2013-02-20 13:11:44 -
Vantiv Reports Fourth Quarter and Full Year 2012 Results
Completes Successful First Year as a Public Company
$0.38 in Fourth Quarter Adjusted Cash Net Income per Share
$1.22 in Full Year Adjusted Cash Net Income per Share
Net Revenue Guidance for 2013 of $1.21 to $1.23 Billion
Adjusted Cash Net Income per Share Guidance for 2013 of $1.46 to $1.50
CINCINNATI - February 20, 2013 - Vantiv, Inc. (NYSE: VNTV) (Vantiv or "the
Company") today announced financial results for the fourth quarter and full year
ended December 31, 2012. Revenue increased 13% to $494.1 million in the fourth
quarter as compared to $439.0 million in the prior year period. Net revenue
increased 12% to $271.2 million in the fourth quarter as compared to $242.7
million in the prior year period. On a GAAP basis, net income attributable to
Vantiv, Inc. was $28.8 million during the fourth quarter, or $0.22 per diluted
share, compared with $15.7 million, or $0.18 per diluted share, in the prior
year period. Cash net income increased 39% in the fourth quarter to $81.6
million as compared to $58.5 million in the prior year period. Adjusted cash net
income per share was $0.38 for the fourth quarter. (See Schedule 2 for cash net
income and Schedules 6 and 7 for GAAP net income reconciliation to cash net
income.)
For the full year, revenue increased 15% to $1,863.2 million as compared to
$1,622.4 million in the prior year. Net revenue increased 18% to $1,022.6
million in 2012 as compared to $865.7 million in the prior year. On a GAAP
basis, net income attributable to Vantiv, Inc. in 2012 was $57.6 million, or
$0.47 per diluted share, compared with $36.2 million, or $0.40 per diluted
share, in the prior year. Cash net income increased 41% in 2012 to $260.0
million as compared to $184.1 million in the prior year. Adjusted cash net
income per share was $1.22 for the full year 2012. (See Schedule 2 for cash net
income and Schedules 6 and 7 for GAAP net income reconciliation to cash net
income.)
Transaction growth was 20% and 19% for the fourth quarter and full year,
respectively, primarily due to superior transaction growth in the Merchant
Services segment of 23% and 24% for the fourth quarter and full year,
respectively. The Financial Institutions Services segment also experienced
strong transaction growth with a 7% and 3% increase for the fourth quarter and
full year, respectively.
Vantiv's scale and efficiency continued to support superior profitability as
reflected by the Company's fourth quarter adjusted EBITDA margin of 53%. For
the full year, Vantiv's adjusted EBITDA margin was 50%. (See Schedules 6 and 7
for GAAP net income reconciliation to cash net income and Schedule 8 for
reconciliation from GAAP income from operations to adjusted EBITDA.)
With respect to cash net income, income tax expense was reduced by the
recognition of tax benefits attributable to the amortization of intangibles and
other tax attributes associated with acquisitions, including Litle, and to the
tax basis step up associated with our separation from Fifth Third Bank and the
subsequent purchase or exchange of Class B units of Vantiv Holding. This tax
benefit is recurring and is expected to reduce income tax expense with respect
to cash net income by approximately $4.0 million each quarter in 2013 and
beyond.
"Our fourth quarter results cap an outstanding first year for Vantiv as a public
company," said Charles Drucker, president and chief executive officer at Vantiv.
"Our strong financial performance is a testament to our dedicated employees, our
commitment to execution, and our focus on our clients. Our strategy to generate
superior growth and profitability by broadening and deepening our distribution
channels, expanding into high growth markets, and increasing our small to mid-
sized client base is working, and I expect to continue to deliver double-digit
growth in 2013 and beyond."
Merchant Services
Net revenue increased 12% to $188.4 million in the fourth quarter as compared to
$167.5 million in the prior year period, primarily due to a 23% increase in
transactions. On a full year basis, net revenue increased 24% to $699.8
million, primarily due to a 24% increase in transactions. Net revenue grew at a
lower rate in the fourth quarter as compared to the full year due primarily to
the impact of the debit interchange legislation in the Durbin Amendment in the
fourth quarter of 2011. Consistent with the prior two quarters, net revenue per
transaction declined as compared to the prior year period due principally to the
addition of a large national processing contract in the second quarter. Sales
and marketing expenses increased 6% in the fourth quarter to $62.5 million and
by 21% for the full year to $255.9 million.
Financial Institution Services
Net revenue increased 10% to $82.8 million in the fourth quarter as compared to
$75.2 million in the prior year period, primarily due to a 7% increase in
transactions and growth in value added services revenue. On a full year basis,
net revenue increased 7% to $322.8 million, primarily due to a 3% increase in
transactions and growth in value added services revenue. Sales and marketing
expenses increased by 4% in the fourth quarter to $5.6 million and by 3% for the
full year to $24.8 million.
2013 Financial Outlook
"The results we achieved in 2012 along with continued expectations for strong
growth in our core business as well as expansion into ecommerce gives us
confidence in our growth as we enter 2013," said Mark Heimbouch, chief financial
officer. "In 2013, we expect to generate net revenue of $1.21 to $1.23 billion,
which represents growth of approximately 18% to 20%, and adjusted cash net
income per share of $1.46 to $1.50, which represents growth of 20% to 23%. On a
GAAP basis, we expect to generate earnings per share of $0.60 to $0.63 in 2013."
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss fourth quarter and full year
2012 financial results today at 8:00 AM ET. Hosting the call will be Charles
Drucker, president and chief executive officer and Mark Heimbouch, chief
financial officer. The conference call can be accessed live over the phone by
dialing (888) 205-6695, or for international callers (913) 981-5583, and
referencing conference code 8782456. A replay will be available approximately
two hours after the call concludes and can be accessed by dialing (888)
203-1112, or for international callers (719) 457-0820, and entering replay pass
code 8782456. The replay will be available through Wednesday, March 6, 2013.
The call will be webcast live from the Company's investor relations website at
investors.vantiv.com.
About Vantiv, Inc.
Vantiv, Inc. (NYSE: VNTV) is a leading, integrated payment processor
differentiated by a single, proprietary technology platform. Vantiv offers a
comprehensive suite of traditional and innovative payment processing and
technology solutions to merchants and financial institutions of all sizes in the
U.S., enabling them to address their payment processing needs through a single
provider. We build strong relationships with our customers, helping them become
more efficient, more secure and more successful. Vantiv is the third largest
merchant acquirer and the largest PIN debit acquirer based on number of
transactions in the U.S. The Company's growth strategy includes expanding
further into high growth payment segments, such as ecommerce, mobile, prepaid
and information solutions, and attractive industry verticals, such as business-
to-business, government, healthcare and education. For more information, visit
www.vantiv.com.
Non-GAAP Financial Measures
This earnings release presents non-GAAP financial information including net
revenue, adjusted EBITDA, cash net income, and adjusted cash net income per
share information. These are important financial performance measures for the
Company, but are not financial measures as defined by GAAP. The presentation of
this financial information is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared and presented
in accordance with GAAP. The Company uses these non-GAAP financial measures for
financial and operational decision making and as a means to evaluate period-to-
period comparisons. The Company believes that they provide useful information
about operating results, enhance the overall understanding of past financial
performance and future prospects, and allow for greater transparency with
respect to key metrics used by management in its financial and operational
decision making. Reconciliations of these non-GAAP financial measures to the
most directly comparable GAAP financial measures are presented in the attached
schedules.
Net revenue is revenue, less network fees and other costs. Cash net income
includes adjustments to exclude amortization of intangible assets acquired in
business combinations and customer portfolio and related asset acquisitions,
share-based compensation, transition costs associated with our separation from
Fifth Third Bank, integration costs incurred in connection with acquisitions,
cash tax adjustments, and conversion of non-controlling interests into shares of
Class A common stock. For purposes of providing better comparability we also
made adjustments to interest expense and depreciation in 2011. (See Schedule 6
and 7 for a reconciliation from GAAP net income to cash net income.)
Forward-Looking Statements
This release contains forward-looking statements that are subject to risks and
uncertainties. All statements other than statements of historical fact or
relating to present facts or current conditions included in this release are
forward-looking statements including any statements regarding guidance and
statements of a general economic or industry specific nature. Forward-looking
statements give our current expectations and projections relating to our
financial condition, results of operations, guidance, plans, objectives, future
performance and business. You can identify forward-looking statements by the
fact that they do not relate strictly to historical or current facts. These
statements may include words such as "anticipate," "estimate,"
"expect,"
"project," "plan," "intend," "believe,"
"may," "should," "can have," "likely"
and other words and terms of similar meaning in connection with any discussion
of the timing or nature of future operating or financial performance or other
events.
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 risk factors are discussed in the Company's filings with the U.S.
Securities and Exchange Commission and include, but are not limited to: (i) the
ability to keep pace with rapid developments and change in our industry and
provide new services to our clients; (ii) competition within our industry; (iii)
disclosure of unauthorized data and security breaches that expose us to
liability, litigation and reputational damage; (iv) failures of our systems or
systems of our third party providers; (v) our inability to expand our market
share in existing markets or expand into new markets; (vi) our ability to
identify acquisition, joint venture and partnership candidates and finance or
integrate businesses, services or technologies that we acquire; (vii) failure to
comply with applicable requirements of Visa, MasterCard or other payment
networks; (viii) changes in payment network rules or standards; (ix) our ability
to pass fee increases along to merchants; (x) termination of sponsorship or
clearing services provided to us; (xi) increased attrition of our merchants,
independent sales organizations, or ISOs, or referral partners; (xii) inability
to successfully renew or renegotiate agreements with our clients or ISOs; (xiii)
reductions in overall consumer, business and government spending; (xiv) fraud by
merchants or others; (xv) a decline in the use of credit, debit or prepaid
cards; (xvi) consolidation in the banking and retail industries; and (xvii) the
effects of governmental regulation, changes in laws and 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.
Any forward-looking statement made by us in this release speaks only as of the
date on which we make it. 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.
Contacts:
Investors
Nathan Rozof, CFA
Senior Vice President, Investor Relations
(866) 254-4811
(513) 900-4811
IR@vantiv.com
Media
Andrew Ciafardini
Director of Public Relations
(513) 900-5308
Andrew.Ciafardini@vantiv.com
Schedule 1
Vantiv, Inc.
Consolidated Statements of Income
(Unaudited)
(in thousands, except share data)
Three Months Ended Year Ended
------------------------------- -------------------------------
December 31, December 31, December 31, December
31,
2012 2011 % Change 2012 2011
% Change
---------------- -------------- ---------- --------------- ---------------
---------
Revenue $ 494,092 $ 439,047 13 % $ 1,863,239 $
1,622,421 15 %
Network fees
and other
costs 222,906 196,359 14 % 840,597
756,735 11 %
---------------- -------------- --------------- ---------------
Net revenue 271,186 242,688 12 % 1,022,642
865,686 18 %
Sales and
marketing 68,042 64,633 5 % 280,644
236,917 18 %
Other
operating
costs 38,572 35,672 8 % 158,374
143,420 10 %
General and
administrative 31,844 18,367 73 % 118,231
86,870 36 %
Depreciation
and
amortization 41,357 39,559 5 % 160,538
155,326 3 %
---------------- -------------- --------------- ---------------
Income from
operations 91,371 84,457 8 % 304,855
243,153 25 %
Interest
expense-net (9,897) (25,764) (62) % (54,572)
(111,535) (51) %
Non-operating
expenses(1) - (700) NM (92,672)
(14,499) NM
---------------- -------------- --------------- ---------------
Income before
applicable
income taxes 81,474 57,993 40 % 157,611
117,119 35 %
Income tax
expense 24,005 18,226 32 % 46,853
32,309 45 %
---------------- -------------- --------------- ---------------
Net income 57,469 39,767 45 % 110,758
84,810 31 %
Less: Net
income
attributable
to non-
controlling
interests (28,715) (24,054) 19 % (53,148)
(48,570) 9 %
---------------- -------------- --------------- ---------------
Net income
attributable
to
Vantiv, Inc. $ 28,754 $ 15,713 83 % $ 57,610 $
36,240 59 %
---------------- -------------- --------------- ---------------
Net income per
share of
Class A common
stock
attributable
to
Vantiv, Inc.:
Basic $ 0.23 $ 0.18 $ 0.50 $
0.40
Diluted $ 0.22 $ 0.18 $ 0.47 $
0.40
Shares used in
computing net
income per
share of Class
A common
stock:
Basic 126,100,698 89,515,617 116,258,204
89,515,617
Diluted 132,783,880 89,515,617 122,747,362
89,515,617
Non Financial
Data:
Transactions
(in millions) 4,171 3,490 20 % 15,362
12,935 19 %
----
(1) Non-operating expenses primarily consist of charges incurred with the
refinancing of our debt in March 2012 and May 2011 and the termination of our
interest rate swaps in March 2012.
Schedule 2
Vantiv, Inc.
Cash Net Income (Non-GAAP)
(Unaudited)
(in thousands, except share data)
See schedule 6 and 7 for a reconciliation of GAAP net income to cash net income.
Three Months Ended Year Ended
----------------------------- -------------------------------
December
December 31, 31, December 31, December
31,
2012 2011 % Change 2012 2011
% Change
--------------- ------------- ---------- --------------- ---------------
---------
Revenue $ 494,092 $ 439,047 13 % $ 1,863,239 $
1,622,421 15 %
Network fees
and other
costs 222,906 196,359 14 % 840,597
756,735 11 %
--------------- ------------- --------------- ---------------
Net revenue 271,186 242,688 12 % 1,022,642
865,686 18 %
Sales and
marketing 68,042 64,133 6 % 280,644
236,126 19 %
Other
operating
costs 38,374 32,921 17 % 155,825
128,256 21 %
General and
administrative 20,771 15,229 36 % 76,329
62,509 22 %
--------------- ------------- --------------- ---------------
Adjusted
EBITDA(1) 143,999 130,405 10 % 509,844
438,795 16 %
Depreciation
and
amortization 12,077 9,453 28 % 43,103
33,733 28 %
--------------- ------------- --------------- ---------------
Adjusted
income from
operations 131,922 120,952 9 % 466,741
405,062 15 %
Interest
expense-net (9,897) (25,764) (62) % (54,572)
(105,638) (48) %
--------------- ------------- --------------- ---------------
Adjusted
income before
applicable
income taxes 122,025 95,188 28 % 412,169
299,424 38 %
Income tax
expense (at an
effective tax
rate of
38.5%)(2) 46,980 36,646 28 % 158,685
115,278 38 %
Cash tax
adjustments(3) (6,525) - NM (6,525)
- NM
--------------- ------------- --------------- ---------------
Adjusted
income tax
expense 40,455 36,646 152,160
115,278
--------------- ------------- --------------- ---------------
Cash net
income(4) $ 81,570 $ 58,542 39 % $ 260,009 $
184,146 41 %
--------------- ------------- --------------- ---------------
Adjusted cash
net income per
share(5) $ 0.38 $ 1.22
Adjusted
shares
outstanding(6) 213,724,756 213,772,063
Non Financial
Data:
Transactions
(in millions) 4,171 3,490 20 % 15,362
12,935 19 %
Non-GAAP Financial Measures
This schedule presents net revenue, adjusted EBITDA, cash net income, and
adjusted cash net income per share information. These are important financial
performance measures for the company, but are not financial measures as defined
by GAAP. Such financial measures should not be considered as alternatives to
GAAP net income, and such measures may not be comparable to those reported by
other companies.
Cash net income is derived from GAAP net income, adjusting for the following
items: (a) amortization of intangible assets acquired in business combinations
and customer portfolio and related asset acquisitions; (b) non-operating
expenses primarily associated with the refinancing of our debt and the
termination of our interest rate swaps in March 2012 and May 2011;
(c) adjustments to income tax expense assuming conversion of non-controlling
interests into shares of Class A common stock; (d) share-based compensation;
(e) costs associated with our separation from Fifth Third Bank and acquisition
and integration costs incurred in connection with our acquisitions; and (f) tax
benefits due to the amortization of intangible assets and other tax attributes
resulting from or acquired with our acquisitions, including Litle, and to the
tax basis step up associated with our separation from Fifth Third Bank and the
purchase or exchange of Class B units of Vantiv Holding, net of payment
obligations under tax receivable agreements established at the time of our
initial public offering. For purposes of providing better comparability, we also
make adjustments in 2011 to reflect depreciation and amortization assuming that
our property and equipment at December 31, 2011 was in place on January 1, 2011
and for interest expense assuming the Company's level of debt and applicable
terms as of December 31, 2011 was outstanding on January 1, 2011.
----
(1) See schedule 8 for a reconciliation of GAAP income from operations to
adjusted EBITDA.
(2) Represents adjustments to income tax expense assuming conversion of non-
controlling interests into shares of Class A common stock, including the tax
effect of adjustments described above.
(3) Represents tax benefits due to the amortization of intangible assets and
other tax attributes resulting from or acquired with our acquisitions, including
Litle, and to the tax basis step up associated with our separation from Fifth
Third Bank and the purchase or exchange of Class B units of Vantiv Holding, net
of payment obligations under tax receivable agreements established at the time
of our initial public offering.
(4) Cash net income assumes the conversion of non-controlling interests into
shares of Class A common stock.
(5) Adjusted cash net income per share is calculated as cash net income divided
by adjusted shares outstanding.
(6) Shares for the twelve months ended December 31, 2012 are pro forma and
weighted assuming the equity structure in place March 31, 2012, was in place
January 1, 2012. The quarter to date and year to date adjusted shares
outstanding include 80,940,875 Class B units that are excluded from the GAAP
dilutive income per share calculation.
Schedule 3
Vantiv, Inc.
Segment Information
(Unaudited)
(in thousands)
Three Months Ended December 31, 2012
--------------------------------------------------------------------------
Financial Institution General
Merchant Services Services Corporate/Other Total
------------------- ----------------------- ----------------- ------------
Total
revenue $ 380,232 $ 113,860 $ - $
494,092
Network fees
and other
costs 191,842 31,064 -
222,906
------------------- ----------------------- ----------------- ------------
Net revenue 188,390 82,796 -
271,186
Sales and
marketing 62,492 5,550 -
68,042
------------------- ----------------------- ----------------- ------------
Segment
profit $ 125,898 $ 77,246 $ - $
203,144
------------------- ----------------------- ----------------- ------------
Non-
financial
data:
Transactions
(in
millions) 3,300 871
4,171
Net revenue
per
transaction $ 0.0571 $ 0.0951 $
0.0650
Three Months Ended December 31, 2011
--------------------------------------------------------------------------
Financial Institution General
Merchant Services Services Corporate/Other Total
------------------- ----------------------- ----------------- ------------
Total
revenue $ 331,514 $ 107,533 $ - $
439,047
Network fees
and other
costs 164,053 32,306 -
196,359
------------------- ----------------------- ----------------- ------------
Net revenue 167,461 75,227 -
242,688
Sales and
marketing 58,799 5,335 499
64,633
------------------- ----------------------- ----------------- ------------
Segment
profit $ 108,662 $ 69,892 $ (499) $
178,055
------------------- ----------------------- ----------------- ------------
Non-
financial
data:
Transactions
(in
millions) 2,673 817
3,490
Net revenue
per
transaction $ 0.0626 $ 0.0921 $
0.0695
Year Ended December 31, 2012
----------------------------------------------------------------------------
Financial Institution General
Merchant Services Services Corporate/Other Total
------------------- ----------------------- ----------------- --------------
Total
revenue $ 1,409,158 $ 454,081 $ - $
1,863,239
Network fees
and other
costs 709,341 131,256 -
840,597
------------------- ----------------------- ----------------- --------------
Net revenue 699,817 322,825 -
1,022,642
Sales and
marketing 255,887 24,757 -
280,644
------------------- ----------------------- ----------------- --------------
Segment
profit $ 443,930 $ 298,068 $ - $
741,998
------------------- ----------------------- ----------------- --------------
Non-
financial
data:
Transactions
(in
millions) 11,912 3,450
15,362
Net revenue
per
transaction $ 0.0587 $ 0.0936 $
0.0666
Year Ended December 31, 2011
----------------------------------------------------------------------------
Financial Institution General
Merchant Services Services Corporate/Other Total
------------------- ----------------------- ----------------- --------------
Total
revenue $ 1,185,253 $ 437,168 $ - $
1,622,421
Network fees
and other
costs 620,852 135,883 -
756,735
------------------- ----------------------- ----------------- --------------
Net revenue 564,401 301,285 -
865,686
Sales and
marketing 211,062 24,046 1,809
236,917
------------------- ----------------------- ----------------- --------------
Segment
profit $ 353,339 $ 277,239 $ (1,809) $
628,769
------------------- ----------------------- ----------------- --------------
Non-
financial
data:
Transactions
(in
millions) 9,591 3,344
12,935
Net revenue
per
transaction $ 0.0588 $ 0.0901 $
0.0669
Schedule 4
Vantiv, Inc.
Condensed Consolidated Statements of Financial Position
(Unaudited)
(in thousands)
December 31, December 31,
2012 2011
--------------- --------------
Assets
Current assets:
Cash and cash equivalents $ 67,058 $ 370,549
Accounts receivable-net 397,664 368,658
Related party receivable 4,415 4,361
Settlement assets 429,377 46,840
Prepaid expenses 10,629 8,642
Other 11,934 20,947
--------------- --------------
Total current assets 921,077 819,997
Customer incentives 28,927 17,493
Property and equipment-net 174,940 152,310
Intangible assets-net 884,536 916,198
Goodwill 1,804,592 1,532,374
Deferred taxes 141,361 4,292
Other assets 24,096 47,046
--------------- --------------
Total assets $ 3,979,529 $ 3,489,710
--------------- --------------
Liabilities and equity
Current liabilities:
Accounts payable and accrued expenses $ 215,998 $ 193,706
Related party payable 1,625 3,814
Settlement obligations 542,564 208,669
Current portion of note payable 92,500 16,211
Deferred income 9,667 7,313
Current maturities of capital lease
obligations 5,505 4,607
Other 1,609 6,400
--------------- --------------
Total current liabilities 869,468 440,720
Long-term liabilities:
Note payable 1,163,605 1,738,498
Tax receivable agreement obligations 484,700 -
Capital lease obligations 8,275 12,322
Deferred taxes 8,207 9,263
Other 1,039 33,187
--------------- --------------
Total long-term liabilities 1,665,826 1,793,270
Total liabilities 2,535,294 2,233,990
Commitments and contingencies
Equity:
Total equity (1) 1,444,235 1,255,720
--------------- --------------
Total liabilities and equity $ 3,979,529 $ 3,489,710
--------------- --------------
----
(1) Includes equity attributable to non-controlling interests.
Schedule 5
Vantiv, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Year Ended
----------------------------
December
December 31, 31,
2012 2011
--------------- ------------
Operating Activities:
Net income $ 110,758 $ 84,810
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 160,538 155,326
Loss on derivative assets - 800
Amortization of customer incentives 6,372 3,511
Amortization and write-off of debt issuance
costs 59,407 19,544
Share-based compensation expense 33,444 2,974
Deferred taxes 352 31,133
Other non-cash items 1,208 303
Change in operating assets and liabilities:
Increase in accounts receivable and related
party receivable (28,517) (25,715)
Decrease in net settlement assets and
obligations (48,668) (38,258)
Increase in customer incentives (9,306) (11,385)
Decrease (increase) in prepaid and other assets 11,053 (10,532)
(Decrease) increase in accounts payable and
accrued expenses (3,415) 30,693
Decrease in payable to related party (2,189) (8,652)
Increase (decrease) in other liabilities 2,077 (1,098)
--------------- ------------
Net cash provided by operating activities 293,114 233,454
--------------- ------------
Investing Activities:
Purchases of property and equipment (51,435) (62,714)
Acquisition of customer portfolios and related
assets (13,213) (3,906)
Purchase of investments (313) (3,300)
Cash used in acquisitions, net of cash acquired (352,330) -
--------------- ------------
Net cash used in investing activities (417,291) (69,920)
--------------- ------------
Financing Activities:
Proceeds from initial public offering, net of
offering costs of $39,091 460,913 -
Proceeds from follow-on offering, net of
offering costs of $1,951 33,512 -
Proceeds from issuance of long-term debt 1,338,750 -
Repayment of debt and capital lease obligations (1,859,199) (20,373)
Payment of debt issuance costs (28,949) (6,276)
Purchase of Class B units in Vantiv Holding from
Fifth Third (33,512) -
Repurchase of Class A common stock (to satisfy
tax withholding obligations) (17,906) -
Tax benefit from employee share-based
compensation 14,747 -
Distribution to funds managed by Advent
International Corporation (40,086) -
Distribution to non-controlling interests (47,584) (2,848)
--------------- ------------
Net cash used in financing activities (179,314) (29,497)
--------------- ------------
Net increase in cash and cash equivalents (303,491) 134,037
Cash and cash equivalents-Beginning of period 370,549 236,512
--------------- ------------
Cash and cash equivalents-End of period $ 67,058 $ 370,549
--------------- ------------
Cash Payments:
Interest $ 60,886 $ 106,459
Taxes 29,261 12,127
Non-cash Items:
Issuance of tax receivable agreements $ 484,700 $ -
Assets acquired under capital lease obligations 1,202 19,711
Assets acquired under debt obligations - 19,302
Accrual of secondary offering costs 3,000 -
Schedule 6
Vantiv, Inc.
Reconciliation of GAAP Net Income to Cash Net Income
(Unaudited)
(in thousands)
Three Months Ended December 31, 2012
---------------------------------------------------------------------------------------
Transition, Acquisition Share-Based Other
GAAP and Integration(1) Compensation Adjustments
Cash Net Income
------------- ------------------------- -------------- -------------
----------------
Revenue $ 494,092 $ - $ - $ -
$ 494,092
Network fees
and other
costs 222,906 - - -
222,906
----------- --------- ----------- ------------
----------------
Net revenue 271,186 - - -
271,186
Sales and
marketing 68,042 - - -
68,042
Other
operating
costs 38,572 (198) - -
38,374
General and
administrative 31,844 (4,518) (6,555) -
20,771
Depreciation
and
amortization 41,357 - - (29,280) (2)
12,077
----------- --------- ----------- ------------
----------------
Income from
operations 91,371 4,716 6,555 29,280
131,922
Interest
expense-net (9,897) - - -
(9,897)
Non-operating
expenses - - - -
-
----------- --------- ----------- ------------
----------------
Income before
applicable
income taxes 81,474 4,716 6,555 29,280
122,025
Income tax
expense 24,005 1,816 2,524 18,635 (4)
46,980
Tax
adjustments(5) - - - (6,525)
(6,525)
----------- --------- ----------- ------------
----------------
Net income(6) $ 57,469 $ 2,900 $ 4,031 $ 17,170
$ 81,570
----------- --------- --------- ------------
----------------
Three Months Ended December 31, 2011
---------------------------------------------------------------------------------------
Transition, Acquisition Share-Based Other
GAAP and Integration(1) Compensation Adjustments
Cash Net Income
------------- ------------------------- -------------- -------------
----------------
Revenue $ 439,047 $ - $ - $ -
$ 439,047
Network fees
and other
costs 196,359 - - -
196,359
----------- --------- --------- ------------
----------------
Net revenue 242,688 - - -
242,688
Sales and
marketing 64,633 (500) - -
64,133
Other
operating
costs 35,672 (2,751) - -
32,921
General and
administrative 18,367 (2,366) (772) -
15,229
Depreciation
and
amortization 39,559 - - (30,106) (2)
9,453
----------- --------- --------- ------------
----------------
Income from
operations 84,457 5,617 772 30,106
120,952
Interest
expense-net (25,764) - - -
(25,764)
Non-operating
expenses (700) - - 700 (3)
-
----------- --------- --------- ------------
----------------
Income before
applicable
income taxes 57,993 5,617 772 30,806
95,188
Income tax
expense 18,226 2,161 297 15,962 (4)
36,646
Tax
adjustments(5) - - - -
-
----------- --------- --------- ------------
----------------
Net income(6) $ 39,767 $ 3,456 $ 475 $ 14,844
$ 58,542
----------- --------- --------- ------------
----------------
Non-GAAP Financial Measures
This schedule presents net revenue and cash net income. These are important
financial performance measures for the company, but are not financial measures
as defined by GAAP. Such financial measures should not be considered as
alternatives to GAAP net income, and such measures may not be comparable to
those reported by other companies.
----
(1) Represents acquisition and integration costs incurred in connection with our
acquisitions and costs associated with our separation from Fifth Third Bank.
(2) Represents amortization of intangible assets acquired through business
combinations and customer portfolio and related asset acquisitions.
(3) Represents non-operating expenses primarily associated with the refinancing
of our debt in 2012 and 2011.
(4) Represents adjustments to income tax expense assuming conversion of non-
controlling interests into shares of Class A common stock.
(5) Represents tax benefits due to the amortization of intangible assets and
other tax attributes resulting from or acquired with our acquisitions, including
Litle, and to the tax basis step up associated with our separation from Fifth
Third Bank and the purchase or exchange of Class B units of Vantiv Holding, net
of payment obligations under tax receivable agreements established at the time
of our initial public offering.
(6) Net income assumes the conversion of non-controlling interests into shares
of Class A common stock.
Schedule 7
Vantiv, Inc.
Reconciliation of GAAP Net Income to Cash Net Income
(Unaudited)
(in thousands)
Year Ended December 31, 2012
----------------------------------------------------------------------------------------------
Transition,
Acquisition
and Share-Based Comparability Other
Cash
GAAP Integration(1) Compensation Adjustments
Adjustments Net Income
--------------- ---------------- -------------- --------------- -------------
--------------
Revenue $ 1,863,239 $ - $ - $ - $
- $ 1,863,239
Network fees
and other 840,597 - - -
- 840,597
costs
------------- ---------------- ---------- ------- -----------
--------------
Net revenue 1,022,642 - - -
- 1,022,642
Sales and 280,644 - - -
- 280,644
marketing
Other
operating 158,374 (2,549) - -
- 155,825
costs
General and 118,231 (8,458) (33,444) -
- 76,329
administrative
Depreciation
and 160,538 - - -
(117,435) (2) 43,103
amortization
--------------- ---------------- ---------- ----- -------------
--------------
Income from 304,855 11,007 33,444 -
117,435 466,741
operations
Interest (54,572) - - -
- (54,572)
expense-net
Non-operating (92,672) - - -
92,672 (3) -
expenses
--------------- ---------------- ---------- ----- -------------
--------------
Income before
applicable 157,611 11,007 33,444 -
210,107 412,169
income taxes
Income tax 46,853 4,238 12,876 -
94,718 (4) 158,685
expense
Tax - - - -
(6,525) (6,525)
adjustments(5)
--------------- ---------------- ---------- ----- -------------
--------------
Net income(6) $ 110,758 $ 6,769 $ 20,568 $ - $
121,914 $ 260,009
--------------- ---------------- -------- ----- -------------
--------------
Year Ended December 31, 2011
------------------------------------------------------------------------------------------------
Transition,
Acquisition
and Share-Based Comparability Other
Cash
GAAP Integration(1) Compensation Adjustments
Adjustments Net Income
--------------- ---------------- -------------- ---------------
------------- --------------
Revenue $ 1,622,421 $ - $ - $ - $
- $ 1,622,421
Network fees
and other 756,735 - - -
- 756,735
costs
------------- ---------- --------- ---------------
------------- --------------
Net revenue 865,686 - - -
- 865,686
Sales and 236,917 (791) - -
- 236,126
marketing
Other
operating 143,420 (15,164) - -
- 128,256
costs
General and 86,870 (21,387) (2,974) -
- 62,509
administrative
Depreciation
and 155,326 - - 1,734 (7)
(123,327) (2) 33,733
amortization
------------- ---------------- --------- ---------------
------------- --------------
Income from 243,153 37,342 2,974 (1,734)
123,327 405,062
operations
Interest (111,535) - - 5,897 (8)
- (105,638)
expense-net
Non-operating (14,499) - - -
14,499 (3) -
expenses
------------- ---------------- --------- ---------------
------------- --------------
Income before
applicable 117,119 37,342 2,974 4,163
137,826 299,424
income taxes
Income tax 32,309 14,376 1,145 1,603
65,845 (4) 115,278
expense
Tax - - - -
- -
adjustments(5)
------------- ---------------- --------- ---------------
------------- --------------
Net income(6) $ 84,810 $ 22,966 $ 1,829 $ 2,560 $
71,981 $ 184,146
------------- ---------------- -------------- ---------------
------------- --------------
Non-GAAP Financial Measures
This schedule presents net revenue and cash net income. These are important
financial performance measures for the company, but are not financial measures
as defined by GAAP. Such financial measures should not be considered as
alternatives to GAAP net income, and such measures may not be comparable to
those reported by other companies.
----
(1) Represents acquisition and integration costs incurred in connection with our
acquisitions and costs associated with our separation from Fifth Third Bank.
(2) Represents amortization of intangible assets acquired through business
combinations and customer portfolio and related asset acquisitions.
(3) Represents non-operating expenses primarily associated with the refinancing
of our debt in 2012 and 2011 and the termination of our interest rate swaps in
2012.
(4) Represents adjustments to income tax expense assuming conversion of non-
controlling interests into shares of Class A common stock.
(5) Represents tax benefits due to the amortization of intangible assets and
other tax attributes resulting from or acquired with our acquisitions, including
Litle, and to the tax basis step up associated with our separation from Fifth
Third Bank and the purchase or exchange of Class B units of Vantiv Holding, net
of payment obligations under tax receivable agreements established at the time
of our initial public offering.
(6) Net income assumes the conversion of non-controlling interests into shares
of Class A common stock.
(7) Depreciation and amortization represents expense associated with our
property and equipment, assuming that our property and equipment at December 31,
2011 was in place on January 1, 2011.
(8) Represents adjustment to reflect what our 2011 interest expense would have
been if the Company's level of debt and applicable terms as of December 31,
2011 was outstanding on January 1, 2011.
Schedule 8
Vantiv, Inc.
Reconciliation of GAAP Income from Operations to Adjusted EBITDA
(Unaudited)
(in thousands)
Three Months Ended Year Ended
----------------------------- ---------------------------
December December
December 31, December 31, 31, 31,
2012 2011 % Change 2012 2011
% Change
-------------- -------------- ---------- ------------- ------------- ---------
Income from
operations $ 91,371 $ 84,457 8 % $ 304,855 $ 243,153
25 %
Depreciation
and
amortization 41,357 39,559 5 % 160,538 155,326
3 %
Transition,
acquisition
and
integration
costs(1) 4,716 5,617 (16) % 11,007 37,342
(71) %
Share-based
compensation 6,555 772 NM 33,444 2,974
NM
-------------- -------------- ------------- -------------
Adjusted
EBITDA $ 143,999 $ 130,405 10 % $ 509,844 $ 438,795
16 %
-------------- -------------- ------------- -------------
Non-GAAP Financial Measures
This schedule presents adjusted EBITDA, which is an important financial
performance measure for the company, but is not a financial measure as defined
by GAAP. Such financial measure should not be considered as an alternative to
GAAP income from operations, and such measure may not be comparable to those
reported by other companies.
----
(1) Represents costs associated with our separation from Fifth Third Bank and
acquisition and integration costs in connection with our acquisitions.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Vantiv, Inc. via Thomson Reuters ONE
[HUG#1679126]
