SOUTH PORTLAND, Maine--(BUSINESS WIRE)--Dec. 16, 2008--Wright Express Corporation (NYSE: WXS) announced today that it has
modified its fuel-price risk management program. The Company currently
intends to continue purchasing derivative instruments to cover
approximately 80% of its fuel-price-related earnings exposure going
forward. However, these purchases will not be made as far in advance as
in the past. As a result, the Company has temporarily suspended new
purchases of instruments under the program.
Prior to this modification, Wright Express purchased derivative
instruments to cover a portion of its fuel-price-related earnings
exposure in every quarter on a rolling basis. These instruments create a
"costless collar," which is designed to enhance the visibility and
predictability of the Company's future earnings, based on the U.S.
Department of Energy's weekly diesel fuel price index and NYMEX unleaded
gasoline contracts.
The following table shows the approximate range of the collar and
estimated percentage of fuel-price-related earnings exposure covered by
previously announced purchases:
Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Average
low end 2.50 2.58 2.67 2.86 3.02 3.25 3.34 3.60
of
range
Average
top end 2.56 2.64 2.73 2.92 3.08 3.31 3.40 3.66
of
range
%
Locked 90% 90% 90% 90% 90% 80% 53% 27%
in
"We are partially hedged through the third quarter of 2010, and we
expect that hedging will continue to be important to the Wright Express
business model going forward," said Michael Dubyak, Chairman, CEO and
President. "However, given the depressed level of fuel prices prevailing
today, as well as our diminished overall fuel-price-related earnings
exposure, we have decided to temporarily suspend new purchases of
derivative instruments."
About Wright Express
Wright Express is a leading global provider of payment processing and
information management services. Wright Express captures and combines
transaction information from its proprietary network with specialized
analytical tools and purchasing control capabilities in a suite of
solutions that enable fleets to manage their vehicles more effectively.
The Company's charge cards are used by commercial and government fleets
to purchase fuel and maintenance services for approximately 4.5 million
vehicles. Wright Express markets its services directly to fleets and as
an outsourcing partner for its strategic relationships and franchisees.
The Company's business portfolio includes a MasterCard-branded corporate
card as well as TelaPoint, a provider of supply chain software solutions
for petroleum distributors and retailers, and Pacific Pride, an
independent fuel distributor franchisee network, as well as
international subsidiaries. For more information about Wright Express,
please visit www.wrightexpress.com.
This press release contains forward-looking statements, including
statements regarding: the intention to continue purchasing derivative
instruments to cover the Company's fuel-price-related earnings exposure
and the manner in which the program will be executed; and, the use of
fuel price derivative instruments to mitigate financial risks associated
with the variability in fuel prices. These forward-looking statements
include a number of risks and uncertainties that could cause actual
results to differ materially, including: volatility in fuel prices;
future fueling patterns; risks related to customer and counterparty
bankruptcies and credit failures; changes in interest rates; the effect
of the Company's fuel-price-related derivative instruments; effects of
competition; the potential loss of key strategic relationships;
decreased demand for fuel and other vehicle products and services and
the effects of general economic conditions on the commercial activity of
fleets; the Company's ability to rapidly implement new technology and
systems; potential corporate transactions including alliances, mergers,
acquisitions and divestitures; achievement of the expected benefits of
the Company's acquisitions; and the other risks and uncertainties
included from time to time in the Company's filings with the Securities
and Exchange Commission, including the annual report on Form 10-K filed
on February 28, 2008, and the Company's other periodic and current
reports. Wright Express Corporation undertakes no obligation to update
these forward-looking statements at any future date or dates.
CONTACT: News media contact:
Wright ExpressJessica Roy, 207-523-6763
Jessica_Roy@wrightexpress.com
or
Investor contact:
Wright ExpressSteve Elder, 207-523-7769
Steve_Elder@wrightexpress.com
Source:
Wright Express Corporation