Cass Information Systems, Inc. Reports 2nd Quarter 2004 Earnings.ST. LOUIS -- Cass Information Systems, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CASS), the nation's leading provider of freight and utility invoice An itemized statement or written account of goods sent to a purchaser or consignee by a vendor that indicates the quantity and price of each piece of merchandise shipped. A consular invoice is one used in foreign trade. payment, rating, auditing and information services See Information Systems. , reported second quarter earnings of 45 cents per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, a 25% decrease from the 60 cents reported for the second quarter of 2003. Total net income for the quarter was down 24% to $1,700,000, compared to the $2,239,000 reported for the same period in 2003 when Cass realized a gain of $1,362,000 from the sale of securities. No such gain was realized in the current quarter. Positive Operating Results Continue Profits for the quarter from Cass' core businesses of information processing information processing: see data processing. information processing Acquisition, recording, organization, retrieval, display, and dissemination of information. Today the term usually refers to computer-based operations. and banking increased $106,000 (5%), fueled by a 15% increase in utility invoice processing volume and a 2% increase in freight volume that led to a $751,000 (11%) rise in information processing fees. A growing customer base and increased freight activity among existing clients led to the positive result. Total freight dollars processed increased 12% and utility dollars increased 14% over the second quarter of 2003. Those increases, combined with growth in deposits at Cass Bank, drove a 17% expansion in average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin . Growth in earning assets largely offset a decline in the net interest margin from 5.02% to 4.33%, stemming from the general level of interest rates. The result was a $161,000 (2%) decline in net investment income. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. decreased $558,000 or 4% largely due to a series of cost saving technology initiatives related to processing activity. The company's Government e-Management Solutions, Inc. (GEMS) subsidiary posted a decline of $695,000 (38%) in revenues compared to the year-earlier period. A sluggish marketplace contributed to the poor result. The subsidiary continues to receive positive feedback from prospects and customers on its enhanced product line and sales activity is expected to improve during the second half of the year. Other variances in operating results from the current period to the same period in 2003 include a $150,000 loan loss provision which reflects the assessment of risk in the growing loan portfolio and a decrease in effective income tax rates from 32% to 28% resulting from the purchase of additional municipal securities. "We continue to be excited with the growth in customers and volume through our utility and freight invoice processing divisions. National freight volume continues to expand, and a firming interest rate environment should boost results from lending and investing," said Lawrence Lawrence. 1 City (1990 pop. 26,763), Marion co., central Ind., a residential suburb of Indianapolis, on the West Fork of the White River. It has light manufacturing. 2 City (1990 pop. 65,608), seat of Douglas co., NE Kans. A. Collett, Cass chief executive officer and chairman. "While revenues from government software operations were weak, we believe they can return to prior levels. Overall, we will continue to focus on expanding our information processing capabilities and activities." Six-Month 2004 Results For the six-month period ended June June: see month. 30, 2004, the company generated $.95 fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , a 6% decrease from the $1.01 fully diluted earnings per share reported for the six months ended June 30, 2003. Net income for the first half of 2004 was $3,547,000, compared to $3,757,000 in 2003. Total revenues were down $1,212,000 (4%) compared to the same period of 2003, primarily reflecting the decrease in software revenue. Operating expenses also declined $853,000 (3%). Net profits for the first half of 2004 generated from the company's core businesses of information processing and banking increased $893,000 or 24% over the same period in 2003. Selected Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Financial Data The following table presents selected unaudited consolidated financial data (in thousands, except share and per share data) for the periods ended June 30, 2004 and 2003.
Quarter Quarter Six Months Six Months
Ended Ended Ended Ended
6/30/04 6/30/03 6/30/04 6/30/03
Transportation Invoice
Volume 5,921 5,810 11,350 11,476
Transportation Dollar
Volume $2,416,168 $2,154,256 $4,637,814 $4,208,168
Utility Transaction
Volume 1,286 1,116 2,570 2,149
Utility Dollar Volume $ 895,730 $ 788,714 $1,830,091 $1,614,075
Payment and Processing
Fees $ 7,621 $ 6,870 $ 15,219 $ 13,839
Software Revenue 1,134 1,829 2,313 3,607
Net Investment Income 6,324 6,485 12,697 13,074
Gain on Sale of Debt
Securities -- 1,362 441 1,362
Other 607 601 1,156 1,156
---------- ---------- ---------- ----------
Total Revenues $ 15,686 $ 17,147 $ 31,826 $ 33,038
Salaries and Benefits $ 9,301 $ 9,400 $ 18,458 $ 18,752
Occupancy 436 457 894 893
Equipment 986 1,121 2,011 2,282
Other 2,590 2,893 5,432 5,721
---------- ---------- ---------- ----------
Total Operating
Expenses $ 13,313 $ 13,871 $ 26,795 $ 27,648
Income before Income
Taxes $ 2,373 $ 3,276 $ 5,031 $ 5,390
Provision for Income
Taxes $ 673 $ 1,037 $ 1,484 $ 1,633
Net Income $ 1,700 $ 2,239 $ 3,547 $ 3,757
Average Earning Assets $ 627,453 $ 534,810 $ 613,338 $ 534,564
Net Interest Margin 4.33% 5.02% 4.45% 5.15%
Allowance for Loan
Losses to Loans 1.24% 1.22% 1.24% 1.22%
Non-performing Loans
to Total Loans .73% .39% .73% .39%
Net Loan Charge-offs
to Loans -- -- -- --
Provision for Loan
Losses $ 150 $ -- $ 350 $ 90
Non-performing Loans $ 3,467 $ 1,727 $ 3,467 $ 1,727
Basic Earnings per
Share $ .47 $ .61 $ .97 $ 1.02
Diluted Earnings per
Share $ .45 $ .60 $ .95 $ 1.01
About Cass Information Systems Cass has been a leading provider of payables Payables Related: Accounts payable services and information support systems to companies throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. since 1956. The company pays over $12 billion annually in freight and utility invoices on behalf of its customers from processing centers in St. Louis, Mo., Columbus, Ohio Columbus is the capital and the largest city of the American state of Ohio. Named for explorer Christopher Columbus, the city was founded in 1812 at the confluence of the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816. and Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. , Mass. The support of its bank subsidiary, Cass Commercial Bank, founded in 1906, makes the company unique in the industry. Note to Investors Certain matters set forth in this news release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. For a discussion of certain factors that may cause such forward-looking statements to differ materially from the company's actual results, see the company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2003. |
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