Amounts in US$ unless otherwise noted Record quarterly net revenue of US$274.6 million driving adjusted EPS of US$0.29 and adjusted free cash flow per share of US$0.38 Robust net revenue growth of 14.1% year-over-year led by a double-digit increase across net financing and services revenues; and up 4.6% from a strong Q1 2024 Reports record origination volume; up 28.2% from Q1 2024 and up 4.6% from Q2 2023 Raises full-year 2024 guidance on most metrics as a result of robust first half 2024 performance Unveils first-ever Purpose statement: Move the World Through Intelligent Mobility Accelerates digitization and automation capabilities with the execution of a definitive agreement for the acquisition of Autofleet Solutions Ltd. ("Autofleet") TORONTO, Aug. 13, 2024 (GLOBE NEWSWIRE) -- Element Fleet Management Corp. (TSX:EFN) ("Element" or the "Company"), the largest publicly traded, pure-play automotive fleet manager in the world, today announced strong financial and operating results for the three months ended June 30, 2024. The following table presents Element's selected financial results in U.S. dollars unless otherwise noted.   Q2 20241 Q1 20241,2 Q2 2023 QoQ YoY In US$ millions, except percentages and per share amount and unless otherwise noted US$ US$ US$ % % Selected financial results - as reported:           Net revenue 274.6   262.5   240.6   4.6 % 14.1 % Pre-tax income 135.2   123.0   118.9   9.9 % 13.7 % Pre-tax income margin 49.2 % 46.9 % 49.4 % 230 bps -20 bps Earnings per share (EPS) [basic] 0.26   0.23   0.22   0.03   0.04   Earnings per share (EPS) [basic] [$CAD] 0.35   0.31   0.29   0.04   0.06   Adjusted results (excludes one-time strategic project costs in 2024)1           Adjusted net revenue3 274.6   262.5   240.6   4.6 % 14.1 % Adjusted operating income (AOI)3 152.9   143.6   132.7   6.4 % 15.2 % Adjusted operating margin3 55.7 % 54.7 % 55.1 % +100 bps +60 bps Adjusted EPS3 [basic] 0.29   0.27   0.25   0.02   0.04   Adjusted EPS3 [basic] [$CAD] 0.39   0.36   0.33   0.03   0.06   Other highlights:           Adjusted free cash flow per share3 (FCF/sh) 0.38   0.35   0.34   0.03   0.04   Adjusted free cash flow per share3 (FCF/sh) [$CAD] 0.52   0.47   0.46   0.05   0.06   Originations (excluding Armada) 1,976   1,542   1,889   28.2 % 4.6 % Q2 2024 and Q1 2024 included US$2.4 million and US$2.1 million, respectively, in one-time strategic project costs. Q1 2024 revenue benefitted from US$7.0 million in certain services revenue items which are unlikely to repeat in 2024. Adjusted results are non-GAAP or supplemental financial measures, which do not have any standard meaning prescribed by GAAP under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. For further information, please see the "IFRS to Non-GAAP Reconciliations" section in this earnings release. The Company uses "Adjusted Results" because it believes that they provide useful information to investors regarding its performance and results of operations. "Our robust growth was driven by our continued commercial success," said Laura Dottori-Attanasio, Chief Executive Officer of Element. "Driven by our aspiration to take Element to new heights, we are delighted to unveil our very first Purpose Statement "Move the World Through Intelligent Mobility." We developed this brand promise with the collaboration of our team members. It is a reflection of our unwavering commitment to putting our clients first and embodies our dedication to intelligent, seamless mobility." Net revenue growth Element grew Q2 2024 net revenue 14.1% over Q2 2023 ("year-over-year") to US$274.6 million led largely by robust growth across all revenue line items. Net revenue increased US$12.1 million or 4.6% from Q1 2024 ("quarter-over-quarter"). Net financing revenue Q2 2024 net financing revenue grew US$16.7 million or 15.8% from Q2 2023 and grew US$15.2 million or 14.2% quarter-over-quarter. Year-over-year growth was largely as a result of higher net earning assets associated with higher originations in the U.S., Canada, and ANZ regions. These increases were partly offset by higher funding costs year-over-year. Gain on sale ("GOS") was largely unchanged year-over-year as higher GOS in Mexico was mostly offset by lower GOS in ANZ as prices continue to moderate but remain well above historic levels. Higher volume of vehicles available for sale in Mexico continue to mitigate used vehicle pricing headwinds. Service revenue Element's largely unlevered services revenue is the key pillar of its capital-light business model, which also improves the Company's return on equity profile. Q2 2024 services revenue grew 10.8% year-over-year to US$140.1 million driven primarily by higher origination volumes, and higher penetration rates of our service offerings from existing clients. Also contributing to the year-over-year increase was growth in both Mexico and ANZ. Q1 2024 services revenue benefitted from US$7.0 million in certain services revenue items that we do not anticipate to recur in 2024 (as previously disclosed). Excluding these amounts, services revenue was largely unchanged quarter-over-quarter. Syndication volume The Company syndicated a record US$955.2 million of assets in Q2 2024 - US$440.8 million or 85.7% more volume than Q2 last year and more than double that of Q1 2024. These increases are attributed to record originations and our ongoing focus on our capital lighter model. The Company expanded the number of names it syndicated, impacting the Company's syndication mix. Overall, pricing in the syndication market has improved from Q1 and client demand remains robust. Q2 2024 syndication revenue grew US$3.6 million or 41.9% year-over-year and US$3.8 million or 46.4% quarter-over-quarter largely due to record volumes this quarter. Adjusted operating income and adjusted operating margins AOI was US$152.9 million this quarter, an increase of US$20.2 million or 15.2% year-over-year — amounting to adjusted EPS of US$0.29 for Q2 2024, which is a 4 cent increase year-over-year. Q2 2024 adjusted operating margin was 55.7%, representing margin expansion of 60 basis points year-over-year. This expansion is driven largely by positive operating leverage (i.e. net revenue growth outpacing growth in adjusted operating expenses). Adjusted operating margin expanded 100 basis points quarter-over-quarter. Element expanded adjusted pre-tax return on common equity by 140 basis points year-over-year to 19.6% in Q2 2024. Originations Element originated US$2.0 billion of assets in Q2 2024 (excluding Armada), which is a US$87.2 million or 4.6% increase year-over-year and a US$434.1 million or 28.2% increase quarter-over-quarter. The table below sets out the geographic distribution of originations (excluding Armada) for the three-month periods indicated. (in U.S.$000's) June 30, 2024 June 30, 2023 Variance to Q2 2023 (Excluding Armada) US$ % US$ % US$ % United States and Canada 1,599,955 81.0 1,522,241 80.6 77,714   5.1 % Mexico 252,573 12.8 255,453 13.5 (2,880 ) (1.1 )% Australia and New Zealand 123,486 6.2 111,123 5.9 12,363   11.1 % Total 1,976,014 100.0 1,888,817 100.0 87,197   4.6 % Growing adjusted free cash flow per share and return of capital to shareholders On an adjusted basis, Element generated US$0.38 of adjusted free cash flow ("FCF") per share in Q2 2024 – 4 cents more year-over-year driven primarily by an increase in net revenues and higher originations, while investing US$17.4 million in total capital investments this quarter. Element returned US$37.7 million and US$75.9 million of cash to common shareholders through dividends and buybacks of common shares in Q2 2024 and first half 2024, respectively. Full-year 2024 guidance As a result of its robust first-half performance and positive outlook for the remainder of the year, Element is raising its full-year guidance on most metrics. In US$ unless otherwise noted FY 2023 - U.S. Dollars Prior 2024 Guidance - U.S. Dollars New 2024 Guidance - U.S. Dollars Net revenue $959.1 million $1.020 - 1.040 billion $1.060 - $1.080 billion Implied YoY Growth   6-8% 11-13% Adjusted operating margin 55.3% 55.0% - 55.5% 55.0% - 55.5% Adjusted operating income $530.6 million $560 – 575 million $575 - 595 million Implied YoY Growth   6-8% 8-12% Adjusted EPS [basic] $0.98 $1.05 - 1.09 $1.07 - $1.11 Implied YoY Growth   7-11% 9-13% Adjusted free cash flow per share $1.24 $1.31 - 1.34 $1.32 - 1.36 Implied YoY Growth   6-8% 6-10% Originations (excl Armada) $6.3 billion $7.0 - 7.4 billion $7.0 - 7.4 billion Implied YoY Growth   11-17% 11-17% Certain implied year-over-year growth amounts shown in this table may not calculate exactly due to rounding. Element's full-year 2023 results and 2024 guidance exclude non-recurring setup costs associated with its previously announced strategic initiatives, non-recurring costs associated with the acquisition of Autofleet, and also prior to any material changes in foreign exchange. Acquisition of Autofleet Today, the Company announced it has entered into a definitive agreement to acquire Autofleet, an innovator in fleet and mobility solutions. Autofleet has a robust and highly scalable fleet optimization technology platform alongside optimized mobility solutions tailored for the fleet industry. "Having previously worked with Autofleet and witnessed the common culture, commitment to clients, and focus on delivering impactful results that our two companies share, we are thrilled to welcome them to the Element organization as an integral part of our business," commented Dottori-Attanasio. "We are confident their expertise will enable us to fast-track the modernization of our digital capabilities, enhance our ability to scale our core business more quickly, and ultimately deliver increased value to our clients and shareholders." Founded in 2018, the firm boasts a skilled team of approximately 70 professionals including developers, engineers, and data scientists. Element anticipates that the combination of its own scale, market leadership, and comprehensive fulfillment capabilities with Autofleet's digital, data, and cloud capabilities, will advance its purpose to Move the World Through Intelligent Mobility and unlock new revenue streams for both companies. "This partnership represents a powerful alignment of two companies with shared aspiration and cultures, and enables us to leverage Element's commercial organization and leadership to accelerate new growth areas for the business," stated Kobi Eisenberg, Chief Executive Officer of Autofleet. "We are incredibly proud to join forces with Element, a company that shares our commitment to advancing intelligent solutions within the fleet and mobility industries." The completion of the acquisition is subject to customary closing conditions, and the terms of the transaction remain undisclosed. The Company expects the transaction to close in early Q4 2024. Strategic initiatives update As previously disclosed, the Company plans to optimize its business further by centralizing accountability for its U.S. and Canadian leasing operations and establishing a strategic sourcing presence in Asia. The Company continues to expect these initiatives to generate between US$30 - $45 million (CAD $40 - $60 million) of run-rate net revenue, and between US$22 - $37 million (CAD $30 - $50 million) of run-rate adjusted operating income ("AOI"), by full-year 2028. The above initiatives require approximately US$22 million (total) (CAD $30 million) in non-recurring setup costs, of which US$2.4 million and US$2.1 million were incurred in Q2 2024 and Q1 2024, respectively (H1 2023 - nil). In 2023, the Company incurred US$13.7 million, in aggregate, in such costs. The remaining and final costs of approximately US$3.8 million will likely be recorded in Q3 2024. In August, the Company commenced operations in Dublin, creating a global standard for leasing excellence. This Dublin-based team is currently comprised of 50 cross-functional professionals, growing to approximately 80 later this year. As previously communicated, centralizing our U.S. and Canadian leasing functions in Ireland provides the following benefits: Enhancing our consistent, superior client leasing experience to grow market-leading offerings across leasing lifecycle; Greater control over a broader leasing functions to better asses performance and optimize capital allocations; Aligning commercial sales and strategic alliances to leasing strategy; and A more disciplined pricing strategy. In April 2024, the Company commenced operations in Singapore, marking a significant milestone in its ongoing strategic initiative to enhance its global procurement capabilities and strategic sourcing relationships in Asia. Concurrently, the Company entered into its first collaboration agreement with a strategic sourcing supplier. The expected payback period from the Company's investments is anticipated to be less than 2.5 years. The Company also remains focused on prioritizing digitization and automation initiatives to enable future growth, drive operational efficiencies and position itself as a leading industry player in the rapidly evolving mobility and vehicle connectivity landscape. Capital structure Redemption of all outstanding 6.21% Cumulative 5-Year Rate Reset Preferred Shares Series C On June 30, 2024, the Company redeemed all of its 5,126,400 issued and outstanding 6.21% Cumulative 5-Year Rate Reset Preferred Shares Series C (the "Series C Shares") at a price of CAD$25.00 per Series C Share for an aggregate total amount of approximately US$91.2 million (CAD$128 million), together with all accrued and unpaid dividends up to but excluding the Share Redemption Date (the "Redemption Price"), less any tax required to be deducted and withheld by the Company. Intention to redeem all its outstanding 5.903% Cumulative 5-Year Rate Reset Preferred Shares Series E To further optimize the Company's balance sheet and mature its capital structure, the Company announced today its intention to redeem - in accordance with the terms of the 5.903% Cumulative 5-Year Rate Reset Preferred Shares Series E (the "Series E Shares") as set out in the Company's articles - all of its 5,321,900 issued and outstanding Series E Shares on September 30, 2024 (the "Share Redemption Date") for a redemption price equal to CAD$25.00 per Series E Share for a an aggregate total amount of approximately US$92.4 million (CAD$133 million), together with all accrued and unpaid dividends up to but excluding the Share Redemption Date (the "Redemption Price"), less any tax required to be deducted and withheld by the Company. The Company has provided notice today of the Redemption Price and the Share Redemption Date to the sole registered holder of the Series E Shares in accordance with the terms of the Series E Shares as set out in the Company's articles. Non-registered holders of Series E Shares should contact their broker or other intermediary for information regarding the redemption process for the Series E Shares in which they hold a beneficial interest. The Company's transfer agent for the Series E Shares is Computershare Investor Services Inc. ("Computershare Investor Services"). Questions regarding the redemption process may be directed to Computershare Investor Services at 1-800-564-6253 or by email to Following their redemption on September 30, 2024, the Series E Shares will be de-listed from and no longer trade on the Toronto Stock Exchange ("TSX"). 4.25% Convertible Unsecured Subordinated Debentures Exchanged for Common Shares On June 26, 2024, the Company redeemed all of its remaining outstanding 4.25% Convertible Unsecured Subordinated Debentures (the "Debentures") due June 30, 2024 (the "Redemption Date"). Prior to the Redemption Date, beneficial holders of the Debentures exercised their right to exchange an aggregate principal amount of approximately CAD$172.0 million for consideration of approximately 14.6 million Common Shares, issued from Treasury and delivered to beneficial holders. The Debentures were converted into Common Shares at a conversion price of CAD$11.77391 per Common Share. As a result, the Debentures were delisted from and no longer trade on the TSX (TSX:EFN). As at June 30, 2024, total Common Shares issued and outstanding were 403.6 million. Conference call and webcast A conference call to discuss these results will be held on Wednesday, August 14, 2024 at 8:00 a.m. Eastern Time. The conference call and webcast can be accessed as follows: Webcast:   https://services.choruscall.ca/links/elementfleet2024q2.html        Telephone:   Click here to join the call most efficiently,     or dial one of the following numbers to speak with an operator:           Canada/USA toll-free: 1-844-763-8274           International: +1-647-484-8814       A taped recording of the conference call may be accessed through September 14, 2024 by dialing 1-855-669-9658 (Canada Toll Free), 1-877-344-7529 (U.S. Toll Free) or 1-412-317-0088 (International Toll) and entering the access code 2637551. Dividends declared The Company's Board has authorized and declared a quarterly dividend of CAD$0.12 per outstanding common share of Element for the third quarter of 2024. The dividend will be paid on October 15, 2024 to shareholders of record as at the close of business on September 27, 2024. Element's Board of Directors also declared the following dividends on Element's preferred shares: