Element Reports $99.2MM Operating Income for Q4/2018, Up $3.8MM Y/Y

Element Fleet Management released its financial results for the fourth quarter and 12 months ended December 31, 2018 and reported accelerated progress on its transformation work.

Element’s fleet platform generated adjusted operating income of $99.2 million from its core business in Q4, an increase of $3.8 million over Q4/2017. On a consolidated basis, it reported net income of $41.2 million or $0.07 per share for Q4/2018, compared to a net loss of $1.5 million or $(0.03) per share in Q4 2017.

For 2018 as a whole, the core Fleet Management business was essentially flat, with net revenue down 1.3% year-over-year while net earning assets and new originations grew 2.0% and 4.8% respectively. Net revenue from non-core assets declined 88.8% year-over-year as Element wound down or sold off these non-strategic assets, reducing its consolidated net revenue from $952.0 million in 2017 to $873.5 million in 2018.

Element’s transformation under its strategic plan is ahead of schedule, with the company identifying and initiating $58 million of run-rate profit improvements in 2018, $18 million more than the targeted $40 million previously announced.

Element also continues to prioritize strengthening its balance sheet and reducing leverage. The company has sold real estate, successfully repositioned the non-core 19th Capital business for run-off or potential sale and will refinance materially less than the $345 million of convertible debentures maturing on June 30, 2019, settling the balance in cash.

“Element’s client-centric transformation is producing results. Our team took action on 30% more service improvement and profitability enhancement projects than we initially thought achievable in 2018, strengthening our business while consistently delivering a superior client experience” said Jay Forbes, president and CEO of Element. “The company’s focus on what matters most to our clients is paying off. We see strong signs of significantly improved client retention, and evidence of organic earnings growth from our market-leading platform.

“I am thrilled with our 2018 progress and continued momentum in 2019 as we go ‘Back to Basics’ with our transformation efforts. While change is never without challenges, I’m confident we will achieve our strategic goals and fulfill Element’s incredible potential to be the leading fleet management company in our industry.”

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