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) January 29, 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)
CASS INFORMATION SYSTEMS, INC.
FORM 8-K
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
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99.1 Press Release dated January 29, 2004, issued by Cass
Information Systems, Inc. (the Registrant)
Item 9. Information Furnished Under Item 12 - Results of Operations and
Financial Condition
The information in this report is furnished pursuant to Item 12,
"Disclosure of Results of Operations and Financial Condition."
On January 29, 2004, the registrant issued a press release announcing its
preliminary results of operations for the quarter ended December 31, 2003. 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 is being furnished
under Item 12 and 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.
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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.
January 29, 2004 By: /s/ Lawrence A. Collett
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Lawrence A. Collett
Chairman and Chief Executive Officer
January 29, 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 January 29, 2004.
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Exhibit 99.1
January 29, 2004
Cass Information Systems, Inc. Ends 2003
With 9% Increase in 4th Quarter Earnings
ST. LOUIS - Cass Information Systems, Inc. (NASDAQ: CASS), the nation's
leading provider of freight and utility invoice payment, rating, auditing and
information services, reports that in the fourth quarter of 2003 it earned 63
cents per share fully diluted, a 9% increase over 2002 fourth quarter earnings
of 58 cents per share fully diluted. Net income for the period was $2,123,000,
an 8% increase over net income of $1,961,000 reported in the fourth quarter of
2002.
The solid growth in earnings over the period was largely the result of a
9% increase in overall processing fees driven by a 7% rise in freight invoice
volume and a 39% rise in utility transactions.
2003 Summary
For the year ending Dec. 31, 2003, Cass posted earnings of $2.34 per fully
diluted share, an 8% increase over the $2.16 per fully diluted share it earned
in 2002. Net income was $7,902,000 in 2003, an 8% increase over the $7,312,000
earned in 2002.
Cass achieved higher earnings despite a difficult economic environment.
Low interest rates significantly reduced the company's net investment income,
while anemic national freight activity, especially in the first half of 2003,
adversely impacted processing volumes from existing customers.
Cass was able to offset these declines by expanding its customer base and
product offerings to drive a 16% increase in overall processing revenues. It
grew freight transaction volume by 8% and utility processing volume by 34%.
Total revenue increased $9,385,000, largely as a result of consolidating
the operating results of a software subsidiary, Government e-Management
Solutions (GEMS). GEMS, which markets integrated financial, property and human
resource management systems to the public sector, generated revenues of
$7,696,000 in 2003.
While net investment income decreased $2,652,000 due to lower interest
rates, the impact was partially offset by an increase in earning assets, changes
in the mix of the company's investments and gains on the sale of investments.
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"I am delighted with the 34% growth in transaction volume our utility
invoice processing operations achieved and with our ability to increase freight
transaction processing volumes by 8% despite an adverse level of economic
activity," said Lawrence A. Collett, Cass chief executive officer and chairman
of the board. "Undeniably, the $2,652,000 drop in net investment income,
attributable to lower interest rates, was a major burden on company-wide
earnings," he continued. "Our focus in 2004 will be to continue to expand our
information processing activities with the hope of seeing an improvement in the
yields from our lending and investment portfolios."
Operating expenses increased 18% in 2003, attributable mainly to the GEMS'
consolidation. Prior to Dec. 31, 2002, GEMS was accounted for as an asset held
for sale and its operating results were not consolidated with those of the
company. Statement of Financial Accounting Standards No.144, adopted by the
company in 2002, now requires that GEMS be reclassified as an asset held and
used. Consequently, Cass reclassified the entity's net assets and consolidated
its operations with the parent company on Jan.1, 2003. Excluding the effect of
that consolidation, operating expenses were 2% higher than those reported in
2002. For the fourth quarter, the 11% increase in operating expenses was also
primarily related to the GEMS' consolidation. Excluding GEMS, operating expenses
decreased 4% and total revenues decreased 1% compared to the fourth quarter of
2002.
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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 December 31,
2003 and 2002.
Quarter Quarter Year Year
Ended Ended Ended Ended
12/31/03 12/31/02 12/31/03 12/31/02
Transportation Invoice Volume 6,001 5,629 23,359 21,549
Transportation Dollar Volume $2,256,947 $2,083,125 $8,673,993 $7,715,588
Utility Transaction Volume 1,251 903 4,618 3,435
Utility Dollar Volume $ 847,302 $ 696,591 $3,340,375 $2,634,269
Payment and Processing Fees $ 7,293 $ 6,670 $ 28,440 $ 24,622
Software Revenue 1,825 -- 7,696 --
Net Investment Income 6,604 6,938 26,192 28,844
Gain on Sale of Debt Securities -- 535 1,454 1,477
Other 642 563 2,477 1,931
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Total Revenues $ 16,364 $ 14,706 $ 66,259 $ 56,874
Salaries and Benefits $ 9,126 $ 8,055 $ 37,152 $ 31,405
Occupancy 442 385 1,782 1,500
Equipment 1,128 1,069 4,478 4,310
Other 2,660 2,536 11,492 9,360
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Total Operating Expenses $ 13,356 $ 12,045 $ 54,904 $ 46,575
Income before Income Taxes $ 3,008 $ 2,661 $ 11,355 $ 10,299
Provision for Income Taxes $ 885 $ 700 $ 3,453 $ 2,987
Net Income $ 2,123 $ 1,961 $ 7,902 $ 7,312
Average Earning Assets $ 606,189 $ 553,121 $ 563,071 $ 544,011
Net Interest Margin 4.57% 5.29% 4.85% 5.60%
Allowance for Loan Losses to Loans 1.17% 1.22% 1.17% 1.22%
Non-performing Loans to Total Loans .94% 2.12% .94% 2.12%
Net Loan Charge-offs to Loans -- .01% -- .03%
Provision for Loan Losses $ 100 $ 140 $ 190 $ 500
Non-performing Loans $ 4,394 $ 9,194 $ 4,394 $ 9,194
Basic Earnings per Share $ .63 $ .58 $ 2.36 $ 2.18
Diluted Earnings per Share $ .63 $ .58 $ 2.34 $ 2.16
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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, 2002.
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