Fourth Quarter Cash Flow Fuels $42 Million Debt Pay-down and $7.6 Million in Stock Repurchases; 278,000 GSA Vehicles Implemented in DecemberSOUTH PORTLAND, Maine, Feb 11, 2009 (BUSINESS WIRE) -- Wright Express Corporation (NYSE: WXS), a leading provider of payment
processing and information management services to the U.S. commercial
and government fleet industry, today reported financial results for the
three and 12 months ended December 31, 2008.
Total revenue for the fourth quarter of 2008 decreased 11% to $80.9
million from $90.7 million for the fourth quarter of 2007. Net income to
common shareholders on a GAAP basis was $65.2 million, or $1.66 per
diluted share, compared with $4.6 million, or $0.11 per diluted share,
for the comparable quarter a year earlier. On a non-GAAP basis, the
Company's adjusted net income for the fourth quarter of 2008 was $12.5
million, or $0.32 per diluted share, compared with $19.7 million, or
$0.49 per diluted share, for the year-earlier period. In addition to
previously excluded items, adjusted net income for the fourth quarter of
2008 excludes a non-cash asset impairment charge of $1.5 million related
to product development costs.
Wright Express uses fuel-price derivative instruments to mitigate
financial risks associated with the variability in fuel prices. For the
fourth quarter of 2008, the Company's GAAP financial results include an
unrealized $86.2 million pre-tax, non-cash, mark-to-market gain on these
instruments. For the fourth quarter of 2007, the Company reported an
unrealized pre-tax, non-cash, mark-to-market loss of $22.8 million.
Total revenue for the year ended December 31, 2008 was $393.6 million
compared to $336.1 million in 2007. Net income for 2008 on a GAAP basis
was $127.6 million, or $3.22 per diluted share, compared with $51.6
million, or $1.27 per diluted share, for full year 2007. On a non-GAAP
basis, adjusted net income for full year 2008 was $74.1 million,
compared with $76.0 million a year earlier.
Exhibit 1 reconciles adjusted net income, which has not been determined
in accordance with GAAP, to net income as determined in accordance with
GAAP, for the three- and 12-month periods ended December 31, 2008 and
December 31, 2007.
Management uses the non-GAAP measures presented within this news release
to evaluate the Company's performance on a comparable basis, to
eliminate the volatility associated with its derivative instruments and
to measure the amount of cash that is available for making payments on
the Company's financing debt and for discretionary purposes. Management
believes that investors may find these measures useful for the same
purposes, but cautions that they should not be considered a substitute
for disclosure in accordance with GAAP.
Fourth Quarter 2008 Performance Metrics
-
Average number of vehicles serviced was approximately 4.6 million,
compared with approximately 4.5 million in the fourth quarter of 2007.
-
Total fuel transactions processed increased 6% from the fourth quarter
of 2007 to 66.9 million. Payment processing transactions decreased 4%
to 51.5 million, and transaction processing transactions increased 58%
to 15.3 million.
-
Average expenditure per payment processing transaction decreased 16%
from the fourth quarter of 2007 to $52.69.
-
Average retail fuel price declined 15% to $2.59 per gallon from $3.06
per gallon in the fourth quarter of 2007.
-
Total MasterCard purchase volume grew 21% to $586 million, from $484
million for the fourth quarter of 2007.
To provide investors with additional insight into its operational
performance, Wright Express has included in this news release a table of
selected non-financial metrics for the five quarters ended December 31,
2008. This table is presented as Exhibit 2.
Management Comments on the Fourth Quarter
"Wright Express executed well in a very tough economic environment this
quarter," said Michael Dubyak, Chairman and CEO. "Our new GSA Fleet
portfolio added approximately 278,000 vehicles to our installed base and
attrition remained low, while our diversification efforts, including
MasterCard, Pacific Pride and TelaPoint, together made a significant
contribution to our results."
"The Company generated strong cash flow and maintained excellent
liquidity in the fourth quarter and through 2008," Dubyak said. "After
paying down $42 million in financing debt and repurchasing $7.6 million
in common stock during the quarter, we begin 2009 with an exceptionally
strong balance sheet."
"Our goal is to build on these strengths and maximize the results we
produce even in difficult market conditions," said Dubyak. "We expect
further success in adding new vehicles and controlling attrition, and
the diversification strategy we embarked on two years ago should
continue to drive expanding streams of revenue. We will continue to
invest in our growth strategies and in our people, and I am confident
that Wright Express will be positioned for industry-leading growth when
the economy begins to recover."
Financial Guidance
Wright Express Corporation is issuing financial guidance for the first
quarter and full year 2009. This guidance assumes continued
deterioration in the economy and, therefore, further declines in fuel
purchasing volume through the year, with volume in the Company's
installed base declining by approximately 10% to 15% from 2008. The
guidance below also assumes a significant year-over-year decline in
average fuel prices, partially countered by the Company's fuel-price
derivative instruments. The guidance below further assumes that credit
loss for full year 2009 will range from 45 to 55 basis points. The
guidance below does not reflect the impact of any stock repurchases that
may occur in 2009. In addition, the Company's guidance excludes the
impact of non-cash, mark-to-market adjustments on the Company's
fuel-price-related derivative instruments, the amortization of purchased
intangibles, and adjustments related to the deferred tax asset and
tax-receivable agreement with the Company's former parent company. The
fuel prices referenced below are based on the applicable NYMEX futures
price:
-
For the first quarter of 2009, revenue in the range of $61 million to
$68 million. This is based on an assumed average retail fuel price of
$1.98 per gallon.
-
First quarter 2009 adjusted net income in the range of $10 million to
$12 million, or $0.25 to $0.31 per diluted share, based on
approximately 39 million shares outstanding.
-
For the full year 2009, the Company expects revenue in the range of
$270 million to $285 million. This is based on an assumed average
retail fuel price of $1.97 per gallon.
-
For the full year 2009, the Company expects adjusted net income in the
range of $51 million to $59 million, or $1.30 to $1.50 per diluted
share, based on approximately 39 million shares outstanding.
Conference Call Details
In conjunction with this announcement, Wright Express will host a
conference call today, February 11, 2009, at 10:00 a.m. (ET). The
conference call will be webcast live on the Internet, and can be
accessed at the Investor Relations section of the Wright Express
website, www.wrightexpress.com.
The live conference call also can be accessed by dialing (877) 407-5790
or (201) 689-8328. A replay of the webcast will be available on the
Company's website for approximately three months.
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 4.6 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: expectations for further success in adding new
vehicles and controlling attrition; the implementation of a
diversification strategy and its ability to expand revenue streams;
plans for investment in growth strategies and human capital; confidence
for success following an economic recovery; expectations for future
financial performance; and assumptions, expectations and guidance for
first quarter and full year 2009 results. These forward-looking
statements include a number of risks and uncertainties that could cause
actual results to differ materially, including: volatility in fuel
prices; first quarter and full year 2009 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.
|
WRIGHT EXPRESS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31,
|
|
Year Ended December 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment processing revenue
|
|
$
|
56,236
|
|
$
|
69,339
|
|
$
|
297,441
|
|
$
|
257,493
|
|
|
Transaction processing revenue
|
|
|
4,778
|
|
|
3,641
|
|
|
19,339
|
|
|
14,452
|
|
|
Account servicing revenue
|
|
|
7,975
|
|
|
7,344
|
|
|
30,631
|
|
|
26,767
|
|
|
Finance fees
|
|
|
7,864
|
|
|
7,523
|
|
|
31,043
|
|
|
26,885
|
|
|
Other
|
|
|
4,014
|
|
|
2,834
|
|
|
15,128
|
|
|
10,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
80,867
|
|
|
90,681
|
|
|
393,582
|
|
|
336,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary and other personnel
|
|
|
16,931
|
|
|
16,964
|
|
|
66,969
|
|
|
65,014
|
|
|
Service fees
|
|
|
4,732
|
|
|
4,199
|
|
|
20,361
|
|
|
14,987
|
|
|
Provision for credit losses
|
|
|
14,477
|
|
|
7,963
|
|
|
45,021
|
|
|
20,569
|
|
|
Technology leasing and support
|
|
|
2,032
|
|
|
2,121
|
|
|
8,510
|
|
|
8,738
|
|
|
Occupancy and equipment
|
|
|
3,376
|
|
|
1,512
|
|
|
9,159
|
|
|
6,091
|
|
|
Depreciation and amortization
|
|
|
5,481
|
|
|
4,456
|
|
|
20,123
|
|
|
15,018
|
|
|
Operating interest expense
|
|
|
7,326
|
|
|
9,061
|
|
|
34,993
|
|
|
34,086
|
|
|
Other
|
|
|
7,498
|
|
|
4,865
|
|
|
27,014
|
|
|
19,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
61,853
|
|
|
51,141
|
|
|
232,150
|
|
|
184,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
19,014
|
|
|
39,540
|
|
|
161,432
|
|
|
152,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing interest expense
|
|
|
(2,736
|
)
|
|
(3,367
|
)
|
|
(11,859
|
)
|
|
(12,677
|
)
|
|
Loss on extinguishment of debt
|
|
|
---
|
|
|
---
|
|
|
---
|
|
|
(1,572
|
)
|
|
Net realized and unrealized gains (losses) on fuel price derivatives
|
|
|
87,082
|
|
|
(28,580
|
)
|
|
55,206
|
|
|
(53,610
|
)
|
|
(Increase) decrease in amount due to Avis under tax receivable
agreement
|
|
|
145
|
|
|
---
|
|
|
(9,014
|
)
|
|
78,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
103,505
|
|
|
7,593
|
|
|
195,765
|
|
|
163,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
38,354
|
|
|
2,970
|
|
|
68,125
|
|
|
111,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
65,151
|
|
$
|
4,623
|
|
$
|
127,640
|
|
$
|
51,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.69
|
|
$
|
0.12
|
|
$
|
3.28
|
|
$
|
1.29
|
|
|
Diluted
|
|
$
|
1.66
|
|
$
|
0.11
|
|
$
|
3.22
|
|
$
|
1.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
38,544
|
|
|
39,808
|
|
|
38,885
|
|
|
40,042
|
|
|
Diluted
|
|
|
39,373
|
|
|
40,425
|
|
|
39,787
|
|
|
40,751
|
|
WRIGHT EXPRESS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
183,117
|
|
$
|
43,019
|
|
|
|
Accounts receivable (less reserve for credit losses of $18,435 in
2008 and $9,466 in 2007)
|
|
|
702,225
|
|
|
1,070,273
|
|
|
|
Income taxes receivable
|
|
|
7,903
|
|
|
3,320
|
|
|
|
Available-for-sale securities
|
|
|
12,533
|
|
|
9,494
|
|
|
|
Fuel price derivatives, at fair value
|
|
|
49,294
|
|
|
--
|
|
|
|
Property, equipment and capitalized software, net
|
|
|
44,864
|
|
|
45,537
|
|
|
|
Deferred income taxes, net
|
|
|
239,957
|
|
|
283,092
|
|
|
|
Goodwill
|
|
|
315,230
|
|
|
294,365
|
|
|
|
Other intangible assets, net
|
|
|
39,922
|
|
|
20,932
|
|
|
|
Other assets
|
|
|
16,810
|
|
|
15,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,611,855
|
|
$
|
1,785,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
249,067
|
|
$
|
363,189
|
|
|
|
Accrued expenses
|
|
|
34,931
|
|
|
35,310
|
|
|
|
Deposits
|
|
|
540,146
|
|
|
599,089
|
|
|
|
Borrowed federal funds
|
|
|
--
|
|
|
8,175
|
|
|
|
Revolving line-of-credit facilities
|
|
|
170,600
|
|
|
199,400
|
|
|
|
Fuel price derivatives, at fair value
|
|
|
--
|
|
|
41,598
|
|
|
|
Other liabilities
|
|
|
3,083
|
|
|
4,544
|
|
|
|
Amounts due to Avis under tax receivable agreement
|
|
|
309,366
|
|
|
319,512
|
|
|
|
Preferred stock; 10,000 shares authorized:
|
|
|
|
|
|
|
|
|
|
|
Series A non-voting convertible, redeemable preferred stock;
|
|
|
|
|
|
|
|
|
|
|
|
0.1 shares issued and outstanding
|
|
|
10,000
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
1,317,193
|
|
|
1,580,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Common stock $0.01 par value; 175,000 shares authorized, 40,966 in
2008
|
|
|
|
|
|
|
|
|
|
|
|
and 40,798 in 2007 shares issued; 38,244 in 2008 and 39,625 in 2007
shares outstanding
|
|
|
410
|
|
|
408
|
|
|
|
|
Additional paid-in capital
|
|
|
100,359
|
|
|
98,174
|
|
|
|
|
Retained earnings
|
|
|
272,479
|
|
|
144,839
|
|
|
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized loss on available-for-sale securities
|
|
|
(53
|
)
|
|
(49
|
)
|
|
|
|
|
Net unrealized (loss) gain on interest rate swaps
|
|
|
(1,736
|
)
|
|
(1,417
|
)
|
|
|
|
|
Net foreign currency translation adjustment
|
|
|
(55
|
)
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive (loss) income
|
|
|
(1,844
|
)
|
|
(1,451
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less treasury stock at cost, 2,722 shares in 2008 and 1,173 shares
in 2007
|
|
|
(76,742
|
)
|
|
(37,711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
294,662
|
|
|
204,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,611,855
|
|
$
|
1,785,076
|
|
|
WRIGHT EXPRESS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
127,640
|
|
$
|
51,577
|
|
|
|
Adjustments to reconcile net income to net cash provided by (used
for) operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net unrealized (gain) loss on derivative instruments
|
|
|
(90,892
|
)
|
|
37,074
|
|
|
|
|
Stock-based compensation
|
|
|
5,216
|
|
|
4,508
|
|
|
|
|
Depreciation and amortization
|
|
|
20,588
|
|
|
15,719
|
|
|
|
|
Loss on extinguishment of debt
|
|
|
--
|
|
|
1,572
|
|
|
|
|
Deferred taxes
|
|
|
41,967
|
|
|
95,117
|
|
|
|
|
Provision for credit losses
|
|
|
45,021
|
|
|
20,569
|
|
|
|
|
Loss on disposal and impairment of property and equipment
|
|
|
108
|
|
|
--
|
|
|
|
|
Loss on impairment of internal-use software under development
|
|
|
1,538
|
|
|
--
|
|
|
|
|
Changes in operating assets and liabilities, net of effects of
acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
362,444
|
|
|
(286,236
|
)
|
|
|
|
|
Other assets
|
|
|
(328
|
)
|
|
(2,163
|
)
|
|
|
|
|
Accounts payable
|
|
|
(156,463
|
)
|
|
66,048
|
|
|
|
|
|
Accrued expenses
|
|
|
(1,105
|
)
|
|
6,756
|
|
|
|
|
|
Income taxes
|
|
|
(4,934
|
)
|
|
(4,147
|
)
|
|
|
|
|
Other liabilities
|
|
|
(1,475
|
)
|
|
364
|
|
|
|
|
|
Amounts due to Avis under tax receivable agreement
|
|
|
(10,146
|
)
|
|
(98,847
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for) operating activities
|
|
|
339,179
|
|
|
(92,089
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(16,111
|
)
|
|
(16,624
|
)
|
|
|
Purchases of available-for-sale securities
|
|
|
(4,301
|
)
|
|
(2,518
|
)
|
|
|
Maturities of available-for-sale securities
|
|
|
1,255
|
|
|
1,123
|
|
|
|
Purchases of fleet card receivables
|
|
|
--
|
|
|
(1,922
|
)
|
|
|
Purchase of trade name
|
|
|
(44
|
)
|
|
--
|
|
|
|
Acquisitions, net of cash acquired
|
|
|
(41,613
|
)
|
|
(40,806
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for investing activities
|
|
|
(60,814
|
)
|
|
(60,747
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
Excess tax benefits from equity instrument share-based payment
arrangements
|
|
|
113
|
|
|
3,023
|
|
|
|
Payments in lieu of issuing shares of common stock
|
|
|
(2,225
|
)
|
|
(2,188
|
)
|
|
|
Proceeds from stock option exercises
|
|
|
415
|
|
|
3,459
|
|
|
|
Net (decrease) increase in deposits
|
|
|
(58,943
|
)
|
|
204,390
|
|
|
|
Net decrease in borrowed federal funds
|
|
|
(8,175
|
)
|
|
(57,221
|
)
|
|
|
Net (repayments) borrowings on 2007 revolving line-of-credit facility
|
|
|
(28,800
|
)
|
|
199,400
|
|
|
|
Loan origination fees paid for 2007 revolving line-of-credit facility
|
|
|
(1,556
|
)
|
|
(998
|
)
|
|
|
Net repayments on 2005 revolving line-of-credit facility
|
|
|
--
|
|
|
(20,000
|
)
|
|
|
Repayments on term loan
|
|
|
--
|
|
|
(131,000
|
)
|
|
|
Repayments of acquired debt
|
|
|
--
|
|
|
(374
|
)
|
|
|
Purchase of shares of treasury stock
|
|
|
(39,031
|
)
|
|
(37,711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used for) provided by financing activities
|
|
|
(138,202
|
)
|
|
160,780
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash and cash equivalents
|
|
|
(65
|
)
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
140,098
|
|
|
7,959
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
43,019
|
|
|
35,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
183,117
|
|
$
|
43,019
|
|
|
Exhibit 1
|
|
Wright Express Corporation
Reconciliation of Adjusted Net Income to GAAP Net Income
Fourth Quarter and Full Year 2008 and 2007
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
2008
|
|
Three months
ended
December 31,
2007
|
|
12 months
ended
December 31,
2008
|
|
12 months
ended
December 31,
2007
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
$
|
12,518
|
|
|
$
|
19,673
|
|
|
$
|
74,148
|
|
|
$
|
76,010
|
|
|
Non-cash, mark-to-market adjustments on derivative instruments
|
|
|
86,240
|
|
|
|
(22,823
|
)
|
|
|
90,892
|
|
|
|
(37,074
|
)
|
|
Amortization of purchased intangibles
|
|
|
(1,499
|
)
|
|
|
(681
|
)
|
|
|
(4,854
|
)
|
|
|
(1,089
|
)
|
|
Asset impairment charge
|
|
|
(1,538
|
)
|
|
|
--
|
|
|
|
(1,538
|
)
|
|
|
--
|
|
|
Tax impact of foregoing adjustments
|
|
|
(30,570
|
)
|
|
|
8,454
|
|
|
|
(31,008
|
)
|
|
|
13,730
|
|
|
GAAP net income
|
|
$
|
65,151
|
|
|
$
|
4,623
|
|
|
$
|
127,640
|
|
|
$
|
51,577
|
|
Although adjusted net income is not calculated in accordance with
generally accepted accounting principles (GAAP), this measure is
integral to the Company's reporting and planning processes. The Company
considers this measure integral because it eliminates the non-cash
volatility associated with the derivative instruments, excludes the
amortization of purchased intangibles, and in the fourth quarter of 2008
excludes a non-cash asset impairment charge. Specifically, in addition
to evaluating the Company's performance on a GAAP basis, management
evaluates the Company's performance on a basis that excludes the above
items because:
-
Exclusion of the non-cash, mark-to-market adjustments on derivative
instruments helps management identify and assess trends in the
Company's underlying business that might otherwise be obscured due to
quarterly non-cash earnings fluctuations associated with fuel-price
derivative contracts;
-
The non-cash, mark-to-market adjustments on derivative instruments are
difficult to forecast accurately, making comparisons across historical
and future quarters difficult to evaluate; and
-
The amortization of purchased intangibles and asset impairment have no
impact on the operations of the business.
For the same reasons, Wright Express believes that adjusted net income
may also be useful to investors as one means of evaluating the Company's
performance. However, because adjusted net income is a non-GAAP measure,
it should not be considered as a substitute for, or superior to, net
income, operating income or cash flows from operating activities as
determined in accordance with GAAP. In addition, adjusted net income as
used by Wright Express may not be comparable to similarly titled
measures employed by other companies.
|
Exhibit 2
|
|
Wright Express Corporation
Selected Non Financial Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2008
|
|
Q3 2008
|
|
Q2 2008
|
|
Q1 2008
|
|
Q4 2007
|
|
Fleet Payment Processing Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment processing transactions (000s)
|
|
|
51,509
|
|
55,519
|
|
55,940
|
|
53,225
|
|
53,379
|
|
Gallons per payment processing transaction
|
|
|
20.3
|
|
20.1
|
|
19.9
|
|
20.1
|
|
20.5
|
|
Payment processing gallons of fuel (000s)
|
|
|
1,047,627
|
|
1,115,908
|
|
1,112,153
|
|
1,070,829
|
|
1,093,510
|
|
Average fuel price
|
|
$
|
2.59
|
|
4.02
|
|
3.96
|
|
3.26
|
|
3.06
|
|
Payment processing $ of fuel (000s)
|
|
$
|
2,713,812
|
|
4,488,293
|
|
4,403,377
|
|
3,485,857
|
|
3,346,443
|
|
Net payment processing rate
|
|
|
1.86%
|
|
1.71%
|
|
1.82%
|
|
1.87%
|
|
1.91%
|
|
Fleet payment processing revenue (000s)
|
|
$
|
50,407
|
|
76,802
|
|
80,217
|
|
65,075
|
|
64,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MasterCard Payment Processing Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
MasterCard purchase volume (000s)
|
|
$
|
585,967
|
|
670,137
|
|
622,844
|
|
525,699
|
|
484,343
|
|
Net interchange rate
|
|
|
0.99%
|
|
1.03%
|
|
1.07%
|
|
1.05%
|
|
1.10%
|
|
MasterCard payment processing revenue (000s)
|
|
$
|
5,830
|
|
6,883
|
|
6,692
|
|
5,536
|
|
5,323
|
Definitions:
Payment processing transactions represents the total number of purchases
made by fleets that have a payment processing relationship with Wright
Express.
Payment processing gallons of fuel represents the total number of
gallons of fuel purchased by fleets that have a payment processing
relationship with Wright Express.
Payment processing $ of fuel represents the total dollar value of the
fuel purchased by fleets that have a payment processing relationship
with Wright Express.
Net payment processing rate represents the percentage of the dollar
value of each payment processing transaction that Wright Express records
as revenue from merchants less any discounts given to fleets or
strategic relationships.
MasterCard purchase volume represents the total dollar value of all
transactions that use a Wright Express MasterCard branded product.
Net interchange rate represents the percentage of the dollar value of
each MasterCard transaction that Wright Express records as revenue less
any discounts given to customers.
SOURCE: Wright Express Corporation
News media contact:
Wright Express
Jessica Roy, 207-523-6763
Jessica_Roy@wrightexpress.com
or
Investor contact:
Wright Express
Steve Elder, 207-523-7769
Steve_Elder@wrightexpress.com