Cass Information Systems, Inc. (Nasdaq:
CASS), the leading provider of transportation, energy,
telecom and waste invoice payment and information services,
reported fourth quarter 2020 earnings of $.44 per diluted share, an
increase of 2% from the $.43 per diluted share it earned in the
fourth quarter of 2019. While revenue was 5% lower, net income was
1% higher compared to 2019’s fourth quarter.
4th Quarter
YTD
2020
2019
% Change
2020
2019
% Change
Transportation Invoice Volume
9.0 million
8.6 million
3.6
33.2 million
36.0 million
(7.9)
Transportation Dollar Volume
$7.5 billion
$6.9 billion
9.5
$26.5 billion
$28.1 billion
(5.6)
Facility Expense Transaction
Volume*
7.0 million
6.5 million
7.2
27.3 million
27.5 million
(0.8)
Facility Expense Dollar Volume*
$3.3 billion
$3.4 billion
(2.2)
$13.5 billion
$14.9 billion
(9.6)
Revenues
$37.1 million
$38.9 million
(4.6)
$145.0 million
$157.2 million
(7.8)
Net Income
$6.4 million
$6.4 million
0.6
$25.2 million
$30.4 million
(17.2)
Diluted EPS
$.44
$.43
2.3
$1.73
$2.07
(16.4)
*Includes Energy, Telecom and Waste
2020 4th Quarter Recap
Higher net investment income, lower operating and income tax
expenses and a notable strengthening in the transportation sector
fueled the improvement in net income. The regression in revenue
stemmed from historically low interest rates and the ongoing impact
of the COVID-19 pandemic on Cass customers. However, the
year-over-year quarterly decline was significantly less than what
Cass experienced in the second and third quarters given the
strengthening in the transportation sector.
Transportation volumes for invoices and dollars increased 4% and
10% respectively. With strong performance from the manufacturing
sector, this was the first quarter in 2020 where volumes surpassed
2019 levels. The consistent addition of new business throughout
2020 and a more stable foundation of current customer volumes are
encouraging factors for growth in 2021.
Growth in new business enabled facility-related (electricity,
gas, waste and telecom expense management) invoice volumes to
increase 7%, overcoming a number of COVID-related bankruptcies and
location closings. Telecom showed continued strength in global
engagements, both in new business and pipelines. Facility dollar
volumes dipped 2% as governmental restrictions in the restaurant,
retail and hospitality sectors curtailed business hours and
consumers continued to be cautious about travel and entertainment,
both creating lower utility usage. As states continue to re-open
their economies, it is anticipated that usage will gradually return
to normal.
Consolidated operating expenses decreased $1,124,000 (4%) due to
lower personnel expense and a COVID-associated decline in travel
and other business development activities.
Summary and Outlook
“It is a testament to the efforts of our team that the company
achieved year-over-year growth in fourth quarter net income despite
the headwinds presented by COVID-19,” noted Eric H. Brunngraber, Cass chairman and chief
executive officer. “While challenges remain, being a flexible and
reliable business partner is proving to be a critical benefit to
our clients. In addition, the continued expansion of our customer
base sets the stage for further recovery in our financial results
once the negative forces of the pandemic subside.”
2020 Full Year Recap
For the year ended December 31, 2020, Cass earned $1.73 per
diluted share, a decrease of 16% over the $2.07 per diluted share
it earned in 2019. Net income was $25.2 million, compared to $30.4
million in 2019. Revenues dropped 8%, from $157.2 million in 2019
to $145.0 million in 2020.
Consolidated operating expenses were down 4%, or $5.2 million,
due to lower transaction volumes for the full year.
Remote Workforce Continuing
Cass also reported that it continues to operate its remote
workforce program with most of its employees around the globe.
Cash Dividend Declared
On January 26, 2021, the company’s board of directors declared a
first quarter dividend of $.27 per share payable March 15, 2021 to
shareholders of record March 5, 2021. Cass has continuously paid
regularly scheduled cash dividends since 1934.
“Our history of uninterrupted dividend payments combined with
share repurchase activity that has returned over $35 million to
shareholders during the last five years reflect the company’s
commitment to rewarding shareholders,” Brunngraber stated.
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 over $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 December 31, 2020 and 2019:
Quarter
Ended
December 31, 2020
Quarter
Ended
December 31, 2019
Year
Ended
December 31, 2020
Year
Ended
December 31, 2019
Transportation Invoice Volume
8,950
8,636
33,184
36,042
Transportation Dollar Volume
$
7,529,560
$
6,878,768
$
26,516,803
$
28,090,514
Facility Expense Transaction Volume
6,962
6,496
27,292
27,525
Facility Expense Dollar Volume
$
3,339,960
$
3,413,832
$
13,458,230
$
14,882,728
Payment and Processing Fees
$
24,664
$
26,903
$
97,204
$
107,953
Net Investment Income
11,892
11,513
44,515
47,166
Gain on Sales of Securities
6
—
1,075
19
Other
570
519
2,162
2,097
Total Revenues
$
37,132
$
38,935
$
144,956
$
157,235
Personnel
$
22,223
$
22,489
$
88,062
$
91,083
Occupancy
930
988
3,739
3,918
Equipment
1,668
1,565
6,568
6,140
Other
4,828
5,731
16,246
18,628
Total Operating Expenses
$
29,649
$
30,773
$
114,615
$
119,769
Income from Operations before Income
Taxes
$
7,483
$
8,162
$
30,341
$
37,466
Income Tax Expense
1,072
1,791
5,165
7,062
Net Income
$
6,411
$
6,371
$
25,176
$
30,404
Basic Earnings per Share
$
.45
$
.44
$
1.75
$
2.11
Diluted Earnings per Share
$
.44
$
.43
$
1.73
$
2.07
Average Earning Assets
$
1,847,652
$
1,520,342
$
1,674,297
$
1,472,399
Net Interest Margin
2.68%
3.14%
2.82%
3.36%
Allowance for Credit Losses to Loans
1.34%
1.37%
1.34%
1.37%
Non-performing Loans to Total Loans
—
—
—
—
Net Loan (Recoveries) / Charge-offs to
Loans
—
(.01)
—
(.01)
Provision for Credit Losses
$
85
$
—
$
810
$
250
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210128005103/en/
Kenn Entringer at Casey Communications, Inc., (314) 721-2828
kentringer@caseycomm.com
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