Home » CSI revenues increase for 32nd consecutive quarter

CSI revenues increase for 32nd consecutive quarter

PADUCAH, Ky. (July 3, 2012)— Computer Services, Inc. (CSI) today reported growth in revenues and net income for the first quarter of fiscal 2013 ended May 31.

CSI’s revenues grew 18.6 percent to $48.0 million for the first fiscal quarter of fiscal 2013 compared with $40.4 million for the first quarter fiscal 2012. Net income rose 4.2 percent to $5.9 million for the first quarter of fiscal 2013 compared with $5.6 million in the first quarter 2012. Net income per fully diluted share increased 5.3 percent to $0.40 for the first quarter of 2013 compared with $0.38 for the prior year’s first quarter.

“CSI’s growth in revenues and net income highlights the continued demand for our processing services and the contribution from HEIT Consulting, Inc. (HEIT) that we acquired in September 2011,” said Chief Executive Officer Steven A. Powless. “This was our 32nd consecutive quarter of revenue growth as we benefited from higher processing revenues generated from long-term contracts and significant growth in transaction volume from our regulatory and compliance services compared with last year.

The board of directors in June increased the quarterly cash dividend to $0.14 per share, a 12 percent increase from the current quarterly dividend payment amount, the 24th consecutive annual increase in CSI’s cash dividend.

“Our focus for fiscal 2013 will be on driving revenue growth through product innovation, merging resources company-wide to broaden our product suites, and capitalizing on growth opportunities in our regulatory and compliance businesses,” Powless said.

First quarter results

Consolidated revenues rose 18.6 percent to $48.0 million for first quarter of fiscal 2013 compared with $40.4 million in the first quarter of fiscal 2012. Processing revenues rose 4.9 percent to $31.1 million compared with $29.6 million for the first quarter of fiscal 2012. The growth in processing revenues was primarily driven by sales to new customers, cross-sales to existing customers and increases in transaction volumes from existing customers, offset partially by the effect of lost business. Other revenues rose 56.4 percent to $16.9 million compared with first quarter of fiscal 2012. The internal growth rate was 11.8 percent with the remaining growth resulting from the HEIT acquisition. The internal revenue growth was primarily due to growth in homeland security and fraud prevention services; higher eBusiness group revenues; growth in network monitoring services, partially offset by lower equipment-related revenues and lower software license revenues.

Operating income rose 2.2 percent to $9.5 million for the first quarter of fiscal 2013 compared with $9.3 million for the first quarter of fiscal 2012. Operating margin was 19.8 percent in the first quarter of 2013 compared to 23.0 percent for the first quarter last year. The decrease in operating margin was primarily due to the ramp up of expenses related to our Strategic Growth Initiative (SGI) launched in fiscal 2012.

“We expect our growth in operating expenses to increase in the second quarter due to higher costs associated with SGI and the ramp up of conversion costs to bring on major new processing customers,” Powless said. “As a result, we expect to report lower operating income in the second quarter of fiscal 2013 that will not be offset by higher revenues until the second half of the year. We expect revenues and operating income to ramp up in the second half due to new processing customers coming online and to continued growth from our other business units. Our goal for fiscal 2013 is to report growth in both revenue and net income compared with fiscal 2012.”

Net income for the first quarter of fiscal 2013 rose 4.2 percent to $5.9 million compared with $5.6 million for the first quarter of fiscal 2012. Net income per diluted share increased 5.3 percent to $0.40 for the first quarter 2013 on 14.7 million weighted average diluted shares outstanding compared with $0.38 for the first quarter 2012 on 14.6 million weighted average diluted shares outstanding.

Cash flow from operations rose to $13.9 million in the first quarter 2013, and cash and cash equivalents increased to $14.1 million at May 31, 2012, compared with $10.1 million at May 31, 2011.

“During the first quarter, we invested $5.3 million in new equipment and software, paid shareholders $1.8 million in cash dividends and repurchased or redeemed $1.2 million in common stock,” Powless said.

CSI repurchased 19,135 shares of the company’s stock during the first quarter of fiscal 2013 under existing stock repurchase authorizations. CSI had approximately $3.6 million available under existing stock purchase authorizations outstanding as of May 31.