Wright Express is a company that provides mostly fuel payment processing services to commercial and government automobile fleets. Its business is primarily in the US, although it recently acquired a sizable business in Australia.
For the quarter ended December 31, 2010, total revenues jumped 38 percent from last year to $114.9 million. In 2009, it rose just 4 percent from the previous year.
For 2010, $17 million of it came from its acquisition in Australia, so without it, revenues increased only 18 percent.
Operating income was $42.9 million, up 43 percent from last year. On the expense side, salary, occupancy, and equipment cost did not rise as rapidly as revenues. Net income was $18.4 million, up 52 percent from last year. One reason net income grew at a faster pace is that Wright Express paid a lower tax rate in Q4 2010.
Its comprehensive income, which includes several items not directly related to business performance, was nearly the same as net income in 2009. In 2010, it's close to double that because of a $14.5 million gain to due foreign currency translation, or converting gains from foreign operations when their results are translated into US dollars.
Judging by Wright Express' non-financial data, certain margins metrics are under pressure. Gallons per payment procession transaction, payment processing rate, and net interchange rate are all down from last year and last quarter (Q3 2010).
Conference call (paraphrased, not direct quote):
-For Australia Queensland flood, we may take an initial downside hit. We will work out payment plans with small fleets there, because they're just suffering from cash flow problems. Later on, we may benefit from the rebuilding growth there.
-For January 2011, there is a little negative impact from snow storms in US. But that tends to temporary.
-We will launch a payrolls cards program this year, although due to the initial investment cost, it probably won't be too profitable this year. We will tap into existing customers for this product.
-We will launch a payrolls cards program this year, although there is the initial investment cost. We will tap into our existing customers to pitch this product.
-Lower gallons per payment procession transaction is due to incorporating Australia's business, which is lower than the US for this metric.
-No cash flow statement because of the complexity of Australia's integration. It will come shortly.
-We see opportunities in Europe and will continue to work with oil companies there.
-We are considering share buy backs. In the short-term, we will continue to pay down debt.
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