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EX-99.1

Exhibit 99.1

 

LOGO

 

Investor Relations:

Brian Norris

Vice President of Investor Relations

+1 781.250.3829

brian.norris@fleetmatics.com

  

Public Relations:

Juli Burda

Director of Public Relations

+1 847.378.4398

juli.burda@fleetmatics.com

Fleetmatics Reports Strong First Quarter Financial Results and Subscriber Growth

- Company Reaffirms Outlook for 2016 -

 

  •   Q1 Revenue of $78.9 million, up 21% year-over-year

 

  •   Q1 GAAP EPS of $0.14; Non-GAAP1 adjusted EPS of $0.35

 

  •   Q1 Adjusted EBITDA1 of $24.3 million, or 30.8% of total revenue

 

  •   Q1 Cash flow from operations of $23.5 million

 

  •   Q1 Free cash flow of $13.7 million, or 17.4% of total revenue

 

  •   Active vehicles under subscription increases to 737,000

Dublin, Ireland and Boston, Massachusetts – May 4, 2016 – 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, 2016.

“We’re pleased to report strong first quarter results which were highlighted by solid revenue and subscriber growth and improved free cash flow margins,” said Jim Travers, Chairman and Chief Executive Officer of Fleetmatics. “Our results continue to reflect our expanding leadership position in North America, our growing presence in international markets and our ability to deliver innovative applications that meet the needs of our rapidly growing customer base. Looking ahead, we remain well positioned to execute on our strategic growth plans.”

Results for the First Quarter of 2016

Total revenue for the first quarter of 2016 was $78.9 million, an increase of 21% compared to $65.5 million for the first quarter of 2015. GAAP net income for the first quarter of 2016 was $5.6 million, or $0.14 per diluted share, compared to $11.8 million, or $0.30 per diluted share, for the first quarter of 2015. Non-GAAP1 adjusted earnings for the first quarter of 2016 was $13.9 million, or $0.35 per diluted share, compared to $12.7 million, or $0.33 per diluted share, for the first quarter of 2015. Adjusted EBITDA1 for the first quarter of 2016 was $24.3 million, an increase of 15% compared to $21.2 million for the first quarter of 2015. Adjusted EBITDA1 margin for the first quarter of 2016 was 30.8% compared to 32.4% for the first quarter of 2015. As of March 31, 2016, the Company had cash of $186.2 million compared to $177.1 million at December 31, 2015. During the first quarter of 2016, the Company generated $23.5 million in net cash from operations


and invested $9.8 million in purchases of property and equipment and capitalization of internally developed software, resulting in free cash flow of $13.7 million. 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.

Company Issues Second Quarter Guidance and Reaffirms Full Year 2016 Outlook

The Company today issued guidance for the second quarter of 2016 and reaffirmed its full year 2016 outlook. The Company’s guidance is based on the current indications for its business, which may change at any time.

 

  •   Second Quarter 2016 Guidance: The Company expects total revenue to be in the range of $82.5 million to $84.0 million. Adjusted EBITDA1 is expected to be in the range of $26.0 million to $27.0 million. Non-GAAP1 adjusted earnings per share is expected to be in the range of $0.39 to $0.41 based on approximately 39.8 million weighted average diluted shares outstanding.

 

  •   Full Year 2016 Guidance: The Company expects total revenue to be in the range of $342.0 million to $346.0 million. Adjusted EBITDA1 is expected to be in the range of $113.0 million to $117.0 million. Non-GAAP1 adjusted earnings per share is expected to be in the range of $1.72 to $1.80 based on approximately 40.5 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 1.800.230.1059 and using access code “FLTX”. The conference call may be accessed outside of the United States by dialing +1.612.288.0337 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 390358 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, 2016, Fleetmatics served approximately 37,000 customers and approximately 737,000 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 excludes share-based compensation; amortization of intangible assets; certain non-recurring litigation and settlement costs; certain acquisition-related transaction costs; and contingent consideration expense. 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; contingent consideration expense; 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 provision for (benefit from) 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; contingent consideration expense; 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 continued leadership position, extending our international presence, and our ability to develop innovative products and our expected financial results for the second quarter of 2016, the full year of 2016 and beyond. 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 customers; 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; our ability to retain and increase sales to our existing customers; our ability to successfully attract customers on a cost-effective basis; our dependence on enterprise customers and their renewal of their agreements with us; our dependence on various lead generation programs; our ability to successfully complete and integrate acquisitions; expectations regarding the widespread adoption of fleet management solutions; our ability to expand the sales of our products in new geographies using our current lead generation and sales model; the effect of fluctuations in foreign currency exchange rates; our ability to integrate and sell our products through indirect sales channels; our ability to maintain high levels of performance of our software offering; our ability to keep up with the rapid technological change required to remain competitive in our industry; our ability to migrate customers to newer technologies; the impact of adverse economic conditions on information technology spending by our target customers; and 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 26, 2016, 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,
 
     2016     2015  

Subscription revenue

   $ 78,947      $ 65,471   

Cost of subscription revenue

     20,943        17,185   
  

 

 

   

 

 

 

Gross profit

     58,004        48,286   
  

 

 

   

 

 

 

Operating expenses:

    

Sales and marketing

     29,423        23,269   

Research and development

     6,839        4,597   

General and administrative

     16,080        11,685   
  

 

 

   

 

 

 

Total operating expenses

     52,342        39,551   
  

 

 

   

 

 

 

Income from operations

     5,662        8,735   

Interest income (expense), net

     (237     (269

Foreign currency transaction gain (loss), net

     (2,795     4,969   

Loss on extinguishment of debt

     —          (107
  

 

 

   

 

 

 

Income before income taxes

     2,630        13,328   

Provision for (benefit from) income taxes

     (2,931     1,577   
  

 

 

   

 

 

 

Net income

   $ 5,561      $ 11,751   
  

 

 

   

 

 

 

Net income per share:

    

Basic

   $ 0.14      $ 0.31   
  

 

 

   

 

 

 

Diluted

   $ 0.14      $ 0.30   
  

 

 

   

 

 

 

Weighted average ordinary shares outstanding:

    

Basic

     38,768,333        37,989,086   
  

 

 

   

 

 

 

Diluted

     39,599,032        39,025,216   
  

 

 

   

 

 

 


FLEETMATICS GROUP PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

     March 31,
2016
     December 31,
2015
 
     (Unaudited)         

Assets

     

Current assets:

     

Cash

   $ 186,223       $ 177,083   

Restricted cash

     142         135   

Accounts receivable, net of allowances of $2,237 and $2,233 at March 31, 2016 and December 31, 2015, respectively

     20,748         20,971   

Prepaid expenses and other current assets

     16,354         14,430   
  

 

 

    

 

 

 

Total current assets

     223,467         212,619   

Property and equipment, net

     105,490         104,506   

Goodwill

     54,250         54,178   

Intangible assets, net

     13,804         14,889   

Deferred tax assets, net

     6,686         6,573   

Other assets

     10,046         9,630   
  

 

 

    

 

 

 

Total assets

   $ 413,743       $ 402,395   
  

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

     

Current liabilities:

     

Accounts payable

   $ 10,084       $ 7,853   

Accrued expenses and other current liabilities

     25,700         24,447   

Deferred revenue

     21,650         22,339   
  

 

 

    

 

 

 

Total current liabilities

     57,434         54,639   

Deferred revenue

     8,231         7,951   

Accrued income taxes

     832         3,739   

Long-term debt, net of discount of $673 and $717 at March 31, 2016 and December 31, 2015, respectively

     23,077         23,033   

Other liabilities

     9,835         10,856   
  

 

 

    

 

 

 

Total liabilities

     99,409         100,218   
  

 

 

    

 

 

 

Total shareholders’ equity

     314,334         302,177   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 413,743       $ 402,395   
  

 

 

    

 

 

 


FLEETMATICS GROUP PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2016     2015  

Cash flows from operating activities:

    

Net income

   $ 5,561      $ 11,751   

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

    

Depreciation and amortization of property and equipment

     9,298        6,566   

Amortization of capitalized in-vehicle devices owned by customers

     —          426   

Amortization of intangible assets

     1,010        585   

Amortization of deferred commissions, other deferred costs and debt discount

     2,991        2,486   

Provision for accounts receivable allowances

     1,444        503   

Unrealized foreign currency transaction (gain) loss

     2,793        (5,045

Loss on disposal of property and equipment and other assets

     836        559   

Share-based compensation

     8,267        4,543   

Change in excess tax benefits from share-based awards

     (621     (1,063

Loss on extinguishment of debt

     —          107   

Changes in operating assets and liabilities:

    

Accounts receivable

     (1,042     (4,396

Prepaid expenses and other current and long-term assets

     (4,678     (3,028

Accounts payable, accrued expenses and other current liabilities

     959        1,485   

Accrued income taxes

     (2,906     423   

Deferred revenue

     (441     1,392   
  

 

 

   

 

 

 

Net cash provided by operating activities

     23,471        17,294   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (8,071     (9,091

Capitalization of internal-use software costs

     (1,679     (982

Payment for businesses acquired, net of cash acquired

     (72     (7,673

Net increase in restricted cash

     —          (149
  

 

 

   

 

 

 

Net cash used in investing activities

     (9,822     (17,895
  

 

 

   

 

 

 

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

     151        1,303   

Taxes paid related to net share settlement of equity awards

     (5,316     (2,551

Change in excess tax benefits from share-based awards

     621        1,063   

Payments of capital lease obligations

     (533     (174

Payments of notes payable

     —          (210
  

 

 

   

 

 

 

Net cash used in financing activities

     (5,077     (1,778
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     568        (848
  

 

 

   

 

 

 

Net increase (decrease) in cash

     9,140        (3,227

Cash, beginning of period

     177,083        175,400   
  

 

 

   

 

 

 

Cash, end of period

   $ 186,223      $ 172,173   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

    

Cash paid for interest

   $ 173      $ 231   

Cash paid (refunds received), net for income taxes

   $ 204      $ 129   

Supplemental disclosure of non-cash financing and investing activities:

    

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

   $ 631      $ 494   

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

   $ 1,730      $ 2,410   


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

(In thousands)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2016     2015  

Gross Profit GAAP

   $ 58,004      $ 48,286   

Share-based compensation

     410        251   

Amortization of intangible assets

     371        300   
  

 

 

   

 

 

 

Gross Profit Non-GAAP

   $ 58,785      $ 48,837   
  

 

 

   

 

 

 

Subscription revenue

   $ 78,947      $ 65,471   

Gross Margin Percentages:

    

GAAP

     73.5     73.8

Non-GAAP

     74.5     74.6

 

     Three Months Ended
March 31,
 
     2016      2015  

Operating income GAAP

   $ 5,662       $ 8,735   

Share-based compensation

     8,267         4,543   

Amortization of intangible assets

     1,010         585   

Litigation and settlements

     97         172   

Acquisition-related transaction costs

     —           157   
  

 

 

    

 

 

 

Operating income Non-GAAP

   $ 15,036       $ 14,192   
  

 

 

    

 

 

 


RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2016     2015  

Reconciliation of Net Income to Adjusted EBITDA:

    

Net income

   $ 5,561      $ 11,751   

Provision for (benefit from) income taxes

     (2,931     1,577   

Interest (income) expense, net

     237        269   

Foreign currency transaction (gain) loss, net

     2,795        (4,969

Depreciation and amortization of property and equipment

     9,298        6,566   

Amortization of capitalized in-vehicle devices owned by customers

     —          426   

Amortization of intangible assets

     1,010        585   

Share-based compensation

     8,267        4,543   

Litigation and settlements

     97        172   

Acquisition-related transaction costs

     —          157   

Loss on extinguishment of debt

     —          107   
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 24,334      $ 21,184   
  

 

 

   

 

 

 

Subscription revenue

   $ 78,947      $ 65,471   

Adjusted EBITDA margin

     30.8     32.4


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,
 
     2016     2015  

Net income

   $ 5,561      $ 11,751   

Amortization of intangible assets

     1,010        585   

Share-based compensation

     8,267        4,543   

Foreign currency transaction (gain) loss, net

     2,795        (4,969

Litigation and settlements

     97        172   

Acquisition-related transaction costs

     —          157   

Loss on extinguishment of debt

     —          107   

Tax effect of non-GAAP adjustments above at 8%

     (973     (48

Tax reserve component of income tax provision

     (2,905     423   
  

 

 

   

 

 

 

Adjusted earnings

   $ 13,852      $ 12,721   
  

 

 

   

 

 

 

Weighted average ordinary shares outstanding — diluted

     39,599,032        39,025,216   

Non-GAAP adjusted EPS

   $ 0.35      $ 0.33   
  

 

 

   

 

 

 


FLEETMATICS GROUP PLC

RECONCILIATION TO NON-GAAP INCOME

(In thousands)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2016     2015  

Cost of subscription revenue

    

Share-based compensation

   $ 410      $ 251   

Amortization of intangible assets

     371        300   
  

 

 

   

 

 

 

Subtotal cost of subscription revenue

     781        551   

Sales and marketing

    

Share-based compensation

     2,900        1,824   

Amortization of intangible assets

     639        285   
  

 

 

   

 

 

 

Subtotal sales and marketing

     3,539        2,109   

Research and development

    

Share-based compensation

     1,237        673   
  

 

 

   

 

 

 

Subtotal research and development

     1,237        673   

General and administrative

    

Share-based compensation

     3,720        1,795   

Litigation and settlements

     97        172   

Acquisition-related transaction costs

     —          157   
  

 

 

   

 

 

 

Subtotal general and administrative

     3,817        2,124   

Foreign currency transaction (gain) loss, net

     2,795        (4,969

Loss on extinguishment of debt

     —          107   

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

     (3,878     375   
  

 

 

   

 

 

 

Total expense add-backs

   $ 8,291      $ 970   
  

 

 

   

 

 

 
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