WEX Inc. posts 13% revenue growth in Q2
Courtesy of WEX
WEX Inc., an international fleet card and corporate payment services company based in South Portland, achieved a 13% gain in total revenue in the second quarter, it said Wednesday.
For the three months ended June 30, WEX said revenue totaled $201.6 million, up from $178.3 million for the second quarter of 2013.
In a telephone interview with Mainebiz prior to this morning’s conference call with investors, WEX President and CEO Melissa Smith characterized the company’s continuing strong revenue and earnings growth in the first half of the 2014 fiscal year as a “team achievement” — both in launching key strategic initiatives as well as in continuing to make improvements in its core fleet card and corporate payment service sectors.
Net income to common shareholders on a generally accepted accounting principles (GAAP) basis was $43.3 million, or $1.11 per diluted share, compared with $42.2 million, or $1.08 per diluted share, for the second quarter last year. On a non-GAAP basis, the company's adjusted net income for the second quarter of 2014 increased 28% to $54.0 million, or $1.39 per diluted share, from $42.3 million, or $1.08 per diluted share, for the same period a year ago. Adjusted net income now excludes the expense of stock-based compensation and certain acquisition-related expenses.
“The game plan is working,” she said, noting that the second quarter’s revenue and net income gains were achieved almost entirely by “organic growth” within its domestic and international markets.
“Our efforts to accelerate growth, both organically and through mergers and acquisitions, globalize the business and drive scale are clearly paying off,” she said.
Smith said the company’s fleet payments segment picked up new customers, including “the first co-branded agreement by WEX Fleet One in our heavy truck program, as well as a new private label agreement with Sunoco.” Globally, she said, WEX’S acquisition of ExxonMobil’s European commercial Esso card program — a deal first announced last November — is on track after clearing all regulatory hurdles. An agreement with Shell to process prepaid fleet transactions in Europe and Asia, announced in mid-July, and continuing growth in WEX’s virtual travel products are other examples of the company’s continuing growth in the international arena.
Smith also noted that WEX closed its $532.5 million acquisition of Evolution1, a cloud-based technology and health-care payment services company based in Fargo, N.D., which she said “significantly enhances” the company’s vertical integration of its health care payments segment by adding a “business-to-business-to-consumer” level of service to its offerings. “It significantly opens up our ability to grow [in the health care payments market],” she said.
Among the performance metrics cited in the second quarter earnings report:
• Total fuel transactions processed increased 6% from the second quarter of 2013 to 98.6 million. Payment processing transactions increased 6% to 78.4 million.
• Average expenditure per payment processing transaction increased 3% from the second quarter of 2013 to $88.46.
• Average U.S. retail fuel price increased 2% to $3.76 per gallon from $3.70 per gallon in the second quarter of 2013.
• Total corporate card purchase volume grew 36% to $4.3 billion, from $3.2 billion for the second quarter of 2013.
Looking forward, in a press release accompanying the earnings statement, Steve Elder, WEX senior vice president and chief financial officer, reported that for the third quarter of 2014 WEX expects revenue in the range of $213 million to $223 million and adjusted net income in the range of $51 million to $53 million, or $1.30 to $1.37 per diluted share. For the full year, the company expects revenue in the range of $813 million to $823 million and adjusted net income to be in the range of $189 million to $195 million, or $4.84 to $4.99 per diluted share.
Founded in 1983 as a provider of fuel cards for vehicle fleets, WEX (NYSE: WEX) and its subsidiaries now employ more than 1,700 people worldwide.
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