HireRight Reports Fourth Quarter 2021 Results

March 28, 2022

Revenues Grew 32% over Prior Year

Raised More than $390 Million in Net Proceeds from Initial Public Offering

Announces Full-year Guidance for 2022

HireRight Holdings Corporation (the “Company”) (NYSE: HRT) (“HireRight” or the “Company”), a leading provider of background screening services, today announced financial results for its fourth quarter and year ended December 31, 2021. The Company completed its IPO in November 2021.

Fourth Quarter 2021 Highlights Compared to Fourth Quarter 2020:

Revenues of $198.5 million increased 32.3% from $150.1 million
Operating income of $7.3 million improved from operating loss of $0.2 million
Net loss of $13.0 million improved from net loss of $19.1 million
Adjusted net income of $22.7 million improved from adjusted net loss of $3.2 million
Earnings (loss) per share (“EPS”) of $(0.18) improved compared to loss per share of $(0.33)
Adjusted Diluted EPS of $0.32, up from Adjusted Diluted EPS of $(0.06)

Full Year 2021 Highlights Compared to Full Year 2020:

Revenues of $730.1 million increased 35.1% from $540.2 million
Operating income of $56.7 million improved from operating loss of $12.1 million
Net loss of $21.3 million improved from net loss of $92.1 million
Adjusted net income of $75.3 million improved from adjusted net loss of $0.9 million
Earnings (loss) per share (“EPS”) of $(0.35) compared to EPS of $(1.61)
Adjusted Diluted EPS of $1.24, up from Adjusted Diluted EPS of $(0.02)

“We completed a transformational year on a high note with record results and growing demand for our services following our initial public offering,” said HireRight President and CEO Guy Abramo. “We grew fourth quarter revenues 32% over the prior year period, and both Adjusted EBITDA and Adjusted EPS more than doubled. The strength of our leadership in this industry continues to be evidenced through our marquee customer base in the healthcare, technology, financial services and transportation industries. We are trusted by the leading companies in each of those industries to deliver the highest quality, timely and compliant background solutions to protect their businesses.

Additionally, we are pleased to expand our leadership abroad with more than 15% of our background screens completed on employees and applicants based outside the U.S. Our internationally driven revenue reached more than $100 million during 2021 and is growing at double digit rates. Our focus for 2022 is on automation and related margin expansion, and I am pleased with our progress to date and look forward to the initial deployments this year. Our guidance for the new year demonstrates the earnings power of our business and the sharp focus of our entire team on creating meaningful long-term shareholder value.”

Liquidity and Capital Resources

In connection with our initial public offering, the Company received net proceeds of $393.5 million, after deducting underwriting discounts and commissions and other offering costs payable by the Company. The Company used $215.0 million of the net proceeds for repayment, in full, of its second lien term loan facility and $100.0 million of the net proceeds to repay, in part, its first lien term loan facility. As of December 31, 2021, the Company had approximately $98.2 million in available borrowing capacity under the Revolving Credit Facility, after utilizing approximately $1.8 million for letters of credit.

Unrestricted cash and cash equivalents as of December 31, 2021, totaled $111.0 million.

The Company generated $47.5 million of cash from operations for the year ended December 31, 2021, compared to cash from operations of $16.4 million for the year ended December 31, 2020.

Full-Year Outlook

Based on current expectations, HireRight is providing the Company’s initial full-year 2022 outlook as set forth in the table below:

	Estimated Low		Estimated High
	(in thousands, except per share data)
Revenues	$	805,000	$	820,000
Adjusted net income ⁽¹⁾	$	105,000	$	115,000
Adjusted EBITDA	$	180,000	$	190,000
Diluted adjusted EPS ⁽¹⁾	$	1.32	$	1.45

⁽¹⁾A reconciliation of the guidance for the Non-GAAP financial measures of Adjusted Net Income and Adjusted EPS in the table above cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on the Company’s future Non-GAAP financial measures.

Webcast and Conference Call

Management will discuss fourth quarter 2021 results on a webcast at 2 p.m. (PT) / 5 p.m. (ET) today, Monday, March 21, 2022. The webcast, along with the related presentation materials, may be accessed via HireRight’s investor relations website page at ir.hireright.com under “News and Events.” To listen by phone, please dial 1-855-327-6837 or 1-631-891-4304.

The webcast replay, along with the related presentation materials, can be accessed via HireRight’s investor relations website page at ir.hireright.com under “News and Events,” and will be available for 90 days. A replay of the call will also be available until midnight on June 20, 2022 by dialing 1-844-512-2921 or 1-412-317-6671 and entering passcode 10016015.

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