CSI Reports Record First Quarter Revenues and Net Income
Revenues Increase for 36th Consecutive Quarter
PADUCAH, Ky. (July 2, 2013) – Computer Services, Inc. (CSI) (OTCQX: CSVI) today reported record revenues and net income for the first quarter of fiscal 2014 ended May 31, 2013.
CSI’s revenues grew 7.8% to $51.7 million for the first quarter of fiscal 2014 compared with $48.0 million for the first quarter of fiscal 2013. Net income rose 2.9% to $6.0 million for the first quarter of fiscal 2014 compared with $5.9 million in the first quarter 2013. Net income per fully diluted share increased 2.5% to $0.41 for the first quarter of 2014 compared with $0.40 for the prior year’s first quarter.
“This quarter marked our 36th consecutive quarter of revenue growth that benefited from long-term processing contracts and continued growth from our other ancillary services,” stated Chief Executive Officer Steven A. Powless. “Our solid growth in processing revenues was up on the strength of new customers and increased cross-sales of products and services. Other revenues benefited from growth in transaction volume, increased demand for regulatory compliance services and Internet and mobile banking products.
“We remain focused on driving revenue growth through our expanded national sales network and product innovation, and expanding our markets for regulatory compliance services,” Powless continued. “We remain positive about our continued growth in fiscal 2014 based on our pipeline for new processing business, high contract renewal rate from core customers, and expanded revenues from regulatory compliance services. We are on track to exceed the record 32 billion transactions processed during fiscal 2013.”
First Quarter Results
Consolidated revenues rose 7.8% to $51.7 million for the first quarter of fiscal 2014 compared with $48.0 million in the first quarter of fiscal 2013. Processing revenues rose 8.2% to $33.6 million compared with $31.1 million for the first quarter of fiscal 2013. The growth in processing revenues was driven primarily by sales to new customers, cross-sales to existing customers and increases in transaction volumes from existing customers, offset partially by the effect of lost business. Other revenues rose 7.2% to $18.1 million compared with the first quarter of fiscal 2013. Other revenue benefited from growth in homeland security and fraud prevention services; higher eBusiness group revenues; and increased demand for our document services.
Operating income rose 5.1% to $10.0 million for the first quarter of fiscal 2014 compared with $9.5 million for the first quarter of fiscal 2013. Operating margin was 19.3% in the first quarter of 2014 compared with 19.8% for the first quarter last year. The decrease in operating margin was due primarily to the ramp up of expenses related to our Strategic Growth Initiative (SGI) launched in fiscal 2012. In addition, expenses increased for equipment, travel expense 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 expense.
Net income for the first quarter of fiscal 2014 rose 2.9% to $6.0 million compared with $5.9 million for the first quarter of fiscal 2013. Net income per diluted share increased 2.5% to $0.41 for the first quarter 2014 on 14.6 million weighted average diluted shares outstanding compared with $0.40 for the first quarter 2013 on 14.8 million weighted average diluted shares outstanding.
“CSI’s cash flow from operations increased to $14.2 million in the first quarter of fiscal 2014,” Powless said. “During the quarter, we invested about $4.6 million in new equipment and software to support our continued growth and returned $4.5 million to shareholders in cash dividends and stock repurchases. We ended the quarter with $5.1 million in cash and cash equivalents and only $49,000 in short-term capitalized lease obligations.”
CSI repurchased 84,070 shares of the Company’s stock for $2.5 million during the first quarter of fiscal 2014. CSI had approximately $1.7 million available under existing stock purchase authorizations outstanding as of May 31, 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.
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.