WEX Inc. (NYSE:WEX), a leading provider of corporate payment
solutions, today reported financial results for the three months
ended September 30, 2016.
Third Quarter 2016 Financial Results
Total revenue for the third quarter of 2016 increased 27.3% to
$287.8 million from $226.1 million for the third quarter of 2015.
During the quarter, lower fuel prices negatively impacted revenue
by $10.7 million when compared to the prior year period. The impact
of foreign currency translation was not material.
Net earnings attributable to shareholders on a GAAP basis
decreased $12.5 million to $19.7 million, or $0.46 per diluted
share, compared with $32.2 million, or $0.83 per diluted share, for
the third quarter of 2015. The Company's adjusted net income
attributable to shareholders, which is a non-GAAP measure, for the
third quarter of 2016 was $53.4 million, or $1.25 per diluted
share, which is above the high end of our guidance range, down from
$1.30 per diluted share for the same period last year. Please note
that beginning this quarter, adjusted net income excludes the
amortization of debt issuance costs. For comparative purposes,
adjusted net income year to date and for the prior period also
reflects this change. See Exhibit 1 for a full explanation and
reconciliation of adjusted net income attributable to shareholders
and adjusted net income attributable to shareholders per diluted
share to the comparable GAAP measures.
"I am extremely pleased to report our results for the quarter
came in ahead of our top and bottom line expectations," said
Melissa Smith, WEX’s president and chief executive officer. "Our
commitment to expanding our market-leading offerings, accelerating
growth across our core verticals, and capturing scale continues to
pay off. This includes furthering the price modernization work in
Fleet, making meaningful headway on the integration of EFS, robust
growth in our health and employee benefits business, as well as
capturing new business signings and marquee client renewals during
the quarter."
Smith continued, "Overall, I am encouraged by the strength of
our growth engine, the diversity of our business as we continue to
expand globally, and our pipeline, which remains robust across our
core verticals. We made significant progress in achieving our
strategic objectives for the year and remain excited about our
ability to carry this momentum through the fourth quarter and into
next year."
Third Quarter 2016 Performance Metrics
- Average number of vehicles serviced
worldwide was approximately 10.3 million, an increase of 6% from
the third quarter of 2015.
- Total fuel transactions processed
increased 21% from the third quarter 2015 to 126.9 million. Payment
processing transactions increased 15% to 102.9 million.
- Average expenditure per payment
processing transaction was $64.05, which represents a decrease of
2% from the third quarter of 2015.
- U.S. retail fuel price decreased 14% to
$2.24 per gallon from $2.61 per gallon in the third quarter of
2015.
- Total Travel and Corporate Solution
card purchase volume grew 23% to $7.1 billion, from $5.8 billion in
the third quarter of 2015.
Financial Guidance and Assumptions
The Company provides revenue guidance on a GAAP basis and
earnings guidance on a non-GAAP basis, due to the uncertainty and
indeterminate amount of certain elements that are included in
reported GAAP earnings.
- For the fourth quarter of 2016, WEX
expects revenue in the range of $272 million to $282 million and
adjusted net income in the range of $52 million to $55 million, or
$1.20 to $1.27 per diluted share.
- For the full year 2016, the Company
expects revenue in the range of $1.00 billion to $1.01 billion and
adjusted net income in the range of $186 million to $189 million,
or $4.53 to $4.60 per diluted share.
"We are pleased by our strong performance this quarter, and
remain encouraged by our momentum entering the final quarter of
2016. As we look ahead, our updated guidance for the full year
reflects favorable contributions from our outperformance in the
third quarter, slightly improved fuel prices compared to our prior
assumption, contributions from EFS, and operational efficiencies.
We look forward to a strong close to 2016," said Roberto Simon,
WEX's chief financial officer.
Fourth quarter 2016 guidance is based on an assumed average U.S.
retail fuel price of $2.32 per gallon. Full-year 2016 guidance is
based on an assumed average U.S. retail fuel price of $2.22 per
gallon. The fuel prices referenced above are based on the
applicable NYMEX futures price. Our guidance assumes approximately
43 million shares outstanding for the fourth quarter.
The Company's guidance also assumes that fourth quarter 2016
fleet credit loss will range between 12 and 17 basis points, and
full year 2016 fleet credit loss will range between 10 and 11 basis
points.
The Company's adjusted net income guidance, which is a non-GAAP
measure, excludes acquisition and divestiture related items,
certain debt restructuring costs and debt issuance cost
amortization, stock-based compensation, restructuring costs, net
foreign currency remeasurement gains and losses, non-cash
adjustments related to tax receivable agreement, similar
adjustments attributed to our non-controlling interest and certain
tax related items.
Additional Information
Management uses the non-GAAP measures presented within this news
release to evaluate the Company's performance on a comparable
basis. Management believes that investors may find these measures
useful for the same purposes, but cautions that they should not be
considered a substitute for, or superior to, disclosure in
accordance with GAAP.
WEX historically used fuel-price derivative instruments to
mitigate financial risks associated with the variability in fuel
prices in North America. Starting with the second quarter of 2016,
there are no longer any fuel price related derivatives
outstanding.
To provide investors with additional insight into its
operational performance, WEX has included in this news release in
Exhibit 2, a table illustrating the impact of foreign currency
translations and fuel prices for each of our operating segments for
the three and nine months ended September 30, 2016 and 2015, and in
Exhibit 3, a table of selected non-financial metrics for the five
quarters ended September 30, 2016. The Company is also providing
selected segment revenue information for the three and nine months
ended September 30, 2016 and 2015 in Exhibit 4.
Conference Call Details
In conjunction with this announcement, WEX will host a
conference call today, October 27, 2016, at 9:00 a.m. (ET). As
previously announced, the conference call will be webcast live on
the Internet, and can be accessed at the Investor Relations section
of the WEX website, http://www.wexinc.com. The live conference call
also can be accessed by dialing (866) 334-7066 or (973) 935-8463.
The Conference ID number is 88565999. A replay of the webcast will
be available on the Company's website.
About WEX Inc.
WEX Inc. (NYSE:WEX) is a leading provider of corporate payment
solutions. From its roots in fleet card payments beginning in 1983,
WEX has expanded the scope of its business into a multi-channel
provider of corporate payment solutions representing more than 10
million vehicles and offering exceptional payment security and
control across a wide spectrum of business sectors. WEX serves a
global set of customers and partners through its operations around
the world, with offices in the United States, Australia, New
Zealand, Brazil, the United Kingdom, Italy, France, Germany,
Norway, and Singapore. WEX and its subsidiaries employ more than
2,500 associates. The Company has been publicly traded since 2005,
and is listed on the New York Stock Exchange under the ticker
symbol “WEX.” For more information, visit www.wexinc.com and follow
WEX on Twitter at @WEXIncNews.
Forward-Looking Statements
This news release contains forward-looking statements, including
statements regarding: financial guidance; assumptions underlying
the Company's financial guidance; beliefs about momentum and
opportunities to drive scale; and, confidence about the Company’s
market position, product offerings and customer service. Any
statements that are not statements of historical facts may be
deemed to be forward-looking statements. When used in this news
release, the words "may," "could," "anticipate," "plan,"
"continue," "project," "intend," "estimate," "believe," "expect"
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
such words. These forward-looking statements are subject to a
number of risks and uncertainties that could cause actual results
to differ materially, including: the effects of general economic
conditions on fueling patterns as well as payment and transaction
processing activity; the impact of foreign currency exchange rates
on the Company’s operations, revenue and income; changes in
interest rates; the impact of fluctuations in fuel prices; the
effects of the Company’s business expansion and acquisition
efforts; potential adverse reactions or changes to business or
employee relationships, including those resulting from the
completion of an acquisition; competitive responses to any
acquisitions; uncertainty of the expected financial performance of
the combined operations following completion of an acquisition; the
ability to successfully integrate the Company's acquisitions,
specifically, the Electronic Funds Source LLC's operations and
employees; the ability to realize anticipated synergies and cost
savings; unexpected costs, charges or expenses resulting from an
acquisition; the Company's failure to successfully operate and
expand ExxonMobil's European commercial fuel card program, or Esso
Card; the failure of corporate investments to result in anticipated
strategic value; the impact and size of credit losses; the impact
of changes to the Company's credit standards; breaches of the
Company’s technology systems (or those of its third party service
providers) and any resulting negative impact on our reputation,
liabilities or relationships with customers or merchants; the
Company’s failure to maintain or renew key agreements; failure to
expand the Company’s technological capabilities and service
offerings as rapidly as the Company’s competitors; the actions of
regulatory bodies, including banking and securities regulators, or
possible changes in banking or financial regulations impacting the
Company’s industrial bank, the Company as the corporate parent or
other subsidiaries or affiliates; the impact of the Company’s
outstanding notes on its operations; the impact of increased
leverage on the Company's operations, results or borrowing capacity
generally, and as a result of potential acquisitions specifically;
the incurrence of impairment charges if our assessment of the fair
value of certain of our reporting units changes; the uncertainties
of litigation; as well as other risks and uncertainties identified
in Item 1A of our annual report for the year ended December 31,
2015, filed on Form 10-K with the Securities and Exchange
Commission on February 26, 2016 and in Item 1A of our quarterly
report on Form 10-Q filed with the Securities and Exchange
Commission on April 28, 2016. The Company's forward-looking
statements do not reflect the potential future impact of any
alliance, merger, acquisition, disposition or stock repurchases.
The forward-looking statements speak only as of the date of this
earnings release and undue reliance should not be placed on these
statements. The Company disclaims any obligation to update any
forward-looking statements as a result of new information, future
events or otherwise.
WEX INC.
CONDENSED CONSOLIDATED STATEMENTS
OF
INCOME
(in thousands, except per share
data)
(unaudited)
Three months ended September 30,
Nine months ended September 30, 2016
2015 2016 2015 Revenues Payment
processing revenue
$ 146,182 $ 133,198
$
383,319 $ 378,714 Account servicing revenue
58,815
39,578
150,770 115,000 Finance fee revenue
36,138
23,502
92,348 64,094 Other revenue
46,621
29,779
101,184 84,187 Total revenues
287,756 226,057
727,621 641,995
Expenses
Salary and other personnel
76,706 57,174
206,778
174,682 Restructuring
2,531 (45 )
7,626 8,514 Service
fees
53,415 36,924
136,098 100,935 Provision for
credit losses
9,489 6,635
19,849 14,532 Technology
leasing and support
12,517 10,157
34,525 29,612
Occupancy and equipment
7,271 5,240
19,096 15,271
Depreciation and amortization
46,008 20,778
91,381
62,924 Operating interest expense
2,599 1,483
5,490
4,419 Cost of hardware and equipment sold
859 706
2,429 2,499 Other
21,793 19,260
57,018 50,919
Gain on divestiture
— —
—
(1,215 ) Total operating expenses
233,188
158,312
580,290 463,092
Operating income
54,568 67,745
147,331 178,903
Financing interest expense
(35,064 ) (11,330 )
(87,040 ) (35,334 ) Net foreign currency gain (loss)
5,932 6,525
17,233 (12 ) Net realized and unrealized
gain on fuel price derivative instruments
— 7,922
711
4,671 Non-cash adjustments related to tax receivable agreement
(168 ) 1,634
(168 ) 1,634
Income before income taxes
25,268 72,496
78,067
149,862 Income taxes
6,065 30,714
23,730 61,647
Net income 19,203
41,782
54,337 88,215 Less: Net (loss) gain attributable to
non-controlling interests
(493 ) 203
(1,013 ) (2,201 )
Net earnings attributable to WEX
Inc. $ 19,696 $ 41,579
$ 55,350 $
90,416 Accretion of non-controlling interest
— (9,413
)
— (9,413 )
Net earnings attributable to
shareholders $ 19,696 $ 32,166
$ 55,350 $ 81,003
Net earnings
attributable to shareholders per share: Basic
$
0.46 $ 0.83
$ 1.38 $ 2.09 Diluted
$
0.46 $ 0.83
$ 1.38 $ 2.08
Weighted average
common shares outstanding: Basic
42,788 38,745
40,126 38,780 Diluted
42,871 38,808
40,199
38,852
WEX INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except per share
data)
(unaudited)
September 30, 2016
December 31, 2015 Assets Cash and cash
equivalents
$ 537,150 $ 279,989 Accounts receivable
(less reserve for credit losses of $13,987 in 2016 and $13,832 in
2015)
2,061,358 1,508,605 Securitized accounts receivable,
restricted
89,252 87,724 Income taxes receivable
11,006 — Available-for-sale securities
24,160 18,562
Fuel price derivatives, at fair value
— 5,007 Property,
equipment and capitalized software (net of accumulated depreciation
of $224,075 in 2016 and $192,140 in 2015)
162,473 138,585
Deferred income taxes, net
43,362 10,303 Goodwill
1,894,663 1,112,878 Other intangible assets, net
1,293,124 470,712 Other assets
270,142 215,544
Total assets $ 6,386,690 $
3,847,909
Liabilities and Stockholders’ Equity
Accounts payable
$ 711,101 $ 378,811 Accrued expenses
287,523 156,180 Income taxes payable
2,181 2,732
Deposits
1,286,595 870,518 Securitized debt
83,868
82,018 Revolving line-of-credit facilities and term loan, net
1,702,265 664,918 Deferred income taxes, net
227,451
83,912 Notes outstanding, net
395,351 394,800 Other debt
108,127 50,046 Amounts due under tax receivable agreement
49,612 57,537 Other liabilities
14,411 10,756
Total liabilities 4,868,485 2,752,228
Commitments and contingencies
Stockholders’ Equity Common
stock $0.01 par value; 175,000 shares authorized; 47,171 shares
issued in 2016 and 43,079 in 2015; 42,840 shares outstanding in
2016 and 38,746 in 2015
472 431 Additional paid-in capital
542,010 174,972 Non-controlling interest
11,614
12,437 Retained earnings
1,238,984 1,183,634 Accumulated
other comprehensive income
(102,533 ) (103,451 ) Less
treasury stock at cost; 4,428 shares in 2016 and 2015
(172,342 ) (172,342 )
Total stockholders’
equity 1,518,205 1,095,681
Total
liabilities and stockholders’ equity $ 6,386,690
$ 3,847,909
Exhibit 1
Reconciliation of GAAP Net Earnings
Attributable to Shareholders to Adjusted Net Income Attributable to
Shareholders
(in thousands, excepts per share data)
(unaudited)
Three months ended September 30, 2016
2015
per diluted share
per diluted share
Net earnings attributable to shareholders
$
19,696 $ 0.46 $ 32,166
$ 0.83 Acquisition and divestiture related items
46,955 1.10 11,888 0.31 Debt
restructuring and debt issuance cost amortization
9,106 0.21
778 0.02 Stock-based compensation
5,199 0.12 3,067 0.08
Restructuring and other costs
3,767 0.09 (45 ) — Changes in
unrealized fuel price derivatives
— — 3,251 0.08 Net foreign
currency remeasurement gains
(5,932 ) (0.14 ) (6,525
) (0.17 ) Non-cash adjustments related to tax receivable agreement
168 — (1,634 ) (0.04 ) Regulatory reserve
— — 2,250
0.06 ANI adjustments attributable to non-controlling interest
(339 ) (0.01 ) 9,025 0.23 Tax related items
(25,214 ) (0.59 ) (3,827 ) (0.10
)
Adjusted Net Income attributable to shareholders $
53,406 $ 1.25 $ 50,394 $ 1.30
Nine months
ended September 30, 2016 2015
per diluted share
per diluted share
Net earnings attributable to shareholders
$
55,350 $ 1.38 $ 81,003
$ 2.08 Acquisition and divestiture related items
108,805 2.71 34,843 0.90 Debt restructuring and debt
issuance cost amortization
10,649 0.26 2,319 0.06
Stock-based compensation
14,312 0.36 10,227 0.26
Restructuring and other costs
11,689 0.29 8,514 0.22 Changes
in unrealized fuel price derivatives
5,007 0.12 27,552 0.71
Net foreign currency remeasurement (gain) loss
(17,233
) (0.43 ) 12 — Non-cash adjustments related to tax
receivable agreement
168 — (1,634 ) (0.04 ) Regulatory
reserve
— — 2,250 0.06 ANI adjustments attributable to
non-controlling interest
(1,200 ) (0.03 ) 5,407 0.14
Tax related items
(53,505 ) (1.33 )
(24,570 ) (0.63 )
Adjusted Net Income attributable to
shareholders $ 134,042 $ 3.33 $ 145,923 $ 3.76
Note: per share amounts may not sum
due to rounding
The Company's non-GAAP adjusted net income guidance excludes
acquisition and divestiture related items, debt restructuring and
debt issuance cost amortization, stock-based compensation,
restructuring and other costs, changes in unrealized fuel price
derivatives, net foreign currency remeasurement gains and losses,
non-cash adjustments related to tax receivable agreement, reserves
for regulatory penalties, similar adjustments attributed to our
non-controlling interest and certain tax related items.
Although adjusted net income is not calculated in accordance
with generally accepted accounting principles (GAAP), this non-GAAP
measure is integral to the Company's reporting and planning
processes and the chief operating decision maker of the Company
uses it to allocate resources. The Company considers this measure
integral because in the periods prior to the second quarter of
2016, it eliminated the non-cash volatility associated with fuel
price related derivative instruments, and it continues to exclude
other specified items that the Company's management excludes in
evaluating the Company's performance. Specifically, in addition to
evaluating the Company's performance on a GAAP basis, management
evaluates the Company's performance on a basis that excludes the
above items because:
- The Company considers certain
acquisition-related costs, including certain financing costs,
ticking fees, investment banking fees, warranty and indemnity
insurance, acquisition-related expenses and amortization of
acquired intangibles, as well as gains and losses from divestitures
to be unpredictable, dependent on factors that may be outside of
our control and unrelated to the continuing operations of the
acquired or divested business or the Company. In prior periods not
reflected above, the Company has adjusted for goodwill impairments
and acquisition related asset impairments. In addition, the size
and complexity of an acquisition, which often drives the magnitude
of acquisition-related costs, may not be indicative of such future
costs. The Company believes that excluding acquisition-related
costs and gains or losses of divestitures facilitates the
comparison of our financial results to the Company's historical
operating results and to other companies in our industry.
- Debt issuance cost amortization is a
non-cash item. Additionally, both these and the costs associated
with debt restructuring are unrelated to the continuing operations
of the Company. Because these types of costs are dependent upon the
financing method which can vary widely company to company, we
believe that excluding these costs helps to facilitate comparison
to historical results as well as to other companies within our
industry.
- Stock-based compensation is different
from other forms of compensation, as it is a non-cash expense. For
example, a cash salary generally has a fixed and unvarying cash
cost. In contrast, the expense associated with an equity-based
award is generally unrelated to the amount of cash ultimately
received by the employee, and the cost to the Company is based on a
stock-based compensation valuation methodology and underlying
assumptions that may vary over time.
- Restructuring costs are related to
employee termination benefits from certain identified initiatives
to further streamline the business, improve the Company's
efficiency, create synergies, and to globalize the Company's
operations, all with an objective to improve scale and increase
profitability going forward. We exclude these items when evaluating
our continuing business performance as such items are not
consistently occurring and do not reflect expected future operating
expense, nor provide insight into the fundamentals of current or
past operations of our business.
- Exclusion of the non-cash,
mark-to-market adjustments on fuel-price related derivative
instruments helps management identify and assess trends in the
Company's underlying business that might otherwise be obscured due
to quarterly non-cash earnings fluctuations associated with
fuel-price-related derivative contracts.The non-cash,
mark-to-market adjustments on derivative instruments are difficult
to forecast accurately, making comparisons across historical and
future quarters difficult to evaluate.
- Net foreign currency gains and losses
primarily result from the remeasurement to functional currency of
cash, receivable and payable balances, certain intercompany notes
denominated in foreign currencies and any gain or loss on foreign
currency hedges relating to these items. The exclusion of these
items helps management compare changes in operating results between
periods that might otherwise be obscured due to currency
fluctuations.
- Regulatory reserves reflect charges
related to the estimated impact of a regulatory action which
resulted in WEX paying a penalty. We have excluded this item when
evaluating our continuing business performance as it is not
consistently recurring and does not reflect an expected future
operating expense, nor provide insight into the fundamentals of the
current or past operations of our business.
- The adjustments attributable to
non-controlling interests, including adjustments to the redemption
value of a non-controlling interest, and the non-cash adjustments
related to tax receivable agreement have no significant impact on
the ongoing operations of the business.
- The tax related items are the
difference between the Company’s U.S. GAAP tax provision and a pro
forma tax provision based upon the Company’s adjusted net income
before taxes as well as the impact from certain discrete tax items.
The methodology utilized for calculating the Company’s adjusted net
income tax provision is the same methodology utilized in
calculating the Company’s U.S. GAAP tax provision.
For the same reasons, WEX believes that adjusted net income may
also be useful to investors as one means of evaluating the
Company's performance. However, because adjusted net income is a
non-GAAP measure, it should not be considered as a substitute for,
or superior to, net income, operating income or cash flows from
operating activities as determined in accordance with GAAP. In
addition, adjusted net income as used by WEX may not be comparable
to similarly titled measures employed by other companies. The
Company is unable to reconcile our adjusted net income guidance to
the comparable GAAP measure because of the difficulty in predicting
the amounts to be adjusted.
The table below shows the impact of certain macro factors on
reported revenue:
Exhibit 2
Segment Revenue Results(in
thousands) (unaudited)
Fleet Solutions
Travel and Corporate
Solutions
Health and Employee Benefit
Solutions
Total WEX Inc. Three months ended September
30, 2016 2015
2016 2015
2016 2015
2016 2015
Reported revenue
$ 184,758 142,837
$63,315 $56,482
$39,683 $26,738
$287,756 $ 226,057 FX impact (favorable) /
unfavorable
(694 ) —
1,144 —
(544
) —
(94 ) — PPG impact (favorable) /
unfavorable
10,726 —
— —
— —
10,726
—
Nine months ended September 30, 2016
2015
2016 2015
2016
2015
2016 2015 Reported revenue
$ 449,791 411,770
$161,795 $147,769
$116,035 $82,456
$727,621 $ 641,995 FX impact
(favorable) / unfavorable
2,361 —
2,967 —
1,545 —
6,873 — PPG impact (favorable) / unfavorable
40,170 —
— —
— —
40,170 —
To determine the impact of foreign exchange translation (“FX”)
on revenue, revenue from entities whose functional currency is not
denominated in U.S. dollars, as well as revenue from purchase
volume transacted in non-US denominated currencies, were translated
using the weighted average exchange rates for the same period in
the prior year.
To determine the impact of price per gallon of fuel (“PPG”) on
revenue, revenue variable to changes in fuel prices was calculated
based on the average retail price of fuel for the same period in
the prior year for the portion of our business that earns revenue
based on a percentage of fuel spend. For the portions of our
business that earns revenue based on margin spreads, revenue was
calculated utilizing the comparable margin from the prior year.
The table below shows management's estimate of the impact of
certain macro factors on reported Adjusted Net Income:
Segment Estimated Earnings
Impact
(in thousands)
(unaudited)
Fleet Solutions
Travel and Corporate
Solutions
Health and Employee Benefit
Solutions
Three months ended September 30, 2016 2015
2016 2015
2016
2015 FX impact (favorable) / unfavorable
$
(11
) —
$336
—
$
(189
) — PPG impact (favorable) / unfavorable
6,443
—
— —
— — Realized gain on hedge settlement
—
6,635
— —
— —
Nine
months ended September 30, 2016 2015
2016 2015
2016
2015 FX impact (favorable) / unfavorable
$
734
—
$870
—
$266
— PPG impact (favorable) / unfavorable
24,233 —
— —
— — Realized gain on hedge settlement
—
20,023
— —
—
—
To determine the estimated earnings impact of foreign exchange
translation (“FX”), revenue and expenses from entities whose
functional currency is not denominated in U.S. dollars, as well as
revenue and variable expenses from purchase volume transacted in
non-US denominated currencies, were translated using the weighted
average exchange rates for the same period in the prior year, net
of tax.
To determine the estimated earnings impact of price per gallon
of fuel (“PPG”), revenue and certain variable expenses impacted by
changes in fuel prices, were adjusted based on the average retail
price of fuel for the same period in the prior year for the portion
of our business that earns revenue based on a percentage of fuel
spend, net of applicable taxes. For the portions of our business
that earn revenue based on margin spreads, revenue was adjusted to
the comparable margin from the prior year, net of applicable
taxes.
Exhibit 3Selected Non-Financial Metrics
(unaudited)
Q3 2016 Q2 2016 Q1 2016 Q4 2015
Q3 2015
Fleet Solutions – Payment Processing Revenue:
Payment processing transactions (000s)
102,947 94,155 89,097 84,763 89,578 Gallons per payment
processing transaction
27.0 22.6 22.7 23.3 23.0 Payment
processing gallons of fuel (000s)
2,776,622 2,126,372
2,018,310 1,972,028 2,064,100 Average US fuel price (US$ / gallon)
$ 2.24 $ 2.29 $ 1.97 $ 2.29 $ 2.61 Average Australian
fuel price (US$ / gallon)
$ 3.45 $ 3.29 $ 3.10 $ 3.36
$ 3.63 Payment processing $ of fuel (000s)
$
6,593,406 $ 5,236,151 $ 4,336,399 $ 5,000,752 $ 5,825,928
Net payment processing rate
1.26 % 1.35 % 1.44 % 1.46
% 1.38 % Fleet payment processing revenue (000s)
$
83,132 $ 70,711 $ 62,290 $ 72,995 $ 80,230
Travel and
Corporate Solutions – Payment Processing Revenue: Purchase
volume (000s)
$ 7,138,956 $ 5,595,326 $ 4,879,001 $
4,567,831 $ 5,800,134 Net interchange rate
0.74 %
0.77 % 0.71 % 0.80 % 0.76 % Payment solutions processing revenue
(000s)
$ 52,551 $ 43,194 $ 34,626 $ 36,726 $ 44,386
Health and Employee Benefit Solutions: Purchase volume
(000s)
$ 875,598 $ 1,051,839 $ 1,092,552 $ 591,445 $
651,845
Definitions and explanations:
Payment processing transactions represents the total number of
purchases made by fleets that have a payment processing
relationship with WEX.
Payment processing gallons of fuel represents the total number
of gallons of fuel purchased by fleets that have a payment
processing relationship with WEX.
Payment processing dollars of fuel represents the total dollar
value of the fuel purchased by fleets that have a payment
processing relationship with WEX.
Net payment processing rate represents the percentage of the
dollar value of each payment processing transaction that WEX
records as revenue from merchants less any discounts given to
fleets or strategic relationships.
Payment solutions purchase volume represents the total dollar
value of all transactions that use WEX corporate card products
including single use account products.
Net interchange rate represents the percentage of the dollar
value of each transaction that WEX records as revenue less any
discounts given to customers.
Exhibit 4
Segment Revenue Information
Third Quarter Ended September 30, 2016
and 2015
(in thousands)
(unaudited)
Fleet Solutions
Three months ended September
30,
Increase (decrease)
Nine months ended September
30,
Increase (decrease) 2016 2015
Amount Percent
2016 2015 Amount Percent
Revenues
Payment processing revenue
$
83,132 $ 80,230 $ 2,902 3.6 %
$
216,133 $ 233,300 $ (17,167 ) (7.4 )% Account
servicing revenue
37,414 26,024 11,390 43.8 %
90,400
75,267 15,133 20.1 % Finance fee revenue
33,230 21,794
11,436 52.5 %
85,841 59,858 25,983 43.4 % Other revenue
30,982 14,789 16,193
109.5 %
57,417 43,345 14,072
32.5 % Total revenues
$ 184,758 $ 142,837 $
41,921 29.3 %
$ 449,791 $ 411,770 $
38,021
9.2 %
Travel and Corporate Solutions
Three months ended September
30,
Increase (decrease)
Nine months ended September
30,
Increase (decrease) 2016 2015
Amount Percent
2016 2015 Amount Percent
Revenues Payment processing revenue
$ 52,551 $
44,387 $ 8,164 18.4 %
$ 130,372 $ 114,586
$
15,786
13.8 % Account servicing revenue
242 449 (207 ) (46.1 )%
852 1,329 (477 ) (35.9 )% Finance fee revenue
115 104
11 10.6 %
336 233 103 44.2 % Other revenue
10,407 11,542 (1,135 ) (9.8 )%
30,235 31,621 (1,386 ) (4.4 )%
Total revenues
$ 63,315 $ 56,482 $ 6,833 12.1 %
$ 161,795 $ 147,769
$
$14,026 9.5 %
Health and Employee Benefit Solutions
Three months ended September
30,
Increase (decrease)
Nine months ended September
30,
Increase (decrease) 2016 2015
Amount Percent
2016 2015 Amount Percent
Revenues Payment processing revenue
$ 10,499 $
8,581 $ 1,918 22.4 %
$ 36,814 $ 30,828
$
5,986
19.4 % Account servicing revenue
21,159 13,105 8,054 61.5 %
59,518 38,404 21,114 55.0 % Finance fee revenue
2,793
1,604 1,189 74.1 %
6,171 4,003 2,168 54.2 % Other revenue
5,232 3,448 1,784 51.7 %
13,532 9,221 4,311
46.8 % Total revenues
$ 39,683 $ 26,738 $ 12,945 48.4
%
$ 116,035 $ 82,456
$
$33,579 40.7 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161027005388/en/
News media:WEX Inc.Jessica Roy,
207-523-6763Jessica.Roy@wexinc.comorInvestor:WEX Inc.Steve
Elder, 207-523-7769Steve.Elder@wexinc.com
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