Vantiv Reports Fourth Quarter and Full-Year 2014 Results
Fourth Quarter Net Revenue Increased 30% to $402 Million and Pro Forma Adjusted Net Income per Share Increased 18% to $0.53
Full-Year 2014 Net Revenue Increased 20% to $1,403 Million and Pro Forma Adjusted Net Income per Share Increased 20% to $1.87
CINCINNATI, Feb. 12, 2015 - Vantiv, Inc. (NYSE: VNTV) ("Vantiv" or the "Company") today announced financial results for the fourth quarter and full-year ended December 31, 2014. Revenue increased 31% to $733.8 million in the fourth quarter as compared to $558.4 million in the prior year period. Net revenue increased 30% to $402.2 million in the fourth quarter as compared to $308.6 million in the prior year period, primarily due to strong growth in our Merchant Services segment. On a GAAP basis, net income attributable to Vantiv, Inc. was $68.6 million or $0.35 per diluted share in the fourth quarter as compared to $42.8 million or $0.26 per diluted share in the prior year period. Pro forma adjusted net income increased 16% to $105.1 million in the fourth quarter as compared to $90.4 million in the prior year period. Pro forma adjusted net income per share increased 18% to $0.53 in the fourth quarter as compared to $0.45 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.)
For full-year 2014, revenue increased 22% to $2,577.2 million as compared to $2,108.1 million in the prior year. Net revenue increased 20% to $1,402.5 million in 2014 as compared to $1,172.6 million in the prior year, primarily due to strong growth in our Merchant Services segment. On a GAAP basis, net income attributable to Vantiv, Inc. was $125.3 million or $0.75 per diluted share in 2014 as compared to $133.6 million or $0.87 per diluted share in the prior year. Pro forma adjusted net income increased 16% to $372.4 million in 2014 as compared to $320.5 million in the prior year. Pro forma adjusted net income per share increased 20% to $1.87 in 2014 as compared to $1.56 in the prior year. (See Schedule 2 for pro forma adjusted net income and Schedule 7 for GAAP net income reconciliation to pro forma adjusted net income.)
"We delivered strong results for 2014, including completing our strategic acquisition of Mercury, expanding organic growth throughout the year, and leveraging our strengths in security, EMV and omni-channel to win new business," said Charles Drucker, president and chief executive at Vantiv. "During 2015, we will press our advantages in order to continue to win market share as well as to drive superior returns."
Merchant Services net revenue increased 41% to $318.0 million in the fourth quarter as compared to $225.6 million in the prior year period, primarily due to a 30% increase in transactions and an 8% increase in net revenue per transaction. On a full-year basis, net revenue increased 27% to $1,066.6 million as compared to $837.7 million in the prior year, primarily due to a 22% increase in transactions and a 4% increase in net revenue per transaction. Excluding the impact of recent acquisitions, net revenue growth expanded 8% on an organic basis for the fourth quarter over the prior year period. This was primarily due to increased new business as well as the company's expansion in high growth channels and verticals, including Integrated Payments, eCommerce and Merchant Bank. Sales and marketing expenses were $107.8 million in the fourth quarter as compared to $73.2 million in the prior year period and $368.0 million for the full-year as compared to $286.2 million in the prior year.
Financial Institution Services
Financial Institution Services net revenue increased 1% to $84.1 million in the fourth quarter as compared to $83.1 million in the prior year period as a 6% increase in transactions was partially offset by lower net revenue per transaction. In addition to improved net revenue growth, new sales signings improved in the fourth quarter. On a full-year basis, net revenue was up modestly to $336.0 million as compared to $334.9 million in the prior year, primarily due to a 6% increase in transactions, partially offset by lower net revenue per transaction. Sales and marketing expenses increased to $8.4 million in the fourth quarter as compared to $6.9 million in the prior year period and to $28.4 million for the full-year from $25.8 million in the prior year.
First Quarter and Full-Year 2015 Financial Outlook
Based on the current level of transaction trends and new business activity, net revenue for the first quarter of 2015 is expected to be $364 to $369 million, representing growth of 26% to 28% above the prior year period. Pro forma adjusted net income per share for the first quarter of 2015 is expected to be $0.42 to $0.44. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.11 to $0.13 for the first quarter of 2015.
For the full-year 2015, net revenue is expected to be $1,600 to $1,625 million, representing growth of 14% to 16% above the prior year. Pro forma adjusted net income per share is expected to be $2.09 to $2.15 for the full-year 2015, representing growth of 12% to 15% above the prior year. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.93 to $0.99 for the full-year 2015.
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss the fourth quarter and full-year 2014 financial results today at 8:00 AM ET. The conference call can be accessed live over the phone by dialing (866) 454-4210, or for international callers (913) 312-0960, and referencing conference code 3266852. 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 3266852. The replay will be available through Thursday, February 26, 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.
Nathan Rozof, CFA
Senior Vice President, Investor Relations
Vice President, Corporate Communications
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 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 channels and verticals, including integrated payments, ecommerce, and merchant bank. For more information, visit www.vantiv.com.
© Copyright Vantiv, LLC. All rights reserved. Vantiv, the Vantiv logo, and all other Vantiv product or service names and logos are registered trademarks or trademarks of Vantiv, LLC in the USA and other countries. ® indicates USA registration.
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.
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 risks are discussed in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC") and include, but are not limited to: (i) our ability to adapt to developments and change in our industry; (ii) competition; (iii) unauthorized disclosure of data or security breaches; (iv) systems failures or interruptions; (v) our ability to expand our market share or enter new markets; (vi) our ability to identify and complete acquisitions, joint ventures and partnerships; (vii) failure to comply with applicable requirements of Visa, MasterCard or other payment networks or changes in those requirements; (viii) our ability to pass along fee increases; (ix) termination of sponsorship or clearing services; (x) loss of clients or referral partners; (xi) reductions in overall consumer, business and government spending; (xii) fraud by merchants or others; (xiii) a decline in the use of credit, debit or prepaid cards; (xiv) consolidation in the banking and retail industries; (xv) the effects of governmental regulation or changes in laws; and (xvi) 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. More information on potential factors that could affect the Company's financial results and performance is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's periodic reports filed with the SEC, including the Company's most recently filed Annual Report on Form 10-K and its subsequent filings with the SEC.
Any forward-looking statement made by us in this release speaks only as of the date of this release. 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.