FleetCor Reports Fourth Quarter and Fiscal-Year 2015 Financial Results

Fourth Quarter and Fiscal-Year 2015 Adjusted Net Income Per Share Grows 22% Year-Over-Year

NORCROSS, Ga.--(BUSINESS WIRE)-- FleetCor Technologies, Inc. (NYSE: FLT), a leading global provider of fuel cards and workforce payment products to businesses, today reported financial results for its fourth quarter ended December 31, 2015.

“We posted another 20% plus adjusted net income growth quarter, despite a pretty challenging macro environment,” said Ron Clarke, chairman and chief executive officer, FleetCor Technologies, Inc. “For full year 2015, total revenue grew 42%, organic revenue grew approximately 10%, and adjusted net income per share grew 22%.”

Financial Results for Fourth Quarter 2015:

GAAP Results

• Total revenues increased 14% to $430.6 million in the fourth quarter of 2015 compared to $376.7 million in the fourth quarter of 2014.
• GAAP net income 1 decreased 52% to $52.8 million or $0.56 per diluted share in the fourth quarter of 2015 compared to GAAP net income of $109.5 million or $1.21 per diluted share in the fourth quarter of 2014. Included in GAAP net income for the quarter was a $40.0 million non-cash impairment charge related to our minority investment in Masternaut and a $34.4 million increase in non-cash stock based compensation expense compared to 2014.

Non-GAAP Results

• Adjusted revenues1 (revenues, net less merchant commissions) increased 17% to $403.1 million in the fourth quarter of 2015 compared to $343.4 million in the fourth quarter of 2014.
• Adjusted net income1 increased 27% to $160.2 million in the fourth quarter of 2015 compared to $125.8 million in the fourth quarter of 2014.
• Adjusted net income per diluted share1 increased 22% to $1.70 in the fourth quarter of 2015 compared to $1.39 in the fourth quarter of 2014.

Financial Results for Fiscal-Year 2015:

GAAP Results

• Total revenues increased 42% to $1,702.9 million in 2015 compared to $1,199.4 million in 2014.
• GAAP net income1 decreased 2% to $362.4 million or $3.85 per diluted share in 2015 compared to GAAP net income of $368.7 million or $4.24 per diluted share in 2014. Included in GAAP net income in 2015 was a $40.0 million non-cash impairment charge related to a minority investment in Masternaut and a $52.5 million increase in non-cash stock based compensation expense compared to 2014.

Non-GAAP Results

• Adjusted revenues1 (revenues, net less merchant commissions) increased 45% to $1,594.6 million in 2015 compared to $1,103.1 million in 2014.
• Adjusted net income per diluted share1 increased 22% to $6.30 in 2015 compared to $5.15 in 2014.

Fiscal Year 2016 Outlook:

“For 2016, we again have a number of macro-economic headwinds impacting our business, primarily foreign exchange rates and fuel prices,” said Eric Dey, chief financial officer FleetCor Technologies, Inc. “In aggregate, we are estimating that the macro-economic environment creates an approximate $100 million revenue headwind and an approximate $0.70 adjusted net income per diluted share headwind versus 2015. Despite these headwinds, we like our fundamentals, and are guiding to year-over-year organic revenue growth of approximately 10% at constant fuel prices, currency, and market spreads. Our adjusted net income per share guidance at the midpoint of the range of $6.50 would have been approximately $7.20 for 2016 at constant fuel price, currency, and markets spread margins.”

For fiscal-year 2016, FleetCor Technologies, Inc. financial guidance and assumptions are as follows:

• Total revenues between $1,730 million and $1,780 million;
• Adjusted net income1 between $605 million and $625 million; and
• Adjusted net income per diluted share1 between $6.40 and $6.60.

FleetCor’s fiscal-year guidance assumptions for 2016 are as follows:

• Weighted fuel prices equal to $1.91 per gallon average for 2016 in the U.S. compared to $2.56 per gallon average in the U.S. in 2015, down approximately 25%.
• Market spreads returning to normalized levels for 2016, down approximately $15 million versus 2015.
• Foreign exchange rates equal to the seven day average ended January 15, 2016.
• SVS business is retained for 2016.
• Continued weakness in the Company’s Brazilian and Russian businesses
• Fully diluted shares outstanding of 94.7 million shares.
• Full year tax rate of approximately 32.2%.
• No impact related to acquisitions or material new partnership agreements not already disclosed.

Conference Call

The company will host a conference call to discuss fourth quarter and fiscal-year 2015 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 (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 13629029. The replay will be available until February 11, 2016. 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, 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 partnership arrangements or acquisitions and the failure to successfully integrate or otherwise achieve anticipated benefits from such partnerships or acquired businesses; failure to successfully expand business internationally, 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, 2014, filed with the Securities and Exchange Commission on March 2, 2015. 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, net 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 and intangible assets, (c) amortization of the premium recognized on the purchase of receivables, (d) loss on the early extinguishment of debt, (e) our proportionate share of amortization of intangible assets at our equity method investment, (f) non-cash impairment charges, and (g) other non-cash adjustments. The company uses adjusted revenues as a basis to evaluate the company’s revenues, net of the commissions that are paid to merchants to participate in our card programs. The commissions paid to merchants can vary when market spreads fluctuate in much the same way as revenues are impacted when market spreads fluctuate. The company believes this is a more effective way to evaluate the company’s revenue performance. We prepare adjusted net income to eliminate the effect of items that we do not consider indicative of our core operating performance. Adjusted revenues and adjusted net income are supplemental measures of operating performance that do not represent and should not be considered as an alternative to revenues, net, 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 exclude loss on the early extinguishment of debt and impairment charges from adjusted net income, as these expenses are non-cash and are one-time in nature and do not reflect the ongoing operations of the business. Reconciliations of GAAP results to non-GAAP results are provided in the attached Exhibit 1.

Management uses adjusted revenues and adjusted net income:

• as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis;
• for planning purposes, including the preparation of our internal annual operating budget;
• to allocate resources to enhance the financial performance of our business; and
• to evaluate the performance and effectiveness of our operational strategies.

We believe adjusted revenues and adjusted net income 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 is a leading global provider of fuel cards and workforce payment products to businesses. FleetCor's payment programs enable businesses to better control employee spending and provide card-accepting merchants with a high volume customer base that can increase their sales and customer loyalty. FleetCor serves commercial accounts in North America, Latin America, Europe, and Australia/New Zealand. For more information, please visit www.FLEETCOR.com.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160204006331/en/

FleetCor Technologies, Inc.
Investor Relations
770-729-2017
[email protected]

Source: FleetCor Technologies, Inc.

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