PADUCAH, Ky., May 9, 2013 /PRNewswire/ -- Computer
Services, Inc. (CSI) (OTCQX: CSVI) today reported record
revenues and net income for the fourth quarter and fiscal year
ended February 28, 2013. The
record results for fiscal 2013 marked CSI's 13th
consecutive year of revenue growth and 16th consecutive
year of growth in net income.
(Logo:
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Fourth quarter revenues rose 11.5% to a record $52.1 million in fiscal 2013 compared with
$46.7 million in the fourth quarter
of fiscal 2012. Net income was a record $7.3
million, or $0.50 per fully
diluted share, in the fourth quarter of fiscal 2013 compared with
$7.2 million, or $0.49 per fully diluted share, in the fourth
quarter of fiscal 2012.
CSI's revenues for fiscal 2013 were a record $198.3 million and rose 11.2% compared with
$178.2 million for fiscal 2012. Net
income for fiscal 2013 was a record $25.8
million, a 1.3% increase compared with fiscal 2012 income of
$25.5 million. Net income per fully
diluted share increased 2.3% to $1.76 compared with $1.72 last year.
"Our record results for fiscal 2013 benefited from higher
processing revenues generated from our core processing customers
and record transaction volume from our regulatory compliance
services," stated Chief Executive Officer Steven A. Powless. "We had a record year for new
bank sales, including the addition of our largest core customer in
our history, a $3.4 billion bank with
more than 50 branches. We also processed over 32 billion
transactions during fiscal 2013.
"Our outlook for fiscal 2014 is positive based on the continued
growth of our processing business, our solid base of recurring
revenues, high contract renewal rates and opportunities to expand
our regulatory compliance services," continued Mr.
Powless.
Fiscal 2013 Results
Consolidated revenues rose 11.2% to $198.3 million for fiscal 2013 compared with
$178.2 million for fiscal 2012. CSI's
growth in revenues reflects new customers added since last year,
cross-sales to existing customers, increased transaction volume
from existing customers, and the contribution from the HEIT
acquisition. Processing revenues rose 4.7% to $126.0 million for fiscal 2013 compared with
$120.4 million for fiscal 2012.
The growth in processing revenues included higher sales to new
customers, cross-sales to existing customers and increases in
transaction volumes from existing customers, partially offset by
the effect of processing accounts that terminated during fiscal
2013 and 2012. Other revenues increased 24.9% to $72.3 million for fiscal 2013 compared with
$57.8 million for fiscal 2012.
The growth in other revenues reflected the significant growth in
transactions processed for new and existing customers, increased
demand for document services, continued growth in eBusiness and the
contribution from the HEIT acquisition. HEIT, a provider of
cloud-based managed compliance, security and IT services, was
acquired September 1, 2011.
Operating expenses rose 13.5% to $156.4
million in fiscal 2013 compared with fiscal 2012. The
increase in operating expense growth was due partly to higher
employee-related expenses attributed to personnel additions to
support our Strategic Growth Initiative (SGI) announced in early
fiscal 2012, higher card-related fees due to growth in ATM and
debit card processing, and to the acquisition of HEIT. Fiscal 2012
operating expenses reflect a $2.0
million non-recurring gain from the reduction in earn-out of
an acquisition.
Operating income rose 3.7% to $41.9
million in fiscal 2013 compared with $40.4 million in fiscal 2012. Operating margins
declined to 21.1% in fiscal 2013 compared with 22.6% in fiscal
2012. 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 2013 rose 1.3% to $25.8 million compared with $25.5 million for fiscal 2012. Net income per
fully diluted share increased 2.3% to $1.76 for fiscal 2013 compared with $1.72 for fiscal 2012. Weighted average fully
diluted shares outstanding declined 0.5% from fiscal year 2012 due
to CSI shares repurchased under the Company's stock repurchase
program. CSI repurchased 167,472 shares of its stock in fiscal
2013.
CSI's cash flow from operations was $41.1
million in fiscal 2013. The Company returned a record
$28.1 million to shareholders during
fiscal 2013 in cash dividends and stock repurchases or otherwise
redeemed. Total long-term debt was reduced to $7,000 in fiscal 2013 from $77,000 in the prior year. Cash and cash
equivalents totaled $499,000 at
February 28, 2013.
"We used our strong cash flow to reduce debt, repurchase CSI
shares and increase our cash dividend during fiscal 2013, while
investing $21 million in hardware and
software to support our continued growth," stated Mr.
Powless. "We paid shareholders a record $22.5 million in cash dividends in fiscal 2013,
the highest amount returned to CSI shareholders in our 48-year
history. The growth in our dividend payout included a 12% increase
in our quarterly cash dividend to $0.14 per share, our 24th consecutive
year of increased dividends, and a special $1.00 per share cash dividend paid in
December 2012. We also repurchased
$5.1 million in CSI stock during the
year. Our Board remains focused on building shareholder value
through our cash dividend and stock repurchase programs."
Fourth Quarter Results
Fourth quarter consolidated revenues rose 11.5% to a record
$52.1 million compared with
$46.7 million for the fourth quarter
ended February 29, 2012. Processing
revenues increased 6.5% to $32.5
million in the fourth quarter of fiscal 2013 compared with
$30.5 million in the fourth quarter
of fiscal 2012. Other revenues were up 21.0% to $19.6 million in the fourth quarter of fiscal
2013 compared with $16.2 million in
the fourth quarter of fiscal 2012. The significant growth in other
revenues benefited from new customers for regulatory compliance
services, growth in transaction volume, and higher sales of
eBusiness and document services.
Fourth quarter 2013 operating expenses rose 10.3% to
$40.2 million compared with
$36.5 million in the fourth quarter
of 2012. 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 16.1% to
$11.9 million in fiscal 2013 compared
with $10.2 million in fiscal 2012.
Operating margins increased to 22.8% in the fourth quarter of
fiscal 2013 compared with 21.9% in the fourth quarter of fiscal
2012. The improvement in CSI's operating margin was due primarily
to growth in revenues and improved sales mix compared with the
prior fiscal year's results.
Income before taxes rose 16.0% to $11.9
million in the fourth quarter of fiscal 2013 compared with
$10.2 million in the same quarter of
fiscal 2012. Provision for income taxes rose to $4.5 million in the fourth quarter of fiscal 2013
compared with $3.0 million in the
fourth quarter of fiscal 2012. The effective income tax rate was
38.3% in the fourth quarter of fiscal 2013 compared with 29.4% in
the fourth quarter of fiscal 2012. The lower tax rate in fiscal
2012 was primarily due to deductions in fiscal 2012 related to the
recharacterization of expense with respect to various stock option
exercises, in addition to state income taxes and adjustments to
various deferred tax assets and liabilities.
Net income for the fourth quarter of fiscal 2013 rose to
$7.3 million, or $0.50 per fully diluted share, compared with
$7.2 million, or $0.49 per fully diluted share, for the fourth
quarter of fiscal 2012.
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 Report, 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 February
28 and 29,
|
|
Year Ended February 28 and
29,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Processing
revenues
|
$
32,522
|
|
$
30,526
|
|
$
126,002
|
|
$
120,381
|
Other revenues
|
19,568
|
|
16,171
|
|
72,254
|
|
57,843
|
|
Total revenues
|
52,090
|
|
46,697
|
|
198,256
|
|
178,224
|
Operating
expenses
|
40,207
|
|
36,466
|
|
156,395
|
|
137,839
|
|
Operating
income
|
11,883
|
|
10,231
|
|
41,861
|
|
40,385
|
Interest income (expense),
net
|
(14)
|
|
3
|
|
(16)
|
|
(60)
|
|
Income before income
taxes
|
11,869
|
|
10,234
|
|
41,845
|
|
40,325
|
Provision for income
taxes
|
4,540
|
|
3,009
|
|
16,006
|
|
14,819
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
7,329
|
|
$
7,225
|
|
$
25,839
|
|
$
25,506
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
$
0.50
|
|
$
0.49
|
|
$
1.76
|
|
$
1.74
|
|
Diluted
|
$
0.50
|
|
$
0.49
|
|
$
1.76
|
|
$
1.72
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing
earnings per
|
|
|
|
|
|
|
|
|
common and common equivalent
share
|
|
|
|
|
|
|
|
|
|
Basic
|
14,640,589
|
|
14,688,790
|
|
14,695,122
|
|
14,649,630
|
|
|
Diluted
|
14,651,023
|
|
14,792,351
|
|
14,721,622
|
|
14,792,213
|
COMPUTER SERVICES, INC. AND
SUBSIDIARIES
|
Condensed Consolidated
Balance Sheets
|
(in thousands, except
share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/28/2013
|
|
02/29/2012
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
499
|
|
$
8,514
|
|
|
Accounts
receivable
|
21,953
|
|
21,306
|
|
|
Income tax
receivable
|
797
|
|
2,444
|
|
|
Prepaid expenses and other
current assets
|
6,625
|
|
6,664
|
|
|
|
Total current
assets
|
29,874
|
|
38,928
|
|
Property and equipment, net of
accumulated depreciation
|
34,996
|
|
32,341
|
|
Software and software
licenses, net of accumulated amortization
|
18,952
|
|
15,058
|
|
Goodwill
|
|
60,115
|
|
60,115
|
|
Intangible
assets
|
9,374
|
|
10,643
|
|
Other assets
|
8,703
|
|
7,908
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
162,014
|
|
$
164,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
$
12,979
|
|
$
15,935
|
|
|
Deferred
revenue
|
9,337
|
|
9,751
|
|
|
Notes payable
|
60
|
|
145
|
|
|
|
Total current
liabilities
|
22,376
|
|
25,831
|
|
Long-term
liabilities
|
|
|
|
|
|
Notes payable
|
7
|
|
77
|
|
|
Deferred income
taxes
|
13,193
|
|
11,902
|
|
|
Other long-term
liabilities
|
1,071
|
|
1,337
|
|
|
|
Total long-term
liabilities
|
14,271
|
|
13,316
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
36,647
|
|
39,147
|
|
|
|
|
|
|
|
|
|
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, 14,620,743 at February 28, 2013
|
|
|
|
|
|
|
and 14,707,495 at February 29,
2012
|
22,442
|
|
21,477
|
|
|
Retained
earnings
|
105,845
|
|
107,474
|
|
|
Restricted
stock
|
(2,920)
|
|
(3,105)
|
|
|
|
Total shareholders'
equity
|
125,367
|
|
125,846
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
162,014
|
|
$
164,993
|
SOURCE Computer Services, Inc.