Exhibit 99.1
FLEETCOR Reports Third Quarter 2017 Financial Results
PEACHTREE CORNERS, Ga., November 1, 2017 — FLEETCOR Technologies, Inc. (NYSE: FLT), a leading global provider of commercial payment solutions, today reported financial results for its third quarter ended September 30, 2017.
“We posted another good quarter, with revenue growth of 19% and adjusted net income per diluted share growth of 13% compared to the third quarter of 2016,” said Ron Clarke, chairman and chief executive officer, FLEETCOR Technologies, Inc. “The third quarter was quite busy for us; we closed the Cambridge acquisition, we entered into a full outsourcing partner deal in Russia and we repurchased $350 million of our shares. Post Q3 we also closed CLS - a small lodging tuck-in.”
Financial Results for Third Quarter of 2017:
GAAP Results
| |
| • | Total revenues increased 19.3% to $577.9 million in the third quarter of 2017 compared to $484.4 million in the third quarter of 2016. |
| |
| • | Net income increased 56.5% to $202.8 million in the third quarter of 2017 compared to $129.6 million in the third quarter of 2016. |
| |
| • | Net income per diluted share increased 60.4% to $2.18 in the third quarter of 2017 compared to $1.36 per diluted share in the third quarter of 2016. |
Non-GAAP Results1
| |
| • | Adjusted revenues1 (revenues, net less merchant commissions) increased 20.6% to $550.2 million in the third quarter of 2017 compared to $456.2 million in the third quarter of 2016. |
| |
| • | Adjusted net income1 increased 10.6% to $202.8 million in the third quarter of 2017 compared to $183.3 million in the third quarter of 2016. |
| |
| • | Adjusted net income per diluted share1 increased 13.4% to $2.18 in the third quarter of 2017 compared to $1.92 per diluted share in the third quarter of 2016. |
Share Repurchase Program Update:
The Board of Directors authorized a $350 million increase in the size of the Company’s previously announced share repurchase program. With the increase, and giving effect to the Company’s $590 million of previous repurchases, the Company may repurchase up to $510 million in shares of its common stock at any time prior to February 1, 2019. In total, the Company purchased 2.4 million shares in the third quarter of 2017 and a total of 4.1 million shares of common stock since the beginning of the program.
Fiscal-Year 2017 Outlook:
“We are raising our full year guidance to reflect our third quarter results and an expected favorable macro environment in the fourth quarter,” said Eric Dey, chief financial officer, FLEETCOR Technologies, Inc. “To remind everyone our third quarter actuals reflect the impact of selling the Nextraq business in July, the August acquisition of Cambridge, and the impact of a $350 million share buyback in the third quarter. These changes collectively resulted in a neutral third quarter adjusted net income per diluted share impact.”
For 2017, FLEETCOR Technologies, Inc. financial guidance is as follows:
| |
| • | Total revenues between $2,225 million and $2,255 million; |
| |
| • | GAAP net income between $608 million and $618 million; |
| |
| • | GAAP net income per diluted share between $6.50 and $6.60; |
| |
| • | Adjusted net income1 between $784 million and $794 million; and |
| |
| • | Adjusted net income per diluted share1 between $8.38 and $8.48. |
FLEETCOR’s guidance assumptions for 2017 are as follows:
| |
| • | Fourth quarter weighted fuel prices equal to $2.57 per gallon average in the U.S. for those businesses sensitive to the movement in the retail price of fuel. |
| |
| • | Market spreads returning to historical levels, no change from prior guidance. |
| |
| • | Foreign exchange rates equal to the seven day average as of October 5, 2017. A slight improvement from prior guidance. |
| |
| • | Interest expense of $110 million in 2017. |
| |
| • | Fully diluted shares outstanding of approximately 93.5 million shares. |
| |
| • | A fourth quarter tax rate of 29.2%. |
| |
| • | Fourth quarter guidance reflects the sale of the Nextraq business and the acquisition of Cambridge in the third quarter. |
| |
| • | Neutral impact in adjusted net income from the CLS acquisition and new partner agreement in the fourth quarter. |
| |
| • | No impact related to acquisitions or material new partnership agreements not already disclosed. |
______________________________
1Reconciliations of GAAP results to non-GAAP results are provided in Exhibit 1 attached. Additional supplemental data is provided in Exhibit 2-3 and 5, and segment information is provided in Exhibit 4. A reconciliation of GAAP guidance to non-GAAP guidance is provided in Exhibit 6.
Conference Call
The Company will host a conference call to discuss third 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 13672093. The replay will be available until November 8, 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, 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, and 10-Q for the quarter ended June 30, 2017 filed with the Securities and Exchange Commission on March 1, 2017 and August 8, 2017, respectively. 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, (f) impairment of our equity method investment, (g) net gain on disposition of business, (h) loss on early extinguishment of debt and, (i) a non-recurring loss due to merger of entities. 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, losses, 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 GAAP to non-GAAP guidance is provided in the attached exhibit 6.
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.
Contact:
Investor Relations
investor@fleetcor.com
(770) 729-2017
FleetCor Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income
(In thousands, except per share amounts)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | 2017 |
| 2016 | | 2017 | | 2016 |
| Revenues, net | | $ | 577,877 |
| | $ | 484,426 |
| | $ | 1,639,547 |
| | $ | 1,316,593 |
|
| Expenses: | | | |
| | | | |
| Merchant commissions | | 27,687 |
| | 28,214 |
| | 82,690 |
| | 78,755 |
|
| Processing | | 111,283 |
| | 96,233 |
| | 316,429 |
| | 256,738 |
|
| Selling | | 45,060 |
| | 34,180 |
| | 122,854 |
| | 92,680 |
|
| General and administrative | | 92,043 |
| | 77,904 |
| | 275,046 |
| | 209,084 |
|
| Depreciation and amortization | | 69,156 |
| | 57,084 |
| | 198,731 |
| | 141,848 |
|
| Other operating, net | | 11 |
| | (244 | ) | | 49 |
| | (690 | ) |
| Operating income | | 232,637 |
| | 191,055 |
| | 643,748 |
| | 538,178 |
|
| Equity method investment loss (income) | | 47,766 |
| | 2,744 |
| | 52,497 |
| | (2,247 | ) |
| Other (income) expense, net | | (175,271 | ) | | 293 |
| | (173,626 | ) | | 1,056 |
|
| Interest expense, net | | 29,344 |
| | 17,814 |
| | 76,322 |
| | 49,905 |
|
| Loss on early extinguishment of debt | | 3,296 |
| | — |
| | 3,296 |
| | — |
|
| Total other (income) expense | | (94,865 | ) | | 20,851 |
| | (41,511 | ) | | 48,714 |
|
| Income before income taxes | | 327,502 |
| | 170,204 |
| | 685,259 |
| | 489,464 |
|
| Provision for income taxes | | 124,679 |
| | 40,586 |
| | 227,756 |
| | 132,503 |
|
| Net income | | $ | 202,823 |
| | $ | 129,618 |
| | $ | 457,503 |
| | $ | 356,961 |
|
| Basic earnings per share | | $ | 2.23 |
| | $ | 1.40 |
| | $ | 4.99 |
| | $ | 3.85 |
|
| Diluted earnings per share | | $ | 2.18 |
| | $ | 1.36 |
| | $ | 4.87 |
| | $ | 3.75 |
|
| Weighted average shares outstanding: | | | |
| |
| |
|
| Basic shares | | 90,751 |
| | 92,631 |
| | 91,619 |
| | 92,604 |
|
| Diluted shares | | 93,001 |
| | 95,307 |
| | 93,923 |
| | 95,204 |
|
FleetCor Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and par value amounts)
|
| | | | | | | | |
| | | September 30, 2017 | | December 31, 2016 |
| | | (Unaudited) | | |
| Assets | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 834,756 |
| | $ | 475,018 |
|
| Restricted cash | | 183,515 |
| | 168,752 |
|
| Accounts and other receivables (less allowance for doubtful accounts of $47,779 at September 30, 2017 and $32,506 at December 31, 2016) | | 1,606,921 |
| | 1,202,009 |
|
| Securitized accounts receivable — restricted for securitization investors | | 794,000 |
| | 591,000 |
|
| Prepaid expenses and other current assets | | 102,309 |
| | 90,914 |
|
| Total current assets | | 3,521,501 |
| | 2,527,693 |
|
| Property and equipment, net | | 168,065 |
| | 142,504 |
|
| Goodwill | | 4,644,559 |
| | 4,195,150 |
|
| Other intangibles, net | | 2,876,440 |
| | 2,653,233 |
|
| Investments | | 33,526 |
| | 36,200 |
|
| Other assets | | 86,203 |
| | 71,952 |
|
| Total assets | | $ | 11,330,294 |
| | $ | 9,626,732 |
|
| Liabilities and Stockholders’ Equity | | | | |
| Current liabilities: | | | | |
| Accounts payable | | $ | 1,506,488 |
| | $ | 1,151,432 |
|
| Accrued expenses | | 285,841 |
| | 238,812 |
|
| Customer deposits | | 731,501 |
| | 530,787 |
|
| Securitization facility | | 794,000 |
| | 591,000 |
|
| Current portion of notes payable and lines of credit | | 808,507 |
| | 745,506 |
|
| Other current liabilities | | 46,561 |
| | 38,781 |
|
| Total current liabilities | | 4,172,898 |
| | 3,296,318 |
|
| Notes payable and other obligations, less current portion | | 2,933,976 |
| | 2,521,727 |
|
| Deferred income taxes | | 742,498 |
| | 668,580 |
|
| Other noncurrent liabilities | | 50,504 |
| | 56,069 |
|
| Total noncurrent liabilities | | 3,726,978 |
| | 3,246,376 |
|
| Commitments and contingencies | | | | |
| Stockholders’ equity: | | | | |
| Common stock, $0.001 par value; 475,000,000 shares authorized, 121,837,990 shares issued and 89,558,913 shares outstanding at September 30, 2017; and 121,259,960 shares issued and 91,836,938 shares outstanding at December 31, 2016 | | 122 |
| | 121 |
|
| Additional paid-in capital | | 2,165,326 |
| | 2,074,094 |
|
| Retained earnings | | 2,676,224 |
| | 2,218,721 |
|
| Accumulated other comprehensive loss | | (466,367 | ) | | (666,403 | ) |
| Less treasury stock, 32,279,077 shares at September 30, 2017 and 29,423,022 shares at December 31, 2016 | | (944,887 | ) | | (542,495 | ) |
| Total stockholders’ equity | | 3,430,418 |
| | 3,084,038 |
|
| Total liabilities and stockholders’ equity | | $ | 11,330,294 |
| | $ | 9,626,732 |
|
FleetCor Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(In thousands)
|
| | | | | | | | |
| | | Nine Months Ended September 30, |
| | | 2017 | | 2016 |
| Operating activities | | | | |
| Net income | | $ | 457,503 |
| | $ | 356,961 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
|
| Depreciation | | 35,096 |
| | 25,706 |
|
| Stock-based compensation | | 68,897 |
| | 50,025 |
|
| Provision for losses on accounts receivable | | 35,949 |
| | 24,512 |
|
| Amortization of deferred financing costs and discounts | | 5,411 |
| | 5,568 |
|
| Amortization of intangible assets | | 158,897 |
| | 112,455 |
|
| Amortization of premium on receivables | | 4,738 |
| | 3,687 |
|
| Loss on early extinguishment of debt | | 3,296 |
| | — |
|
| Deferred income taxes | | (38,092 | ) | | (23,566 | ) |
| Equity method investment loss (income) | | 52,497 |
| | (2,247 | ) |
| Gain on disposition of business | | (174,984 | ) | | — |
|
| Other non-cash operating income | | (49 | ) | | (690 | ) |
| Changes in operating assets and liabilities (net of acquisitions): | | | |
|
| Restricted cash | | (12,105 | ) | | (28,744 | ) |
| Accounts and other receivables | | (512,594 | ) | | (527,255 | ) |
| Prepaid expenses and other current assets | | (14,065 | ) | | (1,291 | ) |
| Other assets | | (15,378 | ) | | (9,115 | ) |
| Accounts payable, accrued expenses and customer deposits | | 364,473 |
| | 418,280 |
|
| Net cash provided by operating activities | | 419,490 |
| | 404,286 |
|
| Investing activities | | | | |
| Acquisitions, net of cash acquired | | (602,298 | ) | | (1,331,079 | ) |
| Purchases of property and equipment | | (49,459 | ) | | (41,877 | ) |
| Proceeds from disposal of a business | | 316,501 |
| | — |
|
| Other | | (6,327 | ) | | 1,411 |
|
| Net cash used in investing activities | | (341,583 | ) | | (1,371,545 | ) |
| Financing activities | | | | |
| Proceeds from issuance of common stock | | 20,192 |
| | 18,620 |
|
| Repurchase of common stock | | (402,393 | ) | | (35,492 | ) |
| Borrowings on securitization facility, net | | 203,000 |
| | 42,000 |
|
| Deferred financing costs paid and debt discount | | (11,230 | ) | | (2,272 | ) |
| Proceeds from notes payable | | 780,656 |
| | 600,000 |
|
| Principal payments on notes payable | | (388,656 | ) | | (85,125 | ) |
| Borrowings from revolver – A Facility | | 845,000 |
| | 1,105,107 |
|
| Payments on revolver – A Facility | | (804,808 | ) | | (670,940 | ) |
| Borrowings on swing line of credit, net | | 7,800 |
| | 5,188 |
|
| Other | | 538 |
| | (673 | ) |
| Net cash provided by financing activities | | 250,099 |
| | 976,413 |
|
| Effect of foreign currency exchange rates on cash | | 31,732 |
| | (50,871 | ) |
| Net increase (decrease) in cash and cash equivalents | | 359,738 |
| | (41,717 | ) |
| Cash and cash equivalents, beginning of period | | 475,018 |
| | 447,152 |
|
| Cash and cash equivalents, end of period | | $ | 834,756 |
| | $ | 405,435 |
|
| Supplemental cash flow information | |
| |
|
| Cash paid for interest | | $ | 79,144 |
| | $ | 48,525 |
|
| Cash paid for income taxes | | $ | 257,349 |
| | $ | 79,599 |
|
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 September 30, | | Nine Months Ended September 30, |
| | | 2017 |
| 2016 | | 2017 | | 2016 |
| Revenues, net | | $ | 577,877 |
| | $ | 484,426 |
| | $ | 1,639,547 |
| | $ | 1,316,593 |
|
| Merchant commissions | | 27,687 |
| | 28,214 |
| | 82,690 |
| | 78,755 |
|
| Total adjusted revenues | | $ | 550,190 |
| | $ | 456,212 |
| | $ | 1,556,857 |
| | $ | 1,237,838 |
|
The following table reconciles net income to adjusted net income and adjusted net income per diluted share:* |
| | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | 2017 |
| 2016 | | 2017 | | 2016 |
| Net income | | $ | 202,823 |
| | $ | 129,618 |
| | $ | 457,503 |
| | $ | 356,961 |
|
| | | | | | | | | |
| Stock based compensation | | 24,654 |
| | 17,405 |
| | 68,897 |
| | 50,025 |
|
| Amortization of intangible assets | | 54,003 |
| | 46,341 |
| | 158,897 |
| | 112,455 |
|
| Amortization of premium on receivables | | 1,650 |
| | 1,348 |
| | 4,738 |
| | 3,687 |
|
| Amortization of deferred financing costs and discounts | | 1,611 |
| | 1,917 |
| | 5,411 |
| | 5,568 |
|
| Amortization of intangibles at equity method investment | | 2,965 |
| | 2,406 |
| | 8,341 |
| | 7,533 |
|
| Impairment of equity method investment | | 44,600 |
| | — |
| | 44,600 |
| | — |
|
| Net gain on disposition of business | | (109,205 | ) | | — |
| | (109,205 | ) | | — |
|
| Loss on early extinguishment of debt | | 3,296 |
| | — |
| | 3,296 |
| | — |
|
| Non recurring loss due to merger of entities | | 2,028 |
| | — |
| | 2,028 |
| | — |
|
| Non recurring net gain at equity method investment | | — |
| | — |
| | — |
| | (10,845 | ) |
| Total pre-tax adjustments | | 25,602 |
| | 69,417 |
| | 187,003 |
| | 168,423 |
|
Income tax impact of pre-tax adjustments at the effective tax rate1 | | (25,656 | ) | | (15,726 | ) | | (69,711 | ) | | (46,425 | ) |
| Adjusted net income | | $ | 202,769 |
| | $ | 183,310 |
| | $ | 574,795 |
| | $ | 478,959 |
|
| Adjusted net income per diluted share | | $ | 2.18 |
| | $ | 1.92 |
| | $ | 6.12 |
| | $ | 5.03 |
|
| Diluted shares | | 93,001 |
| | 95,307 |
| | 93,923 |
| | 95,204 |
|
|
|
| *Columns may not calculate due to impact of rounding. |
| |
1 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. Also excludes the net gain realized upon our disposition of Nextraq, representing a pretax gain of $175.0 million and tax on gain of $65.8 million. The tax on the gain is included in "Net gain on disposition of business". |
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 September 30, | | Nine Months Ended September 30, |
| | | 2017 |
| 2016 | | Change | | % Change | | 2017 | | 2016 | | Change | | % Change |
| NORTH AMERICA | | | | | | | | | | | | | | | | |
'- Transactions 5 | | 398.4 |
| | 370.1 |
| | 28.3 |
| | 8 | % | | 1,301.1 |
| | 1,214.3 |
| | 86.8 |
| | 7 | % |
'- Revenues, net per transaction | | $ | 0.91 |
| | $ | 0.93 |
| | $ | (0.02 | ) | | (2 | )% | | $ | 0.80 |
| | $ | 0.78 |
| | $ | 0.01 |
| | 2 | % |
'- Revenues, net | | $ | 364.4 |
| | $ | 345.9 |
| | $ | 18.6 |
| | 5 | % | | $ | 1,037.4 |
| | $ | 950.5 |
| | $ | 86.8 |
| | 9 | % |
| INTERNATIONAL | | | | | | | | | | | | | | | | |
'- Transactions | | 280.7 |
| | 127.4 |
| | 153.3 |
| | 120 | % | | 823.0 |
| | 233.3 |
| | 589.6 |
| | 253 | % |
'- Revenues, net per transaction | | $ | 0.76 |
| | $ | 1.09 |
| | $ | (0.33 | ) | | (30 | )% | | $ | 0.73 |
| | $ | 1.57 |
| | $ | (0.84 | ) | | (53 | )% |
'- Revenues, net | �� | $ | 213.4 |
| | $ | 138.6 |
| | $ | 74.9 |
| | 54 | % | | $ | 602.2 |
| | $ | 366.1 |
| | $ | 236.1 |
| | 65 | % |
| FLEETCOR CONSOLIDATED REVENUES | | | | | | | | | | | | | | |
'- Transactions 5 | | 679.1 |
| | 497.5 |
| | 181.6 |
| | 37 | % | | 2,124.1 |
| | 1,447.6 |
| | 676.4 |
| | 47 | % |
'- Revenues, net per transaction | | $ | 0.85 |
| | $ | 0.97 |
| | $ | (0.12 | ) | | (13 | )% | | $ | 0.77 |
| | $ | 0.91 |
| | $ | (0.14 | ) | | (15 | )% |
'- Revenues, net | | $ | 577.9 |
| | $ | 484.4 |
| | $ | 93.5 |
| | 19 | % | | $ | 1,639.5 |
| | $ | 1,316.6 |
| | $ | 323.0 |
| | 25 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The following table presents revenue and revenue per transaction, by product category.* |
| | | As Reported | | Pro Forma and Macro Adjusted2 |
| | | Three Months Ended September 30, | | Three Months Ended September 30, |
| | | 2017 | | 2016 | | Change | | % Change | | 20173 | | 20164 | | Change | | % Change |
| FUEL CARDS | | | | | | | | | | | | | | | | |
'- Transactions5 | | 119.6 |
|
| 112.5 |
|
| 7.1 |
|
| 6 | % |
| 119.6 |
|
| 113.6 |
|
| 6.0 |
|
| 5 | % |
'- Revenues, net per transaction | | $ | 2.31 |
|
| $ | 2.30 |
|
| $ | 0.01 |
|
| — | % |
| $ | 2.29 |
|
| $ | 2.28 |
|
| $ | 0.01 |
|
| — | % |
'- Revenues, net | | $ | 276.2 |
|
| $ | 258.8 |
|
| $ | 17.4 |
|
| 7 | % |
| $274.0 |
| $ | 259.5 |
|
| $ | 14.5 |
|
| 6 | % |
| CORPORATE PAYMENTS | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
'- Transactions | | 10.9 |
|
| 10.0 |
|
| 0.9 |
|
| 9 | % |
| 10.9 |
|
| 10.2 |
|
| 0.7 |
|
| 7 | % |
'- Revenues, net per transaction | | $ | 6.63 |
|
| $ | 4.61 |
|
| $ | 2.02 |
|
| 44 | % |
| $ | 6.58 |
|
| $ | 5.99 |
|
| $ | 0.58 |
|
| 10 | % |
'- Revenues, net | | $ | 72.2 |
|
| $ | 46.1 |
|
| $ | 26.1 |
|
| 57 | % |
| $ | 71.7 |
|
| $ | 61.3 |
|
| $ | 10.4 |
|
| 17 | % |
| TOLLS | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
'- Transactions | | 231.0 |
|
| 81.1 |
|
| 149.8 |
|
| 185 | % |
| 231.0 |
|
| 225.0 |
|
| 5.9 |
|
| 3 | % |
'- Revenues, net per transaction | | $ | 0.36 |
|
| $ | 0.32 |
|
| $ | 0.04 |
|
| 13 | % |
| $ | 0.35 |
|
| $ | 0.30 |
|
| $ | 0.05 |
|
| 16 | % |
'- Revenues, net | | $ | 82.9 |
|
| $ | 25.8 |
|
| $ | 57.1 |
|
| 221 | % |
| $ | 80.8 |
|
| $ | 67.8 |
|
| $ | 13.0 |
|
| 19 | % |
| LODGING | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
'- Transactions | | 4.1 |
|
| 3.5 |
|
| 0.6 |
|
| 17 | % |
| 4.1 |
|
| 3.5 |
|
| 0.6 |
|
| 17 | % |
'- Revenues, net per transaction | | $ | 8.14 |
|
| $ | 8.04 |
|
| $ | 0.10 |
|
| 1 | % |
| $ | 8.14 |
|
| $ | 8.04 |
|
| $ | 0.10 |
|
| 1 | % |
'- Revenues, net | | $ | 33.2 |
|
| $ | 28.1 |
|
| $ | 5.2 |
|
| 18 | % |
| $ | 33.2 |
|
| $ | 28.1 |
|
| $ | 5.2 |
|
| 18 | % |
| GIFT | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
'- Transactions | | 294.1 |
|
| 269.5 |
|
| 24.6 |
|
| 9 | % |
| 294.1 |
|
| 269.5 |
|
| 24.6 |
|
| 9 | % |
'- Revenues, net per transaction | | $ | 0.19 |
|
| $ | 0.22 |
|
| $ | (0.03 | ) |
| (14 | )% |
| $ | 0.19 |
|
| $ | 0.22 |
|
| $ | (0.03 | ) |
| (14 | )% |
'- Revenues, net | | $ | 54.8 |
|
| $ | 58.3 |
|
| $ | (3.5 | ) |
| (6 | )% |
| $ | 54.8 |
|
| $ | 58.3 |
|
| $ | (3.5 | ) |
| (6 | )% |
OTHER1 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
'- Transactions5 | | 19.4 |
|
| 20.8 |
|
| (1.4 | ) |
| (7 | )% |
| 19.4 |
|
| 20.4 |
|
| (1.0 | ) |
| (5 | )% |
'- Revenues, net per transaction | | $ | 3.01 |
|
| $ | 3.24 |
|
| $ | (0.22 | ) |
| (7 | )% |
| $ | 2.99 |
|
| $ | 2.80 |
|
| $ | 0.20 |
|
| 7 | % |
'- Revenues, net | | $ | 58.5 |
|
| $ | 67.4 |
|
| $ | (8.8 | ) |
| (13 | )% |
| $ | 58.1 |
|
| $ | 57.1 |
|
| $ | 1.0 |
|
| 2 | % |
| FLEETCOR CONSOLIDATED REVENUES | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
'- Transactions5 | | 679.1 |
|
| 497.5 |
|
| 181.6 |
|
| 37 | % |
| 679.1 |
|
| 642.2 |
|
| 36.8 |
|
| 6 | % |
'- Revenues, net per transaction | | $ | 0.85 |
|
| $ | 0.97 |
|
| $ | (0.12 | ) |
| (13 | )% |
| $ | 0.84 |
|
| $ | 0.83 |
|
| $ | 0.01 |
|
| 2 | % |
'- Revenues, net | | $ | 577.9 |
|
| $ | 484.4 |
|
| $ | 93.5 |
|
| 19 | % |
| 572.6 |
|
| $ | 532.1 |
|
| $ | 40.6 |
|
| 8 | % |
|
|
| *Columns may not calculate due to impact of rounding. |
1Other includes telematics, maintenance, food, and transportation related businesses. |
2 Pro forma and macro adjusted revenue is a non-GAAP financial measure defined as revenues, net adjusted for the impact of the macroeconomic environment and acquisitions and dispositions and other one-time items. We use pro forma and macro adjusted revenue as a basis to evaluate our organic growth. See Exhibit 5 for a reconciliation of pro forma and macro adjusted revenue by product, non-GAAP measures, to the GAAP equivalent. |
32017 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. |
42016 is pro forma to include acquisitions and exclude dispositions consistent with 2017 ownership. |
52016 and YTD 2017 transactions reflect immaterial corrections from previously disclosed amounts for the prior period. |
Exhibit 3
Revenues by Geography, Product and Source
(In millions)
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue by Geography* | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2017 | | % | | 2016 | | % | | 2017 | | % | | 2016 | | % |
| US | $ | 358 |
|
| 62 | % |
| $ | 346 |
|
| 71 | % |
| $ | 1,031 |
|
| 63 | % |
| $ | 951 |
|
| 72 | % |
| UK | 61 |
|
| 11 | % |
| 56 |
|
| 12 | % |
| 174 |
|
| 11 | % |
| 175 |
|
| 13 | % |
| Brazil | 101 |
|
| 17 | % |
| 43 |
|
| 9 | % |
| 287 |
|
| 17 | % |
| 78 |
|
| 6 | % |
| Other | 58 |
|
| 10 | % |
| 40 |
|
| 8 | % |
| 148 |
|
| 9 | % |
| 113 |
|
| 9 | % |
| Consolidated Revenues, net | $ | 578 |
|
| 100 | % |
| $ | 484 |
|
| 100 | % |
| $ | 1,640 |
|
| 100 | % |
| $ | 1,317 |
|
| 100 | % |
*Columns may not calculate due to impact of rounding.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue by Product Category* | Three Months Ended September 30, | | Nine Months Ended September 30,8 |
| | 2017 | | % | | 2016 | | % | | 2017 | | % | | 2016 | | % |
| Fuel Cards | $ | 276 |
|
| 48 | % |
| $ | 259 |
|
| 53 | % |
| $ | 815 |
|
| 50 | % |
| $ | 741 |
|
| 56 | % |
| Corporate Payments | 72 |
|
| 12 | % |
| 46 |
|
| 10 | % |
| 169 |
|
| 10 | % |
| 132 |
|
| 10 | % |
| Tolls | 83 |
|
| 14 | % |
| 26 |
|
| 5 | % |
| 236 |
|
| 14 | % |
| 30 |
|
| 2 | % |
| Lodging | 33 |
|
| 6 | % |
| 28 |
|
| 6 | % |
| 86 |
|
| 5 | % |
| 74 |
|
| 6 | % |
| Gift | 55 |
|
| 9 | % |
| 58 |
|
| 12 | % |
| 144 |
|
| 9 | % |
| 138 |
|
| 10 | % |
| Other | 59 |
|
| 10 | % |
| 67 |
|
| 14 | % |
| 189 |
|
| 12 | % |
| 201 |
|
| 15 | % |
| Consolidated Revenues, net | $ | 578 |
|
| 100 | % |
| $ | 484 |
|
| 100 | % |
| $ | 1,640 |
|
| 100 | % |
| $ | 1,317 |
|
| 100 | % |
*Columns may not calculate due to impact of rounding.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Major Sources of Revenue* | | Three Months Ended September 30, | | Nine Months Ended September 30,8 |
| | | 2017 | | % | | 2016 | | % | | 2017 | | % | | 2016 | | % |
| Customer | | | | | | | | | | | | | | | | |
Processing and Program Revenue1 | | $ | 288 |
|
| 50 | % |
| $ | 218 |
|
| 45 | % |
| $ | 781 |
|
| 48 | % |
| $ | 563 |
|
| 43 | % |
Late Fees and Finance Charges2 | | 34 |
|
| 6 | % |
| 31 |
|
| 6 | % |
| 105 |
|
| 6 | % |
| 86 |
|
| 7 | % |
Miscellaneous Fees3 | | 32 |
|
| 5 | % |
| 34 |
|
| 7 | % |
| 97 |
|
| 6 | % |
| 93 |
|
| 7 | % |
| | | 354 |
|
| 61 | % |
| 283 |
|
| 58 | % |
| 983 |
|
| 60 | % |
| 742 |
|
| 56 | % |
| Merchant | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount Revenue (Fuel)4 | | 77 |
|
| 13 | % |
| 68 |
|
| 14 | % |
| 223 |
|
| 14 | % |
| 194 |
|
| 15 | % |
Discount Revenue (NonFuel)5 | | 45 |
|
| 8 | % |
| 40 |
|
| 8 | % |
| 130 |
|
| 8 | % |
| 116 |
|
| 9 | % |
Tied to Fuel-Price Spreads6 | | 53 |
|
| 9 | % |
| 53 |
|
| 11 | % |
| 165 |
|
| 10 | % |
| 145 |
|
| 11 | % |
Program Revenue7 | | 49 |
|
| 8 | % |
| 41 |
|
| 8 | % |
| 139 |
|
| 8 | % |
| 119 |
|
| 9 | % |
| | | 224 |
|
| 39 | % |
| 202 |
|
| 42 | % |
| 657 |
|
| 40 | % |
| 574 |
|
| 44 | % |
| Consolidated Revenues, net | | $ | 578 |
|
| 100 | % |
| $ | 484 |
|
| 100 | % |
| $ | 1,640 |
|
| 100 | % |
| $ | 1,317 |
|
| 100 | % |
|
|
1Includes 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, gifts cards and toll related businesses. |
2Fees for late payment and interest charges for carrying a balance charged to a customer. |
3Non-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. |
4Interchange revenue directly influenced by the absolute price of fuel and other interchange related to fuel products. |
5Interchange revenue related to nonfuel products. |
6Revenue 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. |
7Revenue derived primarily from the sale of equipment, software and related maintenance to merchants. |
8Amounts shown for the nine months ended September 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 September 30, | | Nine Months Ended September 30, |
| | | 2017 |
| 2016 | | 2017 | | 2016 |
Revenues, net: 1 | | | | | | | | |
| North America | | $ | 364,443 |
| | $ | 345,868 |
| | $ | 1,037,386 |
| | $ | 950,542 |
|
| International | | 213,434 |
| | 138,558 |
| | 602,161 |
| | 366,051 |
|
| | | $ | 577,877 |
| | $ | 484,426 |
| | $ | 1,639,547 |
| | $ | 1,316,593 |
|
Operating income: 1 | | | | | | | | |
| North America | | $ | 138,748 |
| | $ | 135,760 |
| | $ | 394,646 |
| | $ | 367,221 |
|
| International | | 93,889 |
| | 55,295 |
| | 249,102 |
| | 170,957 |
|
| | | $ | 232,637 |
| | $ | 191,055 |
| | $ | 643,748 |
| | $ | 538,178 |
|
Depreciation and amortization: 1 | | | | | | | | |
| North America | | $ | 37,600 |
| | $ | 32,739 |
| | $ | 104,161 |
| | $ | 96,351 |
|
| International | | 31,556 |
| | 24,345 |
| | 94,570 |
| | 45,497 |
|
| | | $ | 69,156 |
| | $ | 57,084 |
| | $ | 198,731 |
| | $ | 141,848 |
|
Capital expenditures: 1 | | | | | | | | |
| North America | | $ | 9,167 |
| | $ | 11,980 |
| | $ | 30,901 |
| | $ | 28,501 |
|
| International | | 7,692 |
| | 5,140 |
| | 18,558 |
| | 13,376 |
|
| | | $ | 16,859 |
| | $ | 17,120 |
| | $ | 49,459 |
| | $ | 41,877 |
|
|
|
1The results from our Cambridge business acquired in the third quarter of 2017, are reported in our North America segment for their business in the United States and Canada and within our International segment for their business in all other countries outside of the United States and Canada. |
Exhibit 5
Reconciliation of Non-GAAP Revenue and Transactions by Product to GAAP*
(In millions)
(Unaudited)
|
| | | | | | | | | | | | | | | | |
| | | Revenue | | Transactions |
| | | Three Months Ended September 30, | Three Months Ended September 30, |
| | | 2017 | | 2016 | | 2017 | | 2016 |
| FUEL CARDS | | | | | | | | |
Pro forma and macro adjusted2,3 | | $ | 274.0 |
| | $ | 259.5 |
| | $ | 119.6 |
|
| $ | 113.6 |
|
| Impact of acquisitions/dispositions | | — |
| | (0.7 | ) | | — |
|
| (1.0 | ) |
| Impact of fuel prices/spread | | (0.6 | ) | | — |
| | — |
|
| — |
|
| Impact of foreign exchange rates | | 2.9 |
| | — |
| | — |
|
| — |
|
| As reported | | $ | 276.3 |
| | $ | 258.8 |
| | $ | 119.6 |
|
| $ | 112.5 |
|
| CORPORATE PAYMENTS | |
|
| |
|
| |
|
|
|
|
|
Pro forma and macro adjusted2,3 | | $ | 71.7 |
| | $ | 61.3 |
| | $ | 10.9 |
|
| $ | 10.2 |
|
| Impact of acquisitions/dispositions | | — |
| | (15.2 | ) | | — |
|
| (0.2 | ) |
| Impact of fuel prices/spread | | 0.1 |
| | — |
| | — |
|
| — |
|
| Impact of foreign exchange rates | | 0.4 |
| | — |
| | — |
|
| — |
|
| As reported | | $ | 72.2 |
| | $ | 46.1 |
| | $ | 10.9 |
|
| $ | 10.0 |
|
| TOLLS | |
|
| |
|
| |
|
|
|
|
|
Pro forma and macro adjusted2,3 | | $ | 80.8 |
| | $ | 67.8 |
| | $ | 231.0 |
|
| $ | 225.0 |
|
| Impact of acquisitions/dispositions | | — |
| | (42.0 | ) | | — |
|
| (143.9 | ) |
| Impact of fuel prices/spread | | — |
| | — |
| | — |
|
| — |
|
| Impact of foreign exchange rates | | 2.1 |
| | — |
| | — |
|
| — |
|
| As reported | | $ | 82.9 |
| | $ | 25.8 |
| | $ | 231.0 |
|
| $ | 81.1 |
|
| LODGING | |
|
| |
|
| |
|
|
|
|
|
Pro forma and macro adjusted2,3 | | $ | 33.2 |
| | $ | 28.1 |
| | $ | 4.1 |
|
| $ | 3.5 |
|
| Impact of acquisitions/dispositions | | — |
| | — |
| | — |
|
| — |
|
| Impact of fuel prices/spread | | — |
| | — |
| | — |
|
| — |
|
| Impact of foreign exchange rates | | — |
| | — |
| | — |
|
| — |
|
| As reported | | $ | 33.2 |
| | $ | 28.1 |
| | $ | 4.1 |
|
| $ | 3.5 |
|
| GIFT | |
|
| |
|
| |
|
|
|
|
|
Pro forma and macro adjusted2,3 | | $ | 54.8 |
| | $ | 58.3 |
| | $ | 294.1 |
|
| $ | 269.5 |
|
| Impact of acquisitions/dispositions | | — |
| | — |
| | — |
|
| — |
|
| Impact of fuel prices/spread | | — |
| | — |
| | — |
|
| — |
|
| Impact of foreign exchange rates | | — |
| | — |
| | — |
|
| — |
|
| As reported | | $ | 54.8 |
| | $ | 58.3 |
| | $ | 294.1 |
|
| $ | 269.5 |
|
OTHER1 | |
|
| |
|
| |
|
|
|
|
|
Pro forma and macro adjusted2,3 | | $ | 58.1 |
| | $ | 57.1 |
| | $ | 19.4 |
|
| $ | 20.4 |
|
| Impact of acquisitions/dispositions | | — |
| | 10.3 |
| | — |
|
| 0.4 |
|
| Impact of fuel prices/spread | | — |
| | — |
| | — |
|
| — |
|
| Impact of foreign exchange rates | | 0.4 |
| | — |
| | — |
|
| — |
|
| As reported | | $ | 58.5 |
| | $ | 67.4 |
| | $ | 19.4 |
|
| $ | 20.8 |
|
| | |
|
| |
|
| |
|
|
|
|
|
| FLEETCOR CONSOLIDATED REVENUES | |
|
| |
|
| |
|
|
|
|
|
Pro forma and macro adjusted2,3 | | $ | 572.6 |
| | $ | 532.1 |
| | $ | 679.1 |
|
| $ | 642.2 |
|
| Impact of acquisitions/dispositions | | — |
| | (47.6 | ) | | — |
|
| (144.7 | ) |
| Impact of fuel prices/spread | | (0.5 | ) | | — |
| | — |
|
| — |
|
| Impact of foreign exchange rates | | 5.8 |
| | — |
| | — |
|
| — |
|
| As reported | | $ | 577.9 |
| | $ | 484.4 |
| | $ | 679.1 |
|
| $ | 497.5 |
|
| | | | | | | | | |
| * Columns may not calculate due to impact of rounding. |
|
|
|
1Other includes telematics, maintenance, food and transportation related businesses. |
|
|
|
22016 is pro forma to include acquisitions and exclude dispositions, consistent with 2017 ownership. |
32017 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. |
42016 transactions reflect immaterial corrections from previously disclosed amounts for the prior period. |
Exhibit 6
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 | | $ | 608 |
| | $ | 618 |
|
| Net income per diluted share | | $ | 6.50 |
| | $ | 6.60 |
|
| | | | | |
| Stock based compensation | | 94 |
| | 94 |
|
| Amortization of intangible assets, premium on receivables, deferred financing costs and discounts | | 229 |
| | 229 |
|
| Amortization of intangibles at equity method investment | | 8 |
| | 8 |
|
| Impairment of equity method investment | | 45 |
| | 45 |
|
| Net gain on disposition of business | | (109 | ) | | (109 | ) |
| Loss on early extinguishment of debt | | 3 |
| | 3 |
|
| Non recurring loss due to merger of entities | | 2 |
| | 2 |
|
| Total pre-tax adjustments | | 272 |
| | 272 |
|
| Income tax impact of pre-tax adjustments at the effective tax rate** | | (97 | ) | | (97 | ) |
| Adjusted net income | | $ | 784 |
| | $ | 794 |
|
| Adjusted net income per diluted share | | $ | 8.38 |
| | $ | 8.48 |
|
| | | | | |
| 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 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 or are expected to reverse in 2017. Also excludes the net gain realized upon our disposition of Nextraq, representing a pretax gain of $175.0 million and tax on gain of $65.8 million. The tax on the gain is included in "Net gain on disposition of business". |
