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Fleetmatics Announces Record Third Quarter 2013 Financial Results

Fleetmatics Group PLC (NYSE: FLTX), a leading global provider of fleet management solutions for commercial fleet vehicles delivered as software-as-a-service (SaaS), today announced financial results for its third quarter ended September 30, 2013.

“Our ability to exceed the high end of our expectations across all key operating metrics during the third quarter was driven by the ongoing strong demand for our comprehensive fleet management solution,” stated Jim Travers, Chairman and Chief Executive Officer of Fleetmatics. “The combination of growth in new customers, increasing sales to existing customers and low churn lead to the record results during the quarter. Looking forward, we continue to be very excited about the Company’s future which is supported by our continued execution and increased financial guidance for 2013.”

Third Quarter 2013 Financial Highlights

  • Revenue: Total revenue for the third quarter was $46.3 million, an increase of 39.4% compared to $33.2 million for the third quarter of 2012.
  • Gross Profit: GAAP gross profit for the third quarter was $34.8 million, compared to $24.3 million for the third quarter of 2012. GAAP gross margin was 75.2% compared to 73.1% for the same period in 2012. Non-GAAP gross profit, which excludes share-based compensation and amortization of intangible assets was $35.2 million for the quarter compared to $24.4 million in the year ago period. Non-GAAP gross margin was 75.9% for the third quarter of 2013, compared to 73.5% during the same period last year.
  • Operating Income: GAAP operating income for the third quarter was $6.9 million, compared to $2.5 million for the third quarter of 2012. Non-GAAP operating income, which excludes share-based compensation, amortization of intangible assets and other items as defined in “Non-GAAP Financial Measures”, was $11.4 million, compared to $7.5 million for the third quarter of 2012.
  • Net Income: GAAP net income for the third quarter was $5.6 million, compared to $1.2 million for the same period last year. GAAP net income per share attributable to ordinary shareholders for the third quarter was $0.15 based on 37.6 million weighted-average diluted shares outstanding, compared to $0.04, based on 2.8 million weighted-average diluted shares outstanding, for the same period last year.Non-GAAP adjusted earnings, which excludes share-based compensation, amortization of intangible assets and other items as defined in “Non-GAAP Financial Measures”, was $9.3 million for the third quarter, compared to $5.6 million for the third quarter of 2012. Non-GAAP adjusted earnings per share for the third quarter was $0.25 based on 37.6 million weighted-average diluted shares outstanding compared to $0.19 per share based on 29.5 million pro forma weighted-average diluted shares outstanding for the same period last year.
  • Adjusted EBITDA: Adjusted EBITDA for the third quarter was $15.1 million, an increase of 49.5% compared to $10.1 million for the third quarter of 2012. Adjusted EBITDA margin was 32.5% for the third quarter of 2013, compared to a 30.3% margin for the same period last year. Adjusted EBITDA is defined as net income (loss) plus provision for income taxes; interest (income) expense, net; foreign currency transaction (gain) loss, net; depreciation and amortization of property and equipment; amortization of capitalized in-vehicle devices owned by customers; amortization of intangible assets; share-based compensation; and other items as defined in “Non-GAAP Financial Measures.”

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

  • Balance Sheet: As of September 30, 2013, Fleetmatics had cash of $139.8 million, an increase of $34.6 million since June 30, 2013. Fleetmatics completed a follow-on public offering on July 30, 2013, which generated net proceeds of approximately $32.1 million for the Company.During the third quarter of 2013, the Company generated $16.6 million in net cash from operations and invested $8.1 million in capital expenditures, resulting in free cash flow of $8.5 million. During the third quarter of 2012, the Company generated $0.5 million in net cash from operations and invested $6.5 million in capital expenditures, resulting in free cash flow of negative $6.0 million.

Third Quarter 2013 and Recent Operating Highlights

  • Fleetmatics ended the third quarter of 2013 with over 417,000 active vehicles under subscription, up 37.6% compared to over 303,000 during the third quarter of 2012.
  • Quarterly net churn during the third quarter of 2013 was 1.1% compared to 2.1% for the third quarter of 2012. We calculate our net churn for a period by dividing (i) the number of vehicles under subscription added from existing customers less vehicles under subscription lost from existing customers over that period by (ii) the total vehicles under subscription at the beginning of that period. A positive net churn in each period means we added more vehicles from existing customers than we lost from those customers during the particular period. Gross churn for the period was 1.9%, compared to 2.2% during the third quarter of 2012.

Financial Outlook

As of November 6, 2013, Fleetmatics is providing guidance for the fourth quarter of 2013 and full year 2013 as follows:

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