Vantiv Reports Second Quarter 2015 Results

Vantiv Reports Second Quarter 2015 Results

Net Revenue Increased 28% to $424 Million

Pro Forma Adjusted Net Income per Share Increased 19% to $0.56

Increased Full-Year Guidance

CINCINNATI, July 29, 2015 - Vantiv, Inc. VNTV ("Vantiv" or the "company") today announced financial results for the second quarter ended June 30, 2015. Revenue increased 29% to $786.0 million in the second quarter as compared to $608.7 million in the prior year period. Net revenue increased 28% to $423.6 million in the second quarter as compared to $331.3 million in the prior year period, primarily due to strong growth in our Merchant Services segment. On a GAAP basis, net income (loss) attributable to Vantiv, Inc. was $36.5 million or $0.24 per diluted share in the second quarter as compared to ($1.4) million or ($0.01) per diluted share in the prior year period. Pro forma adjusted net income increased 22% to $112.8 million in the second quarter as compared to $92.7 million in the prior year period. Pro forma adjusted net income per share increased 19% to $0.56 in the second quarter as compared to $0.47 in the prior year period. (See Schedule 2 for pro forma adjusted net income and Schedule 6 for GAAP net income reconciliation to pro forma adjusted net income.)

"This was a great quarter for Vantiv. In addition to delivering strong financial results and increasing our outlook for the year, we also reached several important new milestones," said Charles Drucker, president and chief executive officer of Vantiv. "We celebrated the one-year anniversary of the Mercury acquisition, which established our leading position within the fast-growing integrated payments channel, and we announced important new wins. Additionally, I am happy to announce that we terminated a portion of our TRAs, which will generate meaningful earnings accretion and a strong return for our shareholders."

Merchant Services
Merchant Services net revenue increased 37% to $337.1 million in the second quarter as compared to $245.6 million in the prior year period, primarily due to a 23% increase in transactions and a 12% increase in net revenue per transaction. Our prior acquisition of Mercury Payment Systems ("Mercury") was completed during the second quarter of 2014. On a pro forma organic basis, Merchant Services net revenue would have increased 11% in the second quarter as compared to the prior year period if we had owned Mercury during both periods. Sales and marketing expenses increased 39% to $116.9 million in the second quarter as compared to $84.0 million in the prior year period, primarily due to impacts from the Mercury acquisition.

Financial Institution Services
Financial Institution Services net revenue increased 1% to $86.6 million in the second quarter as compared to $85.8 million in the prior year period as a 6% increase in transactions was partially offset by lower net revenue per transaction. Sales and marketing expenses decreased 7% to $6.1 million in the second quarter as compared to $6.5 million in the prior year period.

Tax Receivable Agreement Termination
Vantiv entered into an agreement with the selling shareholders of Mercury to terminate portions of the obligations under the tax receivable agreement ("TRA") established at the time of the acquisition. The initial payment under this agreement will generate approximately $0.05 in accretion to pro forma adjusted net income per share in 2015. Under the terms of the agreement, the Company obtained additional call options to terminate additional obligations under the TRAs in annual installments through 2019. If the Company does not exercise any call option, the selling shareholders can exercise a corresponding put option to require the Company to terminate those additional obligations.

"Strategic capital allocation is a priority," said chief operating and chief financial officer Mark Heimbouch. "We have generated strong returns through a combination of successful M&A as well as return of capital to shareholders, principally through share repurchase programs and the purchase of some of the unique tax attributes we have available to us like these TRAs. These actions underscore our commitment to drive shareholder value."

Third Quarter and Full-Year Financial Outlook
Based on the current level of transaction trends and new business activity, net revenue for the third quarter of 2015 is expected to be $410 to $415 million, representing an increase of 8% to 9% above the prior year period. Pro forma adjusted net income per share for the third quarter of 2015 is expected to be $0.54 to $0.56, representing an increase of 10% to 14% above the prior year period. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.23 to $0.25 for the third quarter of 2015.

Based on our strong performance year-to-date and outlook for the third quarter, our full-year 2015 expectations have increased.  Net revenue for the full-year 2015 is expected to be $1,625 to $1,645 million, representing growth of 16% to 17% above the prior year.  Pro forma adjusted net income per share for the full-year 2015 is expected to be $2.15 to $2.20, representing growth of 15% to 18% above the prior year.  GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.90 to $0.95 for the full-year 2015.

Earnings Conference Call and Audio Webcast
The company will host a conference call to discuss the second quarter 2015 financial results today at 8:00 a.m. EDT. The conference call can be accessed live over the phone by dialing (888) 806-6230, or for international callers (913) 981-5517, and referencing conference code 9069196. A replay will be available approximately two hours after the call concludes and can be accessed by dialing (888) 203-1112, or for international callers (719) 457-0820, and entering replay passcode 9069196. The replay will be available through Tuesday, August 11, 2015. The call will also be webcast live from the company's investor relations website at http://investors.vantiv.com. Following completion of the call, a recorded replay of the webcast will be available on the website.

About Vantiv, Inc.
Vantiv, Inc. VNTV is a leading payment processor differentiated by an integrated technology platform. Vantiv offers a comprehensive suite of traditional and innovative payment processing and technology solutions to merchants and financial institutions of all sizes, enabling them to address their payment processing needs through a single provider. We build strong relationships with our customers, helping them become more efficient, more secure and more successful. Vantiv is the second largest merchant acquirer and the largest PIN debit acquirer based on number of transactions in the U.S. The company's growth strategy includes expanding further into high-growth channels and verticals, including integrated payments, ecommerce, and merchant bank. For more information, visit www.vantiv.com.

© 2015 Vantiv, LLC. All Rights Reserved. All trademarks, service marks and trade names referenced herein are the property of their respective owners. Vantiv and other Vantiv products and services mentioned herein as well as their respective logos are registered trademarks or trademarks of Vantiv, LLC in the U.S. and other countries.

Non-GAAP and Pro Forma Financial Measures
This earnings release presents non-GAAP and pro forma financial information including net revenue, adjusted EBITDA, pro forma adjusted net income, and pro forma adjusted net income per share. These are important financial performance measures for the company, but are not financial measures as defined by GAAP. The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The company uses these non-GAAP and pro forma financial performance measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

Forward-Looking Statements
This release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this release are forward-looking statements including any statements regarding guidance and statements of a general economic or industry specific nature. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, guidance, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "should," "can have," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

The forward-looking statements contained in this release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you review and consider information presented herein, you should understand that these statements are not guarantees of future performance or results. They depend upon future events and are subject to risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual future performance or results and cause them to differ materially from those anticipated in the forward-looking statements. Certain of these factors and other risks are discussed in the company's filings with the U.S. Securities and Exchange Commission (the "SEC") and include, but are not limited to: (i) our ability to adapt to developments and change in our industry; (ii) competition; (iii) unauthorized disclosure of data or security breaches; (iv) systems failures or interruptions; (v) our ability to expand our market share or enter new markets; (vi) our ability to identify and complete acquisitions, joint ventures and partnerships; (vii) failure to comply with applicable requirements of Visa, MasterCard or other payment networks or changes in those requirements; (viii) our ability to pass along fee increases; (ix) termination of sponsorship or clearing services; (x) loss of clients or referral partners; (xi) reductions in overall consumer, business and government spending; (xii) fraud by merchants or others; (xiii) a decline in the use of credit, debit or prepaid cards; (xiv) consolidation in the banking and retail industries; (xv) the effects of governmental regulation or changes in laws; and (xvi) outcomes of future litigation or investigations. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. More information on potential factors that could affect the company's financial results and performance is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the company's periodic reports filed with the SEC, including the company's most recently filed Annual Report on Form 10-K and its subsequent filings with the SEC.

Any forward-looking statement made by us in this release speaks only as of the date of this release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Contacts
Investors
Nathan Rozof, CFA
Senior Vice President, Investor Relations
(866) 254-4811
(513) 900-4811
IR@vantiv.com

Media
Andrew Ciafardini
Vice President, Corporate Communications
(513) 900-5308
Andrew.Ciafardini@vantiv.com

Q2 2015 EARNINGS RELEASE SCHEDULES ACCESSIBLE AT THE LINK BELOW

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