October 18, 2021

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FLEETCOR Reports Fourth Quarter and Fiscal Year 2020 Financial Results

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ATLANTA–(BUSINESS WIRE)–FLEETCOR Technologies, Inc. (NYSE: FLT), a global leader in business payments, today reported financial results for its fourth quarter and year ended December 31, 2020.

“Q4 finished better than expected, with improving trends across the board. Our 2021 set up looks good, with the potential for high-teens revenue and profit growth from Q2 on,” said Ron Clarke, chairman and chief executive officer, FLEETCOR Technologies, Inc. “We are particularly excited about our SMB online bill pay acquisition, which creates the opportunity to accelerate both our Corporate Payments and Fuel card growth over the mid-term,” Clarke continued.

Financial Results for Fourth Quarter of 2020:

GAAP Results

  • Revenues decreased 12% to $617.3 million in the fourth quarter of 2020, compared with $698.9 million in the fourth quarter of 2019.
  • Net income decreased 11% to $209.9 million in the fourth quarter of 2020, compared with $235.5 million in the fourth quarter of 2019.
  • Net income per diluted share decreased 6% to $2.44 in the fourth quarter of 2020, compared with $2.60 per diluted share in the fourth quarter of 2019.

Non-GAAP Results1

  • Adjusted net income1 decreased 10% to $258.4 million in the fourth quarter of 2020, compared with $286.4 million in the fourth quarter of 2019.
  • Adjusted net income per diluted share1 decreased 5% to $3.01 in the fourth quarter of 2020, compared with $3.17 per diluted share in the fourth quarter of 2019.

Financial Results for Fiscal Year 2020:

GAAP Results

  • Revenues decreased 10% to $2,388.9 million in 2020, compared with $2,648.8 million in 2019.
  • Net income decreased 21% to $704.2 million in 2020, compared with $895.1 million in 2019.
  • Net income per diluted share decreased 18% to $8.12 in 2020, compared with $9.94 per diluted share in 2019.

Non-GAAP Results1

  • Adjusted net income1 decreased 9% to $962.2 million in 2020, compared with $1,062.1 million in 2019.
  • Adjusted net income per diluted share1 decreased 6% to $11.09 in 2020, compared with $11.79 in 2019.

Fiscal Year 2021 Outlook:

“Clearly there is still tremendous uncertainty on the path and pace of recovery for 2021, much of it predicated on widespread vaccinations and a corresponding economic recovery. Based on what we know today, and our expectation that activity will continue to improve throughout the year, our outlook for 2021 is for organic revenue growth to be in the 9% to 13% range, and adjusted net income to be up a corresponding amount, excluding acquisitions. Our assumption underlying these expectations is that the soft, COVID-driven operating environment will continue for most of the first half of 2021, and then improve meaningfully in the second half of the year. We also expect that expenses will be higher than our 2020 levels, but we will continue to manage them in line with revenue growth,” said Charles Freund, chief financial officer, FLEETCOR Technologies, Inc.

For fiscal year 2021, FLEETCOR’s financial outlook is as follows:

  • Total revenues to be between $2,600 million and $2,700 million;
  • GAAP net income to be between $810 million and $890 million;
  • GAAP net income per diluted share to be between $9.40 and $10.20;
  • Adjusted net income to be between $1,020 million and $1,110 million;
  • Adjusted net income per diluted share to be between $11.90 and $12.70.

FLEETCOR’s outlook assumptions for fiscal year 2021 are as follows:

  • Weighted fuel prices equal to $2.43 per gallon average in the U.S.;
  • Market spreads significantly unfavorable compared to the 2020 average;
  • Foreign exchange rates equal to the average of the four weeks of January, 2021;
  • Interest expense between $110 million and $120 million;
  • Approximately 87 million fully diluted shares outstanding for 2021;
  • An adjusted tax rate of approximately 19.5% to 21.5%; and
  • No impact related to acquisitions or material new partnership agreements not already disclosed.

First Quarter of 2021 Outlook:

The Company currently expects that first quarter adjusted net income per diluted share will likely be between $2.60 and $2.80. There is seasonality in the first quarter, causing it to be the lowest in terms of both revenue and net income for the year. The quarter will also be affected by the normalization of certain expenses, and incremental growth investments, including those for the Roger acquisition.

 

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 2020 financial results today at 5:30 pm ET. Hosting the call will be Ron Clarke, chief executive officer, Charles Freund, chief financial officer, and Jim Eglseder, senior vice president investor relations. The conference call can be accessed live by dialing (877) 407-0784, or for international callers (201) 689-8560. 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 13715437. The replay will be available until Thursday, February 17, 2021. The call will be webcast live from the Company’s investor relations website at https://investor.fleetcor.com. The Company will post on its website, the customary supplemental financial information that may be discussed during the call.

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 (COVID-19); 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 December 31, 2019 filed with the Securities and Exchange Commission (“SEC”) on March 2, 2020 and subsequent filings 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. 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 our 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 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 and intangible assets, amortization of the premium recognized on the purchase of receivables, and our proportionate share of amortization of intangible assets at our equity method investment, and (c) integration and deal related costs, and (d) other non-recurring items, including unusual credit losses occurring largely due to COVID-19, the impact of discrete tax items, impairment charges, asset write-offs, restructuring costs, gains due to disposition of assets and a business, 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. We also believe that integration and deal related costs and one-time non-recurring expenses, gains, losses, 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 to, or 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 Statements of Income

(In thousands, except per share amounts)

 

Three Months Ended December 31,

 

Year Ended December 31,

2020

 

2019

 

2020

 

2019

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

Revenues, net

$

617,333

 

$

698,881

 

$

2,388,855

 

$

2,648,848

 
Expenses:
Processing

 

121,514

 

 

146,081

 

 

596,363

 

 

530,669

Selling

 

47,737

 

 

51,899

 

 

192,732

 

 

204,806

General and administrative

 

90,961

 

 

109,592

 

 

374,678

 

 

407,210

Depreciation and amortization

 

64,685

 

 

68,510

 

 

254,802

 

 

274,210

Other operating, net

 

(1,503

)

 

2,003

 

 

(1,985

)

 

523

Operating income

 

293,939

 

 

320,796

 

 

972,265

 

 

1,231,430

Investment (gain) loss

 

 

 

(12,190

)

 

(30,008

)

 

3,470

Other expense (income), net

 

422

 

 

(535

)

 

(10,055

)

 

93

Interest expense, net

 

30,329

 

 

34,960

 

 

129,803

 

 

150,048

Total other expense

 

30,751

 

 

22,235

 

 

89,740

 

 

153,611

Income before income taxes

 

263,188

 

 

298,561

 

 

882,525

 

 

1,077,819

Provision for income taxes

 

53,337

 

 

63,051

 

 

178,309

 

 

182,746

Net income

$

209,851

 

$

235,510

 

$

704,216

 

$

895,073

 
Basic earnings per share

$

2.51

 

$

2.72

 

$

8.38

 

$

10.36

Diluted earnings per share

$

2.44

 

$

2.60

 

$

8.12

 

$

9.94

 
Weighted average shares outstanding:
Basic shares

 

83,514

 

 

86,600

 

 

84,005

 

 

86,401

Diluted shares

 

85,846

 

 

90,427

 

 

86,719

 

 

90,070

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

December 31, 2020

December 31, 2019

(Unaudited)

Assets
 
Current assets:
Cash and cash equivalents

$

934,900

 

$

1,271,494

 

Restricted cash

 

541,719

 

 

403,743

 

Accounts and other receivables (less allowance for credit losses of $79,112 and $70,890 at December 31, 2020 and 2019, respectively)

 

1,366,775

 

 

1,568,961

 

Securitized accounts receivable – restricted for securitization investors

 

700,000

 

 

970,973

 

Prepaid expenses and other current assets

 

412,924

 

 

403,400

 

 
Total current assets

 

3,956,318

 

 

4,618,571

 

 
Property and equipment, net

 

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