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|Vantiv Reports Fourth Quarter and Full-Year 2015 Results|
CINCINNATI, Feb. 3, 2016 - Vantiv, Inc. (NYSE: VNTV) ("Vantiv" or the "company") today announced financial results for the fourth quarter and full-year ended December 31, 2015. For the fourth quarter, revenue increased 16% to $852 million as compared to $734 million in the prior year period. Net revenue increased 13% to $453 million as compared to $402 million in the prior year period, reflecting strong growth in both of our segments. On a GAAP basis, net income attributable to Vantiv, Inc. was $51 million or $0.31 per diluted share as compared to $69 million or $0.35 per diluted share in the prior year period. Pro forma adjusted net income increased 22% to $128 million as compared to $105 million in the prior year period. Pro forma adjusted net income per share increased 23% to $0.65 as compared to $0.53 in the prior year period. (See Schedule 2 for pro forma adjusted net income and Schedule 6 for GAAP net income reconciliation to pro forma adjusted net income.)
For the full-year 2015, revenue increased 23% to $3,160 million as compared to $2,577 million in the prior year. Net revenue increased 20% to $1,682 million as compared to $1,403 million in the prior year. On a GAAP basis, net income attributable to Vantiv, Inc. was $148 million or $0.95 per diluted share in 2015 as compared to $125 million or $0.75 per diluted share in the prior year. Pro forma adjusted net income increased 21% to $449 million as compared to $372 million in the prior year. Pro forma adjusted net income per share increased 20% to $2.24 as compared to $1.87 in the prior year. (See Schedule 2 for pro forma adjusted net income and Schedule 7 for GAAP net income reconciliation to pro forma adjusted net income.)
Vantiv's scale and superior cost structure continue to drive high levels of profitability. For the fourth quarter, adjusted EBITDA margin expanded by 100 basis points to 49.1% as compared to 48.1% in the prior year period, primarily due to cost synergies created by the on-going integration of Mercury Payment Systems ("Mercury"). For the full-year 2015, adjusted EBITDA margin was flat as compared to the prior year, primarily due to impacts from the Mercury acquisition, which were offset by cost synergies realized during the year. (See Schedule 8 for a reconciliation of GAAP net income to adjusted EBITDA.)
"Our strong results in 2015 demonstrate how our strategy to invest in our core strengths while expanding into high-growth channels and verticals has successfully generated sustainable organic growth across our business," said Charles Drucker, president and chief executive officer at Vantiv. "I am proud of the way that our people have navigated the changes in the payments industry to make this a great year while simultaneously positioning us for continued future success."
For the full-year 2015, Merchant Services net revenue increased 25% to $1,336 million as compared to $1,067 million in the prior year, primarily due to a 17% increase in transactions and a 7% increase in net revenue per transaction. The Mercury acquisition was completed during the second quarter of 2014. On a pro forma organic basis, Merchant Services net revenue would have increased 14% for full-year 2015 as compared to the prior year if we had owned Mercury throughout both years. Sales and marketing expenses increased 30% to $479 million for the full-year as compared to $368 million in the prior year, due to new sales growth, as well as impacts from the Mercury acquisition.
Financial Institution Services
For the full-year 2015, Financial Institution Services net revenue increased 3% to $346 million as compared to $336 million in the prior year as a 6% increase in transactions was partially offset by lower net revenue per transaction. Sales and marketing expenses decreased 11% to $25 million for the full-year from $28 million in the prior year.
Full-Year and First Quarter 2016 Financial Outlook
For the first quarter of 2016, net revenue is expected to be $405 to $410 million, representing an increase of 8% to 9% above the prior year period. Pro forma adjusted net income per share for the first quarter of 2016 is expected to be $0.51 to $0.53, representing an increase of 13% to 18% above the prior year period. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.18 to $0.20 for the first quarter of 2016.
Earnings Conference Call and Audio Webcast
Non-GAAP and Pro Forma Financial Measures
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 risks are discussed in the company's filings with the U.S. Securities and Exchange Commission (the "SEC") and include, but are not limited to: (i) our ability to adapt to developments and change in our industry; (ii) competition; (iii) unauthorized disclosure of data or security breaches; (iv) systems failures or interruptions; (v) our ability to expand our market share or enter new markets; (vi) our ability to identify and complete acquisitions, joint ventures and partnerships; (vii) failure to comply with applicable requirements of Visa, MasterCard or other payment networks or changes in those requirements; (viii) our ability to pass along fee increases; (ix) termination of sponsorship or clearing services; (x) loss of clients or referral partners; (xi) reductions in overall consumer, business and government spending; (xii) fraud by merchants or others; (xiii) a decline in the use of credit, debit or prepaid cards; (xiv) consolidation in the banking and retail industries; (xv) the effects of governmental regulation or changes in laws; and (xvi) 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 most recently filed Annual Report on Form 10-K and its subsequent filings with the SEC.
Any forward-looking statement made by us in this release speaks only as of the date of this release. 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.