UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
Commission file number 1-6002
Computer Data Systems, Inc.
(Exact name of registrant as specified in its charter)
MARYLAND 52-0882982
(State or other jurisdiction (IRS Employer ID No.)
of incorporation or organization)
ONE CURIE COURT
ROCKVILLE, MARYLAND 20850-4389
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 921-7000
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 outstanding shares of the registrant's Common Stock, par
value $0.10 per share, was 5,768,092 on February 12, 1996.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
COMPUTER DATA SYSTEMS, INC.
Consolidated Statements of Operations
(Unaudited)
For the Quarter Ended
December 31
---------------------
1995 1994
---- ----
<S> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 61,183,200 $ 51,968,400
------------- -------------
Costs and Expenses:
Salaries, wages and employee benefits . . . . . . . . . . . . . 31,468,200 33,635,000
Subcontractors . . . . . . . . . . . . . . . . . . . . . . . . . 21,299,700 11,145,500
Travel, relocation and subsistence . . . . . . . . . . . . . . . 625,800 529,800
Rental of space and equipment . . . . . . . . . . . . . . . . . 652,400 968,700
Depreciation and amortization . . . . . . . . . . . . . . . . . 841,400 724,700
Other operating and administrative costs . . . . . . . . . . . . 3,193,400 2,642,800
------------- -------------
58,080,900 49,646,500
Income from operations . . . . . . . . . . . . . . . . . . . . . . 3,102,300 2,321,900
Interest and other income, net . . . . . . . . . . . . . . . . . . 367,500 40,500
------------- -------------
Income before income taxes . . . . . . . . . . . . . . . . . . . . 3,469,800 2,362,400
Provision for income taxes . . . . . . . . . . . . . . . . . . . . 1,358,000 935,800
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,111,800 $ 1,426,600
============= =============
Net Income per Common Share . . . . . . . . . . . . . . . . . . . . $ .36 $ .24
============= =============
The unaudited financial statements presented herein reflect all material adjustments which in management's opinion are necessary
for a fair presentation of the interim periods.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMPUTER DATA SYSTEMS, INC.
Consolidated Statements of Operations
(Unaudited)
For the Six Months Ended
December 31
------------------------
1995 1994
---- ----
<S> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 121,056,200 $ 106,199,300
-------------- --------------
Costs and Expenses:
Salaries, wages and employee benefits . . . . . . . . . . . . . 65,901,700 67,657,900
Subcontractors . . . . . . . . . . . . . . . . . . . . . . . . . 37,487,700 22,593,300
Travel, relocation and subsistence . . . . . . . . . . . . . . . 1,443,900 1,163,900
Rental of space and equipment . . . . . . . . . . . . . . . . . 1,298,000 1,923,000
Depreciation and amortization . . . . . . . . . . . . . . . . . 1,623,300 1,444,700
Other operating and administrative costs . . . . . . . . . . . . 6,480,700 6,536,200
114,235,300 101,319,000
-------------- --------------
Income from operations . . . . . . . . . . . . . . . . . . . . . . 6,820,900 4,880,300
Interest and other income, net . . . . . . . . . . . . . . . . . . 339,200 244,200
-------------- --------------
Income before income taxes . . . . . . . . . . . . . . . . . . . . 7,160,100 5,124,500
Provision for income taxes . . . . . . . . . . . . . . . . . . . . 2,797,300 2,023,300
-------------- --------------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,362,800 $ 3,101,200
============== ==============
Net Income per Common Share . . . . . . . . . . . . . . . . . . . . $ .74 $ .52
============== ==============
Dividends per Common Share . . . . . . . . . . . . . . . . . . . . $ .05 $ .05
============== ==============
The unaudited financial statements presented herein reflect all material adjustments which in management's opinion are necessary
for a fair presentation of the interim periods.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMPUTER DATA SYSTEMS, INC.
Consolidated Balance Sheets
December 31, June 30,
1995 1995
Assets Unaudited Audited
--------- -------
Current Assets:
<S> <C> <C>
Cash and cash equivalents . . . . . . . . . . . . . . . . $ 242,300 $ 1,237,000
Trade accounts receivable . . . . . . . . . . . . . . . . 63,524,600 52,236,900
Deferred income taxes . . . . . . . . . . . . . . . . . . 456,600 456,600
Income tax refunds receivable . . . . . . . . . . . . . . 145,100 151,400
Prepaid expenses and deposits . . . . . . . . . . . . . . 1,711,400 1,948,300
-------------- --------------
Total Current Assets . . . . . . . . . . . . . . . . 66,080,000 56,030,200
Long-term investments . . . . . . . . . . . . . . . . . . 1,621,000 1,584,800
Land, building and equipment . . . . . . . . . . . . . . . 31,639,800 26,452,900
Other assets . . . . . . . . . . . . . . . . . . . . . . . 918,700 855,100
-------------- --------------
Total Assets . . . . . . . . . . . . . . . . . . . . $ 100,259,500 $ 84,923,000
============== ==============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities . . . . . . . . . $ 24,876,300 $ 15,652,600
Accrued wages and related benefits . . . . . . . . . . . . 10,476,300 14,363,800
Income taxes payable . . . . . . . . . . . . . . . . . . . 127,300
-------------- --------------
Total Current Liabilities . . . . . . . . . . . . . 35,479,900 30,016,400
-------------- --------------
Long-Term Liabilities:
Note payable . . . . . . . . . . . . . . . . . . . . . . . 5,800,000
Deferred compensation . . . . . . . . . . . . . . . . . . 4,027,100 4,245,500
Deferred income taxes . . . . . . . . . . . . . . . . . . 580,500 599,500
-------------- --------------
Total Long-Term Liabilities. . . . . . . . . . . . . 10,407,600 4,845,000
-------------- --------------
Stockholders' Equity:
Common Stock, par value $.10 . . . . . . . . . . . . . . . 576,800 573,800
Capital in excess of par value . . . . . . . . . . . . . . 6,246,000 6,014,500
Retained earnings . . . . . . . . . . . . . . . . . . . . 47,549,200 43,473,300
-------------- --------------
Total Stockholders' Equity . . . . . . . . . . . . . 54,372,000 50,061,600
-------------- --------------
Total Liabilities and Stockholders' Equity . . . . . $ 100,259,500 $ 84,923,000
============== ==============
The unaudited financial statements presented herein reflect all material adjustments which in management's opinion are necessary
for a fair presentation of the interim periods.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMPUTER DATA SYSTEMS, INC.
Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months Ended
December 31
------------------------
1995 1994
---- ----
<S> <C> <C>
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,362,800 $ 3,101,200
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 1,623,300 1,444,600
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . (19,000) (2,100)
Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . . 160,000 114,700
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59,900) (33,500)
Net cash provided by (used in) changes in operating assets and
liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,281,400) (2,521,000)
Prepaid expenses and deposits . . . . . . . . . . . . . . . . . . . . . . 236,900 121,600
Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . 9,422,700 3,569,500
Accrued wages and related benefits . . . . . . . . . . . . . . . . . . . . (3,961,000) (1,592,600)
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,300
-------------- --------------
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . 611,700 4,202,400
-------------- --------------
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,896,400) (2,022,000)
Proceeds from sale of equipment. . . . . . . . . . . . . . . . . . . . . . 56,200 4,000
Purchase of long-term investments . . . . . . . . . . . . . . . . . . . . (174,400) (175,800)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34,500) (42,300)
-------------- --------------
Net cash (used in) investing activities . . . . . . . . . . . . . . . . . . . . (7,049,100) (2,236,100)
-------------- --------------
Cash flows from financing activities:
Payment on note payable . . . . . . . . . . . . . . . . . . . . . . . . . (6,133,300)
Borrowings on note payable . . . . . . . . . . . . . . . . . . . . . . . . 5,800,000
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (286,900) (285,500)
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . 234,500 177,000
Payment of deferred compensation . . . . . . . . . . . . . . . . . . . . . (304,900) (8,800)
-------------- --------------
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . 5,442,700 (6,250,600)
-------------- --------------
Net (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . (994,700) (4,284,300)
-------------- --------------
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . 1,237,000 8,182,100
-------------- --------------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . $ 242,300 $ 3,897,800
============== ==============
The unaudited financial statements presented herein reflect all material adjustments which in management's opinion are necessary
for a fair presentation of the interim periods.
</TABLE>
<PAGE>
COMPUTER DATA SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
A. COMPUTATION OF EARNINGS PER SHARE
Net income per share of common stock is based on the weighted average
number of common and common stock equivalent shares outstanding during each
period.
Average Number of Shares Outstanding
December 31, 1995 December 31, 1994
5,910,779 5,909,621
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations
December 31, 1995 vs December 31, 1994 - Six Months
Revenues for the period were $121,056,200 versus $106,199,300 for the
prior year. The 14% increase in revenues was attributable to expansion on the
Department of Education contract and certain Professional Services contracts.
Costs and expenses grew by 13%. Costs and expenses increased in line with
the growth in revenues offset by the absence of costs of the Argentine
proposal, reduced i.e.FARS development costs and proposal protest costs incurred
in the prior year.
Income from operations rose due to improved contract margins and the lower
costs noted above.
Interest and other income, net increased due to higher investment gains
offset in part by increased interest expense due to larger borrowings under the
Company's line of credit arising from equipment commitments on the Argentine
contract and accounts receivable growth.
The provision for income taxes increased as a result of a slightly lower
combined federal and state tax rate applied to the higher operating income.
Net income rose due to the higher operating margins on the expanding
contract base.
December 31, 1995 vs December 31, 1994 - Three Months
Revenues for the quarter ended December 31, 1995 were $61,183,200 as
compared to the comparable quarter last year of $51,968,400. The 18% increase
in revenues was attributable primarily to continuing expansion of the Department
of Education contract and other existing contracts.
Costs and expenses rose at a slightly lower rate compared to the increase
in revenues. Expenses increased by 17% due to the growth on existing contracts.
Income from operations rose due to improved contract margins on the
growing contract base.
Interest and other income, net increased despite the lower available
investment balances and increased borrowings on the Company's line of credit
during the quarter due to realized gains on the sale of investments of
approximately $440,000.
The provision for income taxes increased as a result of a slightly lower
combined federal and state tax rate applied to the higher operating income.
Net income was above last year's comparable quarter due to improved
operating margins on the expanding contract base and the higher interest and
other income.
Comparison of Financial Condition
December 31, 1995 Compared to June 30, 1995
Total assets increased to $100,259,500 from $84,923,000 at June 30, 1995.
Working capital increased by approximately $4,586,300 since June 30, 1995. The
increase is attributed primarily to the retention of earnings after payment of
dividends. Borrowings under the Company's three-year revolving line of credit
were used to fund accounts receivable growth.
Capital expenditures for the year are expected to be in the $8,000,000
range.
PART II -- OTHER INFORMATION
ITEMS 1-5. Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURE
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, in Rockville, Maryland on February 14,
1996.
COMPUTER DATA SYSTEMS, INC.
By /s/ Wyatt D. Tinsley
________________________
Wyatt D. Tinsley
Executive Vice President
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CDSI'S
CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000022989
<NAME> COMPUTER DATA SYSTEMS, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 242,300
<SECURITIES> 0
<RECEIVABLES> 63,524,600
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 66,080,000
<PP&E> 31,639,800
<DEPRECIATION> 1,623,329
<TOTAL-ASSETS> 100,259,500
<CURRENT-LIABILITIES> 35,479,900
<BONDS> 0
0
0
<COMMON> 576,800
<OTHER-SE> 53,795,200
<TOTAL-LIABILITY-AND-EQUITY> 100,259,500
<SALES> 0
<TOTAL-REVENUES> 121,056,203
<CGS> 0
<TOTAL-COSTS> 114,235,308
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 103,209
<INCOME-PRETAX> 7,160,070
<INCOME-TAX> 2,797,271
<INCOME-CONTINUING> 4,362,799
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,362,799
<EPS-PRIMARY> 0.74
<EPS-DILUTED> 0.74
</TABLE>
