01—Abstract
Summary
Summary of the 10-Q filed May 9, 2017. Cited figures are marked; the original filing is the authoritative source.
FleetCor Technologies, Inc. (CPAY) reported a strong first quarter for 2017, with total revenues increasing by 25.6% year-over-year to $520.4 milliona.
This growth was driven by significant contributions from acquisitions made in 2016, particularly in the International segment, which saw a 72.1% revenue increase. Organic growth also remained robust, contributing approximately 10% to overall revenue growth, demonstrating the company's ability to expand its core business alongside strategic acquisitions. Net income also saw a healthy increase of 11.3% to $123.7 millionb, translating to a diluted EPS of $1.31, up from $1.17 in the prior year.
The company's liquidity position remains strong, with substantial cash and cash equivalents, and ample availability under its credit facilities. Looking ahead, FleetCor announced a significant acquisition of Cambridge Global Payments for approximately $675 millionc, further bolstering its corporate payments segment.
02—Key points
Key Highlights
- Total revenues grew by 25.6% to $520.4 million in Q1 2017, driven by acquisitions and organic growth.
- International segment revenue surged by 72.1%, largely due to acquisitions like STP and Travelcard.
- Net income increased by 11.3% to $123.7 million, with diluted EPS rising to $1.31.
- The company announced a significant agreement to acquire Cambridge Global Payments for $675 million, expanding its corporate payments capabilities.
- Operating income increased by 10.9% to $195.1 million, though operating margin decreased slightly to 37.5% due to higher amortization and stock-based compensation expenses.
- The company ended the quarter with $735.0 million in cash and cash equivalents, including $188.4 million in restricted cash.
- FleetCor continues its strategic acquisition approach, with over 70 acquisitions completed since 2002.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2017filed May 9, 2017Financial Statements
Q1 FY2017 against Q1 FY2016
| Line item | Q1 FY2017Q1 FY2016 | Change |
|---|---|---|
| Revenue | $520.43M$414.26M | +25.6% |
| Operating Income | $195.07M$175.96M | +10.9% |
| Net Income | $123.69M$111.09M | +11.3% |
| EPS (Basic) | $1.34$1.20 | +11.7% |
| EPS (Diluted) | $1.31$1.17 | +12.0% |
| Shares Outstanding (Basic) | 92.11M92.52M | −0.4% |
| Shares Outstanding (Diluted) | 94.56M95.03M | −0.5% |
05—Questions
Frequently Asked Questions
What were the main drivers of FleetCor's revenue growth in the first quarter of 2017?
FleetCor's revenue growth was primarily driven by the successful integration of acquisitions completed in 2016, which contributed approximately $56 million in additional revenue, particularly in the International segment. Organic growth also played a significant role, contributing approximately 10% of the overall revenue increase through growth in both transaction volume and revenue per transaction.
How did the acquisition of Cambridge Global Payments impact the company's strategy?
The planned acquisition of Cambridge Global Payments for approximately $675 million signifies FleetCor's commitment to expanding its corporate payments footprint. Cambridge's expertise in B2B international payments is expected to further enhance FleetCor's offerings in this growing segment.
What is the company's liquidity position as of March 31, 2017?
FleetCor maintained a strong liquidity position with $735.0 million in total cash and cash equivalents, of which $188.4 million was restricted. The company also had approximately $467 million available under its Credit Facility and $77 million under its Securitization Facility, indicating sufficient resources to meet its obligations and fund operations for at least the next twelve months.
What is the outlook for the company's expenses, particularly with the increase in amortization and stock-based compensation?
While revenue and net income saw solid growth, operating expenses, particularly depreciation and amortization, increased significantly (78.6%) due to acquisitions like STP and Travelcard. General and administrative expenses also rose due to acquisition-related costs and higher stock-based compensation. The company expects its general and administrative expenses to decrease as a percentage of revenue over the long term as revenue increases.
06—Continue