Vantiv, Inc. (NYSE:VNTV) Files An 8-K Reports Third Quarter 2016 Results

Vantiv, Inc. (NYSE:VNTV) today announced financial results for the third quarter ended September 30, 2016. Total revenue increased 12% to $914 million in the third quarter as compared to $816 million in the prior year period. Net revenue increased 14% to $491 million as compared to $430 million in the prior year period, reflecting strong transaction growth. On a GAAP basis, net income per diluted share attributable to Vantiv, Inc. increased 52% to $0.41 as compared to $0.27 in the prior year period. Pro forma adjusted net income per share increased 20% to $0.71 as compared to $0.59 in the prior year period. (See Schedule 2 for pro forma adjusted net income per share.)

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“Our business continues to generate high rates of organic growth,” said Charles Drucker, president and chief executive officer at Vantiv. “Our ability to deliver superior financial results by consistently winning market share speaks to the strength of our people and their consistent focus on execution.”

Merchant Services

Merchant Services net revenue increased 17% to $404 million in the third quarter as compared to $345 million in the prior year period, primarily due to a 10% increase in transactions and a 6% increase in net revenue per transaction. Sales and marketing expenses increased 17% to $148 million in the third quarter as compared to $126 million in the prior year period, primarily due to new sales growth in partner channels.

Financial Institution Services

Financial Institution Services net revenue increased 1% to $86.2 million in the third quarter as compared to $85.6 million in the prior year period. Net revenue growth was impacted by compression from the Fifth Third Bank contract renewal, partially offset by contribution from EMV card reissuance and fraud related services. Sales and marketing expenses decreased 8% to $5.6 million in the third quarter as compared to $6.1 million in the prior year period.

Operating Expenses

Other operating costs increased 8% on a GAAP basis to $72 million in the third quarter as compared to $67 million in the prior year period. When excluding transition, acquisition and integration costs, Other operating costs increased 15% on a pro forma basis to $70 million as compared to $61 million in the prior year period.

General and administrative expenses decreased 2% on a GAAP basis to $40.7 million in the third quarter as compared to $41.5 million in the prior year period. When excluding transition, acquisition and integration costs as well as share-based compensation, General and administrative expenses increased 7% on a pro forma basis to $30 million as compared to $28 million in the prior year period.

Adjusted EBITDA

Adjusted EBITDA increased 14% to $237 million or 48.3% of net revenue in the third quarter as compared to $208 million or 48.4% of net revenue in the prior year period.

Depreciation and Amortization

Depreciation and amortization expense decreased on a GAAP basis to $66 million in the third quarter as compared to $71 million in the prior year period. Excluding amortization of intangible assets related to acquisitions, depreciation and amortization expense decreased on a pro forma basis to $18 million as compared to $22 million in the prior year period.

Share Repurchase Authorization Increased to $300 Million

Vantiv’s Board of Directors authorized the repurchase of additional shares of Vantiv Class A common stock  with an aggregate purchase price of up to $250 million, providing the company with a total of approximately $300 million available for share repurchases.

Debt Refinancing

Total debt was increased by $250 million in connection with the refinancing of credit facilities which resulted in a reduction of interest rates. Following the refinancing, outstanding debt consists of a $2.5 billion Term A loan, maturing in October 2021, and a $765 million Term B loan, maturing in October 2023. The financing also includes a revolving credit facility of $650 million.

Full-Year and Fourth Quarter Financial Outlook

Based on continued strong performance, the company is increasing full-year 2016 expectations. Net revenue for the full-year 2016 is expected to be $1,890 to $1,900 million, representing an increase of 12% to 13% above the prior year. On a GAAP basis, net income per diluted share attributable to Vantiv, Inc. is expected to be $1.43 to $1.45 for the full-year 2016. Pro forma adjusted net income per share is expected to be $2.67 to $2.69 for the full-year 2016.

For the fourth quarter of 2016, net revenue is expected to be $488 to $498 million, representing an increase of 8% to 10% above the prior year period. On a GAAP basis, net income per diluted share attributable to Vantiv, Inc. is expected to be$0.39 to $0.41 for the fourth quarter of 2016. Pro forma adjusted net income per share is expected to be $0.70 to $0.72 for the fourth quarter of 2016.

Earnings Conference Call and Audio Webcast

The company will host a conference call to discuss the third quarter financial results today at 8:00 a.m. ET. The conference call can be accessed live over the phone by dialing (877) 852-6581, or for international callers (719) 325-4850, and referencing conference code 9805706. 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 9805706. The replay will be available through November 9, 2016. 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

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 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. Visit us at the new www.vantiv.com, or follow us on Twitter, Facebook, LinkedIn, Google+ and YouTube.

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