613

)

 

(437,962

)

Accumulated deficit

(394,832

)

 

(544,053

)

Total stockholders' equity

196,775

 

 

27,260

 

Total liabilities and stockholders' equity

$

1,214,977

 

 

$

1,388,292

 

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

Years Ended December 31,

 

2020

 

2019

Cash Flows from Operating Activities

 

 

 

 

 

Net income

$

149,221

 

 

$

35,504

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

146,523

 

 

206,270

 

Amortization of debt issuance costs

1,068

 

 

1,123

 

Deferred income taxes

(147,329

 

 

(25,118

)

Provision for credit losses

32,077

 

 

30,092

 

Provision for service credits

32,550

 

 

25,467

 

Stock-based compensation (benefit) expense

(2,895

)

 

14,119

 

Other components of net periodic pension cost

42,236

 

 

53,161

 

Loss on early extinguishment of debt

 

 

6,375

 

Loss on disposal/write-off of fixed assets and capitalized software

3,544

 

 

5,942

 

Impairment charges

24,911

 

 

5,670

 

Non-cash loss (gain) from remeasurement of indemnification asset

5,443

 

 

4,093

 

Changes in working capital items, excluding acquisitions:

 

 

 

 

 

Accounts receivable

41,382

 

 

16,457

 

Contract assets

369

 

 

1,515

 

Prepaid and other assets

472

 

 

5,676

 

Accounts payable and accrued liabilities

(100,708

)

 

(69,244

)

Accrued income taxes, net

14,547

 

 

4,376

 

Operating lease liability

(4,006

)

 

(10,587

)

Contract liabilities

(5,737

)

 

(6,391

)

Settlement of stock option liability

(896

)

 

(33,901

)

Net cash provided by operating activities

232,772

 

 

270,599

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

Additions to fixed assets and capitalized software

(27,757

)

 

(26,065

)

Proceeds from the sale of building and fixed assets

1,546

 

 

847

 

Acquisition of a business, net of cash acquired

 

 

(147

)

Net cash (used in) investing activities

(26,211

)

 

(25,365

)

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

Payments of Senior Term Loan

(113,747

)

 

(148,256

)

Payments of Senior Term Loan, related party

(46,643

)

 

(66,744

)

Proceeds from Senior Term Loan, net

 

 

193,625

 

Proceeds from Senior Term Loan, related party

 

 

225,000

 

Payments of Original Term Facility, upon extinguishment

 

 

 

Payments of Original Term Facility, upon extinguishment, related party

 

 

 

Payments of Original Term Facility, prior to extinguishment

 

 

 

Payments of Original Term Facility, prior to extinguishment, related party

 

 

 

Proceeds from ABL Facility

1,143,700

 

 

1,142,717

 

Payments of ABL Facility

(1,169,446

)

 

(1,184,310

)

Purchase of treasury stock

(30,626

)

 

(437,962

)

Other

10,695

 

 

(1,561

)

Net cash (used in) financing activities

(206,067

)

 

(277,491

)

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

494

 

 

(32,257

)

Cash and cash equivalents, beginning of period

1,912

 

 

34,169

 

Cash and cash equivalents, end of period

$

2,406

 

 

$

1,912

 

 

 

 

 

 

 

Supplemental Information

 

 

 

 

 

Cash paid for interest

$

72,931

 

 

$

81,543

 

Cash paid for income taxes, net

$

24,799

 

 

$

38,091

 

 

Non-GAAP Measures

Our audited results included in this press release include Adjusted EBITDA, which is not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). This non-GAAP measure is presented for supplemental informational purposes only and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please refer to the supplemental information presented in the table below for a reconciliation of Adjusted EBITDA to net income, the most comparable GAAP financial measure.

We believe that this non-GAAP financial measure provide useful information about our financial performance, enhances the overall understanding of our past performance and future prospects and allows for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that this measure provides an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, it is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.

The following is a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, net income (in thousands):

 

Three Months Ended
December 31,

 

Year Ended December 31,

 

2020

 

2019

 

2020

 

2019

Reconciliation of Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

109,800

 

 

$

(2,053

)

 

$

149,221

 

 

$

35,504

 

Interest expense

14,988

 

 

21,883

 

 

68,539

 

 

92,951

 

(Benefit) provision for income taxes (1)

(118,306

)

 

(798

)

 

(107,983

)

 

18,062

 

Depreciation and amortization expense

35,640

 

 

50,985

 

 

146,523

 

 

206,270

 

Loss on early extinguishment of debt

 

 

 

 

 

 

6,375

 

Restructuring and integration expenses (2)

4,557

 

 

9,098

 

 

28,459

 

 

40,290

 

Transaction costs (3)

6,320

 

 

5,938

 

 

20,999

 

 

6,081

 

Stock-based compensation expense (benefit) (4)

1,300

 

 

4,583

 

 

(2,895

)

 

14,119

 

Other components of net periodic pension cost (5)

10,924

 

 

33,364

 

 

42,236

 

 

53,161

 

Non-cash loss (gain) from remeasurement of indemnification asset (6)

1,565

 

 

(553

)

 

5,443

 

 

4,093

 

Impairment charges (7)

5,497

 

 

611

 

 

24,911

 

 

5,670

 

Other (8)

(654

)

 

(553

)

 

(3,614

)

 

(943

)

Adjusted EBITDA

$

71,631

 

 

$

122,505

 

 

$

371,839

 

 

$

481,633

 

(1)

Income tax benefit of $118.3 million and $108.0 million recorded during the three months and year ended December 31, 2020, respectively, is primarily attributable to a partial release of the Company’s valuation allowance on the basis of management’s reassessment of the amount of its deferred tax assets that are more likely than not to be realized.

(2)

For the three months and year ended December 31, 2020, expenses relate to periodic efforts to enhance efficiencies and reduce costs, and include severance benefits, loss on disposal of fixed assets and capitalized software, and costs associated with abandoned facilities and system consolidation. A portion of the severance benefits, amounting to $5.0 million, resulted from COVID-19. For the three months and year ended December 31, 2019, restructuring and integration charges include severance benefits, facility exit costs, system consolidation and integration costs, and professional consulting and advisory services costs related to the YP Acquisition.

(3)

Expenses related to the Company's direct listing and other transaction costs.

(4)

The Company records stock-based compensation expense related to the amortization of grant date fair value of the Company’s stock-based compensation awards. Prior to October 1, 2020, stock-based compensation expense includes the remeasurement of these awards at each period end.

(5)

Other components of net periodic pension cost are from our non-contributory defined benefit pension plans that are currently frozen and incur no additional service costs. The most significant component of other components of net periodic pension cost relates to the mark to market pension remeasurement.

(6)

In connection with the YP Acquisition, the seller provided the Company indemnity for future potential losses associated with certain federal and state tax positions taken in tax returns filed by the seller prior to the acquisition date. The indemnity covers potential losses in excess of $8.0 million and is capped at an amount equal to the lesser of the uncertain tax position liability or the current fair value of the 1,804,715 shares of the Company's common stock issued to the seller as part of the purchase consideration.

(7)

Impairment charges of $5.5 million and $24.9 million recorded during the three months and year ended December 31, 2020, respectively, are primarily due to the Company closing certain office buildings as part of becoming a “Remote First” company and consolidating operations at certain locations. Impairment charges of $0.6 million and $5.7 million recorded during the three months and year ended December 31, 2019, respectively, are due to consolidating operations at certain locations and are included in Restructuring and integration charges in the consolidated statements of operations.

(8)

Other primarily includes expenses related to potential non-income based tax liabilities.

Forward-Looking Statements

Some statements included in this release constitute forward-looking statements. Statements that include the words “may”, “will”, “could”, “should”, “would”, “believe”, “anticipate”, “forecast”, “estimate”, “expect”, “preliminary”, “intend”, “plan”, “project”, “outlook”, “future”, “forward”, “guidance” and similar statements of a future or forward-looking nature identify forward-looking statements. These statements are not guarantees of future performance. Forward-looking statements provide current expectations with respect to our financial performance and future events with respect to our business and industry in general. Forward-looking statements are based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the risks related to the following: risks related to the ongoing COVID-19 pandemic, the Company’s ability to maintain adequate liquidity to fund operations; the Company’s future operating and financial performance; the Company’s ability to consummate acquisitions, or, if consummated, to successfully integrate acquired businesses into the Company’s operations, the Company’s ability to recognize the benefits of acquisitions, or the failure of an acquired company to achieve its plans and objectives; limitations on our operating and strategic flexibility and the ability to operate our business, finance our capital needs or expand business strategies under the terms of our credit facilities; our ability to retain existing business and obtain and retain new business; general economic or business conditions affecting the markets we serve; declining use of print yellow page directories by consumers; our ability to collect trade receivables from clients to whom we extend credit; credit risk associated with our reliance on small and medium sized businesses as clients; our ability to attract and retain key managers; increased competition in our markets; our ability to obtain future financing due to changes in the lending markets or our financial position; our ability to maintain agreements with major Internet search and local media companies; reduced advertising spending and increased contract cancellations by our clients, which causes reduced revenue; and our ability to anticipate or respond effectively to changes in technology and consumer preferences. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such cautionary statements.

If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. For these reasons, we caution you against relying on forward-looking statements. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. These forward-looking statements speak only as of the date hereof and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Thryv Holdings, Inc.

Thryv Holdings, Inc. owns the easy-to-use Thryv® end-to-end customer experience software built for growing small to medium sized businesses (SMBs) that helps over 40,000 SaaS clients with the daily demands of running a business. With Thryv®, SMBs can get the job, manage the job and get credit. Thryv’s award-winning platform provides modernized business functions, allowing SMBs to reach more customers, stay organized, get paid faster and generate reviews. These functions include building a digital customer database, automated marketing through email and text, updating business listings across the internet, scheduling online appointments, sending notifications and reminders, managing ratings and reviews, generating estimates and invoices, and processing payments.

Thryv supports franchise operators and multi-location business owners with Hub by Thryv™, a software console that enables businesses managers to oversee their operations using the Thryv® software.

Thryv also connects local businesses to consumer services through our search, display and social media management products, our print directories featuring The Real Yellow Pages® tagline, and our local search portals, which operate under the DexKnows.com®, Superpages.com® and Yellowpages.com URLs and reach some 35 million monthly visitors. For more information about the company, visit thryv.com.

Thryv delivers business services to more than 400,000 SMBs worldwide that enable these SMBs to compete and win in today’s economy.

On March 1, 2021, Thryv announced it closed the acquisition of Sensis, Australia’s leading digital, marketing and directory services provider, which helps Australians connect and engage through its leading platforms, digital consumer businesses (Yellow, White Pages, True Local and Whereis), search engine marketing and optimization services, website products, social, data and mapping solutions, and through its digital agency Found. Sensis is also Australia’s largest print directory publisher including the Yellow and White Pages.

Headquartered in Melbourne, Sensis has a sales presence in all states and territories across Australia.

Media Contact:
Paige Blankenship
Thryv, Inc.
972.453.3012
paige.blankenship@thryv.com

Will Clarke
Sensis
+61 (0) 488 345 464
Will.clarke@sensis.com.au

Investor Contacts:
Cameron Lessard
Thryv, Inc.
214.773.7022
cameron.lessard@thryv.com

KJ Christopher
Thryv, Inc.
972.453.7068
kj.christopher@thryv.com

Source: Thryv, Inc.



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