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, 1995
___________________________
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[ ]
Shares of Common Stock, $.33 1/3 par value, were
24,675,984 as of June 30, 1995.
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CONCORD EFS, INC. AND SUBSIDIARIES
INDEX
Page No.
--------
PART 1- Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
June 30, 1995 and December 31, 1994 1
Condensed Consolidated Statements of Income
Three Months and Six Months ended June 30, 1995
and June 30, 1994 2
Condensed Consolidated Statements of Cash Flows
Six Months ended June 30, 1995 and June 30, 1994 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
<PAGE>
CONCORD EFS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30
1995 December 31
(UNAUDITED) 1994
ASSETS ------------ -----------
Assets
Cash and cash equivalents $ 25,059,153 $23,030,329
Securities available-for-sale 17,502,216 12,113,593
Accounts receivable, net 27,935,858 33,763,804
Inventories 2,208,291 2,907,661
Prepaid expenses and other 5,616,316 3,810,968
------------ -----------
Total Current Assets 78,321,834 75,626,355
Securities held-to-maturity 3,788,807 4,196,454
Property and equipment 53,673,580 49,789,902
Less accumulated depreciation and amortization 33,630,281 30,150,571
------------ -----------
20,043,299 19,639,331
------------ -----------
$102,153,940 $99,462,140
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 21,232,597 $30,508,847
Accrued liabilities 3,142,451 3,228,829
Current maturities of long-term debt 379,999 368,198
------------ -----------
Total Current Liabilities 24,755,047 34,105,874
Long term debt, less current maturities 1,177,508 1,370,504
Deferred income taxes 1,708,000 1,244,000
Minority interest in subsidiary 762,877 806,891
Stockholders' Equity:
Common Stock-par value $.33 1/3 per share;
authorized 25,000,000 shares, issued 24,675,984
shares at June 30, 1995 and 16,105,434 shares
at December 31, 1994 8,225,328 5,368,478
Other stockholders' equity 65,525,180 56,566,393
------------ -----------
73,750,508 61,934,871
------------ -----------
$102,153,940 $99,462,140
============ ===========
See Notes to Condensed Consolidated Financial Statements - Unaudited.
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<PAGE>
CONCORD EFS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
------------------------ ------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
Revenues $29,897,035 $22,126,018 $55,824,999 $41,764,558
Cost of operations 21,334,718 15,972,355 40,014,482 30,393,290
Selling, general and
administrative expenses 2,743,166 2,172,376 5,071,605 3,948,393
----------- ----------- ----------- -----------
Operating income 5,819,151 3,981,287 10,738,912 7,422,875
Other income (expense):
Interest income 509,474 410,465 1,001,321 714,933
Interest expense (25,949) (30,931) (53,296) (41,479)
----------- ----------- ----------- -----------
Income before income taxes
and minority interest 6,302,676 4,360,821 11,686,967 8,096,329
Income taxes 2,250,000 1,540,000 4,191,000 2,863,000
----------- ----------- ----------- -----------
Income before minority
interest 4,052,676 2,820,821 7,495,967 5,233,329
Minority interest 28,258 11,760 44,014 34,574
----------- ----------- ----------- -----------
Net income $ 4,080,934 $ 2,832,581 $ 7,539,951 $ 5,267,903
=========== =========== =========== ===========
Per share data:
Weighted average common
and common equivalent
shares outstanding 25,547,765 24,707,268 25,405,796 24,711,456
========== ========== ========== ==========
Earnings per share $0.16 $0.11 $0.30 $0.21
===== ===== ===== =====
See Notes to Condensed Consolidated Financial Statements - Unaudited
-2-
<PAGE>
CONCORD EFS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months
Ended
June 30
----------------------------
1995 1994
----------- -----------
Net cash provided by operating activities $ 8,043,436 $ 9,050,660
----------- -----------
Investing activities:
Acquisition of property and equipment (3,883,678) (5,063,180)
Purchases of securities available-for-sale (4,366,734) (6,887,613)
Sales of securities available-for-sale 247,500 4,102,672
Maturities of securities held-to-maturity 404,490 570,216
----------- -----------
Net cash used in investing activities (7,598,422) (7,277,905)
----------- -----------
Financing activities:
Proceeds from sale of common stock 1,765,005 150,042
Proceeds on issuance of note payable 2,000,000
Payments on notes payable (181,195) (85,729)
----------- -----------
Net cash provided by financing activities 1,583,810 2,064,313
----------- -----------
Increase in cash and cash equivalents 2,028,824 3,837,068
Cash and cash equivalents at beginning
of period 23,030,329 12,465,815
----------- -----------
Cash and cash equivalents at end of period $25,059,153 $16,302,883
=========== ===========
For purposes of these statements, the Company considers all highly liquid
investments with a maturity of six months or less when purchased to be cash
equivalents.
See Notes to Condensed Consolidated Financial Statements - Unaudited.
-3-
<PAGE>
CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
JUNE 30, 1995
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, 1995 are not
necessarily indicative of the results that may be expected for the
year ended December 31, 1995. 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, 1994.
The balance sheet at December 31, 1994 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
1995 1994
--------- -----------
Decrease in securities
available-for-sale $616,011 $1,882,243
Increase in deferred tax assets 209,000 640,000
Decrease in equity 407,011 1,242,243
Stockholders' Matters and Earnings Per Share
The Board of Directors approved three for two stock splits on
August 18, 1994 and April 27, 1995. Prior periods earnings per share
and related per share data have been restated to reflect the stock splits.
-4-
<PAGE>
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 1995
increased 35% and 44% respectively, compared to the same period
last year. Revenue and net income for the first six months ended
June 30, 1995 increased 34% and 43% respectively, compared to the
same period of the prior year. The increase in revenue was attributable
to additional volume from existing customers and the addition of new
customers in Bank Card Services and Trucking Services. Continuing
telemarketing efforts were responsible for the new customers.
Net income as a percentage of revenue increased from 12.8% to 13.7%
for the second quarter, compared to the prior year. The increase
was primarily due to the Bank Card Services growth coupled with
slower operational cost increases.
LIQUIDITY AND CAPITAL RESOURCES
Capital additions for the quarter were $1,843,843. These additions
were primarily for new computer equipment financed by working
capital. 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.
-5-
<PAGE>
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 second
quarter.
-6-
<PAGE>
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 11, 1995 By:/s/Dan M. Palmer
-----------------------
Dan M. Palmer
Chief Executive Officer
Date: August 11, 1995 By:/s/Thomas R. Renfro
-----------------------
Thomas R. Renfro
Chief Financial Officer
-7-
<PAGE>
CONCORD EFS, INC. AND SUBSIDIARIES EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
Three Months Six Months
Ended June 30 Ended June 30
---------------------- ----------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
Primary earnings per share:
Net income $4,080,934 $2,832,581 $7,539,951 $5,267,903
========== ========== ========== ==========
Weighted average of common
shares outstanding 24,603,466 24,149,972 24,387,425 24,114,100
Weighted average common stock
equivalent for stock options
by treasury stock method 944,299 557,296 1,018,371 597,356
---------- ---------- ---------- ----------
Weighted average common and
common equivalent shares 25,547,765 24,707,268 25,405,796 24,711,456
========== ========== ========== ==========
Per share amount $0.16 $0.11 $0.30 $0.21
========== ========== ========== ==========
Fully diluted earnings per share:
Net income $4,080,934 $2,832,581 $7,539,951 $5,267,903
========== ========== ========== ==========
Weighted average common and
common equivalent shares for
common earnings per shares 25,547,765 24,707,268 25,405,796 24,711,456
Add shares representing
additional shares for stock
options based on period-end
market price 261,951 26,417 186,668 9,719
---------- ---------- ---------- ----------
Weighted average common and
common equivalent shares-fully
diluted basis 25,809,716 24,733,685 25,592,464 24,721,175
========== ========== ========== ==========
Per share amount $0.16 $0.11 $0.29 $0.21
========== ========== ========== ==========
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