FLEETCOR Technologies, Inc. (NYSE:FLT), a leading global
provider of commercial payment solutions, today reported financial
results for its second quarter ended June 30, 2017.
“We reported another very good quarter, with adjusted net income
per diluted share growth of 26%, and organic revenue growth of
approximately 9% in the quarter, on a constant fuel price,
currency, and spread basis,” said Ron Clarke, chairman and chief
executive officer, FLEETCOR Technologies, Inc. “We recently
completed the sale of our Nextraq business, we announced the
upsizing of our senior credit facility, and accelerated share
repurchase (ASR) agreement.”
Financial Results for Second Quarter of 2017:
GAAP Results
- Total revenues increased 29.5% to
$541.2 million in the second quarter of 2017 compared to $417.9
million in the second quarter of 2016.
- GAAP net income increased 12.7% to
$131.0 million in the second quarter of 2017 compared to $116.3
million2 in the second quarter of 2016.
- GAAP net income per diluted share
increased 13.9% to $1.39 in the second quarter of 2017 compared to
$1.22 per diluted share2 in the second quarter of 2016.
Non-GAAP Results1
- Adjusted revenues1 (revenues, net less
merchant commissions) increased 29.1% to $510.6 million in the
second quarter of 2017 compared to $395.6 million in the second
quarter of 2016.
- Adjusted net income1 increased 24.7% to
$187.0 million in the second quarter of 2017 compared to $150.0
million2 in the second quarter of 2016.
- Adjusted net income per diluted share1
increased 26% to $1.99 in the second quarter of 2017 compared to
$1.57 per diluted share2 in the second quarter of 2016.
Fiscal-Year 2017 Outlook:
“We are raising our guidance to reflect our second quarter
results compared to our expectations. We also are estimating that
the impact of the sale of the Nextraq business, the acquisition of
Cambridge, and impact of the ASR will have a neutral impact on our
rest of year results, but will be cumulatively accretive on an
annual basis.” said Eric Dey, chief financial officer, FLEETCOR
Technologies, Inc.
For 2017, FLEETCOR Technologies, Inc. financial guidance is as
follows:
- Total revenues between $2,195 million
and $2,245 million;
- GAAP net income between $545 million
and $565 million;
- GAAP net income per diluted share
between $5.80 and $6.00;
- Adjusted net income1 between $775
million and $795 million; and
- Adjusted net income per diluted share1
between $8.24 and $8.44.
FLEETCOR’s guidance assumptions for 2017 are as follows:
- Weighted fuel prices equal to $2.43 per
gallon average in the U.S. for those businesses sensitive to the
movement in the retail price of fuel for 2017.
- Market spreads returning to historical
levels.
- Foreign exchange rates as of June 30,
2017. A slight improvement from prior guidance.
- SVS business is retained for 2017.
- Interest expense of $108 million in
2017.
- Fully diluted shares outstanding of 94
million shares. This assumes an approximate 600,000 share impact
from the ASR for the balance of the year.
- Full year tax rate of 29.2%.
- The Nextraq business was sold on July
17, 2017 and is not included in the Company’s rest of year
guidance. The impact of removing Nextraq is an approximate
reduction of $0.08 in adjusted net income per diluted share. The
Company estimates it will recognize a net gain on sale of Nextraq
of approximately $90 million or $0.95 per diluted share, which is
not included in guidance.
- The Company assumes that the Cambridge
Global Payments acquisition will close by September 1, and is
included in guidance. The impact of the Cambridge acquisition in
the Company’s second half guidance is approximately $0.04 to $0.05
in adjusted net income per diluted share, net of deal related
expenses.3
- No impact related to acquisitions or
material new partnership agreements not already disclosed.
The Company’s volumes build throughout the year and new asset
initiatives gain momentum throughout the year resulting in higher
earnings per share in the third and fourth quarters. For the third
quarter, the Company is expecting adjusted net income per diluted
share to be in the range of $2.09 to $2.16.
_________________________________________ 1 Reconciliations of GAAP
results to non-GAAP results are provided in Exhibit 1 attached.
Additional supplemental data is provided in Exhibit 2-3 and 5-6,
and segment information is provided in Exhibit 4. A reconciliation
of GAAP guidance to non-GAAP guidance is provided in Exhibit 7.
2 Reflects the impact of the Company’s
adoption of Accounting Standard’s Update 2016-09,
Compensation-Stock Compensation (Topic 718): Improvements to
Employee Share-Based Payment Accounting, to simplify several
aspects of the accounting for share-based compensation, including
the income tax consequences. See Exhibit 6 for a reconciliation to
previously issued results.
3 There can be no assurance that the Cambridge acquisition will
close on September 1. The actual 2017 impact will depend on the
actual date of closing.
Conference Call
The Company will host a conference call to discuss second
quarter 2017 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) 407-0784, or for international callers
(201) 689-8560. A replay will be available one hour after the call
and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for
international callers; the conference ID is 13667017. The replay
will be available until August 10, 2017. 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 macro- economic
conditions and estimated impact of these conditions on our
operations and financial results, expected timing of acquisitions
and dispositions, revenue and earnings guidance and assumptions
underlying financial guidance. 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 fuel price and spread
volatility; 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; 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 customer arrangements or
acquisitions and the failure to successfully integrate or otherwise
achieve anticipated benefits from such customer arrangements or
acquired businesses; failure to successfully expand business
internationally, risks related to litigation, our ability to
complete an accelerated share repurchase, 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, 2016, filed with the Securities and Exchange
Commission on March 1, 2017. 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 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, discounts and intangible assets, (c)
amortization of the premium recognized on the purchase of
receivables, (d) our proportionate share of amortization of
intangible assets at our equity method investment, (e) a
non-recurring net gain at our equity method investment and (f)
impairment of our equity method investment. The Company uses
adjusted revenue 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
revenues, 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
believe one-time non-recurring gains and impairment charges do not
necessarily reflect how our equity method investment and business
is performing. Reconciliations of GAAP results to non-GAAP results
are provided in the attached exhibit 1. A reconciliation of GAAP to
non-GAAP product revenue organic growth calculation is provided in
the attached exhibit 5. A reconciliation of the impact of the
adoption of ASU 2016-09 to GAAP and non-GAAP results is provided in
the attached exhibit 6. A reconciliation of GAAP to non-GAAP
guidance is provided in the attached exhibit 7.
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, adjusted net income, and adjusted
net income per diluted share 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 Technologies (NYSE: FLT) is a leading global provider
of commercial payment solutions. The Company helps businesses of
all sizes better control, simplify and secure payment of their
fuel, toll, lodging and other general payables. With its
proprietary payment acceptance networks, FLEETCOR provides
affiliated merchants with incremental sales and loyalty. FLEETCOR
serves businesses, partners and merchants in North America, Latin
America, Europe, and Australasia. For more information, please
visit www.FLEETCOR.com.
FleetCor Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income (In
thousands, except per share amounts)
Three Months Ended
June 30, Six Months Ended June 30, 2017
20161
2017
20161
Revenues, net $ 541,237 $ 417,905 $ 1,061,670 $ 832,167
Expenses: Merchant commissions 30,619 22,308 55,003 50,541
Processing 103,322 80,691 205,146 160,505 Selling 38,957 31,947
77,794 58,500 General and administrative 87,569 63,586 183,003
131,180 Depreciation and amortization 64,709 48,436 129,575 84,764
Other operating, net 18 (231 ) 38
(446 ) Operating income 216,043 171,168
411,111 347,123 Equity method
investment loss (income) 2,354 (7,184 ) 4,731 (4,991 ) Other
(income) expense, net (551 ) 104 1,645 763 Interest expense, net
23,851 15,900 46,978
32,091 Total other expense 25,654 8,820
53,354 27,863 Income before income
taxes 190,389 162,348 357,757 319,260 Provision for income taxes
59,402 46,095 103,077
91,917 Net income $ 130,987 $ 116,253 $
254,680 $ 227,343 Basic earnings per share $ 1.42 $
1.25 $ 2.77 $ 2.46 Diluted earnings per share $ 1.39 $ 1.22 $ 2.70
$ 2.39 Weighted average shares outstanding: Basic shares
92,013 92,665 92,060 92,591 Diluted shares 94,223 95,279 94,392
95,137
1
Reflects the impact of the Company's
adoption of Accounting Standards Update 2016-09, Compensation-Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting, to simplify several aspects of the accounting
for share-based compensation, including the income tax
consequences. See Exhibit 6 for a reconciliation to previously
issued results.
FleetCor Technologies, Inc. and
Subsidiaries
Consolidated Balance Sheets (In thousands, except share
and par value amounts) June 30,
2017 December 31, 2016 (Unaudited)
Assets Current assets: Cash and cash equivalents $
564,578 $ 475,018 Restricted cash 201,039 168,752
Accounts and other receivables (less
allowance for doubtful accounts of $47,836 atJune 30, 2017 and
$32,506 at December 31, 2016)
1,429,563 1,202,009 Securitized accounts receivable - restricted
for securitization investors 741,000 591,000 Prepaid expenses and
other current assets 109,178 90,914
Total current assets 3,045,358
2,527,693 Property and equipment, net 154,278 142,504
Goodwill 4,212,523 4,195,150 Other intangibles, net 2,562,326
2,653,233 Investments 40,845 36,200 Other assets 86,381
71,952 Total assets $ 10,101,711
$ 9,626,732
Liabilities and Stockholders’
Equity Current liabilities: Accounts payable $ 1,240,766
$ 1,151,432 Accrued expenses 206,073 238,812 Customer deposits
688,574 530,787 Securitization facility 741,000 591,000 Current
portion of notes payable and lines of credit 702,444 745,506 Other
current liabilities 40,169 38,781
Total current liabilities 3,619,026
3,296,318 Notes payable and other obligations, less
current portion 2,394,621 2,521,727 Deferred income taxes 637,162
668,580 Other noncurrent liabilities 45,402
56,069 Total noncurrent liabilities 3,077,185
3,246,376 Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value;
475,000,000 shares authorized, 121,712,973 sharesissued and
91,878,784 shares outstanding at June 30, 2017; and 121,259,960
sharesissued and 91,836,938 shares outstanding at December 31,
2016
122 121 Additional paid-in capital 2,136,913 2,074,094 Retained
earnings 2,473,401 2,218,721 Accumulated other comprehensive loss
(610,049 ) (666,403 ) Less treasury stock, 29,834,189 shares at
June 30, 2017 and 29,423,022 shares at December 31, 2016 (594,887 )
(542,495 ) Total stockholders’ equity
3,405,500 3,084,038 Total liabilities
and stockholders’ equity $ 10,101,711 $ 9,626,732
FleetCor Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows (In
thousands) Six Months Ended June
30, 2017
20161
Operating activities Net income $ 254,680 $ 227,343
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation 21,593 16,311 Stock-based
compensation 44,243 32,620 Provision for losses on accounts
receivable 27,648 13,729 Amortization of deferred financing costs
and discounts 3,800 3,651 Amortization of intangible assets 104,894
66,114 Amortization of premium on receivables 3,088 2,339 Deferred
income taxes (32,660 ) (9,248 ) Equity method investment loss
(income) 4,731 (4,991 ) Other non-cash operating income - (446 )
Changes in operating assets and liabilities (net of acquisitions):
Restricted cash (28,739 ) 13,555 Accounts and other receivables
(380,196 ) (392,545 ) Prepaid expenses and other current assets
(18,778 ) (4,636 ) Other assets (15,050 ) (9,362 ) Accounts
payable, accrued expenses and customer deposits 189,750
257,608 Net cash provided by operating
activities 179,004 212,042
Investing activities Acquisitions, net of cash
acquired (3,580 ) (5,299 ) Purchases of property and equipment
(32,600 ) (24,757 ) Other (6,327 ) (7,868 ) Net cash
used in investing activities (42,507 ) (37,924 )
Financing activities Proceeds from issuance of
common stock 16,432 7,964 Repurchase of common stock (52,393 )
(26,037 ) Borrowings on securitization facility, net 150,000 99,000
Principal payments on notes payable (66,725 ) (51,750 ) Borrowings
from revolver- A Facility 90,000 140,000 Payments on revolver- A
Facility (215,901 ) (290,000 ) Borrowings on swing line of credit,
net 10,245 – Other 537 (666 ) Net cash used in
financing activities (67,805 ) (121,489 )
Effect of foreign currency exchange rates on cash 20,868
(6,696 ) Net increase in cash and cash
equivalents 89,560 45,933 Cash and cash equivalents, beginning of
period 475,018 447,152 Cash and cash
equivalents, end of period $ 564,578 $ 493,085
Supplemental cash flow information Cash paid for interest $
68,431 $ 30,361 Cash paid for income taxes $
188,157 $ 64,345
1
Reflects the impact of the Company's
adoption of Accounting Standards Update 2016-09, Compensation-Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting, to simplify several aspects of the accounting
for share-based compensation, including the income tax
consequences. See Exhibit 6 for a reconciliation to previously
issued results.
Exhibit 1 RECONCILIATION OF NON-GAAP
MEASURES (In thousands, except per share amounts)
(Unaudited)
The following table reconciles revenues, net
to adjusted revenues:
Three
Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016 Revenues,
net $ 541,237 $ 417,905 $ 1,061,670 $ 832,167 Merchant commissions
30,619 22,308 55,003
50,541 Total adjusted revenues $ 510,618 $
395,597 $ 1,006,667 $ 781,626
The
following table reconciles net income to adjusted net income and
adjusted net income per diluted share:*
Three Months
Ended June 30, Six Months Ended June 30, 2017
20161
2017
20161
Net income $ 130,987 $ 116,253 $ 254,680 $ 227,343 Stock
based compensation 21,150 17,434 44,243 32,620 Amortization of
intangible assets 52,240 38,752 104,894 66,114 Amortization of
premium on receivables 1,544 1,349 3,088 2,339 Amortization of
deferred financing costs and discounts 1,886 1,829 3,800 3,651
Amortization of intangibles at equity method investment 2,917 2,824
5,376 5,127 Non recurring net gain at equity method investment -
(10,845 ) - (10,845 ) Total pre-tax
adjustments 79,737 51,343 161,401 99,006 Income tax impact
of pre-tax adjustments at the effective tax rate2 (23,675 ) (17,635
) (44,055 ) (30,699 ) Adjusted net
income $ 187,049 $ 149,960 $ 372,026 $ 295,650
Adjusted net income per diluted share $ 1.99 $ 1.57 $ 3.94 $
3.11 Diluted shares 94,223 95,279 94,392 95,137 *
Columns may not calculate due to impact of rounding. 1 Reflects the
impact of the Company's adoption of Accounting Standards Update
2016-09, Compensation-Stock Compensation (Topic 718): Improvements
to Employee Share-Based Payment Accounting, to simplify several
aspects of the accounting for share-based compensation, including
the income tax consequences. See Exhibit 6 for a reconciliation to
previously issued results. 2 Excludes the results of our equity
method investment on our effective tax rate, as results from our
equity method investment are reported within the Consolidated
Income Statements on a post-tax basis and no tax-over-book outside
basis differences related to our equity method investment reversed
during 2016 or are expected to reverse in 2017.
Exhibit
2
Transaction Volume and Revenues Per
Transaction by Segment and by Product Category, on a GAAP Basis and
Pro Forma and Macro Adjusted
(In millions except revenues, net per transaction)
(Unaudited) The following table presents revenue and revenue
per transaction, by segment.*
As Reported Three
Months Ended June 30, Six Months Ended June 30,
2017 2016 Change % Change 2017
2016 Change % Change
NORTH
AMERICA
- Transactions 430.7 411.6 19.1 5 % 904.7 846.1 58.6 7 % -
Revenues, net per transaction $ 0.80 $ 0.73 $ 0.06 9 % $ 0.74 $
0.71 $ 0.03 4 % - Revenues, net $ 343.0 $ 301.1 $ 41.9 14 % $ 672.9
$ 604.7 $ 68.3 11 %
INTERNATIONAL
- Transactions 271.3 53.4 217.9 408 % 542.2 106.0 436.3 412 % -
Revenues, net per transaction $ 0.73 $ 2.19 $ (1.46 ) (67 %) $ 0.72
$ 2.15 $ (1.43 ) (67 %) - Revenues, net $ 198.2 $ 116.8 $ 81.5 70 %
$ 388.7 $ 227.5 $ 161.2 71 %
FLEETCOR
CONSOLIDATED REVENUES
- Transactions 702.0 465.0 237.0 51 % 1,446.9 952.0 494.9 52 % -
Revenues, net per transaction $ 0.77 $ 0.90 $ (0.13 ) (14 %) $ 0.73
$ 0.87 $ (0.14 ) (16 %) - Revenues, net $ 541.2 $ 417.9 $ 123.3 30
% $ 1,061.7 $ 832.2 $ 229.5 28 %
The following
table presents revenue and revenue per transaction, by product
category.*
As Reported Pro Forma and Macro
Adjusted2 Three Months Ended June 30, Three
Months Ended June 30, 2017 2016 Change
% Change 2017 2016 Change %
Change
FUEL
CARDS
- Transactions 117.3 108.1 9.1 8 % 117.3 111.3 5.9 5 % - Revenues,
net per transaction $ 2.37 $ 2.23 $ 0.15 7 % $ 2.24 $ 2.18 $ 0.06 3
% - Revenues, net $ 278.2 $ 240.7 $ 37.5 16 % $ 263.0 $ 242.9 $
20.0 8 %
CORPORATE
PAYMENTS
- Transactions 10.4 9.9 0.5 5 % 10.4 9.9 0.5 5 % - Revenues, net
per transaction $ 4.85 $ 4.54 $ 0.31 7 % $ 4.84 $ 4.54 $ 0.30 7 % -
Revenues, net $ 50.2 $ 44.8 $ 5.4 12 % $ 50.1 $ 44.8 $ 5.3 12 %
TOLLS
- Transactions 222.5 9.6 212.9 2211 % 222.5 223.6 (1.0 ) (0 %) -
Revenues, net per transaction $ 0.34 $ 0.25 $ 0.09 37 % $ 0.31 $
0.27 $ 0.04 14 % - Revenues, net $ 76.0 $ 2.4 $ 73.6 3063 % $ 69.6
$ 61.3 $ 8.3 13 %
LODGING
- Transactions 3.4 3.3 0.1 2 % 3.4 3.3 0.1 2 % - Revenues, net per
transaction $ 8.57 $ 7.50 $ 1.06 14 % $ 8.57 $ 7.50 $ 1.06 14 % -
Revenues, net $ 29.0 $ 24.9 $ 4.1 16 % $ 29.0 $ 24.9 $ 4.1 16 %
GIFT
- Transactions 328.3 312.8 15.5 5 % 328.3 312.8 15.5 5 % -
Revenues, net per transaction $ 0.13 $ 0.12 $ 0.01 5 % $ 0.13 $
0.12 $ 0.01 5 % - Revenues, net $ 41.3 $ 37.4 $ 3.9 11 % $ 41.3 $
37.4 $ 3.9 11 %
OTHER1
- Transactions 20.1 21.3 (1.1 ) (5 %) 20.1 21.3 (1.1 ) (5 %) -
Revenues, net per transaction $ 3.31 $ 3.18 $ 0.12 4 % $ 3.34 $
3.18 $ 0.16 5 % - Revenues, net $ 66.6 $ 67.7 $ (1.1 ) (2 %) $ 67.3
$ 67.7 $ (0.4 ) (1 %)
FLEETCOR
CONSOLIDATED REVENUES
- Transactions 702.0 465.0 237.0 51 % 702.0 682.2 19.9 3 % -
Revenues, net per transaction $ 0.77 $ 0.90 $ (0.13 ) (14 %) $ 0.74
$ 0.70 $ 0.04 6 % - Revenues, net $ 541.2
$ 417.9 $ 123.3 30 % $ 520.2
$ 479.1 $ 41.1 9 % * Columns may
not calculate due to impact of rounding. 1 Other includes
telematics, maintenance, food, and transportation related
businesses. 2 See Exhibit 5 for a reconciliation of pro forma and
macro adjusted revenue by product, non-GAAP measures, to the GAAP
equivalent.
Exhibit 3 Revenues by
Geography, Product and Source (In millions)
(Unaudited)
Revenue by
Geography*
Three Months Ended June 30,
Six Months Ended June 30, 2017 %
2016 % 2017 %
2016 % US $ 343 63 % $ 301 72 %
$ 673 63 % $ 605 73 % UK 58 11 % 61 14 % 112 11 % 119 14 %
Brazil
93 17 % 19 4 % 186 18 % 35 4 % Other 47 9 % 38 9 %
90 8 % 73 9 % Consolidated Revenues, net $ 541
100 % $ 418 100 % $ 1,062 100 % $ 832 100 % * Columns may not
calculate due to impact of rounding.
Revenue by
Product Category*
Three Months Ended June 30, Six Months Ended June
30,8 2017 % 2016 %
2017 % 2016 % Fuel Cards $ 278
51 % $ 241 58 % $ 539 51 % $ 483 58 % Corporate Payments 50 9 % 45
11 % 97 9 % 86 10 % Tolls 76 14 % 2 1 % 153 14 % 5 1 % Lodging 29 5
% 25 6 % 53 5 % 46 5 % Gift 41 8 % 37 9 % 90 8 % 80 10 % Other
67 12 % 68 16 % 131 12 % 133 16 %
Consolidated Revenues, net $ 541 100 % $ 418 100 % $ 1,062
100 % $ 832 100 % * Columns may not calculate due to impact of
rounding.
Major Sources of
Revenue*
Three Months Ended June 30, Six Months Ended June
30,8 2017 % 2016 %
2017 % 2016 % Customer Processing and
Program Revenue1 $ 248 46 % $ 173 42 % $ 493 46 % $ 345 41 % Late
Fees and Finance Charges2 34 6 % 27 6 % 71 7 % 55 7 % Miscellaneous
Fees3 33 6 % 31 7 % 65 6 % 59 7 %
314 58 % 231 55 % 629 59 % 459 55 %
Merchant Discount Revenue (Fuel)4 74 14 % 66 16 % 146 14 % 126 15 %
Discount Revenue (NonFuel)5 44 8 % 39 9 % 85 8 % 76 9 % Tied to
Fuel-Price Spreads6 62 12 % 41 10 % 112 11 % 93 11 % Program
Revenue7 47 9 % 40 10 % 91 9 % 78 9 %
227 42 % 187 45 % 433 41 % 373 45 %
Consolidated Revenues, net $ 541 100 %
$ 418 100 % $ 1,062 100 % $ 832 100 % 1 Includes revenue
from customers based on accounts, cards, devices, transactions,
load amounts and/or purchase amounts, etc. for participation in our
various fleet and workforce related programs; as well as, revenue
from partners (e.g., major retailers, leasing companies, oil
companies, petroleum marketers, etc.) for processing and network
management services. Primarily represents revenue from North
American trucking, lodging, prepaid benefits, telematics, gift
cards and toll related businesses. 2 Fees for late payment and
interest charges for carrying a balance charged to a customer. 3
Non-standard fees charged to customers based on customer behavior
or optional participation, primarily including high credit risk
surcharges, over credit limit charges, minimum processing fees,
printing and mailing fees, environmental fees, etc. 4 Interchange
revenue directly influenced by the absolute price of fuel and other
interchange related to fuel products. 5 Interchange revenue related
to nonfuel products. 6 Revenue derived from the difference between
the price charged to a fleet customer for a transaction and the
price paid to the merchant for the same transaction. 7 Revenue
derived primarily from the sale of equipment, software and related
maintenance to merchants. 8Amounts shown for the six months ended
June 30, 2017 and 2016 reflect immaterial corrections in estimated
allocation of revenue by product and sources of revenue from
previously disclosed amounts for the prior period. * We may not be
able to precisely calculate revenue by source, as certain estimates
were made in these allocations. Columns may not calculate due to
impact of rounding. This table reflects how management views the
sources of revenue and may not be consistent with prior disclosure.
Exhibit 4 Segment Results (In
thousands) (Unaudited)
Three Months Ended June
30, Six Months Ended June 30, 2017 2016
2017 2016 Revenues, net: North America $ 342,995 $
301,126 $ 672,943 $ 604,674 International 198,242
116,779 388,727 227,493 $ 541,237 $ 417,905 $
1,061,670 $ 832,167 Operating income: North America $
134,926 $ 117,611 $ 255,898 $ 231,461 International 81,117
53,557 155,213 115,662 $ 216,043 $ 171,168 $
411,111 $ 347,123 Depreciation and amortization: North
America $ 33,384 $ 32,180 $ 66,561 $ 63,612 International
31,325 16,256 63,014 21,152 $ 64,709 $ 48,436
$ 129,575 $ 84,764 Capital expenditures: North America $
12,102 $ 8,579 $ 21,734 $ 16,521 International 5,702
4,439 10,866 8,236 $ 17,804 $ 13,018 $ 32,600 $
24,757
Exhibit 5 Reconciliation of Non-GAAP
Revenue and Transactions by Product to GAAP* (In
millions) (Unaudited)
Revenue Transactions Three Months Ended
June 30, Three Months Ended June 30, 2017
2016 2017 2016
FUEL
CARDS
Pro forma and macro adjusted2,3 $ 263.0 $ 242.9 117.3 111.3 Impact
of acquisitions/dispositions - (2.3 ) - (3.2 ) Impact of fuel
prices/spread 19.5 - - - Impact of foreign exchange rates
(4.3 ) - - - As reported $ 278.2 $
240.7 117.3 108.1
CORPORATE
PAYMENTS
Pro forma and macro adjusted2,3 $ 50.1 $ 44.8 10.4 9.9 Impact of
acquisitions/dispositions - - - - Impact of fuel prices/spread 0.1
- - - Impact of foreign exchange rates - -
- - As reported $ 50.2 $ 44.8 10.4 9.9
TOLLS
Pro forma and macro adjusted2,3 $ 69.6 $ 61.3 222.5 223.6 Impact of
acquisitions/dispositions - (58.9 ) - (213.9 ) Impact of fuel
prices/spread - - - - Impact of foreign exchange rates 6.4
- - - As reported $ 76.0 $ 2.4
222.5 9.6
LODGING
Pro forma and macro adjusted2,3 $ 29.0 $ 24.9 3.4 3.3 Impact of
acquisitions/dispositions - - - - Impact of fuel prices/spread - -
- - Impact of foreign exchange rates - -
- - As reported $ 29.0 $ 24.9 3.4 3.3
GIFT
Pro forma and macro adjusted2,3 $ 41.3 $ 37.4 328.3 312.8 Impact of
acquisitions/dispositions - - - - Impact of fuel prices/spread - -
- - Impact of foreign exchange rates - -
- - As reported $ 41.3 $ 37.4 328.3
312.8
OTHER1
Pro forma and macro adjusted2,3 $ 67.3 $ 67.7 20.1 21.3 Impact of
acquisitions/dispositions - - - - Impact of fuel prices/spread - -
- - Impact of foreign exchange rates (0.7 ) -
- - As reported $ 66.6 $ 67.7 20.1 21.3
FLEETCOR
CONSOLIDATED REVENUES
Pro forma and macro adjusted2,3 $ 520.2 $ 479.1 702.0 682.2 Impact
of acquisitions/dispositions - (61.2 ) - (217.1 ) Impact of fuel
prices/spread 19.7 - - - Impact of foreign exchange rates
1.4 - - - As reported $ 541.2 $
417.9 702.0 465.0 * Columns may not calculate
due to impact of rounding. 1 Other includes telematics,
maintenance, food, and transportation related businesses. 2 2016 is
pro forma to include acquisitions and exclude dispositions,
consistent with 2017 ownership.
3 2017 is adjusted to remove the impact of
changes in the macroeconomic environment to be consistent with the
same period of prior year, using constant fuel prices, fuel price
spreads and foreign exchange rates.
Exhibit 6 Reconciliation of the Impact of
the Company's Adoption of Accounting Standards Update 2016-09
(In thousands, except per share amounts) (Unaudited)
The following table reconciles the impact
of retrospectively applying ASU 2016-09 to the previously issued
consolidated statements ofincome for the three and six month
periods ended June 30, 2016:*
Three Months Ended
June 30, 2016 Six Months Ended June 30, 2016
As PreviouslyReported
Adjustments As Recast1
As PreviouslyReported
Adjustments As Recast1 Income before income
taxes $ 162,348 $ - $ 162,348 $ 319,260 $ - $ 319,260 Provision for
income taxes 48,163 (2,068 ) 46,095
95,103 (3,186 ) 91,917
Net income $ 114,185 $ 2,068 $ 116,253 $ 224,157 $ 3,186 $ 227,343
Earnings per share:
Basic earnings per share
$ 1.23 $ 0.02 $ 1.25 $ 2.42 $ 0.04 $ 2.46 Diluted earnings per
share $ 1.21 $ 0.01 $ 1.22 $ 2.37 $ 0.02 $ 2.39 Weighted
average common shares outstanding: Basic 92,665 - 92,665 92,591 -
92,591 Diluted 94,549 729 95,279 94,437 700 95,137
The following table reconciles the impact
of retrospectively applying ASU 2016-09 to the previously disclosed
calculation of adjusted net income andadjusted net income per
diluted share for the three and six month periods ended June 30,
2016:*
Three Months Ended June 30, 2016 Six Months Ended
June 30, 2016
As PreviouslyReported
Adjustments As Recast1
As PreviouslyReported
Adjustments As Recast1 Adjusted net income and
adjusted net income per diluted share: Net Income $ 114,185 $ 2,068
$ 116,253 $ 224,157 $ 3,186 $ 227,343 Total pre-tax
adjustments 51,343 - 51,343 99,006 - 99,006 Income tax
impact of pre-tax adjustments at the effective tax rate2 (18,427 )
791 (17,635 ) (31,809 ) 1,110 (30,699 )
Adjusted net income $ 147,101 $ 2,859 $ 149,960
$ 291,354 $ 4,296 $ 295,650 Adjusted
net income per diluted share $ 1.56 $ 0.01 $ 1.57 $ 3.09 $ 0.02 $
3.11 Diluted shares 94,549 729 95,279 94,437 700 95,137
The following table reconciles the impact
of retrospectively applying ASU 2016-09 to the consolidated
statement of cash flows for the six months ended June 30,
2016:*
Six Months Ended June 30, 2016
As PreviouslyReported
Adjustments As Recast1 Net cash
provided by operating activities $ 208,856 $ 3,186 $ 212,042 Net
cash used in investing activities (37,924 ) - (37,924 ) Net cash
used in financing activities (118,303 ) (3,186 ) (121,489 ) Effect
of foreign currency exchange rates on cash (6,696 ) - (6,696 )
Net increase in cash
$ 45,933 $ - $ 45,933 * Columns may not
calculate due to impact of rounding. 1 Reflects the impact of the
Company's adoption of Accounting Standards Update 2016-09,
Compensation-Stock Compensation (Topic 718): Improvements to
Employee Share-Based Payment Accounting, to simplify several
aspects of the accounting for share-based compensation, including
the income tax consequences. 2 Excludes the results of our equity
method investment on our effective tax rate, as results from our
equity method investment are reported within the Consolidated
Income Statements on a post-tax basis and no tax-over-book outside
basis differences related to our equity method investment reversed
during 2016 or are expected to reverse in 2017.
Exhibit 7 RECONCILIATION OF NON-GAAP GUIDANCE
MEASURES (In millions, except per share amounts)
(Unaudited) The following
table reconciles 2017 financial guidance for net income to adjusted
net income and adjusted net income per diluted share, at both ends
of the range:
2017 GUIDANCE Low*
High* Net income $ 545 $ 565 Net income per diluted share $
5.80 $ 6.00 Stock based compensation 84 84 Amortization of
intangible assets, premium on receivables, deferred financing costs
and discounts 229 229 Amortization of intangibles at equity method
investment 11 11 Total pre-tax adjustments 324 324
Income tax impact of pre-tax adjustments at the effective
tax rate** (95 ) (95 ) Adjusted net income $ 775
$ 795 Adjusted net income per diluted share $ 8.24 $
8.44 Diluted shares 94 94 * Columns may not calculate due to
impact of rounding.
** Excludes the results of our equity
method investment on our effective tax rate, as results from our
equity method investment are reportedwithin the Consolidated Income
Statements on a post-tax basis and no tax-over-book outside basis
differences related to our equity method investment are expected to
reverse during 2017.
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version on businesswire.com: http://www.businesswire.com/news/home/20170803006431/en/
FLEETCOR Technologies,
Inc.Investor Relations770-729-2017investor@fleetcor.com
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