UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest
event reported) October 26, 2004 (October 21, 2004)
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CASS INFORMATION SYSTEMS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Missouri
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(State or Other Jurisdiction of Incorporation)
2-80070 43-1265338
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(Commission File Number) (IRS Employer Identification No.)
13001 Hollenberg Drive, Bridgeton, Missouri 63044
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(Address of Principal Executive Offices) (Zip Code)
(314) 506-5500
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
CASS INFORMATION SYSTEMS, INC.
FORM 8-K
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On October 21, 2004, the registrant issued a press release announcing its
preliminary results of operations for the quarter ended September 30, 2004. A
copy of the press release is attached hereto as Exhibit 99.1 and hereby
incorporated by reference. The information in this Form 8-K shall not be deemed
to be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934 (the "Exchange Act"), or otherwise subject to the liabilities of such
section, nor shall such information be deemed incorporated by reference in any
filing under the Securities Act of 1933 or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit No. Description
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99.1 Press Release dated October 21, 2004, issued by Cass
Information Systems, Inc. (the Registrant)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cass Information Systems, Inc.
October 26, 2004 By: /s/ Lawrence A. Collett
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Lawrence A. Collett
Chairman and Chief Executive Officer
October 26, 2004 By: /s/ Eric H. Brunngraber
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Eric H. Brunngraber
Vice President-Secretary
(Chief Financial and Accounting Officer)
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release dated October 21, 2004.
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EXHIBIT 99.1
OCTOBER 21, 2004
CASS INFORMATION SYSTEMS, INC.
REPORTS 3RD QUARTER RESULTS
ST. LOUIS - CASS INFORMATION SYSTEMS, INC. (NASDAQ: CASS), the nation's
leading provider of freight and utility invoice payment, rating, auditing and
information services, reported third quarter 2004 earnings of 53 cents per fully
diluted share, a 4% decrease from the 55 cents earnings per fully diluted share
reported for the third quarter of 2003. Total net income for the quarter was
$1,973,000, compared to $2,022,000 in 2003.
Quarterly profits from the company's core information processing and
banking businesses increased 22% or $423,000.
A 7% increase in utility invoice processing volume and a 4% increase in
freight volume led to a 5% ($346,000) rise in information processing fees. An
expanding customer base and increased freight activity among existing clients
led to the increase in payment processing volume and revenue.
An $89,069,000 increase in average earning assets drove a 6% ($383,000)
increase in net investment income. The large rise in earning assets was funded
by additional bank deposits and processing payables. Total freight dollars
processed increased 15% and utility dollars increased 12% over the third quarter
of 2003. The jump in earning assets increased net interest income despite the
current low level of interest rates.
Additionally, company-wide operating expenses fell slightly due to the
beneficial effect of cost-saving technology initiatives.
These positive outcomes were offset by the operating results of GOVERNMENT
E-MANAGEMENT SOLUTIONS, INC. (GEMS), the company's software subsidiary, which
posted a $788,000 decline in revenue compared to the year-earlier period. A
sluggish marketplace contributed to the poor results.
The recent acquisition of PROFITLAB, INC. also had a negative effect on
earnings due to the initial costs of integrating this operation. The planned
benefits of this transaction will be realized as Cass incorporates PROFITLAB,
Inc. and expands its presence in the telecom auditing and application services
market.
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NINE-MONTH 2004 RESULTS
For the nine-month period ended Sept. 30, 2004, Cass generated $1.48 fully
diluted earnings per share, a 5% decrease from the $1.56 fully diluted earnings
per share reported for the nine months ended Sept. 30, 2003. Net income thus far
in 2004 is $5,520,000, compared to $5,779,000 in 2003.
Total revenue was down 3% ($1,566,000) compared to the same period of 2003,
primarily reflecting the decrease in GEMS' software revenue and to a lesser
extent, a decrease in recognized investment gains.
These decreases more than offset an 8% ($1,726,000) increase in
year-to-date payment processing revenue and a 2% decline ($957,000) in overall
operating expenses. Net profits for the first nine months of 2004 from the
company's core information processing and banking businesses increased 23%
($1,317,000) over the same period in 2003.
SELECTED CONSOLIDATED FINANCIAL DATA
The following table presents selected unaudited consolidated financial data (in
thousands, except share and per share data) for the periods ended September 30,
2004 and 2003.
NINE NINE
QUARTER QUARTER MONTHS MONTHS
ENDED ENDED ENDED ENDED
9/30/04 9/30/03 9/30/04 9/30/03
Transportation Invoice Volume 6,104 5,882 17,454 17,358
Transportation Dollar Volume $2,535,799 $2,208,878 $7,173,613 $6,417,046
Utility Transaction Volume 1,304 1,218 3,874 3,367
Utility Dollar Volume $ 985,371 $ 878,998 $2,815,462 $2,493,073
Payment and Processing Fees $ 7,654 $ 7,308 $ 22,873 $ 21,147
Software Revenue 1,433 2,221 3,746 5,871
Net Investment Income 6,897 6,514 19,594 19,588
Gain on Sales of Debt Securities -- 92 441 1,454
Other 519 679 1,675 1,835
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Total Revenues $ 16,503 $ 16,814 $ 48,329 $ 49,895
Salaries and Benefits $ 9,579 $ 9,274 $ 28,037 $ 28,026
Occupancy 460 447 1,354 1,340
Equipment 877 1,068 2,888 3,350
Other 2,880 3,068 8,312 8,832
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Total Operating Expenses $ 13,796 $ 13,857 $ 40,591 $ 41,548
Income before Income Taxes $ 2,707 $ 2,957 $ 7,738 $ 8,347
Provision for Income Taxes $ 734 $ 935 $ 2,218 $ 2,568
Net Income $ 1,973 $ 2,022 $ 5,520 $ 5,779
Average Earning Assets $ 665,105 $ 576,037 $ 630,719 $ 548,540
Net Interest Margin 4.42% 4.61% 4.44% 4.96%
Allowance for Loan Losses to Loans 1.21% 1.20% 1.21% 1.20%
Non-performing Loans to Total Loans .26% .43% .26% .43%
Net Loan Charge-offs to Loans -- -- -- --
Provision for Loan Losses $ 150 $ -- $ 500 $ 90
Non-performing Loans $ 1,289 $ 1,943 $ 1,289 $ 1,943
Basic Earnings per Share .53 $ .56 $ 1.50 $ 1.58
Diluted Earnings per Share .53 $ .55 $ 1.48 $ 1.56
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ABOUT CASS INFORMATION SYSTEMS
Cass has been a leading provider of payables services and information
support systems to companies throughout North America 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 and Boston,
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 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 for the year ended
December 31, 2003.
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