SOUTH PORTLAND, Maine--(BUSINESS WIRE)--WEX Inc. (NYSE:WEX), a leading provider of corporate payment solutions, today reported financial results for the three months and year ended December 31, 2016.

Fourth Quarter and Full Year 2016 Financial Results

Total revenue for the fourth quarter of 2016 increased 37% year-over-year at $290.8 million as compared with $212.6 million for the fourth quarter of 2015. Net earnings attributable to shareholders on a GAAP basis were $5.3 million, or $0.12 per diluted share, compared with $20.9 million, or $0.54 per diluted share, for the fourth quarter of 2015.

The Company's adjusted net income attributable to shareholders, which is a non-GAAP measure, for the fourth quarter of 2016 increased 22% to $55.2 million from $45.2 million, for the same period a year ago. On a per-share basis, adjusted net income for the fourth quarter of 2016 was $1.28 compared to $1.16 for the same period a year ago. In addition to the items that have historically been excluded from adjusted net income, this quarter includes two additional items. First, the Company has excluded a $12.9 million mark to market gain on interest rate swaps. Second, the Company excluded the impact of a vendor settlement of $15.5 million related to a payment in exchange for the release of potential claims related to insourcing certain technology. See Exhibit 1 for a full reconciliation of adjusted net income attributable to shareholders and adjusted net income attributable to shareholders per diluted share to the comparable GAAP measures.

For the full year 2016, revenue increased 19% to $1.018 billion from $854.6 million in 2015. Net earnings attributable to common shareholders on a GAAP basis were $1.48 per diluted share in 2016 compared to $2.62 per diluted share in 2015. On a non-GAAP basis, adjusted net income attributable to shareholders decreased 6% to $4.62 per diluted share from $4.92 per diluted share in 2015. As noted in Exhibit 2, the impact of lower fuel prices and smaller relative hedging gains in 2016 created a swing in adjusted net income of $49.3 million after taxes which is approximately $1.20 per diluted share.

“We are pleased by our strong fourth quarter and fiscal year performance, with favorable results reported across all three of our core segments,” said Melissa Smith, WEX's president and chief executive officer. “This outperformance reflects the significant progress we have made in executing on our strategic priorities and accelerating growth across our core verticals. Our ability to drive results, regardless of the operating environment, highlights the strength of our brand and the diversity of our offerings.”

Smith continued, “Over the past year we have grown both organically and through strategic investments. Our business is more global, diverse and innovative than ever before, and our capabilities continue to expand and position ourselves to compete in the global marketplace. Our performance in both the fourth quarter and fiscal year has provided us with a very solid foundation as we look forward to the company’s continued success.”

Fourth Quarter 2016 Performance Metrics

Where applicable, the performance metrics listed below include Electronic Funds Source LLC, which was acquired in July 2016:

• Average number of vehicles serviced was approximately 10.5 million, an increase of 10% from the fourth quarter of 2015;
• Total fuel transactions processed increased 24% from the fourth quarter of 2015 to 123.1 million. Payment processing transactions increased 18% to 99.7 million;
• U.S. retail fuel price increased less than 1% to $2.30 per gallon from $2.29 per gallon in the fourth quarter of 2015;
• Average expenditure per payment processing transaction increased 13% from the fourth quarter of 2015 to $66.95; and
• Travel and Corporate Solutions purchase volume grew 39% to $6.4 billion, from $4.6 billion for the fourth quarter of 2015.

Financial Guidance and Assumptions

The Company provides revenue guidance on a GAAP basis and earnings guidance on a non-GAAP basis, due to the uncertainty and indeterminate amount of certain elements that are included in reported GAAP earnings.

• For the first quarter of 2017, WEX expects revenue in the range of $275 million to $285 million and adjusted net income in the range of $50 million to $53 million, or $1.16 to $1.24 per diluted share.
• For the full year 2017, the Company expects revenue in the range of $1.15 billion to $1.19 billion and adjusted net income to be in the range of $220 million to $237 million, or $5.10 to $5.50 per diluted share.

“All of our segments met or exceeded our expectations this quarter and reflect not only organic growth but also our ability to integrate strategic investments. We are encouraged by the foundation we have built and believe we are well positioned to capitalize on additional growth opportunities in 2017 and beyond,” said Roberto Simon, WEX's chief financial officer.

First quarter and full year 2017 guidance is based on an assumed average U.S. retail fuel price of $2.43 and $2.44 per gallon, respectively. The fuel prices referenced above are based on the applicable NYMEX futures price. The Company's guidance also assumes that fleet credit loss for first quarter and full year will be in the range of 10 and 15 basis points. Our guidance assumes approximately 43 million shares outstanding for the year.

The Company's adjusted net income guidance, which is a non-GAAP measure, excludes unrealized gains and losses on derivative instruments, net foreign currency remeasurement gains and losses and related hedges, acquisition and divestiture related items, stock-based compensation, restructuring and other costs, a vendor settlement, debt restructuring and issuance cost amortization, non-cash adjustments related to tax receivable agreement, regulatory reserves, similar adjustments attributed to our non-controlling interest and certain tax related items.

Additional Information

Management uses the non-GAAP measures presented within this news release to evaluate the Company's performance on a comparable basis. Management believes that investors may find these measures useful for the same purposes, but cautions that they should not be considered a substitute for, or superior to, disclosure in accordance with GAAP.

WEX historically used fuel-price derivative instruments to mitigate financial risks associated with the variability in fuel prices in North America. Starting with the second quarter of 2016, there are no longer any fuel price related derivatives outstanding.

To provide investors with additional insight into its operational performance, WEX has included in this news release in Exhibit 2, a table illustrating the impact of foreign currency translations and fuel prices for each of our operating segments for the three and twelve months ended December 31, 2016 and 2015, and in Exhibit 3, a table of selected non-financial metrics for the five quarters ended December 31, 2016. The Company is also providing selected segment revenue information for the three and twelve months ended December 31, 2016 and 2015 in Exhibit 4.

About WEX Inc.

WEX Inc. (NYSE:WEX) is a leading provider of corporate payment solutions. From its roots in fleet card payments beginning in 1983, WEX has expanded the scope of its business into a multi-channel provider of corporate payment solutions representing more than 10 million vehicles and offering exceptional payment security and control across a wide spectrum of business sectors. WEX serves a global set of customers and partners through its operations around the world, with offices in the United States, Australia, New Zealand, Brazil, the United Kingdom, Italy, France, Germany, Norway and Singapore. WEX and its subsidiaries employ more than 2,500 associates. The Company has been publicly traded since 2005, and is listed on the New York Stock Exchange under the ticker symbol “WEX.” For more information, visit www.wexinc.com and follow WEX on Twitter at @WEXIncNews.