Vantiv Reports Third Quarter 2015 Results

 

Vantiv Reports Third Quarter 2015 Results

Net Revenue Increased 13% to $430 Million

Pro Forma Adjusted Net Income per Share Increased 20% to $0.59

CINCINNATI, October 28, 2015 - Vantiv, Inc. (NYSE: VNTV) ("Vantiv" or the "company") today announced financial results for the third quarter ended September 30, 2015. Revenue increased 17% to $816 million in the third quarter as compared to $697 million in the prior year period. Net revenue increased 13% to $430 million in the third quarter as compared to $381 million in the prior year period, primarily due to an 8% increase in transactions and a 5% increase in net revenue per transaction. On a GAAP basis, net income attributable to Vantiv, Inc. was $41 million or $0.27 per diluted share in the third quarter as compared to $30 million or $0.20 per diluted share in the prior year period. Pro forma adjusted net income increased 22% to $119 million in the third quarter as compared to $97 million in the prior year period. Pro forma adjusted net income per share increased 20% to $0.59 in the third quarter as compared to $0.49 in the prior year period. (See Schedule 2 for pro forma adjusted net income and Schedule 6 for GAAP net income reconciliation to pro forma adjusted net income.)

"Our business is firing on all cylinders," said Charles Drucker, president and chief executive officer of Vantiv, "with strong performances in both our Merchant and Financial Institution Services segments."

Merchant Services
Merchant Services net revenue increased 16% to $345 million in the third quarter as compared to $298 million in the prior year period, primarily due to an 8% increase in transactions and a 7% increase in net revenue per transaction. Sales and marketing expenses increased 21% to $126 million in the third quarter as compared to $104 million in the prior year period, primarily due to continued successful new sales execution as well as strong growth from our high growth channels.

Financial Institution Services
Financial Institution Services net revenue increased 3% to $86 million in the third quarter as compared to $83 million in the prior year period as a 7% increase in transactions was partially offset by lower net revenue per transaction. Sales and marketing expenses decreased 10% to $6 million in the third quarter as compared to $7 million in the prior year period.

Capital Allocation
The company repurchased approximately 4.4 million shares of its Class A common stock for approximately $200 million beginning in the third quarter and continuing into the fourth quarter. The company also recently terminated a portion of the obligations under the tax receivable agreements with Fifth Third Bank. The terminated obligations represented approximately $140 million in accrued liabilities and were terminated for approximately $49 million. The termination of these obligations will result in approximately $0.05 in accretion to pro forma adjusted net income per share beginning in 2016.

Fourth Quarter and Full-Year Financial Outlook
Based on the current level of transaction trends and new business activity, net revenue for the fourth quarter of 2015 is expected to be $429 to $437 million, representing an increase of 7% to 9% above the prior year period. Pro forma adjusted net income per share for the fourth quarter of 2015 is expected to be $0.61 to $0.63, representing an increase of 15% to 19% above the prior year period. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.30 to $0.32 for the fourth quarter of 2015.

Based on our strong performance year-to-date and outlook for the fourth quarter, our full-year 2015 expectations have increased. Net revenue for the full-year 2015 is expected to be $1,657 to $1,665 million, representing growth of 18% to 19% above the prior year. Pro forma adjusted net income per share for the full-year 2015 is expected to be $2.21 to $2.23, representing growth of 18% to 19% above the prior year. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.94 to $0.96 for the full-year 2015.

Earnings Conference Call and Audio Webcast
The company will host a conference call to discuss the third quarter 2015 financial results today at 8:00 a.m. EDT. The conference call can be accessed live over the phone by dialing (866) 416-5346, or for international callers (913) 312-0692, and referencing conference code 312013. A replay will be available approximately two hours after the call concludes and can be accessed by dialing (888) 203-1112, or for international callers (719) 457-0820, and entering replay passcode 312013. The replay will be available through Wednesday, November 11, 2015. The call will also be webcast live from the company's investor relations website at http://investors.vantiv.com. Following completion of the call, a recorded replay of the webcast will be available on the website.

About Vantiv, Inc.
Vantiv, Inc. (NYSE: VNTV) is a leading payment processor differentiated by an integrated technology platform. Vantiv offers a comprehensive suite of traditional and innovative payment processing and technology solutions to merchants and financial institutions of all sizes, enabling them to address their payment processing needs through a single provider. We build strong relationships with our clients, helping them become more efficient, more secure and more successful. Vantiv is the second largest merchant acquirer and the largest PIN debit acquirer based on number of transactions in the U.S. The company's growth strategy includes expanding further into high-growth channels and verticals, including integrated payments, ecommerce, and merchant bank. For more information, visit www.vantiv.com.

© 2015 Vantiv, LLC. All Rights Reserved. All trademarks, service marks and trade names referenced herein are the property of their respective owners. Vantiv and other Vantiv products and services mentioned herein as well as their respective logos are registered trademarks or trademarks of Vantiv, LLC in the U.S. and other countries.

Non-GAAP and Pro Forma Financial Measures
This earnings release presents non-GAAP and pro forma financial information including net revenue, adjusted EBITDA, pro forma adjusted net income, and pro forma adjusted net income per share. These are important financial performance measures for the company, but are not financial measures as defined by GAAP. The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The company uses these non-GAAP and pro forma financial performance measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

Forward-Looking Statements
This release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this release are forward-looking statements including any statements regarding guidance and statements of a general economic or industry specific nature. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, guidance, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "should," "can have," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

The forward-looking statements contained in this release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you review and consider information presented herein, you should understand that these statements are not guarantees of future performance or results. They depend upon future events and are subject to risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual future performance or results and cause them to differ materially from those anticipated in the forward-looking statements. Certain of these factors and other risks are discussed in the company's filings with the U.S. Securities and Exchange Commission (the "SEC") and include, but are not limited to: (i) our ability to adapt to developments and change in our industry; (ii) competition; (iii) unauthorized disclosure of data or security breaches; (iv) systems failures or interruptions; (v) our ability to expand our market share or enter new markets; (vi) our ability to identify and complete acquisitions, joint ventures and partnerships; (vii) failure to comply with applicable requirements of Visa, MasterCard or other payment networks or changes in those requirements; (viii) our ability to pass along fee increases; (ix) termination of sponsorship or clearing services; (x) loss of clients or referral partners; (xi) reductions in overall consumer, business and government spending; (xii) fraud by merchants or others; (xiii) a decline in the use of credit, debit or prepaid cards; (xiv) consolidation in the banking and retail industries; (xv) the effects of governmental regulation or changes in laws; and (xvi) outcomes of future litigation or investigations. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. More information on potential factors that could affect the company's financial results and performance is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the company's periodic reports filed with the SEC, including the company's most recently filed Annual Report on Form 10-K and its subsequent filings with the SEC.

Any forward-looking statement made by us in this release speaks only as of the date of this release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Contacts
Investors
Nathan Rozof, CFA
Senior Vice President, Investor Relations
(866) 254-4811
(513) 900-4811
[email protected]

Media
Andrew Ciafardini
Vice President, Corporate Communications
(513) 900-5308
[email protected]

Q3 2015 EARNINGS RELEASE SCHEDULES ACCESSIBLE AT THE LINK BELOW

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