FleetCor Reports Fourth Quarter and Fiscal Year 2012 Financial Results

FleetCor Reports Fourth Quarter and Fiscal Year 2012 Financial Results

Fourth Quarter Revenue and Profits Grow Over 45%

Profit Outlook for 2013 up 22% at Midpoint of Guidance Range


NORCROSS, Ga.--(BUSINESS WIRE)-- FleetCor Technologies, Inc. (NYS: FLT) , a leading independent global provider of fuel cards and workforce payment products to businesses, today reported financial results for its fourth quarter and fiscal year ended December 31, 2012.

"2012 was another excellent year for FleetCor, which included revenue growth of 36% and adjusted net income growth of 41% over 2011. We also completed developing market acquisitions in Brazil and Russia, and went live with our GFN platform in Asia for Shell during the fourth quarter," said Ron Clarke, chairman, and chief executive officer, FleetCor Technologies, Inc. "We are also well positioned to kick off 2013 as we have nearly $1 billion in liquidity to continue our global business development efforts."

Financial Results for Fourth Quarter 2012:

GAAP Results

  • Total revenues, net, in the fourth quarter of 2012 increased 45% to $202.6 million compared to $140.2 million in the fourth quarter of 2011

  • Net income in the fourth quarter of 2012 increased 59% to $60.1 million, or $0.70 per diluted share, compared to $37.8 million, or $0.45 per diluted share in the fourth quarter of 2011

Non-GAAP Results

  • Adjusted revenues1 (revenues, net less merchant commissions) in the fourth quarter of 2012 increased 47% to $185.0 million compared to $125.5 million in the fourth quarter of 2011

  • Adjusted net income1 in the fourth quarter of 2012 increased 49% to $70.7 million, or $0.82 per diluted share, compared to $47.3 million, or $0.56 per diluted share in the fourth quarter of 2011

Financial Results for Fiscal Year 2012:

GAAP Results

  • Total revenues, net in 2012 increased 36% to $707.5 million compared to $519.6 million in 2011

  • Net income in 2012 increased 47% to $216.2 million, or $2.52 per diluted share, compared to $147.3 million, or $1.76 per diluted share in 2011

Non-GAAP Results

  • Adjusted revenues1 (revenues, net less merchant commissions) in 2012 increased 39% to $649.0 million compared to $468.4 million in 2011

  • Adjusted net income1 for 2012 increased 41% to $256.0 million, or $2.99 per diluted share, compared to $181.7 million, or $2.17 per diluted share in 2011

2013 Outlook:

FleetCor Technologies, Inc. is introducing initial financial guidance for fiscal year 2013:

  • Revenues, net, between $790 million and $810 million

  • Adjusted Net Income between $300 million and $310 million

  • Adjusted Net Income per diluted share between $3.61 and $3.69

The assumptions included in the guidance are as follows:

  • Fuel prices equal to the 2012 average

  • Market spreads equal to the 2012 average

  • Foreign exchange rates equal to the 2012 average

  • Fully diluted shares outstanding of 84.2 million shares

  • No impact related to future acquisitions or material new partnership agreements

"We have great momentum heading into 2013 and we are projecting another double-digit revenue and profit year despite uncertainty around the macroeconomic environment including fuel prices, fuel price spreads and FX rates. Our guidance produces a 13% revenue and 22% adjusted net income per share growth rate, at the midpoint of our guidance range, versus 2012," said Eric Dey, chief financial officer FleetCor Technologies, Inc.

Conference Call

The Company will host a conference call to discuss fourth quarter and fiscal year 2012 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) 941-8416, or for international callers (480) 629-9808. 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 4592455. The replay will be available until February 14, 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" or "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, expectations regarding entering new markets and building on existing assets in emerging markets. 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, 2011, filed with the Securities and Exchange Commission on February 29, 2012. 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, and Europe. For more information, please visit www.fleetcor.com.

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.

FleetCor Technologies, Inc. and subsidiaries

Consolidated Statements of Income

(In thousands, except per share amounts)

Three Months Ended December 31,

Year Ended December 31,

2012

2011

2012

2011

(Unaudited)

(Unaudited)

(Unaudited)

Revenues, net

$

202,617

$

140,160

$

707,534

$

519,591

Expenses:

Merchant commissions

17,599

14,694

58,573

51,199

Processing

32,285

25,931

115,446

84,516

Selling

13,190

10,332

46,429

36,606

General and administrative

31,256

25,047

110,122

84,765

Depreciation and amortization

15,116

9,924

52,036

36,171

Operating income

93,171

54,232

324,928

226,334

Other expense (income), net

602

19

1,121

(589

)

Interest expense, net

3,390

3,433

13,017

13,377

Loss on extinguishment of debt

-

-

-

2,669

Total other expense

3,992

3,452

14,138

15,457

Income before income taxes

89,179

50,780

310,790

210,877

Provision for income taxes

29,108

13,008

94,591

63,542

Net income

$

60,071

$

37,772

$

216,199

$

147,335

Basic earnings per share

$

0.72

$

0.46

$

2.59

$

1.83

Diluted earnings per share

$

0.70

$

0.45

$

2.52

$

1.76

Weighted average shares outstanding:

Basic shares

83,378

81,512

83,328

80,610

Diluted shares

85,750

84,035

85,736

83,654

FleetCor Technologies, Inc. and subsidiaries

Consolidated Balance Sheets

(In thousands, except share and par value amounts)

December 31, 2012

December 31, 20111

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

283,649

$

285,159

Restricted cash

53,674

55,762

Accounts receivable (less allowance for doubtful accounts of $19,463 and $15,315, respectively)

525,441

481,791

Securitized accounts receivable - restricted for securitization investors

298,000

280,000

Prepaid expenses and other current assets

28,126

15,416

Deferred income taxes

6,464

6,140

Total current assets

1,195,354

1,124,268

Property and equipment

93,902

93,380

Less accumulated depreciation and amortization

(48,706

)

(60,656

)

Net property and equipment

45,196

32,724

Goodwill

926,609

760,736

Other intangibles, net

463,864

385,607

Other assets

90,847

45,834

Total assets

$

2,721,870

$

2,349,169

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

418,609

$

478,882

Accrued expenses

75,812

41,565

Customer deposits

187,627

180,269

Securitization facility

298,000

280,000

Current portion of notes payable and other obligations

162,174

145,836

Total current liabilities

1,142,222

1,126,552

Notes payable and other obligations, less current portion

485,217

278,429

Deferred income taxes

180,609

132,752

Total noncurrent liabilities

665,826

411,181

Commitments and contingencies

Stockholders' equity:

Common stock, $0.001 par value; 475,000,000 shares authorized, 116,772,324 shares issued and 81,037,832 shares outstanding at December 31, 2012; and 475,000,000 shares authorized, 113,741,883 shares issued and 81,860,213 shares outstanding at December 31, 2011

116

114

Additional paid-in capital

542,018

466,203

Retained earnings

750,697

534,498

Accumulated other comprehensive loss

(3,346

)

(13,716

)

Less treasury stock, 35,734,492 shares at December 31, 2012 and 31,881,670 shares at December 31, 2011

(375,663

)

(175,663

)

Total stockholders' equity

913,822

811,436

Total liabilities and stockholders' equity

$

2,721,870

$

2,349,169

1Certain prior period amounts have been recast in connection with ASC 805, Business Combinations.

FleetCor Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In Thousands)

Year Ended December 31,

2012

2011

(Unaudited)

Operating activities

Net income

$

216,199

$

147,335

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

14,116

11,451

Stock-based compensation

19,275

21,743

Provision for losses on accounts receivable