Wright Express Corporation (



JP Morgan Ultimate Services Investor Conference Call Transcript

November 9, 2011 1:15 PM ET


Tien-Tsin Huang – Senior Research Analyst JP Morgan IT Services

Steve Elder – Senior Vice President and Chief Financial Officer


Tien-Tsin Huang

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Thanks everyone for joining us after lunch. My name is Tien-Tsin Huang, I cover the computer services and IT consulting group at JP Morgan. And so we had the prepaid guys in the morning we had the payroll folks after that and now we are going to shift gears and close into the merchant and the point of sale et cetera. So we are going to kick it off with Wright Express with the afternoon session here. And from Wright Express we have got Steve Elder the CFO, we’ve got Nicky Thomas as well from Investor Relations in case you haven’t met.

In terms of format Steve I think we are just going to have Steve start out with some prepared remarks sort of the state of the union, I’ll ask some questions as well then well for sure we will open it up to the audience if that’s okay.

Steve Elder


Tien-Tsin Huang

Let’s do it.

Steve Elder

It’s not going to be the state of the union address.

Tien-Tsin Huang

Yeah state of the union.

Steve Elder

Wright Express is well first of all pleased to be here but a unique play in the payment processing phase. So we are recognized as a leader in the fee payment processing industry in the United States. We’ve got more than 5 million vehicles that we service today in the U.S. and about little more than 6 million vehicles worldwide.

In the U.S., we are recognized for our superior products and superior service. We have the largest market share about 12% of the overall market or about a third of the penetrated marketplace. It’s a very strong profitable business model we have very predictable and recurring revenue streams as fleets of vehicles buy their fuel and it’s also a very high margin business as well, which is very nice.

Going forward, we’ve got a growth strategy that’s got many prongs to it that hopefully we will touch on a lot of them today. But we just got a quick marketplace here in the U.S. expecting to be able to grow that between 5% and 7% annually and in terms of the transaction. And then when you pull out the impacts of fuel prices out on the business 8% to 10% revenue growth annually.

The core fleet market is made up or really of service kind of vehicles well think about a pickup truck or a van kind of fleet that either is going out to provide a service or running a delivery as our primary customer.

We also operate in our other payment solution segment, which is primarily a MasterCard branded corporate card. We are an issuing bank for that product and we issue corporate purchase cards, we also have some special use products that we call are single use account product or also known as a virtual card. We are a very large player in the online travel space for hotel rooms in that market with that single use products.

Also just in terms of kind of like growth areas that single use product has been tremendous over the last several years really the 10 year growth rate and the purchase volume of more than 35%, 36%. And more recently it’s been in the 60%, 70%, 80% range this year due to a large new account that we brought on.

We are also about a year ago a little over a year ago we purchased a business in Australia, that was very similar to us in the fleet space and we are using that as kind of a jumping off point for the rest of Asia. We’ve identified a hand full of countries that we are looking at expanding into further. Nothing terribly concrete at the moment, but we’ve at least identified the areas that we want to move into.

We also more recently at the end of March purchased a very small company in Tampa, called rapid! PayCard, which is a payroll card provider. So kind of maybe (Inaudible) a little bit of what you heard this morning. But we are looking at the prepaid space and saying where can Wright Express bring it to assets and how can we add value? And what we came back to was the payroll space because of the customer base that we have installed already with our fluid space so a lot of overlap between the types of businesses that are interested in offering a payroll card to our distinct customer base that’s another area that we expect to grow in the future.

With that I will leave that as the overview and then let you go with questions.

Tien-Tsin Huang

Yeah, I think it’s a perfect overview. So maybe we just start you mentioned sort of 5% to 7% you guys have been growing transactions in the high single digits. Same-store has been running sort of in the flattish range. So my question I guess is when do some of these new wins roll off? What is the pipeline of new business coming on as well we can help think about the next several quarters as the macro plays out against some of your wins?

Steve Elder

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