FleetCor Reports First Quarter 2013 Financial Results

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,

2013

2012

(Unaudited)

(Unaudited)

Revenues, net

$

193,651

$

146,165

Expenses:

Merchant commissions

13,861

10,393

Processing

29,943

25,579

Selling

11,704

10,175

General and administrative

29,261

23,823

Depreciation and amortization

14,629

11,720

Operating income

94,253

64,475

Other expense (income), net

292

588

Interest expense, net

3,448

3,563

Total other expense

3,740

4,151

Income before income taxes

90,513

60,324

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 shares

81,222

82,565

Diluted shares

83,960

85,164

FleetCor Technologies, Inc. and subsidiaries

Consolidated Balance Sheets

(In thousands, except share and par value amounts)

March 31, 2013

December 31, 2012

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

224,613

$

283,649

Restricted cash

49,347

53,674

Accounts receivable (less allowance for doubtful accounts of $19,576 and $19,463 respectively)

626,464

525,441

Securitized accounts receivable - restricted for securitization investors

385,000

298,000

Prepaid expenses and other current assets

24,932

28,126

Deferred income taxes

7,710

6,464

Total current assets

1,318,066

1,195,354

Property and equipment

97,104

93,902

Less accumulated depreciation and amortization

(51,212

)

(48,706

)

Net property and equipment

45,892

45,196

Goodwill

973,335

926,609

Other intangibles, net

502,103

463,864

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 expenses

61,383

75,812

Customer deposits

170,035

187,627

Securitization facility

385,000

298,000

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 portion

491,988

485,217

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

116

116

Additional paid-in capital

557,279

542,018

Retained earnings

815,359

750,697

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:

Depreciation

4,031

3,119

Stock-based compensation

4,162

3,834

Provision for losses on accounts receivable

4,460

4,957

Amortization of deferred financing costs

760

510

Amortization of intangible assets

9,022

7,276

Amortization of premium on receivables

816

816

Deferred income taxes

(1,012

)

(17

)

Changes in operating assets and liabilities (net of acquisitions):

Restricted cash

4,327

(1,447

)

Accounts receivable

(192,483

)

(183,976

)

Prepaid expenses and other current assets

3,194

(1,889

)

Other assets

40,113

(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

)