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Earnings Disclosure

Q4 2012 Vantiv Inc. Earnings Conference Call

Wednesday, February 20, 2013 8:00 a.m. ET  

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Vantiv, Inc. : Vantiv Reports Fourth Quarter and Full Year 2012 Results

Vantiv Reports Fourth Quarter and Full Year 2012 Results

Completes Successful First Year as a Public Company 
$0.38 in Fourth Quarter Adjusted Cash Net Income per Share 
$1.22 in Full Year Adjusted Cash Net Income per Share 
Net Revenue Guidance for 2013 of $1.21 to $1.23 Billion 
Adjusted Cash Net Income per Share Guidance for 2013 of $1.46 to $1.50

CINCINNATI - February 20, 2013 - Vantiv, Inc. (NYSE: VNTV) (Vantiv or "the Company") today announced financial results for the fourth quarter and full year ended December 31, 2012.  Revenue increased 13% to $494.1 million in the fourth quarter as compared to $439.0 million in the prior year period.  Net revenue increased 12% to $271.2 million in the fourth quarter as compared to $242.7 million in the prior year period.  On a GAAP basis, net income attributable to Vantiv, Inc. was $28.8 million during the fourth quarter, or $0.22 per diluted share, compared with $15.7 million, or $0.18 per diluted share, in the prior year period.  Cash net income increased 39% in the fourth quarter to $81.6 million as compared to $58.5 million in the prior year period. Adjusted cash net income per share was $0.38 for the fourth quarter.  (See Schedule 2 for cash net income and Schedules 6 and 7 for GAAP net income reconciliation to cash net income.)

For the full year, revenue increased 15% to $1,863.2 million as compared to $1,622.4 million in the prior year.  Net revenue increased 18% to $1,022.6 million in 2012 as compared to $865.7 million in the prior year.  On a GAAP basis, net income attributable to Vantiv, Inc. in 2012 was $57.6 million, or $0.47 per diluted share, compared with $36.2 million, or $0.40 per diluted share, in the prior year.  Cash net income increased 41% in 2012 to $260.0 million as compared to $184.1 million in the prior year. Adjusted cash net income per share was $1.22 for the full year 2012.  (See Schedule 2 for cash net income and Schedules 6 and 7 for GAAP net income reconciliation to cash net income.)  

Transaction growth was 20% and 19% for the fourth quarter and full year, respectively, primarily due to superior transaction growth in the Merchant Services segment of 23% and 24% for the fourth quarter and full year, respectively.  The Financial Institutions Services segment also experienced strong transaction growth with a 7% and 3% increase for the fourth quarter and full year, respectively.

Vantiv's scale and efficiency continued to support superior profitability as reflected by the Company's fourth quarter adjusted EBITDA margin of 53%.  For the full year, Vantiv's adjusted EBITDA margin was 50%.  (See Schedules 6 and 7 for GAAP net income reconciliation to cash net income and Schedule 8 for reconciliation from GAAP income from operations to adjusted EBITDA.)

With respect to cash net income, income tax expense was reduced by the recognition of tax benefits attributable to the amortization of intangibles and other tax attributes associated with acquisitions, including Litle, and to the tax basis step up associated with our separation from Fifth Third Bank and the subsequent purchase or exchange of Class B units of Vantiv Holding.  This tax benefit is recurring and is expected to reduce income tax expense with respect to cash net income by approximately $4.0 million each quarter in 2013 and beyond.

"Our fourth quarter results cap an outstanding first year for Vantiv as a public company," said Charles Drucker, president and chief executive officer at Vantiv. "Our strong financial performance is a testament to our dedicated employees, our commitment to execution, and our focus on our clients.  Our strategy to generate superior growth and profitability by broadening and deepening our distribution channels, expanding into high growth markets, and increasing our small to mid-sized client base is working, and I expect to continue to deliver double-digit growth in 2013 and beyond."

Merchant Services
Net revenue increased 12% to $188.4 million in the fourth quarter as compared to $167.5 million in the prior year period, primarily due to a 23% increase in transactions.  On a full year basis, net revenue increased 24% to $699.8 million, primarily due to a 24% increase in transactions.  Net revenue grew at a lower rate in the fourth quarter as compared to the full year due primarily to the impact of the debit interchange legislation in the Durbin Amendment in the fourth quarter of 2011.  Consistent with the prior two quarters, net revenue per transaction declined as compared to the prior year period due principally to the addition of a large national processing contract in the second quarter.  Sales and marketing expenses increased 6% in the fourth quarter to $62.5 million and by 21% for the full year to $255.9 million.

Financial Institution Services
Net revenue increased 10% to $82.8 million in the fourth quarter as compared to $75.2 million in the prior year period, primarily due to a 7% increase in transactions and growth in value added services revenue.  On a full year basis, net revenue increased 7% to $322.8 million, primarily due to a 3% increase in transactions and growth in value added services revenue.  Sales and marketing expenses increased by 4% in the fourth quarter to $5.6 million and by 3% for the full year to $24.8 million.

2013 Financial Outlook
"The results we achieved in 2012 along with continued expectations for strong growth in our core business as well as expansion into ecommerce gives us confidence in our growth as we enter 2013," said Mark Heimbouch, chief financial officer.  "In 2013, we expect to generate net revenue of $1.21 to $1.23 billion, which represents growth of approximately 18% to 20%, and adjusted cash net income per share of $1.46 to $1.50, which represents growth of 20% to 23%.  On a GAAP basis, we expect to generate earnings per share of $0.60 to $0.63 in 2013."

Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss fourth quarter and full year 2012 financial results today at 8:00 AM ET. Hosting the call will be Charles Drucker, president and chief executive officer and Mark Heimbouch, chief financial officer. The conference call can be accessed live over the phone by dialing (888) 205-6695, or for international callers (913) 981-5583, and referencing conference code 8782456.  A replay will be available approximately two hours after the call concludes and can be accessed by dialing (888) 203-1112, or for international callers (719) 457-0820, and entering replay pass code 8782456.  The replay will be available through Wednesday, March 6, 2013.  The call will be webcast live from the Company's investor relations website at http://investors.vantiv.com.

About Vantiv, Inc.
Vantiv, Inc. (NYSE: VNTV) is a leading, integrated payment processor differentiated by a single, proprietary technology platform.  Vantiv offers a comprehensive suite of traditional and innovative payment processing and technology solutions to merchants and financial institutions of all sizes in the U.S., enabling them to address their payment processing needs through a single provider.  We build strong relationships with our customers, helping them become more efficient, more secure and more successful.  Vantiv is the third largest merchant acquirer and the largest PIN debit acquirer based on number of transactions in the U.S.  The Company's growth strategy includes expanding further into high growth payment segments, such as ecommerce, mobile, prepaid and information solutions, and attractive industry verticals, such as business-to-business, government, healthcare and education. For more information, visit www.vantiv.com.

Non-GAAP Financial Measures
This earnings release presents non-GAAP financial information including net revenue, adjusted EBITDA, cash net income, and adjusted cash net income per share information.  These are important financial performance measures for the Company, but are not financial measures as defined by GAAP.  The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.  The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.  Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

Net revenue is revenue, less network fees and other costs. Cash net income includes adjustments to exclude amortization of intangible assets acquired in business combinations and customer portfolio and related asset acquisitions, share-based compensation, transition costs associated with our separation from Fifth Third Bank, integration costs incurred in connection with acquisitions, cash tax adjustments, and conversion of non-controlling interests into shares of Class A common stock. For purposes of providing better comparability we also made adjustments to interest expense and depreciation in 2011. (See Schedule 6 and 7 for a reconciliation from GAAP net income to cash net income.)

Forward-Looking Statements
This release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this release are forward-looking statements including any statements regarding guidance and statements of a general economic or industry specific nature. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, guidance, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "should," "can have," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

The forward-looking statements contained in this release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you review and consider information presented herein, you should understand that these statements are not guarantees of future performance or results. They depend upon future events and are subject to risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual future performance or results and cause them to differ materially from those anticipated in the forward-looking statements. Certain of these factors and other risk factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission and include, but are not limited to: (i) the ability to keep pace with rapid developments and change in our industry and provide new services to our clients; (ii) competition within our industry; (iii) disclosure of unauthorized data and security breaches that expose us to liability, litigation and reputational damage; (iv) failures of our systems or systems of our third party providers; (v) our inability to expand our market share in existing markets or expand into new markets; (vi) our ability to identify acquisition, joint venture and partnership candidates and finance or integrate businesses, services or technologies that we acquire; (vii) failure to comply with applicable requirements of Visa, MasterCard or other payment networks; (viii) changes in payment network rules or standards; (ix) our ability to pass fee increases along to merchants; (x) termination of sponsorship or clearing services provided to us; (xi) increased attrition of our merchants, independent sales organizations, or ISOs, or referral partners; (xii) inability to successfully renew or renegotiate agreements with our clients or ISOs; (xiii) reductions in overall consumer, business and government spending; (xiv) fraud by merchants or others; (xv) a decline in the use of credit, debit or prepaid cards; (xvi) consolidation in the banking and retail industries; and (xvii) the effects of governmental regulation, changes in laws and outcomes of future litigation or investigations.  Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements.

Any forward-looking statement made by us in this release speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Contacts:
Investors
Nathan Rozof, CFA
Senior Vice President, Investor Relations
(866) 254-4811
(513) 900-4811
IR@vantiv.com

Media
Andrew Ciafardini
Director of Public Relations
(513) 900-5308
Andrew.Ciafardini@vantiv.com

Schedule 1
Vantiv, Inc.
Consolidated Statements of Income
(Unaudited)
(in thousands, except share data)

Three Months Ended Year Ended
December 31, December 31, December 31, December 31,
2012 2011 % Change 2012 2011 % Change
Revenue $ 494,092 $ 439,047 13 % $ 1,863,239 $ 1,622,421 15 %
Network fees and other costs 222,906 196,359 14 % 840,597 756,735 11 %
Net revenue 271,186 242,688 12 % 1,022,642 865,686 18 %
Sales and marketing 68,042 64,633 5 % 280,644 236,917 18 %
Other operating costs 38,572 35,672 8 % 158,374 143,420 10 %
General and administrative 31,844 18,367 73 % 118,231 86,870 36 %
Depreciation and amortization 41,357 39,559 5 % 160,538 155,326 3 %
Income from operations 91,371 84,457 8 % 304,855 243,153 25 %
Interest expense-net (9,897) (25,764) (62) % (54,572) (111,535) (51) %
Non-operating expenses(1) - (700)   NM (92,672) (14,499)   NM
Income before applicable income taxes 81,474 57,993 40 % 157,611 117,119 35 %
Income tax expense 24,005 18,226 32 % 46,853 32,309 45 %
Net income 57,469 39,767 45 % 110,758 84,810 31 %
Less: Net income attributable to non-controlling interests (28,715) (24,054) 19 % (53,148) (48,570) 9 %
Net income attributable to Vantiv, Inc. $ 28,754 $ 15,713 83 % $ 57,610 $ 36,240 59 %
Net income per share of Class A common stock attributable to Vantiv, Inc.:
Basic $ 0.23 $ 0.18 $ 0.50 $ 0.40
Diluted $ 0.22 $ 0.18 $ 0.47 $ 0.40
Shares used in computing net income per share of Class A common stock:
Basic 126,100,698 89,515,617 116,258,204 89,515,617
Diluted 132,783,880 89,515,617 122,747,362 89,515,617
Non Financial Data:
Transactions (in millions) 4,171 3,490 20 % 15,362 12,935 19 %

(1) Non-operating expenses primarily consist of charges incurred with the refinancing of our debt in March 2012 and May 2011 and the termination of our interest rate swaps in March 2012.

Schedule 2
Vantiv, Inc.
Cash Net Income (Non-GAAP)
(Unaudited)
(in thousands, except share data)

See schedule 6 and 7 for a reconciliation of GAAP net income to cash net income.

Three Months Ended Year Ended
December 31, December 31, December 31, December 31,
2012 2011 % Change 2012 2011 % Change
Revenue $ 494,092 $ 439,047 13 % $ 1,863,239 $ 1,622,421 15 %
Network fees and other costs 222,906 196,359 14 % 840,597 756,735 11 %
Net revenue 271,186 242,688 12 % 1,022,642 865,686 18 %
Sales and marketing 68,042 64,133 6 % 280,644 236,126 19 %
Other operating costs 38,374 32,921 17 % 155,825 128,256 21 %
General and administrative 20,771 15,229 36 % 76,329 62,509 22 %
Adjusted EBITDA(1) 143,999 130,405 10 % 509,844 438,795 16 %
Depreciation and amortization 12,077 9,453 28 % 43,103 33,733 28 %
Adjusted income from operations 131,922 120,952 9 % 466,741 405,062 15 %
Interest expense-net (9,897) (25,764) (62) % (54,572) (105,638) (48) %
Adjusted income before applicable income taxes 122,025 95,188 28 % 412,169 299,424 38 %
Income tax expense (at an effective tax rate of 38.5%)(2) 46,980 36,646 28 % 158,685 115,278 38 %
Cash tax adjustments(3) (6,525) -  NM (6,525) -  NM
Adjusted income tax expense 40,455 36,646 152,160 115,278
Cash net income(4) $ 81,570 $ 58,542 39 % $ 260,009 $ 184,146 41 %
Adjusted cash net income per share(5) $ 0.38 $ 1.22
Adjusted shares outstanding(6) 213,724,756 213,772,063
Non Financial Data:
Transactions (in millions) 4,171 3,490 20 % 15,362 12,935 19 %

Non-GAAP Financial Measures
This schedule presents net revenue, adjusted EBITDA, cash net income, and adjusted cash net income per share information.  These are important financial performance measures for the company, but are not financial measures as defined by GAAP.  Such financial measures should not be considered as alternatives to GAAP net income, and such measures may not be comparable to those reported by other companies.

Cash net income is derived from GAAP net income, adjusting for the following items: (a) amortization of intangible assets acquired in business combinations and customer portfolio and related asset acquisitions; (b) non-operating expenses primarily associated with the refinancing of our debt and the termination of our interest rate swaps in March 2012 and May 2011; (c) adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock; (d) share-based compensation; (e) costs associated with our separation from Fifth Third Bank and acquisition and integration costs incurred in connection with our acquisitions; and (f) tax benefits due to the amortization of intangible assets and other tax attributes resulting from or acquired with our acquisitions, including Litle, and to the tax basis step up associated with our separation from Fifth Third Bank and the purchase or exchange of Class B units of Vantiv Holding, net of payment obligations under tax receivable agreements established at the time of our initial public offering. For purposes of providing better comparability, we also make adjustments in 2011 to reflect depreciation and amortization assuming that our property and equipment at December 31, 2011 was in place on January 1, 2011 and for interest expense assuming the Company's level of debt and applicable terms as of December 31, 2011 was outstanding on January 1, 2011.

(1) See schedule 8 for a reconciliation of GAAP income from operations to adjusted EBITDA.
(2) Represents adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock, including the tax effect of adjustments described above.
(3) Represents tax benefits due to the amortization of intangible assets and other tax attributes resulting from or acquired with our acquisitions, including Litle, and to the tax basis step up associated with our separation from Fifth Third Bank and the purchase or exchange of Class B units of Vantiv Holding, net of payment obligations under tax receivable agreements established at the time of our initial public offering.
(4) Cash net income assumes the conversion of non-controlling interests into shares of Class A common stock.
(5) Adjusted cash net income per share is calculated as cash net income divided by adjusted shares outstanding.
(6) Shares for the twelve months ended December 31, 2012 are pro forma and weighted assuming the equity structure in place March 31, 2012, was in place January 1, 2012.  The quarter to date and year to date adjusted shares outstanding include 80,940,875 Class B units that are excluded from the GAAP dilutive income per share calculation.

Schedule 3
Vantiv, Inc.
Segment Information
(Unaudited)
(in thousands)

Three Months Ended December 31, 2012
Financial Institution General
Merchant Services Services Corporate/Other Total
Total revenue $ 380,232 $ 113,860 $ - $ 494,092
Network fees and other costs 191,842 31,064 - 222,906
Net revenue 188,390 82,796 - 271,186
Sales and marketing 62,492 5,550 - 68,042
Segment profit $ 125,898 $ 77,246 $ - $ 203,144
Non-financial data:
Transactions (in millions) 3,300 871 4,171
Net revenue per transaction $ 0.0571 $ 0.0951 $ 0.0650

Three Months Ended December 31, 2011
Financial Institution General
Merchant Services Services Corporate/Other Total
Total revenue $ 331,514 $ 107,533 $ - $ 439,047
Network fees and other costs 164,053 32,306 - 196,359
Net revenue 167,461 75,227 - 242,688
Sales and marketing 58,799 5,335 499 64,633
Segment profit $ 108,662 $ 69,892 $ (499) $ 178,055
Non-financial data:
Transactions (in millions) 2,673 817 3,490
Net revenue per transaction $ 0.0626 $ 0.0921 $ 0.0695

Year Ended December 31, 2012
Financial Institution General
Merchant Services Services Corporate/Other Total
Total revenue $ 1,409,158 $ 454,081 $ - $ 1,863,239
Network fees and other costs 709,341 131,256 - 840,597
Net revenue 699,817 322,825 - 1,022,642
Sales and marketing 255,887 24,757 - 280,644
Segment profit $ 443,930 $ 298,068 $ - $ 741,998
Non-financial data:
Transactions (in millions) 11,912 3,450 15,362
Net revenue per transaction $ 0.0587 $ 0.0936 $ 0.0666

Year Ended December 31, 2011
Financial Institution General
Merchant Services Services Corporate/Other Total
Total revenue $ 1,185,253 $ 437,168 $ - $ 1,622,421
Network fees and other costs 620,852 135,883 - 756,735
Net revenue 564,401 301,285 - 865,686
Sales and marketing 211,062 24,046 1,809 236,917
Segment profit $ 353,339 $ 277,239 $ (1,809) $ 628,769
Non-financial data:
Transactions (in millions) 9,591 3,344 12,935
Net revenue per transaction $ 0.0588 $ 0.0901 $ 0.0669

Schedule 4
Vantiv, Inc.
Condensed Consolidated Statements of Financial Position
(Unaudited)
(in thousands)

December 31,
2012
December 31,
2011
Assets
Current assets:
Cash and cash equivalents $ 67,058 $ 370,549
Accounts receivable-net 397,664 368,658
Related party receivable 4,415 4,361
Settlement assets 429,377 46,840
Prepaid expenses 10,629 8,642
Other 11,934 20,947
Total current assets 921,077 819,997
Customer incentives 28,927 17,493
Property and equipment-net 174,940 152,310
Intangible assets-net 884,536 916,198
Goodwill 1,804,592 1,532,374
Deferred taxes 141,361 4,292
Other assets 24,096 47,046
Total assets $ 3,979,529 $ 3,489,710
Liabilities and equity
Current liabilities:
Accounts payable and accrued expenses $ 215,998 $ 193,706
Related party payable 1,625 3,814
Settlement obligations 542,564 208,669
Current portion of note payable 92,500 16,211
Deferred income 9,667 7,313
Current maturities of capital lease obligations 5,505 4,607
Other 1,609 6,400
Total current liabilities 869,468 440,720
Long-term liabilities:
Note payable 1,163,605 1,738,498
Tax receivable agreement obligations 484,700 -
Capital lease obligations 8,275 12,322
Deferred taxes 8,207 9,263
Other 1,039 33,187
Total long-term liabilities 1,665,826 1,793,270
Total liabilities 2,535,294 2,233,990
Commitments and contingencies
Equity:
Total equity (1) 1,444,235 1,255,720
Total liabilities and equity $ 3,979,529 $ 3,489,710

(1) Includes equity attributable to non-controlling interests.

Schedule 5
Vantiv, Inc.
Consolidated Statements of Cash Flows
(Unaudited)

Year Ended
December 31, December 31,
2012 2011
Operating Activities:
Net income $ 110,758 $ 84,810
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 160,538 155,326
Loss on derivative assets - 800
Amortization of customer incentives 6,372 3,511
Amortization and write-off of debt issuance costs 59,407 19,544
Share-based compensation expense 33,444 2,974
Deferred taxes 352 31,133
Other non-cash items 1,208 303
Change in operating assets and liabilities:
Increase in accounts receivable and related party receivable (28,517) (25,715)
Decrease in net settlement assets and obligations (48,668) (38,258)
Increase in customer incentives (9,306) (11,385)
Decrease (increase) in prepaid and other assets 11,053 (10,532)
(Decrease) increase in accounts payable and accrued expenses (3,415) 30,693
Decrease in payable to related party (2,189) (8,652)
Increase (decrease) in other liabilities 2,077 (1,098)
Net cash provided by operating activities 293,114 233,454
Investing Activities:
Purchases of property and equipment (51,435) (62,714)
Acquisition of customer portfolios and related assets (13,213) (3,906)
Purchase of investments (313) (3,300)
Cash used in acquisitions, net of cash acquired (352,330) -
Net cash used in investing activities (417,291) (69,920)
Financing Activities:
Proceeds from initial public offering, net of offering costs of $39,091 460,913 -
Proceeds from follow-on offering, net of offering costs of $1,951 33,512 -
Proceeds from issuance of long-term debt 1,338,750 -
Repayment of debt and capital lease obligations (1,859,199) (20,373)
Payment of debt issuance costs (28,949) (6,276)
Purchase of Class B units in Vantiv Holding from Fifth Third (33,512) -
Repurchase of Class A common stock (to satisfy tax withholding obligations) (17,906) -
Tax benefit from employee share-based compensation 14,747 -
Distribution to funds managed by Advent International Corporation (40,086) -
Distribution to non-controlling interests (47,584) (2,848)
Net cash used in financing activities (179,314) (29,497)
Net increase in cash and cash equivalents (303,491) 134,037
Cash and cash equivalents-Beginning of period 370,549 236,512
Cash and cash equivalents-End of period $ 67,058 $ 370,549
Cash Payments:
Interest $ 60,886 $ 106,459
Taxes 29,261 12,127
Non-cash Items:
Issuance of tax receivable agreements $ 484,700 $ -
Assets acquired under capital lease obligations 1,202 19,711
Assets acquired under debt obligations - 19,302
Accrual of secondary offering costs 3,000 -

Schedule 6
Vantiv, Inc.
Reconciliation of GAAP Net Income to Cash Net Income
(Unaudited)
(in thousands)

Three Months Ended December 31, 2012
GAAP Transition, Acquisition
and Integration(1)
Share-Based
Compensation
Other
Adjustments
Cash Net Income
Revenue $ 494,092 $ - $ - $ - $ 494,092
Network fees and other costs 222,906 - - - 222,906
Net revenue 271,186 - - - 271,186
Sales and marketing 68,042 - - - 68,042
Other operating costs 38,572 (198) - - 38,374
General and administrative 31,844 (4,518) (6,555) - 20,771
Depreciation and amortization 41,357 - - (29,280) (2) 12,077
Income from operations 91,371 4,716 6,555 29,280 131,922
Interest expense-net (9,897) - - - (9,897)
Non-operating expenses - - - - -
Income before applicable income taxes 81,474 4,716 6,555 29,280 122,025
Income tax expense 24,005 1,816 2,524 18,635 (4) 46,980
Tax adjustments(5) - - - (6,525) (6,525)
Net income(6) $ 57,469 $ 2,900 $ 4,031 $ 17,170 $ 81,570

Three Months Ended December 31, 2011
GAAP Transition, Acquisition
and Integration(1)
Share-Based
Compensation
Other
Adjustments
Cash Net Income
Revenue $ 439,047 $ - $ - $ - $ 439,047
Network fees and other costs 196,359 - - - 196,359
Net revenue 242,688 - - - 242,688
Sales and marketing 64,633 (500) - - 64,133
Other operating costs 35,672 (2,751) - - 32,921
General and administrative 18,367 (2,366) (772) - 15,229
Depreciation and amortization 39,559 - - (30,106) (2) 9,453
Income from operations 84,457 5,617 772 30,106 120,952
Interest expense-net (25,764) - - - (25,764)
Non-operating expenses (700) - - 700 (3) -
Income before applicable income taxes 57,993 5,617 772 30,806 95,188
Income tax expense 18,226 2,161 297 15,962 (4) 36,646
Tax adjustments(5) - - - - -
Net income(6) $ 39,767 $ 3,456 $ 475 $ 14,844 $ 58,542

Non-GAAP Financial Measures
This schedule presents net revenue and cash net income.  These are important financial performance measures for the company, but are not financial measures as defined by GAAP.  Such financial measures should not be considered as alternatives to GAAP net income, and such measures may not be comparable to those reported by other companies.

(1) Represents acquisition and integration costs incurred in connection with our acquisitions and costs associated with our separation from Fifth Third Bank.
(2) Represents amortization of intangible assets acquired through business combinations and customer portfolio and related asset acquisitions.
(3) Represents non-operating expenses primarily associated with the refinancing of our debt in 2012 and 2011.
(4) Represents adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock.
(5) Represents tax benefits due to the amortization of intangible assets and other tax attributes resulting from or acquired with our acquisitions, including Litle, and to the tax basis step up associated with our separation from Fifth Third Bank and the purchase or exchange of Class B units of Vantiv Holding, net of payment obligations under tax receivable agreements established at the time of our initial public offering.
(6) Net income assumes the conversion of non-controlling interests into shares of Class A common stock.

Schedule 7
Vantiv, Inc.
Reconciliation of GAAP Net Income to Cash Net Income
(Unaudited)
(in thousands)

Year Ended December 31, 2012
GAAP Transition, 
Acquisition and 
Integration(1)
Share-Based
Compensation
Comparability
Adjustments
Other
Adjustments
Cash 
Net Income
Revenue $ 1,863,239 $ - $ - $ - $ - $ 1,863,239
Network fees and other costs 840,597 - - - - 840,597
Net revenue 1,022,642 - - - - 1,022,642
Sales and marketing 280,644 - - - - 280,644
Other operating costs 158,374 (2,549) - - - 155,825
General and administrative 118,231 (8,458) (33,444) - - 76,329
Depreciation and amortization 160,538 - - - (117,435) (2) 43,103
Income from operations 304,855 11,007 33,444 - 117,435 466,741
Interest expense-net (54,572) - - - - (54,572)
Non-operating expenses (92,672) - - - 92,672 (3) -
Income before applicable income taxes 157,611 11,007 33,444 - 210,107 412,169
Income tax expense 46,853 4,238 12,876 - 94,718 (4) 158,685
Tax adjustments(5) - - - - (6,525) (6,525)
Net income(6) $ 110,758 $ 6,769 $ 20,568 $ - $ 121,914 $ 260,009

Year Ended December 31, 2011
GAAP Transition, 
Acquisition and 
Integration(1)
Share-Based
Compensation
Comparability
Adjustments
Other
Adjustments
Cash 
Net Income
Revenue $ 1,622,421 $ - $ - $ - $ - $ 1,622,421
Network fees and other costs 756,735 - - - - 756,735
Net revenue 865,686 - - - - 865,686
Sales and marketing 236,917 (791) - - - 236,126
Other operating costs 143,420 (15,164) - - - 128,256
General and administrative 86,870 (21,387) (2,974) - - 62,509
Depreciation and amortization 155,326 - - 1,734 (7) (123,327) (2) 33,733
Income from operations 243,153 37,342 2,974 (1,734) 123,327 405,062
Interest expense-net (111,535) - - 5,897 (8) - (105,638)
Non-operating expenses (14,499) - - - 14,499 (3) -
Income before applicable income taxes 117,119 37,342 2,974 4,163 137,826 299,424
Income tax expense 32,309 14,376 1,145 1,603 65,845 (4) 115,278
Tax adjustments(5) - - - - - -
Net income(6) $ 84,810 $ 22,966 $ 1,829 $ 2,560 $ 71,981 $ 184,146

Non-GAAP Financial Measures
This schedule presents net revenue and cash net income.  These are important financial performance measures for the company, but are not financial measures as defined by GAAP.  Such financial measures should not be considered as alternatives to GAAP net income, and such measures may not be comparable to those reported by other companies. 

(1) Represents acquisition and integration costs incurred in connection with our acquisitions and costs associated with our separation from Fifth Third Bank.
(2) Represents amortization of intangible assets acquired through business combinations and customer portfolio and related asset acquisitions.
(3) Represents non-operating expenses primarily associated with the refinancing of our debt in 2012 and 2011 and the termination of our interest rate swaps in 2012.
(4) Represents adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock.
(5) Represents tax benefits due to the amortization of intangible assets and other tax attributes resulting from or acquired with our acquisitions, including Litle, and to the tax basis step up associated with our separation from Fifth Third Bank and the purchase or exchange of Class B units of Vantiv Holding, net of payment obligations under tax receivable agreements established at the time of our initial public offering.
(6) Net income assumes the conversion of non-controlling interests into shares of Class A common stock.
(7) Depreciation and amortization represents expense associated with our property and equipment, assuming that our property and equipment at December 31, 2011 was in place on January 1, 2011.
(8) Represents adjustment to reflect what our 2011 interest expense would have been if the Company's level of debt and applicable terms as of December 31, 2011 was outstanding on January 1, 2011.

Schedule 8
Vantiv, Inc.
Reconciliation of GAAP Income from Operations to Adjusted EBITDA
(Unaudited)
(in thousands)

Three Months Ended Year Ended
December 31, December 31, December 31, December 31,
2012 2011 % Change 2012 2011 % Change
Income from operations $ 91,371 $ 84,457 8 % $ 304,855 $ 243,153 25 %
Depreciation and amortization 41,357 39,559 5 % 160,538 155,326 3 %
Transition, acquisition and integration costs(1) 4,716 5,617 (16) % 11,007 37,342 (71) %
Share-based compensation 6,555 772   NM 33,444 2,974   NM
Adjusted EBITDA $ 143,999 $ 130,405 10 % $ 509,844 $ 438,795 16 %

Non-GAAP Financial Measures
This schedule presents adjusted EBITDA, which is an important financial performance measure for the company, but is not a financial measure as defined by GAAP.  Such financial measure should not be considered as an alternative to GAAP income from operations, and such measure may not be comparable to those reported by other companies. 

(1) Represents costs associated with our separation from Fifth Third Bank and acquisition and integration costs in connection with our acquisitions.


HUG#1679126

Vantiv, Inc. : Vantiv to Announce Fourth Quarter and Full-Year 2012 Results on February 20th

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Vantiv to Announce Fourth Quarter and Full-Year 2012 Results on February 20th

Cincinnati - Jan. 29, 2013 - Vantiv, Inc. (NYSE: VNTV), a leading provider of payment processing services and related technology solutions for merchants and financial institutions of all sizes, announced today that it will host a conference call to discuss its fourth quarter and full-year 2012 financial results and 2013 guidance on Wednesday, Feb. 20, 2013 at 8:00 am ET.  Hosting the call will be CEO Charles Drucker and CFO Mark Heimbouch.  A press release with fourth quarter and full-year 2012 financial results will be issued at approximately 7:00 am ET that same day.

The conference call can be accessed live over the phone by dialing (888) 205-6695, or for international callers (913) 981-5583, and referencing conference ID 8782456.  A replay will be available approximately two hours after the call concludes and can be accessed by dialing (888) 203-1112, or for international callers (719) 457-0820, and entering conference ID 8782456.  The replay will be available through Wednesday, March 6, 2013.  The call will be webcast live from the Company's investor relations website at http://investors.vantiv.com.  Following completion of the call, a recorded replay of the webcast will be available on the website.

CONTACTS:
Nathan Rozof, CFA
Senior Vice President, Investor Relations
(866) 254-4811 or (513) 900-4811
IR@vantiv.com

Andrew Ciafardini
Director of Public Relations
(513) 900-5308
Andrew.Ciafardini@vantiv.com

About Vantiv, Inc.
Vantiv, Inc. (NYSE: VNTV) is a leading, integrated payment processor differentiated by a single, proprietary technology platform. Vantiv offers a comprehensive suite of traditional and innovative payment processing and technology solutions to merchants and financial institutions of all sizes in the U.S., enabling them to address their payment processing needs through a single provider. We build strong relationships with our customers, helping them become more efficient, more secure and more successful. Vantiv is the third largest merchant acquirer and the largest PIN debit acquirer based on number of transactions in the U.S. The company's growth strategy includes expanding further into high growth payment segments, such as eCommerce, mobile, prepaid and information solutions, and attractive industry verticals, such as business-to-business, government, healthcare and education. For more information, visit www.vantiv.com.

 

© Copyright Vantiv, LLC.  All rights reserved.  Vantiv, the Vantiv logo, and all other Vantiv product or service names and logos are registered trademarks or trademarks of Vantiv, LLC in the USA and other countries.  ® indicates USA registration.

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HUG#1674004