Cass Information Systems, Inc. (Nasdaq:
CASS), the leading provider of transportation, energy,
telecom and waste invoice payment and information services,
reported third quarter 2020 earnings of $.40 per diluted share, a
decrease of 29% from the $.56 per diluted share it earned in the
third quarter of 2019. Net income for the period was $5.8 million,
compared to $8.2 million in 2019.
3rd Quarter
YTD
2020
2019
% Change
2020
2019
% Change
Transportation Invoice Volume
8.7 million
9.2 million
(6.2)
24.2 million
27.4 million
(11.6)
Transportation Dollar Volume
$6.8 billion
$7.1 billion
(4.0)
$19.0 billion
$21.2 billion
(10.5)
Facility Expense Transaction
Volume*
7.1 million
7.1 million
(0.4)
20.3 million
21.0 million
(3.3)
Facility Expense Dollar Volume*
$3.6 billion
$4.1 billion
(12.7)
$10.1 billion
$11.5 billion
(11.8)
Revenues
$35.7 million
$40.5 million
(11.8)
$107.8 million
$118.3 million
(8.9)
Net Income
$5.8 million
$8.2 million
(29.4)
$18.8 million
$24.0 million
(21.9)
Diluted Earnings per Share
$.40
$.56
(28.6)
$1.29
$1.64
(21.3)
*Includes Energy, Telecom and
Waste
2020 3rd Quarter Recap
Third quarter revenue decreased 12% and net income was down 29%
compared to 2019’s third quarter – which holds the distinction of
being the most profitable quarter in the history of Cass.
Contributing to the declines were the impact of COVID-19 on Cass
customers and the commitment of the U.S.
Federal Reserve to hold interest rates at near-zero
levels. Lower energy prices also had a negative impact on
results.
Transportation volumes for invoices and dollars declined 6% and
4%, respectively. Volumes are trending to pre-COVID levels led by a
manufacturing sector that has been in expansion territory for the
previous four months. The improvement in this sector, along with
the continued addition of new customers to its roster, has created
a more stable foundation for growth should the economic recovery
continue.
Increased new business enabled facility-related (electricity,
gas, waste and telecom expense management) invoice volumes to
remain virtually unchanged despite a number of COVID-related
bankruptcies and location closings. Dollar volumes dipped 13% as
governmental restrictions in the restaurant, retail and hospitality
sectors curtailed normal activities which were reflected in lower
utility usage. As states open up, it is likely this is a temporary
condition.
Consolidated operating expenses were $1.9 million (6%) lower as
personnel expense decreased due to lower transportation and
facility-related transaction volumes.
Summary and Outlook
“Now more than six months into this pandemic, I continue to be
pleased with how our team is navigating the significant challenges
it presents and that the company remains profitable and financially
strong,” noted Eric H.
Brunngraber, Cass chairman and chief executive officer.
“Being a flexible and reliable business partner is proving to be a
critical benefit to our clients during this unprecedented period.
Additionally, continuing new customer wins sets the stage for a
recovery in our earnings once the negative impacts of the pandemic
subside.”
2020 Nine-Month Recap
For the nine-month period ended September 30, 2020, Cass earned
$1.29 per diluted share, a decrease of 21% from the $1.64 per
diluted share it earned in the same period in 2019. Net income was
$18.8 million, compared to $24.0 million in 2019. Revenues declined
9%, from $118.3 million in 2019 to $107.8 million in 2020.
Consolidated operating expenses were down 5%, or $4.0 million,
due to the lower transaction volumes previously cited.
Remote Workforce Continuing
Cass also reported that it continues to operate its remote
workforce program with most of its employees around the globe.
Cass Bank CARES Act Recap
In conjunction with the Coronavirus
Aid, Relief, and Economic Security Act, Cass Bank
processed nearly 350 applications for Paycheck Protection Program loans totaling
approximately $170 million, primarily to existing bank
customers.
Cash Dividend Declared
On October 20, 2020, the company’s board of directors declared a
fourth quarter dividend of $.27 per share payable December 15, 2020
to shareholders of record December 4, 2020. Cass has continuously
paid regularly scheduled cash dividends since 1934.
“The on-going quarterly payouts demonstrate the board’s
confidence in the company’s long-term prospects, underpinned by its
strong capital base,” Brunngraber noted.
About Cass Information Systems
Cass Information Systems, Inc. is a leading provider of
integrated information and payment management solutions. Cass
enables enterprises to achieve visibility, control and efficiency
in their supply chains, communications networks, facilities and
other operations. Disbursing more than $60 billion annually on
behalf of clients, and with total assets of $2 billion, Cass is
uniquely supported by Cass
Commercial Bank. Founded in
1906 and a wholly owned subsidiary, Cass Bank provides
sophisticated financial exchange services to the parent
organization and its clients. Cass is part of the Russell 2000®. More information is available
at www.cassinfo.com.
Note to Investors
Certain matters set forth in this news release may contain
forward-looking statements that are provided to assist in the
understanding of anticipated future financial performance. However,
such performance involves risks and uncertainties that may cause
actual results to differ materially from those in such statements.
For a discussion of certain factors that may cause such
forward-looking statements to differ materially from the company’s
actual results, see the company’s reports filed from time to time
with the Securities and Exchange Commission including the company’s
annual report on Form 10-K for the year ended December 31,
2019.
Selected Consolidated
Financial Data
The following table presents selected
unaudited consolidated financial data (in thousands, except per
share data) for the periods ended September 30, 2020 and 2019:
Quarter Ended September 30,
2020
Quarter Ended September 30,
2019
Nine Months Ended September
30, 2020
Nine Months Ended September
30, 2019
Transportation Invoice Volume
8,660
9,236
24,234
27,406
Transportation Dollar Volume
$
6,822,565
$
7,104,771
$
18,987,243
$
21,211,746
Facility Expense Transaction Volume
7,117
7,143
20,330
21,029
Facility Expense Dollar Volume
$
3,595,586
$
4,118,393
$
10,118,270
$
11,468,896
Payment and Processing Fees
$
24,376
$
27,741
$
72,540
$
81,050
Net Investment Income
10,814
12,274
32,623
35,653
Gain (Loss) on Sales of Securities
—
—
1,069
19
Other
556
521
1,592
1,578
Total Revenues
$
35,746
$
40,536
$
107,824
$
118,300
Personnel
$
22,521
$
23,514
$
65,839
$
68,594
Occupancy
930
973
2,809
2,930
Equipment
1,648
1,554
4,900
4,575
Other
3,581
4,522
11,418
12,897
Total Operating Expenses
$
28,680
$
30,563
$
84,966
$
88,996
Income from Operations before Income
Taxes
$
7,066
$
9,973
$
22,858
$
29,304
Income Tax Expense
1,285
1,787
4,093
5,271
Net Income
$
5,781
$
8,186
$
18,765
$
24,033
Basic Earnings per Share
$
.40
$
.57
$
1.31
$
1.66
Diluted Earnings per Share
$
.40
$
.56
$
1.29
$
1.64
Average Earning Assets
$
1,734,679
$
1,498,470
$
1,616,090
$
1,456,242
Net Interest Margin
2.59%
3.38%
2.87%
3.44%
Allowance for Loan Losses to Loans
1.20%
1.37%
1.20%
1.37%
Non-performing Loans to Total Loans
—
—
—
—
Net Loan (Recoveries) / Charge-offs to
Loans
—
—
—
—
Provision for Loan Losses
$
—
$
—
$
725
$
250
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201022005134/en/
Kenn Entringer at Casey Communications, Inc., (314) 721-2828
kentringer@caseycomm.com
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