Cass
Information Systems, Inc. (NASDAQ: CASS), the
nation's leading provider of transportation, energy, telecom and waste
invoice payment and information services, reported third quarter 2016
earnings of $.55 per diluted share, an increase of 8% from the $.51 per
diluted share it earned in the third quarter of 2015. Net income for the
period was $6.2 million, compared to $5.9 million in 2015.
3rd Quarter
YTD
2016
2015
% Change
2016
2015
% Change
Transportation Dollar Volume
$5.9 billion
$6.1 billion
(4.5)
$17.1 billion
$18.7 billion
(8.7)
Facility Expense Dollar Volume*
$3.3 billion
$3.2 billion
4.4
$8.9 billion
$8.9 billion
(0.2)
Revenues
$31.6 million
$30.6 million
3.4
$93.4 million
$90.5 million
3.1
Net Income
$6.2 million
$5.9 million
5.8
$17.9 million
$17.0 million
5.6
Diluted Earnings per Share
$.55
$.51
7.8
$1.58
$1.47
7.5
*Includes Energy, Telecom and Waste
2016 3rd Quarter Recap
The increase in revenue and net income of 3% and 6%, respectively, was
primarily the result of the continued growth of the company's customer
list in each of its markets along with the development and expansion of
new revenue-generating services. These successes overcame persistent
economic headwinds and a significant investment in technology and
infrastructure required to support this expansion.
A particularly bright spot of Cass' third quarter performance was the
substantial increase in facility related transactions (electricity, gas,
waste and telecom expense management), which grew 16%. New customer
acquisition, including several large accounts that switched from
competitors, was the primary driver of the increase. Facility expense
dollar volume was also up for the quarter.
In the transportation market, new accounts boosted transaction volume,
but multiple factors continued to challenge dollar volume growth. A
continuing impediment was declining activity from existing customers,
especially those involved in oil and gas production. Transportation
sector dollar volume was also retarded by lower fuel prices which
reduced average invoice amounts. The decrease in dollar volume generated
smaller investable balances that reduced investment income, and more
significantly, lowered fees from carrier services.
Consolidated operating expenses were up $900,000 (4%) due mainly to
continued strategic investment in staff and technology to win and
support new business.
"Although economic challenges, in particular low interest rates and
depressed volume from existing transportation sector clients continue to
persist, our ability to add new accounts and expand our service lines
demonstrates the value of our services," said Eric
H. Brunngraber, Cass chairman and chief executive officer.
Nine-Month 2016 Recap
For the nine-month period ended September 30, 2016 the company earned
$1.58 per diluted share, an increase of 8% from the $1.47 per diluted
share it earned in the same period in 2015. Net income was $17.9
million, compared to $17.0 million in 2015. Revenues rose 3%, from $90.5
million in 2015 to $93.4 million in 2016.
Consolidated operating expenses were up 3%, or $1.9 million, due to the
increased investment in staff and technology, as noted above.
5% Increase in Cash Dividend
On October 17, 2016, the company's board of directors declared a fourth
quarter dividend of $.23 per share payable December 15, 2016 to
shareholders of record December 5, 2016. The new quarterly dividend is
one cent or 5% higher than the previous pay-out of 22 cents per share.
Cass has continuously paid regularly scheduled cash dividends since 1934.
Additionally, after repurchasing more than 210,000 shares of common
stock in the past 12 months, the board voted to restore the capacity of
the company's stock repurchase program to 500,000 shares.
"Our history of dividend payments combined with the return of nearly $21
million to shareholders through share repurchase activity over the past
24 months reflects our solid operating performance, strong capital base
and the board's continued optimism about the company's long-term
prospects," said Brunngraber.
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 $40
billion annually on behalf of clients, and with total assets of $1.5
billion, Cass is uniquely supported by CassCommercial 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, 2015.
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, 2016 and 2015:
