FleetCor Reports First Quarter 2013 Financial Results

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FleetCor Reports First Quarter 2013 Financial Results

Adjusted Net Income Per Share Grows 50%

FleetCor Raises 2013 Guidance


NORCROSS, Ga.--(BUSINESS WIRE)-- FleetCor Technologies, Inc. (NYS: FLT) , a leading global provider of fuel cards and workforce payment products to businesses, today reported financial results for its first quarter ended March 31, 2013.

"Our first quarter results were terrific, with revenue up 32%, and adjusted net income per share up 50%. We are also pleased to have completed three acquisitions year to date - GE's Australia fuel card business, Cardlink in New Zealand, and Telenav Mobile in the U.S.," said Ron Clarke, chairman and chief executive officer, FleetCor Technologies, Inc.

Financial Results for First Quarter 2013:

GAAP Results

  • Total revenues in the first quarter of 2013 increased 32% to $193.7 million compared to $146.2 million in the first quarter of 2012
  • Net income in the first quarter of 2013 increased 54% to $64.7 million, or $0.77 per diluted share, compared to $42.1 million, or $0.49 per diluted share in the first quarter of 2012

Non-GAAP Results

  • Adjusted revenues1 (revenues, net less merchant commissions) in the first quarter of 2013 increased 32% to $179.8 million compared to $135.8 million in the first quarter of 2012
  • Adjusted net income1 in the first quarter of 2013 increased 48% to $75.2 million
  • Adjusted net income per share in the first quarter of 2013 increased 50% to $0.90 per diluted share, compared to $0.60 per diluted share in the first quarter of 2012

2013 Outlook:

FleetCor Technologies, Inc. is raising its financial guidance for 2013 as follows:

  • Revenues, net between $810 million and $820 million, up from our previous guidance range of $790 million to $810 million
  • Adjusted net income between $310 million and $320 million, up from our previous guidance range of $300 million to $310 million; and
  • Adjusted net income per diluted share between $3.70 and $3.80, up from our previous guidance range of $3.61 to $3.69

The Company's full-year 2012 guidance assumptions for the remainder of 2013 are as follows:

  • Fuel prices and FX rates at current levels
  • Market spreads equal to historical average
  • Fully diluted shares outstanding of 84.2 million shares
  • No impact related to acquisitions or material new partnership agreements not already disclosed

"Given our strong first quarter results and our recently completed acquisitions, we are raising our financial guidance for 2013," said Eric Dey, chief financial officer, FleetCor Technologies, Inc. "Included in our updated guidance is the expectation that our two recent acquisitions, in Australia and New Zealand, will be accretive to both revenue and profit in 2013, and we expect the acquisitions to add approximately $0.04 in adjusted net income per share, including deal and restructuring costs, for the remainder of 2013."

_________________________

1 Reconciliations of GAAP results to non GAAP results are provided in Exhibit 1 attached. Additional supplemental data is provided in Exhibit 2 and segment information is provided in Exhibit 3.

Conference Call

The Company will host a conference call to discuss first quarter 2013 financial results today at 5:00pm ET. Hosting the call will be Ron Clarke, chief executive officer, and Eric Dey, chief financial officer. The conference call can be accessed live over the phone by dialing (877) 941-1429, or for international callers (480) 629-9857. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 4615779. The replay will be available until May 9, 2013. The call will be webcast live from the Company's investor relations website at investor.fleetcor.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about FleetCor's beliefs, expectations and future performance, are forward-looking statements. Forward-looking statements can be identified by the use of words such as "anticipate," "intend," "believe," "estimate," "plan," "seek," "project," "expect," "may," "will," "would," "could" or "should," the negative of these terms or other comparable terminology. Examples of forward-looking statements in this press release include statements relating to revenue and earnings guidance, assumptions underlying financial guidance, and expectations regarding recent acquisitions and accretiveness to financial results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement, such as delays or failures associated with implementation; fuel price and spread volatility; changes in credit risk of customers and associated losses; the actions of regulators relating to payment cards or resulting from investigations; failure to maintain or renew key business relationships; failure to maintain competitive offerings; failure to maintain or renew sources of financing; failure to complete, or delays in completing, anticipated new partnership arrangements or acquisitions and the failure to successfully integrate or otherwise achieve anticipated benefits from such partnerships or acquired businesses; failure to successfully expand business internationally; the impact of foreign exchange rates on operations, revenue and income; the effects of general economic conditions on fueling patterns and the commercial activity of fleets, as well as the other risks and uncertainties identified under the caption "Risk Factors" in FleetCor's Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission on March 1, 2013. FleetCor believes these forward-looking statements are reasonable; however, forward-looking statements are not a guarantee of performance, and undue reliance should not be placed on such statements. The forward-looking statements included in this press release are made only as of the date hereof, and FleetCor does not undertake, and specifically disclaims, any obligation to update any such statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments.

About Non-GAAP Financial Measures

Adjusted revenue is calculated as revenues, net less merchant commissions. Adjusted net income is calculated as net income, adjusted to eliminate (a) non-cash stock-based compensation expense related to share-based compensation awards, (b) amortization of deferred financing costs and intangible assets, (c) amortization of the premium recognized on the purchase of receivables, and (d) loss on the early extinguishment of debt. EBITDA is calculated as net income as reflected in our income statement, adjusted to eliminate (a) interest expense, (b) tax expense, (c) depreciation of long-lived assets, and (d) amortization of intangible assets. The company uses adjusted revenues as a basis to evaluate the company's revenues, net of the commissions that are paid to merchants to participate in our card programs. The commissions paid to merchants can vary when market spreads fluctuate in much the same way as revenues are impacted when market spreads fluctuate. The company believes this is a more effective way to evaluate the company's revenue performance. The company uses EBITDA as a basis to evaluate our operating performance net of the impact of certain items during the period. We believe that EBITDA may be useful to investors for understanding our operating performance on a consistent basis. We prepare adjusted net income to eliminate the effect of items that we do not consider indicative of our core operating performance. Adjusted revenues and adjusted net income are supplemental measures of operating performance that do not represent and should not be considered as an alternative to revenues, net, net income or cash flow from operations, as determined by U.S. generally accepted accounting principles, or U.S. GAAP, and our calculation thereof may not be comparable to that reported by other companies. We believe it is useful to exclude non-cash stock-based compensation expense from adjusted net income because non-cash equity grants made at a certain price and point in time do not necessarily reflect how our business is performing at any particular time and stock-based compensation expense is not a key measure of our core operating performance. We also believe that amortization expense can vary substantially from company to company and from period to period depending upon their financing and accounting methods, the fair value and average expected life of their acquired intangible assets, their capital structures and the method by which their assets were acquired; therefore, we have excluded amortization expense from our adjusted net income. We also exclude loss on the early extinguishment of debt from adjusted net income, as this expense is non-cash and is one-time in nature and does not reflect the ongoing operations of the business.

Management uses adjusted revenues and adjusted net income:

  • as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis;
  • for planning purposes, including the preparation of our internal annual operating budget;
  • to allocate resources to enhance the financial performance of our business; and
  • to evaluate the performance and effectiveness of our operational strategies.

We believe adjusted revenues and adjusted net income are key measures used by the Company and investors as supplemental measures to evaluate the overall operating performance of companies in our industry. By providing these non-GAAP financial measures, together with reconciliations, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing strategic initiatives.

About FleetCor

FleetCor is a leading global provider of fuel cards and workforce payment products to businesses. FleetCor's payment programs enable businesses to better control employee spending and provide card-accepting merchants with a commercial customer base that can increase their sales and customer loyalty. FleetCor serves commercial accounts in North America, Latin America, Europe, Australia and New Zealand. For more information, please visit www.fleetcor.com.

    
FleetCor Technologies, Inc. and subsidiaries
Consolidated Statements of Income
(In thousands, except per share amounts)
  
Three Months Ended March 31,
20132012
(Unaudited)(Unaudited)
 
Revenues, net$193,651$146,165
 
Expenses:
Merchant commissions13,86110,393
Processing29,94325,579
Selling11,70410,175
General and administrative29,26123,823
Depreciation and amortization 14,629 11,720
Operating income 94,253 64,475
Other expense (income), net292588
Interest expense, net 3,448 3,563
Total other expense 3,740 4,151
Income before income taxes90,51360,324
Provision for income taxes 25,851 18,245
Net income$64,662$42,079
 
Basic earnings per share$0.80$0.51
Diluted earnings per share$0.77$0.49
 
Weighted average shares outstanding:
Basic shares81,22282,565
Diluted shares83,96085,164
 
    
FleetCor Technologies, Inc. and subsidiaries
Consolidated Balance Sheets
(In thousands, except share and par value amounts)
    
March 31, 2013December 31, 2012
(Unaudited)
Assets
 
Current assets:
Cash and cash equivalents$224,613$283,649
Restricted cash49,34753,674
Accounts receivable (less allowance for doubtful accounts of $19,576 and $19,463 respectively)626,464525,441
Securitized accounts receivable - restricted for securitization investors385,000298,000
Prepaid expenses and other current assets24,93228,126
Deferred income taxes 7,710  6,464 
 
Total current assets 1,318,066  1,195,354 
 
Property and equipment97,10493,902
Less accumulated depreciation and amortization (51,212) (48,706)
 
Net property and equipment45,89245,196
 
Goodwill973,335926,609
Other intangibles, net502,103463,864
Other assets 50,988  90,847 
 
Total assets$2,890,384 $2,721,870 
 
Liabilities and Stockholders' Equity
 
Current liabilities:
Accounts payable$501,036$418,609
Accrued expenses61,38375,812
Customer deposits170,035187,627
Securitization facility385,000298,000
Current portion of notes payable and other obligations 122,375  162,174 
 
Total current liabilities 1,239,829  1,142,222 
 
Notes payable and other obligations, less current portion491,988485,217
Deferred income taxes 175,554  180,609 
 
Total noncurrent liabilities 667,542  665,826 
 
Commitments and contingencies
 
Stockholders' equity:
 

Common stock, $0.001 par value; 475,000,000 shares authorized, 117,080,997 shares issued

and 81,346,505 shares outstanding at March 31, 2013; and 475,000,000 shares authorized,

116,772,324 shares issued and 81,037,832 shares outstanding at December 31, 2012

116116
Additional paid-in capital557,279542,018
Retained earnings815,359750,697
Accumulated other comprehensive loss(14,078)(3,346)

Less treasury stock, 35,734,492 shares at March 31, 2013 and December 31, 2012

(375,663)(375,663)
  
Total stockholders' equity 983,013  913,822 
 
Total liabilities and stockholders' equity$2,890,384 $2,721,870 
 
    
FleetCor Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands)
 
Three Months Ended March 31,
 2013  2012 
(Unaudited)
Operating activities
Net income$64,662$42,079
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
Depreciation4,0313,119
Stock-based compensation4,1623,834
Provision for losses on accounts receivable4,4604,957
Amortization of deferred financing costs760510
Amortization of intangible assets9,0227,276
Amortization of premium on receivables816816
Deferred income taxes(1,012)(17)
Changes in operating assets and liabilities (net of acquisitions):
Restricted cash4,327(1,447)
Accounts receivable(192,483)(183,976)
Prepaid expenses and other current assets3,194(1,889)
Other assets40,113(37,821)
Excess tax benefits related to stock-based compensation(5,843)(8,883)
Accounts payable, accrued expenses and customer deposits 50,101  57,508 
Net cash provided by operating activities (13,690) (113,934)
 
 
Investing activities
Acquisitions, net of cash acquired(94,773)(10)
Purchases of property and equipment (4,762) (3,563)
Net cash used in investing activities (99,535) (3,573)
 
 
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