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PADDING-LEFT:0.50em; PADDING-RIGHT:0.67em; VERTICAL-ALIGN: BOTTOM;
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BORDER-BOTTOM:black 1pt solid; TEXT-ALIGN: RIGHT; BORDER-LEFT:1pt;
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BORDER-BOTTOM:1pt; TEXT-ALIGN: RIGHT; BORDER-LEFT:1pt;
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PADUCAH, Ky., Oct. 4, 2013
/PRNewswire/ -- Computer Services, Inc. (CSI) (OTCQX: CSVI)
today reported record revenues and net income for the fiscal second
quarter and six months ended August 31,
2013.
(Logo: http://photos.prnewswire.com/prnh/20080418/CSILOGO
)
Second quarter revenues rose 11.1% to $54.0 million in fiscal 2014 compared with
$48.6 million in the second quarter
of fiscal 2013. Second quarter net income increased 6.8% to
$6.5 million, or $0.45 per diluted share, compared with
$6.1 million, or $0.41 per diluted share, in the second quarter of
fiscal 2013.
"CSI's record results for the second quarter 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. "This quarter marked
our 37th consecutive quarter of revenue growth, and our
outlook for the second half of fiscal 2014 remains positive based
on our pipeline of new business, high contract renewal rates and
solid growth in transaction volume."
"Our focus remains on driving revenue growth through our
expanded sales and marketing programs," Powless continued.
"We increased our sales force as part of our Strategic Growth
Initiative (SGI), and it has been successful in expanding our
geographic reach to a national presence as well as increasing
cross-sales of products and services to existing customers."
During the second quarter, CSI's Board of Directors approved a
14.3% increase in the quarterly cash dividend to $0.16 per share and authorized a $5.0 million increase in the Company's share
repurchase program. The increased dividend marked the
25th consecutive year of increasing CSI's cash
dividend. The dividend was paid on September 25, 2013,
to shareholders of record as of the close of business on
September 3, 2013. The increase in the share
repurchase program brought the total authorized for share
repurchase to $70 million since CSI's
share repurchase program was initially announced in March 2004.
Second Quarter Results
Second quarter consolidated revenues rose 11.1% to $54.0 million compared with $48.6 million for the second quarter ended
August 31, 2012. Processing
revenues increased 10.5% to $34.0
million compared with $30.8
million in the second quarter of fiscal 2013. The
growth in processing revenues reflects sales to new customers,
cross-sales to existing customers and increases in transaction
volumes from existing customers, partially offset by lost business.
Second quarter fiscal 2014 processing revenue included $1.2 million in early contract termination fees
compared with $51,000 in the second
quarter of fiscal 2013. The early termination fees were due
primarily to former customers being acquired by other non-customer
financial institutions.
Other revenues rose 12.1% to $20.0
million in the second quarter of fiscal 2014 and accounted
for 37.1% of total revenues compared with $17.9 million, or 36.7% of total revenues, in the
second quarter of fiscal 2013. Other revenue growth benefited
from higher sales of Internet and mobile banking services, growth
in homeland security and fraud prevention services, higher
eBusiness group revenues, and higher forms and envelope revenue
within our Document Services Division.
Second quarter operating income rose 9.0% to $10.7 million compared with $9.8 million in the second quarter of fiscal
2013. Operating margin for the second quarter was 19.8%
compared with 20.2% in the second quarter of fiscal 2013. The
decrease in operating margin was due primarily to the ramp up of
expenses related to the SGI 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 compared with the
second quarter of last year.
Net income increased 6.8% to $6.5
million in the second quarter compared with $6.1 million in fiscal 2013. Net income per
fully diluted share rose 9.8% to $0.45 in the second quarter of fiscal 2014
compared with $0.41 in fiscal
2013. Weighted average diluted shares outstanding were down
1.6% to 14.5 million for the second quarter of fiscal 2014 compared
to the same period of fiscal 2013 due primarily to CSI shares
repurchased under the Company's share repurchase program. CSI
repurchased 213,676 shares during the first half of fiscal 2014,
including 129,606 in the second quarter. CSI had
approximately $2.7 million
available under existing stock purchase authorizations outstanding
as of August 31, 2013.
"CSI's balance sheet remained strong with $3.3 million in cash and no long-term debt at
August 31, 2013," Powless said.
"We used our strong cash flow to reduce debt, increase CSI's cash
dividend, repurchase CSI shares and invest in new hardware and
software to support our continued growth. During the second
quarter, we invested about $2.2 million in new equipment and software,
and we returned $6.0 million to
shareholders in cash dividends and stock repurchases."
Six Month Results
Consolidated revenues for the first six months of fiscal 2014
rose 9.5% to a record $105.8 million
compared with $96.6 million
for the same period in fiscal 2013. CSI's growth in
revenues benefited from growth in processing and other
revenues.
Operating income rose 7.1% to $20.7
million for the first six months of fiscal 2014 compared
with $19.3 million for the same
period in fiscal 2013. Operating margin was 19.6% in the
first six months of fiscal 2014 compared with 20.0% in the same
period of fiscal 2013.
Net income for the first six months of fiscal 2014 rose 4.9% to
$12.5 million compared with
$11.9 million in the first six months
of fiscal 2013. Net income per diluted share increased 6.2%
to $0.86 for the first six
months of fiscal 2014 compared with $0.81 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 August
31,
|
|
Six Months Ended August
31,
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
Processing revenues
|
|
$
34,004
|
|
$
30,777
|
|
$
67,627
|
|
$
61,855
|
Other revenues
|
|
20,026
|
|
17,863
|
|
38,123
|
|
34,748
|
|
Total revenues
|
|
54,030
|
|
48,640
|
|
105,750
|
|
96,603
|
Operating expenses
|
|
43,311
|
|
38,807
|
|
85,040
|
|
77,264
|
|
Operating income
|
|
10,719
|
|
9,833
|
|
20,710
|
|
19,339
|
Interest income (expense)
|
|
(11)
|
|
(8)
|
|
(23)
|
|
(10)
|
|
Income before income taxes
|
|
10,708
|
|
9,825
|
|
20,687
|
|
19,329
|
Provision for income taxes
|
|
4,229
|
|
3,759
|
|
8,171
|
|
7,394
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
6,479
|
|
$
6,066
|
|
$
12,516
|
|
$
11,935
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.45
|
|
$
0.41
|
|
$
0.86
|
|
$
0.81
|
|
Diluted
|
|
$
0.45
|
|
$
0.41
|
|
$
0.86
|
|
$
0.81
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing earnings
per
|
|
|
|
|
|
|
|
|
|
common and common equivalent
share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
14,511,898
|
|
14,718,145
|
|
14,563,509
|
|
14,721,665
|
|
|
Diluted
|
|
14,511,898
|
|
14,750,121
|
|
14,563,509
|
|
14,755,580
|
COMPUTER SERVICES, INC. AND
SUBSIDIARIES
|
Condensed Consolidated Balance
Sheets
|
(in thousands, except share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
08/31/2013
|
|
02/28/2013
|
|
08/31/2012
|
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
3,275
|
|
$
499
|
|
$
10,424
|
|
|
Accounts receivable
|
|
22,657
|
|
21,953
|
|
20,575
|
|
|
Income tax receivable
|
|
452
|
|
797
|
|
-
|
|
|
Prepaid expenses and other current
assets
|
|
8,034
|
|
6,625
|
|
6,545
|
|
|
|
Total current assets
|
|
34,418
|
|
29,874
|
|
37,544
|
|
Property and equipment,
net
|
|
35,340
|
|
34,996
|
|
36,414
|
|
Software and software licenses,
net
|
|
18,240
|
|
18,952
|
|
18,293
|
|
Goodwill
|
|
60,115
|
|
60,115
|
|
60,115
|
|
Intangible assets
|
|
8,920
|
|
9,374
|
|
10,009
|
|
Other assets
|
|
9,858
|
|
8,703
|
|
8,540
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
166,891
|
|
$
162,014
|
|
$ 170,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
|
$
17,646
|
|
$
12,979
|
|
$
14,249
|
|
|
Deferred revenue
|
|
8,762
|
|
9,337
|
|
9,923
|
|
|
Income taxes payable
|
|
-
|
|
-
|
|
37
|
|
|
Notes payable
|
|
27
|
|
60
|
|
84
|
|
|
|
Total current liabilities
|
|
26,435
|
|
22,376
|
|
24,293
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
|
Notes payable
|
|
-
|
|
7
|
|
34
|
|
|
Deferred income taxes
|
|
13,193
|
|
13,193
|
|
11,902
|
|
|
Other long-term
liabilities
|
|
1,174
|
|
1,071
|
|
1,128
|
|
|
|
Total long-term
liabilities
|
|
14,367
|
|
14,271
|
|
13,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
40,802
|
|
36,647
|
|
37,357
|
|
|
|
|
|
|
|
|
|
|
|
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,
14,430,952 at August 31, 2013,
|
|
|
|
|
|
|
|
|
|
14,620,743 at February 28, 2013, and
14,700,284 at August 31, 2012
|
|
20,513
|
|
19,522
|
|
19,564
|
|
|
Retained earnings
|
|
105,576
|
|
105,845
|
|
113,994
|
|
|
|
Total shareholders' equity
|
|
126,089
|
|
125,367
|
|
133,558
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders'
equity
|
|
$
166,891
|
|
$
162,014
|
|
$ 170,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Computer Services, Inc.