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)
February 13, 2006 (February 13, 2006)
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 February 13, 2006, Cass Information Systems, Inc. issued a press
release announcing its preliminary results of operations for the fourth quarter
of fiscal year 2005, which ended December 31, 2005. 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, including Exhibit 99.1, is being furnished under
Item 2.02 and shall not be deemed to be "filed" for the purposes of Section 18
of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended, 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, as amended, except as shall be expressly set forth by
specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
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99.1 Press Release dated February 13, 2006, issued by Cass
Information Systems, Inc.
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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.
February 13, 2006 By: /s/ Lawrence A. Collett
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Lawrence A. Collett
Chairman and Chief Executive Officer
February 13, 2006 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 February 13, 2006, issued by Cass
Information Systems, Inc.
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Exhibit 99.1
News Release February 13, 2006
Contact: Contact Kenn Entringer at Casey Communications, Inc., (314) 721-2828 or
kentringer@caseycomm.com
Cass Information Systems, Inc. Ends 2005
With 36% Per Share Earnings Increase Over 2004
ST. LOUIS - Cass Information Systems, Inc. (NASDAQ: CASS), the nation's
leading provider of transportation, utility and telecom invoice payment and
information services, reports that it earned $1.94 per fully diluted share for
the year ended Dec. 31, 2005, a 36% increase over the $1.43 per share (adjusted
for a 50% stock dividend issued Sept.15, 2005) earned in 2004. Net income was
$10,946,000 in 2005, a 37% increase over the $8,005,000 earned in 2004.
4th Quarter 2005 Earnings
Fourth quarter 2005 earnings were 44 cents per fully-diluted share,
identical to the result posted in the fourth quarter of 2004. Net income for the
period was $2,503,000, compared to the $2,485,000 reported during the final
quarter of 2004.
Quarterly earnings were affected by two significant events. The first was
the Dec. 30, 2005 sale of a wholly owned subsidiary, Government e-Management
Solutions, Inc. (GEMS), resulting in a pre-tax gain of $1,336,000. Including the
gain, GEMS generated $518,000 in net income for the quarter, with those results
reclassified as discontinued operations. Second, the company recognized the
impairment of its equity investment in an image processing company, resulting in
a $3,100,000 pre-tax loss. This investment was made in 2001 to acquire imaging
technology for the company's payment operations. Accumulated losses resulted in
the one-time charge.
4th Quarter Revenues from Core Operations Up Strongly
Overall, 2005 fourth quarter pre-tax income from core operations, which
excludes the $3,100,000 impairment charge, increased $1,780,000 or 43% over the
corresponding period in 2004. Income from
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continuing operations before taxes, which includes the impairment charge,
decreased $1,320,000 or 32%.
Total revenue from continuing operations was up 17% or $2,747,000 over the
year-earlier period. Payment and processing fees led the way with a 20% or
$1,592,000 year-to-year increase. Transportation invoices were up 11% and dollar
volume rose 32% due to new business and heightened activity from existing
accounts. New customer growth also led to an 8% increase in utility transactions
and a 42% increase in dollars processed. The company's telecom group, acquired
in August 2004, also contributed to the increase in payment and processing
results.
Net investment income increased 25% or $1,837,000 due to growth in funds
generated from payment processing activities and the rise in prevailing interest
rates.
Total operating expenses were up 8% or $967,000 due mainly to the growth
of expenses related to the increased processing activity.
2005 Summary
Income from core operations before taxes and the $3,100,000 impairment
charge increased $5,236,000 or 37% from 2004. Income from continuing operations
before taxes, which includes the impairment charge, increased $2,136,000 or 15%.
Total revenues from continuing operations rose $10,307,000 or 17% in 2005 as
Cass boosted processing volumes, fee revenues and investment income. Operating
expenses from continuing operations were up 11% or $5,071,000 due mainly to the
increased processing activity and the telecom acquisition.
"Our earnings growth of 36% in 2005 reflects the intrinsic strength of our
core businesses, the soundness of our business strategy and a generally
favorable economic climate," commented Lawrence A. Collett, Cass chief executive
officer and chairman. "The sale of GEMS, a non-core asset, and the write-off
reinforces an already solid balance sheet and sets the stage for future growth.
As we look ahead to 2006, we believe double-digit growth in net income is
attainable."
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Selected Consolidated Financial Data
The following table presents selected unaudited consolidated financial
data (in thousands, except per share data) for the periods ended December 31,
2005 and 2004:
Quarter Quarter Year Year
Ended Ended Ended Ended
12/31/05 12/31/04 12/31/05 12/31/04
Transportation Invoice Volume 6,715 6,072 26,626 23,526
Transportation Dollar Volume $ 3,400,498 $ 2,578,590 $ 11,949,052 $ 9,752,203
Utility Transaction Volume 1,430 1,324 5,655 5,198
Utility Dollar Volume $ 1,256,181 $ 885,203 $ 4,423,045 $ 3,700,665
Payment and Processing Fees $ 9,415 $ 7,823 $ 35,901 $ 30,695
Net Investment Income 9,331 7,494 32,789 27,088
Gain on Sales of Debt Securities - 604 547 1,045
Other 554 632 2,205 2,307
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Total Revenues $ 19,300 $ 16,553 $ 71,442 $ 61,135
Salaries and Benefits $ 9,820 $ 9,085 $ 38,252 $ 33,774
Occupancy 498 423 1,941 1,589
Equipment 648 689 2,795 3,276
Other 2,380 2,182 9,128 8,406
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Total Operating Expenses $ 13,346 $ 12,379 $ 52,116 $ 47,045
Impairment of Equity Investment 3,100 -- 3,100 --
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Income from Continuing Operations before Income Taxes $ 2,854 $ 4,174 $ 16,226 $ 14,090
Provision for Income Taxes $ 869 $ 1,261 $ 5,416 $ 4,209
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Income from Continuing Operations $ 1,985 $ 2,913 $ 10,810 $ 9,881
Income (Loss) from Discontinued Operations 833 (645) 259 (2,823)
Provision (Credit) for Income Taxes 315 (217) 123 (947)
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Income (Loss) from Discontinued Operations $ 518 $ (428) $ 136 $ (1,876)
Net Income $ 2,503 $ 2,485 $ 10,946 $ 8,005
============= =============== ============== ============
Average Earning Assets $ 742,367 $ 682,937 $ 697,285 $ 643,847
Net Interest Margin 5.24% 4.59% 4.95% 4.48%
Allowance for Loan Losses to Loans 1.19% 1.21% 1.19% 1.21%
Non-performing Loans to Total Loans .28% .11% .28% .11%
Net Loan Charge-offs to Loans .02% .01% .10% --
Provision for Loan Losses $ 150 $ 50 $ 775 $ 550
Non-performing Loans $ 1,464 $ 538 $ 1,464 $ 538
Basic Earnings per Share from Continuing Operations $ .36 $ .53 $ 1.96 $ 1.79
Basic Earnings per Share from Discontinued Operations .10 (.08) .03 (.34)
Basic Earnings per Share $ .46 $ .45 $ 1.99 $ 1.45
Diluted Earnings per Share from Continuing Operations $ .34 $ .52 $ 1.92 $ 1.76
Diluted Earnings per Share from Discontinued Operations .10 (.08) .02 (.33)
Diluted Earnings per Share $ .44 $ .44 $ 1.94 $ 1.43
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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 $15 billion annually on behalf of customers from
processing centers in St. Louis, Mo., Columbus, Ohio, Boston, Mass. and
Greenville, S.C. The support of Cass Commercial Bank, founded in 1906, makes
Cass Information Systems 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 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, 2004.
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