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Segment Reporting
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment Reporting
18.
Segment Reporting

The Company has three operating and reportable segments, Commercial Services, Government Solutions and Parking Solutions. Commercial Services offers toll and violation management solutions and title and registration services to commercial fleet vehicle owners, rental car companies and violation-issuing authorities. Government Solutions implements and administers traffic safety programs and products for municipalities and local government agencies of all sizes. As a result of the acquisition of T2 Systems completed in December 2021, the Company added a new reportable segment determined based on the type of products and services offered. T2 Systems provides an integrated suite of parking software and hardware solutions to its customers. The Company’s Chief Operating Decision Maker function (“CODM”) is comprised of the Company’s CEO and certain defined representatives of the Company’s executive management team. The Company’s CODM monitors operating performance, allocates resources and deploys capital based on these three segments.

Segment performance is based on revenues and income from operations before depreciation, amortization, gain (loss) on disposal of assets, net, impairment of property and equipment, and stock-based compensation. The measure also excludes interest expense, net, income taxes and certain other transactions and is inclusive of other income, net. The tables below refer to this measure as segment profit (loss). The aforementioned items are not indicative of operating performance, and, as a result are not included in the measures that are reviewed by the CODM for the segments. Other income, net consists primarily of credit card rebates earned on the prepayment of tolling transactions and is therefore included in segment profit (loss).

The Company allocates certain corporate expenses to the three segments using several different factors depending on the item being allocated. These factors range from specific identification to headcount-based to allocate proportionately between the three segments. The corporate and other columns below include items that are not included in segment profit (loss), plus transaction expenses and other items designated by the CODM as corporate initiatives.

The Company does not disaggregate assets by segment other than equipment installed at customer sites and automobiles, which had carrying values of $61.8 million and $2.7 million, respectively, at December 31, 2021 and carrying values of $42.4 million and $1.8 million, respectively, at December 31, 2020 all of which relate solely to the Government Solutions segment. Refer to Note 6, Goodwill and Intangible Assets for goodwill balances by segment.

The following tables set forth financial information by segment for the fiscal years ended December 31, 2021, 2020 and 2019:

 

 

For the Year Ended December 31, 2021

 

 

 

Commercial

 

 

Government

 

 

Parking

 

 

Corporate

 

 

 

 

($ in thousands)

 

Services

 

 

Solutions

 

 

Solutions

 

 

and Other

 

 

Total

 

Service revenue

 

$

260,899

 

 

$

227,992

 

 

$

3,955

 

 

$

—

 

 

$

492,846

 

Product sales

 

 

—

 

 

 

55,163

 

 

 

2,581

 

 

 

—

 

 

 

57,744

 

Total revenue

 

 

260,899

 

 

 

283,155

 

 

 

6,536

 

 

 

—

 

 

 

550,590

 

Cost of service revenue

 

 

3,183

 

 

 

1,500

 

 

 

654

 

 

 

—

 

 

 

5,337

 

Cost of product sales

 

 

—

 

 

 

28,381

 

 

 

1,428

 

 

 

—

 

 

 

29,809

 

Operating expenses

 

 

65,718

 

 

 

96,284

 

 

 

553

 

 

 

—

 

 

 

162,555

 

Selling, general and administrative expenses

 

 

42,873

 

 

 

52,380

 

 

 

1,488

 

 

 

13,697

 

 

 

110,438

 

Other income, net

 

 

(10,837

)

 

 

(2,040

)

 

 

(18

)

 

 

—

 

 

 

(12,895

)

Segment profit (loss)

 

$

159,962

 

 

$

106,650

 

 

$

2,431

 

 

$

(13,697

)

 

$

255,346

 

Segment profit (loss)

 

$

159,962

 

 

$

106,650

 

 

$

2,431

 

 

$

(13,697

)

 

$

255,346

 

Depreciation and amortization

 

 

—

 

 

 

—

 

 

 

—

 

 

 

116,753

 

 

 

116,753

 

Loss on disposal of assets, net

 

 

—

 

 

 

48

 

 

 

—

 

 

 

—

 

 

 

48

 

Change in fair value of private placement warrants

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,600

 

 

 

7,600

 

Tax receivable agreement liability adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,016

)

 

 

(1,016

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

13,784

 

 

 

13,784

 

Loss on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,334

 

 

 

5,334

 

Interest expense, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

44,942

 

 

 

44,942

 

Income (loss) before income taxes

 

$

159,962

 

 

$

106,602

 

 

$

2,431

 

 

$

(201,094

)

 

$

67,901

 

 

 

 

For the Year Ended December 31, 2020

 

 

 

Commercial

 

 

Government

 

 

Corporate

 

 

 

 

($ in thousands)

 

Services

 

 

Solutions

 

 

and Other

 

 

Total

 

Service revenue

 

$

180,856

 

 

$

155,418

 

 

$

—

 

 

$

336,274

 

Product sales

 

 

—

 

 

 

57,319

 

 

 

—

 

 

 

57,319

 

Total revenue

 

 

180,856

 

 

 

212,737

 

 

 

—

 

 

 

393,593

 

Cost of service revenue

 

 

2,562

 

 

 

1,405

 

 

 

—

 

 

 

3,967

 

Cost of product sales

 

 

—

 

 

 

29,573

 

 

 

—

 

 

 

29,573

 

Operating expenses

 

 

52,505

 

 

 

62,387

 

 

 

—

 

 

 

114,892

 

Selling, general and administrative expenses

 

 

40,978

 

 

 

34,465

 

 

 

2,469

 

 

 

77,912

 

Other income, net

 

 

(11,774

)

 

 

(111

)

 

 

—

 

 

 

(11,885

)

Segment profit (loss)

 

$

96,585

 

 

$

85,018

 

 

$

(2,469

)

 

$

179,134

 

Segment profit (loss)

 

$

96,585

 

 

$

85,018

 

 

$

(2,469

)

 

$

179,134

 

Depreciation and amortization

 

 

—

 

 

 

—

 

 

 

116,570

 

 

 

116,570

 

Loss on disposal of assets, net

 

 

16

 

 

 

258

 

 

 

—

 

 

 

274

 

Change in fair value of private placement warrants

 

 

—

 

 

 

—

 

 

 

1,133

 

 

 

1,133

 

Tax receivable agreement liability adjustment

 

 

—

 

 

 

—

 

 

 

6,850

 

 

 

6,850

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

12,589

 

 

 

12,589

 

Interest expense, net

 

 

—

 

 

 

—

 

 

 

40,865

 

 

 

40,865

 

Income (loss) before income taxes

 

$

96,569

 

 

$

84,760

 

 

$

(180,476

)

 

$

853

 

 

 

 

 

For the Year Ended December 31, 2019

 

 

 

Commercial

 

 

Government

 

 

Corporate

 

 

 

 

($ in thousands)

 

Services

 

 

Solutions

 

 

and Other

 

 

Total

 

Service revenue

 

$

276,479

 

 

$

140,244

 

 

$

—

 

 

$

416,723

 

Product sales

 

 

—

 

 

 

32,014

 

 

 

—

 

 

 

32,014

 

Total revenue

 

 

276,479

 

 

 

172,258

 

 

 

—

 

 

 

448,737

 

Cost of service revenue

 

 

3,709

 

 

 

1,852

 

 

 

—

 

 

 

5,561

 

Cost of product sales

 

 

—

 

 

 

13,919

 

 

 

—

 

 

 

13,919

 

Operating expenses

 

 

66,916

 

 

 

57,905

 

 

 

—

 

 

 

124,821

 

Selling, general and administrative expenses

 

 

41,384

 

 

 

32,696

 

 

 

2,220

 

 

 

76,300

 

Other income, net

 

 

(10,814

)

 

 

(278

)

 

 

—

 

 

 

(11,092

)

Segment profit (loss)

 

$

175,284

 

 

$

66,164

 

 

$

(2,220

)

 

$

239,228

 

Segment profit (loss)

 

$

175,284

 

 

$

66,164

 

 

$

(2,220

)

 

$

239,228

 

Depreciation and amortization

 

 

—

 

 

 

—

 

 

 

115,566

 

 

 

115,566

 

Loss on disposal of assets, net

 

 

145

 

 

 

60

 

 

 

—

 

 

 

205

 

Change in fair value of private placement warrants

 

 

—

 

 

 

—

 

 

 

16,267

 

 

 

16,267

 

Impairment of property and equipment

 

 

—

 

 

 

5,898

 

 

 

—

 

 

 

5,898

 

Tax receivable agreement liability adjustment

 

 

—

 

 

 

—

 

 

 

(106

)

 

 

(106

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

10,012

 

 

 

10,012

 

Interest expense, net

 

 

—

 

 

 

—

 

 

 

60,729

 

 

 

60,729

 

Income (loss) before income taxes

 

$

175,139

 

 

$

60,206

 

 

$

(204,688

)

 

$

30,657

 

 

The Company primarily operates within the United States, Australia, Canada, United Kingdom and in various other countries in Europe. Revenues from international customers for the years ended December 31, 2021, 2020 and 2019 were $40.0 million, $13.3 million and $14.5 million, respectively. Revenues from Australia, United Kingdom and Canada represented $13.9 million, $16.3 million and $6.9 million, respectively for the year ended December 31, 2021. Revenues earned from goods transferred to customers at a point in time were approximately $57.7 million, $57.3 million and $32.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. Property and equipment, net located in foreign countries was $14.8 million as of December 31, 2021, of which Canada represented $6.7 million and Australia represented $6.1 million. Property and equipment, net was $4.7 million as of December 31, 2020 and it was not material for any individual foreign country in which the Company operated.