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, 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
16,208,234 as of March 31, 1995.
CONCORD EFS, INC. AND SUBSIDIARIES
INDEX
Page No.
---------
PART 1- Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
March 31, 1995 and December 31, 1994 1
Condensed Consolidated Statements of Income
Three Months ended March 31, 1995 and
March 31, 1994 2
Condensed Consolidated Statements of Cash Flows
Three Months ended March 31, 1995 and
March 31, 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
CONCORD EFS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31
1995 1994
(UNAUDITED)
ASSETS ----------- -----------
Current Assets
Cash and cash equivalents $26,128,345 $23,030,329
Securities available-for-sale 12,629,946 12,113,593
Accounts receivable, net 23,208,865 33,763,804
Inventories 2,818,676 2,907,661
Prepaid expenses and other 3,816,555 3,810,968
----------- -----------
Total Current Assets 68,602,387 75,626,355
Securities held-to-maturity 4,008,044 4,196,454
Property and equipment 51,829,737 49,789,902
Less accumulated depreciation and amortization 31,896,465 30,150,571
----------- -----------
19,933,272 19,639,331
----------- -----------
$92,543,703 $99,462,140
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $18,389,343 $30,508,847
Accrued liabilities 4,107,465 3,228,829
Current maturities of long-term debt 374,052 368,198
----------- -----------
Total Current Liabilities 22,870,860 34,105,874
Long term debt, less current maturities 1,274,767 1,370,504
Deferred income taxes 1,536,000 1,244,000
Minority interest in subsidiary 791,135 806,891
Stockholders' Equity:
Common Stock-par value $.33 1/3 per share;
authorized 25,000,000 shares, issued 16,208,234
shares at March 31, 1995 and 16,105,434 shares
at December 31, 1994 5,402,745 5,368,478
Other stockholders' equity 60,668,196 56,566,393
----------- -----------
66,070,941 61,934,871
----------- -----------
$92,543,703 $99,462,140
=========== ===========
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
----------------------------
1995 1994
----------- -----------
Revenues $25,927,964 $19,638,539
Cost of operations 18,679,795 14,421,538
Selling, general and administrative expenses 2,328,408 1,775,413
----------- -----------
Operating income 4,919,761 3,441,588
Other income (expense):
Interest income 491,847 304,463
Interest expense (27,347) (10,543)
----------- -----------
Income before income taxes
and minority interest 5,384,261 3,735,508
Income taxes 1,941,000 1,323,000
----------- -----------
Income before minority interest 3,443,261 2,412,508
Minority interest 15,756 22,814
----------- -----------
Net income $ 3,459,017 $ 2,435,322
=========== ===========
Per share data:
Weighted average common and common
equivalent shares outstanding 16,842,466 16,477,097
========== ==========
Earnings per share $0.21 $0.15
========== ==========
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
----------------------------
1995 1994
----------- -----------
Net cash provided by operating activities $ 4,749,968 $ 2,229,649
Investing activities:
Acquisition of property and equipment (2,039,835) (2,359,623)
Purchases of securities available-for-sale (6,887,613)
Sales of securities available-for-sale 4,102,672
Maturities of securities held-to-maturity 189,781 324,687
----------- -----------
Net cash used in investing activities (1,850,054) (4,819,877)
Financing activities:
Proceeds from sale of common stock 287,985 146,842
Proceeds on issuance of note payable 2,000,000
Payments on notes payable (89,883)
----------- -----------
Net cash provided by financing activities 198,102 2,146,842
Increase (decrease) in cash and cash
equivalents 3,098,016 (443,386)
Cash and cash equivalents at beginning
of period 23,030,329 12,465,815
----------- -----------
Cash and cash equivalents at end of period $26,128,345 $12,022,429
=========== ===========
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, 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 three month period ended March 31, 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:
March 31 December 31
1995 1994
---------- -----------
Decrease in securities
available-for-sale $1,367,519 $1,882,243
Increase in deferred tax assets 465,000 640,000
Decrease in equity 902,519 1,242,243
-4-
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenue for the first quarter ended March 31, 1995 increased 32%
over the same period last year. Net income for the first three
months increased 42% over 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 13.3% to 12.4%
for the first three months, 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 $2,039,835. 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-
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 10, 1995 By: Dan M. Palmer
Dan M. Palmer
Chief Executive Officer
Date: May 10, 1995 By: Thomas R. Renfro
Thomas R. Renfro
Chief Financial Officer
-7-
EXHIBIT 11
CONCORD EFS, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Three Months
Ended
March 31
--------------------------
1995 1994
------------ -----------
For primary earnings per share:
Net income $ 3,459,017 $ 2,435,322
=========== ===========
Weighted average of common shares
outstanding net of treasury shares 16,114,256 16,052,153
Weighted average common stock
equivalent for stock options by
treasury stock method 728,210 424,944
----------- -----------
Weighted average common and common
equivalent shares 16,842,466 16,477,097
=========== ===========
Per share amount $0.21 $0.15
=========== ===========
For fully diluted earnings per share:
Net income $ 3,459,017 $ 2,435,322
=========== ===========
Weighted average common and common
equivalent shares for primary
earnings per share 16,842,466 16,477,097
Add shares representing additional
shares for stock options based on
period-end market price 73,836 -0-
----------- -----------
Weighted average common and common
equivalent shares-fully diluted
basis 16,916,302 16,477,097
=========== ===========
Per share amount $0.20 $0.15
=========== ===========
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