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FLEETCOR Reports Fourth Quarter and Fiscal Year 2021 Financial Results

9 Febbraio 2022

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 31 Dicembre 2021.

“We reported record revenues and adjusted net income per share in the fourth quarter, with growth of 30% and 24%, respectively,” said Ron Clarke, chairman and chief executive officer, FLEETCOR Technologies, Inc. “Overall organic revenue growth was 17% for the quarter, consistent with the third quarter and against a tougher comp. We had a terrific finish to the year, delivering full-year earnings of $13.21, up 19%, and well ahead of our initial guidance.”

Financial Results for Fourth Quarter of 2021:

GAAP Results

Revenues increased 30% to $802.3 million in the fourth quarter of 2021, compared to $617.3 million in the fourth quarter of 2020.
Net income increased 7% to $225.0 million in the fourth quarter of 2021, compared to $209.9 million in the fourth quarter of 2020.
Net income per diluted share increased 12% to $2.74 in the fourth quarter of 2021, compared to $2.44 per diluted share in the fourth quarter of 2020.

Non-GAAP Results¹

Adjusted net income¹ increased 18% to $304.9 million in the fourth quarter of 2021, compared to $258.4 million in the fourth quarter of 2020.
Adjusted net income per diluted share¹ increased 24% to $3.72 in the fourth quarter of 2021, compared to $3.01 per diluted share in the fourth quarter of 2020.

Financial Results for Fiscal Year 2021:

GAAP Results

Revenues increased 19% to $2,833.7 million in 2021, compared with $2,388.9 million in 2020.
Net income increased 19% to $839.5 million in 2021, compared with $704.2 million in 2020.
Net income per diluted share increased 23% to $9.99 in 2021, compared with $8.12 per diluted share in 2020.

Non-GAAP Results¹

Adjusted net income¹ increased 15% to $1,109.8 million in 2021, compared with $962.2 million in 2020.
Adjusted net income per diluted share¹ increased 19% to $13.21 in 2021, compared with $11.09 in 2020.

“Our fourth quarter results came in ahead of our expectations we gave in November, for both revenue and adjusted earnings per share,” said Charles Freund, chief financial officer, FLEETCOR Technologies, Inc. “Across the board our businesses showed momentum, and ended the year on a strong note. We also aggressively used capital to buy back shares, given the low stock price when compared with our growth outlook.”

Fiscal Year 2022 Outlook:

“Our current outlook is for the Company to return to its normal growth cadence, with sales growth of 20%, organic growth of 9% to 11%, and adjusted EPS growth in the mid-teens. Volumes and revenue are expected to build throughout the year, as we continue to benefit from our growth investments and acquisitions. We do expect expenses to be higher than in 2021, as we operate at more normalized levels, but we will continue to manage them in line with the revenue growth outlook,” said Charles Freund, chief financial officer, FLEETCOR Technologies, Inc.

For fiscal year 2022, FLEETCOR Technologies, Inc. updated financial guidance¹ is as follows:

Total revenues between $3,190 million and $3,250 million;
GAAP net income between $935 million and $975 million;
GAAP net income per diluted share between $11.65 and $12.15;
Adjusted net income between $1,200 million and $1,240 million; and
Adjusted net income per diluted share between $15.00 and $15.50.

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

Weighted average U.S. fuel prices equal to $3.40 per gallon;
Market spreads slightly favorable to the 2021 average;
Foreign exchange rates equal to the month average of January 2022;
Interest expense between $90 million and $100 million, with three 25bp rate increases;
Approximately 80 million fully diluted shares outstanding;
A tax rate of 24% to 26%; and
No impact related to acquisitions not already closed.

First Quarter of 2022 Outlook:

The Company currently expects first quarter revenues between $740 million and $760 million, and adjusted net income per diluted share between $3.45 and $3.55. We have historically experienced seasonality in the first quarter, causing it to be the lowest in terms of both revenues and net income for the year, where certain businesses such as Gift and Tolls have strong fourth quarters, while Fuel and Lodging tend to have soft first quarters due to weather and holidays.

Increase of Term B Credit Facility and Share Repurchases:

On 22 Dicembre 2021, the Company completed a $750 million upsizing to the Term B credit facility, at a rate of LIBOR plus 175 bps, unchanged from the rate on existing debt. The incremental debt had a minimal impact on the Company’s leverage position at year end. Additionally, given the significant share price dislocation that occurred recently, the Company repurchased approximately 2.3 million shares in the fourth quarter of 2021, and an additional 1.1 million shares in January under a pre-existing 10b5-1 plan. In light of these repurchases, the Board is announcing today an increase in the share repurchase authorization by $1 billion.

_______________________________________

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.

Conference Call:

The Company will host a conference call to discuss fourth quarter and fiscal year 2021 financial results today at 5:00 pm ET. Hosting the call will be Ron Clarke, chief executive officer, Charles Freund, 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 (877) 407-0784 or (201) 689-8560 for international callers; the conference ID is 13726655. The replay will be available until Tuesday, 15 Febbraio 2022. 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 novel coronavirus (including any variants thereof, “COVID-19”); the impact of vaccine mandates on our workforce in certain jurisdictions; adverse changes or volatility in fuel prices and spreads; 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 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 31 Dicembre 2020 filed with the Securities and Exchange Commission (“SEC”) on 26 Febbraio 2021 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 its 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 the appendix for 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 stock 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 unusual credit losses occurring largely, but not necessarily exclusively, due to COVID-19, the impact of discrete tax items, impairment charges, asset write-offs, restructuring costs, gains due to disposition of assets/businesses, loss on extinguishment of debt, and legal settlements. 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 and recoveries (e.g. legal settlements, write-off of customer receivable, etc.), gains and losses on investments, and impairment charges do not necessarily reflect how our investments and business are performing. We adjust net income for the tax effect of each of these non-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 and non-recurring items that have occurred subsequent to that period. We believe that organic revenue growth on a macro-neutral, one-time item, 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 simplifies the way businesses manage and pay their expenses. The FLEETCOR portfolio of brands help companies automate, secure, digitize and control payments on behalf of, their employees and suppliers. FLEETCOR serves businesses, partners and merchants in North America, Latin America, Europe, and Asia Pacific. For more information, please visit www.FLEETCOR.com.

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

	31 Dicembre 2021	31 Dicembre 2020
	(Unaudited)
Assets

Current assets:
Cash and cash equivalents	$ 1,520,027	$ 934,900
Restricted cash	730,668	541,719
Accounts and other receivables (less allowance)	1,731,574	1,366,775
Securitized accounts receivable – restricted for securitization investors	1,118,000	700,000
Prepaid expenses and other current assets	349,575	412,924

Total current assets	5,449,844	3,956,318

Property and equipment, net	236,294	202,509
Goodwill	5,107,878	4,719,181
Other intangibles, net	2,306,485	2,115,882
Investments	52,016	7,480
Other assets	213,932	193,209

Total assets	$ 13,366,449	$ 11,194,579

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$ 1,406,350	$ 1,054,478
Accrued expenses	369,054	282,681
Customer deposits	1,788,705	1,175,322
Securitization facility	1,118,000	700,000
Current portion of notes payable and lines of credit	399,628	505,697
Other current liabilities	170,410	250,133

Total current liabilities	5,252,147	3,968,311

Notes payable and other obligations, less current portion	4,460,039	3,097,580¹
Deferred income taxes	566,291	498,154
Other noncurrent liabilities	221,392	275,123¹

Total noncurrent liabilities	5,247,722	3,870,857

Commitments and contingencies

Stockholders’ equity:
Common stock	127	126
Additional paid-in capital	2,878,751	2,749,900
Retained earnings	6,256,442	5,416,945
Accumulated other comprehensive loss	(1,464,616)	(1,363,158)
Treasury stock	(4,804,124)	(3,448,402)

Total stockholders’ equity	2,866,580	3,355,411

Total liabilities and stockholders’ equity	$ 13,366,449	$ 11,194,579

¹Recast to reflect long term deferred revenue in other noncurrent liabilities, to conform to current year presentation.

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

	Three Months Ended December 31,				Year Ended December 31,
	2021		2020		2021			2020
	(Unaudited)		(Unaudited)		(Unaudited)
Revenues, net	$	802,255	$	617,333	$	2,833,736		$	2,388,855

Expenses:
Processing		171,533		121,514		559,819			596,363
Selling		75,607		47,737		262,118			192,732
General and administrative		140,675		90,961		485,830			374,678
Depreciation and amortization		75,013		64,685		284,197			254,802
Other operating, net		(865)		(1,503)		(784)			(1,985)
Operating income		340,292		293,939		1,242,556			972,265
Investment gain		–		–		(9)			(30,008)
Other expense (income), net		175		422		3,858			(10,055)
Interest expense, net		27,666		30,329		113,705	¹		129,803
Loss on extinguishment of debt		9,964		–		16,194	¹		–
Total other expense		37,805		30,751		133,748			89,740
Income before income taxes		302,487		263,188		1,108,808			882,525
Provision for income taxes		77,483		53,337		269,311			178,309
Net income	$	225,004	$	209,851	$	839,497		$	704,216

Basic earnings per share	$	2.80	$	2.51	$	10.23		$	8.38
Diluted earnings per share	$	2.74	$	2.44	$	9.99		$	8.12

Weighted average shares outstanding:
Basic shares		80,228		83,514		82,060			84,005
Diluted shares		81,981		85,846		84,061			86,719

¹Recast to present loss on extinguishment of debt separately from interest expense, net, to conform to current presentation.

FLEETCOR Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
	Year Ended December 31,
	2021		2020
	(Unaudited)
Operating activities
Net income	$	839,497	$	704,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		75,571		65,181
Stock-based compensation		80,071		43,384
Provision for credit losses on accounts and other receivables		37,919		158,549
Amortization of deferred financing costs and discounts		6,831		6,486
Amortization of intangible assets and premium on receivables		208,625		189,620
Loss on extinguishment of debt		16,194		–
Deferred income taxes		24,970		(15,112)
Investment gain		(9)		(30,008)
Other		(784)		(1,985)
Changes in operating assets and liabilities (net of acquisitions/dispositions):
Accounts and other receivables		(729,144)		264,140
Prepaid expenses and other current assets		184,462		(14,521)
Other assets		35,032		12,656
Accounts payable, accrued expenses and customer deposits		416,028		89,983
Net cash provided by operating activities		1,195,263		1,472,589


Investing activities
Acquisitions, net of cash acquired		(602,120)		(80,787)
Purchases of property and equipment		(111,530)		(78,425)
Proceeds from disposal of investment		–		52,963
Other		(2,281)		–
Net cash used in investing activities		(715,931)		(106,249)


Financing activities
Proceeds from issuance of common stock		48,781		136,797
Repurchase of common stock		(1,355,722)		(849,910)
Borrowings (payments) on securitization facility, net		418,000		(270,973)
Deferred financing costs paid and debt discount		(38,920)		(2,637)
Proceeds from issuance of notes payable		1,900,000		–
Principal payments on notes payable		(507,500)		(175,285)
Borrowings from revolver		1,910,000		1,243,500
Payments on revolver		(1,978,851)		(1,496,907)
Payments on swing line of credit, net		(51,049)		(1,042)
Other		(811)		(344)
Net cash provided by (used in) financing activities		343,928		(1,416,801)

Effect of foreign currency exchange rates on cash		(49,184)		(148,157)

Net increase (decrease) in cash and cash equivalents and restricted cash		774,076		(198,618)
Cash and cash equivalents and restricted cash, beginning of year		1,476,619		1,675,237
Cash and cash equivalents and restricted cash, end of year	$	2,250,695	$	1,476,619

Supplemental cash flow information
Cash paid for interest, net	$	132,504	$	126,460

Cash paid for income taxes, net	$	229,721	$	165,315