10-QPeriod: Q1 FY2015

CORPAY, INC. Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 11, 2015For Securities:CPAY

Summary

Corpay, Inc. (formerly FleetCor Technologies, Inc.) reported its first quarter 2015 results, highlighting significant revenue growth driven primarily by acquisitions made in the prior year, most notably the Comdata acquisition. Total revenues surged by 63.9% to $416.2 million, a substantial increase from $253.9 million in the same period last year, largely attributable to the integration of newly acquired businesses. While overall revenue growth was robust, the company's operating margin saw a decrease from 45.0% to 39.4%, mainly due to increased operating expenses, particularly depreciation and amortization related to recent acquisitions, and higher stock-based compensation. The company's North America segment experienced dramatic revenue growth of 136.4% to $298.8 million, bolstered by the Comdata acquisition, which significantly increased transaction volumes, albeit at a lower revenue per transaction. In contrast, the International segment saw a slight revenue decline of 8.0% to $117.4 million, primarily impacted by unfavorable foreign exchange rates and lower fuel prices. Despite margin pressures, the company's net income still grew by 25.4% to $94.2 million, demonstrating operational leverage and effective cost management post-acquisition. Management expressed confidence in the company's liquidity position, supported by existing cash reserves and available credit facilities.

Financial Highlights

47 data points
Beta

Revenue

$416.17M

Net Income

$94.15M

22.6% Net Margin

EPS (Diluted)

$1.00

Total Assets

$8.50B

Cash & Equivalents

$379.39M

Free Cash Flow

$59.30M

Financial Statements
Beta
Revenue$416.17M
Operating Income$163.77M
Net Income$94.15M
EPS (Basic)$1.03
EPS (Diluted)$1.00
Shares Outstanding (Basic)91.75M
Shares Outstanding (Diluted)93.93M

Key Highlights

  • 1Total revenues increased significantly by 63.9% to $416.2 million in Q1 2015, driven primarily by acquisitions in 2014.
  • 2The North America segment revenue grew by a substantial 136.4% to $298.8 million, largely due to the Comdata acquisition.
  • 3Consolidated operating margin decreased from 45.0% in Q1 2014 to 39.4% in Q1 2015, impacted by increased acquisition-related expenses.
  • 4Net income rose by 25.4% to $94.2 million, or $1.00 per diluted share, despite margin compression.
  • 5Transaction volumes surged by 392% to 431.3 million, mainly from the Comdata acquisition, though consolidated revenue per transaction decreased significantly.
  • 6Interest expense increased by 258.3% to $19.6 million, reflecting higher debt levels from acquisitions.
  • 7The company maintains a strong liquidity position, with $379.4 million in unrestricted cash and cash equivalents and significant available borrowing capacity.

Frequently Asked Questions

The primary driver of the significant revenue growth was the impact of acquisitions completed in 2014, most notably the Comdata acquisition. This led to a substantial increase in transaction volumes and overall revenue.

The operating margin decreased due to an increase in operating expenses, including higher depreciation and amortization costs related to acquired intangible assets and property, plant, and equipment from recent acquisitions, as well as an increase in stock-based compensation expenses.

The Comdata acquisition significantly boosted transaction volumes and North American revenue. However, it also contributed to lower consolidated revenue per transaction due to the nature of some of Comdata's products and increased operating expenses, particularly amortization, which impacted the overall operating margin.

The company's liquidity outlook is positive. They reported $379.4 million in unrestricted cash and cash equivalents and had approximately $480 million available under their Credit Facility and $51 million under their Securitization Facility as of March 31, 2015. Management believes these resources are sufficient to meet liquidity needs for at least the next twelve months.