Business Wire | Mar 25, 2021 07:30AM EDT

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

Mar. 25, 2021

DALLAS--(BUSINESS WIRE)--Mar. 25, 2021--Thryv Holdings, Inc. (NASDAQ:THRY) ("Thryv" or the "Company"), the provider of Thryv(r) 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 Years Ended December 31, December 31,

2020 2019 2020 2019

Revenue $ 246,928 $ 345,130 $ 1,109,435 $ 1,421,374

Operating expenses:

Cost of services(exclusive of 87,755 111,482 366,696 476,355 depreciation andamortization)

Sales and marketing 61,067 86,097 263,006 352,740

General and 39,563 43,559 156,286 174,286 administrative

Depreciation and 35,640 50,985 146,523 206,270 amortization

Impairment charges 5,497 611 24,911 5,670

Total operating 229,522 292,734 957,422 1,215,321 expenses



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, (3,099 ) (5,700 ) (17,002 ) (24,770 )related party

Other components ofnet periodic (10,924 ) (33,364 ) (42,236 ) (53,161 )pension cost

Loss on earlyextinguishment of - - - (6,375 )debt

(Loss) incomebefore benefit (8,506 ) (2,851 ) 41,238 53,566 (provision) forincome taxes

Benefit (provision) 118,306 798 107,983 (18,062 )for income taxes

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-averageshares used incomputing basic and diluted net income(loss) per commonshare:

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 Balance Sheets

(in thousands, except share data)

December December 31, 2020 31, 2019

Assets

Current assets

Cash and cash equivalents $ 2,406 $ 1,912

Accounts receivable, net of allowance of $33,030 296,570 369,690 and $26,828

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 335,683 420,036 $445 and $593

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, 250,000,000shares authorized; 59,590,422, shares issued and32,912,012 shares outstanding as of December 31, 596 574 2020; and 57,443,282 shares issued and 33,490,526shares outstanding as of December 31, 2019

Additional paid-in capital 1,059,624 1,008,701

Treasury stock - 26,678,410 shares as of December31, 2020 and 23,952,756 shares as of December 31, (468,613 ) (437,962 )2019

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.

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 3,544 5,942 capitalized software

Impairment charges 24,911 5,670

Non-cash loss (gain) from remeasurement of 5,443 4,093 indemnification asset

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 directlycomparable GAAP measure, net income (in thousands):

Three Months Ended Year Ended December 31, 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 (118,306 ) (798 ) (107,983 ) 18,062 income taxes ^(1)

Depreciation and 35,640 50,985 146,523 206,270 amortization expense

Loss on early - - - 6,375 extinguishment of debt

Restructuring and 4,557 9,098 28,459 40,290 integration expenses ^(2)

Transaction costs ^(3) 6,320 5,938 20,999 6,081

Stock-based compensation 1,300 4,583 (2,895 ) 14,119 expense (benefit) ^(4)

Other components of netperiodic pension cost ^ 10,924 33,364 42,236 53,161 (5)

Non-cash loss (gain) fromremeasurement of 1,565 (553 ) 5,443 4,093 indemnification asset ^(6)

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(r) 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(r), 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(tm), a software console that enables businesses managers to oversee their operations using the Thryv(r) 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(r) tagline, and our local search portals, which operate under the DexKnows.com(r), Superpages.com(r) 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210325005305/en/

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

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

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

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