Thursday, July 25, 2013 8:00 a.m. ET
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Recent SEC Filings
- Form DEFM14A | Definitive proxy statement relating to merger or acquisition (06/07/19)
- Form DEFM14A | Definitive proxy statement relating to merger or acquisition (06/07/19)
- Form 4 | Statement of changes in beneficial ownership of securities (06/06/19)
- Form 425 | Filing of certain prospectuses and communications in connection with business combination transactions (06/04/19)
- Form 10-Q | Quarterly report which provides a continuing view of a company's financial position (05/03/19)
- Form 10-Q | Quarterly report which provides a continuing view of a company's financial position (11/08/18)
- Form 10-Q | Quarterly report which provides a continuing view of a company's financial position (08/09/18)
- Form 10-K | Annual report which provides a comprehensive overview of the company for the past year (02/26/19)
- Form 10-K | Annual report which provides a comprehensive overview of the company for the past year (02/28/18)
- Form 10-K | Annual report which provides a comprehensive overview of the company for the past year (02/08/17)
Recent Press Releases
- Worldpay Launches Solution to Optimize Payments Under PSD2 Regulations (06/03/19)
- Result of AGM (05/17/19)
- Quarterly Report on Form 10-Q for Q1 2019 (05/07/19)
Vantiv Reports Second Quarter 2013 Results
Vantiv Reports Second Quarter 2013 Results
Net Revenue Grew 14% to $297 Million
Adjusted EBITDA Margin Expanded More Than 60 Basis Points to 51%
Pro Forma Adjusted Net Income per Share Increased 25% to $0.40
Revised 2013 Guidance for Net Revenue to $1.19 to $1.21 Billion and Pro Forma Adjusted Net Income per Share to $1.55-$1.59
Agreement to Acquire Element Payment Services, Inc. to Accelerate Partner Strategy in the Integrated Payments Market
CINCINNATI, July 25, 2013 - Vantiv, Inc. (NYSE: VNTV) ("Vantiv" or the "Company") today announced financial results for the second quarter ended June 30, 2013. Revenue increased 11% to $519.4 million in the second quarter as compared to $469.6 million in the prior year period. Net revenue increased 14% to $296.9 million in the second quarter as compared to $260.4 million in the prior year period. Vantiv's 14% net revenue growth was due primarily to 8% transaction growth and a 6% expansion in net revenue per transaction. On a GAAP basis, net income attributable to Vantiv, Inc. was $28.9 million, or $0.20 per diluted share during the second quarter, compared with $23.0 million, or $0.18 per diluted share, in the prior year period. Pro forma adjusted net income increased 22% in the second quarter to $82.7 million as compared to $68.0 million in the prior year period. Pro forma adjusted net income per share increased 25% to $0.40 for the second quarter as compared to $0.32 in the prior year period. (See Schedule 2 for pro forma adjusted net income, Schedule 3 for net revenue per transaction, and Schedule 6 for GAAP net income reconciliation to pro forma adjusted net income.)
Vantiv's superior cost structure continues to drive high levels of profitability as reflected by the Company's second quarter adjusted EBITDA margin of 51.0%, which reflected more than 60 basis points in margin expansion over the prior year period. Adjusted EBITDA margin expanded given Vantiv's scale, combined with revenue and cost synergies realized through the acquisition of Litle and Co. ("Litle") and success in the ecommerce market. (See Schedule 8 for reconciliation from GAAP net income to adjusted EBITDA.)
Vantiv refinanced its existing debt and borrowed an additional $650 million during the second quarter with $400 million of proceeds used to repurchase 17.5 million shares in connection with a recent secondary offering and the remainder to be utilized for general corporate purposes. As a result, the Company's weighted average adjusted shares outstanding fell to 207.9 million shares in the second quarter from 214.0 million shares in the prior year period.
Vantiv entered into an agreement to acquire Element Payment Services, Inc., with the transaction expected to close in the third quarter. Element is a leading, independent payments technology company focused on solutions for Independent Software Vendors ("ISV") and is led by a talented leadership team. Vantiv does not expect the Element acquisition to have a material impact on the Company's full-year 2013 financial results.
"As we aggressively pursue our technology partner strategy, the acquisition of Element Payment Services will provide additional opportunities for Vantiv to penetrate numerous high-growth verticals by adding unique technological and sales channel capabilities to meet the needs of merchants who are increasingly seeking solutions that provide the end to end functionality needed to run their business," said Charles Drucker, president and chief executive officer at Vantiv. "As has been the case with Litle, we expect that the combination of our two companies will create powerful capabilities designed to capitalize on market opportunities."
"I am proud to report another strong quarter that demonstrates our team's focus on execution," said Drucker. "We are winning in our traditional and ecommerce markets while also investing for the future. Our partnerships with leading technology providers enable us to bring innovative value-added solutions to the market and strategically position us as a partner of choice for financial institutions and merchants. Further, the debt refinancing and share repurchase that we completed during the quarter as well as the pending acquisition of Element demonstrate our commitments to growth and to our shareholders."
Net revenue increased 19% to $210.8 million in the second quarter as compared to $176.9 million in the prior year period, primarily due to an 8% increase in transactions and a 10% expansion in net revenue per transaction, including the recent acquisition of Litle and debit routing benefits. The Company's ecommerce business continued to generate superior growth during the second quarter with a 38% year-over-year increase in sales volume on a pro forma basis, due primarily to strong new sales and organic growth. Sales and marketing expenses increased to $70.4 million in the second quarter from $63.6 million in the prior year period.
Financial Institution Services
Net revenue increased 3% to $86.1 million in the second quarter from $83.4 million in the prior year period as transactions grew 5% year-over-year. Sales and marketing expenses fell to $6.1 million from $6.9 million in the prior year period.
2013 Financial Outlook
"Benefits of scale, revenue and cost synergies associated with growth in ecommerce, and increased net revenue per transaction are driving high margins," said chief financial officer Mark Heimbouch. "For 2013, we now expect to generate up to 100 basis points of adjusted EBITDA margin expansion. Including the impact of the May share repurchase as well as adjusted EBITDA margin expansion, we are revising our pro forma adjusted net income per share guidance range to between $1.55 and $1.59 from our previous estimate of $1.46 to $1.50.
Finally, we are tempering our net revenue expectations to reflect lower consumer spending trends as well the impact of it taking longer to penetrate certain new sales channels. We now expect to generate net revenue of $1.19 to $1.21 billion during 2013, representing 16% to 18% growth for the full year, as compared to our previous net revenue estimate of $1.21 to $1.23 billion. Finally, we now expect to generate GAAP earnings per diluted share of $0.91 to $0.96 for the full year, above our prior guidance range of $0.60 to $0.63."
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss second quarter 2013 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) 599-8691, or for international callers (913) 312-1486, and referencing conference code 6753992. 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 6753992. The replay will be available through Thursday, August 8, 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, payment facilitation (PayFac(TM)), mobile, prepaid and information solutions, and attractive industry verticals, such as petroleum, business-to-business, government, healthcare, gaming 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.
Non-GAAP and Pro Forma Financial Measures
This earnings release presents non-GAAP and pro forma financial information including net revenue, adjusted EBITDA, pro forma adjusted net income, and pro forma adjusted 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 and pro forma financial performance 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 measures to the most directly comparable GAAP financial measures are presented in the attached schedules.
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. More information on potential factors that could affect the Company's financial results and performance is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's periodic reports filed with the SEC, including the Company's Form 10-K for the year ended December 31, 2012, its Form 10-Q for the quarter ended March 31, 2013, and its Form 10-Q for the quarter ended June 30, 2013 to be filed with the SEC.
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.
Nathan Rozof, CFA
Senior Vice President, Investor Relations
Director of Public Relations
2Q 2013 EARNINGS RELEASE SCHEDULES ACCESSIBLE AT THE LINK BELOW
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