10-QPeriod: Q2 FY2012

CORPAY, INC. Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 9, 2012For Securities:CPAY

Summary

FleetCor Technologies, Inc. (CPAY) reported strong revenue growth for the second quarter and first half of 2012, driven by both organic expansion and strategic acquisitions in its North America and International segments. The company's net income saw a significant increase year-over-year, reflecting improved operational efficiencies and favorable revenue mix. Despite overall positive financial performance, the company's international segment experienced a notable decrease in revenue per transaction, largely attributed to the integration of recent acquisitions which, while profitable, offer lower per-transaction revenue compared to existing businesses. Management remains focused on integrating acquisitions, expanding its service offerings, and managing operational costs to sustain growth and profitability. The company also highlighted its liquidity position, with sufficient cash and borrowing capacity to meet its needs for at least the next twelve months.

Financial Highlights

48 data points
Beta

Revenue

$171.82M

Net Income

$54.40M

31.7% Net Margin

EPS (Diluted)

$0.63

Total Assets

$2.50B

Cash & Equivalents

$255.58M

Free Cash Flow

$72.27M

Financial Statements
Beta
Revenue$171.82M
Operating Income$81.45M
Interest Expense$2.82M
Net Income$54.40M
EPS (Basic)$0.65
EPS (Diluted)$0.63
Shares Outstanding (Basic)83.29M
Shares Outstanding (Diluted)85.74M

Key Highlights

  • 1Consolidated revenues increased by 28.0% to $171.8 million for the three months ended June 30, 2012, compared to the prior year period.
  • 2Net income for the three months ended June 30, 2012, increased by 48.2% to $54.4 million.
  • 3The International segment showed substantial revenue growth (56.1% for Q2 2012), largely due to acquisitions in Mexico, the UK (Allstar), and Russia.
  • 4Despite revenue growth, International segment revenue per transaction decreased significantly (down 50.3% for Q2 2012) due to the impact of acquisitions with lower per-transaction revenue models.
  • 5Operating income grew by 36.0% to $81.4 million for the three months ended June 30, 2012, indicating improved operational leverage.
  • 6The company completed several acquisitions during the period, including a Russian fuel card company and CTF Technologies, Inc. in Brazil, further expanding its global footprint.
  • 7FleetCor maintained a strong liquidity position, with $255.6 million in unrestricted cash and cash equivalents at June 30, 2012.

Frequently Asked Questions

FleetCor's revenue growth is driven by a combination of organic growth within its existing payment programs and strategic acquisitions. The company has been actively acquiring businesses to expand its geographic reach and service offerings, particularly in its International segment.

The decrease in revenue per transaction in the International segment is primarily due to the integration of recent acquisitions. While these acquired businesses are profitable, they often operate with lower revenue per transaction products compared to FleetCor's established businesses. When combined, they dilute the overall revenue per transaction for the segment.

FleetCor maintains a strong liquidity position with significant cash and cash equivalents and available borrowing capacity. Management believes its current resources are sufficient to meet its needs for at least the next twelve months. The company may seek additional financing through debt or equity for future growth opportunities, including acquisitions.

Yes, the company is subject to an investigation by the Office of Fair Trading in the United Kingdom concerning its Keyfuels product line. This investigation is looking into potential market dominance and exclusive dealing contracts, which could lead to contract reforms and potentially significant fines if determined adversely.