8-K
CASS INFORMATION SYSTEMS INC (CASS)
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<br> <br>incorporation or organization) | (Commission<br> <br>File Number) | (I.R.S. Employer<br> <br>Identification No.) |
| 12444 Powerscourt Drive, Suite 550<br> <br>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<br> <br>Symbol | Name of each exchange<br> <br>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 <br>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
Contact: Contact Kenn Entringer at Casey Communications, Inc., (314) 721-2828.
kentringer@caseycomm.com
January 31, 2020
CassInformation Systems, Inc.
Records All-Time High Earnings in 2019
Full-Year Diluted Earnings Up 2% ****
ST. LOUIS – Cass 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.
| 4^th^ 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 ofanticipated 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 suchforward-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 endedDecember 31, 2019 and 2018:
| Quarter<br>Ended<br>December 31,2019 | Quarter<br>Ended<br>December 31,2018 | Year<br>Ended<br>December 31,2019 | Year<br>Ended<br>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 | $ | — |