-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JE2xfL2Ojm7GTfZKfPHAOLYl92ZIEkXxNHIaDCX0AhzSl3EMDfTCm65WUL7G3k7B s25bdIb7pRcjPQpp4EGoDw== 0000740112-96-000005.txt : 19960517 0000740112-96-000005.hdr.sgml : 19960517 ACCESSION NUMBER: 0000740112-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONCORD EFS INC CENTRAL INDEX KEY: 0000740112 STANDARD INDUSTRIAL CLASSIFICATION: FUNCTIONS RELATED TO DEPOSITORY BANKING, NEC [6099] IRS NUMBER: 042462252 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13848 FILM NUMBER: 96565143 BUSINESS ADDRESS: STREET 1: 2525 HORIZON LAKE DR STE 120 CITY: MEMPHIS STATE: TN ZIP: 38133 BUSINESS PHONE: 9013718000 MAIL ADDRESS: STREET 1: 2525 HORIZON LAKE DRIVE STREET 2: SUITE 120 CITY: MEMPHIS STATE: TN ZIP: 38133 FORMER COMPANY: FORMER CONFORMED NAME: CONCORD COMPUTING CORP DATE OF NAME CHANGE: 19920515 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended Commission file number 0-13848 March 31, 1996 ___________________________ CONCORD EFS, INC. (Exact name of registrant as specified in its charter) Delaware 04-2462252 _______________________________ _____________________ (State or other jurisdiction of (I.R.S. Employer Incorporation of Organization) Identification Number) 2525 Horizon Lake Drive, Suite 120, Memphis, Tennessee 38133 (Address of Principal Executive Offices) (901) 371-8000 (Registrant's telephone number, including area code) _________________ Indicate by check mark whether the registrant (1) has filed all eports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes[X] No[ ] The number of shares of the registrant's Common Stock, $33.1/3 par value, as of March 31, 1996 was 37,694,064. CONCORD EFS, INC. AND SUBSIDIARIES INDEX Page No. --------- PART 1- Financial Information Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets March 31, 1996 and December 31, 1995 1 Condensed Consolidated Statements of Income Three Months ended March 31, 1996 and March 31, 1995 2 Condensed Consolidated Statements of Cash Flows Three Months ended March 31, 1996 and March 31, 1995 3 Notes to Condensed Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 PART II - Other Information Item 6. Exhibits and Reports on Form 8-K 6 Signatures 7 Exhibit 11 - Computation of Earnings Per Share CONCORD EFS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31 December 31 1996 1995 ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 36,280,858 $ 36,572,976 Securities available-for-sale 27,560,819 23,439,135 Accounts receivable, net 71,013,994 63,690,114 Inventories 4,491,674 4,765,304 Prepaid expenses and other 4,223,267 3,634,801 ------------ ------------ TOTAL CURRENT ASSETS $143,570,612 $132,102,330 SECURITIES HELD-TO-MATURITY 4,793,143 4,865,865 PROPERTY AND EQUIPMENT Less accumulated depreciation 63,744,647 57,749,905 and amortization 39,797,954 37,831,369 ------------ ------------ 23,946,693 19,918,536 ------------ ------------ TOTAL ASSETS $172,310,448 $156,886,731 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and other liabilities $ 68,966,784 $ 60,966,543 Accrued liabilities 2,742,127 2,530,310 Current maturities of long-term debt 398,412 392,177 ------------ ------------ TOTAL CURRENT LIABILITIES $ 72,107,323 $ 63,889,030 LONG TERM DEBT, LESS CURRENT MATURITIES 876,355 978,327 DEFERRED INCOME TAXES 1,821,000 1,743,000 MINORITY INTEREST IN SUBSIDIARY 689,241 731,579 STOCKHOLDERS' EQUITY: Common Stock-par value $.33 1/3 per share; authorized 40,000,000 shares, issued 37,694,064 shares at March 31, 1996 and 24,940,938 shares at December 31, 1995 12,564,688 8,313,646 Other stockholders' equity 84,251,841 81,231,149 ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 96,816,529 89,544,795 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $172,310,448 $156,886,731 ============ ============ See Notes to Condensed Consolidated Financial Statements - Unaudited. -1- CONCORD EFS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended March 31 --------------------------- 1996 1995 ----------- ----------- Revenues $33,894,762 $25,927,964 Cost of operations 24,534,165 18,679,795 Selling, general and administrative expenses 2,733,957 2,328,408 ----------- ----------- OPERATING INCOME 6,626,640 4,919,761 Other income (expense): Interest income 657,870 491,847 Interest expense (27,220) (27,347) ----------- ----------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 7,257,290 5,384,261 Income taxes 2,640,000 1,941,000 ----------- ----------- INCOME BEFORE MINORITY INTEREST 4,617,290 3,443,261 Minority interest 42,338 15,756 ----------- ----------- NET INCOME $ 4,659,628 $ 3,459,017 =========== =========== Per share data: Weighted average common and common equivalent shares outstanding 39,202,989 37,895,549 ========== ========== Earnings per share $0.12 $0.09 ========== ========== See Notes to Condensed Consolidated Financial Statements - Unaudited -2- CONCORD EFS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31 ----------------------- 1996 1995 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 9,185,216 $ 4,749,968 INVESTING ACTIVITIES: Acquisition of property and equipment (5,994,742) (2,039,835) Purchases of securities available-for-sale (4,498,125) Maturities of securities held-to-maturity 70,745 189,781 ----------- ----------- NET CASH USED IN INVESTING ACTIVITIES (10,422,122) (1,850,054) FINANCING ACTIVITIES: Proceeds from sale of common stock 1,040,525 287,985 Payments on notes payable (95,737) (89,883) ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 944,788 198,102 ----------- ----------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (292,118) 3,098,016 Cash and cash equivalents at beginning of period 36,572,976 23,030,329 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $36,280,858 $26,128,345 =========== =========== For purposes of these statements, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. See Notes to Condensed Consolidated Financial Statements - Unaudited. -3- CONCORD EFS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) MARCH 31, 1996 Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the Registrant's annual report on Form 10-K for the year ended December 31, 1995. The balance sheet at December 31, 1995 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Securities Net unrealized loss on securities available-for-sale: March 31 December 31 1996 1995 ---------- ----------- Decrease in securities available-for-sale $681,735 $303,316 Increase in deferred tax assets 230,000 103,000 Decrease in equity 451,735 200,316 -4- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net income increased 35% in the first quarter ended March 31, 1996 due to increased revenues from transaction processing. Bank Card Services, and Trucking Services, which combined represent approximately 90% of the Company's revenue, increased 35%, and 38%, respectively, over the same period of the prior year. Bank Card Services increased through the addition of grocery and retail merchants as well as volume increases in credit and debit card usage, while Trucking Services increased through ATM revenue growth and additional trucking customers. Continued telemarketing efforts combined with merchant association endorsements were responsible for the new customers. Net income as a percentage of revenue increased from 13.3% to 13.8% for the first three months, compared to the prior year. The increase was primarily due to the revenue growth coupled with slower increases in selling, general and administrative expenses. The Company adopted FAS 121 "Accounting For the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of" in the first quarter of 1996. The adoption had no material impact on the financial position or results of operations of the Company. LIQUIDITY AND CAPITAL RESOURCES In the first quarter of 1996, the Company generated $9.2 million from operating activities and received $1.0 million from stock issued from exercises of options under the Company's Incentive Stock Option Plan. From this $4.5 million was invested in securities and $6.0 million in capital additions. The capital additions were primarily for new computer equipment. With little debt, adequate available credit and strong cash generation, the Company is in sound financial condition and expects to fund continued growth from currently available resources. EFS National Bank, a wholly-owned subsidiary of the Company, exceeds required regulatory capital ratios. -5- PART II OTHER INFORMATION Item 6: Exhibits and Reports on Form 8-K. (a) Exhibits 11 - Computation of Earnings Per Share. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the first quarter. -6- 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 thereunto duly authorized. CONCORD EFS, INC. Date: May 14, 1996 By: /s/ Dan M. Palmer . Dan M. Palmer Chief Executive Officer Date: May 14, 1996 By: /s/ Thomas J. Dowling . Thomas J. Dowling Vice President & Controller -7- EXHIBIT 11 CONCORD EFS, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE Three Months Ended March 31 -------------------------- 1996 1995 ----------- ----------- For primary earnings per share: Net income $ 4,659,628 $ 3,459,017 =========== =========== Weighted average of common shares outstanding net of treasury shares 37,578,917 36,257,076 Weighted average common stock equivalent shares for stock options by treasury stock method 1,624,072 1,638,473 ----------- ----------- Weighted average common and common equivalent shares 39,202,989 37,895,549 =========== =========== Per share amount $0.12 $0.09 =========== =========== For fully diluted earnings per share: Net income $ 4,659,628 $ 3,459,017 =========== =========== Weighted average common and common equivalent shares for primary earnings per share 39,202,989 37,895,549 Add shares representing additional shares for stock options based on period-end market price 27,604 166,131 ----------- ----------- Weighted average common and common equivalent shares-fully diluted basis 39,230,593 38,061,680 =========== =========== Per share amount $0.12 $0.09 =========== =========== EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1000 QTR-1 DEC-31-1996 MAR-31-1996 36281 32354 71772 768 4491 143571 63745 39798 172310 72107 0 12565 0 0 84252 172310 33895 33895 24534 27268 0 120 27 7257 2640 4660 0 0 0 4660 .12 .12
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