PADUCAH, Ky., Dec. 30, 2013 /PRNewswire/ -- Computer
Services, Inc. (CSI) (OTCQX: CSVI) today reported record revenues
and net income for the fiscal third quarter and nine months ended
November 30, 2013.
(Logo:
http://photos.prnewswire.com/prnh/20080418/CSILOGO)
Third quarter revenues rose 7.0% to $53.1
million in fiscal 2014 compared with $49.6 million in the third quarter of fiscal
2013. Third quarter net income increased 1.9% to $6.7 million, and diluted net income per share
rose 4.4% to $0.47, compared with
$6.6 million, or $0.45 per diluted share, in the third quarter of
fiscal 2013.
"CSI marked its 38th consecutive quarter of revenue
growth at November 30, 2013," stated
Chief Executive Officer Steven A.
Powless. "We benefited from higher processing revenues
generated from our core processing customers and higher other
revenues due to increased demand for our mobile and Internet
banking solutions as well as record transaction volume from our
regulatory compliance services.
"We expect to report continued revenue growth in the fourth
quarter based on our pipeline of new business, high contract
renewal rates and growth in transaction volume," Powless
continued. "We believe CSI is positioned well to drive future
revenue growth through our expanded sales and marketing programs.
During the first nine months of fiscal 2014, we invested
$9.3 million in new hardware and
software to support our continued growth in transaction
volume. We expect these investments in hardware, software,
sales and marketing programs to be major drivers for our continued
growth next year."
During the third quarter, CSI's Board of Directors declared a
cash dividend of $0.16 per
share. The dividend was paid on December 26, 2013, to shareholders of record as
of the close of business on December 2, 2013.
Third Quarter Results
Third quarter consolidated revenues rose 7.0% to $53.1 million compared with $49.6 million for the third quarter ended
November 30, 2012. Processing
revenues increased 4.5% to $33.1
million compared with $31.6
million in the third quarter of fiscal 2013. The
growth was primarily driven by the addition of new customers,
cross-sales to existing customers and increases in transaction
volumes from existing customers, partially offset by the effect of
lost business. Processing revenues included early contract
termination fees of $957,000 for the
third quarter and $2.7 million for
the first nine months of fiscal 2014 compared with $131,000 for the third quarter and $236,000 for the first nine months of fiscal
2013. A substantial number of the former customers were acquired by
non-customer financial institutions.
Other revenues rose 11.5% to $20.0
million in the third quarter of fiscal 2014 and accounted
for 37.7% of total revenues compared with $17.9 million, or 36.2% of total revenues, in the
third quarter of fiscal 2013. The increase in other revenues
was primarily due to growth in mobile and Internet banking
services, growth in homeland security and fraud prevention
services; higher eBusiness group revenues; and higher forms and
envelope revenue.
Third quarter operating income rose 4.1% to $11.1 million compared with $10.6 million in the third quarter of fiscal
2013. Operating margin for the third quarter was 20.9%
compared with 21.5% in the third quarter of fiscal 2013. The
decrease in operating margin was due primarily to the ramp up of
expenses related to our Strategic Growth Initiative launched in
fiscal 2012, most of which have been incurred. In addition,
expenses increased for equipment and travel related to the build
out of our national sales team, increased fees related to growth in
our ATM and debit card business, and higher network communications
fees compared with the third quarter of last year.
Net income increased 1.9% to $6.7
million in the third quarter compared with $6.6 million in fiscal 2013. Net income per
fully diluted share rose 4.4% to $0.47 in the third quarter of fiscal 2014
compared with $0.45 in fiscal
2013. Weighted average diluted shares outstanding were down
2.2% to 14.4 million for the third quarter of fiscal 2014 compared
with the same period of fiscal 2013 due primarily to CSI shares
repurchased under the Company's share repurchase program. CSI
repurchased 331,892 shares during the first nine months of fiscal
2014, including 118,116 in the third quarter. CSI had
approximately $3.9 million
available under existing stock purchase authorizations outstanding
as of November 30, 2013.
"CSI's balance sheet remained strong at November 30, 2013, with $3.8 million in cash and no long-term debt,"
Powless said. "We used our strong cash flow to return a
portion of our earnings to shareholders through cash dividends and
repurchases of CSI stock. We also continued to invest in new
hardware and software to support our continued growth. During
the third quarter, we invested $2.5 million in new equipment and software,
and we returned $6.1 million to
shareholders in cash dividends and stock repurchases."
Nine Month Results
Consolidated revenues for the first nine months of fiscal 2014
rose 8.6% to a record $158.8 million
compared with $146.2 million
for the same period in fiscal 2013. CSI's increase in
revenues represented growth in both processing and other revenues
categories.
Operating income rose 6.0% to $31.8
million for the first nine months of fiscal 2014 compared
with $30.0 million for the same
period in fiscal 2013. Operating margin was 20.0% in the
first nine months of fiscal 2014 compared with 20.5% in the same
period of fiscal 2013.
Net income for the first nine months of fiscal 2014 rose 3.8% to
$19.2 million compared with
$18.5 million in the first nine
months of fiscal 2013. Net income per diluted share increased
5.6% to $1.33 for the first nine
months of fiscal 2014 compared with $1.26 for the same period of fiscal
2013.
About Computer Services, Inc.
Computer Services, Inc. (CSI) delivers core processing, managed
services, mobile and Internet solutions, payments processing, print
and electronic distribution, and regulatory compliance solutions to
financial institutions and corporate customers across the nation.
Exceptional service, dynamic solutions and superior results are the
foundation of CSI's reputation, and have resulted in the company's
inclusion in such top industry-wide rankings as the FinTech 100,
Talkin' Cloud 100 and MSPmentor Top 501 Global Managed Service
Providers List. CSI's stock is traded on OTCQX under the symbol
CSVI. For more information about CSI, visit www.csiweb.com.
Forward-Looking Statements
This news release contains "forward-looking statements" as
that term is defined in the Private Securities Litigation Reform
Act of 1995. All statements except historical statements contained
herein constitute "forward-looking statements." Forward-looking
statements are inherently uncertain and are based only on current
expectations and assumptions that are subject to future
developments that may cause results to differ materially. Readers
should carefully consider: (i) economic, competitive, technological
and governmental factors affecting CSI's operations, customers,
markets, services, products and prices; and (ii) other factors
discussed in CSI's Annual Report, Quarterly Reports, Information
and Disclosure Statements and other documents posted from time to
time on the OTCQX website (www.otcqx.com), including
without limitation, the description of the nature of CSI's business
and its management discussion and analysis of financial condition
and results of operations for reported periods. Unless required by
law, CSI undertakes no obligation to update, and is not responsible
for updating, the information contained in this report beyond the
publication date, whether as a result of new information or future
events, or to conform the statement to actual results or changes in
CSI's expectations, or otherwise or for changes made to this
document by wire services or Internet services.
|
COMPUTER SERVICES,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Income
|
(Unaudited)
|
(in thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
November 30,
|
|
Nine Months Ended
November 30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
Processing
revenues
|
$
33,050
|
|
$
31,625
|
|
$
100,677
|
|
$
93,480
|
Other
revenues
|
20,000
|
|
17,938
|
|
58,123
|
|
52,686
|
|
Total
revenues
|
53,050
|
|
49,563
|
|
158,800
|
|
146,166
|
Operating
expenses
|
41,973
|
|
38,924
|
|
127,013
|
|
116,188
|
|
Operating
income
|
11,077
|
|
10,639
|
|
31,787
|
|
29,978
|
Interest income
(expense), net
|
(7)
|
|
8
|
|
(30)
|
|
(2)
|
|
Income before income
taxes
|
11,070
|
|
10,647
|
|
31,757
|
|
29,976
|
Provision for income
taxes
|
4,373
|
|
4,072
|
|
12,544
|
|
11,466
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
6,697
|
|
$
6,575
|
|
$
19,213
|
|
$
18,510
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
$
0.47
|
|
$
0.45
|
|
$
1.33
|
|
$
1.26
|
|
Diluted
|
$
0.47
|
|
$
0.45
|
|
$
1.33
|
|
$
1.26
|
|
|
|
|
|
|
|
|
|
Shares used in
computing earnings per
|
|
|
|
|
|
|
|
|
common and common
equivalent share
|
|
|
|
|
|
|
|
|
Basic
|
14,365,593
|
|
14,695,388
|
|
14,498,017
|
|
14,712,969
|
|
Diluted
|
14,365,593
|
|
14,722,738
|
|
14,498,017
|
|
14,744,714
|
|
|
COMPUTER SERVICES,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(in thousands,
except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/30/2013
|
|
02/28/2013
|
|
11/30/2012
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
3,830
|
|
$
499
|
|
$
17,415
|
|
|
Accounts
receivable
|
23,035
|
|
21,953
|
|
19,954
|
|
|
Income tax
receivable
|
236
|
|
797
|
|
-
|
|
|
Prepaid expenses and
other current assets
|
7,812
|
|
6,625
|
|
7,226
|
|
|
|
Total current
assets
|
34,913
|
|
29,874
|
|
44,595
|
|
Property and
equipment, net
|
35,256
|
|
34,996
|
|
35,747
|
|
Software and software
licenses, net
|
17,270
|
|
18,952
|
|
17,346
|
|
Goodwill
|
60,115
|
|
60,115
|
|
60,115
|
|
Intangible
assets
|
8,592
|
|
9,374
|
|
9,692
|
|
Other
assets
|
10,792
|
|
8,703
|
|
8,822
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
166,938
|
|
$
162,014
|
|
$
176,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
17,527
|
|
$
12,979
|
|
$
30,448
|
|
|
Deferred
revenue
|
8,259
|
|
9,337
|
|
9,870
|
|
|
Income taxes
payable
|
-
|
|
-
|
|
333
|
|
|
Notes
payable
|
16
|
|
60
|
|
72
|
|
|
|
Total current
liabilities
|
25,802
|
|
22,376
|
|
40,723
|
|
Long-term
liabilities
|
|
|
|
|
|
|
|
Notes
payable
|
-
|
|
7
|
|
17
|
|
|
Deferred income
taxes
|
13,193
|
|
13,193
|
|
11,902
|
|
|
Other long-term
liabilities
|
1,145
|
|
1,071
|
|
899
|
|
|
|
Total long-term
liabilities
|
14,338
|
|
14,271
|
|
12,818
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
40,140
|
|
36,647
|
|
53,541
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
Preferred stock;
shares authorized, 5,000,000; none issued
|
-
|
|
-
|
|
-
|
|
|
Common stock, no par;
shares authorized, 20,000,000 in fiscal 2014 and
|
|
|
|
|
|
|
|
|
2013; shares issued
and outstanding, 14,314,731 at November 30, 2013,
|
|
|
|
14,620,743 at
February 28, 2013, and 14,695,344 at November 30, 2012
|
20,389
|
|
19,522
|
|
19,661
|
|
|
Retained
earnings
|
106,409
|
|
105,845
|
|
103,115
|
|
|
|
Total shareholders'
equity
|
126,798
|
|
125,367
|
|
122,776
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
166,938
|
|
$
162,014
|
|
$
176,317
|
SOURCE Computer Services, Inc.