-----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, BBTRJa3MP7KIIHhPPnSxhRN42jw5pcNEf/kyJ9CxYA5wIMps9CNHxWTwAsZeA1B7 XRiVACD9anGJujJpBs6foQ== 0000740112-96-000006.txt : 19960814 0000740112-96-000006.hdr.sgml : 19960814 ACCESSION NUMBER: 0000740112-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 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: 96609482 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 June 30, 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 reports 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 June 30, 1996 was 56,647,653. CONCORD EFS, INC. AND SUBSIDIARIES INDEX Page No. --------- PART 1- Financial Information Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets June 30, 1996 and December 31, 1995 1 Condensed Consolidated Statements of Income for the Three and Six Months ended June 30, 1996 and June 30, 1995 2 Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 1996 and June 30, 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) June 30 December 31 1996 1995 ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 31,971,065 $ 36,572,976 Securities available-for-sale 28,617,387 23,439,135 Accounts receivable, net 73,019,558 63,690,114 Inventories 3,604,086 4,765,304 Prepaid expenses and other assets 5,336,369 3,634,801 ------------ ------------ TOTAL CURRENT ASSETS 142,548,465 132,102,330 SECURITIES HELD-TO-MATURITY 6,150,055 4,865,865 PROPERTY AND EQUIPMENT 66,463,851 57,749,905 Less accumulated depreciation and amortization 41,895,461 37,831,369 ------------ ------------ 24,568,390 19,918,536 ------------ ------------ TOTAL ASSETS $173,266,910 $156,886,731 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and other liabilities $ 61,975,301 $ 60,966,543 Accrued liabilities 2,304,938 2,530,310 Current maturities of long-term debt 404,746 392,177 ------------ ------------ TOTAL CURRENT LIABILITIES $ 64,684,985 $ 63,889,030 LONG TERM DEBT, LESS CURRENT MATURITIES 772,762 978,327 DEFERRED INCOME TAXES 1,572,000 1,743,000 MINORITY INTEREST IN SUBSIDIARY 96,462 731,579 STOCKHOLDERS' EQUITY: Common Stock-par value $.33 1/3 per share par value; 80,000,000 shares authorized; 56,647,653 issued and outstanding (56,117,111 at December 31, 1995) 18,882,551 8,313,646 Other stockholders' equity 87,258,150 81,231,149 ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 106,140,701 89,544,795 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $173,266,910 $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 Six Months Ended June 30 June 30 ----------------------- ------------------------ 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Revenues $40,857,650 $29,897,035 $74,752,412 $55,824,999 Cost of operations 28,503,308 21,334,718 53,037,473 40,014,482 Selling, general and administrative expenses 3,224,282 2,743,166 5,958,239 5,071,605 ----------- ----------- ----------- ----------- OPERATING INCOME 9,130,060 5,819,151 15,756,700 10,738,912 Other income (expense): Interest income 657,152 509,474 1,315,022 1,001,321 Interest expense (25,066) (25,949) (52,286) (53,296) ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 9,762,146 6,302,676 17,019,436 11,686,937 Income taxes 3,449,000 2,250,000 6,089,000 4,191,000 ----------- ----------- ----------- ----------- INCOME BEFORE MINORITY INTEREST 6,313,146 4,052,676 10,930,436 7,495,937 Minority interest (41,964) 28,258 374 44,014 ----------- ----------- ----------- ----------- NET INCOME $ 6,271,182 $ 4,080,934 $10,930,810 $ 7,539,951 =========== =========== =========== =========== Per share data: Weighted average common and common equivalent shares outstanding 59,170,953 57,482,471 58,987,732 57,163,041 ========== ========== ========== ========== Earnings per share $0.11 $0.07 $0.19 $0.13 ========== ========== ========== ========== See Notes to Condensed Consolidated Financial Statements - Unaudited -2- CONCORD EFS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30 -------------------------- 1996 1995 ----------- ------------ NET CASH PROVIDED BY OPERATING ACTIVITIES $10,421,231 $ 8,043,436 INVESTING ACTIVITIES: Acquisition of property and equipment (8,713,946) (3,883,678) Purchases of securities available-for-sale (6,463,125) (4,366,734) Purchase of securities held-to-maturity (1,475,000) Sale of securities available-for-sale 247,500 Maturities of securities held-to-maturity 198,353 404,490 ----------- ----------- NET CASH USED IN INVESTING ACTIVITIES (16,453,718) (7,598,422) FINANCING ACTIVITIES: Proceeds from sale of common stock 1,623,572 1,765,005 Payments on notes payable (192,996) (181,195) ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 1,430,576 1,583,810 ----------- ----------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,601,911) 2,028,824 Cash and cash equivalents at beginning of period 36,572,976 23,030,329 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $31,971,065 $25,059,153 =========== =========== 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) JUNE 30, 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 six month period ended June 30, 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: June 30 December 31 1996 1995 ---------- ----------- Decrease in securities available-for-sale $1,580,646 $303,316 Increase in deferred tax assets 535,000 103,000 Decrease in equity 1,045,646 200,316 Stockholders' Matters and Earnings Per Share The Board of Directors approved three for two stock splits on December 15, 1995 and June 18, 1996. Prior periods earnings per share and related per share data have been restated to reflect the stock splits. -4- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Revenue and net income for the second quarter ended June 30, 1996 increased 37% and 54%, respectively, compared to the same period of the prior year. Revenue and net income for the six months ended June 30, 1996 increased 34% and 45%, respectively, compared to the same period of the prior year. The increase in revenue for both the quarter and six months ended June 30, 1996 was attributable to the addition of new customers and additional volume from existing customers in Bank Card Services and Trucking Services. The Company owns and operates approximately 400 cash dispensing machines (ATM's) at major truckstops across the country. ATM surcharge revenue, which began in the second quarter of 1996, accounted for roughly 50% of the increase in Trucking Services revenue for the second quarter of 1996 and 30% of the increase in Trucking Services revenue for the six month period of 1996. Net income as a percentage of revenue increased from 13.7% to 15.3% for the second quarter of 1996, when compared to the prior year. Approximately two thirds of this increase was primarily due to Bank Card Services revenue growth coupled with slower increases in operational costs and selling, general and administrative expenses. The remaining one third of the increase was attributable to net margin on ATM surcharge revenue. Net income as a percentage of revenue increased from 13.5% to 14.6% for the six months ended June 30, 1996, when compared to the prior year. Approximately three quarters of this increase was primarily due to Bank Card Services revenue growth coupled with slower increases in operational costs and selling, general and administrative expenses. The remaining one quarter of the increase was attributable to net margin on ATM surcharge revenue. LIQUIDITY AND CAPITAL RESOURCES For the six months ended June 30, 1996, the Company generated $10.4 million from operating activities and received approximately $1.6 million from stock issued from exercises of options under the Company's Incentive Stock Option Plan. The Company invested $7.9 million in securities and $8.7 million in capital additions during the six months ended June 30, 1996. The capital additions were primarily for new computer equipment. The disqualifying disposition of the incentive stock options also reduced corporate income taxes paid by approximately $3.1 million for the six months ended June 30, 1996. 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: August 12, 1996 By: /s/ Dan M. Palmer ----------------------------------- Dan M. Palmer Chief Executive Officer Date: August 12, 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 Six Months Ended Ended June 30 June 30 ----------------------- ----------------------- 1996 1995 1996 1995 ----------- ----------- ----------- ----------- For primary earnings per share: Net income $ 6,271,182 $ 4,080,934 $10,930,810 $ 7,539,951 =========== =========== =========== =========== Weighted average common shares outstanding net of treasury shares 56,600,084 55,357,799 56,484,230 54,871,706 Weighted average common stock equivalent shares for stock options by treasury stock method using average market price 2,570,869 2,124,672 2,503,502 2,291,335 ----------- ----------- ----------- ----------- Weighted average common and common equivalent shares 59,170,953 57,482,471 58,987,732 57,163,041 =========== =========== =========== =========== Per share amount $0.11 $0.07 $0.19 $0.13 =========== =========== =========== =========== For fully diluted earnings per share: Net income $ 6,271,182 $ 4,080,934 $10,930,810 $ 7,539,951 =========== =========== =========== =========== Weighted average common and common equivalent shares for primary earnings per share 59,170,953 57,482,471 58,987,732 57,163,041 Add shares representing additional shares for stock options based on period-end market price 120,317 589,390 80,861 420,003 ----------- ----------- ----------- ----------- Weighted average common and common equivalent shares- fully diluted basis 59,291,270 58,071,861 59,068,593 57,583,044 =========== =========== =========== =========== Per share amount $0.11 $0.07 $0.19 $0.13 =========== =========== =========== =========== EX-27 2
5 1000 3-MOS 6-MOS DEC-31-1996 DEC-31-1996 JUN-30-1996 JUN-30-1996 31971 31971 34767 34767 73814 73814 794 794 3604 3604 142548 142548 66463 66463 41895 41895 173267 173267 64685 64685 0 0 0 0 0 0 18883 18883 87258 87258 173267 173267 40858 74752 40858 74752 28503 53037 31728 58996 0 0 160 280 25 52 9762 17019 3449 6089 6271 10931 0 0 0 0 0 0 6271 10931 .11 .19 .11 .19
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