FleetCor Reports Fourth Quarter and Fiscal Year 2012 Financial Results

February 7, 2013

Fourth Quarter Revenue and Profits Grow Over 45%

Profit Outlook for 2013 up 22% at Midpoint of Guidance Range

NORCROSS, Ga.--(BUSINESS WIRE)--Feb. 7, 2013-- FleetCor Technologies, Inc. (NYSE: FLT), a leading independent global provider of fuel cards and workforce payment products to businesses, today reported financial results for its fourth quarter and fiscal year ended December 31, 2012.

"2012 was another excellent year for FleetCor, which included revenue growth of 36% and adjusted net income growth of 41% over 2011. We also completed developing market acquisitions in Brazil and Russia, and went live with our GFN platform in Asia for Shell during the fourth quarter,” said Ron Clarke, chairman, and chief executive officer, FleetCor Technologies, Inc. “We are also well positioned to kick off 2013 as we have nearly $1 billion in liquidity to continue our global business development efforts.”

Financial Results for Fourth Quarter 2012:

GAAP Results

Total revenues, net, in the fourth quarter of 2012 increased 45% to $202.6 million compared to $140.2 million in the fourth quarter of 2011
Net income in the fourth quarter of 2012 increased 59% to $60.1 million, or $0.70 per diluted share, compared to $37.8 million, or $0.45 per diluted share in the fourth quarter of 2011

Non-GAAP Results

Adjusted revenues¹ (revenues, net less merchant commissions) in the fourth quarter of 2012 increased 47% to $185.0 million compared to $125.5 million in the fourth quarter of 2011
Adjusted net income¹ in the fourth quarter of 2012 increased 49% to $70.7 million, or $0.82 per diluted share, compared to $47.3 million, or $0.56 per diluted share in the fourth quarter of 2011

Financial Results for Fiscal Year 2012:

GAAP Results

Total revenues, net in 2012 increased 36% to $707.5 million compared to $519.6 million in 2011
Net income in 2012 increased 47% to $216.2 million, or $2.52 per diluted share, compared to $147.3 million, or $1.76 per diluted share in 2011

Non-GAAP Results

Adjusted revenues¹ (revenues, net less merchant commissions) in 2012 increased 39% to $649.0 million compared to $468.4 million in 2011
Adjusted net income¹ for 2012 increased 41% to $256.0 million, or $2.99 per diluted share, compared to $181.7 million, or $2.17 per diluted share in 2011

2013 Outlook:

FleetCor Technologies, Inc. is introducing initial financial guidance for fiscal year 2013:

Revenues, net, between $790 million and $810 million
Adjusted Net Income between $300 million and $310 million
Adjusted Net Income per diluted share between $3.61 and $3.69

The assumptions included in the guidance are as follows:

Fuel prices equal to the 2012 average
Market spreads equal to the 2012 average
Foreign exchange rates equal to the 2012 average
Fully diluted shares outstanding of 84.2 million shares
No impact related to future acquisitions or material new partnership agreements

“We have great momentum heading into 2013 and we are projecting another double-digit revenue and profit year despite uncertainty around the macroeconomic environment including fuel prices, fuel price spreads and FX rates. Our guidance produces a 13% revenue and 22% adjusted net income per share growth rate, at the midpoint of our guidance range, versus 2012,” said Eric Dey, chief financial officer FleetCor Technologies, Inc.

Conference Call

The Company will host a conference call to discuss fourth quarter and fiscal year 2012 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) 941-8416, or for international callers (480) 629-9808. 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 4592455. The replay will be available until February 14, 2013. 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" or "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 revenue and earnings guidance, assumptions underlying financial guidance, expectations regarding entering new markets and building on existing assets in emerging markets. 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 delays or failures associated with implementation; fuel price and spread volatility; 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; 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, 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, 2011, filed with the Securities and Exchange Commission on February 29, 2012. 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 and, (d) loss on the early extinguishment of debt. EBITDA is calculated as net income as reflected in our income statement, adjusted to eliminate (a) interest expense, (b) tax expense, (c) depreciation of long-lived assets, and (d) amortization of intangible assets. 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. The company uses EBITDA as a basis to evaluate our operating performance net of the impact of certain items during the period. We believe that EBITDA may be useful to investors for understanding our operating performance on a consistent basis. 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 from adjusted net income, as this expense is non-cash and is one-time in nature and does not reflect the ongoing operations of the business.

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 commercial customer base that can increase their sales and customer loyalty. FleetCor serves commercial accounts in North America, Latin America, and Europe. For more information, please visit www.fleetcor.com.

¹ Reconciliations of GAAP results to non GAAP results are provided in Exhibit 1 attached. Additional supplemental data is provided in Exhibit 2 and segment information is provided in Exhibit 3.


FleetCor Technologies, Inc. and subsidiaries
Consolidated Statements of Income
(In thousands, except per share amounts)

	Three Months Ended December 31,				Year Ended December 31,
	2012		2011		2012			2011
	(Unaudited)		(Unaudited)		(Unaudited)

Revenues, net	$	202,617	$	140,160	$	707,534	$	519,591

Expenses:
Merchant commissions		17,599		14,694		58,573		51,199
Processing		32,285		25,931		115,446		84,516
Selling		13,190		10,332		46,429		36,606
General and administrative		31,256		25,047		110,122		84,765
Depreciation and amortization		15,116		9,924		52,036		36,171
Operating income		93,171		54,232		324,928		226,334
Other expense (income), net		602		19		1,121		(589	)
Interest expense, net		3,390		3,433		13,017		13,377
Loss on extinguishment of debt		–		–		-		2,669
Total other expense		3,992		3,452		14,138		15,457
Income before income taxes		89,179		50,780		310,790		210,877
Provision for income taxes		29,108		13,008		94,591		63,542
Net income	$	60,071	$	37,772	$	216,199	$	147,335

Basic earnings per share	$	0.72	$	0.46	$	2.59	$	1.83
Diluted earnings per share	$	0.70	$	0.45	$	2.52	$	1.76

Weighted average shares outstanding:
Basic shares		83,378		81,512		83,328		80,610
Diluted shares		85,750		84,035		85,736		83,654


FleetCor Technologies, Inc. and subsidiaries
Consolidated Balance Sheets
(In thousands, except share and par value amounts)

	December 31, 2012			December 31, 2011¹
	(Unaudited)
Assets

Current assets:
Cash and cash equivalents	$	283,649		$	285,159
Restricted cash		53,674			55,762
Accounts receivable (less allowance for doubtful accounts of $19,463 and $15,315, respectively)		525,441			481,791
Securitized accounts receivable - restricted for securitization investors		298,000			280,000
Prepaid expenses and other current assets		28,126			15,416
Deferred income taxes		6,464			6,140

Total current assets		1,195,354			1,124,268

Property and equipment		93,902			93,380
Less accumulated depreciation and amortization		(48,706	)		(60,656	)

Net property and equipment		45,196			32,724

Goodwill		926,609			760,736
Other intangibles, net		463,864			385,607
Other assets		90,847			45,834

Total assets	$	2,721,870		$	2,349,169

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	418,609		$	478,882
Accrued expenses		75,812			41,565
Customer deposits		187,627			180,269
Securitization facility		298,000			280,000
Current portion of notes payable and other obligations		162,174			145,836

Total current liabilities		1,142,222			1,126,552

Notes payable and other obligations, less current portion		485,217			278,429
Deferred income taxes		180,609			132,752

Total noncurrent liabilities		665,826			411,181

Commitments and contingencies

Stockholders’ equity:
Common stock, $0.001 par value; 475,000,000 shares authorized, 116,772,324 shares issued and 81,037,832 shares outstanding at December 31, 2012; and 475,000,000 shares authorized, 113,741,883 shares issued and 81,860,213 shares outstanding at December 31, 2011		116			114
Additional paid-in capital		542,018			466,203
Retained earnings		750,697			534,498
Accumulated other comprehensive loss		(3,346	)		(13,716	)
Less treasury stock, 35,734,492 shares at December 31, 2012 and 31,881,670 shares at December 31, 2011		(375,663	)		(175,663	)

Total stockholders’ equity		913,822			811,436

Total liabilities and stockholders’ equity	$	2,721,870		$	2,349,169


¹Certain prior period amounts have been recast in connection with ASC 805, Business Combinations.


FleetCor Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands)

	Year Ended December 31,
		2012			2011
	(Unaudited)
Operating activities
Net income	$	216,199		$	147,335
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		14,116			11,451
Stock-based compensation		19,275			21,743
Provision for losses on accounts receivable		21,896			19,226
Amortization of deferred financing costs		2,279			1,864
Amortization of intangible assets		32,376			19,590
Amortization of premium on receivables		3,265			3,266
Deferred income taxes		(3,337	)		(2,920	)
Loss on extinguishment of debt		–			2,669
Changes in operating assets and liabilities (net of acquisitions):
Restricted cash		2,088			6,579
Accounts receivable		(71,102	)		(80,024	)
Prepaid expenses and other current assets		(6,847	)		17,581
Other assets		(46,553	)		(1,935	)
Excess tax benefits related to stock-based compensation		(29,355	)		(13,727	)
Accounts payable, accrued expenses and customer deposits		(18,840	)		126,927
Net cash provided by operating activities		135,460			279,625


Investing activities
Acquisitions, net of cash acquired		(190,447	)		(333,763	)
Purchases of property and equipment		(19,111	)		(13,454	)
Net cash used in investing activities		(209,558	)		(347,217	)


Financing activities
Excess tax benefits related to stock-based compensation		29,355			13,727
Repurchase of common stock		(200,000	)		–
Proceeds from issuance of common stock		27,187			8,477
Borrowings on securitization facility, net		18,000			136,000
Deferred financing costs paid		(3,776	)		(7,839	)
Principal payments on notes payable		(30,414	)		(338,965	)
Proceeds from notes payable		250,000			425,000
Payments on revolver		(480,000	)		–
Borrowings from revolver		455,000			–
Payments on swing line of credit, net		(1,874	)		–
Other		(1,490	)		(179	)
Net cash provided by financing activities		61,988			236,221

Effect of foreign currency exchange rates on cash		10,600			1,726

Net (decrease) increase in cash and cash equivalents		(1,510	)		170,355
Cash and cash equivalents, beginning of year		285,159			114,804
Cash and cash equivalents, end of year	$	283,649		$	285,159

Supplemental cash flow information
Cash paid for interest	$	10,889		$	14,961

Cash paid for income taxes	$	29,579		$	49,205


Exhibit 1
RECONCILIATION OF NON-GAAP MEASURES AND PRO FORMA INFORMATION
(In thousands, except shares and per share amounts)
(Unaudited)

The following table reconciles revenues, net to adjusted revenues:

	Three Months Ended December 31,						Year Ended December 31,
		2012			2011			2012			2011

Revenues, net	$	202,617		$	140,160		$	707,534		$	519,591
Merchant commissions		17,599			14,694			58,573			51,199
Total adjusted revenues	$	185,018		$	125,466		$	648,961		$	468,392


The following table reconciles net income to EBITDA:

	Three Months Ended December 31,						Year Ended December 31,
		2012			2011			2012			2011

Net income	$	60,071		$	37,772		$	216,199		$	147,335
Provision for income taxes		29,108			13,008			94,591			63,542
Interest expense, net		3,390			3,433			13,017			13,377
Depreciation and amortization		15,116			9,924			52,036			36,171
Other expense (income), net		602			19			1,121			(589	)
Loss on extinguishment of debt		-			-			-			2,669
EBITDA	$	108,287		$	64,156		$	376,964		$	262,505


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,
		2012			2011			2012			2011
Net income	$	60,071		$	37,772		$	216,199		$	147,335

Stock based compensation		4,988			5,912			19,275			21,743
Amortization of intangible assets		9,332			5,621			32,376			19,590
Amortization of premium on receivables		816			816			3,265			3,266
Amortization of deferred financing costs		683			514			2,279			1,865
Loss on extinguishment of debt		-			-			-			2,669

Total pre-tax adjustments		15,819			12,863			57,195			49,133

Income tax impact of pre-tax adjustments at the effective tax rate		(5,163	)		(3,295	)		(17,410	)		(14,805	)

Adjusted net income	$	70,727		$	47,340		$	255,984		$	181,663
Adjusted net income per diluted share	$	0.82		$	0.56		$	2.99		$	2.17

Diluted shares		85,750			84,035			85,736			83,654


Exhibit 2
Transaction Volume, Revenues and Adjusted Revenue, Per Transaction and by Segment
(In thousands except revenues, net per transaction and adjusted revenues per transaction)
(Unaudited)

	Three Months Ended December 31,											Year Ended December 31,
		2012			2011		Change			% Change			2012			2011		Change			% Change

NORTH AMERICA
- Transactions		39,663			37,636			2,027		5.4	%		156,868			152,700			4,168		2.7	%
- Revenues, net per transaction	$	2.74		$	2.43		$	0.31		12.8	%	$	2.55		$	2.28		$	0.27		11.7	%
- Revenues, net	$	108,571		$	91,340		$	17,231		18.9	%	$	400,164		$	348,784		$	51,380		14.7	%

INTERNATIONAL
- Transactions		38,725			25,906			12,819		49.5	%		146,894			62,121			84,773		136.5	%
- Revenues, net per transaction	$	2.43		$	1.88		$	0.54		28.9	%	$	2.09		$	2.75		$	(0.66	)	-23.9	%
- Revenues, net	$	94,046		$	48,820		$	45,226		92.6	%	$	307,370		$	170,807		$	136,563		80.0	%


FLEETCOR CONSOLIDATED REVENUES
- Transactions		78,388			63,542			14,846		23.4	%		303,762			214,821			88,941		41.4	%
- Revenues, net per transaction	$	2.58		$	2.21		$	0.38		17.2	%	$	2.33		$	2.42		$	(0.09	)	-3.7	%
- Revenues, net	$	202,617		$	140,160		$	62,457		44.6	%	$	707,534		$	519,591		$	187,943		36.2	%



FLEETCOR CONSOLIDATED ADJUSTED REVENUES¹
- Transactions		78,388			63,542			14,846		23.4	%		303,762			214,821			88,941		41.4	%
- Adjusted Revenues per transaction	$	2.36		$	1.97		$	0.39		19.5	%	$	2.14		$	2.18		$	(0.04	)	-2.0	%
- Adjusted Revenues	$	185,018		$	125,466		$	59,552		47.5	%	$	648,961		$	468,392		$	180,569		38.6	%



¹Adjusted revenues is a non-GAAP financial measure defined as revenues, net less merchant commissions. The Company believes this measure is a more effective way to evaluate the Company's revenue performance. Refer to Exhibit 1 for a reconciliation of revenues, net to adjusted revenues.

Sources of Revenue²
	Three Months Ended December 31,											Year Ended December 31,
		2012			2011		Change			% Change			2012			2011		Change			% Change
Revenue from customers and partners		48.6	%		52.7	%		-4.1	%	-7.8	%		46.9	%		51.4	%		-4.5	%	-8.8	%
Revenue from merchants and networks		51.4	%		47.3	%		4.1	%	8.7	%		53.1	%		48.6	%		4.5	%	9.3	%

Revenue tied to fuel-price spreads		17.4	%		18.3	%		-0.9	%	-4.9	%		17.5	%		19.1	%		-1.6	%	-8.4	%
Revenue influenced by absolute price of fuel		20.2	%		22.9	%		-2.7	%	-11.8	%		20.7	%		23.7	%		-3.0	%	-12.7	%
Revenue from program fees, late fees, interest and other		62.4	%		58.8	%		3.6	%	6.1	%		61.8	%		57.2	%		4.6	%	8.0	%

²Expressed as a percentage of consolidated revenue.


Exhibit 3
Segment Results
(In thousands)
(Unaudited)

	Three Months Ended December 31,				Year Ended December 31,
	2012		2011		2012		2011
Revenues, net:
North America	$	108,571	$	91,340	$	400,164	$	348,784
International¹		94,046		48,820		307,370		170,807
	$	202,617	$	140,160	$	707,534	$	519,591

Operating income:
North America	$	55,692	$	38,362	$	196,677	$	153,687
International¹		37,479		15,870		128,251		72,647
	$	93,171	$	54,232	$	324,928	$	226,334

Depreciation and amortization:
North America	$	5,225	$	5,024	$	20,289	$	19,845
International¹		9,891		4,900		31,747		16,326
	$	15,116	$	9,924	$	52,036	$	36,171

Capital expenditures:
North America	$	1,986	$	2,865	$	7,735	$	6,840
International¹		3,492		2,181		11,376		6,614
	$	5,478	$	5,046	$	19,111	$	13,454

¹The results from our Mexican business acquired during the third quarter of 2011, Allstar business acquired during the fourth quarter of 2011, Russian business acquired in the second quarter of 2012 and CTF Technologies, Inc. acquired during the third quarter of 2012 are reported in our International segment.

Source: FleetCor Technologies, Inc.

FleetCor
Investor Relations
investor@fleetcor.com
770-729-2017

Release Details

FleetCor Reports Fourth Quarter and Fiscal Year 2012 Financial Results