UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 26, 2012
Vantiv, Inc.
(Exact name of registrant as specified in its charter)
Delaware |
|
001-35462 |
|
26-4532998 |
(State or other jurisdiction |
|
(Commission File Number) |
|
(I.R.S. Employer |
8500 Governors Hill Drive
Symmes Township, Ohio 45249
(Address of principal executive offices, including zip code)
(513) 900-5250
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On April 26, 2012, Vantiv, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2012. A copy of the press release is furnished as Exhibit 99.1 to this current report and is incorporated herein by reference.
The information furnished on this Form 8-K, including the exhibit attached, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. |
|
Exhibit |
99.1 |
|
Press Release dated April 26, 2012 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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VANTIV, INC. | ||
|
|
| |
|
By: |
/s/ Mark L. Heimbouch | |
|
|
Name: |
Mark L. Heimbouch |
|
|
Title: |
Chief Financial Officer |
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| ||
Dated: April 26, 2012 |
|
Exhibit 99.1
Vantiv Reports Strong First Quarter 2012 Results
Cincinnati, Ohio, April 26, 2012 Vantiv, Inc. (NYSE: VNTV) (Vantiv or the Company) today announced financial results for the first quarter ended March 31, 2012. Revenue increased 17% to $432.8 million as compared to $371.4 million in the prior year. Net revenue increased 23% to $232.6 million as compared to $189.2 million in the prior year. Cash net income increased 30% to $42.4 million as compared to $32.5 million in the prior year. Adjusted cash net income per share was $0.20. (See Schedule 2 for cash net income and Schedule 6 for GAAP net income reconciliation to cash net income.)
On a GAAP basis, net loss attributable to Vantiv, Inc. was $18.4 million, or a $0.38 per diluted share, compared with net income of $3.5 million, or $0.04 per diluted share, in the prior year. GAAP net loss included $91.8 million, or $0.55 loss on a diluted per share basis, primarily related to charges incurred in connection with refinancing of indebtedness following the Companys initial public offering.
Transactions increased 12% and net revenue increased 23% primarily driven by a 16% increase in transactions in the Merchant Services segment and a 17% increase in rate per transaction in the Merchant Services segment. Adjusted EBITDA increased 18% to $102.9 million, as compared to $87.5 million in the prior year. (See Schedule 7 for reconciliation from GAAP income from operations to adjusted EBITDA.)
I am very proud of the results that the 2,500 employees in our talented Vantiv team produced in this new era as a publicly traded company. Our successful IPO and first quarter results are a testament to our strong record of performance and our ability to create and capitalize on opportunities in this fast paced industry, president and chief executive officer Charles Drucker said. We are focused on growing our comprehensive and integrated suite of services and diversifying our distribution channels to expand our market share. I also want to welcome our new shareholders. You can expect our team to continue to build on its accomplishments with a laser focus on creating long-term value.
Merchant Services
Net revenue increased 36% to $157.5 million as compared to $115.8 million in the prior year, primarily due to a 16% increase in transactions, as well as a 17% increase in net revenue per transaction. We continue to experience an increase in net revenue per transaction as we expand our channels and increase our focus on the small and mid-sized merchants. Sales and marketing expenses increased 36% to $66.7 million as compared to $48.9 million in the prior year in connection with the increase in revenue and continued expansion of distribution channels.
Financial Institution Services
Net revenue increased 2% to $75.1 million as compared to $73.5 million in the prior year, as organic revenue growth more than offset the attrition of a large client in the third quarter of 2011. Sales and marketing expenses decreased by 10%.
2012 Financial Outlook
Net revenue for 2012 is expected to be between $995 million and $1,010 million, representing an increase of 15% to 17% as compared to 2011. Cash net income is expected to be between $234 million and $242 million. Adjusted cash net income per share is expected to be between $1.09 and $1.13. GAAP net income per share is expected to be between $0.42 and $0.46 on a diluted per share basis.
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss first quarter 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 (877) 941-1428, or for international callers (480) 629-9665. A replay will be available approximately two hours after the call concludes and can be accessed by dialing (877) 870-5176, or for international callers (858) 384-5517, and entering the conference ID 4532093. The replay will be available through Thursday, May 3, 2012. The call will be webcast live from the Companys investor relations website at http://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 companys 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, EBITDA, adjusted EBITDA, cash net income, and adjusted cash net income per share information. These are important financial 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 less other costs. Cash net income includes adjustments to exclude, amortization of intangible assets acquired in business combinations, primarily customer related intangible assets, share-based compensation, transition costs associated with our separation from Fifth Third Bank, integration costs incurred in connection with acquisitions 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 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 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, 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 this presentation, 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 Companys registration statement filed 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
Don Duffy/Dara Dierks
866-254-4811 or 513-900-4811
IR@vantiv.com
Schedule 1
Vantiv, Inc.
Consolidated Statements of Income (Loss)
(in thousands, except share data)
(Unaudited)
|
|
Three months ended |
|
|
| ||||
|
|
March 31, |
|
March 31, |
|
|
| ||
|
|
2012 |
|
2011 |
|
% Change |
| ||
|
|
|
|
|
|
|
| ||
Revenue |
|
$ |
432,789 |
|
$ |
371,446 |
|
17 |
% |
Network fees and other costs |
|
200,208 |
|
182,216 |
|
10 |
% | ||
Net revenue |
|
232,581 |
|
189,230 |
|
23 |
% | ||
Sales and marketing |
|
72,757 |
|
56,219 |
|
29 |
% | ||
Other operating costs |
|
39,009 |
|
37,740 |
|
3 |
% | ||
General and administrative |
|
28,597 |
|
21,383 |
|
34 |
% | ||
Depreciation and amortization |
|
38,895 |
|
36,700 |
|
6 |
% | ||
Income from operations |
|
53,323 |
|
37,188 |
|
43 |
% | ||
Interest expensenet |
|
(24,450 |
) |
(30,621 |
) |
-20 |
% | ||
Non-operating expenses(1) |
|
(91,836 |
) |
|
|
NM |
| ||
Income (loss) before applicable income taxes |
|
(62,963 |
) |
6,567 |
|
NM |
| ||
Income tax expense (benefit) |
|
(20,035 |
) |
1,868 |
|
NM |
| ||
Net income (loss) |
|
(42,928 |
) |
4,699 |
|
NM |
| ||
Less: Net (income) loss attributable to noncontrolling interests |
|
24,564 |
|
(1,200 |
) |
NM |
| ||
Net income (loss) attributable to Vantiv, Inc. |
|
$ |
(18,364 |
) |
$ |
3,499 |
|
NM |
|
|
|
|
|
|
|
|
| ||
Net income (loss) per share of Class A common stock attributable to Vantiv, Inc.: |
|
|
|
|
|
|
| ||
Basic |
|
$ |
(0.20 |
) |
$ |
0.04 |
|
|
|
Diluted |
|
$ |
(0.38 |
) |
$ |
0.04 |
|
|
|
Shares used in computing net income (loss) per share of Class A common stock: |
|
|
|
|
|
|
| ||
Basic |
|
93,018,506 |
|
89,515,617 |
|
|
| ||
Diluted |
|
102,377,931 |
|
89,515,617 |
|
|
| ||
|
|
|
|
|
|
|
| ||
Non Financial Data: |
|
|
|
|
|
|
| ||
Transactions (in millions) |
|
3,367 |
|
3,002 |
|
12 |
% |
(1) Non-operating expenses primarily consist of charges incurred with the refinancing of our debt and the termination of our interest rate swaps in March 2012.
Schedule 2
Vantiv, Inc.
Cash Net Income (Non-GAAP)
(in thousands, except share data)
(Unaudited)
See schedule 6 for a reconciliation of GAAP net income (loss) to cash net income.
|
|
Three months ended |
|
|
| ||||
|
|
March 31, |
|
March 31, |
|
|
| ||
|
|
2012 |
|
2011 |
|
% Change |
| ||
|
|
|
|
|
|
|
| ||
Revenue |
|
$ |
432,789 |
|
$ |
371,446 |
|
17 |
% |
Network fees and other costs |
|
200,208 |
|
182,216 |
|
10 |
% | ||
Net revenue |
|
232,581 |
|
189,230 |
|
23 |
% | ||
Sales and marketing |
|
72,757 |
|
56,219 |
|
29 |
% | ||
Other operating costs |
|
38,557 |
|
31,500 |
|
22 |
% | ||
General and administrative |
|
18,327 |
|
13,990 |
|
31 |
% | ||
Adjusted EBITDA(1) |
|
102,940 |
|
87,521 |
|
18 |
% | ||
Depreciation and amortization |
|
9,606 |
|
8,093 |
|
19 |
% | ||
Income from operations |
|
93,334 |
|
79,428 |
|
18 |
% | ||
Interest expensenet |
|
(24,450 |
) |
(26,625 |
) |
-8 |
% | ||
Income before applicable income taxes |
|
68,884 |
|
52,803 |
|
30 |
% | ||
Income tax expense (at an effective tax rate of 38.5%) |
|
26,520 |
|
20,330 |
|
30 |
% | ||
Cash net income(2) |
|
$ |
42,364 |
|
$ |
32,473 |
|
30 |
% |
|
|
|
|
|
|
|
| ||
Adjusted cash net income per share |
|
$ |
0.20 |
|
|
|
|
| |
|
|
|
|
|
|
|
| ||
Adjusted shares outstanding(3) |
|
212,304,534 |
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
Non Financial Data: |
|
|
|
|
|
|
| ||
Transactions (in millions) |
|
3,367 |
|
3,002 |
|
12 |
% |
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 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, primarily customer related intangible assets; (b) non-operating expenses primarily associated with the refinancing of our debt and the termination of our interest rate swaps in March 2012; (c) adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock. For purposes of providing better comparability, we also make adjustments for Q1 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 Companys level of debt and applicable terms as of December 31, 2011 was outstanding on January 1, 2011.
(1) See schedule 7 for a reconciliation of GAAP income from operations to adjusted EBITDA.
(2) Cash net income assumes the conversion of non-controlling interests into shares of Class A common stock.
(3) Shares are pro forma assuming the equity structure in place March 31, 2012, was in place January 1, 2012. Shares used in computing GAAP diluted net income (loss) per share were 102,377,931 .
Adjusted shares for the three months ended March 31, 2012 |
|
|
|
Shares used in computing adjusted cash net income per share: |
|
|
|
Class A common stock(a) |
|
120,641,114 |
|
Class B units of Vantiv Holding(b) |
|
85,913,505 |
|
Restricted stock(a)(c) |
|
1,961,837 |
|
Warrant(d) |
|
3,788,078 |
|
Adjusted shares outstanding |
|
212,304,534 |
|
(a) Shares are weighted as if the equity structure in place March 31, 2012, was in place January 1, 2012.
(b) Class B units in Vantiv Holding are based on the if-converted method and represent fully diluted ownership in Vantiv, Inc. weighted as if the equity structure in place March 31, 2012, was in place January 1, 2012.
(c) Restricted Class A common stock issued under the treasury method based on the closing share price of VNTV as of March 30, 2012. These are excluded for GAAP purposes as they are anti-dilutive.
(d) Class A common stock issued upon exercise of the Warrant under the treasury method based on the closing share price of VNTV as of March 30, 2012. These are excluded for GAAP purposes as they are anti-dilutive.
Schedule 3
Vantiv, Inc.
Segment Information
(in thousands)
(Unaudited)
|
|
Three months ended March 31, 2012 |
| ||||||||||
|
|
|
|
Financial Institution |
|
General |
|
|
| ||||
|
|
Merchant Services |
|
Services |
|
Corporate/Other |
|
Total |
| ||||
Total revenue |
|
$ |
322,978 |
|
$ |
109,811 |
|
$ |
|
|
$ |
432,789 |
|
Network fees and other costs |
|
165,526 |
|
34,682 |
|
|
|
200,208 |
| ||||
Net revenue |
|
157,452 |
|
75,129 |
|
|
|
232,581 |
| ||||
Sales and marketing |
|
66,699 |
|
6,058 |
|
|
|
72,757 |
| ||||
Segment profit |
|
$ |
90,753 |
|
$ |
69,071 |
|
$ |
|
|
$ |
159,824 |
|
|
|
|
|
|
|
|
|
|
| ||||
Non-financial data: |
|
|
|
|
|
|
|
|
| ||||
Transactions (in millions) |
|
2,544 |
|
823 |
|
|
|
3,367 |
| ||||
Net revenue per transaction |
|
$ |
0.0619 |
|
$ |
0.0913 |
|
|
|
$ |
0.0691 |
|
|
|
Three months ended March 31, 2011 |
| ||||||||||
|
|
|
|
Financial Institution |
|
General |
|
|
| ||||
|
|
Merchant Services |
|
Services |
|
Corporate/Other |
|
Total |
| ||||
Total revenue |
|
$ |
262,686 |
|
$ |
108,760 |
|
$ |
|
|
$ |
371,446 |
|
Network fees and other costs |
|
146,911 |
|
35,305 |
|
|
|
182,216 |
| ||||
Net revenue |
|
115,775 |
|
73,455 |
|
|
|
189,230 |
| ||||
Sales and marketing |
|
48,887 |
|
6,710 |
|
622 |
|
56,219 |
| ||||
Segment profit |
|
$ |
66,888 |
|
$ |
66,745 |
|
$ |
(622 |
) |
$ |
133,011 |
|
|
|
|
|
|
|
|
|
|
| ||||
Non-financial data: |
|
|
|
|
|
|
|
|
| ||||
Transactions (in millions) |
|
2,184 |
|
818 |
|
|
|
3,002 |
| ||||
Net revenue per transaction |
|
$ |
0.0530 |
|
$ |
0.0898 |
|
|
|
$ |
0.0630 |
|
Schedule 4
Vantiv, Inc.
Condensed Consolidated Statements of Financial Position
(in thousands, except share data)
|
|
March 31, |
|
December 31, |
| ||
|
|
2012 |
|
2011 |
| ||
|
|
(Unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
156,362 |
|
$ |
370,549 |
|
Accounts receivable net |
|
352,033 |
|
368,658 |
| ||
Related party receivable |
|
5,002 |
|
4,361 |
| ||
Settlement assets |
|
71,811 |
|
46,840 |
| ||
Prepaid expenses |
|
11,270 |
|
8,642 |
| ||
Other |
|
46,734 |
|
20,947 |
| ||
Total current assets |
|
643,212 |
|
819,997 |
| ||
|
|
|
|
|
| ||
Customer incentives |
|
17,681 |
|
17,493 |
| ||
Property and equipment net |
|
160,272 |
|
152,310 |
| ||
Intangible assets net |
|
889,389 |
|
916,198 |
| ||
Goodwill |
|
1,532,374 |
|
1,532,374 |
| ||
Deferred taxes |
|
12,292 |
|
4,292 |
| ||
Other assets |
|
28,540 |
|
47,046 |
| ||
Total assets |
|
$ |
3,283,760 |
|
$ |
3,489,710 |
|
|
|
|
|
|
| ||
Liabilities and equity |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable and accrued expenses |
|
$ |
172,107 |
|
$ |
193,706 |
|
Related party payable |
|
950 |
|
3,814 |
| ||
Settlement obligations |
|
163,851 |
|
208,669 |
| ||
Current portion of note payable |
|
52,500 |
|
16,211 |
| ||
Deferred income |
|
9,402 |
|
7,313 |
| ||
Current maturities of capital lease obligations |
|
4,256 |
|
4,607 |
| ||
Other |
|
5,759 |
|
6,400 |
| ||
Total current liabilities |
|
408,825 |
|
440,720 |
| ||
Long-term liabilities: |
|
|
|
|
| ||
Note payable |
|
1,202,217 |
|
1,738,498 |
| ||
Tax receivable agreement obligations |
|
333,000 |
|
|
| ||
Capital lease obligations |
|
11,152 |
|
12,322 |
| ||
Deferred taxes |
|
9,263 |
|
9,263 |
| ||
Other |
|
2,006 |
|
33,187 |
| ||
Total long-term liabilities |
|
1,557,638 |
|
1,793,270 |
| ||
Total liabilities |
|
1,966,463 |
|
2,233,990 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
Equity: |
|
|
|
|
| ||
Total equity(1) |
|
1,317,297 |
|
1,255,720 |
| ||
Total liabilities and equity |
|
$ |
3,283,760 |
|
$ |
3,489,710 |
|
(1) Includes equity attributable to non-controlling interests.
Schedule 5
Vantiv, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
|
|
Three months ended |
| ||||
|
|
March 31, |
|
March 31, |
| ||
|
|
2012 |
|
2011 |
| ||
Operating Activities: |
|
|
|
|
| ||
Net (loss) income |
|
$ |
(42,928 |
) |
$ |
4,699 |
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |
|
|
|
|
| ||
Depreciation and amortization expense |
|
38,895 |
|
36,700 |
| ||
Amortization of customer incentives |
|
1,234 |
|
684 |
| ||
Amortization and write-off of debt issuance costs |
|
56,352 |
|
2,575 |
| ||
Share-based compensation expense |
|
8,663 |
|
652 |
| ||
Change in operating assets and liabilities: |
|
|
|
|
| ||
Decrease in accounts receivable and related party receivable |
|
15,984 |
|
25,611 |
| ||
Decrease in net settlement assets and obligations |
|
(69,789 |
) |
(42,852 |
) | ||
Increase in customer incentives |
|
(1,422 |
) |
(3,045 |
) | ||
Increase in prepaid and other assets |
|
(26,764 |
) |
(7,231 |
) | ||
Decrease in accounts payable and accrued expenses |
|
(35,099 |
) |
(13,505 |
) | ||
Decrease in payable to related party |
|
(2,864 |
) |
(2,798 |
) | ||
Increase in other liabilities |
|
1,719 |
|
495 |
| ||
Net cash (used in) provided by operating activities |
|
(56,019 |
) |
1,985 |
| ||
|
|
|
|
|
| ||
Investing Activities: |
|
|
|
|
| ||
Purchases of property and equipment |
|
(10,269 |
) |
(7,915 |
) | ||
Residual buyouts |
|
(2,829 |
) |
(512 |
) | ||
Purchase of investments |
|
|
|
(3,300 |
) | ||
Net cash used in investing activities |
|
(13,098 |
) |
(11,727 |
) | ||
|
|
|
|
|
| ||
Financing Activities: |
|
|
|
|
| ||
Proceeds from initial public offering, net of offering costs |
|
460,913 |
|
|
| ||
Proceeds from follow-on offering, net of offering costs |
|
33,512 |
|
|
| ||
Proceeds from issuance of long-term debt |
|
1,248,750 |
|
|
| ||
Repayment of debt and capital lease obligations |
|
(1,761,784 |
) |
(3,972 |
) | ||
Payment of debt issuance costs |
|
(28,949 |
) |
|
| ||
Purchase of Class B units in Vantiv Holding from Fifth Third |
|
(33,512 |
) |
|
| ||
Repurchase of Class A common stock (to satisfy tax withholding obligations) |
|
(11,929 |
) |
|
| ||
Tax benefit from employee share-based compensation |
|
10,244 |
|
|
| ||
Distribution to funds managed by Advent International Corporation |
|
(40,086 |
) |
|
| ||
Distribution to non-controlling interests |
|
(22,229 |
) |
(28 |
) | ||
Net cash used in financing activities |
|
(145,070 |
) |
(4,000 |
) | ||
|
|
|
|
|
| ||
Net decrease in cash and cash equivalents |
|
(214,187 |
) |
(13,742 |
) | ||
Cash and cash equivalents Beginning of period |
|
370,549 |
|
236,512 |
| ||
Cash and cash equivalents End of period |
|
$ |
156,362 |
|
$ |
222,770 |
|
|
|
|
|
|
| ||
Cash Payments: |
|
|
|
|
| ||
Interest |
|
$ |
32,559 |
|
$ |
26,927 |
|
Taxes |
|
773 |
|
667 |
| ||
Noncash Items: |
|
|
|
|
| ||
Assets acquired under capital lease obligations |
|
$ |
|
|
$ |
12,234 |
|
Schedule 6
Vantiv, Inc.
Reconciliation of GAAP Net Income (Loss) to Cash Net Income
(in thousands)
(Unaudited)
|
|
Three months ended March 31, 2012 |
| ||||||||||||||||
|
|
|
|
Transition, Acquisition |
|
Share-Based |
|
Comparability |
|
Other |
|
|
| ||||||
|
|
GAAP |
|
and Integration(1) |
|
Compensation |
|
Adjustments |
|
Adjustments |
|
Cash Net Income |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenue |
|
$ |
432,789 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
432,789 |
|
Network fees and other costs |
|
200,208 |
|
|
|
|
|
|
|
|
|
200,208 |
| ||||||
Net revenue |
|
232,581 |
|
|
|
|
|
|
|
|
|
232,581 |
| ||||||
Sales and marketing |
|
72,757 |
|
|
|
|
|
|
|
|
|
72,757 |
| ||||||
Other operating costs |
|
39,009 |
|
(452 |
) |
|
|
|
|
|
|
38,557 |
| ||||||
General and administrative |
|
28,597 |
|
(1,607 |
) |
(8,663 |
) |
|
|
|
|
18,327 |
| ||||||
Depreciation and amortization |
|
38,895 |
|
|
|
|
|
|
|
(29,289 |
)(2) |
9,606 |
| ||||||
Income from operations |
|
53,323 |
|
2,059 |
|
8,663 |
|
|
|
29,289 |
|
93,334 |
| ||||||
Interest expensenet |
|
(24,450 |
) |
|
|
|
|
|
|
|
|
(24,450 |
) | ||||||
Non-operating expenses |
|
(91,836 |
) |
|
|
|
|
|
|
91,836 |
(3) |
|
| ||||||
Income (loss) before applicable income taxes |
|
(62,963 |
) |
2,059 |
|
8,663 |
|
|
|
121,125 |
|
68,884 |
| ||||||
Income tax expense (benefit) |
|
(20,035 |
) |
793 |
|
3,335 |
|
|
|
42,427 |
(4) |
26,520 |
| ||||||
Net income (loss)(5) |
|
$ |
(42,928 |
) |
$ |
1,266 |
|
$ |
5,328 |
|
$ |
|
|
$ |
78,698 |
|
$ |
42,364 |
|
|
|
Three months ended March 31, 2011 |
| ||||||||||||||||
|
|
|
|
Transition, Acquisition |
|
Share-Based |
|
Comparability |
|
Other |
|
|
| ||||||
|
|
GAAP |
|
and Integration(1) |
|
Compensation |
|
Adjustments |
|
Adjustments |
|
Cash Net Income |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenue |
|
$ |
371,446 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
371,446 |
|
Network fees and other costs |
|
182,216 |
|
|
|
|
|
|
|
|
|
182,216 |
| ||||||
Net revenue |
|
189,230 |
|
|
|
|
|
|
|
|
|
189,230 |
| ||||||
Sales and marketing |
|
56,219 |
|
|
|
|
|
|
|
|
|
56,219 |
| ||||||
Other operating costs |
|
37,740 |
|
(6,240 |
) |
|
|
|
|
|
|
31,500 |
| ||||||
General and administrative |
|
21,383 |
|
(6,741 |
) |
(652 |
) |
|
|
|
|
13,990 |
| ||||||
Depreciation and amortization |
|
36,700 |
|
|
|
|
|
2,597 |
(6) |
(31,204 |
)(2) |
8,093 |
| ||||||
Income (loss) from operations |
|
37,188 |
|
12,981 |
|
652 |
|
(2,597 |
) |
31,204 |
|
79,428 |
| ||||||
Interest expensenet |
|
(30,621 |
) |
|
|
|
|
3,996 |
(7) |
|
|
(26,625 |
) | ||||||
Non-operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income before applicable income taxes |
|
6,567 |
|
12,981 |
|
652 |
|
1,399 |
|
31,204 |
|
52,803 |
| ||||||
Income tax expense |
|
1,868 |
|
4,998 |
|
251 |
|
539 |
|
12,674 |
(4) |
20,330 |
| ||||||
Net income(5) |
|
$ |
4,699 |
|
$ |
7,983 |
|
$ |
401 |
|
$ |
860 |
|
$ |
18,530 |
|
$ |
32,473 |
|
Non-GAAP Financial Measures
This schedule presents net revenue and cash net income. These are important financial 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 costs associated with our separation from Fifth Third Bank and acquisition and integration costs in connection with our acquisitions in 2010.
(2) Represents amortization of intangible assets acquired in business combinations, primarily customer related intangible assets.
(3) Represents non-operating expenses primarily associated with the refinancing of our debt and the termination of our interest rate swaps in March 2012.
(4) Represents adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock.
(5) Net income (loss) assumes the conversion of non-controlling interests into shares of Class A common stock.
(6) 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.
(7) Represents adjustment to reflect what our 2011 interest expense would have been if the Companys level of debt and applicable terms as of December 31, 2011 was outstanding on January 1, 2011.
Schedule 7
Vantiv, Inc.
Reconciliation of GAAP Income from Operations to Adjusted EBITDA
(in thousands)
(Unaudited)
|
|
Three months ended |
|
|
| ||||
|
|
March 31, |
|
March 31, |
|
|
| ||
|
|
2012 |
|
2011 |
|
% Change |
| ||
|
|
|
|
|
|
|
| ||
Income from operations |
|
$ |
53,323 |
|
$ |
37,188 |
|
43 |
% |
Depreciation and amortization |
|
38,895 |
|
36,700 |
|
6 |
% | ||
EBITDA |
|
92,218 |
|
73,888 |
|
25 |
% | ||
Transition, acquisition and integration costs(1) |
|
2,059 |
|
12,981 |
|
-84 |
% | ||
Share-based compensation |
|
8,663 |
|
652 |
|
NM |
| ||
Adjusted EBITDA |
|
$ |
102,940 |
|
$ |
87,521 |
|
18 |
% |
Non-GAAP Financial Measures
This schedule presents EBITDA and adjusted EBITDA. These are important financial measures for the company, but are not financial measures as defined by GAAP.
These financial measures should not be considered as an alternative to GAAP income from operations, and 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 in 2010.