10-QPeriod: Q1 FY2011

CORPAY, INC. Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 16, 2011For Securities:CPAY

Summary

FleetCor Technologies, Inc. (CPAY) reported solid revenue growth and improved profitability for the first quarter of 2011 compared to the prior year. Total revenues increased by 6.5% to $111.0 million, driven by organic growth in payment programs, favorable foreign exchange rates, and higher average retail fuel prices, although this was partially offset by margin compression. Net income saw a substantial increase of 18.2% to $32.3 million. This improvement was largely attributed to a reduction in interest expense (partially due to a maturing interest rate swap) and a lower effective tax rate. The company also highlighted strong operating income growth in its International segment (19.2%) compared to a more modest increase in North America (0.9%). Despite increased general and administrative expenses, the company maintained healthy operating margins, indicating effective cost management and operational efficiency.

Financial Highlights

25 data points
Beta

Revenue

$111.00M

Net Income

$32.34M

29.1% Net Margin

EPS (Diluted)

$0.39

Cash & Equivalents

$119.78M

Free Cash Flow

-$11.39M

Financial Statements
Beta
Revenue$111.00M
Operating Income$50.49M
Net Income$32.34M
EPS (Basic)$0.40
EPS (Diluted)$0.39
Shares Outstanding (Basic)80K
Shares Outstanding (Diluted)83K

Key Highlights

  • 1Revenue increased by 6.5% to $111.0 million in Q1 2011 compared to Q1 2010.
  • 2Net income rose by 18.2% to $32.3 million in Q1 2011.
  • 3Operating income grew by 7.2% to $50.5 million.
  • 4International segment revenue grew by 10.7% to $39.4 million, outpacing North America's 4.4% growth.
  • 5Interest expense decreased significantly by 36.1% to $3.4 million, partly due to the expiration of an interest rate swap.
  • 6The effective tax rate decreased from 34.6% in Q1 2010 to 31.5% in Q1 2011.
  • 7Total assets increased to $1.62 billion from $1.48 billion at year-end 2010.

Frequently Asked Questions

The primary driver of the revenue increase was organic growth in certain payment programs, which contributed approximately $4.1 million. Additionally, favorable foreign exchange rates contributed $1.3 million, and higher average retail fuel prices, despite margin compression, added another $1.0 million.

The significant decrease in interest expense was substantially due to the expiration of an interest rate swap agreement in November 2010, which had created $1.8 million in interest expense in the prior year's comparable quarter. Additionally, declining interest rates on the company's credit facilities also contributed to the reduction.

The International segment showed stronger operating income growth, increasing by 19.2% to $19.3 million, with an operating margin of 48.9%. The North American segment saw a more modest increase of 0.9% in operating income to $31.2 million, and its operating margin slightly decreased to 43.6%.

Total assets increased by approximately $138 million to $1.62 billion. Key changes include a significant increase in accounts receivable (from $260 million to $379 million) and a corresponding increase in total current liabilities, particularly accounts payable and the securitization facility. Total stockholders' equity also grew by approximately $42 million.