Release Details

Adjusted Net Income Increases 32% Versus Prior Year

FleetCor Raises 2012 Guidance

NORCROSS, Ga.--(BUSINESS WIRE)--Aug. 8, 2012-- 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 second quarter ended June 30, 2012.

"We are extremely pleased with our second quarter results which include revenue growth of 28% and adjusted net income growth of 32%," said Ron Clarke, chairman, and chief executive officer, FleetCor Technologies, Inc. "In addition, we are pleased to have recently expanded to the Brazilian market with our acquisition of CTF Technologies as well as completing another acquisition in Russia. Both acquisitions further demonstrate our commitment to developing markets.”

Financial results for the second quarter of 2012:

GAAP Results

• Total revenues, net in the second quarter of 2012 increased 28% to $171.8 million compared to $134.2 million in the second quarter of 2011
• Net income in the second quarter of 2012 increased 48% to $54.4 million, or $0.63 per diluted share, compared to $36.7 million, or $0.44 per diluted share in the second quarter of 2011

Non-GAAP Results

• Adjusted revenues¹ (revenues, net less merchant commissions) in the second quarter of 2012 increased 29% to $154.3 million compared to $119.3 million in the second quarter of 2011
• Adjusted net income¹ in the second quarter of 2012 increased 32% to $63.0 million, or $0.73 per diluted share, compared to $47.8 million, or $0.57 per diluted share in the second quarter of 2011

2012 Outlook:

FleetCor Technologies, Inc. is raising its financial guidance for 2012 as follows:

• Revenues, net between $665 million and $675 million, up from our previous guidance range of $615 million to $625 million
• Adjusted net income¹ between $235 million and $240 million, up from our previous guidance range of $217 million to $222 million; and
• Adjusted net income¹ per diluted share between $2.74 and $2.78, up from our previous guidance range of $2.55 to $2.60

The assumptions included in the guidance are as follows:

• Fuel prices flat to current levels
• Market spreads to return to their historic normal levels
• A 0.4% decrease in our effective tax rate from 30.1% in 2011 to 29.7% in 2012
• Foreign exchange rates to remain at current levels
• An increase in fully diluted shares outstanding to 86.2 million shares
• No impact related to future acquisitions or material new partnership agreements

“Given our strong results for the first half of the year and our recently completed acquisitions we are raising our financial guidance for 2012,” said Eric Dey, chief financial officer, FleetCor Technologies, Inc. “As we said previously, we expect our two recent acquisitions, in Brazil and Russia, to be accretive to both revenue and profit in 2012, and expect the acquisitions to add at least $0.06 to $0.07 in adjusted net income per share, including deal and restructuring costs, for the remainder of 2012.”

Conference Call

The Company will host a conference call to discuss second quarter of 2012 financial results on August 8th 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 877-941-2069, or for international callers 480-629-9713. 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 4556767. The replay will be available until Wednesday, August 15, 2012. 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, and management's expectations regarding accretion from completed acquisitions. 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 revenues, net are 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 and intangible assets, (c) amortization of the premium recognized on the purchase of receivables and, (d) loss on the early extinguishment of debt. 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 expenses 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 used by 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)
(Unaudited)
									Three Months Ended June 30,										Six Months Ended June 30,
									2012					2011					2012				2011
Revenues, net									$	171,820				$	134,213				$	317,985			$	245,218
Expenses:
Merchant commissions										17,651					14,881					28,044				23,158
Processing										27,014					19,775					52,593				37,707
Selling										10,274					9,003					20,449				16,790
General and administrative										23,824					22,074					47,647				39,989
Depreciation and amortization										11,609					8,588					23,329				17,195
Operating income										81,448					59,892					145,923				110,379
Other (income) expense, net										(66	)				(56	)				522				(90	)
Interest expense, net										2,818					3,451					6,381				6,814
Loss on extinguishment of debt										-					2,669					-				2,669
Total other expense										2,752					6,064					6,903				9,393
Income before income taxes										78,696					53,828					139,020				100,986
Provision for income taxes										24,295					17,113					42,540				31,937
Net income									$	54,401				$	36,715				$	96,480			$	69,049
Basic earnings per share									$	0.65				$	0.46				$	1.16			$	0.86
Diluted earnings per share									$	0.63				$	0.44				$	1.13			$	0.83
Weighted average shares outstanding:
Basic shares										83,294					80,151					82,929				80,044
Diluted shares										85,737					83,548					85,451				83,464

FleetCor Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and par value amounts)
									June 30, 2012					December 31, 20111
									(Unaudited)
Assets
Current assets:
Cash and cash equivalents									$	255,579				$	285,159
Restricted cash										50,127					55,762
Accounts receivable (less allowance for doubtful accounts of $17,959 and $15,315, respectively)										545,796					481,791
Securitized accounts receivable - restricted for securitization investors										325,000					280,000
Prepaid expenses and other current assets										17,505					15,416
Deferred income taxes										4,310					4,797
Total current assets										1,198,317					1,122,925
Property and equipment										101,875					93,380
Less accumulated depreciation and amortization										(66,198	)				(60,656	)
Net property and equipment										35,677					32,724
Goodwill										775,749					760,872
Other intangibles, net										408,731					379,907
Other assets										86,215					45,834
Total assets									$	2,504,689				$	2,342,262
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable									$	474,837				$	478,882
Accrued expenses										34,857					41,565
Customer deposits										170,640					180,269
Securitization facility										325,000					280,000
Current portion of notes payable and other obligations										129,873					140,354
Total current liabilities										1,135,207					1,121,070
Notes payable and other obligations, less current portion										285,950					278,429
Deferred income taxes										141,612					131,327
Total noncurrent liabilities										427,562					409,756
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 475,000,000 shares authorized, 115,390,487 shares issued and 83,508,817 shares outstanding at June 30, 2012; and 475,000,000 shares authorized, 113,741,883 shares issued and 81,860,213 shares outstanding at December 31, 2011										115					114
Additional paid-in capital										500,331					466,203
Retained earnings										630,978					534,498
Accumulated other comprehensive loss										(13,841	)				(13,716	)
Less treasury stock, 31,881,670 shares at June 30, 2012 and December 31, 2011										(175,663	)				(175,663	)
Total stockholders’ equity										941,920					811,436
Total liabilities and stockholders’ equity									$	2,504,689				$	2,342,262
1 Certain 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)
(Unaudited)
			Six Months Ended June 30,
			2012					2011
Operating activities
Net income			$	96,480				$	69,049
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation				6,288					5,531
Stock-based compensation				7,793					11,983
Provision for losses on accounts receivable				10,953					8,771
Amortization of deferred financing costs				1,051					843
Amortization of intangible assets				14,357					9,187
Amortization of premium on receivables				1,633					1,634
Deferred income taxes				(167	)				(765	)
Loss on extinguishment of debt				-					2,669
Changes in operating assets and liabilities (net of acquisitions):
Restricted cash				5,635					(667	)
Accounts receivable				(117,325	)				(154,408	)
Prepaid expenses and other current assets				2,808					(4,608	)
Other assets				(42,268	)				(1,114	)
Excess tax benefits related to stock-based compensation				(14,750	)				(1,821	)
Accounts payable, accrued expenses and customer deposits				(9,286	)				56,170
Net cash (used in) provided by operating activities				(36,798	)				2,454
Investing activities
Acquisitions, net of cash acquired				(35,490	)				(785	)
Purchases of property and equipment				(8,431	)				(5,916	)
Net cash used in investing activities				(43,921	)				(6,701	)
Financing activities
Excess tax benefits related to stock-based compensation				14,750					1,821
Borrowings on securitization facility, net				45,000					18,000
Deferred financing costs paid				(795	)				(7,736	)
Proceeds from issuance of common stock				11,584					855
Principal payments on notes payable				(7,500	)				(331,465	)
Borrowings on notes payable				-					300,000
Borrowings from revolver				145,000					-
Payments on revolver, net				(185,000	)				-
Borrowings on swing line of credit, net				26,862					-
Other				-					(179	)
Net cash provided by (used in) financing activities				49,901					(18,704	)
Effect of foreign currency exchange rates on cash				1,238					9,347
Net increase in cash and cash equivalents				(29,580	)				(13,604	)
Cash and cash equivalents, beginning of period				285,159					114,804
Cash and cash equivalents, end of period			$	255,579				$	101,200
Supplemental cash flow information
Cash paid for interest			$	7,209				$	4,335
Cash paid for income taxes			$	24,164				$	20,284

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 June 30,										Six Months Ended June 30,
			2012					2011					2012					2011
Revenues, net			$	171,820				$	134,213				$	317,985				$	245,218
Merchant commissions				17,561					14,881					28,044					23,158
Total adjusted revenues			$	154,259				$	119,332				$	289,941				$	222,060
	The following table reconciles net income to adjusted net income and adjusted net income per diluted share:
			Three Months Ended June 30,										Six Months Ended June 30,										Year Ended
			2012					2011					2012					2011					2011
Net income			$	54,401				$	36,715				$	96,480				$	69,049				$	147,335
Stock based compensation				3,960					7,842					7,793					11,983					21,743
Amortization of intangible assets				7,081					4,587					14,357					9,187					19,590
Amortization of premium on receivables				817					818					1,633					1,634					3,266
Amortization of deferred financing costs				541					377					1,051					843					1,864
Loss on extinguishment of debt				-					2,669					-					2,669					2,669
Total pre-tax adjustments				12,399					16,293					24,834					26,316					49,132
Income tax impact of pre-tax adjustments at the effective tax rate				(3,828	)				(5,180	)				(7,599	)				(8,322	)				(14,805	)
Adjusted net income			$	62,972				$	47,828				$	113,715				$	87,043				$	181,662
Adjusted net income per diluted share			$	0.73				$	0.57				$	1.33				$	1.04				$	2.17
Diluted shares				85,737					83,548					85,451					83,464					83,654

Exhibit 2
Key Operating Metrics
(In thousands, except revenues, net per transaction and adjusted revenues per transaction)
(Unaudited)
Transaction Volume, Revenues and Adjusted Revenue, Per Transaction and by Segment
				Three Months Ended June 30,																		Six Months Ended June 30,
				2012					2011					Change					% Change			2012					2011					Change					% Change
	NORTH AMERICA
	- Transactions				39,336					38,625					711				1.8	%			76,001					74,782					1,219				1.6	%
	- Revenues, net per transaction			$	2.73				$	2.40				$	0.33				13.8	%		$	2.50				$	2.20				$	0.30				13.6	%
	- Revenues, net			$	107,286				$	92,865				$	14,421				15.5	%		$	190,098				$	164,449				$	25,649				15.6	%
	INTERNATIONAL2
	- Transactions2				34,903					11,108					23,795				214.2	%			70,112					21,920					48,192				219.9	%
	- Revenues, net per transaction2			$	1.85				$	3.72				$	(1.87	)			-50.3	%		$	1.82				$	3.68				$	(1.86	)			-50.5	%
	- Revenues, net			$	64,534				$	41,348				$	23,186				56.1	%		$	127,887				$	80,769				$	47,118				58.3	%
	FLEETCOR CONSOLIDATED REVENUES2
	- Transactions2				74,239					49,733					24,506				49.3	%			146,113					96,702					49,411				51.1	%
	- Revenues, net per transaction2			$	2.31				$	2.70				$	(0.39	)			-14.4	%		$	2.18				$	2.54				$	(0.36	)			-14.2	%
	- Revenues, net			$	171,820				$	134,213				$	37,607				28.0	%		$	317,985				$	245,218				$	72,767				29.7	%
	FLEETCOR CONSOLIDATED ADJUSTED REVENUES1,2
	- Transactions2				74,239					49,733					24,506				49.3	%			146,113					96,702					49,411				51.1	%
	- Adjusted Revenues per transaction2			$	2.08				$	2.40				$	(0.32	)			-13.3	%		$	1.98				$	2.30				$	(0.32	)			-13.9	%
	- Adjusted Revenues			$	154,259				$	119,332				$	34,927				29.3	%		$	289,941				$	222,060				$	67,881				30.6	%
1 Adjusted 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.
2 The presentation of prior quarters presented herein has been conformed to the current period presentation that eliminates certain intercompany transactions.
Sources of Revenue3
				Three Months Ended June 30,																		Six Months Ended June 30,
				2012					2011					Change					% Change			2012					2011					Change					% Change
	Revenue from customers and partners				40.8	%				47.3	%				-6.5	%			-13.7	%			44.7	%				51.0	%				-6.3	%			-12.4	%
	Revenue from merchants and networks				59.2	%				52.7	%				6.5	%			12.3	%			55.3	%				49.0	%				6.3	%			12.9	%
	Revenue tied to fuel-price spreads				23.5	%				21.5	%				2.0	%			9.3	%			19.7	%				19.2	%				0.5	%			2.6	%
	Revenue influenced by absolute price of fuel				19.2	%				25.6	%				-6.4	%			-25.0	%			19.2	%				24.0	%				-4.8	%			-20.0	%
	Revenue from program fees, late fees, interest and other				57.3	%				52.9	%				4.4	%			8.3	%			61.1	%				56.8	%				4.3	%			7.6	%
3 Expressed as a percentage of consolidated revenue.

Exhibit 3
GAAP Segment Results
(In thousands)
(Unaudited)
				Three Months Ended June 30,								Six Months Ended June 30,
				2012				2011				2012				2011
Revenues, net:
	North America			$	107,286			$	92,865			$	190,098			$	164,449
	International1				64,534				41,348				127,887				80,769
				$	171,820			$	134,213			$	317,985			$	245,218
Operating income:
	North America			$	53,598			$	40,471			$	91,711			$	71,990
	International1				27,850				19,421				54,212				38,389
				$	81,448			$	59,892			$	145,923			$	110,379
Depreciation and amortization:
	North America			$	5,024			$	4,889			$	10,018			$	9,831
	International1				6,585				3,699				13,311				7,364
				$	11,609			$	8,588			$	23,329			$	17,195
Capital expenditures:
	North America			$	2,501			$	1,347			$	4,596			$	2,834
	International1				2,367				1,975				3,835				3,082
				$	4,868			$	3,322			$	8,431			$	5,916
1 The results from our Mexican business acquired during the third quarter of 2011, Allstar business acquired during the fourth quarter of 2011 and Russian business acquired in the second quarter of 2012 are reported in our International segment.

 

Source: FleetCor Technologies, Inc.

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