8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported):    May 12, 2011

FleetCor Technologies, Inc.

 

 

(Exact name of registrant as specified in its charter)

 

Delaware   001-35004   72-1074903
                                                                                                        

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

655 Engineering Drive, Suite 300,

Norcross, Georgia

    30092-2830
                                                                                              
(Address of principal executive offices)     (Zip Code)
Registrant’s telephone number, including area code:   (770) 449-0479

Not Applicable

 

 

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02 Results of Operations and Financial Condition.

On May 12, 2011, FleetCor Technologies, Inc. issued a press release announcing first quarter 2011 financial results. A copy of the press release is attached as Exhibit 99.1, which is incorporated by reference in its entirety. The information in this item, including Exhibit 99.1, is being furnished, not filed. Accordingly, the information in this item will not be incorporated by reference into any registration statement filed by FleetCor Technologies, Inc. under the Securities Act of 1933, as amended, unless specifically identified as being incorporated into it by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. 99.1 FleetCor Technologies, Inc. press release dated May 12, 2011


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    FleetCor Technologies, Inc.

May 12, 2011

   

By:     /s/ Eric R. Dey

   

Eric R. Dey

   

Chief Financial Officer


Exhibit Index

 

Exhibit No.    Description
99.1    FleetCor Technologies, Inc. press release dated May 12, 2011
PRESS RELEASE

Exhibit 99.1

FleetCor Reports First Quarter 2011 Financial Results

NORCROSS, Ga., May 12, 2011 — FleetCor Technologies, Inc. (NYSE: FLT), a leading independent global provider of specialized payment products and services to businesses, commercial fleets, major oil companies, petroleum marketers and government fleets, today reported financial results for its first quarter ended March 31, 2011.

“We are very pleased with our first quarter results. In the first quarter we reported adjusted net income growth of 20%, on a pro forma basis, which is in line with our previously announced organic growth earnings target “ said Ron Clarke, chairman, president and chief executive officer, FleetCor Technologies, Inc. “Our strategy continues to be growing the business through organic measures, signing new partnership agreements, such as the recently announced major oil company agreement, and pursuing acquisitions, particularly in emerging markets.”

Financial results for the first quarter of 2011:

GAAP Results

 

   

Total revenues, net in the first quarter of 2011 increased 6.5% to $111.0 million compared to $104.2 million in the first quarter of 2010

   

Net income in the first quarter of 2011 increased 18.2% to $32.3 million, or $0.39 per diluted share, compared to $27.3 million, or $0.34 per diluted share in the first quarter of 2010

Non-GAAP Results

 

   

Adjusted revenues (revenues, net less merchant commissions) in the first quarter of 2011 increased 10.9% to $102.7 million compared to $92.6 million in the first quarter of 2010

   

Adjusted net income in the first quarter of 2011 increased 20% to $39.3 million, or $0.47 per diluted share, compared to $32.7 million, or $0.39 per diluted share in the first quarter of 2010 on a pro forma basis (to reflect the impact of public company expenses, non-cash compensation expenses, decrease in the effective tax rate, effective during the first quarter of 2011, and fully diluted shares effective in the first quarter of 2011, as if these changes had occurred during the first quarter of 2010)

Reconciliations of GAAP results to non-GAAP results and pro forma adjustments are provided in exhibit 1 attached. Additional supplemental data is provided in exhibit 2.

2011 Outlook

FleetCor Technologies, Inc. is re-affirming its financial guidance for 2011 as follows:

 

   

Revenue between $460 million to $480 million

   

Adjusted Net Income between $155 million to $165 million

   

Adjusted Net income per diluted share between $1.83 to $1.95

“We remain confident about our full year guidance, given the generally positive economic environment , and the progress on our organic growth initiatives”, said Mr. Clarke.


The Company’s full year 2011 guidance includes the following:

 

   

Approximately $2 million of incremental cash operating costs for public company expenses

   

A 1.9% increase in our effective tax rate from 28.7% in 2010 to 30.6% in 2011

   

An increase of 3.9 million diluted shares outstanding from 80.8 million shares in 2010 to 84.7 million shares in 2011

If these incremental costs and shares had been incurred in 2010, the Company’s full year 2010 Adjusted Net Income would have been $138.3 million, or $1.63 per diluted share.

The Company’s full year 2011 guidance is presented on a constant currency basis and assumes similar macroeconomic and business conditions exist in 2011 as did in 2010. This guidance does not reflect the impact of any future acquisitions or material new partnership agreements.

Conference Call

The Company will host a conference call to discuss first quarter 2011 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 877-941-1427, or for international callers 480-629-9664. 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 4436750. The replay will be available until Thursday, May 19, 2011. 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 plans for 2011 and confidence in prospects for growth. 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; failure to maintain or renew key business relationships; failure to maintain competitive offerings; failure to maintain or renew sources of financing; failure to successfully integrate 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, 2010, filed with the Securities and Exchange Commission on March 25, 2011. 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 are calculated as revenues less merchant commissions. Adjusted net income is calculated as net income, adjusted to eliminate (a) stock-based compensation expense related to share-based compensation awards, (b) amortization of deferred financing costs and intangible assets and (c) amortization of the premium recognized on the purchase of receivables. 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 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 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.

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 is 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, The Global Fleet Card Company, is a leading independent global provider of specialized payment products and services to businesses, commercial fleets, major oil companies, petroleum marketers and government entities. FleetCor’s payment programs enable businesses to better manage and 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 18 countries in North America, Europe, Africa and Asia. For more information, please visit www.fleetcor.com.


FleetCor Technologies, Inc. and subsidiaries

GAAP Consolidated Statements of Income

(In thousands, except share and per share amounts)

 

     1st Quarter  
     2011     2010  
     (Unaudited)     (Unaudited)  

Revenues, net

   $ 111,005      $ 104,202   

Expenses:

    

Merchant commissions

     8,277        11,589   

Processing

     17,932        17,521   

Selling

     7,787        6,849   

General and administrative

     17,915        13,089   
                
     59,094        55,154   

Depreciation and amortization

     8,607        8,054   
                

Operating income

     50,487        47,100   
                

Other (income) loss, net

     (34     44   

Interest expense, net

     3,363        5,264   
                

Total other expense

     3,329        5,308   
                

Income before income taxes

     47,158        41,792   

Provision for income taxes

     14,823        14,447   
                

Net income

     32,335        27,345   

Calculation of income attributable to common shareholders:

    

Convertible preferred stock accrued dividends

     -        (4,420
                

Income attributable to common shareholders for basic earnings per share

   $ 32,335      $ 22,925   
                

Basic earnings per share

   $ 0.40      $ 0.67   

Diluted earnings per share

   $ 0.39      $ 0.34   

Weighted average shares outstanding:

    

Basic shares

     79,937        34,011   

Diluted shares

     83,378        80,489   


FleetCor Technologies, Inc. and subsidiaries

Consolidated Balance Sheets

(In thousands, except share and par value amounts)

 

     March 31, 2011     December 31, 2010  
     (Unaudited)        

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 119,779      $ 114,804   

Restricted cash

     66,319        62,341   

Accounts receivable (less allowance for doubtful accounts of $15,187 and $14,256, respectively)

     378,951        260,163   

Securitized accounts receivable - restricted for securitization investors

     154,000        144,000   

Prepaid expenses and other current assets

     36,226        33,191   

Deferred income taxes

     4,594        4,484   
                

Total current assets

     759,869        618,983   
                

Property and equipment

     87,411        83,013   

Less accumulated depreciation and amortization

     (60,314     (56,195
                

Net property and equipment

     27,097        26,818   

Goodwill

     602,017        601,666   

Other intangibles, net

     190,066        193,861   

Other assets

     43,172        42,790   
                

Total assets

   $ 1,622,221      $ 1,484,118   
                

Liabilities and Stockholders’ Equity

    

Current liabilities:

    

Accounts payable

   $ 250,765      $ 177,644   

Accrued expenses

     59,002        49,176   

Customer deposits

     81,016        78,685   

Securitization facility

     154,000        144,000   

Current portion of notes payable and other obligations

     11,134        11,617   
                

Total current liabilities

     555,917        461,122   
                

Notes payable and other obligations, less current portion

     317,287        313,796   

Deferred income taxes

     81,350        83,255   
                

Total noncurrent liabilities

     398,637        397,051   
                

Commitments and contingencies

    

Stockholders’ equity:

    

Common stock, $0.001 par value; 475,000,000 shares authorized, 11,885,103 shares issued and 80,003,433 shares outstanding at March 31, 2011; and 475,000,000 shares authorized, 111,522,354 shares issued and 79,655,213 shares outstanding at December 31, 2010

     112        112   

Additional paid-in capital

     427,849        421,991   

Retained earnings

     419,498        387,163   

Accumulated other comprehensive loss

     (4,129     (8,101

Less treasury stock, 31,881,670 shares at March 31, 2011 and 31,867,141 shares at December 31, 2010

     (175,663     (175,220
                

Total stockholders’ equity

     667,667        625,945   
                

Total liabilities and stockholders’ equity

   $ 1,622,221      $ 1,484,118   
                


Exhibit 1

RECONCILIATION OF NON-GAAP MEASURES AND PRO FORMA INFORMATION

(In thousands, except shares and per share amounts)

 

 

The following table reconciles revenues, net to adjusted revenues:

 

     1st Quarter
2011
     1st Quarter
2010
 

Revenues, net

     111,005         104,202   

Merchant commissions

     8,277         11,589   
                 

Total adjusted revenues

   $ 102,728       $ 92,613   
                 

 

 

The following table reconciles net income to adjusted net income and adjusted net income per diluted share:

 

     1st Quarter
2011
    1st Quarter
2010
    Year Ended
2010
 
Net income    $ 32,335      $ 27,345      $ 107,896   
Stock based compensation      4,250        853        27,546   
Amortization of intangible assets      4,600        4,188        17,203   
Amortization of premium on receivables      816        816        3,263   

Amortization of deferred financing costs

 

     466        427        2,016   
                        
Total pre-tax adjustments      10,132        6,284        50,028   

Income tax impact of pre-tax adjustments at the effective tax rate

 

    

 

(3,184

 

 

   

 

(2,172

 

 

   

 

(14,340

 

 

                        
Adjusted net income    $ 39,283      $ 31,457      $ 143,584   
                        
Adjusted net income per diluted share    $ 0.47      $ 0.39      $ 1.78   
Diluted shares      83,378        80,489        80,751   

 

 

For the periods presented below, the following table reconciles 2010 actual results to 2010 pro forma results , which reflects the impact of stock-based compensation expense related to share-based compensation awards, public company expenses and a decrease in the effective tax rate, effective during 2011, as if these changes had occurred in 2010:

       
     Quarter Ended
March 31, 2010
    Q1 2011
Changes1
    Pro forma
March 31, 2010
    Year Ended
2010
    2011
Changes2
    Pro forma
2010
 
Income before income taxes    $ 41,792      $ (3,745   $ 38,047        151,280      $ (14,000   $ 137,280   
Provision for income taxes      14,447        (2,517     11,930        43,384        (1,376     42,008   
                                                
Net income      27,345        (1,228     26,117        107,896        (12,624     95,272   
Stock based compensation      853        3,288        4,141        27,546        12,000        39,546   
Amortization of intangible assets      4,188        -        4,188        17,203        -        17,203   
Amortization of premium on receivables      816        -        816        3,263        -        3,263   

Amortization of deferred financing costs

 

    

 

427

 

  

 

   

 

-

 

  

 

   

 

427

 

  

 

   

 

2,016

 

  

 

   

 

-

 

  

 

   

 

2,016

 

  

 

                                                
Total pre-tax adjustments      6,284        3,288        9,572        50,028        12,000        62,028   

Income tax impact of pre-tax adjustments at the effective tax rate

 

    

 

(2,172

 

 

   

 

(829

 

 

   

 

(3,001

 

 

   

 

(14,340

 

 

   

 

(4,641

 

 

   

 

(18,981

 

 

                                                
Adjusted net income    $ 31,457      $ 1,231      $ 32,688      $ 143,584      $ (5,265   $ 138,319   
                                                
Adjusted net income per diluted share    $ 0.39        $ 0.39      $ 1.78        $ 1.63   
Diluted shares      80,489          83,378        80,751          84,700   
1 Q1 2011 changes include approximately $0.3 million in incremental cash operating costs for public company expenses, $3.3 million of non-cash compensation expenses associated with our stock plan, and a 3.2% decrease in our effective tax rate from 34.6% at March 31, 2010 to 31.4% at March 31, 2011. Additionally, 2011 reflects an increase of 2.9 million diluted shares outstanding, from 80.5 million at March 31, 2010 to 83.4 million at March 31, 2011.        
2 2011 changes include approximately $2.0 million in incremental cash operating costs for public company expenses, $12.0 million of non-cash compensation expenses associated with our stock plan, and a 1.9% increase in our effective tax rate from 28.7% in 2010 to 30.6% in 2011. Additionally, 2011 reflects an increase of 3.9 million diluted shares outstanding, from 80.8 million in 2010 to 84.7 million in 2011.        


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)

 

     1st Quarter                
     2011      2010      Change      % Change  

 

NORTH AMERICA

           

- Transactions

     36,157         34,926         1,231         3.5

- Revenues, net per transaction

   $ 1.98       $ 1.96       $ 0.02         0.8

- Revenues, net

   $ 71,585       $ 68,591       $ 2,994         4.4

 

INTERNATIONAL1

           

- Transactions

     11,299         10,733         567         5.3

- Revenues, net per transaction

   $ 3.49       $ 3.29       $ 0.20         6.1

- Revenues, net

   $ 39,420       $ 35,297       $ 4,123         11.7
           

 

FLEETCOR CONSOLIDATED REVENUES1

                                   

- Transactions

     47,457         45,659         1,798         3.9

- Revenues, net per transaction

   $ 2.34       $ 2.28       $ 0.06         2.8

- Revenues, net

   $ 111,005       $ 103,888       $ 7,117         6.9
                                     
           

 

FLEETCOR CONSOLIDATED ADJUSTED REVENUES1,2

                                   

- Transactions

     47,457         45,659         1,798         3.9

- Adjusted Revenues per transaction

   $ 2.16       $ 2.02       $ 0.14         7.1

- Adjusted Revenues

   $ 102,728       $ 92,299       $ 10,429         11.3
                                     

1 Calculation of revenue per transaction for our International segment and on a consolidated basis for the quarter ended March 31, 2010 excludes the impact of a non-renewed partner contract in Europe, inherited from an acquisition, which we chose not to renew. This non-renewed contract contributed approximately 1.6 million transactions and $0.3 million in revenues, net to our International segment in the quarter ended March 31, 2010. This contract had a high number of transactions and very little revenue and had a $0.40 negative impact on our International segment revenue per transaction in the quarter ended March 31, 2010. We believe that excluding the impact of this contract is a more effective measure for evaluating the Company’s revenue performance of its continuing business. Revenues, net, excluding the impact of a non-renewed partner contract in Europe for our International segment and on a consolidated basis are supplemental non-GAAP financial measures of performance.

2Adjusted 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.