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PADUCAH, Ky., Jan. 8, 2013 /PRNewswire/ -- Computer
Services, Inc. (CSI) (OTCQX: CSVI) today reported growth in revenue
and net income for the third quarter and nine months ended
November 30, 2012.
(Logo:
http://photos.prnewswire.com/prnh/20080418/CSILOGO )
Third quarter revenues rose 4.2% to $49.6
million in fiscal 2013 compared with $47.6 million in the third quarter of fiscal
2012. Third quarter net income increased 5.5% to $6.6 million, or $0.45 per diluted share compared with
$6.2 million, or $0.42 per diluted share, in the third quarter of
last fiscal year.
"Our growth in third quarter revenue benefited from the addition
of new processing accounts coming online and continued growth
from our other business units," stated Chief Executive Officer
Steven A. Powless. "We are
pleased to report our 34th consecutive quarter of
revenue growth that benefited from higher processing revenues
generated from long-term contracts and solid growth in transaction
volume from our regulatory and compliance services.
"Our Board of Directors highlighted our continued growth by
declaring a special cash dividend of $1.00 per share in October that was paid to
shareholders in December 2012," continued Mr. Powless. "In
addition, our Board approved a $5
million increase in our Company's share repurchase program
as part of our long-term program to return a portion of CSI's
earnings to our shareholders. We returned approximately
$8.1 million to CSI shareholders
through our cash dividend and stock repurchase programs during the
first nine months of fiscal 2013, and in December we paid out an
additional $14.7 million to
shareholders in the special cash dividend.
"Our focus remains on driving revenue growth through product
innovation, merging resources companywide to broaden our product
suites, and capitalizing on growth opportunities in our regulatory
and compliance businesses. We also continue to use our strong
cash flow and balance sheet to invest in our operations.
During the first nine months of this fiscal year, we invested
$15.9 in new equipment and software,
including $5.1 million for a new host
processor. We expect our investments in new hardware and software
to support our continued growth in transaction volume. Our
outlook for fiscal 2013 remains very positive. We expect the
addition of the new processing accounts and growth from our other
business units to contribute to record revenues and earnings in
fiscal 2013," continued Mr. Powless.
Third Quarter Results
Third quarter consolidated revenues rose 4.2% to $49.6 million compared with $47.6 million for the third quarter ended
November 30, 2011. Processing
revenues increased 6.1% to $31.6
million compared with $29.8
million in the third quarter of last year. The growth
in processing revenues reflects new customers added since last
year, cross-sales to existing customers, and increases in
transaction volumes from existing customers, partially offset by
lost business. Other revenues rose 1.0% to $17.9 million in the third quarter of fiscal 2013
compared with $17.8 million in the
third quarter of fiscal 2012. Growth in other revenue
benefited from higher transaction volume for regulatory and
compliance services, higher eBusiness group revenues, and growth in
Internet banking and mobile banking services.
Third quarter operating income increased 3.3% to $10.6 million compared with $10.3 million in the third quarter of the prior
year. Operating margin for the third quarter was 21.5%
compared with 21.7% in the third quarter of fiscal 2012. The
decline in CSI's operating margin was primarily due to staffing
additions as part of Strategic Growth Initiative (SGI); higher
network communication expense; and higher general and
administrative expenses compared with the third quarter of the
prior fiscal year.
Net income increased 5.5% to $6.6
million in the third quarter compared with $6.2 million in the prior-year period. Net
income per fully diluted share rose 7.1% to $0.45 in the third quarter of fiscal 2013
compared with $0.42 in the same
quarter last year. Weighted average diluted shares
outstanding were down 0.9% to 14.7 million since last year due
primarily to CSI shares repurchased under the Company's stock
repurchase program. CSI repurchased 76,571 shares during the
nine months of this fiscal year, including 24,140 in the third
quarter. CSI had approximately $6.9 million available under existing stock
purchase authorizations outstanding at November 30, 2012, including a $5.0 million increase in the Company's share
repurchase program announced in November
2012.
CSI's cash and cash equivalents rose to $17.4 million at November
30, 2012, up from $8.5 million
at February 29, 2012. The growth in cash was
largely attributable to cash flow from operations that totaled
$33.5 million in the first nine
months of fiscal 2013. Total debt at November 30, 2012 declined to $89,000.
Nine Month Results
Consolidated revenues for the first nine months of fiscal 2013
rose 11.1% to a record $146.2 million
compared with $131.5 million
for the same period in fiscal 2012. CSI's growth in
revenues benefited from a 4% increase in processing revenues and a
26.4% increase in other revenues compared with the first nine
months of the prior fiscal year. The increase in other
revenue was due primarily to the acquisition of HEIT Consulting,
Inc. (HEIT) that was acquired in September
2011.
Operating income was $30.0 million
for the first nine months of fiscal 2013 compared with $30.2 million for the same period last
year. Operating margin declined to 20.5% in the first nine
months of fiscal 2013 compared with 22.9% in the same period of
fiscal 2012. The decrease in operating income and margin was
due primarily to increased personnel costs associated with planned
staffing additions as part of SGI; higher network communication
expense; and higher general and administrative expenses compared to
the same period of fiscal 2012.
Net income for the first nine months of fiscal 2013 rose 1.3% to
$18.5 million compared with
$18.3 million in the first nine
months of fiscal 2012. Net income per diluted share rose to
$1.26 for the latest nine month
period compared with $1.24 for the
same period last year.
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 100 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 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,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Processing revenues
|
$
31,625
|
|
$
29,818
|
|
$
93,480
|
|
$
89,855
|
Other revenues
|
17,938
|
|
17,764
|
|
52,686
|
|
41,672
|
|
Total revenues
|
49,563
|
|
47,582
|
|
146,166
|
|
131,527
|
Operating expenses
|
38,924
|
|
37,278
|
|
116,188
|
|
101,373
|
|
Operating income
|
10,639
|
|
10,304
|
|
29,978
|
|
30,154
|
Interest income (expense), net
|
8
|
|
(44)
|
|
(2)
|
|
(63)
|
|
Income before income taxes
|
10,647
|
|
10,260
|
|
29,976
|
|
30,091
|
Provision for income taxes
|
4,072
|
|
4,026
|
|
11,466
|
|
11,810
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
6,575
|
|
$
6,234
|
|
$
18,510
|
|
$
18,281
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
Basic
|
$
0.45
|
|
$
0.42
|
|
$
1.26
|
|
$
1.25
|
|
Diluted
|
$
0.45
|
|
$
0.42
|
|
$
1.26
|
|
$
1.24
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing earnings
per
|
|
|
|
|
|
|
|
|
common and common equivalent
share
|
|
|
|
|
|
|
|
|
|
Basic
|
14,695,388
|
|
14,720,524
|
|
14,712,969
|
|
14,636,671
|
|
|
Diluted
|
14,722,738
|
|
14,862,459
|
|
14,744,714
|
|
14,792,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPUTER SERVICES, INC. AND SUBSIDIARIES
|
Condensed Consolidated Balance Sheets
|
(in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/30/2012
|
|
02/29/2012
|
|
11/30/2011
|
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
17,415
|
|
$
8,514
|
|
$
10,013
|
|
|
Accounts receivable
|
19,954
|
|
21,306
|
|
19,696
|
|
|
Income tax receivable
|
-
|
|
2,444
|
|
-
|
|
|
Prepaid expenses and other current
assets
|
7,226
|
|
6,664
|
|
5,296
|
|
|
|
Total current assets
|
44,595
|
|
38,928
|
|
35,005
|
|
Property and equipment, net
|
35,747
|
|
32,341
|
|
31,500
|
|
Software and software licenses,
net
|
17,346
|
|
15,058
|
|
15,762
|
|
Goodwill
|
|
60,115
|
|
60,115
|
|
56,166
|
|
Intangible assets
|
9,692
|
|
10,643
|
|
10,941
|
|
Other assets
|
8,822
|
|
7,908
|
|
7,565
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
176,317
|
|
$
164,993
|
|
$
156,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
$
30,448
|
|
$
15,935
|
|
$
16,198
|
|
|
Deferred revenue
|
9,870
|
|
9,751
|
|
7,811
|
|
|
Income taxes payable
|
333
|
|
-
|
|
2,923
|
|
|
Notes payable
|
72
|
|
145
|
|
220
|
|
|
Earn-out provision related to
acquisition
|
-
|
|
-
|
|
1,000
|
|
|
|
Total current liabilities
|
40,723
|
|
25,831
|
|
28,152
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
Notes payable
|
17
|
|
77
|
|
2,069
|
|
|
Deferred income taxes
|
11,902
|
|
11,902
|
|
3,403
|
|
|
Other long-term liabilities
|
899
|
|
1,337
|
|
827
|
|
|
|
Total long-term liabilities
|
12,818
|
|
13,316
|
|
6,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
53,541
|
|
39,147
|
|
34,451
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
Preferred stock; shares authorized,
5,000,000; none issued
|
-
|
|
-
|
|
-
|
|
|
Common stock, no par; shares authorized,
20,000,000 in fiscal 2013 and
|
|
|
|
|
|
|
|
|
2012; shares issued and outstanding,
14,695,344 at November 30, 2012,
|
|
|
|
|
|
|
|
|
14,707,495 at February 29, 2012, and
14,703,909 at November 30, 2011
|
22,599
|
|
21,477
|
|
21,517
|
|
|
Retained earnings
|
103,115
|
|
107,474
|
|
104,077
|
|
|
Restricted stock
|
(2,938)
|
|
(3,105)
|
|
(3,106)
|
|
|
|
Total shareholders' equity
|
122,776
|
|
125,846
|
|
122,488
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders'
equity
|
$
176,317
|
|
$
164,993
|
|
$
156,939
|
|
|
|
|
|
|
|
|
|
|
SOURCE Computer Services, Inc.