FleetCor Reports First Quarter 2013 Financial Results

May 2, 2013

Adjusted Net Income Per Share Grows 50%

FleetCor Raises 2013 Guidance

NORCROSS, Ga.--(BUSINESS WIRE)--May. 2, 2013-- FleetCor Technologies, Inc. (NYSE: FLT), a leading global provider of fuel cards and workforce payment products to businesses, today reported financial results for its first quarter ended March 31, 2013.

"Our first quarter results were terrific, with revenue up 32%, and adjusted net income per share up 50%. We are also pleased to have completed three acquisitions year to date - GE’s Australia fuel card business, Cardlink in New Zealand, and Telenav Mobile in the U.S.,” said Ron Clarke, chairman and chief executive officer, FleetCor Technologies, Inc.

Financial Results for First Quarter 2013:

GAAP Results

Total revenues in the first quarter of 2013 increased 32% to $193.7 million compared to $146.2 million in the first quarter of 2012
Net income in the first quarter of 2013 increased 54% to $64.7 million, or $0.77 per diluted share, compared to $42.1 million, or $0.49 per diluted share in the first quarter of 2012

Non-GAAP Results

Adjusted revenues¹ (revenues, net less merchant commissions) in the first quarter of 2013 increased 32% to $179.8 million compared to $135.8 million in the first quarter of 2012
Adjusted net income¹ in the first quarter of 2013 increased 48% to $75.2 million
Adjusted net income per share in the first quarter of 2013 increased 50% to $0.90 per diluted share, compared to $0.60 per diluted share in the first quarter of 2012

2013 Outlook:

FleetCor Technologies, Inc. is raising its financial guidance for 2013 as follows:

Revenues, net between $810 million and $820 million, up from our previous guidance range of $790 million to $810 million
Adjusted net income between $310 million and $320 million, up from our previous guidance range of $300 million to $310 million; and
Adjusted net income per diluted share between $3.70 and $3.80, up from our previous guidance range of $3.61 to $3.69

The Company's full-year 2012 guidance assumptions for the remainder of 2013 are as follows:

Fuel prices and FX rates at current levels
Market spreads equal to historical average
Fully diluted shares outstanding of 84.2 million shares
No impact related to acquisitions or material new partnership agreements not already disclosed

“Given our strong first quarter results and our recently completed acquisitions, we are raising our financial guidance for 2013,” said Eric Dey, chief financial officer, FleetCor Technologies, Inc. “Included in our updated guidance is the expectation that our two recent acquisitions, in Australia and New Zealand, will be accretive to both revenue and profit in 2013, and we expect the acquisitions to add approximately $0.04 in adjusted net income per share, including deal and restructuring costs, for the remainder of 2013.”

_________________________

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.

Conference Call

The Company will host a conference call to discuss first quarter 2013 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) 941-1429, or for international callers (480) 629-9857. 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 4615779. The replay will be available until May 9, 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," "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 expectations regarding recent acquisitions and accretiveness to financial results. 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, 2012, filed with the Securities and Exchange Commission on March 1, 2013. 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, Europe, Australia and New Zealand. For more information, please visit www.fleetcor.com.


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

	Three Months Ended March 31,
	2013		2012
	(Unaudited)		(Unaudited)

Revenues, net	$	193,651	$	146,165

Expenses:
Merchant commissions		13,861		10,393
Processing		29,943		25,579
Selling		11,704		10,175
General and administrative		29,261		23,823
Depreciation and amortization		14,629		11,720
Operating income		94,253		64,475
Other expense (income), net		292		588
Interest expense, net		3,448		3,563
Total other expense		3,740		4,151
Income before income taxes		90,513		60,324
Provision for income taxes		25,851		18,245
Net income	$	64,662	$	42,079

Basic earnings per share	$	0.80	$	0.51
Diluted earnings per share	$	0.77	$	0.49

Weighted average shares outstanding:
Basic shares		81,222		82,565
Diluted shares		83,960		85,164


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

	March 31, 2013			December 31, 2012
	(Unaudited)
Assets

Current assets:
Cash and cash equivalents	$	224,613		$	283,649
Restricted cash		49,347			53,674
Accounts receivable (less allowance for doubtful accounts of $19,576 and $19,463 respectively)		626,464			525,441
Securitized accounts receivable - restricted for securitization investors		385,000			298,000
Prepaid expenses and other current assets		24,932			28,126
Deferred income taxes		7,710			6,464

Total current assets		1,318,066			1,195,354

Property and equipment		97,104			93,902
Less accumulated depreciation and amortization		(51,212	)		(48,706	)

Net property and equipment		45,892			45,196

Goodwill		973,335			926,609
Other intangibles, net		502,103			463,864
Other assets		50,988			90,847

Total assets	$	2,890,384		$	2,721,870

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	501,036		$	418,609
Accrued expenses		61,383			75,812
Customer deposits		170,035			187,627
Securitization facility		385,000			298,000
Current portion of notes payable and other obligations		122,375			162,174

Total current liabilities		1,239,829			1,142,222

Notes payable and other obligations, less current portion		491,988			485,217
Deferred income taxes		175,554			180,609

Total noncurrent liabilities		667,542			665,826

Commitments and contingencies

Stockholders’ equity:

Common stock, $0.001 par value; 475,000,000 shares authorized, 117,080,997 shares issued
and 81,346,505 shares outstanding at March 31, 2013; and 475,000,000 shares authorized,
116,772,324 shares issued and 81,037,832 shares outstanding at December 31, 2012		116			116
Additional paid-in capital		557,279			542,018
Retained earnings		815,359			750,697
Accumulated other comprehensive loss		(14,078	)		(3,346	)
Less treasury stock, 35,734,492 shares at March 31, 2013 and December 31, 2012		(375,663	)		(375,663	)

Total stockholders’ equity		983,013			913,822

Total liabilities and stockholders’ equity	$	2,890,384		$	2,721,870


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

	Three Months Ended March 31,
		2013			2012
	(Unaudited)
Operating activities
Net income	$	64,662		$	42,079

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation		4,031			3,119
Stock-based compensation		4,162			3,834
Provision for losses on accounts receivable		4,460			4,957
Amortization of deferred financing costs		760			510
Amortization of intangible assets		9,022			7,276
Amortization of premium on receivables		816			816
Deferred income taxes		(1,012	)		(17	)
Changes in operating assets and liabilities (net of acquisitions):
Restricted cash		4,327			(1,447	)
Accounts receivable		(192,483	)		(183,976	)
Prepaid expenses and other current assets		3,194			(1,889	)
Other assets		40,113			(37,821	)
Excess tax benefits related to stock-based compensation		(5,843	)		(8,883	)
Accounts payable, accrued expenses and customer deposits		50,101			57,508
Net cash provided by operating activities		(13,690	)		(113,934	)


Investing activities
Acquisitions, net of cash acquired		(94,773	)		(10	)
Purchases of property and equipment		(4,762	)		(3,563	)
Net cash used in investing activities		(99,535	)		(3,573	)


Financing activities
Excess tax benefits related to stock-based compensation		5,843			8,883
Proceeds from issuance of common stock		5,256			7,737
Borrowings on securitization facility, net		87,000			61,000
Deferred financing costs paid		(1,830	)		(681	)
Principal payments on notes payable		(7,500	)		(3,750	)
Proceeds from notes payable		–			–
Payments on revolver		(25,000	)		(110,000	)
Borrowings from revolver		–			85,000
Payments on swing line of credit, net		–			63,960
Other		(178	)		–
Net cash provided by financing activities		63,591			112,149

Effect of foreign currency exchange rates on cash		(9,402	)		7,318

Net (decrease) increase in cash and cash equivalents		(59,036	)		1,960
Cash and cash equivalents, beginning of year		283,649			285,159
Cash and cash equivalents, end of year	$	224,613		$	287,119

Supplemental cash flow information
Cash paid for interest	$	3,863		$	4,028

Cash paid for income taxes	$	38,426		$	6,004


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 March 31,
		2013			2012

Revenues, net		193,651			146,165
Merchant commissions		13,861			10,393
Total adjusted revenues	$	179,790		$	135,772


The following table reconciles net income to EBITDA:

	Three Months Ended March 31,
		2013			2012

Net income	$	64,662		$	42,079
Provision for income taxes		25,851			18,245
Interest expense, net		3,448			3,563
Depreciation and amortization		14,629			11,720
Other expense (income), net		292			588
EBITDA	$	108,882		$	76,195


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

	Three Months Ended March 31,
		2013			2012
Net income	$	64,662		$	42,079

Stock based compensation		4,162			3,834
Amortization of intangible assets		9,022			7,276
Amortization of premium on receivables		816			816
Amortization of deferred financing costs		760			510

Total pre-tax adjustments		14,760			12,436

Income tax impact of pre-tax adjustments at the effective tax rate		(4,216	)		(3,761	)

Adjusted net income	$	75,206		$	50,754
Adjusted net income per diluted share	$	0.90		$	0.60

Diluted shares		83,960			85,164


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 March 31,
		2013			2012		Change			% Change

NORTH AMERICA
- Transactions²		38,262			36,747			1,515		4.1	%
- Revenues, net per transaction	$	2.63		$	2.25		$	0.38		16.9	%
- Revenues, net	$	100,594		$	82,812		$	17,782		21.5	%

INTERNATIONAL
- Transactions²		35,898			35,209			689		2.0	%
- Revenues, net per transaction	$	2.59		$	1.80		$	0.79		43.9	%
- Revenues, net	$	93,057		$	63,353		$	29,704		46.9	%


FLEETCOR CONSOLIDATED REVENUES
- Transactions²		74,160			71,956			2,204		3.1	%
- Revenues, net per transaction	$	2.61		$	2.03		$	0.58		28.6	%
- Revenues, net	$	193,651		$	146,165		$	47,486		32.5	%



FLEETCOR CONSOLIDATED ADJUSTED REVENUES¹
- Transactions²		74,160			71,956			2,204		3.1	%
- Adjusted Revenues per transaction	$	2.42		$	1.89		$	0.53		28.0	%
- Adjusted Revenues	$	179,790		$	135,772		$	44,018		32.4	%



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.

²The 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 March 31,
		2013			2012		Change			% Change
Revenue from customers and partners		51.4	%		49.3	%		2.1	%	4.3	%
Revenue from merchants and networks		48.6	%		50.7	%		-2.1	%	-4.1	%

Revenue tied to fuel-price spreads		15.9	%		15.1	%		0.8	%	5.3	%
Revenue influenced by absolute price of fuel		20.8	%		19.2	%		1.6	%	8.3	%
Revenue from program fees, late fees, interest and other		63.3	%		65.7	%		-2.4	%	-3.7	%

³Expressed as a percentage of consolidated revenue.


Exhibit 3
Segment Results
(In thousands)
(Unaudited)

	Three Months Ended March 31,
	2013		2012
Revenues, net:
North America	$	100,594	$	82,812
International¹		93,057		63,353
	$	193,651	$	146,165

Operating income:
North America	$	49,426	$	38,113
International¹		44,827		26,362
	$	94,253	$	64,475

Depreciation and amortization:
North America	$	5,172	$	4,994
International¹		9,457		6,726
	$	14,629	$	11,720

Capital expenditures:
North America	$	1,064	$	2,095
International¹		3,698		1,468
	$	4,762	$	3,563

¹The results from our Russian business acquired in the second quarter of 2012, CTF Technologies, Inc. acquired during the third quarter of 2012 and our Australian business acquired during the first quarter of 2013 are reported in our International segment.

Source: FleetCor Technologies, Inc.

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

Release Details

FleetCor Reports First Quarter 2013 Financial Results