Cass Information Systems, Inc. Reports a 12% Increase in 3rd Quarter Net Income and an 8% Increase in Its Quarterly Cash Dividend
ST. LOUIS--(BUSINESS WIRE)--
Cass Information Systems, Inc. (NASDAQ: CASS), the nation's leading provider of transportation, utility and telecom invoice payment and information services, reported third quarter 2008 net income of $5.2 million, a 12% increase over the $4.7 million in net income reported in the third quarter of 2007. The company posted earnings of $.56 per fully-diluted share, a 12% increase over the $.50 per fully-diluted share earned a year earlier.
2008 3rd Quarter Recap
9/30/08 9/30/07 % Change
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Transportation Dollar Volume $4.9 billion $3.7 billion 35%
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Utility Dollar Volume $2.6 billion $2.1 billion 27%
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Revenues $23.9 million $22.5 million 6%
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Net Income $5.2 million $4.7 million 12%
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Diluted Earnings per Share $.56 $.50 12%
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Payment and processing fees increased 15%, or $1.7 million, compared to the year-earlier period. Freight transaction volume was up 13% and dollar volume rose 35% due primarily to new business. Utility transaction volume was up 14% and utility dollar volume rose 27% due to new business and heightened activity from existing customers.
Net investment income decreased $427,000, or 4%, primarily due to the overall decline in interest rates.
Operating expenses were up 5%, or $815,000, as a result of higher employee costs related to transaction growth.
"The continued strong growth in transaction volume experienced by our utility and freight invoice processing operations has enabled the company to overcome the negative effects of the current low interest rate environment," said Eric H. Brunngraber, Cass president and chief executive officer. "These solid results are encouraging, particularly considering the challenges posed by the current economic environment. We remain optimistic about the ability of the company to continue to perform well in the future."
Due to its lack of exposure to sub-prime mortgage loans, mortgage-backed securities, or residential development loans of any kind, the issues that are having a significant detrimental effect on the financial community are not affecting Cass in such a manner.
Nine-Month 2008 Recap
9/30/08 9/30/07 % Change
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Transportation Dollar Volume $13.1 billion $10.8 billion 22%
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Utility Dollar Volume $7.1 billion $5.7 billion 25%
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Revenues $68.6 million $66.2 million 4%
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Net Income $13.8 million $13.1 million 6%
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Diluted Earnings per Share $1.47 $1.40 5%
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Over the first nine months of 2008, payment and processing fees increased 11%, or $3.8 million, compared to the year-earlier period. Freight transaction volume was up 10% and dollar volume rose 22%. Utility transaction volume was up 14% and dollar volume rose 25%.
Net investment income decreased $1,480,000, or 5%, primarily due to the overall decline in interest rates.
Operating expenses were up 5%, or $2,418,000, as a result of higher employee costs related to transaction growth.
Cash Dividend Increased by 8%
On October 20, 2008, the company's board of directors declared a fourth quarter cash dividend of $.13 per share payable December 15, 2008 to shareholders of record December 5, 2008. This represents an 8% increase over the prior dividend payout. "The company continues to perform well and the board of directors is pleased to provide continuing increases in dividends for our shareholders," said Brunngraber. CASS has continuously paid regularly scheduled cash dividends since 1934.
About Cass Information Systems
Cass Information Systems is the leading provider of transportation, utility and telecom invoice payment and information services. The company, which has been involved in the payables services and information support business since 1956, disburses over $25 billion annually on behalf of customers from processing centers in St. Louis, Mo., Columbus, Ohio, Boston, Mass., Greenville, S.C. and Wellington, Kansas. The support of Cass Commercial Bank, founded in 1906, makes Cass Information Systems unique in the industry. Cass is part of the Russell 2000(R) Index and earlier this year was one of only 27 companies to be honored with a 2008 Supplier Excellence Award by AT&T Inc. (NYSE:T) for its service in utility management.
Note to Investors
Certain matters set forth in this news release may contain forward-looking statements 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 reports filed from time to time with the Securities and Exchange Commission including the company's annual report on Form 10-K for the year ended December 31, 2007.
Selected Consolidated Financial Data
The following table presents selected unaudited consolidated financial
data (in thousands, except per share data) for the periods ended
September 30, 2008 and 2007:
Quarter Quarter Nine Months Nine Months
Ended Ended Ended Ended
9/30/08 9/30/07 9/30/08 9/30/07
---------- ---------- ----------- -----------
Transportation
Invoice Volume 6,772 5,976 19,509 17,659
Transportation
Dollar Volume $4,936,507 $3,669,117 $13,149,602 $10,764,558
Utility Transaction
Volume 2,702 2,361 7,852 6,872
Utility Dollar
Volume $2,633,438 $2,081,529 $ 7,126,799 $ 5,687,627
Payment and
Processing Fees $ 13,116 $ 11,441 $ 37,907 $ 34,089
Net Investment
Income 10,023 10,450 28,750 30,230
Gain on Sale of
Securities 209 -- 209 --
Other 568 629 1,692 1,895
---------- ----------- ------------ ------------
Total Revenues $ 23,916 $ 22,520 $ 68,558 $ 66,214
---------- ----------- ------------ ------------
Salaries and
Benefits $ 12,468 $ 11,700 $ 37,401 $ 35,135
Occupancy 576 550 1,676 1,572
Equipment 825 876 2,521 2,565
Other 2,610 2,538 7,749 7,657
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Total
Operating
Expenses $ 16,479 $ 15,664 $ 49,347 $ 46,929
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Income from
Operations before
Income Taxes $ 7,437 $ 6,856 $ 19,211 $ 19,285
Provision for Income
Taxes 2,209 2,179 5,398 6,230
---------- ----------- ------------ ------------
Net Income $ 5,228 $ 4,677 $ 13,813 $ 13,055
========== =========== ============ ============
Basic Earnings per
Share $ .57 $ .51 $ 1.51 $ 1.42
========== =========== ============ ============
Diluted Earnings per
Share $ .56 $ .50 $ 1.47 $ 1.40
========== =========== ============ ============
Average Earning
Assets $ 864,685 $ 827,755 $ 822,980 $ 799,144
Net Interest Margin 5.34% 5.46% 5.43% 5.48%
Allowance for Loan
Losses to Loans 1.09% 1.18% 1.09% 1.18%
Non-performing Loans
to Total Loans .30% .06% .30% .06%
Net Loan Charge-offs
to Loans .06% .20% .28% .24%
Provision for Loan
Losses $ 500 $ 225 $ 1,600 $ 675
Source: Cass Information Systems, Inc.
