|
|
Three months ended
December 31 |
|
Year ended
December 31 |
|
|
2020 |
2019 |
|
2020 |
2019 |
|
|
$ |
$ |
|
$ |
$ |
| Net income (loss) |
|
22,577 |
(3,077) |
|
(103,670) |
(69,465) |
| Change in redemption value of liability-classified common and preferred shares(a) |
|
– |
3,616 |
|
76,438 |
41,744 |
| Accelerated amortization of deferred transaction costs / loss on debt modification(b) |
|
– |
– |
|
24,491 |
4,830 |
| Amortization of acquisition-related intangible assets(c) |
|
16,008 |
14,612 |
|
59,219 |
42,846 |
| Acquisition, integration and severance costs(d) |
|
4,673 |
2,785 |
|
9,970 |
19,914 |
| Share-based payments(e) |
|
3,200 |
227 |
|
10,407 |
994 |
| Net loss (gain) on foreign currency exchange(f) |
|
1,029 |
(10,725) |
|
18,918 |
(11,680) |
| Legal settlement costs and other(g) |
|
1,079 |
(16) |
|
933 |
259 |
| Adjustments |
|
25,989 |
10,499 |
|
200,376 |
98,907 |
| Income tax expense related to adjustments(h) |
|
(2,074) |
(2,058) |
|
(7,720) |
(7,096) |
| Adjusted net income (loss)(i) |
|
46,492 |
5,364 |
|
88,986 |
22,346 |
| Adjusted net income per share attributable to common shareholders of the Company(j) |
|
|
|
|
|
|
| Basic |
|
0.34 |
0.06 |
|
0.88 |
0.35 |
| Diluted |
|
0.33 |
0.06 |
|
0.84 |
0.33 |
a. The weighted average number of common shares outstanding previous to the IPO has been adjusted to take into consideration the Reorganization discussed in Note 17 of the Consolidated Financial Statements.
Reconciliation of Adjusted EBITDA to net income (loss)
(In thousands of U.S. dollars)
|
|
Three months ended
December 31 |
|
Year ended
December 31 |
|
|
2020 |
2019 |
|
2020 |
2019 |
|
|
$ |
$ |
|
$ |
$ |
| Net income (loss) |
|
22,577 |
(3,077) |
|
(103,670) |
(69,465) |
| Finance cost (recovery) |
|
(1,257) |
19,254 |
|
170,111 |
90,640 |
| Finance income |
|
(1,257) |
(1,130) |
|
(5,427) |
(5,188) |
| Depreciation and amortization |
|
18,410 |
17,041 |
|
69,673 |
51,125 |
| Income tax expense (recovery) |
|
(892) |
(4,160) |
|
3,087 |
(4,699) |
| Acquisition, integration and severance costs(a) |
|
4,673 |
2,785 |
|
9,970 |
19,914 |
| Share-based payments(b) |
|
3,200 |
227 |
|
10,407 |
994 |
| Net loss (gain) on foreign currency exchange(c) |
|
4,780 |
1,018 |
|
7,898 |
3,620 |
| Legal settlement costs and other(d) |
|
1,079 |
(16) |
|
933 |
259 |
| Adjusted EBITDA(e) |
|
51,313 |
31,942 |
|
162,982 |
87,200 |
| Advance from third party – merchant residual received(f) |
|
2,946 |
4,303 |
|
12,469 |
11,671 |
a. These expenses relate to:
(i) professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities and financing activities during the period and our IPO, which were $5,669 and $10,852 for the three months and year ended December 31, 2020, respectively, (December 31, 2019 – $2,328 and $19,881, respectively). These costs are presented in the professional fees line item of the selling, general and administrative expenses.
(ii) acquisition-related compensation, which was $80 and $803 for the three months and year ended December 31, 2020, respectively, (December 31, 2019 – $241 and $964, respectively). These costs are presented in the employee compensation line item of the selling, general and administrative expenses.
(iii) change in deferred purchase consideration for previously acquired businesses, which was a gain of $1,200 and $2,470 for the three months and year ended December 31, 2020, respectively, (December 31, 2019 – $117 and $2,415, respectively). These adjustments are presented in the contingent consideration adjustment line item of the selling, general and administrative expenses.
(iv) severances, which were $121 and $741 for the three months and year ended December 31, 2020, respectively (December 31, 2019 – $296 and $1,187, respectively), and integration expenses. Severance costs are presented in the employee compensation line item of the selling, general and administrative expenses.
b. These expenses represent non-cash expenses recognized in connection with stock options and other awards issued under share-based plans.
c. This includes losses on foreign currency exchange included in selling, general and administration expenses.
d. This line item primarily represents legal settlements and associated legal costs reached outside of the normal course of business, which were $203 and $589 for the three months and year ended December 31, 2020, respectively (December 31, 2019 – $292 and $716, respectively), as well as non-cash gains, losses and provisions and certain other costs. These costs are presented in the other line item of the selling, general and administrative expenses.
e. Adjusted EBITDA is a non-IFRS measure that the Company uses to assess its operating performance and cash flows.
f. Commencing in 2018, the Company entered into various agreements with a single third-party independent sales organization to acquire the rights to future cash flows from a portfolio of merchant contracts.
Reconciliation of Adjusted net income to net income (loss)
(In thousands of U.S. dollars except for per share amounts)
|
|
Three months ended
December 31 |
|
Year ended
December 31 |
|
|
2020 |
2019 |
|
2020 |
2019 |
|
|
$ |
$ |
|
$ |
$ |
| Net income (loss) |
|
22,577 |
(3,077) |
|
(103,670) |
(69,465) |
| Change in redemption value of liability-classified common and preferred shares(a) |
|
– |
3,616 |
|
76,438 |
41,744 |
| Accelerated amortization of deferred transaction costs / loss on debt modification(b) |
|
– |
– |
|
24,491 |
4,830 |
| Amortization of acquisition-related intangible assets(c) |
|
16,008 |
14,612 |
|
59,219 |
42,846 |
| Acquisition, integration and severance costs(d) |
|
4,673 |
2,785 |
|
9,970 |
19,914 |
| Share-based payments(e) |
|
3,200 |
227 |
|
10,407 |
994 |
| Net loss (gain) on foreign currency exchange(f) |
|
1,029 |
(10,725) |
|
18,918 |
(11,680) |
| Legal settlement costs and other(g) |
|
1,079 |
(16) |
|
933 |
259 |
| Adjustments |
|
25,989 |
10,499 |
|
200,376 |
98,907 |
| Income tax expense related to adjustments(h) |
|
(2,074) |
(2,058) |
|
(7,720) |
(7,096) |
| Adjusted net income (loss)(i) |
|
46,492 |
5,364 |
|
88,986 |
22,346 |
| Adjusted net income per share attributable to common shareholders of the Company(j) |
|
|
|
|
|
|
| Basic |
|
0.34 |
0.06 |
|
0.88 |
0.35 |
| Diluted |
|
0.33 |
0.06 |
|
0.84 |
0.33 |
a. This line item represents change in redemption value related to shares classified as liabilities prior to the IPO. As part of the IPO, the shares were converted into equity as Subordinate Voting Shares. These expenses are included in finance costs.
b. With the repayment of long-term debt from the IPO proceeds, the associated deferred transaction costs were recognized in finance costs on an accelerated pro-rata basis. Additionally, in 2019 a loss on debt modification was recognized because of the incremental debt taken to fund the SafeCharge acquisition.
c. This line item relates to amortization expense taken on intangible assets created from the purchase price adjustment process on acquired companies and businesses and from the acquisition of all the outstanding shares of Pivotal Holdings Ltd. by Nuvei in September 2017, and excludes amortization expense related to capitalized development costs incurred in the normal course of operations.
d. These expenses relate to:
(i) professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities and financing activities during the period and our IPO, which were $5,669 and $10,852 for the three months and year ended December 31, 2020, respectively (December 31, 2019 – $2,328 and $19,881, respectively). These costs are presented in the professional fees line item of the selling, general and administrative expenses.
(ii) acquisition-related compensation, which was $80 and $803 for the three months and year ended December 31, 2020, respectively (December 31, 2019 – $241 and $964, respectively). These costs are presented in the employee compensation line item of the selling, general and administrative expenses.
(iii) change in deferred purchase consideration for previously acquired businesses, which was a gain of $1,200 and $2,470 for the three months and year ended December 31, 2020, respectively (December 31, 2019 – $117 and $2,415, respectively). These adjustments are presented in the contingent consideration adjustment line item of the selling, general and administrative expenses.
(iv) severances, which were $121 and $741 for the three months and year ended December 31, 2020, respectively (December 31, 2019 – $296 and $1,187, respectively), and integration expenses. Severance costs are presented in the employee compensation line item of the selling, general and administrative expenses.
e. These expenses represent non-cash expenses recognized in connection with stock options and other awards issued under share-based plans.
f. This includes gains or losses on foreign currency exchange included in finance costs and selling, general and administration expenses.
g. This line item primarily represents legal settlements and associated legal costs reached outside of the normal course of business, which were $203 and $589 for the three months and year ended December 31, 2020 (December 31, 2019 – $292 and $716), as well as non-cash gains, losses and provisions and certain other costs. These costs are presented in the other line item of the selling, general and administrative expenses.
h. This line item reflects income tax expense on taxable adjustments using the tax rate of the applicable jurisdiction.
i. Adjusted net income is a non-IFRS measure that the Company uses to further assess its operating performance.
j. Adjusted net income per diluted share is calculated using stock options outstanding at the end of each period on a fully diluted basis if they were in-the-money at that time.
Consolidated Statements of Financial Position
(in thousands of U.S. dollars)
|
|
December 31, |
|
December 31, |
|
|
2020 |
|
2019 |
|
|
$ |
|
$ |
| Assets |
|
|
|
|
| Current assets |
|
|
|
|
| Cash |
|
180,722 |
|
60,072 |
| Trade and other receivables |
|
32,055 |
|
32,765 |
| Inventory |
|
80 |
|
709 |
| Prepaid expenses |
|
4,727 |
|
2,268 |
| Income taxes receivables |
|
6,690 |
|
– |
| Current portion of advances to third parties |
|
8,520 |
|
8,901 |
| Current portion of contract assets |
|
1,587 |
|
1,720 |
| Total current assets before segregated funds |
|
234,381 |
|
106,435 |
| Segregated funds |
|
443,394 |
|
200,612 |
| Total current assets |
|
677,775 |
|
307,047 |
|
|
|
|
|
| Non-current assets |
|
|
|
|
| Advances to third parties |
|
38,478 |
|
42,584 |
| Property and equipment |
|
16,537 |
|
15,272 |
| Intangible assets |
|
524,232 |
|
408,380 |
| Goodwill |
|
969,820 |
|
768,497 |
| Contract assets |
|
1,300 |
|
1,426 |
| Processor deposits |
|
13,898 |
|
12,478 |
| Other non-current assets |
|
1,944 |
|
3,088 |
| Total Assets |
|
2,243,984 |
|
1,558,772 |
Consolidated Statements of Financial Position (continued)
(in thousands of U.S. dollars)
|
|
December 31, |
|
December 31, |
|
|
2020 |
|
2019 |
|
|
$ |
|
$ |
| Liabilities |
|
|
|
|
| Current liabilities |
|
|
|
|
| Trade and other payables |
|
64,779 |
|
51,258 |
| Income taxes payable |
|
7,558 |
|
2,866 |
| Current portion of loans and borrowings |
|
2,527 |
|
2,874 |
| Other current liabilities |
|
7,132 |
|
9,875 |
| Liability-classified common shares |
|
– |
|
58,262 |
| Liability-classified preferred shares |
|
– |
|
39,967 |
| Total current liabilities before due to merchants |
|
81,996 |
|
165,102 |
| Due to merchants |
|
443,394 |
|
200,612 |
| Total current liabilities |
|
525,390 |
|
365,714 |
|
|
|
|
|
| Non-current liabilities |
|
|
|
|
| Loans and borrowings |
|
212,726 |
|
722,166 |
| Deferred tax liabilities |
|
46,320 |
|
12,976 |
| Other non-current liabilities |
|
1,659 |
|
4,875 |
| Unsecured convertible debentures due to shareholders |
|
– |
|
109,022 |
| Total Liabilities |
|
786,095 |
|
1,214,753 |
|
|
|
|
|
| Equity |
|
|
|
|
| Equity attributable to shareholders |
|
|
|
|
| Share capital |
|
1,625,785 |
|
450,523 |
| Contributed surplus |
|
11,966 |
|
1,603 |
| Deficit |
|
(211,042) |
|
(104,812) |
| Accumulated other comprehensive income (loss) |
|
22,470 |
|
(10,385) |
|
|
1,449,179 |
|
336,929 |
| Non-controlling interest |
|
8,710 |
|
7,090 |
| Total Equity |
|
1,457,889 |
|
344,019 |
| Total Liabilities and Equity |
|
2,243,984 |
|
1,558,772 |
Consolidated Statements of Cash Flows
(in thousands of U.S. dollars)
|
|
Year ended December 31 |
|
|
2020 |
|
2019 |
|
|
$ |
|
$ |
| Cash flows from (used in) operating activities |
|
|
|
|
| Net loss |
|
(103,670) |
|
(69,465) |
| Adjustments for: |
|
|
|
|
| Depreciation of property and equipment |
|
5,121 |
|
3,682 |
| Amortization of intangible assets |
|
64,552 |
|
47,443 |
| Amortization of contract assets |
|
2,114 |
|
2,323 |
| Share-based payments |
|
10,407 |
|
994 |
| Net finance costs |
|
164,684 |
|
85,452 |
| Impairment on disposal of a subsidiary |
|
338 |
|
– |
| Write-down of inventory to net realizable value |
|
513 |
|
134 |
| Income tax expense (recovery) |
|
3,087 |
|
(4,699) |
| Changes in non-cash working capital items |
|
10,061 |
|
2,667 |
| Interest paid |
|
(43,788) |
|
(43,197) |
| Net realized loss on foreign currency exchange |
|
(5,937) |
|
– |
| Income taxes paid |
|
(14,223) |
|
(2,629) |
|
|
93,259 |
|
22,705 |
| Cash flows from (used in) investing activities |
|
|
|
|
| Business acquisitions, net of cash acquired |
|
(67,537) |
|
(780,196) |
| Decrease (increase) in other non-current assets |
|
(1,683) |
|
1,158 |
| Proceeds from the sale of a subsidiary, net of cash |
|
19,045 |
|
– |
| Sale of equity investments |
|
– |
|
28,600 |
| Net decrease (increase) in advances to third parties |
|
9,401 |
|
(14,531) |
| Acquisition of property and equipment |
|
(3,395) |
|
(1,825) |
| Acquisition of intangible assets |
|
(14,448) |
|
(8,595) |
|
|
(58,617) |
|
(775,389) |
| Cash flows from (used in) financing activities |
|
|
|
|
| Transaction costs related to loans and borrowings |
|
(3,380) |
|
(28,833) |
| Repayment of unsecured convertible debentures due to shareholders |
|
(93,384) |
|
(100,500) |
| Issuance of Subordinate Voting Shares |
|
758,447 |
|
– |
| Equity issuance fees |
|
(42,966) |
|
– |
| Issuance of common shares |
|
150 |
|
187,295 |
| Proceeds from loans and borrowings |
|
110,000 |
|
629,509 |
| Repayment of loans and borrowings |
|
(642,786) |
|
(157,496) |
| Payment of lease liabilities |
|
(946) |
|
(939) |
| Dividend paid to non controlling interest |
|
(940) |
|
(360) |
| Redemption of preferred shares |
|
– |
|
(2,299) |
| Issuance of preferred shares |
|
– |
|
81,240 |
| Issuance of unsecured convertible debentures due to shareholders |
|
– |
|
199,000 |
|
|
84,195 |
|
806,617 |
| Effect of movements in exchange rates on cash |
|
1,813 |
|
69 |
|
|
|
|
|
| Net increase in cash |
|
120,650 |
|
54,002 |
|
|
|
|
|
| Cash – Beginning of year |
|
60,072 |
|
6,070 |
| Cash – End of year |
|
180,722 |
|
60,072 |
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