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EX-99.1

Exhibit 99.1

 

LOGO

 

Investor Relations: Public Relations:
Brian Norris Juli Burda
Vice President of Investor Relations Director of Public Relations
+1 781.250.3829 +1 847.378.4398
brian.norris@fleetmatics.com juli.burda@fleetmatics.com

Fleetmatics Reports Strong First Quarter Financial Results and Subscriber Growth

– Revenue Outlook Updated to Reflect Currency Headwinds and Activation Timing of Certain Enterprise Customers –

– Company Reaffirms Full Year Non-GAAP EPS Outlook of $1.26-$1.30 –

 

  •   Q1 Revenue of $65.5 million, up 26% year-over-year

 

  •   Q1 GAAP EPS of $0.30; Non-GAAP1 adjusted EPS of $0.33

 

  •   Q1 Adjusted EBITDA1 of $21.2 million, or 32.4% of total revenue

 

  •   Q1 Cash flow from operations of $17.3 million

 

  •   Active vehicles under subscription of 594,000, up 26% year-over-year

Dublin, Ireland and Boston, Massachusetts – May 6, 2015 – Fleetmatics Group PLC (NYSE: FLTX), a leading global provider of mobile workforce solutions for service-based businesses of all sizes delivered as software-as-a-service (SaaS), today announced financial results for its first quarter ended March 31, 2015.

“Our first quarter results were highlighted by strong growth in both revenue and earnings,” said Jim Travers, Chairman and Chief Executive Officer of Fleetmatics. “We are pleased to report that in the first quarter we attained strong sequential growth in subscriptions sold to SMB customers as well as saw a record number of subscriptions both up for renewal and renewed. Further, we’re delighted to announce that we recently secured several significant enterprise wins and expansions including Brink’s France and DIRECTV, which in aggregate comprises over 7,000 new subscribers. Our updated outlook reflects the foreign exchange headwinds that we are subject to given our growing international presence and our current conservative view as to the timing of the full activation of certain enterprise customers.”

Results for the First Quarter of 2015

Total revenue for the first quarter of 2015 was $65.5 million, an increase of 26% compared to $51.9 million for the first quarter of 2014. GAAP net income for the first quarter of 2015 was $11.8 million, or $0.30 per diluted share, compared to $3.6 million, or $0.09 per diluted share, for the first quarter of 2014. Non-GAAP1 adjusted earnings for the first quarter of 2015 was $12.7 million, or $0.33 per diluted share, compared to $7.2 million, or $0.19 per diluted share, for the first quarter of 2014. Adjusted EBITDA1 for the first quarter of 2015 was $21.2 million, an increase of 54% compared to $13.8 million for the first quarter of 2014. Adjusted EBITDA1 margin for the first quarter of 2015 was 32.4% compared to 26.5% for the first quarter of 2014. As of March 31, 2015, the Company had cash of $172.2 million compared to $175.4 million at December 31, 2014. During the first quarter of 2015, the Company generated $17.3 million in net cash from operations and invested $10.1 million in purchases of property and equipment and capitalization of internally developed software, resulting in free cash flow of $7.2 million. During the first quarter of 2014, the Company generated $20.3 million in net cash from operations and invested $8.6 million in purchases of property and equipment and capitalization of internally developed software, resulting in free cash flow of $11.7 million.


Company Issues Second Quarter Guidance and Updated Full Year 2015 Guidance

The Company today issued guidance for the second quarter of 2015 and updated its previously issued guidance for the full year of 2015. The Company’s guidance is based on the current indications for its business, which may change at any time.

 

  •   Second Quarter 2015 Guidance: The Company expects total revenue to be in the range of $67.9 million to $68.7 million, reflecting 91 days of revenue in the quarter and the impact of currently expected currency exchange headwinds. Adjusted EBITDA1 is expected to be in the range of $17.5 million to $18.5 million. Non-GAAP1 adjusted earnings per share is expected to be in the range of $0.24 to $0.26 based on approximately 39.3 million weighted average diluted shares outstanding.

 

  •   Full Year 2015 Guidance: The Company expects total revenue to be in the range of $281.0 million to $283.0 million. Excluding the impact of currency exchange, expectations for total revenue are in the range of $287.0 million to $288.0 million. The Company’s estimate of total revenue reflects currently expected currency exchange headwinds of approximately $6.0 million and the currently expected timing of certain enterprise customer activations. Adjusted EBITDA1 is expected to be in the range of $84.0 million to $86.0 million. Non-GAAP1 adjusted earnings per share is expected to be in the range of $1.26 to $1.30 based on approximately 39.4 million weighted average diluted shares outstanding.

Company to Host Live Conference Call and Webcast

The Company’s management team plans to host a live conference call and webcast at 5:00 p.m. Eastern Time today to discuss the financial results as well as management’s outlook for the business and other matters. The conference call may be accessed in the United States by dialing 1.800.230.1951 and using access code “FLTX”. The conference call may be accessed outside of the United States by dialing +1.612.288.0329 and using access code “FLTX”. The conference call will be simultaneously webcast on the Company’s investor relations website, which can be accessed at http://ir.fleetmatics.com. A replay of the conference call will be available approximately two hours after the call by dialing 1.800.475.6701 or +1.320.365.3844 and using access code 357575 or by accessing the webcast replay on the Company’s investor relations website. The Company has used, and intends to continue to use, the investor relations portion of its website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.


About Fleetmatics Group PLC

Fleetmatics Group PLC is a leading global provider of mobile workforce solutions for service-based businesses of all sizes delivered as software-as-a-service (SaaS). Our solutions enable businesses to meet the challenges associated with managing local fleets, and improve the productivity of their mobile workforces, by extracting actionable business intelligence from real-time and historical vehicle and driver behavioral data. Fleetmatics Group’s intuitive, cost-effective Web-based solutions provide fleet operators with visibility into vehicle location, fuel usage, speed and mileage, and other insights into their mobile workforce, enabling them to reduce operating and capital costs, as well as increase revenue. An integrated, full-featured mobile workforce management product provides additional efficiencies related to job management by empowering the field worker and speeding the job completion process – quote through payment. As of March 31, 2015, Fleetmatics served approximately 28,000 customers, with approximately 594,000 subscribed vehicles worldwide. To learn more about Fleetmatics, visit www.fleetmatics.com.

1Non-GAAP Financial Measures

In this release, Fleetmatics’ non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP adjusted earnings, non-GAAP diluted adjusted earnings per share, adjusted EBITDA and adjusted EBITDA margin are not presented in accordance with generally accepted accounting principles (GAAP) and are not intended to be used in lieu of GAAP presentations of results of operations. Non-GAAP gross profit and non-GAAP gross margin exclude share-based compensation and amortization of intangible assets. Non-GAAP operating income, non-GAAP adjusted earnings and non-GAAP diluted adjusted earnings per share exclude share-based compensation; amortization of intangible assets; foreign currency transaction (gain) loss; certain non-recurring litigation and settlement costs; certain acquisition-related transaction costs; loss on extinguishment of debt; the tax effects related to these items, and the tax reserve component of the income tax provision.

Adjusted EBITDA is defined as net income (loss) plus (benefit) provision for income taxes; interest (income) expense, net; foreign currency transaction (gain) loss, net; depreciation and amortization of property and equipment; amortization of capitalized in-vehicle devices owned by customers; amortization of intangible assets; share-based compensation; certain non-recurring litigation and settlement costs; loss on extinguishment of debt; and certain acquisition-related transaction costs.

Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company’s performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company’s financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our leadership position in North America, the addition of new products, the impact of foreign currency exchange headwinds on our results of operations, and our expected financial results for the second quarter of 2015 and the full year of 2015. These forward-looking statements include, but are not limited to: plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, risks associated with the fluctuations of foreign currency exchange rates and the impact on our revenue and expenses; risks associated with our ability to effectively and efficiently attract, sell to and retain SMB customers; our ability to attract customers on a cost-effective basis; our dependence on enterprise customers; our dependence on various lead generation programs; our ability to retain and increase sales to our existing customers; our ability to successfully complete and integrate acquisitions including Ornicar SAS; expectations regarding the widespread adoption of fleet management solutions; our ability to expand the sales of our products to customers located outside the U.S.; our ability to continue to compete in a highly fragmented market and the risk of future competitors by way of recent and future acquisitions or otherwise; keeping up with the rapid technological change required to remain competitive in our industry; our ability to migrate customers to newer technologies; and the impact of adverse economic conditions on information technology spending by SMB businesses, collection of our accounts receivable and other risks set forth under the caption “Risk Factors” in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2015, as updated by our subsequently filed quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.


FLEETMATICS GROUP PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2015     2014  

Subscription revenue

   $ 65,471      $ 51,897   

Cost of subscription revenue

     17,185        12,746   
  

 

 

   

 

 

 

Gross profit

  48,286      39,151   
  

 

 

   

 

 

 

Operating expenses:

Sales and marketing

  23,269      18,362   

Research and development

  4,597      4,177   

General and administrative

  11,685      11,272   
  

 

 

   

 

 

 

Total operating expenses

  39,551      33,811   
  

 

 

   

 

 

 

Income from operations

  8,735      5,340   

Interest income (expense), net

  (269   (163

Foreign currency transaction gain (loss), net

  4,969      (48

Loss on extinguishment of debt

  (107   —     

Other income (expense), net

  —        41   
  

 

 

   

 

 

 

Income before income taxes

  13,328      5,170   

Provision for income taxes

  1,577      1,542   
  

 

 

   

 

 

 

Net income

$ 11,751    $ 3,628   
  

 

 

   

 

 

 

Net income per share:

Basic

$ 0.31    $ 0.10   
  

 

 

   

 

 

 

Diluted

$ 0.30    $ 0.09   
  

 

 

   

 

 

 

Weighted average ordinary shares outstanding:

Basic

  37,989,086      37,129,314   
  

 

 

   

 

 

 

Diluted

  39,025,216      38,366,942   
  

 

 

   

 

 

 


FLEETMATICS GROUP PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

     March 31,
2015
     December 31,
2014
 
     (Unaudited)         

Assets

     

Current assets:

     

Cash

   $ 172,173       $ 175,400   

Restricted cash

     141         —     

Accounts receivable, net of allowances of $2,877 and $2,200 at March 31, 2015 and December 31, 2014, respectively

     20,892         16,876   

Deferred tax assets

     7,435         7,458   

Prepaid expenses and other current assets

     14,425         13,379   
  

 

 

    

 

 

 

Total current assets

  215,066      213,113   

Property and equipment, net

  82,456      79,734   

Goodwill

  38,835      30,207   

Intangible assets, net

  7,907      6,460   

Deferred tax assets, net

  6,232      6,353   

Other assets

  10,729      10,829   
  

 

 

    

 

 

 

Total assets

$ 361,225    $ 346,696   
  

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable

$ 10,534    $ 8,001   

Accrued expenses and other current liabilities

  24,485      24,307   

Deferred revenue

  24,319      22,592   
  

 

 

    

 

 

 

Total current liabilities

  59,338      54,900   
  

 

 

    

 

 

 

Deferred revenue

  9,941      10,241   

Accrued income taxes

  3,573      3,164   

Long-term debt, net of discount

  23,069      23,750   

Other liabilities

  4,100      2,356   
  

 

 

    

 

 

 

Total liabilities

  100,021      94,411   
  

 

 

    

 

 

 

Total shareholders’ equity

  261,204      252,285   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

$ 361,225    $ 346,696   
  

 

 

    

 

 

 


FLEETMATICS GROUP PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2015     2014  

Cash flows from operating activities:

    

Net income

   $ 11,751      $ 3,628   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization of property and equipment

     6,566        4,303   

Amortization of capitalized in-vehicle devices owned by customers

     426        286   

Amortization of intangible assets

     585        594   

Amortization of deferred commissions, other deferred costs and debt discount

     2,486        1,773   

Provision for (benefit from) deferred taxes

     —         78   

Provision for accounts receivable allowances

     503        790   

Unrealized foreign currency transaction (gain) loss

     (5,045     20   

Loss on disposal of property and equipment and other assets

     559        417   

Share-based compensation

     4,543        3,004   

Excess tax benefits from share-based awards

     (1,063     (96

Loss on extinguishment of debt

     107        —     

Changes in operating assets and liabilities:

    

Accounts receivable

     (4,396     913   

Prepaid expenses and other current and long-term assets

     (3,028     (2,114

Accounts payable, accrued expenses and other current liabilities

     1,485        2,112   

Accrued income taxes

     423        263   

Deferred revenue

     1,392        4,287   
  

 

 

   

 

 

 

Net cash provided by operating activities

  17,294      20,258   
  

 

 

   

 

 

 

Cash flows from investing activities:

Purchases of property and equipment

  (9,091   (8,115

Capitalization of internal-use software costs

  (982   (416

Proceeds from sale of property and equipment

  —        41   

Payment for business acquired, net of cash acquired

  (7,673   —     

Net (increase) decrease in restricted cash

  (149   64   
  

 

 

   

 

 

 

Net cash used in investing activities

  (17,895   (8,426
  

 

 

   

 

 

 

Cash flows from financing activities:

Payments of borrowings under Revolving Credit Facility

  (23,750   —     

Proceeds from borrowings under Credit Facility

  22,541      —     

Proceeds from exercise of stock options

  1,303      770   

Taxes paid related to net share settlement of equity awards

  (2,551   (1,368

Excess tax benefits from share-based awards

  1,063      96   

Payments of capital lease obligations

  (174   (156

Payments of notes payable

  (210   (45
  

 

 

   

 

 

 

Net cash used in financing activities

  (1,778   (703
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

  (848   (108
  

 

 

   

 

 

 

Net increase (decrease) in cash

  (3,227   11,021   

Cash, beginning of period

  175,400      137,171   
  

 

 

   

 

 

 

Cash, end of period

$ 172,173    $ 148,192   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

Cash paid for interest

$ 231    $ 175   

Cash paid (refunds received), net for income taxes

$ 129    $ (370

Supplemental disclosure of non-cash financing and investing activities:

Acquisition of property and equipment and software through capital leases and note payable

$ 494    $ 1,315   

Additions to property and equipment included in accounts payable or accrued expenses at the balance sheet dates

$ 2,410    $ 2,025   


RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT AND OPERATING INCOME

(In thousands)

(Unaudited)

 

                         
     Three Months Ended
March 31,
 
     2015     2014  

Gross Profit GAAP

   $ 48,286      $ 39,151   

Share-based compensation

     251        147   

Amortization of intangible assets

     300        258   
  

 

 

   

 

 

 

Gross Profit Non-GAAP

$ 48,837    $ 39,556   
  

 

 

   

 

 

 

Subscription revenue

$ 65,471    $ 51,897   

Gross Margin Percentages:

GAAP

  73.8   75.4

Non-GAAP

  74.6   76.2
     Three Months Ended
March 31,
 
     2015     2014  

Operating income GAAP

   $ 8,735      $ 5,340   

Share-based compensation

     4,543        3,004   

Amortization of intangible assets

     585        594   

Litigation and settlements

     172        120   

Acquisition-related transaction costs

     157        89   
  

 

 

   

 

 

 

Operating income Non-GAAP

$ 14,192    $ 9,147   
  

 

 

   

 

 

 


RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2015     2014  

Reconciliation of Net Income to Adjusted EBITDA:

    

Net income

   $ 11,751      $ 3,628   

Provision for income taxes

     1,577        1,542   

Interest (income) expense, net

     269        163   

Foreign currency transaction (gain) loss, net

     (4,969     48   

Depreciation and amortization of property and equipment

     6,566        4,303   

Amortization of capitalized in-vehicle devices owned by customers

     426        286   

Amortization of intangible assets

     585        594   

Share-based compensation

     4,543        3,004   

Litigation and settlements

     172        120  

Acquisition-related transaction costs

     157        89  

Loss on extinguishment of debt

     107        —    
  

 

 

   

 

 

 

Adjusted EBITDA

$ 21,184    $ 13,777   
  

 

 

   

 

 

 

Subscription revenue

$ 65,471    $ 51,897   

Adjusted EBITDA margin

  32.4   26.5


RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS AND EPS

(In thousands, except share and per share data)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2015     2014  

Net income

   $ 11,751      $ 3,628   

Amortization of intangible assets

     585        594   

Share-based compensation

     4,543        3,004   

Foreign currency transaction (gain) loss, net

     (4,969     48   

Litigation and settlements

     172        120   

Acquisition-related transaction costs

     157        89   

Loss on extinguishment of debt

     107        —     

Tax effect of non-GAAP adjustments above at 8% and 15% in the three months ended March 31, 2015 and 2014, respectively

     (48     (578

Tax reserve component of income tax provision

     423        263   
  

 

 

   

 

 

 

Adjusted earnings

$ 12,721    $ 7,168   
  

 

 

   

 

 

 

Weighted average ordinary shares outstanding — diluted

  39,025,216      38,366,942   

Non-GAAP adjusted EPS

$ 0.33    $ 0.19   
  

 

 

   

 

 

 


FLEETMATICS GROUP PLC

RECONCILIATION TO NON-GAAP INCOME

(In thousands)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2015     2014  

Cost of subscription revenue

    

Share-based compensation

   $ 251      $ 147   

Amortization of intangible assets

     300        258   
  

 

 

   

 

 

 

Subtotal cost of subscription revenue

  551      405   

Sales and marketing

Share-based compensation

  1,824      1,173   

Amortization of intangible assets

  285      336   
  

 

 

   

 

 

 

Subtotal sales and marketing

  2,109      1,509   

Research and development

Share-based compensation

  673      397   
  

 

 

   

 

 

 

Subtotal research and development

  673      397   

General and administrative

Share-based compensation

  1,795      1,287   

Litigation and settlements

  172      120   

Acquisition-related transaction costs

  157      89   
  

 

 

   

 

 

 

Subtotal general and administrative

  2,124      1,496   

Foreign currency transaction (gain) loss, net

  (4,969   48   

Loss on extinguishment of debt

  107      —     

Tax effect of non-GAAP adjustments, net of tax reserve component of income tax provision

  375      (315
  

 

 

   

 

 

 

Total expense add-backs

$ 970    $ 3,540   
  

 

 

   

 

 

 
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