SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community

TMC NEWS

TMCNET eNEWSLETTER SIGNUP

FLEETCOR Reports Fourth Quarter and Fiscal-Year 2017 Financial Results
[February 08, 2018]

FLEETCOR Reports Fourth Quarter and Fiscal-Year 2017 Financial Results


FLEETCOR Technologies, Inc. (NYSE:FLT), a leading global provider of commercial payment solutions, today reported financial results for its fourth quarter and year ended December 31, 2017.

"Our Q4 revenues and profits finished above our expectations, and our sales, retention, and same store customer trends were very strong. For fiscal year 2017, revenues and adjusted net income per diluted share grew 23%; while we re-positioned the company for faster growth, with the Cambridge acquisition and the Nextraq divestiture," said Ron Clarke, chairman and chief executive officer, FLEETCOR Technologies, Inc. "For 2018, we expect each of our four primary product categories - fuel, toll, lodging, corporate payments - to continue to drive our Company's growth as we focus relentlessly on execution in order to win new clients, open up new geographies, and provide improved value over a broader range of spend categories."

Financial Results for Fourth Quarter of 2017:

GAAP Results

  • Total revenues increased 18.5% to $610.0 million in the fourth quarter of 2017 compared to $515.0 million in the fourth quarter of 2016.
  • Net income increased 196.3% to $282.7 million in the fourth quarter of 2017 compared to $95.4 million in the fourth quarter of 2016. Included in the fourth quarter is the favorable estimated impact of adoption of the Tax Reform Act of $127.5 million. Also, included in the fourth quarter of 2016 were non-cash impairment charges related to the Company's minority investment in Masternaut of approximately $36 million.
  • Net income per diluted share increased 204.6% to $3.05 in the fourth quarter of 2017 compared to $1.00 per diluted share in the fourth quarter of 2016.

Non-GAAP Results1

  • Adjusted revenues1 (revenues, net less merchant commissions) increased 18.4% to $579.5 million in the fourth quarter of 2017 compared to $489.4 million in the fourth quarter of 2016.
  • Adjusted net income1 increased 24.1% to $224.1 million in the fourth quarter of 2017 compared to $180.5 million in the fourth quarter of 2016.
  • Adjusted net income per diluted share1 increased 27.6% to $2.42 in the fourth quarter of 2017 compared to $1.90 per diluted share in the fourth quarter of 2016.

Financial Results for Fiscal-Year 2017:

GAAP Results

  • Total revenues increased 22.8% to $2,249.5 million in 2017 compared to $1,831.5 million in 2016.
  • GAAP net income increased 63.6% to $740.2 million in 2017 compared to $452.4 million in 2016. Included in 2017 is the favorable estimated impact of adoption of the Tax Reform Act of $127.5 million and a gain on the sale of Nextraq of $109.2 million.
  • GAAP net income per diluted share increased 66.5% to $7.91 in 2017 compared to $4.75 per diluted share in 2016.

Non-GAAP Results1

  • Adjusted revenues1 (revenues, net less merchant commissions) increased 23.7% to 2,136.4 million in 2017 compared to $1,727.2 million in 2016.
  • Adjusted net income1 increased 21.2% to $798.9 million in 2017 compared to $659.2 million in 2016.
  • Adjusted net income per diluted share1 increased 23.3% to $8.54 in 2017 compared to $6.92 in 2016.

Fiscal-Year 2018 Outlook:

"2018 is setting up well with a number of tailwinds that we expect will help drive profits in the year. First, the macro is expected to continue to be favorable to revenue by approximately $40 million, organic growth is expected to be in the 8% to 10% range on a normalized basis, and the new tax act will drive our overall tax rate down by an estimated 5%. As a result, we are guiding adjusted net income per diluted share to $10.20 at the midpoint which represents approximately a 20% growth from prior year," said Eric Dey, chief financial officer FLEETCOR Technologies, Inc.

For 2018, FLEETCOR Technologies, Inc. financial guidance is as follows:

  • Total revenues between $2,490 million and $2,550 million;
  • Adjusted Revenues to be between $2,370 million and $2,430 million;
  • GAAP net income between $690 million and $720 million;
  • GAAP net income per diluted share between $7.40 and $7.70;
  • Adjusted net income1 between $935 million and $965 million; and
  • Adjusted net income per diluted share1 between $10.05 and $10.35.

FLEETCOR's guidance assumptions for 2018 are as follows:

  • 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 equal to the 2017 average.
  • Foreign exchange rates equal to the seven-day average as of January 22, 2018.
  • Interest expense of $125 million, which assumes two additional twenty-five basis point increases in 2018.
  • Fully diluted shares outstanding of approximately 93.3 million shares.
  • A tax rate of 22 to 24%.
  • No impact for ASC 606, as we are still completing our analysis.
  • No impact related to acquisitions or material new partnership agreements not already disclosed.

Fiscal First Quarter of 2018 Outlook:

For those of you that are looking for guidance for the first quarter, the business has some seasonality and typically the first quarter is the lowest in terms of both revenue and profit. First quarter seasonality is impacted by weather, holidays in the U.S., and lower business levels in Brazil, due to summer break and the Carnival celebration that occurs in the first quarter.

With that said, the Company is expecting first quarter adjusted net income per diluted share to be between $2.30 and $2.401. Additionally, volumes should build throughout the year, and new asset initiatives are also expected to gain momentum throughout the year resulting in higher revenue and earnings per share in the second through fourth quarters.



_______________________________________
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, 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 fourth quarter and full year 2017 financial results today at 5:00pm ET. Hosting the call will be Ron Clarke, chief executive officer, Eric Dey, chief financial officer and Jim Eglseder, investor relations. 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 13675734. The replay will be available until February 15, 2018. The call will be webcast live from the Company's investor relations website at investor.fleetcor.com. Prior to the conference call, the Company will post supplemental financial information that will be discussed during the call and live webcast.

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, expected organic growth rates, impact of the new tax act, 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, filed with the Securities and Exchange Commission on March 1, 2017, and quarterly reports on form 10-Q for the quarters ended June 30 and September 30, 2017 filed with the Securities and Exchange Commission on August 8, 2017 and November 9, 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, amortization of the premium recognized on the purchase of receivables, and our proportionate share of amortization of intangible assets at our equity method investment, (c) a non-recurring net gain at our equity method investment, (d) impairment of our equity method investment, (e) net gain on disposition of business, (f) loss on early extinguishment of debt and, (g) other non-recurring items, including the impact of the Tax Reform Act. 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 calculate 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 investments and business are 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.

       
FleetCor Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and par value amounts)
  December 31, 2017 December 31, 2016
(Unaudited)
Assets
 
Current assets:
Cash and cash equivalents $ 941,116 $ 475,018
Restricted cash 189,753 168,752

Accounts and other receivables (less allowance for doubtful accounts of $46,031 and
$32,506 at December 31, 2017 and 2016, respectively)

1,443,578 1,202,009
Securitized accounts receivable - restricted for securitization investors 811,000 591,000
Prepaid expenses and other current assets   167,282     90,914  
 
Total current assets   3,552,729     2,527,693  
 
Property and equipment, net 180,057 142,504
Goodwill 4,704,934 4,195,150
Other intangibles, net 2,724,957 2,653,233
Investments 32,859 36,200
Other assets   115,196     71,952  
 
Total assets $ 11,310,732   $ 9,626,732  
 
Liabilities and Stockholders' Equity
 
Current liabilities:
Accounts payable $ 1,469,358 $ 1,151,432
Accrued expenses 231,230 238,812
Customer deposits 708,347 530,787
Securitization facility 811,000 591,000
Current portion of notes payable and lines of credit 805,512 745,506
Other current liabilities   65,321     38,781  
 
Total current liabilities   4,090,768     3,296,318  
 
Notes payable and other obligations, less current portion 2,902,104 2,521,727
Deferred income taxes 516,019 668,580
Other noncurrent liabilities   125,319     56,069  
 
Total noncurrent liabilities   3,543,442     3,246,376  
 
Commitments and contingencies
 
Stockholders' equity:

Common stock, $0.001 par value; 475,000,000 shares authorized, 122,083,059 shares
issued and 89,803,982 shares outstanding at December 31, 2017; and 121,259,960
shares issued and 91,836,938 shares outstanding at December 31, 2016

122 121
Additional paid-in capital 2,214,224 2,074,094
Retained earnings 2,958,921 2,218,721
Accumulated other comprehensive loss (551,857 ) (666,403 )

Less treasury stock, 32,279,077 shares at December 31, 2017 and 29,423,022 shares at
December 31, 2016

(944,888 ) (542,495 )
   
Total stockholders' equity   3,676,522     3,084,038  
 
Total liabilities and stockholders' equity $ 11,310,732   $ 9,626,732  
 
 
FleetCor Technologies, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share amounts)
                   
Three Months Ended December 31, Year Ended December 31,    
  2017     2016   2017     2016  
(Unaudited) (Unaudited)
 
Revenues, net $ 609,991 $ 514,953 $ 2,249,538 $ 1,831,546
 
Expenses:
Merchant commissions 30,443 25,590 113,133 104,345
Processing 113,184 98,676 429,613 355,414
Selling 47,863 38,763 170,717 131,443
General and administrative 112,648 74,541 387,694 283,625
Depreciation and amortization 65,829 61,408 264,560 203,256
Other operating, net   12     -   61     (690 )
Operating income   240,012     215,975   883,760     754,153  
Investment loss 667 38,603 53,164 36,356
Other (income) expense, net 190 1,926 (173,436 ) 2,982
Interest expense, net 30,825 21,991 107,146 71,896
Loss on extinguishment of debt   -     -   3,296     -  
Total other expense (income)   31,682     62,520   (9,830 )   111,234  
Income before income taxes 208,330 153,455 893,590 642,919
(Benefit) provision for income taxes   (74,366 )   58,031   153,390     190,534  
Net income $ 282,696   $ 95,424 $ 740,200   $ 452,385  
 
Basic earnings per share $ 3.15 $ 1.03 $ 8.12 $ 4.89
Diluted earnings per share $ 3.05 $ 1.00 $ 7.91 $ 4.75
 
Weighted average shares outstanding:
Basic shares 89,676 92,574 91,129 92,597
Diluted shares 92,623 95,235 93,594 95,213
 
FleetCor Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
    Year Ended December 31,
  2017         2016  
(Unaudited)
Operating activities
Net income $ 740,200 $ 452,385
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 46,599 36,456
Stock-based compensation 93,297 63,946
Provision for losses on accounts receivable 44,857 35,885
Amortization of deferred financing costs and discounts 6,952 7,582
Amortization of intangible assets 211,849 161,635
Amortization of premium on receivables 6,112 5,165
Loss on extinguishment of debt 3,296 -
Deferred income taxes (250,115 ) (28,681 )
Investment loss 53,164 36,356
Gain on disposition of business (174,983 ) -
Other non-cash operating income (61 ) (690 )
Changes in operating assets and liabilities (net of acquisitions and dispositions):
Restricted cash (15,070 ) (2,306 )
Accounts and other receivables (438,290 ) (338,796 )
Prepaid expenses and other current assets 32,255 5,301
Other assets (20,957 ) (20,345 )
Accounts payable, accrued expenses and customer deposits   325,763     292,019  
Net cash provided by operating activities   664,868     705,912  
 
 
Investing activities
Acquisitions, net of cash acquired (667,591 ) (1,331,985 )
Purchases of property and equipment (70,093 ) (59,011 )
Proceeds from disposal of a business 316,501 -
Other   (38,953 )   1,411  
Net cash used in investing activities   (460,136 )   (1,389,585 )
 
 
Financing activities
Proceeds from issuance of common stock 44,690 21,231
Repurchase of common stock (402,393 ) (187,678 )
Borrowings (payments) on securitization facility, net 220,000 (23,000 )
Deferred financing costs paid and debt discount (12,908 ) (2,272 )
Proceeds from issuance of notes payable 780,656 600,000
Principal payments on notes payable (423,156 ) (118,500 )
Borrowings from revolver- A Facility 1,100,000 1,225,107
Payments on revolver- A Facility (1,031,722 ) (786,849 )
(Payments) borrowings on swing line of credit, net (23,686 ) 26,606
Other   457     (676 )
Net cash provided by financing activities   251,938     753,969  
 
Effect of foreign currency exchange rates on cash   9,428     (42,430 )
 
Net increase in cash and cash equivalents 466,098 27,866
Cash and cash equivalents, beginning of year   475,018     447,152  
Cash and cash equivalents, end of year $ 941,116   $ 475,018  
 
Supplemental cash flow information
Cash paid for interest $ 113,416   $ 70,339  
 
Cash paid for income taxes $ 392,192   $ 101,951  
 
               
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 December 31, Year Ended December 31,
  2017     2016     2017     2016  
 
Revenues, net $ 609,991 $ 514,953 $ 2,249,538 $ 1,831,546
Merchant commissions   30,443     25,590     113,133     104,345  
Total adjusted revenues $ 579,548   $ 489,363   $ 2,136,405   $ 1,727,201  
 
                           
The following table reconciles net income to adjusted net income and adjusted net income per diluted share:*
 
Three Months Ended December 31,     Year Ended December 31,    
  2017     2016     2017    

2016(2)

 

Net income $ 282,696 $ 95,424 $ 740,200 $ 452,385
 
Stock based compensation 24,400 13,921 93,297 63,946

Amortization of intangible assets, premium on receivables, deferred financing
costs and discounts

55,893 55,232 233,280 184,475
Impairment of equity method investment - 36,065 44,600 36,065
Net gain on disposition of business - - (109,205 ) -
Loss on extinguishment of debt - - 3,296 -
Non-recurring loss due to merger of entities - - 2,028 -
Non-recurring net gain at equity method investment - - - (10,845 )
Legal settlement 11,000 - 11,000 -
Restructuring costs 1,043 - 1,043 -
       
Total pre-tax adjustments 92,336 105,218 279,339 273,641
 
Income tax impact of pre-tax adjustments at the effective tax rate1 (23,453 ) (20,121 ) (93,164 ) (66,850 )
Impact of 2017 tax reform (127,466 ) - (127,466 ) -
       
Adjusted net income $ 224,113   $ 180,521   $ 798,909   $ 659,176  
Adjusted net income per diluted share $ 2.42 $ 1.90 $ 8.54 $ 6.92
 
Diluted shares 92,623 95,235 93,594 95,213
* 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. 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".
 
2 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.
 
Exhibit 2
Transaction Volume and Revenues Per Transaction by Segment and by Product Category, on a GAAP Basis and Pro Forma and Macro Adjusted

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 December 31, Year Ended December 31,
  2017   2016 Change % Change     2017     2016   Change % Change  
 

NORTH AMERICA

- Transactions5 541.3 500.3 41.0 8 % 1,842.5 1,714.6 127.8 7 %
- Revenues, net per transaction $ 0.72 $ 0.66 $ 0.06 9 % $ 0.78 $ 0.75 $ 0.03 4 %
- Revenues, net $ 387.8 $ 328.6 $ 59.2 18 % $ 1,428.7 $ 1,279.1 $ 149.6 12 %
 

INTERNATIONAL

- Transactions 291.6 274.4 17.1 6 % 1,114.5 507.8 606.7 119 %
- Revenues, net per transaction $ 0.76 $ 0.68 $ 0.08 12 % $ 0.74 $ 1.09 $ (0.35 ) (32 %)
- Revenues, net $ 222.2 $ 186.4 $ 35.8 19 % $ 820.8 $ 552.4 $ 268.4 49 %
                                                                 
 

FLEETCOR CONSOLIDATED REVENUES

- Transactions5 832.9 774.8 58.2 8 % 2,957.0 2,222.4 734.6 33 %
- Revenues, net per transaction $ 0.73 $ 0.66 $ 0.07 10 % $ 0.76 $ 0.82 $ (0.06 ) (8 %)
- Revenues, net $ 610.0 $ 515.0 $ 95.0 18 % $ 2,249.5 $ 1,831.5 $ 418.0 23 %
                                                                 
 
                                                                 
The following table presents revenue and revenue per transaction, by product category.*
As Reported Pro Forma and Macro Adjusted2
Three Months Ended December 31, Three Months Ended December 31,
  2017   2016 Change % Change     2017( 3 )   2016 (4 ) Change % Change  
 

FUEL6

- Transactions5 119.0 112.5 6.5 6 % 119.0 114.5 4.4 4 %
- Revenues, net per transaction $ 2.36 $ 2.28 $ 0.09 4 % $ 2.26 $ 2.23 $ 0.02 1 %
- Revenues, net $ 281.4 $ 255.9 $ 25.5 10 % $ 268.4 (7 ) $ 255.7 (7 ) $ 12.7 5 %
 

CORPORATE PAYMENTS

- Transactions 10.8 9.9 0.9 9 % 10.8 10.1 0.7 7 %
- Revenues, net per transaction $ 8.58 $ 4.81 $ 3.77 78 % $ 8.49 $ 7.84 $ 0.65 8 %
- Revenues, net $ 92.6 $ 47.4 $ 45.2 95 % $ 91.6 $ 79.1 $ 12.5 16 %
 

TOLLS

- Transactions 239.6 225.8 13.8 6 % 239.6 225.8 13.8 6 %
- Revenues, net per transaction $ 0.38 $ 0.32 $ 0.06 19 % $ 0.37 $ 0.32 $ 0.05 17 %
- Revenues, net $ 91.1 $ 72.3 $ 18.8 26 % $ 89.7 $ 72.3 $ 17.4 24 %
 

LODGING

- Transactions 6.3 3.4 2.9 83 % 6.3 3.8 2.5 67 %
- Revenues, net per transaction $ 6.44 $ 7.84 $ (1.40 ) -18 % $ 6.44 $ 8.18 $ (1.74 ) (21 %)
- Revenues, net $ 40.7 $ 27.0 $ 13.7 51 % $ 40.7 $ 31.1 $ 9.7 31 %
 

GIFT

- Transactions 438.5 403.0 35.4 9 % 438.5 403.0 35.4 9 %
- Revenues, net per transaction $ 0.11 $ 0.12 $ (0.00 ) (2 %) $ 0.11 $ 0.12 $ (0.00 ) (2 %)
- Revenues, net $ 49.6 $ 46.6 $ 3.0 6 % $ 49.6 $ 46.6 $ 3.0 6 %
 

OTHER1

- Transactions5 18.6 20.1 (1.5 ) (7 %) 18.6 19.7 (1.0 ) (5 %)
- Revenues, net per transaction $ 2.93 $ 3.26 $ (0.33 ) (10 %) $ 2.87 $ 2.71 $ 0.16 6 %
- Revenues, net $ 54.6 $ 65.6 $ (11.1 ) (17 %) $ 53.5 $ 53.4 $ 0.1 0 %
 
                                                                 

FLEETCOR CONSOLIDATED REVENUES

- Transactions5 832.9 774.8 58.1 8 % 832.9 777.0 55.9 7 %
- Revenues, net per transaction $ 0.73 $ 0.66 $ 0.07 10 % $ 0.71 $ 0.69 $ 0.02 3 %
- Revenues, net       $ 610.0       $ 515.0       $ 95.0         18 %       $ 593.6         $ 538.2         $ 55.4         10 %
* Columns may not calculate due to impact of rounding.
1 Other 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.
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.
4 2016 is pro forma to include acquisitions and exclude dispositions consistent with 2017 ownership.
5 2016 and YTD 2017 transactions reflect immaterial corrections from previously disclosed amounts for the prior period.
6 Fuel Cards product category further refined to Fuel, to reflect different ways that fuel is paid for by our customers.
7 Reflects adjustments related to one-time items not representative of normal business operations.
 
                                 
Exhibit 3
Revenues by Geography, Product and Source
(In millions)
(Unaudited)
                                                     

Revenue by Geography*

Three Months Ended December 31,   Year Ended December 31,
    2017 %     2016 %     2017 %     2016 %  
 
US $ 370 61 % $ 329 64 % $ 1,401 62 % $ 1,279 70 %
Brazil 108 18 % 90 17 % 395 18 % 168 9 %
UK 63 10 % 54 11 % 237 10 % 229 13 %
Other   70 11 %   43 8 %   218 10 %   156 8 %
 
Consolidated Revenues, net $ 610 100 % $ 515 101 % $ 2,250 99 % $ 1,832 100 %
* Columns may not calculate due to impact of rounding.                                  
 

Revenue by Product Category*

Three Months Ended December 31,   Year Ended December 31,8
  2017 %     2016 %     2017 %     2016 %  
 
Fuel $ 281 46 % $ 256 50 % $ 1,096 49 % $ 997 54 %
Corporate Payments 93 15 % 47 9 % 262 12 % 180 10 %
Tolls 91 15 % 72 14 % 327 15 % 103 6 %
Lodging 41 7 % 27 5 % 127 6 % 101 5 %
Gift 50 8 % 47 9 % 194 9 % 185 10 %
Other   55 9 %   66 13 %   244 11 %   266 15 %
 
Consolidated Revenues, net $ 610 100 % $ 515 100 % $ 2,250 100 % $ 1,832 100 %
* Columns may not calculate due to impact of rounding.
 
 

Major Sources of Revenue*

Three Months Ended December 31,8   Year Ended December 31,8
  2017 %     2016 %     2017 %     2016 %  
Customer
Processing and Program Revenue1 $ 313 51 % $ 246 48 % $ 1,093 49 % $ 809 44 %
Late Fees and Finance Charges2 36 6 % 33 6 % 141 6 % 118 6 %
Miscellaneous Fees3   32 5 %   36 7 %   129 6 %   129 7 %
  380 62 %   315 61 %   1,363 61 %   1,057 58 %
Merchant
Discount Revenue (Fuel)4 80 13 % 67 13 % 303 13 % 260 14 %
Discount Revenue (NonFuel)5 45 7 % 41 8 % 175 8 % 157 9 %
Tied to Fuel-Price Spreads6 54 9 % 48 9 % 220 10 % 194 11 %
Program Revenue7   50 8 %   45 9 %   189 8 %   164 9 %
  230 38 %   200 39 %   887 39 %   774 42 %
 
Consolidated Revenues, net $ 610 100 % $ 515 100 % $ 2,250 100 % $ 1,832 100 %
 
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.
8 Amounts shown for the three months ended December 31, 2016 and years ended December 31, 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)
 
Three Months Ended December 31, Year Ended December 31,
  2017   2016   2017 (2 )   2016
(Unaudited) (Unaudited)
Revenues, net:1
North America $ 387,762 $ 328,560 $ 1,428,711 $ 1,279,102
International   222,229   186,393   820,827     552,444
$ 609,991 $ 514,953 $ 2,249,538   $ 1,831,546
 
Operating income:1
North America $ 147,220 $ 139,193 $ 541,598 $ 506,414
International   92,792 $ 76,782   342,162     247,739
$ 240,012 $ 215,975 $ 883,760   $ 754,153
 
Depreciation and amortization:1
North America $ 34,458 $ 33,302 $ 139,418 $ 129,653
International   31,371   28,106   125,142     73,603
$ 65,829 $ 61,408 $ 264,560   $ 203,256
 
Capital expenditures:1
North America $ 9,846 $ 10,499 $ 40,747 $ 39,000
International   10,788   6,635   29,346     20,011
$ 20,634 $ 17,134 $ 70,093   $ 59,011
 
1The results from our Cambridge business acquired in the third quarter of 2017 and CLS business acquired in the fourth quarter of 2017, are reported in our North America segment. The results from our Russian business acquired in the fourth quarter of 2017 are reported in our International segment.
 
2The results from our Cambridge business acquired in the third quarter of 2017 are reported in our North America segment. As we have concluded that this business is part of our North America segment, the results for this business have been recast into our North America segment for the year ended 2017, as they were partially presented in our international segment during the three months ended September 30, 2017.
 
               
Exhibit 5
Reconciliation of Non-GAAP Revenue and Transactions by Product to GAAP*
(In millions)
(Unaudited)
                         
Revenue Transactions
Three Months Ended December 31, Three Months Ended December 31,
  2017     2016   2017

2016 4

 

 

FUEL

Pro forma and macro adjusted2,3 $ 268.4 $ 255.7 119.0 114.5
Impact of acquisitions/dispositions - (2.1 ) - (2.1 )
Impact of fuel prices/spread 7.8 - - -
Impact of foreign exchange rates 6.8 - - -
One-time items5   (1.6 )   2.3   - -  
As reported $ 281.4   $ 255.9   119.0 112.5  
 

CORPORATE PAYMENTS

Pro forma and macro adjusted2,3 $ 91.6 $ 79.1 10.8 10.1
Impact of acquisitions/dispositions - (31.6 ) - (0.2 )
Impact of fuel prices/spread 0.1 - - -
Impact of foreign exchange rates 0.9 - - -
One-time items5   -     -   - -  
As reported $ 92.6   $ 47.4   10.8 9.9  
 

TOLLS

Pro forma and macro adjusted2,3 $ 89.7 $ 72.3 239.6 225.8
Impact of acquisitions/dispositions - - - -
Impact of fuel prices/spread - - - -
Impact of foreign exchange rates 1.4 - - -
One-time items5   -     -   - -  
As reported $ 91.1   $ 72.3   239.6 225.8  
 

LODGING

Pro forma and macro adjusted2,3 $ 40.7 $ 31.1 6.3 3.8
Impact of acquisitions/dispositions - (4.0 ) - (0.4 )
Impact of fuel prices/spread - - - -
Impact of foreign exchange rates - - - -
One-time items5   -     -   - -  
As reported $ 40.7   $ 27.0   6.3 3.4  
 

GIFT

Pro forma and macro adjusted2,3 $ 49.6 $ 46.6 438.5 403.0
Impact of acquisitions/dispositions - - - -
Impact of fuel prices/spread - - - -
Impact of foreign exchange rates - - - -
One-time items5   -     -   - -  
As reported $ 49.6   $ 46.6   438.5 403.0  
 

OTHER1

Pro forma and macro adjusted2,3 $ 53.5 $ 53.4 18.6 19.7
Impact of acquisitions/dispositions - 12.2 - 0.5
Impact of fuel prices/spread - - - -
Impact of foreign exchange rates 1.1 - - -
One-time items5   -     -   - -  
As reported $ 54.6   $ 65.6   18.6 20.1  
                         
 

FLEETCOR CONSOLIDATED REVENUES

Pro forma and macro adjusted2,3 $ 593.6 $ 538.2 832.9 777.0
Impact of acquisitions/dispositions - (25.5 ) - (2.2 )
Impact of fuel prices/spread 7.9 - - -
Impact of foreign exchange rates 10.1 - - -
One-time items5   (1.6 )   2.3   - -  
As reported $ 610.0   $ 515.0   832.9 774.8  
 
* 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.
4 2016 transactions reflect immaterial corrections from previously disclosed amounts for the prior period.
5 Adjustments related to one-time items not representative of normal business operations.
 
 
Exhibit 6
RECONCILIATION OF NON-GAAP GUIDANCE MEASURES
(In millions, except per share amounts)
(Unaudited)
   

 

The following tables reconcile first quarter and full year 2018 financial guidance for net income to adjusted net income and adjusted net income per diluted share, at both ends of the range, as well as full year 2018 financial guidance for revenues, net to adjusted revenues.
         
Q1 2018 GUIDANCE
Low* High*
Net income $ 150   $ 160  
Net income per diluted share $ 1.63 $ 1.73
 
Stock based compensation 22 22
Amortization of intangible assets, premium on receivables, deferred financing costs and discounts 59 59
   
Total pre-tax adjustments 81 81
 
Income tax impact of pre-tax adjustments at the effective tax rate (18 ) (18 )
   
Adjusted net income $ 213   $ 223  
Adjusted net income per diluted share $ 2.30 $ 2.40
 
Diluted shares       93         93  
 
FULL YEAR 2018 GUIDANCE
Low* High*
Revenues, net $ 2,490 $ 2,550
Merchant commissions   120     120  
Total adjusted revenues $ 2,370   $ 2,430  
 
 
Net income $ 690   $ 720  
Net income per diluted share $ 7.40 $ 7.70
 
Stock based compensation 89 89
Amortization of intangible assets, premium on receivables, deferred financing costs and discounts 234 234
   
Total pre-tax adjustments 323 323
 
Income tax impact of pre-tax adjustments at the effective tax rate (78 ) (78 )
   
Adjusted net income $ 935   $ 965  
Adjusted net income per diluted share $ 10.05 $ 10.35
 
Diluted shares 93 93
 
* Columns may not calculate due to impact of rounding.


[ Back To TMCnet.com's Homepage ]









Technology Marketing Corporation

35 Nutmeg Drive Suite 340, Trumbull, Connecticut 06611 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2018 Technology Marketing Corporation. All rights reserved | Privacy Policy