PADUCAH, Ky., May 7, 2014 /PRNewswire/ -- Computer Services,
Inc. (CSI) (OTCQX: CSVI) today reported record revenues and
net income for the fourth quarter and fiscal year ended
February 28, 2014. The record
results for fiscal 2014 marked CSI's 14th consecutive
year of revenue growth and 17th consecutive year of
growth in net income.
(Logo:
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Fourth quarter revenues rose 3.9% to a record $54.1 million in fiscal 2014 compared with
$52.1 million in the fourth quarter
of fiscal 2013. Net income was a record $7.4
million, or $0.52 per fully
diluted share, in the fourth quarter of fiscal 2014 compared with
$7.3 million, or $0.50 per fully diluted share, in the fourth
quarter of fiscal 2013.
CSI's revenues for fiscal 2014 were a record $212.9 million and rose 7.4% compared with
$198.3 million for fiscal 2013. Net
income for fiscal 2014 was a record $26.7
million, a 3.2% increase compared with fiscal 2013 income of
$25.8 million. Net income per fully
diluted share increased 5.1% to $1.85 compared with $1.76 in the prior fiscal year.
"We completed our most successful sales year in fiscal 2014 and
benefited from revenue growth from every CSI division,"
stated Chief Executive Officer Steven
A. Powless. "Our growth in processing revenues gained
momentum with sales to new core customers and increased cross-sales
to existing customers. We added numerous new core customers
across the country accounting for a record $58.9 million in total contract value in fiscal
2014. We also strengthened our recurring revenue base with
new long-term contracts from renewals and new customers,
highlighting our customers' high satisfaction levels and their
confidence in CSI's future.
"CSI enters fiscal 2015 with excellent potential to set new
records in our 50th year of operation. We have a growing
back-log of pending business augmented by a high percentage of
recurring revenues from core processing customers. We also
remain focused on delivering service and support that exceeds our
customers' expectations and believe these will be key in supporting
our continued growth," continued Mr. Powless.
Fiscal 2014 Results
Consolidated revenues rose 7.4% to $212.9
million for fiscal 2014 compared with $198.3 million for fiscal 2013. CSI's growth in
revenues reflects new customers added since last year, cross-sales
to existing customers, and increased transaction volume. Processing
revenues rose 6.5% to $134.1 million
for fiscal 2014 compared with $126.0 million for fiscal 2013. The growth
in processing revenues included record sales to new customers,
cross-sales to existing customers and increases in transaction
volumes from existing customers. Other revenues increased 9.0% to
$78.8 million for fiscal 2014
compared with $72.3 million for
fiscal 2013. The increase in other revenues was due primarily to
growth in mobile and Internet banking services, growth in homeland
security and fraud prevention services, and higher eBusiness group
revenues.
Operating expenses rose 7.9% to $168.8
million in fiscal 2014 compared with fiscal 2013. The
increase in operating expenses was due primarily to costs related
to CSI's Strategic Growth Initiative (SGI).
"We made significant investments in ramping up SGI over the past
three years," continued Powless. "We expect to leverage these
expenses in sales, marketing, and expanded management talent.
We believe these investments in SGI will accelerate our revenue and
earnings growth potential and will be key to building future
shareholder value."
Operating income rose 5.3% to $44.1
million in fiscal 2014 compared with $41.9 million in fiscal 2013. Operating margins
were 20.7% in fiscal 2014 compared with 21.1% in fiscal 2013. The
decline in CSI's operating margin was due primarily to staffing
additions as part of SGI compared with the prior fiscal
year.
Net income for fiscal 2014 rose 3.2% to $26.7 million compared with $25.8 million for fiscal 2013. Net income per
fully diluted share increased 5.1% to $1.85 for fiscal 2014 compared with $1.76 for fiscal 2013. Weighted average fully
diluted shares outstanding declined 1.9% from fiscal year 2013 due
to CSI shares repurchased under the Company's stock repurchase
program. CSI repurchased 421,951 shares of its stock in fiscal
2014.
CSI's cash flow from operations was $36.6
million in fiscal 2014. The Company returned $22.4 million to shareholders during fiscal 2014
in cash dividends and stock repurchased or redeemed. Total
long-term debt was eliminated in fiscal 2014 from $7,000 the prior year. Cash and cash equivalents
totaled $1.1 million at February 28, 2014.
"CSI's financial position remained strong in fiscal 2014 and
benefited from growth in net income and our strong cash flow from
operations," stated Mr. Powless. "Our Board remains focused
on building shareholder value through our cash dividend and stock
repurchase programs. We used our earnings power to increase our
quarterly cash dividend for the 42nd consecutive year
and to add $10 million to the
Company's share repurchase program. We also invested $13.4 million in new property, equipment,
hardware and software during fiscal 2014 to support our continued
growth."
Fourth Quarter Results
Fourth quarter consolidated revenues rose 3.9% to a record
$54.1 million compared with
$52.1 million for the fourth quarter
ended February 28, 2013. Processing
revenues increased 2.9% to $33.5
million in the fourth quarter of fiscal 2014 compared with
$32.5 million in the fourth quarter
of fiscal 2013. Other revenues were up 5.6% to $20.7 million in the fourth quarter of fiscal
2014 compared with $19.6 million in
the fourth quarter of fiscal 2013. The significant growth in other
revenues benefited from new customers for regulatory compliance
services, growth in transaction volumes, and higher sales of
eBusiness and document services.
Fourth quarter 2014 operating expenses rose 4.0% to $41.8 million compared with $40.2 million in the fourth quarter of 2013. The
increase in operating expenses was due partly to higher
employee-related expenses attributed to personnel additions to
support SGI, which was announced in early fiscal 2012.
Operating income for the fourth quarter rose 3.6% to
$12.3 million in fiscal 2014 compared
with $11.9 million in fiscal 2013.
Operating margins decreased to 22.7% in the fourth quarter of
fiscal 2014 compared with 22.8% in the fourth quarter of fiscal
2013. The decline in CSI's operating margin was due primarily to
staffing additions as part of SGI compared with the prior fiscal
year.
Income before taxes rose 3.6% to $12.3
million in the fourth quarter of fiscal 2014 compared with
$11.9 million in the same quarter of
fiscal 2013. Provision for income taxes rose to $4.9 million in the fourth quarter of fiscal 2014
compared with $4.5 million in the
fourth quarter of fiscal 2013. The effective income tax rate was
39.5% in the fourth quarter of fiscal 2014 compared with 38.3% in
the fourth quarter of fiscal 2013.
Net income for the fourth quarter of fiscal 2014 rose to
$7.4 million, or $0.52 per fully diluted share, compared with
$7.3 million, or $0.50 per fully diluted share, for the fourth
quarter 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; (ii) risk factors affecting the financial
services information technology industry generally including, but
not limited to, cybersecurity risks that may result in increased
costs for us to protect against the risks, as well as liability or
reputational damage to the Company in the event of a breach of our
security; and (iii) 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
|
(Audited)
|
(in thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
February 28,
|
|
Year Ended
February 28,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Processing
revenues
|
$
33,456
|
|
$
32,522
|
|
$
134,133
|
|
$
126,002
|
Other
revenues
|
20,658
|
|
19,568
|
|
78,781
|
|
72,254
|
|
Total
revenues
|
54,114
|
|
52,090
|
|
212,914
|
|
198,256
|
Operating
expenses
|
41,808
|
|
40,207
|
|
168,821
|
|
156,395
|
|
Operating
income
|
12,306
|
|
11,883
|
|
44,093
|
|
41,861
|
Interest expense,
net
|
(4)
|
|
(14)
|
|
(34)
|
|
(16)
|
|
Income before income
taxes
|
12,302
|
|
11,869
|
|
44,059
|
|
41,845
|
Provision for income
taxes
|
4,859
|
|
4,540
|
|
17,403
|
|
16,006
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
7,443
|
|
$
7,329
|
|
$
26,656
|
|
$
25,839
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
$
0.52
|
|
$
0.50
|
|
$
1.85
|
|
$
1.76
|
|
Diluted
|
$
0.52
|
|
$
0.50
|
|
$
1.85
|
|
$
1.76
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing earnings per
|
|
|
|
|
|
|
|
|
common and common
equivalent share
|
|
|
|
|
|
|
|
|
|
Basic
|
14,265,434
|
|
14,640,549
|
|
14,440,668
|
|
14,695,122
|
|
|
Diluted
|
14,265,434
|
|
14,651,023
|
|
14,440,668
|
|
14,721,622
|
COMPUTER SERVICES,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(Audited)
|
(in thousands,
except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/28/2014
|
|
02/28/2013
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
1,078
|
|
$
499
|
|
|
Accounts
receivable
|
25,962
|
|
21,953
|
|
|
Income tax
receivable
|
538
|
|
797
|
|
|
Prepaid expenses and
other current assets
|
9,628
|
|
6,625
|
|
|
|
Total current
assets
|
37,206
|
|
29,874
|
|
Property and
equipment, net of accumulated depreciation
|
35,252
|
|
34,996
|
|
Software and software
licenses, net of accumulated amortization
|
17,963
|
|
18,952
|
|
Goodwill
|
60,115
|
|
60,115
|
|
Intangible
assets
|
8,264
|
|
9,374
|
|
Other
assets
|
16,120
|
|
8,703
|
|
|
|
|
|
|
|
|
Total
assets
|
$
174,920
|
|
$
162,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
18,536
|
|
$
12,979
|
|
|
Deferred
revenue
|
9,430
|
|
9,337
|
|
|
Notes
payable
|
7
|
|
60
|
|
|
|
Total current
liabilities
|
27,973
|
|
22,376
|
|
Long-term
liabilities
|
|
|
|
|
|
Notes
payable
|
-
|
|
7
|
|
|
Deferred income
taxes
|
14,418
|
|
13,193
|
|
|
Other long-term
liabilities
|
1,198
|
|
1,071
|
|
|
|
Total long-term
liabilities
|
15,616
|
|
14,271
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
43,589
|
|
36,647
|
|
|
|
|
|
|
|
|
|
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, 14,227,951 at February 28, 2014
|
|
|
|
|
|
|
|
and 14,620,743 at
February 28, 2013
|
|
20,316
|
|
19,522
|
|
|
Retained
earnings
|
111,015
|
|
105,845
|
|
|
|
Total shareholders'
equity
|
131,331
|
|
125,367
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
174,920
|
|
$
162,014
|
|
|
|
|
|
|
|
|
SOURCE Computer Services, Inc.