SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) April 17, 1997
(Exact name of registrant as specified in its charter)
DST Systems, Inc.
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
Delaware 1-14036 43-1581814
333 West 11th Street, Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 435-6568
(Former name or former address, if changed since last report.)
FORM 8-K
DST SYSTEMS, INC.
ITEM 1 CHANGES IN CONTROL OF REGISTRANT
Not applicable.
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
Not applicable.
ITEM 3 BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5 OTHER EVENTS
See attached as an Exhibit to this Form 8-K a News Release released April 17,
1997 concerning the announcement of financial results.
ITEM 6 RESIGNATIONS OF REGISTRANT'S DIRECTORS
Not applicable.
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
Not applicable.
ITEM 8 CHANGE IN FISCAL YEAR
Not applicable.
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 hereunto duly authorized.
DST Systems, Inc.
/s/ Robert C. Canfield
Senior Vice President, General Counsel,
Secretary
Date: April 22, 1997
NEWS RELEASE C1997-02 Contact:
DST Systems, Inc. Thomas A. McDonnell (816) 435-8684
333 West 11th Street President and Chief Executive Officer
Kansas City, MO Kenneth V. Hager (816) 435-8603
64105-1594 Vice President and Chief Financial Officer
NYSE Symbol: DST
FOR IMMEDIATE RELEASE
April 17, 1997
DST SYSTEMS, INC. ANNOUNCES FIRST QUARTER 1997 FINANCIAL RESULTS
DST Systems, Inc. (DST) announces financial results for the quarter ended March
31, 1997. For the quarter ended March 31, 1997, DST's consolidated net income
was $15.1 million, or $.30 per share, compared to $4.4 million, or $.09 per
share for the quarter ended March 31, 1996. Eliminating the equity in losses of
its former affiliate, The Continuum Company, Inc. (Continuum), net income for
the quarter ended March 31, 1996 would have been $11.8 million or $.24 per
share.
Revenues for the quarter ended March 31, 1997 totaled $158.7 million, an
increase of 10% over the prior year quarter. U.S. revenues were $138.7 million
for the quarter, an increase of 11.6% over comparable 1996 revenues. U.S.
revenues reflected increases in mutual fund, output processing and subscriber
management revenues. U.S. mutual fund shareowner accounts serviced totaled 41.8
million at March 31, 1997, an increase of 1.7% from the 41.1 million serviced at
December 31, 1996 and an increase of 9.1% from the 38.3 million serviced at
March 31, 1996. The increase in accounts serviced was achieved even though, as
expected and earlier reported, a client of Boston Financial Data Services, Inc.
(BFDS) internalized the processing for its approximately 900,000 mutual fund
shareowner accounts previously processed by BFDS. U.S. output processing pages
printed for the quarter increased 6.1% over first quarter 1996 volumes to 349
million pages.
International revenues totaled $20.0 million for the quarter, a slight increase
over comparable prior year revenues. Modest increases in revenues from mutual
fund, investment management and Automated Work DistributorTM products were
offset by lower non-mutual fund Canadian revenues.
Consolidated income from operations increased 23.5% over the prior year quarter
to $23.7 million, with an operating margin of 14.9%, compared to 13.3% for the
prior year. Costs and expenses increased 8.4% to $115.4 million, primarily from
increased personnel related costs. Depreciation and amortization increased 5.0%
from the prior year quarter. Although individual unit results varied,
international businesses posted an aggregate operating loss of $2.4 million for
the current year quarter.
Equity in earnings of unconsolidated affiliates totaled $1.0 million for the
quarter ended March 31, 1997, as compared to a loss of $7.6 million for the
quarter ended March 31, 1996. The 1996 loss primarily was the result of DST's
$10.2 million share of a non-recurring charge by Continuum related to
Continuum's March 1996 acquisition of Hogan Systems, Inc. Excluding the effect
of Continuum, equity in earnings of unconsolidated affiliates was $0.4 million
for the March 31, 1996 quarter. Increased earnings at BFDS and Argus Health
Systems, Inc. contributed to the $0.6 million increase in 1997.
Interest expense totaled $2.2 million for the quarter ended March 31, 1997, up
slightly from the $2.1 million recorded in the prior year quarter.
DST's effective tax rate was 35.2% for the first quarter 1997, as compared to
57.5% for the prior year quarter. Eliminating the effects of Continuum, the 1996
tax rate would have been 35.8%.
DST SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share amounts)
(Unaudited)
For the Three Months Ended
March 31, 1996 March 31, 1997
Revenues $ 144,262 $ 158,684
Costs & Expenses 106,389 115,354
Depreciation & Amortization 18,688 19,629
-------------- --------------
Income from Operations 19,185 23,701
Interest Expense (2,102) (2,163)
Other Income 931 979
Equity in Earnings (7,641) 1,044
of Unconsolidated Affiliates -------------- --------------
Income Before Income Taxes 10,373 23,561
Minority Interest
Income Taxes 5,963 8,302
-------------- --------------
Income Before Minority Interest 4,410 15,259
Minority Interest in Income (Losses) (7) 156
-------------- --------------
Net Income $ 4,417 $ 15,103
============== ==============
Average Common Shares Outstanding 50,000 49,529
Earnings Per Share $0.09 $0.30
