WEX Board of Directors Authorizes Increased Share Repurchase Program

Rhea-AI Summary

WEX Inc. announces an amended share repurchase program authorizing the repurchase of an additional $400 million worth of common stock, totaling $1.05 billion by December 31, 2025. The company has already repurchased $478 million, leaving approximately $572 million of capacity. The program aims to drive sustainable cash generation, strategic growth investments, and value for shareholders.

Insights

Financial Analyst

The decision by WEX Inc. to expand its share repurchase program represents a significant allocation of capital that warrants analysis from a financial perspective. Share buybacks are a mechanism through which a company can return value to shareholders, as they tend to increase earnings per share (EPS) by reducing the number of shares outstanding. The increase in the authorization amount to $1.05 billion, up from $650 million, indicates a strong balance sheet and confidence in the company's cash generation capabilities. It is essential to assess the impact of such repurchases on the company's financial ratios, such as return on equity (ROE) and to consider the opportunity cost of not investing that capital back into the business or potential acquisitions.

Furthermore, the repurchase strategy could be seen as a signal to the market that the management believes the stock is undervalued. The repurchase program's flexibility, including open market purchases and privately negotiated transactions, allows WEX to be strategic in its execution, potentially optimizing the timing and pricing of buybacks. However, it is crucial to monitor the execution of the repurchase plan, as aggressive buybacks can sometimes lead to a more leveraged balance sheet, which may not be favorable in all market conditions.

Market Research Analyst

From a market perspective, WEX's share repurchase program could be interpreted as a positive signal, potentially leading to a bullish sentiment among investors. The repurchase program's expansion is noteworthy as it represents a substantial commitment to shareholder value and confidence in the company's future performance. It is important to understand the market dynamics and investor sentiment surrounding WEX, as well as the sector in which it operates.

Analyzing the historical performance of WEX's stock in relation to repurchase announcements can provide insights into how the market might react to this news. Additionally, the repurchase program could impact the liquidity and volatility of WEX's shares in the market. It is also relevant to consider the broader economic context, as share repurchases are more common during periods of economic growth and may slow during economic downturns.

Corporate Governance Expert

Examining the governance implications of the amended share repurchase program, it is evident that WEX's board of directors is exercising its fiduciary responsibility to maximize shareholder value. The repurchase program, as a part of the company's capital allocation strategy, reflects the board's strategic decision-making. It is essential to analyze the transparency and rationale behind the repurchase program, ensuring that it aligns with the long-term interests of shareholders and is not primarily a tool to artificially inflate stock prices or to meet executive compensation targets.

Moreover, the adherence to SEC Rule 10b-18 and the potential use of Rule 10b5-1 trading plans underlines the company's commitment to regulatory compliance and mitigating insider trading concerns. It is critical to evaluate how these governance practices affect investor confidence and the company's reputation in the market.

Amended Program Authorizes Repurchase of $1.05 Billion Worth of Company Stock, Increasing Total by $400 Million

PORTLAND, Maine--(BUSINESS WIRE)-- WEX Inc. (NYSE: WEX), the global commerce platform that simplifies the business of running a business, today announced that its board of directors has authorized an amended share repurchase program under which up to an additional $400 million worth of WEX’s common stock may be repurchased, expanding the total authorization to $1.05 billion.

The share repurchase program, first announced in August 2022 and amended in October 2022, previously authorized the Company to repurchase up to $650 million through December 31, 2025. This amendment increases the repurchase authorization to $1.05 billion through December 31, 2025.

To date, WEX has repurchased approximately $478 million of its common stock under the program, including approximately $41.5 million in 2024, representing 2.8 million shares since the initial authorization of the program. Accordingly, as of today, the Company has approximately $572 million of capacity remaining under the repurchase authorization, as amended.

“We remain focused on driving sustainable cash generation to power our strategic growth investments and maintain our solid balance sheet, all while returning capital to shareholders,” said Melissa Smith, WEX’s Chair, Chief Executive Officer, and President. “Our board and management team continue to view share repurchases as an important part of our capital allocation strategy, and believe expanding the authorization of this program to over $1 billion reflects our commitment to driving long-term value for our shareholders.”

Under the amended program, repurchases may be made on a discretionary basis from time to time through open market purchases, privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, issuer self-tender offers, any combination of the foregoing, or any other purchase techniques deemed appropriate. The timing and amount of any transactions are subject to the discretion of WEX based upon, among other things, market conditions and other opportunities that the Company may have for the use or investment of its cash balances. In addition, repurchases are subject to the availability of shares of stock for purchase, prevailing market conditions, the trading price of the Company’s stock, and the Company's financial performance. The repurchase program does not obligate WEX to acquire any specific number of shares and may be modified, discontinued, or suspended at any time. WEX intends that all instructions for the repurchase of shares under this program shall be in compliance with Rule 10b-18 and the covenants or provisions of any debt or other obligations then outstanding. Purchases may be executed through the use of Rule 10b5-1 trading plans or other techniques.

About WEX

WEX (NYSE: WEX) is the global commerce platform that simplifies the business of running a business. WEX has created a powerful ecosystem that offers seamlessly embedded, personalized solutions for its customers around the world. Through its rich data and specialized expertise in simplifying benefits, reimagining mobility and paying and getting paid, WEX aims to make it easy for companies to overcome complexity and reach their full potential. For more information, please visit www.wexinc.com.

Forward-Looking Statements

This press release contains forward-looking statements including, but not limited to, statements about management’s plans, goals and expectations with respect to the Company’s share repurchase program. Any statements in this press release that are not statements of historical facts are forward-looking statements. When used in this press release, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “positions,” “confidence,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Forward-looking statements relate to our future plans, objectives, expectations, and intentions and are not historical facts and accordingly involve known and unknown risks and uncertainties and other factors that may cause the actual results or performance to be materially different from future results or performance expressed or implied by these forward-looking statements, including a change in the Company’s ability to effectuate the share repurchase program; as well as other risks and uncertainties identified in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on February 28, 2023 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023, filed with the Securities and Exchange Commission on April 27, 2023 and July 27, 2023, respectively, and subsequent filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of the initial filing of this press release and undue reliance should not be placed on these statements. The Company disclaims any obligation to update any forward-looking statements as a result of new information, future events, or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240214477965/en/

Media contact:

WEX

Julie Lydon, 415-816-9397

Julie.Lydon@wexinc.com

Investor contact:

WEX

Steve Elder, 207-523-7769

Steve.Elder@wexinc.com

Source: WEX

FAQ

What is the total value of the share repurchase program authorized by WEX Inc.?

WEX Inc. has authorized a total of $1.05 billion for its share repurchase program.

How much common stock has WEX Inc. repurchased under the program?

WEX Inc. has repurchased approximately $478 million of its common stock, including $41.5 million in 2024.

What is the remaining capacity under the repurchase authorization?

As of now, WEX Inc. has approximately $572 million of capacity remaining under the repurchase authorization.

What are the methods through which WEX Inc. can make repurchases under the amended program?

Repurchases can be made through open market purchases, privately negotiated transactions, accelerated share repurchase programs, or other derivative transactions.

What factors determine the timing and amount of repurchases by WEX Inc.?

The timing and amount of repurchases are subject to market conditions, the trading price of the Company’s stock, and the Company's financial performance.