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Wright Express Reports First Quarter 2009 Financial Results

SOUTH PORTLAND, Maine--Wright Express Corporation , a leading provider of payment processing and information management services to the U.S. commercial and government fleet industry, today reported financial results for the three months ended March 31, 2009.

Total revenue for the first quarter of 2009 decreased 26% to $69.2 million from $92.9 million for the first quarter of 2008. Net income to common shareholders on a GAAP basis was $11.0 million, or $0.28 per diluted share, compared with $14.5 million, or $0.36 per diluted share, for the comparable quarter a year earlier. On a non-GAAP basis, the Company’s adjusted net income for the first quarter of 2009 was $16.3 million, or $0.42 per diluted share, compared with $17.4 million, or $0.44 per diluted share, for the year-earlier period. In addition to previously excluded items, adjusted net income for the first quarter of 2009 excludes a non-cash asset impairment charge of $421,000 related to internally developed software costs, as well as adjustments to the deferred tax asset and related tax-receivable agreement with the Company’s former parent company.

Wright Express uses fuel-price derivative instruments to mitigate financial risks associated with the variability in fuel prices. For the first quarter of 2009, the Company’s GAAP financial results include an unrealized $6.5 million pre-tax, non-cash, mark-to-market loss on these instruments. For the first quarter of 2008, the Company reported an unrealized pre-tax, non-cash, mark-to-market loss of $3.6 million.

Exhibit 1 reconciles adjusted net income for the first quarters of 2009 and 2008, which has not been determined in accordance with GAAP, to net income as determined in accordance with GAAP.

Management uses the non-GAAP measures presented within this news release to evaluate the Company’s performance on a comparable basis, to eliminate the volatility associated with its derivative instruments and to measure the amount of cash that is available for making payments on the Company’s financing debt and for discretionary purposes. Management believes that investors may find these measures useful for the same purposes, but cautions that they should not be considered a substitute for disclosure in accordance with GAAP.

First Quarter 2009 Performance Metrics

  • Average number of vehicles serviced increased 6% from the first quarter of 2008 to approximately 4.7 million.
  • Total fuel transactions processed declined 2% from the first quarter of 2008 to 63.3 million. Payment processing transactions decreased 7% to 49.3 million, and transaction processing transactions increased 21% to 14.0 million.
  • Average expenditure per payment processing transaction decreased 38% from the first quarter of 2008 to $40.78.
  • Average retail fuel price declined 39% to $2.00 per gallon from $3.26 per gallon in the first quarter of 2008.
  • Total MasterCard purchase volume grew 23% to $649 million, from $526 million for the first quarter of 2008.

To provide investors with additional insight into its operational performance, Wright Express has included in this news release a table of selected non-financial metrics for the five quarters ended March 31, 2009. This table is presented as Exhibit 2.

Management Comments on the First Quarter

“This was a very positive quarter for Wright Express, as we exceeded our guidance for both revenue and adjusted net income,” said Michael Dubyak, Chairman and CEO. “Although we did see the year-over-year erosion in fleet transaction volume that we expected, our collections experience improved significantly in the quarter. As a consequence, fleet credit loss fell back to within the Company’s historic range, significantly improving our results this quarter.”

“At the front end of the business, we continued to perform well in acquiring new customers,” Dubyak said. “In addition, our first-quarter performance metrics reflected the full impact of the federal GSA Fleet portfolio that we added in the fourth quarter of 2008. In the aggregate our MasterCard, TelaPoint, Pacific Pride and WEXSmart telematics businesses continued to grow in the first quarter both in terms of dollars contributed and as a percentage of the overall top line compared to the first quarter of 2008. These businesses have clearly helped Wright Express weather the economic storm this past year by continuing to grow at a time when our fleet customer base activity was contracting.”

“We will continue to consider additional opportunities to diversify our top line and strengthen our business, and are well-positioned with excellent liquidity as we do so,” said Dubyak. “Our business model continues to generate significant cash flow, which enabled us to pay down $34 million in debt this quarter, further reinforcing the Company’s exceptionally strong balance sheet.”

“Wright Express is performing well at a very challenging time because of a unique combination of strengths,” Dubyak said. “These include front-end sales growth: increasingly diversified revenue; low attrition rates overall; strong capital structure, liquidity and cash flow; a promising international business; as well as upside from our fuel hedging strategy. We look forward to further capitalizing on these advantages as the year unfolds.”