Release Details

NORCROSS, Ga., May 12, 2011 (BUSINESS WIRE) -- FleetCor Technologies, Inc. (NYSE: FLT), a leading independent global provider of specialized payment products and services to businesses, commercial fleets, major oil companies, petroleum marketers and government fleets, today reported financial results for its first quarter ended March 31, 2011.

"We are very pleased with our first quarter results. In the first quarter we reported adjusted net income growth of 20%, on a pro forma basis, which is in line with our previously announced organic growth earnings target " said Ron Clarke, chairman, president and chief executive officer, FleetCor Technologies, Inc. "Our strategy continues to be growing the business through organic measures, signing new partnership agreements, such as the recently announced major oil company agreement, and pursuing acquisitions, particularly in emerging markets."

Financial results for the first quarter of 2011:

GAAP Results

 

• Total revenues, net in the first quarter of 2011 increased 6.5% to $111.0 million compared to $104.2 million in the first quarter of 2010
• Net income in the first quarter of 2011 increased 18.2% to $32.3 million, or $0.39 per diluted share, compared to $27.3 million, or $0.34 per diluted share in the first quarter of 2010

 

Non GAAP Results

 

• Adjusted revenues (revenues, net less merchant commissions) in the first quarter of 2011 increased 10.9% to $102.7 million compared to $92.6 million in the first quarter of 2010
• Adjusted net income in the first quarter of 2011 increased 20% to $39.3 million, or $0.47 per diluted share, compared to $32.7 million, or $0.39 per diluted share in the first quarter of 2010 on a pro forma basis (to reflect the impact of public company expenses, non-cash compensation expenses, decrease in the effective tax rate, effective during the first quarter of 2011, and fully diluted shares effective in the first quarter of 2011, as if these changes had occurred during the first quarter of 2010)

 

Reconciliations of GAAP results to non GAAP results and pro forma adjustments are provided in exhibit 1 attached. Additional supplemental data is provided in exhibit 2.

2011 Outlook

FleetCor Technologies, Inc. is re-affirming its financial guidance for 2011 as follows:

 

• Revenue between $460 million to $480 million
• Adjusted Net Income between $155 million to $165 million
• Adjusted Net income per diluted share between $1.83 to $1.95

 

"We remain confident about our full year guidance, given the generally positive economic environment , and the progress on our organic growth initiatives," said Mr. Clarke.

The Company's full year 2011 guidance includes the following:

 

• Approximately $2 million of incremental cash operating costs for public company expenses
• A 1.9% increase in our effective tax rate from 28.7% in 2010 to 30.6% in 2011
• An increase of 3.9 million diluted shares outstanding from 80.8 million shares in 2010 to 84.7 million shares in 2011

 

If these incremental costs and shares had been incurred in 2010, the Company's full year 2010 Adjusted Net Income would have been $138.3 million, or $1.63 per diluted share.

The Company's full year 2011 guidance is presented on a constant currency basis and assumes similar macroeconomic and business conditions exist in 2011 as did in 2010. This guidance does not reflect the impact of any future acquisitions or material new partnership agreements.

Conference Call

The Company will host a conference call to discuss first quarter 2011 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 877-941-1427, or for international callers 480-629-9664. 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 4436750. The replay will be available until Thursday, May 19, 2011. 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, and management's plans for 2011 and confidence in prospects for growth. 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; failure to maintain or renew key business relationships; failure to maintain competitive offerings; failure to maintain or renew sources of financing; failure to successfully integrate 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, 2010, filed with the Securities and Exchange Commission on March 25, 2011. 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 revenues are calculated as revenues less merchant commissions. Adjusted net income is calculated as net income, adjusted to eliminate (a) stock-based compensation expense related to share-based compensation awards, (b) amortization of deferred financing costs and intangible assets and (c) amortization of the premium recognized on the purchase of receivables. 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. 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 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 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 expenses 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.

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 is used by 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, The Global Fleet Card Company, is a leading independent global provider of specialized payment products and services to businesses, commercial fleets, major oil companies, petroleum marketers and government entities. FleetCor's payment programs enable businesses to better manage and control employee spending and provide card-accepting merchants with a high volume customer base that can increase their sales and customer loyalty. FleetCor serves commercial accounts in 18 countries in North America, Europe, Africa and Asia. For more information, please visit http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.fleetcor.com&esheet=6720798&lan=en-US&anchor=www.fleetcor.com&index=2&md5=e66757b14869714ae3bf9683f75cabb2.

FleetCor Technologies, Inc. and subsidiaries
GAAP Consolidated Statements of Income
(In thousands, except share and per share amounts)
			1st Quarter
			2011				2010
			(Unaudited)				(Unaudited)
Revenues, net		$	111,005			$	104,202
Expenses:
Merchant commissions			8,277				11,589
Processing			17,932				17,521
Selling			7,787				6,849
General and administrative			17,915				13,089
			59,094				55,154
Depreciation and amortization			8,607				8,054
Operating income			50,487				47,100
Other (income) loss, net			(34	)			44
Interest expense, net			3,363				5,264
Total other expense			3,329				5,308
Income before income taxes			47,158				41,792
Provision for income taxes			14,823				14,447
Net income			32,335				27,345
Calculation of income attributable to common shareholders:
Convertible preferred stock accrued dividends			-				(4,420	)
Income attributable to common shareholders for basic earnings per share		$	32,335			$	22,925
Basic earnings per share		$	0.40			$	0.67
Diluted earnings per share		$	0.39			$	0.34
Weighted average shares outstanding:
Basic shares			79,937				34,011
Diluted shares			83,378				80,489

FleetCor Technologies, Inc. and subsidiaries
Consolidated Balance Sheets
(In thousands, except share and par value amounts)
			March 31, 2011				December 31, 2010
			(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	119,779			$	114,804
Restricted cash			66,319				62,341
Accounts receivable (less allowance for doubtful accounts of $15,187 and $14,256, respectively)			378,951				260,163
Securitized accounts receivable - restricted for securitization investors			154,000				144,000
Prepaid expenses and other current assets			36,226				33,191
Deferred income taxes			4,594				4,484
Total current assets			759,869				618,983
Property and equipment			87,411				83,013
Less accumulated depreciation and amortization			(60,314	)			(56,195	)
Net property and equipment			27,097				26,818
Goodwill			602,017				601,666
Other intangibles, net			190,066				193,861
Other assets			43,172				42,790
Total assets		$	1,622,221			$	1,484,118
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	250,765			$	177,644
Accrued expenses			59,002				49,176
Customer deposits			81,016				78,685
Securitization facility			154,000				144,000
Current portion of notes payable and other obligations			11,134				11,617
Total current liabilities			555,917				461,122
Notes payable and other obligations, less current portion			317,287				313,796
Deferred income taxes			81,350				83,255
Total noncurrent liabilities			398,637				397,051
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value; 475,000,000 shares authorized, 11,885,103 shares issued and 80,003,433 shares outstanding at March 31, 2011; and 475,000,000 shares authorized, 111,522,354 shares issued and 79,655,213 shares outstanding at December 31, 2010			112				112
Additional paid-in capital			427,849				421,991
Retained earnings			419,498				387,163
Accumulated other comprehensive loss			(4,129	)			(8,101	)
Less treasury stock, 31,881,670 shares at March 31, 2011 and 31,867,141 shares at December 31, 2010			(175,663	)			(175,220	)
Total stockholders' equity			667,667				625,945
Total liabilities and stockholders' equity		$	1,622,221			$	1,484,118

Exhibit 1
RECONCILIATION OF NON-GAAP MEASURES AND PRO FORMA INFORMATION
(In thousands, except shares and per share amounts)
The following table reconciles revenues, net to adjusted revenues:
			1st Quarter				1st Quarter
			2011				2010
Revenues, net			111,005				104,202
Merchant commissions			8,277				11,589
Total adjusted revenues		$	102,728			$	92,613
The following table reconciles net income to adjusted net income and adjusted net income per diluted share:
			1st Quarter				1st Quarter				Year Ended
			2011				2010				2010
Net income		$	32,335			$	27,345			$	107,896
Stock based compensation			4,250				853				27,546
Amortization of intangible assets			4,600				4,188				17,203
Amortization of premium on receivables			816				816				3,263
Amortization of deferred financing costs			466				427				2,016
Total pre-tax adjustments			10,132				6,284				50,028
Income tax impact of pre-tax adjustments at the effective tax rate			(3,184	)			(2,172	)			(14,340	)
Adjusted net income		$	39,283			$	31,457			$	143,584
Adjusted net income per diluted share		$	0.47			$	0.39			$	1.78
Diluted shares			83,378				80,489				80,751
For the periods presented below, the following table reconciles 2010 actual results to 2010 pro forma results , which reflects the impact of stock-based compensation expense related to share-based compensation awards, public company expenses and a decrease in the effective tax rate, effective during 2011, as if these changes had occurred in 2010:
			Quarter Ended				Q1 2011				Pro forma			Year Ended				2011			Pro forma
			March 31, 2010				Changes1				March 31, 2010			2010				Changes2			2010
Income before income taxes		$	41,792			$	(3,745	)		$	38,047			151,280			$	(14,000	)	$	137,280
Provision for income taxes			14,447				(2,517	)			11,930			43,384				(1,376	)		42,008
Net income			27,345				(1,228	)			26,117			107,896				(12,624	)		95,272
Stock based compensation			853				3,288				4,141			27,546				12,000			39,546
Amortization of intangible assets			4,188				-				4,188			17,203				-			17,203
Amortization of premium on receivables			816				-				816			3,263				-			3,263
Amortization of deferred financing costs			427				-				427			2,016				-			2,016
Total pre-tax adjustments			6,284				3,288				9,572			50,028				12,000			62,028
Income tax impact of pre-tax adjustments at the effective tax rate			(2,172	)			(829	)			(3,001	)		(14,340	)			(4,641	)		(18,981	)
Adjusted net income		$	31,457			$	1,231			$	32,688		$	143,584			$	(5,265	)	$	138,319
Adjusted net income per diluted share		$	0.39							$	0.39		$	1.78						$	1.63
Diluted shares			80,489								83,378			80,751							84,700
1 Q1 2011 changes include approximately $0.3 million in incremental cash operating costs for public company expenses, $3.3 million of non-cash compensation expenses associated with our stock plan, and a 3.2% decrease in our effective tax rate from 34.6% at March 31, 2010 to 31.4% at March 31, 2011. Additionally, 2011 reflects an increase of 2.9 million diluted shares outstanding, from 80.5 million at March 31, 2010 to 83.4 million at March 31, 2011.
2 2011 changes include approximately $2.0 million in incremental cash operating costs for public company expenses, $12.0 million of non-cash compensation expenses associated with our stock plan, and a 1.9% increase in our effective tax rate from 28.7% in 2010 to 30.6% in 2011. Additionally, 2011 reflects an increase of 3.9 million diluted shares outstanding, from 80.8 million in 2010 to 84.7 million in 2011.

Exhibit 2
Transaction Volume, Revenues and Adjusted Revenue, Per Transaction and by Segment
(in thousands except revenues, net per transaction and adjusted revenues per transaction)
			1st Quarter
			2011			2010			Change		% Change
NORTH AMERICA
- Transactions			36,157			34,926			1,231		3.5%
- Revenues, net per transaction		$	1.98		$	1.96		$	0.02		0.8%
- Revenues, net		$	71,585		$	68,591		$	2,994		4.4%
INTERNATIONAL1
- Transactions			11,299			10,733			567		5.3%
- Revenues, net per transaction		$	3.49		$	3.29		$	0.20		6.1%
- Revenues, net		$	39,420		$	35,297		$	4,123		11.7%
FLEETCOR CONSOLIDATED REVENUES1
- Transactions			47,457			45,659			1,798		3.9%
- Revenues, net per transaction		$	2.34		$	2.28		$	0.06		2.8%
- Revenues, net		$	111,005		$	103,888		$	7,117		6.9%
FLEETCOR CONSOLIDATED ADJUSTED REVENUES1,2
- Transactions			47,457			45,659			1,798		3.9%
- Adjusted Revenues per transaction		$	2.16		$	2.02		$	0.14		7.1%
- Adjusted Revenues		$	102,728		$	92,299		$	10,429		11.3%
1Calculation of revenue per transaction for our International segment and on a consolidated basis for the quarter ended March 31, 2010 excludes the impact of a non-renewed partner contract in Europe, inherited from an acquisition, which we chose not to renew. This non-renewed contract contributed approximately 1.6 million transactions and $0.3 million in revenues, net to our International segment in the quarter ended March 31, 2010. This contract had a high number of transactions and very little revenue and had a $0.40 negative impact on our International segment revenue per transaction in the quarter ended March 31, 2010. We believe that excluding the impact of this contract is a more effective measure for evaluating the Company's revenue performance of its continuing business. Revenues, net, excluding the impact of a non-renewed partner contract in Europe for our International segment and on a consolidated basis are supplemental non-GAAP financial measures of performance.
2Adjusted revenues is a non-gaap financial measure defined as revenues, net less merchant commissions. The Company believes this measure is a more effective way to evaluate the Company's revenue performance. Refer to Exhibit 1 for a reconciliation of revenues, net to adjusted revenues.

SOURCE: FleetCor Technologies, Inc.

FleetCor Technologies, Inc.
Investor Relations, 770-729-2017
investor@fleetcor.com