TechDogs-"FLEETCOR Reports Fourth Quarter and Full Year 2022 Financial Results"

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FLEETCOR Reports Fourth Quarter and Full Year 2022 Financial Results

By Business Wire

Business Wire
Overall Rating

All-time record revenues and adjusted net income

ATLANTA--(BUSINESS WIRE)--FLEETCOR Technologies, Inc. (NYSE: FLT), a leading global business payments company, today reported financial results for its fourth quarter and year ended December 31, 2022.

“We reported better than expected results in the fourth quarter, with very favorable sales and retention trends exiting the year,” said Ron Clarke, Chairman and Chief Executive Officer, FLEETCOR Technologies, Inc. “Our full year 2022 financial performance was absolutely outstanding, with 21% revenue growth, and 22% adjusted earnings per share growth.1 Additionally, we made meaningful advances on our EV capabilities and are running hard at that big opportunity.”

Financial Results for Fourth Quarter of 2022:

GAAP Results

  • Revenues increased 10% to $883.6 million in the fourth quarter of 2022, compared with $802.3 million in the fourth quarter of 2021.
  • Net income was $225.3 million in the fourth quarter of 2022, compared with $225.0 million in the fourth quarter of 2021.
  • Net income per diluted share increased 11% to $3.03 in the fourth quarter of 2022, compared with $2.74 per diluted share in the fourth quarter of 2021.

Non-GAAP Results1

  • Adjusted net income1 decreased 2% to $300.2 million in the fourth quarter of 2022 compared with $304.9 million in the fourth quarter of 2021.
  • Adjusted net income per diluted share1 increased 9% to $4.04 in the fourth quarter of 2022, compared with $3.72 per diluted share in the fourth quarter of 2021.

Financial Results for Full Year 2022:

GAAP Results

  • Revenues increased 21% to $3,427.1 million in 2022, compared with $2,833.7 million in 2021.
  • Net income increased 14% to $954.3 million in 2022, compared with $839.5 million in 2021.
  • Net income per diluted share increased 24% to $12.42 in 2022, compared with $9.99 per diluted share in 2021.

Non-GAAP Results1

  • Adjusted net income1 increased 11% to $1,236.7 million in 2022, compared with $1,109.8 million in 2021.
  • Adjusted net income per diluted share1 increased 22% to $16.10 in 2022, compared with $13.21 in 2021.

“For the full year 2022, our results were terrific, with full year organic revenue growth of 13% and adjusted net income per share $0.85 ahead of our initial expectations,” said Alissa Vickery, Interim Chief Financial Officer, FLEETCOR Technologies, Inc. “Organic growth in every category was at our targeted levels and new sales of 21% provides a strong platform for growth into 2023.”1

Full Year 2023 Outlook:

“Our 2023 outlook is for the Company to deliver our targeted organic revenue growth of 9% to 11%, with EBITDA growing faster, and with sales growth of approximately 15%. Volumes and revenue should build throughout the year, as we continue to benefit from our growth investments, acquisitions and seasonality. We are working to manage expenses carefully and expect margins to improve throughout the year as higher revenues generate operating leverage and we realize synergies from recent acquisitions,” said Alissa Vickery, Interim Chief Financial Officer, FLEETCOR Technologies, Inc.

For full year 2023, FLEETCOR Technologies, Inc. financial guidance1 is as follows:

  • Total revenues between $3,800 million and $3,850 million;
  • GAAP net income between $983 million and $1,023 million;
  • GAAP net income per diluted share between $13.15 and $13.65;
  • Adjusted net income between $1,253 million and $1,293 million; and
  • Adjusted net income per diluted share between $16.75 and $17.25.

FLEETCOR’s guidance assumptions for the full year are as follows:

  • Weighted average U.S. fuel prices equal to $4.00 per gallon;
  • Market spreads flat with the 2022 average;
  • Foreign exchange rates equal to the month average of January 2023;
  • Interest expense between $312 million and $332 million, using the treasury curve from February 1, 2023;
  • Approximately 75 million fully diluted shares outstanding;
  • A tax rate of approximately 26% to 27%; and
  • No impact related to acquisitions not already closed.

First Quarter of 2023 Outlook:

The Company currently expects first quarter revenues between $875 million and $890 million, and adjusted net income per diluted share between $3.55 and $3.75. Significantly higher interest rates on our floating rate debt are a headwind to net income in the first quarter of 2023. Furthermore, the Company has historically experienced seasonality in the first quarter, causing it to be the lowest in terms of both revenues and net income for the year; as certain businesses such as fuel, lodging and tolls tend to have lighter first quarters due to weather and holidays.

Interest Rate Swaps and Share Repurchases:

In January 2023, the Company entered into $1.5 billion of incremental interest rate swaps, with an average term of three years, to reduce the variability of interest payments on our floating rate debt. Additionally, in February 2023, the Company executed $500 million of U.S. dollar to euro denominated cross-currency swaps to benefit from lower euro interest rates. The combination of these swaps, along with existing swaps, helps to manage interest rate risk on approximately 47% of floating rate debt in our Credit Facility for 2023. Additionally, given the continued significant share price dislocation, the Company repurchased approximately 0.6 million shares in the fourth quarter of 2022, for a total of 6.2 million shares for $1.4 billion in 2022.

Conference Call:

The Company will host a conference call to discuss fourth quarter and full year 2022 financial results today at 5:00 pm ET. Hosting the call will be Ron Clarke, chief executive officer, Alissa Vickery, interim chief financial officer and Jim Eglseder, investor relations. The conference call can be accessed live via webcast from the Company's investor relations website at http://investor.fleetcor.com. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 10174535. The replay will be available until Tuesday, February 15, 2023. Prior to the conference call, the Company will post supplemental financial information that will be discussed during the call and live webcast.

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, assumptions, 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.

These forward-looking statements are not a guarantee of performance, and you should not place undue reliance on such statements. We have based these forward-looking statements largely on preliminary information, internal estimates and management assumptions, expectations and plans about future conditions, events and results. Forward-looking statements are subject to many uncertainties and other variable circumstances, such as regulatory measures, voluntary actions, or changes in consumer preferences, that impact our transaction volume, including social distancing, shelter-in-place, shutdowns of nonessential businesses and similar measures imposed or undertaken in an effort to contain and mitigate the spread of the coronavirus (including any variants thereof, “COVID-19”) or new outbreaks thereof, including in China; the impact of vaccine mandates on our workforce in certain jurisdictions; adverse changes or volatility in fuel prices and spreads and the current inflationary environment; adverse changes in program fees or charges we may collect, whether through legal, regulatory or contractual changes; adverse outcomes with respect to current and future legal proceedings or investigations, including without limitation, the FTC lawsuit, or actions of governmental, regulatory or quasi-governmental bodies or standards or industry organizations with respect to our payment cards; delays or failures associated with implication of, or adaption to, new technology, changes in credit risk of customers and associated losses; failure to maintain or renew key business relationships; failure to maintain competitive product offerings; failure to complete, or delays in completing, acquisitions, new partnerships or customer arrangements; and to successfully integrate or otherwise achieve anticipated benefits from such acquisitions, partnerships, and customer arrangements; failure to successfully expand and manage our business internationally; and other risks related to our international operations, including the impact of the conflict between Russia and Ukraine on our business and operations, the potential impact to our business as a result of the United Kingdom’s referendum to leave the European Union; the impact of foreign exchange rates on operations, revenues and income; and the failure or compromise of our data centers and other information technology assets; 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, 2021, and Quarterly Report on Form 10-Q for the three and six months ended June 30, 2022, respectively, filed with the Securities and Exchange Commission (“SEC”) and subsequent filings with the SEC made by us. These factors could cause our actual results and experience to differ materially from any forward-looking statement made herein. The forward-looking statements included in this press release are made only as of the date hereof and we do not undertake, and specifically disclaim, any obligation to update any such statements as a result of new information, future events or developments, except as specifically stated or to the extent required by law. You may access FLEETCOR’s SEC filings for free by visiting the SEC web site at www.sec.gov.

About Non-GAAP Financial Measures:

This press release includes non-GAAP financial measures, which are used by the Company as supplemental measures to evaluate its overall operating performance. The Company’s definitions of the non-GAAP financial measures used herein may differ from similarly titled measures used by others, including within our industry. By providing these non-GAAP financial measures, together with reconciliations to the most directly comparable GAAP financial measures, 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. See additional information regarding these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP measure.

Adjusted net income is calculated as net income, adjusted to eliminate (a) non-cash share based compensation expense related to share based compensation awards, (b) amortization of deferred financing costs, discounts, intangible assets, and amortization of the premium recognized on the purchase of receivables, (c) integration and deal related costs, and (d) other non-recurring items, including the impact of discrete tax items, impairment charges, asset write-offs, restructuring and related costs, loss on extinguishment of debt, and legal settlements and regulatory related legal fees. We adjust net income for the tax effect of non-tax items using our effective income tax rate, exclusive of discrete tax items. We calculate adjusted net income and adjusted net income per diluted share to eliminate the effect of items that we do not consider indicative of our core operating performance.

Adjusted net income and adjusted net income per diluted share are supplemental measures of operating performance that do not represent and should not be considered as an alternative to net income, net income per diluted share or cash flow from operations, as determined by U.S. generally accepted accounting principles, or U.S. GAAP. We believe it is useful to exclude non-cash share 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 share 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. Integration and deal related costs represent business acquisition transaction costs, professional services fees, short-term retention bonuses and system migration costs, etc., that are not indicative of the performance of the underlying business. We also believe that certain expenses, the impact of discrete tax items, impairment charges, asset write-offs, restructuring and related costs, losses on extinguishment of debt, and legal settlements and regulatory related legal fees do not necessarily reflect how our business is performing. We adjust net income for the tax effect of each of these non-tax items using the effective tax rate during the period, exclusive of discrete tax items.

Organic revenue growth is calculated as revenue growth in the current period adjusted for the impact of changes in the macroeconomic environment (to include fuel price, fuel price spreads and changes in foreign exchange rates) over revenue in the comparable prior period adjusted to include or remove the impact of acquisitions and/or divestitures that have occurred subsequent to that period. We believe that organic revenue growth on a macro-neutral and consistent acquisition/divestiture/non-recurring item basis is useful to investors for understanding the performance of FLEETCOR.

Management uses adjusted net income, adjusted net income per diluted share and organic revenue growth:

  • 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.

About FLEETCOR®

FLEETCOR Technologies (NYSE: FLT) is a leading global business payments company that helps businesses spend less by providing innovative solutions that enable and control expense-related purchasing and payment processes. The FLEETCOR portfolio of brands automate, secure, digitize and manage payment transactions on behalf of businesses across more than 150 countries in North America, Latin America, Europe, and Asia Pacific. 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 Exhibits 2-3 and 5, and segment information is provided in Exhibit 4. A reconciliation of GAAP guidance to non-GAAP guidance is provided in Exhibit 6.

FLEETCOR Technologies, Inc. and Subsidiaries

Consolidated Statements of Income

(In thousands, except per share amounts)

Three Months Ended December 31,

Year Ended December 31,

2022

2021

%
Change

2022

2021

%
Change

(Unaudited)

(Unaudited)

(Unaudited)

Revenues, net

$

883,610

$

802,255

10%

$

3,427,129

$

2,833,736

21%

Expenses:

Processing

201,610

171,533

18%

764,707

559,819

37%

Selling

78,864

75,607

4%

309,082

262,118

18%

General and administrative

143,873

140,675

2%

584,135

485,830

20%

Depreciation and amortization

89,793

75,013

20%

322,282

284,197

13%

Other operating, net

200

(865

)

NM

282

(784

)

NM

Total operating expense

514,340

461,963

11%

1,980,488

1,591,180

24%

Operating income

369,270

340,292

9%

1,446,641

1,242,556

16%

Other expenses:

Investment loss (gain)

863

NM

1,382

(9

)

NM

Other (income) expense, net

(3,184

)

175

NM

3,003

3,858

NM

Interest expense, net

74,152

27,666

168%

164,662

113,705

45%

Loss on extinguishment of debt

9,964

NM

1,934

16,194

NM

Total other expense

71,831

37,805

90%

170,981

133,748

28%

Income before income taxes

297,439

302,487

(2) %

1,275,660

1,108,808

15%

Provision for income taxes

72,120

77,483

(7) %

321,333

269,311

19%

Net income

$

225,319

$

225,004

—%

$

954,327

$

839,497

14%

Basic earnings per share

$

3.07

$

2.80

9%

$

12.62

$

10.23

23%

Diluted earnings per share

$

3.03

$

2.74

11%

$

12.42

$

9.99

24%

Weighted average shares outstanding:

Basic shares

73,484

80,228

75,598

82,060

Diluted shares

74,246

81,981

76,862

84,061

FLEETCOR Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and par value amounts)

December 31,
2022

December 31,
2021

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

1,435,163

$

1,520,027

Restricted cash

854,017

730,668

Accounts and other receivables (less allowance)

2,064,745

1,793,274

Securitized accounts receivable — restricted for securitization

1,287,000

1,118,000

Prepaid expenses and other current assets

469,147

326,079

Total current assets

6,110,072

5,488,048

Property and equipment, net

294,692

236,294

Goodwill

5,201,435

5,078,978

Other intangibles, net

2,130,974

2,335,385

Investments

74,281

52,016

Other assets

281,726

213,932

Total assets

$

14,093,180

$

13,404,653

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

1,568,942

$

1,406,350

Accrued expenses

351,936

369,054

Customer deposits

1,505,004

1,788,705

Securitization facility

1,287,000

1,118,000

Current portion of notes payable and lines of credit

1,027,056

399,628

Other current liabilities

303,517

208,614

Total current liabilities

6,043,455

5,290,351

Notes payable and other obligations, less current portion

4,722,838

4,460,039

Deferred income taxes

531,385

566,291

Other noncurrent liabilities

254,009

221,392

Total noncurrent liabilities

5,508,232

5,247,722

Commitments and contingencies

Stockholders’ equity:

Common stock

128

127

Additional paid-in capital

3,049,570

2,878,751

Retained earnings

7,210,769

6,256,442

Accumulated other comprehensive loss

(1,509,650

)

(1,464,616

)

Treasury stock

(6,209,324

)

(4,804,124

)

Total stockholders’ equity

2,541,493

2,866,580

Total liabilities and stockholders’ equity

$

14,093,180

$

13,404,653

FLEETCOR Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

Year Ended December 31,

2022

2021

(Unaudited)

Operating activities

Net income

$

954,327

$

839,497

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

Depreciation

92,010

75,571

Stock-based compensation

121,416

80,071

Provision for credit losses on accounts and other receivables

131,096

37,919

Amortization of deferred financing costs and discounts

7,748

6,831

Amortization of intangible assets and premium on receivables

230,272

208,625

Loss on extinguishment of debt

1,934

16,194

Deferred income taxes

(33,174

)

11,026

Investment loss (gain)

1,382

(9

)

Other non-cash operating expense (income), net

282

(784

)

Changes in operating assets and liabilities (net of acquisitions):

Accounts and other receivables

(598,674

)

(731,137

)

Prepaid expenses and other current assets

(17,543

)

141,058

Derivative assets and liabilities, net

(11,260

)

(15,360

)

Other assets

(41,068

)

47,055

Accounts payable, accrued expenses and customer deposits

(83,951

)

480,506

Net cash provided by operating activities

754,797

1,197,063

Investing activities

Acquisitions, net of cash acquired

(216,917

)

(602,120

)

Purchases of property and equipment

(151,428

)

(111,530

)

Other

(2,281

)

Net cash used in investing activities

(368,345

)

(715,931

)

Financing activities

Proceeds from issuance of common stock

49,404

48,781

Repurchase of common stock

(1,405,200

)

(1,355,722

)

Borrowings on securitization facility, net

169,000

418,000

Deferred financing costs paid and debt discount

(10,355

)

(38,920

)

Proceeds from issuance of notes payable

3,000,000

1,900,000

Principal payments on notes payable

(2,824,000

)

(507,500

)

Borrowings from revolver

7,236,000

1,910,000

Payments on revolver

(6,526,000

)

(1,978,851

)

Borrowings (payments) on swing line of credit, net

194

(51,049

)

Other

(271

)

(811

)

Net cash (used in) provided by financing activities

(311,228

)

343,928

Effect of foreign currency exchange rates on cash

(36,739

)

(50,984

)

Net increase in cash and cash equivalents and restricted cash

38,485

774,076

Cash and cash equivalents and restricted cash, beginning of year

2,250,695

1,476,619

Cash and cash equivalents and restricted cash, end of year

$

2,289,180

$

2,250,695

Supplemental cash flow information

Cash paid for interest, net

$

229,641

$

132,504

Cash paid for income taxes, net

$

358,231

$

229,721

Exhibit 1

RECONCILIATION OF NON-GAAP MEASURES

(In thousands, except shares and per share amounts)

(Unaudited)

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,

2022

2021

2022

2021

Net income

$

225,319

$

225,004

$

954,327

$

839,497

Stock based compensation

20,588

27,986

121,416

80,071

Amortization1

66,648

56,974

238,020

215,456

Loss on extinguishment of debt

9,964

1,934

16,194

Integration and deal related costs

4,824

12,501

18,895

30,632

Restructuring and related costs (subsidies)

5,420

(181

)

6,690

(2,112

)

Legal settlements/litigation

1,366

152

6,051

5,772

Total pre-tax adjustments

98,846

107,396

393,006

346,013

Income taxes2

(23,967

)

(27,510

)

(110,634

)

(75,703

)

Adjusted net income

$

300,198

$

304,890

$

1,236,699

$

1,109,807

Adjusted net income per diluted share

$

4.04

$

3.72

$

16.10

$

13.21

Diluted shares

74,246

81,981

76,862

84,061

1Includes amortization related to intangible assets, premium on receivables, deferred financing costs and debt discounts.

2 Includes $9.0 million adjustment for tax benefit of certain income determined to be permanently invested in 2Q 2022.

* Columns may not calculate due to rounding.

Exhibit 2

Key Performance Indicators, by Solution and Revenue Per Performance Metric on a GAAP Basis and Pro Forma and Macro Adjusted

(In millions except revenues, net per key performance metric)

(Unaudited)

The following table presents revenue and revenue per key performance metric by solution.*

As Reported

Pro Forma and Macro Adjusted2

Three Months Ended December 31,

Three Months Ended December 31,

2022

2021

Change

%
Change

2022

2021

Change

%
Change

FUEL

- Revenues, net

$

351.1

$

316.4

$

34.7

11%

$

323.7

$

318.1

$

5.6

2%

- Transactions

119.7

116.4

3.3

3%

119.7

117.9

1.8

2%

- Revenues, net per transaction

$

2.93

$

2.72

$

0.22

8%

$

2.70

$

2.70

$

0.01

—%

CORPORATE PAYMENTS

- Revenues, net

$

202.0

$

174.5

$

27.5

16%

$

210.3

$

174.9

$

35.4

20%

- Spend volume

$

29,986

$

25,665

$

4,322

17%

$

29,986

$

25,665

$

4,322

17%

- Revenues, net per spend $

0.67

%

0.68

%

(0.01

)%

(1)%

0.70

%

0.68

%

0.02

%

3%

TOLLS

- Revenues, net

$

97.5

$

86.7

$

10.8

12%

$

91.9

$

86.7

$

5.2

6%

- Tags (average monthly)

6.3

6.1

0.2

4%

6.3

6.1

0.2

4%

- Revenues, net per tag

$

15.41

$

14.22

$

1.19

8%

$

14.52

$

14.22

$

0.30

2%

LODGING

- Revenues, net

$

119.1

$

103.1

$

16.0

15%

$

119.8

$

105.5

$

14.3

14%

- Room nights

9.0

8.9

—%

9.0

9.0

(0.1

)

(1)%

- Revenues, net per room night

$

13.28

$

11.53

$

1.76

15%

$

13.36

$

11.68

$

1.68

14%

GIFT

- Revenues, net

$

47.4

$

55.1

$

(7.8

)

(14)%

$

49.3

$

55.1

$

(5.9

)

(11)%

- Transactions

362.7

379.9

(17.2

)

(5)%

362.7

379.9

(17.2

)

(5)%

- Revenues, net per transaction

$

0.13

$

0.15

$

(0.01

)

(10)%

$

0.14

$

0.15

$

(0.01

)

(6)%

OTHER1

- Revenues, net

$

66.5

$

66.4

$

0.1

—%

$

68.7

$

66.4

$

2.3

3%

- Transactions

10.8

9.0

1.8

20%

10.8

9.0

1.8

20%

- Revenues, net per transaction

$

6.16

$

7.37

$

(1.21

)

(16)%

$

6.36

$

7.37

$

(1.01

)

(14)%

FLEETCOR CONSOLIDATED REVENUES

- Revenues, net

$

883.6

$

802.3

$

81.4

10%

$

863.6

$

806.7

$

56.9

7%


Contacts

Investor Relations
Jim Eglseder, 770-417-4697
Jim.Eglseder@fleetcor.com


Read full story here

First published on Thu, Feb 9, 2023

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