PADUCAH, Ky., Oct. 6, 2014 /PRNewswire/ -- Computer
Services, Inc. (CSI) (OTCQX: CSVI) today reported record
revenues and net income for the second quarter of fiscal 2015,
which ended August 31, 2014.
Photo - http://photos.prnewswire.com/prnh/20080418/CSILOGO
CSI's revenues grew 2.9% to $55.6
million for the second quarter of fiscal 2015 compared with
$54.0 million for the second
quarter of fiscal 2014. Net income rose 17.5% to $7.6 million for the second quarter of fiscal
2015 compared with $6.5 million in
the second quarter of fiscal 2014. Net income per share increased
20.0% to $0.54 for the second
quarter of fiscal 2015 compared with $0.45 for the prior year's second
quarter.
"CSI reported record revenues and net income in our second
fiscal quarter and benefited from new customer contracts coming
online and cross-sales to existing customers," stated Chief
Executive Officer Steven A. Powless.
"We also continue to have high contract renewal rates from existing
customers that provide CSI with a solid base of recurring
revenues. This marked our 41st consecutive quarter
of revenue growth, and we are poised to report continued revenue
growth this fiscal year based on these trends.
"During the second quarter, our Board of Directors increased our
cash dividend by 37.5% to $0.22 per
share and authorized an additional $5
million in our share repurchase program, highlighting our
long-term growth record and solid financial condition. This
dividend increase marks our 43rd consecutive year of
increasing our cash dividend. We remain focused on broadening
our market reach through our expanded national sales network and
expect increased demand for our regulatory compliance services and
Internet and mobile banking products to be drivers for future
growth," Powless continued.
Second Quarter Results
Consolidated revenues rose 2.9% to $55.6
million for the second quarter of fiscal 2015 compared with
$54.0 million in the second
quarter of fiscal 2014. Processing revenues rose 4.2% to
$35.4 million compared with
$34.0 million for the second
quarter of fiscal 2014. The growth in processing revenues was
driven primarily by sales to new customers, cross-sales to existing
customers and increases in transaction volume from existing
customers, offset partially by the effect of lost business. Other
revenues rose 0.7% to $20.2 million
compared with the second quarter of fiscal 2014. Other revenues
benefited from growth in Internet and mobile banking services,
growth in homeland security products and fraud prevention services,
higher hardware revenues, and growth in managed services.
Operating income rose 17.8% to $12.6
million for the second quarter of fiscal 2015 compared with
$10.7 million for the second
quarter of fiscal 2014. Operating margin increased to 22.7% in the
second quarter of fiscal 2015 compared with 19.8% for the second
quarter of fiscal 2014. The increase in operating margin was due
primarily to lower operating expenses compared with the second
quarter of last fiscal year. Operating expenses were down
0.8% from the prior year's second quarter and benefited from lower
employee-related expenses, including lower recognized commission
expense due to a change in accounting for commissions to the
deferral method in the fourth quarter of fiscal 2014, and savings
realized from data center consolidations completed during the third
quarter of fiscal 2014 and the first quarter of fiscal 2015. The
reduced expenses were offset partially by higher self-funded
medical plan expenses due to adverse claims experience that are
projected to be higher during the second half of the year compared
with the prior fiscal year.
Net income for the second quarter of fiscal 2015 rose 17.5% to
$7.6 million compared with
$6.5 million for the second quarter
of fiscal 2014. Net income per share increased 20.0% to
$0.54 for the second quarter of
fiscal 2015 on 14.2 million weighted average shares outstanding
compared with $0.45 for the
second quarter of fiscal 2014 on 14.5 million weighted average
shares outstanding.
Six Months Results
Consolidated revenues for the first six months of fiscal 2015
rose 4.2% to $110.2 million compared
with $105.8 million for the
first six months of fiscal 2014. CSI's increase in revenues
represented growth in both processing and other revenues
categories.
Operating income rose 11.7% to $23.1
million for the first six months of fiscal 2015 compared
with $20.7 million for the first
six months of fiscal 2014. Operating margin increased to
21.0% in the first six months of fiscal 2015 compared with 19.6% in
the first six months of fiscal 2014.
Net income for the first six months of fiscal 2015 rose 11.4% to
$13.9 million compared with
$12.5 million in the first six months
of fiscal 2014. Net income per share increased 14.0% to
$0.98 for the first six months
of fiscal 2015 compared with $0.86 for the first six months of fiscal
2014.
"CSI's cash flow from operations rose 14% to $23.5 million in the first half of fiscal 2015,"
Powless said. "Our cash position has more than doubled since last
year to $7.6 million, and we had no
long-term debt at August 31,
2014. We continue to use our strong financial position to
invest in our business while returning a portion of our earnings to
shareholders through our cash dividend program and repurchases of
CSI stock. During the first half of fiscal 2015, we invested about
$7.9 million in new equipment and
software to support our continued growth and returned $9.2 million to shareholders in cash dividends
and stock repurchases and redemptions."
About Computer Services, Inc.
Computer Services, Inc. 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 CSI in the event of a breach of our
security; and (iii) other factors discussed in CSI's Annual
Reports, Quarterly Reports, Information and Disclosure Statements
and other documents posted from time to time on the OTCQX website
(available either at www.otcmarkets.com or 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.
Except as required by law or OTC Markets Group, Inc., CSI
undertakes no obligation to update, and is not responsible for
updating, the information contained or incorporated by reference in
this report beyond the publication date, whether as a result of new
information or future events, or to conform this document to actual
results or changes in CSI's expectations, or for changes made to
this document by wire services or Internet services or
otherwise.
COMPUTER SERVICES,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Income
|
(Unaudited)
|
(in thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
August 31,
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
Processing
revenues
|
$
35,431
|
|
$
34,004
|
Other
revenues
|
20,176
|
|
20,026
|
|
Total
revenues
|
55,607
|
|
54,030
|
Operating
expenses
|
42,975
|
|
43,311
|
|
Operating
income
|
12,632
|
|
10,719
|
Interest income
(expense)
|
5
|
|
(11)
|
|
Income before income
taxes
|
12,637
|
|
10,708
|
Provision for income
taxes
|
5,023
|
|
4,229
|
|
|
|
|
|
|
|
Net income
|
$
7,614
|
|
$
6,479
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
$
0.54
|
|
$
0.45
|
|
|
|
|
|
|
Shares used in
computing earnings per
|
|
|
|
common
and common equivalent share
|
14,177,750
|
|
14,511,898
|
|
|
|
|
|
|
COMPUTER SERVICES,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(in thousands,
except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
08/31/2014
|
|
02/28/2014
|
|
08/31/2013
|
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$ 7,558
|
|
$ 1,078
|
|
$ 3,275
|
|
|
Accounts
receivable
|
22,568
|
|
25,962
|
|
22,657
|
|
|
Income tax
receivable
|
510
|
|
538
|
|
452
|
|
|
Prepaid expenses and
other current assets
|
10,451
|
|
9,628
|
|
8,034
|
|
|
Total current
assets
|
41,087
|
|
37,206
|
|
34,418
|
|
Property and
equipment, net
|
34,752
|
|
35,252
|
|
35,340
|
|
Software and software
licenses, net
|
19,460
|
|
17,963
|
|
18,240
|
|
Goodwill
|
|
60,115
|
|
60,115
|
|
60,115
|
|
Intangible
assets
|
7,608
|
|
8,264
|
|
8,920
|
|
Other
assets
|
17,355
|
|
16,120
|
|
9,858
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ 180,377
|
|
$ 174,920
|
|
$ 166,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$ 21,986
|
|
$ 18,536
|
|
$ 17,646
|
|
|
Deferred
revenue
|
8,427
|
|
9,430
|
|
8,762
|
|
|
Notes
payable
|
-
|
|
7
|
|
27
|
|
|
Total current
liabilities
|
30,413
|
|
27,973
|
|
26,435
|
|
Long-term
liabilities
|
|
|
|
|
|
|
|
Deferred income
taxes
|
14,418
|
|
14,418
|
|
13,193
|
|
|
Other long-term
liabilities
|
1,171
|
|
1,198
|
|
1,174
|
|
|
Total long-term
liabilities
|
15,589
|
|
15,616
|
|
14,367
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
46,002
|
|
43,589
|
|
40,802
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
Preferred stock;
shares authorized, 5,000,000; none issued
|
-
|
|
-
|
|
-
|
|
|
Common stock, no par;
shares authorized, 20,000,000 in fiscal 2015 and
|
|
|
|
|
|
|
|
2014; shares
issued and outstanding, 14,135,667 at August 31, 2015,
|
|
|
|
|
|
|
|
14,227,951 at
February 28, 2014, and 14,430,952 at August 31, 2013
|
21,372
|
|
20,316
|
|
20,513
|
|
|
Retained
earnings
|
113,003
|
|
111,015
|
|
105,576
|
|
|
Total
shareholders' equity
|
134,375
|
|
131,331
|
|
126,089
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$ 180,377
|
|
$ 174,920
|
|
$ 166,891
|
|
|
|
|
|
|
|
|
|
|
SOURCE Computer Services, Inc.