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Vantiv Reports Third Quarter 2015 Results

The following excerpt is from the company's SEC filing.

Net Revenue Increased 13% to $430 Million

Pro Forma Adjusted Net Income per Share Increased 20% to $0.59

CINCINNATI, October 28, 2015 - Vantiv, Inc. (NYSE: VNTV) (“Vantiv” or the “company”) today announced financial results for the third quarter ended September 30, 2015. Revenue increased 17% to $816 million in the third quarter as compared to $697 million in the prior year period. Net revenue increased 13% to $430 million in the third quarter as compared to $381 million in the prior year period, primarily due to an 8% increase in transactions and a 5% increase in net revenue per transaction. On a GA AP basis, net income attributable to Vantiv, Inc. was $41 million or $0.27 per diluted share in the third quarter as compared to $30 million or $0.20 per diluted share in the prior year period. Pro forma adjusted net income increased 22% to $119 million in the third quarter as compared to $97 million in the prior year period. Pro forma adjusted net income per share increased 20% to $0.59 in the third quarter as compared to $0.49 in the prior year period. (See Schedule 2 for pro forma adjusted net income and Schedule 6 for GAAP net income reconciliation to pro forma adjusted net income.)

“Our business is firing on all cylinders,” said Charles Drucker, president and chief executive officer of Vantiv, “with strong performances in both our Merchant and Financial Institution Services segments.”

Merchant Services

Merchant Services net revenue increased 16% to $345 million in the third quarter as compared to $298 million in the prior year period, primarily due to an 8% increase in transactions and a 7% increase in net revenue per transaction. Sales and marketing expenses increased 21% to $126 million in the third quarter as compared to $104 million in the prior year period, primarily due to continued successful new sales execution as well as strong growth from our high growth channels.

Financial Institution Services net revenue increased 3% to $86 million in the third quarter as compared to $83 million in the prior year period as a 7% increase in transactions was partially offset by lower net revenue per transaction. Sales and marketing expenses decreased 10% to $6 million in the third quarter as compared to $7 million in the prior year period.

Capital Allocation

The company repurchased approximately 4.4 million shares of its Class A common stock for approximately $200 million beginning in the third quarter and continuing into the fourth quarter. The company also recently terminated a portion of the obligations under the tax receivable agreements with Fifth Third Bank. The terminated obligations represented approximately $140 million in accrued liabilities and were terminated for approximately $49 million. The termination of these obligations will result in approximately $0.05 in accretion to pro forma adjusted net income per share beginning in 2016.

Fourth Quarter and Full-Year Financial Outlook

Based on the current level of transaction trends and new business activity, net revenue for the fourth quarter of 2015 is expected to be $429 to $437 million, representing an increase of 7% to 9% above the prior year period. Pro forma adjusted net income per share for the fourth quarter of 2015 is expected to be $0.61 to $0.63, representing an increase of 15% to 19% above the prior year period. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.30 to $0.32 for the fourth quarter of 2015.

Based on our strong performance year-to-date and outlook for the fourth quarter, our full-year 2015 expectations have increased. Net revenue for the full-year 2015 is expected to be $1,657 to $1,665 million, representing growth of 18% to 19% above the prior year. Pro forma adjusted net income per share for the full-year 2015 is expected to be $2.21 to $2.23, representing growth of 18% to 19% above the prior year. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.94 to $0.96 for the full-year 2015.

Earnings Conference Call and Audio Webcast

The company will host a conference call to discuss the third quarter 2015 financial results today at 8:00 a.m. EDT. The conference call can be accessed live over the phone by dialing (866) 416-5346, or for international callers (913) 312-0692, and referencing conference code 312013. 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 passcode 312013. The replay will be available through Wednesday, November 11, 2015. The call will also be webcast live from the company's investor relations website at http://investors.vantiv.com. Following completion of the call, a recorded replay of the webcast will be available on the website.

About Vantiv, Inc.

Vantiv, Inc. (NYSE: VNTV) is a leading payment processor differentiated by an integrated technology platform. Vantiv offers a comprehensive suite of traditional and innovative payment processing and technology solutions to merchants and financial institutions of all sizes, enabling them to address their payment processing needs through a single provider. We build strong relationships with our clients, helping them become more efficient, more secure and more successful. Vantiv is the second 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 channels and verticals, including integrated payments, ecommerce, and merchant bank. For more information, visit www.vantiv.com.

Non-GAAP and Pro Forma Financial Measures

This earnings release presents non-GAAP and pro forma financial information including net revenue, adjusted EBITDA, pro forma adjusted net income, and pro forma adjusted net income per share. 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 of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The company uses these non-GAAP and pro forma financial performance 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 measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

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...


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