8-K
CASS INFORMATION SYSTEMS INC false 0000708781 0000708781 2020-01-31 2020-01-31

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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 31, 2020

 

CASS INFORMATION SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

 

Missouri

 

000-20827

 

43-1265338

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

12444 Powerscourt Drive, Suite 550

St. Louis, Missouri

 

63131

(Address of principal executive offices)

 

(Zip Code)

(314) 506-5500

(Registrant’s telephone number, including area code)

 

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.

Soliciting material pursuant to Rule 14a-12 under the Exchange Act.

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol

 

Name of each exchange

on which registered

Common Stock, par value $0.50 per share

 

CASS

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


Item 2.02. Results of Operations and Financial Condition.

On January 31, 2020, Cass Information Systems, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2019. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information reported under this Item 2.02 of Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (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, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01. Other Events.

On January 31, 2020, the Company also announced that its Board of Directors declared a first quarter dividend of $.27 per share payable on March 13, 2020 to shareholders of record on March 3, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

             (d)       Exhibits.

Exhibit
Number

   

Description

         
 

99.1

   

Press release issued by Cass Information Systems, Inc. dated January 31, 2020.

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document).


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.

Dated: January 31, 2020

CASS INFORMATION SYSTEMS, INC.

     

By:

 

/s/ Eric H. Brunngraber

Name:

 

Eric H. Brunngraber

Title:

 

Chairman, President and Chief Executive Officer

     

By:

 

/s/ P. Stephen Appelbaum

Name:

 

P. Stephen Appelbaum

Title:

 

Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

 

LOGO

Contact: Contact Kenn Entringer at Casey Communications, Inc., (314) 721-2828.

kentringer@caseycomm.com

January 31, 2020

Cass Information Systems, Inc.

Records All-Time High Earnings in 2019

Full-Year Diluted Earnings Up 2%

ST. LOUISCass Information Systems, Inc. (NASDAQ: CASS), the leading provider of transportation, energy, telecom and waste invoice payment and information services, reported fourth quarter 2019 earnings of $.43 per diluted share, a decrease of 9% from the $.47 per diluted share it earned in the fourth quarter of 2018. Net income for the period was $6.4 million, compared to $7.1 million in 2018.

 

     4th Quarter            YTD         
     2019      2018      %
Change
    2019      2018      %
Change
 

Transportation Invoice Volume

     8.7 million        9.2 million        (6.1     36.0 million        37.5 million        (4.0

Transportation Dollar Volume

   $ 6.9 billion      $ 7.3 billion        (6.0   $ 28.1 billion      $ 28.5 billion        (1.6

Facility Expense Transaction Volume*

     6.5 million        7.3 million        (11.0     27.5 million        28.7 million        (4.1

Facility Expense Dollar Volume*

   $ 3.4 billion      $ 3.5 billion        (2.2   $ 14.9 billion      $ 13.8 billion        7.6  

Revenues

   $ 38.9 million      $ 38.3 million        1.7     $ 157.2 million      $ 148.3 million        6.0  

Net Income

   $ 6.4 million      $ 7.1 million        (9.7   $ 30.4 million      $ 30.3 million        0.4  

Diluted EPS

   $ .43      $ .47        (8.5   $ 2.07      $ 2.03        2.0  

 

*

Includes Energy, Telecom and Waste

For the year ended December 31, 2019, Cass earned $2.07 per diluted share, an increase of 2% over the $2.03 per diluted share it earned in 2018. Net income was $30.4 million, compared to $30.3 million in 2018. Revenues rose 6%, from $148.3 million in 2018 to $157.2 million in 2019.

“We are pleased to report record earnings for the fourth consecutive year. Exceeding $150 million in revenue, representing 6% growth over 2018’s record results, and again surpassing $30 million in net income while continuing to fund initiatives that support future growth are noteworthy accomplishments,” stated Eric H. Brunngraber, Cass chairman and chief executive officer.


2019 4th Quarter Recap

Transportation volumes for both invoices and dollars declined 6% as a historically robust 2018 created a difficult comparison in 2019. With manufacturing companies representing an important component of the transportation customer base, the widely reported fourth quarter 2019 contraction in this sector created year-over-year trials for the division.

Facility-related (electricity, gas, waste and telecom expense management) transaction volume was down 11%, primarily due to the loss of a high transaction volume customer, while facility expense dollar volume fell only 2%, as new, high spend customer acquisitions overcame most of the transaction shortfall.

Consolidated operating expenses increased $1,029,000 (3%) due mainly to the aforementioned investment in technology and staff required to win new business and support service growth with existing clients. Additionally, the integration costs related to the Gyve on-line generosity platform that was purchased in September are included in the fourth quarter results.

“As previously reported, the volatile business climate, competitive marketplace and the impact of a lower interest rate environment converged to create headwinds during the fourth quarter,” continued Brunngraber. “However, our sales pipelines remain strong and we continue to introduce new services that promise to accelerate earnings and overcome these challenges.”

Cash Dividend Declared

On January 28, 2020, the company’s board of directors declared a first quarter dividend of $.27 per share payable March 13, 2020 to shareholders of record March 3, 2020. Cass has continuously paid regularly scheduled cash dividends since 1934.


“Our history of uninterrupted dividend payments combined with share repurchase activity that returned nearly $23 million to shareholders during 2019 reflect the company’s commitment to rewarding shareholders in a meaningful way,” Brunngraber stated.

About Cass Information Systems

Cass Information Systems, Inc. is a leading provider of integrated information and payment management solutions. Cass enables enterprises to achieve visibility, control and efficiency in their supply chains, communications networks, facilities and other operations. Disbursing over $60 billion annually on behalf of clients, and with total assets of $1.7 billion, Cass is uniquely supported by Cass Commercial Bank. Founded in 1906 and a wholly owned subsidiary, Cass Bank provides sophisticated financial exchange services to the parent organization and its clients. Cass is part of the Russell 2000®. More information is available at www.cassinfo.com.

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, 2018.


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, 2019 and 2018:

 

     Quarter
Ended
December 31,
2019
    Quarter
Ended
December 31,
2018
    Year
Ended
December 31,
2019
    Year
Ended
December 31,
2018
 

Transportation Invoice Volume

     8,636       9,193       36,042       37,542  

Transportation Dollar Volume

   $ 6,878,768     $ 7,321,409     $ 28,090,514     $ 28,549,225  

Facility Expense Transaction Volume

     6,496       7,299       27,525       28,713  

Facility Expense Dollar Volume

   $ 3,413,832     $ 3,492,249     $ 14,882,728     $ 13,831,228  

Payment and Processing Fees

   $ 26,903     $ 26,113     $ 107,953     $ 102,181  

Net Investment Income

     11,513       11,676       47,166       44,190  

Gain (Loss) on Sales of Securities

     —         —         19       (42

Other

     519       514       2,097       1,937  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

   $ 38,935     $ 38,303     $ 157,235     $ 148,266  
  

 

 

   

 

 

   

 

 

   

 

 

 

Personnel

   $ 22,489     $ 22,163     $ 91,083     $ 85,881  

Occupancy

     988       969       3,918       3,723  

Equipment

     1,565       1,460       6,140       5,610  

Other

     5,731       5,152       18,628       16,705  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Expenses

   $ 30,773     $ 29,744     $ 119,769     $ 111,919  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from Operations before Income Taxes

   $ 8,162     $ 8,559     $ 37,466     $ 36,347  

Income Tax Expense

     1,791       1,502       7,062       6,079  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 6,371     $ 7,057     $ 30,404     $ 30,268  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic Earnings per Share

   $ .44     $ .48     $ 2.11     $ 2.06  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted Earnings per Share

   $ .43     $ .47     $ 2.07     $ 2.03  
  

 

 

   

 

 

   

 

 

   

 

 

 

Average Earning Assets

   $ 1,520,342     $ 1,457,933     $ 1,472,399     $ 1,403,748  

Net Interest Margin

     3.14     3.33     3.36     3.32

Allowance for Loan Losses to Loans

     1.37     1.42     1.37     1.42

Non-performing Loans to Total Loans

     —         —         —         —    

Net Loan (Recoveries) / Charge-offs to Loans

     (.01     —         (.01     —    

Provision for Loan Losses

   $ —       $ —       $ 250     $ —