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Thryv Reports Strong Fourth Quarter and Fiscal Year 2021 Results, Exceeding All Guidance Targets

March 10, 2022 7:30 AM

– Fourth Quarter Total SaaS Revenue Grows 36% Year-Over-Year

– Full Year 2021 Total SaaS Revenue Grows 32% Year-Over-Year

DALLAS--(BUSINESS WIRE)-- Thryv Holdings, Inc. (NASDAQ: THRY) (“Thryv” or the “Company”), the end-to-end client experience platform for growing small businesses, announced audited financial results for the fourth quarter and fiscal year 2021. The Company has also provided guidance for first quarter and full year 2022.

“We are pleased to report a strong finish to 2021, with Q4 representing our largest SaaS revenue quarter on record,” said Joe Walsh, Chairman and CEO. “We beat all of our 2021 guidance targets. These outstanding results confirm that Thryv has become the leader in moving small to medium-sized businesses to cloud software to enable them to modernize and run their businesses.”

The Company also announced that it has acquired Vivial Media Holdings, Inc. (“Vivial”), a regional provider of small business digital and print marketing services, for $21 million. On a post synergy basis, the purchase price of Vivial corresponds to an enterprise value / adjusted EBITDA multiple of approximately 2x, consistent with Thryv’s disciplined acquisition strategy and prior marketing services acquisitions.

“Vivial has a strong presence in key US markets including Hawaii, Alaska, Cincinnati, Ohio, Rochester, New York, and Lincoln, Nebraska,” said Walsh. “These fit synergistically into Thryv’s national platform. We are confident that many of Vivial’s 25,000 digital customers will adopt Thryv’s CRM software.”

“With the highly-profitable Marketing Services business providing low-cost leads into the SaaS business, the Company will continue to generate strong EBITDA margins from a consolidated standpoint," said Paul Rouse, Chief Financial Officer. "We have a strong track record of optimizing profits and we believe this trajectory will continue throughout 2022.”

“Finally, we look forward to sharing more of the long-term vision at our upcoming in-person investor and analyst day in New York City on April 5th,” concluded Walsh.

Fourth Quarter 2021 Financial Highlights:

Full Year 2021 Financial Highlights:

SaaS Highlights

2021 Product Innovation and Accolades

Outlook

Based on information available as of March 10, 2022, Thryv is issuing guidance7 for the first quarter and full year 2022 as indicated below:

For the first quarter 2022, the Company expects:

For the full year 2022, the Company currently expects:

Earnings Conference Call Information

Thryv will host a conference call on Thursday, March 10, 2022 at 8:30 a.m. (Eastern Time) to discuss the Company's fourth quarter and full year 2021 results. The conference call will be available via the Internet at investor.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) 770-2030 or (647) 362-9199 and enter “87769.”

_______________________

1

Defined as total client billings by month divided by the number of revenue-generating units during the month.

2

Calculated as the percentage decrease in billable clients in the current month compared to the prior month.

3

SaaS Monthly Seasoned Churn is defined as monthly churn excluding clients acquired over the previous 12 months.

4

Defined as the percentage of revenue from clients with monthly billed revenue in the current month compared to the same month in prior year.

5

Seasoned Net Dollar Retention is defined as net dollar retention excluding clients acquired over the previous 12 months.

6

Defined as a client with one or more users who log into our SaaS solutions at least once during the calendar month.

7

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.

Final Results

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

Three Months Ended December 31,

Years Ended December 31,

(in thousands, except share and per share data)

2021

2020

2021

2020

Revenue

$

244,439

$

246,928

$

1,113,382

$

1,109,435

Cost of services

93,109

105,717

408,043

439,742

Gross profit

151,330

141,211

705,339

669,693

Operating expenses:

Sales and marketing

99,536

73,492

357,813

315,195

General and administrative

46,540

44,816

153,902

177,574

Impairment charges

—

5,497

3,611

24,911

Total operating expenses

146,076

123,805

515,326

517,680

Operating income

5,254

17,406

190,013

152,013

Other income (expense):

Interest expense

(10,708

)

(11,889

)

(48,867

)

(51,537

)

Interest expense, related party

(4,278

)

(3,099

)

(17,507

)

(17,002

)

Other components of net periodic pension benefit (cost)

13,831

(10,924

)

14,829

(42,236

)

Other income (expense)

3

—

(4,154

)

—

Income (loss) before income tax benefit (expense)

4,102

(8,506

)

134,314

41,238

Income tax benefit (expense)

986

118,306

(32,737

)

107,983

Net income

$

5,088

$

109,800

$

101,577

$

149,221

Other comprehensive income (loss):

Foreign currency translation adjustment

498

—

(8,047

)

—

Comprehensive income

$

5,586

$

109,800

$

93,530

$

149,221

Net income per common share:

Basic

$

0.15

$

3.52

$

3.02

$

4.73

Diluted

$

0.13

$

3.31

$

2.78

$

4.42

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

Basic

34,006,358

31,230,392

33,607,446

31,522,845

Diluted

37,983,847

33,212,192

36,495,746

33,795,594

Thryv Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share data)

December 31, 2021

December 31, 2020

Assets

Current assets

Cash and cash equivalents

$

11,262

$

2,406

Accounts receivable, net of allowance of $17,387 in 2021 and $33,030 in 2020

279,053

296,570

Contract assets, net of allowance of $88 in 2021 and $338 in 2020

5,259

10,975

Taxes receivable

14,711

9,229

Prepaid expenses

22,418

13,411

Indemnification asset

24,346

24,346

Other current assets

13,596

12,761

Total current assets

370,645

369,698

Fixed assets and capitalized software, net

50,938

89,044

Goodwill

671,886

609,457

Intangible assets, net

82,577

31,777

Deferred tax assets

90,565

93,099

Other assets

33,891

21,902

Total assets

$

1,300,502

$

1,214,977

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

8,610

$

8,927

Accrued liabilities

131,813

139,613

Current portion of unrecognized tax benefits

29,771

30,022

Contract liabilities

51,726

18,942

Current portion of long-term debt

70,000

—

Other current liabilities

15,214

9,896

Total current liabilities

307,134

207,400

New Term Loan, net

309,672

—

New Term Loan, related party

142,875

—

Senior Term Loan, net

—

335,683

Senior Term Loan, related party

—

113,482

ABL Facility

39,929

79,238

Leaseback obligations

—

54,798

Pension obligations, net

140,167

190,827

Deferred tax liabilities

10,798

508

Other liabilities

35,212

36,266

Total long-term liabilities

678,653

810,802

Commitments and contingencies

Stockholders' equity

Common stock - $0.01 par value, 250,000,000 shares authorized; 60,830,853, shares issued and 34,145,311 shares outstanding at December 31, 2021; and 59,590,422 shares issued and 32,912,012 shares outstanding at December 31, 2020

608

596

Additional paid-in capital

1,084,288

1,059,624

Treasury stock - 26,685,542 shares at December 31, 2021 and 26,678,410 shares at December 31, 2020

(468,879

)

(468,613

)

Accumulated other comprehensive loss

(8,047

)

—

Accumulated deficit

(293,255

)

(394,832

)

Total stockholders' equity

314,715

196,775

Total liabilities and stockholders' equity

$

1,300,502

$

1,214,977

Thryv Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

Years Ended December 31,

(in thousands)

2021

2020

Cash Flows from Operating Activities

Net income

$

101,577

$

149,221

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

Depreciation and amortization

105,473

146,523

Amortization of debt issuance costs

4,919

1,068

Deferred income taxes

(20,438

)

(147,329

)

Provision for credit losses

8,031

32,077

Provision for service credits

11,363

32,550

Stock-based compensation expense (benefit)

8,094

(2,895

)

Other components of net periodic pension (benefit) cost

(14,829

)

42,236

Loss on termination of leaseback obligations

3,409

—

(Gain) loss on disposal/write-off of fixed assets and capitalized software

(5,536

)

3,544

Impairment charges

3,611

24,911

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

(1

)

5,443

Other, net

304

—

Changes in working capital items, excluding acquisitions:

Accounts receivable

74,368

41,382

Contract assets

5,628

369

Prepaid expenses and other current assets

6,084

472

Accounts payable and accrued liabilities

(125,883

)

(86,161

)

Operating lease liability

(3,370

)

(4,006

)

Contract liabilities

7,767

(5,737

)

Settlement of stock option liability

—

(896

)

Net cash provided by operating activities

170,571

232,772

Cash Flows from Investing Activities

Additions to fixed assets and capitalized software

(26,849

)

(27,757

)

Proceeds from the sale of assets

6,836

1,546

Acquisition of a business, net of cash acquired

(175,370

)

—

Other

(1,192

)

—

Net cash (used in) investing activities

(196,575

)

(26,211

)

Cash Flows from Financing Activities

Proceeds from New Term Loan

418,070

—

Proceeds from New Term Loan, related party

260,930

—

Payments of New Tern Loan

(110,215

)

—

Payments of New Term Loan, related party

(47,785

)

—

Payments of Senior Term Loan

(335,821

)

(113,747

)

Payments of Senior Term Loan, related party

(113,789

)

(46,643

)

Proceeds from ABL Facility

1,046,249

1,143,700

Payments of ABL Facility

(1,085,558

)

(1,169,446

)

Purchase of treasury stock

—

(30,626

)

Proceeds from exercise of stock options

7,047

11,241

Proceeds from exercise of stock warrants

13,920

—

Proceeds from private placement

—

445

Payments of lease obligations

(10,532

)

(411

)

Other

(3,428

)

(580

)

Net cash provided by (used in) financing activities

39,088

(206,067

)

Effect of exchange rate changes on cash and cash equivalents

(1,933

)

—

Increase in cash and cash equivalents and restricted cash

11,151

494

Cash and cash equivalents and restricted cash, beginning of period

2,406

1,912

Cash and cash equivalents and restricted cash, end of period

$

13,557

$

2,406

Supplemental Information

Cash paid for interest

$

66,737

$

72,931

Cash paid for income taxes, net

$

63,893

$

24,799

Three Months Ended December 31,

Change

2021

2020

Amount

%

(in thousands of $)

Revenue

Marketing Services

$

153,555

$

212,058

$

(58,503

)

(27.6

)%

SaaS

47,061

34,870

12,191

35.0

%

Thryv International (1)

43,823

—

43,823

NM

Consolidated Revenue

$

244,439

$

246,928

$

(2,489

)

(1.0

)%

Segment EBITDA

Marketing Services

$

40,684

$

69,381

$

(28,697

)

(41.4

)%

SaaS

(6,693

)

2,250

(8,943

)

(397.5

)%

Thryv International (1)

12,487

—

12,487

NM

Consolidated Adjusted EBITDA

$

46,478

$

71,631

$

(25,153

)

(35.1

)%

Years Ended December 31,

Change

2021

2020

Amount

%

(in thousands of $)

Revenue

Marketing Services

$

797,493

$

979,611

$

(182,118

)

(18.6

)%

SaaS

170,498

129,824

40,674

31.3

%

Thryv International(1)

145,391

—

145,391

NM

Consolidated Revenue

$

1,113,382

$

1,109,435

$

3,947

0.4

%

Segment EBITDA

Marketing Services

$

318,230

$

358,804

$

(40,574

)

(11.3

)%

SaaS

(14,004

)

13,035

(27,039

)

(207.4

)%

Thryv International (1)

46,297

—

46,297

NM

Consolidated Adjusted EBITDA

$

350,523

$

371,839

$

(21,316

)

(5.7

)%

(1)

Thryv International includes Thryv Australia revenue subsequent to the March 1, 2021 acquisition date.

Non-GAAP Measures

Our results included in this press release include Adjusted EBITDA and Adjusted Gross Profit, which are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are presented for supplemental informational purposes only and are 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 tables below for a reconciliation of Adjusted EBITDA to Net income, and Adjusted Gross Profit to gross profit. Both Net income and Gross profit are the most comparable GAAP financial measure to Adjusted EBITDA and Adjusted Gross Profit, respectively.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide additional tools 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:

Three Months Ended December 31,

Years Ended December 31,

(in thousands)

2021

2020

2021

2020

Reconciliation of Adjusted EBITDA

Net income

$

5,088

$

109,800

$

101,577

$

149,221

Interest expense

14,986

14,988

66,374

68,539

Income tax (benefit) expense

(986

)

(118,306

)

32,737

(107,983

)

Depreciation and amortization expense

24,798

35,640

105,473

146,523

Restructuring and integration expenses (1)

3,109

4,557

18,145

28,459

Transaction costs (2)

5,086

6,320

25,059

20,999

Stock-based compensation expense (benefit) (3)

1,862

1,300

8,094

(2,895

)

Other components of net periodic pension (benefit) cost (4)

(13,831

)

10,924

(14,829

)

42,236

Non-cash loss (gain) from remeasurement of indemnification asset (5)

1,247

1,565

(1

)

5,443

Impairment charges

—

5,497

3,611

24,911

Other (6)

5,119

(654

)

4,283

(3,614

)

Adjusted EBITDA

$

46,478

$

71,631

$

350,523

$

371,839

(1)

For the year ended December 31, 2021 and 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.

(2)

Expenses related to our direct listing, Thryv Australia acquisition and other transaction costs.

(3)

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

(4)

Other components of net periodic pension cost is 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.

(5)

In connection with the YP Acquisition, the seller provided us 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.

(6)

Other primarily includes expenses related to potential non income-based tax liabilities. Additionally, during the year ended December 31, 2021, other includes expenses related to the valuation of certain assets as a result of the acquisition of Thryv Australia and foreign exchange-related expense.

The following is a reconciliation of Adjusted Gross Profit, to its most directly comparable GAAP measure, Gross profit:

Three Months Ended December 31,

(in thousands)

2021

2020

Reconciliation of Adjusted Gross Profit

Gross profit

$

151,330

$

141,211

Plus:

Depreciation and amortization expense

10,242

17,962

Stock-based compensation expense

60

104

Adjusted Gross Profit

$

161,632

$

159,277

Gross Margin

61.9

%

57.2

%

Adjusted Gross Margin

66.1

%

64.5

%

Years Ended December 31,

(in thousands)

2021

2020

Reconciliation of Adjusted Gross Profit

Gross profit

$

705,339

$

669,693

Plus:

Depreciation and amortization expense

53,233

73,046

Stock-based compensation expense (benefit)

380

(72

)

Adjusted Gross Profit

$

758,952

$

742,667

Gross Margin

63.4

%

60.4

%

Adjusted Gross Margin

68.2

%

66.9

%

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. (NASDAQ: THRY) is a global software and marketing services company that empowers small- to medium-sized businesses (SMBs), franchises and agencies to grow and modernize their operations so they can compete and win in today's economy. Over 45,000 businesses use our award-winning SaaS platform, Thryv®, to manage their end-to-end customer experience, which has helped businesses across the U.S. and overseas grow their bottom line. Thryv also manages digital and print presence for over 400,000 businesses, connecting these SMBs to local consumers via proprietary local search portals and print directories. For more information about Thryv Holdings, Inc, visit thryv.com.

Media Contact:

Morisa Young

Gregory FCA

347.428.4325

[email protected]

Investor Contact:

Cameron Lessard

Thryv, Inc.

214.773.7022

[email protected]

Source: Thryv

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