Fleetmatics Announces Record First Quarter 2013 Financial Results
Over 356,000 total subscribed vehicles attained
Total revenue of $38.4 million, up 38.0% year-over-year
GAAP EPS of $0.08; non-GAAP EPS of $0.15, up 50% year-over-year
Adjusted EBITDA of $11.1 million, up 81.1% year-over-year
Generated free cash flow of $3.5 million
DUBLIN & BOSTON--(BUSINESS WIRE)-- Fleetmatics Group PLC (NYS: FLTX) , a leading global provider of fleet management solutions for commercial fleet vehicles delivered as Software-as-a-Service (SaaS), today announced financial results for its first quarter ended March 31, 2013.
"Our ability to exceed expectations across all key operating metrics during the first quarter highlights the continued robust demand from our SMB customers," stated Jim Travers, Chief Executive Officer of Fleetmatics. "Our strong revenue and subscription growth is also being driven by continued solid execution by our team and the value proposition of our comprehensive Software-as-a-Service fleet management solution."
Travers added, "Fleetmatics remains committed to investing in product development as well as its sales, marketing and operational infrastructure in order to maintain its momentum and capitalize on the large underpenetrated market for fleet tracking. Looking forward, we continue to expect to extend our leadership position and increase our market share worldwide by acquiring new customers, increasing sales to existing customers, entering new geographies, introducing new features and further monetizing our data."
First Quarter 2013 Financial Highlights
Revenue: Total revenue for the first quarter was $38.4 million, an increase of 38.0% compared to $27.8 million for the first quarter of 2012.
Gross Profit: GAAP gross profit for the first quarter was $28.4 million, compared to $19.4 million for the first quarter of 2012. GAAP gross margin was 74.0% compared to 69.7% for the same period in 2012. Non-GAAP gross profit, which excludes share-based compensation and amortization of intangible assets was $28.5 million for the quarter compared to $19.5 million in the year ago period. Non-GAAP gross margin was 74.2% for the first quarter of 2013, compared to 70.1% during the same period last year.
Operating Income: GAAP operating income for the first quarter was $5.8 million, compared to $2.1 million for the first quarter of 2012. Non-GAAP operating income, which excludes share-based compensation, amortization of intangible assets and other items as defined in "Non-GAAP Financial Measures", was $7.9 million, compared to $3.8 million for the first quarter of 2012.
Net Income: GAAP net income for the first quarter was $3.0 million, compared to $1.0 million for the same period last year. GAAP net income per share attributable to ordinary shareholders for the first quarter was $0.08, based on 36.2 million weighted-average diluted shares outstanding, compared to $0.03, based on 2.6 million weighted-average diluted shares outstanding, for the same period last year.
Non-GAAP adjusted earnings, which excludes share-based compensation, amortization of intangible assets and other items as defined in "Non-GAAP Financial Measures", was $5.4 million for the first quarter, compared to $2.8 million for the first quarter of 2012. Non-GAAP diluted adjusted earnings per share for the first quarter was $0.15 based on 36.2 million weighted-average diluted shares outstanding compared to $0.10 per share based on 29.2 million pro forma weighted-average diluted shares outstanding for the same period last year.
Adjusted EBITDA: Adjusted EBITDA for the first quarter was $11.1 million, an increase of 81.1% compared to $6.1 million for the first quarter of 2012. Adjusted EBITDA margin was 28.8% for the first quarter of 2013, compared to a 21.9% margin for the same period last year. Adjusted EBITDA is defined as net income (loss) plus provision for income taxes; interest (income) expense, net; foreign currency transaction (gain) loss, net; depreciation and amortization of property and equipment; amortization of capitalized in-vehicle devices owned by customers; amortization of intangible assets; share-based compensation; and other items as defined in "Non-GAAP Financial Measures."
A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
Balance Sheet: As of March 31, 2013, Fleetmatics had cash of $102.0 million, an increase of $1.9 million since December 31, 2012.
During the first quarter of 2013, the company generated $12.1 million in net cash from operations and invested $8.5 million in capital expenditures, resulting in free cash flow of $3.5 million. During the first quarter of 2012, the company generated $4.5 million in net cash from operations and invested $5.4 million in capital expenditures, resulting in free cash flow of negative $0.9 million.
First Quarter 2013 Operating Highlights
Fleetmatics ended the first quarter of 2013 with over 356,000 active vehicles under subscription, up 39.1% compared to over 256,000 during the first quarter of 2012.
Quarterly net churn during the first quarter of 2013 improved to 1.3% compared to 0.8% during the first quarter of 2012. We calculate our net churn for a period by dividing (i) the number of vehicles under subscription added from existing customers less vehicles under subscription lost from existing customers over that period by (ii) the total vehicles under subscription at the beginning of that period. A positive net churn in each period means we added more vehicles from existing customers than we lost from those customers during the particular period.
As of May 8, 2013, Fleetmatics is initiating guidance for the second quarter of 2013 and full year 2013 as follows:
Second Quarter 2013 Guidance: Total revenue is expected to be in the range of $40.8 million to $41.2 million. Adjusted EBITDA is expected to be in the range of $10.0 million to $10.4 million. Non-GAAP diluted adjusted earnings per share is expected to be in the range of $0.15 to $0.17 based on approximately 37.2 million weighted-average diluted shares outstanding.
Full Year 2013 Guidance: Total revenue is expected to be in the range of $165.0 million to $167.0 million, which represents growth of 30% year-over-year at the midpoint. Adjusted EBITDA is expected to be in the range of $46.5 million to $47.5 million. Non-GAAP diluted adjusted earnings per share is expected to be in the range of $0.70 to $0.73 based on approximately 37.2 million weighted-average diluted shares outstanding.
Quarterly Conference Call
Fleetmatics will host a conference call today at 5:00 p.m. EST to discuss the company's financial results for the first quarter 2013, its business outlook and other matters. To access this call, dial +1-888-299-7207 (United States), or +1-719-325-4828 (international), with conference ID #1966789. A live webcast of this conference call will also be available on the investor relations portion of the company's website at ir.fleetmatics.com, and a replay will be archived on the website as well. A replay of this conference call will also be available through May 22, 2013, by dialing +1-877-870-5176 (United States), or +1-858-384-5517 (international). The recording access code is #1966789.
About Fleetmatics Group PLC
Fleetmatics Group PLC is a leading global provider of fleet management solutions for small and mid-sized businesses delivered as Software-as-a-Service (SaaS). Our solutions enable businesses to meet the challenges associated with managing local fleets, and improve the productivity of their mobile workforces, by extracting actionable business intelligence from real-time and historical vehicle and driver behavioral data.
Fleetmatics' intuitive, cost-effective Web-based solutions provide fleet operators with visibility into vehicle location, fuel usage, speed and mileage, and other insights into their mobile workforce, enabling them to reduce operating and capital costs, as well as increase revenue. Fleetmatics serves more than 19,000 customers, tracking more than 356,000 vehicles worldwide.
Non-GAAP Financial Measures
In this release, Fleetmatics' non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP adjusted earnings, non-GAAP diluted adjusted earnings per share, Adjusted EBITDA and Adjusted EBITDA margin are not presented in accordance with generally accepted accounting principles (GAAP) and are not intended to be used in lieu of GAAP presentations of results of operations. Non-GAAP gross profit and non-GAAP gross margin exclude share-based compensation and amortization of intangible assets. Non-GAAP operating income, Non-GAAP adjusted earnings and non-GAAP diluted adjusted earnings per share exclude share-based compensation; amortization of intangible assets; foreign currency transaction (gain) loss; loss on extinguishment of debt; certain non-recurring litigation and settlement costs; certain non-recurring secondary public offering costs; management services agreement expense; the tax effects related to these items, and the tax reserve component of the income tax provision.
Adjusted EBITDA is defined as net income (loss) plus provision for income taxes; interest (income) expense, net; foreign currency transaction (gain) loss, net; depreciation and amortization of property and equipment; amortization of capitalized in-vehicle devices owned by customers; amortization of intangible assets; share-based compensation; certain non-recurring litigation and settlement costs; certain non-recurring secondary public offering costs; management services agreement expense; and loss on extinguishment of debt.
Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.
The Company's earnings press releases containing such non-GAAP reconciliations can be found on the Investors section of the Company's web site at http://ir.fleetmatics.com.
Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our future investments, growth strategy, extending our market leadership position, acquiring new customers, increasing sales to existing customers, entering new geographies, introducing new features, monetizing our data, and our expected financial results for the second quarter of 2013, the full year of 2013 and the financial results for the first quarter of 2013. These forward-looking statements include, but are not limited to: plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, risks associated with our ability to effectively and efficiently attract, sell to and retain SMB customers; our ability to attract customers on a cost-effective basis, our ability to retain and increase sales to our existing customers; our ability to successfully complete and integrate acquisitions; expectations regarding the widespread adoption of fleet management solutions; our ability to expand the sales of our products to customers located outside the U.S.; our ability to continue to compete in a highly fragmented market and the risk of future competitors by way of acquisition or otherwise; keeping up with the rapid technological change required to remain competitive in our industry; and the impact of adverse economic conditions on information technology spending by SMB business, and other risks set forth under the caption "Risk Factors" in the Company's annual report on Form 20-F filed with the Securities and Exchange Commission on March 29, 2013, as updated by our subsequently furnished or filed quarterly reports on Form 6-K, annual reports on Form 20-F and other filings that we make with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
FLEETMATICS GROUP PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Three Months Ended March 31,
Cost of subscription revenue
Sales and marketing
Research and development
General and administrative
Total operating expenses
Income from operations
Interest income (expense), net
Foreign currency transaction gain (loss), net
Income before income taxes
Provision for income taxes
Accretion of redeemable convertible preferred shares to redemption value
Net income attributable to participating securities
Net income attributable to ordinary shareholders
Net income per share attributable to ordinary shareholders:
Weighted average ordinary shares outstanding:
FLEETMATICS GROUP PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, net of allowances of $897 and $887 at March 31, 2013 and December 31, 2012, respectively
Deferred tax assets
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Intangible assets, net
Deferred tax assets, net
Liabilities and Shareholders' Equity
Accrued expenses and other current liabilities
Current portion of long-term debt
Total current liabilities
Accrued income taxes
Long-term debt, net of discount of $520 and $556 at March 31, 2013 and December 31, 2012, respectively
Total shareholders' equity
Total liabilities and shareholders' equity
FLEETMATICS GROUP PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
Cash flows from operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment
Amortization of capitalized in-vehicle devices owned by customers
Amortization of intangible assets
Amortization of deferred commissions, other deferred costs and debt discount
Provision for (benefit from) deferred tax assets
Provision for accounts receivable allowances
Unrealized foreign currency transaction (gain) loss
Loss on disposal of property and equipment and other assets
Changes in operating assets and liabilities:
Prepaid expenses and other current and long-term assets
Accounts payable, accrued expenses and other current liabilities
Accrued income taxes
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of property and equipment
Capitalization of internal-use software costs
Net increase in restricted cash
Net cash used in investing activities
Cash flows from financing activities:
Payments of Term Loan
Proceeds from exercise of stock options
Excess tax benefits from share-based awards
Payments of previously accrued initial public offering costs
Payments of Senior Secured Notes
Payments of capital lease obligations
Net cash used in financing activities
Effect of exchange rate changes on cash
Net increase (decrease) in cash