UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended JUNE 30, 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
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( X )
The aggregate market value of the voting stock held by non-affiliates of
the Company at September 1, 1995 was $53,698,622, based on the closing price of
$10.25 per share. As of that date, 5,737,842 shares of Common Stock were issued
and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT PART OF 10-K
Portions of the Definitive Proxy Statement
filed pursuant to Regulation 14A Part III, Items 10-13
PART I
ITEM 1. BUSINESS
Principal Services Rendered
- ---------------------------
Computer Data Systems, Inc. (the "Company"), was incorporated in the
State of Maryland in 1968. The Company provides information technology services
and products including system integration, software engineering/re-engineering,
development and maintenance, data base support, data center management and
processing services, and telecommunications engineering. The Company's products
include CASE tools as well as financial and accounting, debt management, loan
and mortgage processing, and biometric identification systems. The Company's
3,400 employees serve a wide array of government and private industry customers
with information technology expertise, systems, and products. The Company
provides information technology solutions on more than 100 current contracts
from 21 office locations.
The Company's operations are concentrated in two business segments.
Information with respect to such business segments may be found in Note 9 to the
Company's Consolidated Financial Statements.
Of these business segments, the larger Professional Services Group
primarily markets its expertise in software programming and network engineering
to those federal government agencies that demand highly technical information
technology solutions. The Company's Professional Services Group applies proven
information technology to design, implement, and operate data center facilities,
networks, imaging systems, interactive databases, automated biometric
identification tools, and information management and reporting systems.
The Company's Data Processing Support Services Group provides
financial systems and services to include debt collection, pension trust fund
support, loan processing, cash management, mortgage servicing, and fulfillment
systems and services. In addition, this group markets the Company's proprietary
software packages and CASE re-engineering tools. The group's suite of CASE
tools enhances the development and maintenance of COBOL programs and increases
operational reliability and maintainability. The Data Processing Support
Services Group also operates a modern data center, which services the
information processing requirements, both mainframe and client-server, of
numerous federal and commercial clients. Data center services include the full
range of associated technical support: LAN administration, system and data
security, data integrity, user training, office automation support, hotline
support, and courier services.
Recent awards include new contracts with the Resolution Trust
Corporation, the New York Higher Education Services Corporation, and the Naval
Air Systems Command. In addition, the Company reached a settlement with the
Department of Energy and another contractor pursuant to which the Company will
continue to provide approximately 50% of the previous support levels on the new
contract.
In March 1995, the Company's Argentine subsidiary along with the
prime contractor NetStar S.A., was awarded a contract with the Banco Social de
Cordoba to automate the state-owned Quinela lottery. However, after
successfully completing acceptance testing on the prototype and investing $11
million in hardware and software development in the contract, a decree was
issued by the outgoing Governor of Cordoba on his last day in office effectively
cancelling all work on the contract and reopening the bidding process from the
initial receipt of proposals. An appeal has been made to the new Governor to
reconsider the decree and reinstate the contract. The prime contractor and the
Company have joined efforts to protest vigorously the cancellation of the
contract. No determination as to the resolution of the contract or recovery of
the costs can be made at this time.
During the past year, the Company lost the reprocurements of the
General Services Administration Central Zone and Department of Justice
Immigration and Naturalization contracts. Each contract generated approximately
$18-19 million in annual revenues. The Company completed performance on these
contracts in October 1994 and September 1995, respectively.
Most contracts are awarded on the basis of competitive bidding, and
are generally structured as time-and-materials, cost-plus-fixed-fee, fixed-
price, or unit-price contracts. Such contracts include specific objectives and
performance periods ranging upwards of several years.
Under time-and-materials contracts, the Company receives a fixed
hourly rate intended to cover salary costs attributable to work performed under
the contract, including related expenses and a specified profit margin. Under
cost-plus-fixed-fee contracts, the Company is reimbursed for allowable costs and
is paid a negotiated fee. Under fixed-priced and unit-priced contracts, the
Company bears the risk of increased or unexpected costs and benefits if its
costs are lower than estimated. Key factors in the award of such contracts have
been technical expertise, past performance, and pricing.
Market and Competition
- ----------------------
A substantial number of companies offer information technology
services and products that overlap and are competitive with those offered by the
Company. These include: (1) companies that offer one or more information
technology services as a main line of their business; (2) computer manufacturers
who offer the same information technology services as adjunct technical support
for their equipment or as separate functions; and (3) companies primarily
engaged in other businesses that also outsource their information technology
facilities, services and expertise.
The Company has many competitors in each of the areas in which it
does business. Some of its competitors are large, diversified firms having
substantially greater financial resources and larger technical staffs than the
Company. The primary competitive factors in the market are technical
qualifications, management performance, and price. Greater emphasis on value
rather than simply price considerations has been noted in recent contract
awards.
While the federal market for the Company's services is projected to
grow 5-8% annually, increasing federal regulation, continuing competition for
qualified technical personnel, and narrow profit margins are characteristic of
this highly competitive industry. In recent years, the trend toward
consolidation of existing contracts and an emphasis on fixed-price contracts has
grown. Economic uncertainty and federal budget pressures continued to affect
the marketplace in 1995.
Dependence on Government Contracts
- ----------------------------------
The Company's business with the federal government is subject to
various risks, including the reduction or modification of contracts due to
changing government needs and requirements. The Company's contracts are not
subject to renegotiation of profits. In the event of termination for
convenience, the Company would be reimbursed for the costs of terminating the
contract.
In fiscal year 1995, professional services sales to the General
Services Administration and the Department of Energy were $89,117,600 (40%) and
$46,160,400 (21%) respectively. Data processing support services revenues from
the Department of Education was $25,642,500 (12%) in fiscal year 1995. In
fiscal year 1994, professional services sales to the General Services
Administration, and Department of Energy were $82,837,900 (40%) and $48,491,600
(24%), respectively. In fiscal year 1993, professional services sales to the
Department of Energy, General Service Administration, and Department of Justice
were $48,676,300 (27%), $72,467,400 (40%) and $19,489,000 (11%), respectively.
Backlog
- -------
As of June 30, 1995, the Company had a funded backlog of
approximately $179,998,200 compared to $165,310,500 as of June 30, 1994. The
Company expects that virtually all of the backlog will be fulfilled during the
current fiscal year. Most contracts are subject to termination at the
convenience of the government client.
Other Matters
- -------------
The Company is not materially dependent upon any raw materials for
its products and holds no material patents, licenses, or franchises. However,
the Company offers for license its proprietary software products: Information
Engineered Financial Accounting and Reporting System (i.e. FARSTM); Debt
Management and Collection System (DMCS); Cash Management System (CMS); Automated
Biometric Identification System (ABIDSTM); and a suite of re-engineering tools
including SCAN/COBOL, SUPERSTRUCTURE(R), RETOOL(C), COBOL-METRICS, and SLEUTH.
The Company does not experience any seasonal variations in its
levels of operations, and neither the Company nor its subsidiaries currently
have any significant foreign operations.
ITEM 2. PROPERTIES
The Company owns its corporate headquarters building at One Curie
Court, Rockville, Maryland. The 130,000 square foot facility is used by both
business segments.
The Company is a partner in a general partnership which owns a
25,000 square foot office building in California, Maryland. The building has
been leased to a tenant through September 1998.
In connection with certain professional services contracts, the
Company leases general office space in the following locations: Huntsville and
Montgomery, Alabama; Rosslyn, Virginia; Atlanta, Georgia; Fort Worth and San
Antonio, Texas; Beavercreek, Ohio; Des Plaines, Illinois; Vicksburg,
Mississippi; Pensacola, Florida; Kansas City, Kansas; St. Louis, Missouri;
Denver, Colorado; Washington, D. C.; and Germantown, Maryland. The leases
provide space ranging from 500 to 62,000 square feet and annual extension
options concurrent with the Company's current contract performance periods.
The Company leases a warehouse in Elkridge, Maryland for a
fulfillment contract. The 100,000 square foot facility is leased through
September 1995, the completion date of the contract.
In the opinion of management, the Company's current space is
adequate for its operating needs.
ITEM 3. LEGAL PROCEEDINGS
The Company is party to various legal proceedings arising in the
normal course of its business. Management of the Company does not believe that
the outcome of any of these proceedings will have a material adverse effect on
the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's common stock, par value $.10 per share ("Common
Stock") is publicly traded on The Nasdaq Stock Market's National Market
("Nasdaq") and is quoted under the symbol "CDSI."
As of September 1, 1995, there were approximately 733 record holders
of Common Stock. The number of record holders was determined from the records
of the Company's transfer agent and does not include beneficial owners of Common
Stock whose shares are held in the names of various securities brokers, dealers
and registered clearing agencies. The Company estimates that there are
approximately 3,000 stockholders.
The following table sets forth the high and low sales prices on the
Nasdaq for the Common Stock and dividends per share paid for fiscal years 1994
and 1995. On July 29, 1993, the Company declared a two-for-one stock split of
its Common Stock effected as a 100% stock dividend to stockholders of record on
August 23, 1993. The per share amounts and prices shown are on a post-split
basis.
1994 - 1995 1993 - 1994 DIVIDENDS PER SHARE
----------- ----------- -------------------
Quarter High Low High Low 1995 1994
- ------- ---- --- ---- --- ---- ----
First $14 1/4 $10 3/4 $14 1/2 $ 8 3/4 $ .05 $ .04
Second 12 1/2 8 3/4 19 1/2 11 3/4
Third 10 1/2 8 1/2 24 16 3/4 .05 .05
Fourth 11 1/4 9 1/2 21 3/4 11 3/4
The Company has paid semi-annual dividends since 1976. The payment
and amount of any future dividends will necessarily depend upon the existing
conditions, including the Company's earnings, financial condition, working
capital requirements, and other factors.
ITEM 6. SELECTED FINANCIAL DATA
1995 1994 1993 1992 1991
---- ---- ---- ----
Revenues $220,667,000 $205,923,300 $180,958,500 $141,698,600 $129,660,900
Costs & expenses 207,903,800 193,706,500 172,245,800 136,296,900 125,281,700
----------- ----------- ----------- ----------- -----------
Income from
operations 12,763,200 12,216,800 8,712,700 5,401,700 4,379,200
Interest and other
income, net 420,000 290,400 71,000 198,200 15,300
----------- ----------- ----------- ----------- -----------
Income before
income taxes 13,183,200 12,507,200 8,783,700 5,599,900 4,394,500
Provision for
income taxes 5,132,300 4,777,800 3,276,300 2,088,800 951,200
----------- ----------- ----------- ----------- -----------
Net Income $ 8,050,900 $ 7,729,400 $ 5,507,400 $ 3,511,100 $ 3,443,300
=========== =========== =========== =========== ===========
Net Incom per
Common Share $ 1.36 $ 1.31 $ .97 $ .64 $ .63
Dividends per
Common Share $ .10 $ .09 $ .08 $ .075 $.07
Total assets $ 84,923,000 $ 77,295,900 $ 68,189,300 $ 57,665,800 $ 52,356,300
Long-term debt $ 4,533,300 $ 6,133,300 $ 10,905,200 $ 10,958,700
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
1995 Compared With 1994
- -----------------------
Revenues in fiscal year 1995 increased approximately 7% from 1994.
The increase resulted primarily from the Data Processing Support Services
Group's Department of Education contract and growth on several contracts in the
Professional Services Group. Data Processing Support Services Group revenues
grew 70% primarily as a result of $14 million growth in the Department of
Education contract. The expiration of two large Professional Services Group
contracts during 1994 and the reduced contract scope resulting from the
settlement of the Department of Energy contract protest partially offset the
increase in revenues. In fiscal year 1995, Professional Services accounted for
80% of consolidated revenues and 89% of income from operations. Data Processing
Support Services accounted for 20% of consolidated revenues and 11% of income
from operations for the year.
Costs and expenses increased at approximately the same rate as the
growth in revenues. Costs which contributed to the increase in expenses
included corporate investments in software development, marketing initiatives,
and continuing development of Centers of Expertise. Increases in expenses were
mitigated by cost reduction efforts which included reduced interest expense
resulting from the repayment of the note payable ($370,600) and operating
efficiencies realized on the expanding contract base.
Income from operations was $12,763,200 compared to $12,216,800 in
the prior period. Operating margins decreased to 5.7% from 5.9%. Lower margins
in the initial phases of new contracts in the Data Processing Support Services
Group and the corporate investments noted above contributed to the decline in
operating margins.
Interest and other income, net increased by $129,600, principally
due to a $115,000 gain on the unwinding of an interest rate swap associated with
the note payable, prepaid in September 1994.
The provision for income taxes increased due to higher operating
income before income taxes and an increase from 38.2% to 38.9% in federal and
state tax rates.
Net income increased by $321,500 due to improved operating results.
1994 Compared With 1993
- -----------------------
Revenues in fiscal year 1994 increased approximately 14% from 1993.
The increase resulted primarily from new contracts in the Professional Services
and Data Processing Support Services Groups and increased funding on several
major contracts in the Professional Services Group. The increase was tempered
by the loss of the General Services Administration Eastern Zone contract ($12
million annual revenues), which expired in March 1994. Data Processing Support
Services Group revenues grew 45% as the new Department of Education contract
more than offset reduced licensing and mainframe processing services. In fiscal
year 1994, Professional Services accounted for 87% of consolidated revenues and
85% of income from operations. Data Processing Support Services accounted for
13% of consolidated revenues and 15% of income from operations for the year.
Costs and expenses increased approximately 12%, a lower rate than
the increase in revenues. This resulted from operating efficiencies realized as
the Company's business base expanded, higher margins on new contracts replacing
previous contracts, and a $732,100 savings in interest expense charged to other
general and administrative expenses due to the April 1993 refinancing of the
headquarters building mortgage. The positive effects were offset in part by
increased bid and proposal expenses, legal costs associated with the Department
of Energy bid protest, and software development costs of $600,000.
Income from operations was $12,216,800 compared to $8,712,700 in the
prior period. Operating margins improved to 5.9% from 4.8%. The improvement is
attributable to higher margins on new contracts and operating efficiencies.
Interest and other income, net increased by $219,400 due to higher
available investment balances, reduced line of credit borrowings, and investment
gains.
The provision for income taxes increased due to higher operating
income and higher federal and state tax rates.
Net income increased by $2,222,000 due to the improved operating
results.
1993 Compared With 1992
- -----------------------
Revenues in fiscal year 1993 increased approximately 28% over the
prior year. The increase resulted primarily from the award of new contracts
from the General Services Administration and modest expansion of staffing on
existing contracts in the Professional Services Group. Data Processing Support
Services Group revenues declined 14% due to reduced licensing and product sales
and mainframe processing services. In fiscal year 1993, Professional Services
accounted for 90% of consolidated revenues and 94% of income from operations.
Data Processing Support Services accounted for 10% of consolidated revenues and
6% of income from operations for the year.
Costs and expenses increased approximately 26% over the prior year.
The increase was due to expanded staffing levels on government contracts and
related contracts costs, offset in part by reduced interest expense charged to
other general and administrative expenses due to refinancing of the headquarters
building mortgage.
Income from operations was $8,712,700 compared to $5,401,700 in the
prior period. Income from operations increased to 4.8% from 3.8% of revenues.
The increase was attributable to improvement in operating margins on new and
recompeted contracts in the Professional Services Group, offset in part by the
77% decline in operating income in the Data Processing Support Services Group.
The decline resulted from a $750,000 writedown of proprietary software products,
approximately $250,000 in software development costs, and lower margins on the
reduced processing levels.
Interest and other income, net decreased by $127,200 due to lower
interest rates on smaller investment balances during the year and a $28,200
increase in interest expense due to higher borrowings on the Company's line of
credit to fund working capital requirements.
The provision for income taxes increased due to higher operating
income.
Net income increased by $1,996,300 due to the improvement in
operating results.
Liquidity
- ---------
The Company's working capital increased by $83,300 to $26,013,800 at
June 30, 1995. The increase was attributable to additional income retained
after dividends paid of $571,600 offset by capital expenditures of approximately
$7 million including $4.3 million for the Argentina contract. As the Company
bids larger, more complex contracts in both the government and commercial
markets, capital expenditures may be required that are not directly
reimbursable. Such commitments and other working capital requirements are
expected to be met with internally generated funds. In addition, the Company
has available its bank line of credit facilities.
The eventual resolution of the canceled Argentina contract may have
an effect on the future financial position and results of operations of the
Company. However, the outcome of this matter cannot be determined at this time.
At June 30, 1995 the Company had invested $4.3 million, primarily in equipment
and had total additional commitments of approximately $6.7 million.
Successful rewins of incumbent contracts is an integral part of the
Company's long term growth. The Company has experienced a higher level of
losses on incumbent recompetitions in the past 18 months. The Company is
continuing to invest in its business development, marketing, and proposal
resources to address the recent incumbent losses.
Capital Resources
- -----------------
Capital expenditures in fiscal year 1995 were approximately
$7,000,000 for data processing equipment and software and were funded
internally. Capital expenditures for fiscal year 1996 are expected to
approximate $9,500,000, including approximately $6,700,000 committed on the
Argentina contract and are anticipated to be funded from internally generated
working capital and existing credit facilities.
Effects Of Inflation
- --------------------
The majority of the Company's contracts provide for annual
adjustments on prices. Increases in revenues are primarily the result of
increased levels of service and product sales rather than price increases.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Auditors
Report of Independent Accountants
Consolidated Statements of Operations for the years ended
June 30, 1995, 1994 and 1993
Consolidated Balance Sheets as of June 30, 1995 and 1994
Consolidated Statements of Cash Flows for the years ended
June 30, 1995, 1994 and 1993
Consolidated Statements of Changes in Stockholders' Equity
for the years ended June 30, 1995, 1994 and 1993
Notes to Consolidated Financial Statements for the years ended
June 30, 1995, 1994 and 1993
Report of Independent Auditors
To the Board of Directors and Stockholders of Computer Data Systems, Inc.
We have audited the accompanying consolidated balance sheets of Computer
Data Systems, Inc. and its subsidiaries, as of June 30, 1995 and 1994 and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. The accompanying
consolidated statements of operations, changes in stockholders' equity and cash
flows for the year ended June 30, 1993, were audited by other auditors whose
report dated July 29, 1993, expressed an unqualified opinion on those
statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 1995 and 1994 financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Computer Data Systems, Inc. and its subsidiaries at June 30, 1995 and 1994, and
the consolidated results of their operations and their cash flows for the years
then ended, in conformity with generally accepted accounting principles.
As discussed in Note 8 to the consolidated financial statements, in 1994,
the Company changed its method of accounting for income taxes to conform with
Statement of Accounting Standards No. 109.
/s/ Ernst & Young LLP
Washington, D.C.
July 26, 1995
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Computer Data Systems, Inc.
Rockville, MD 20850
We have audited the accompanying consolidated statements of operations, changes
in stockholders' equity and cash flows of Computer Data Systems, Inc. and its
subsidiary for the year ended June 30, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the results of operations and cash flows for the year ended
June 30, 1993 in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Washington, D.C.
July 29, 1993
COMPUTER DATA SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended June 30
-------------------
1995 1994 1993
---- ---- ----
Revenues $220,667,000 $205,923,300 $180,958,500
Costs and Expenses:
Salaries, wages and benefits 138,758,200 141,577,500 124,638,400
Subcontractors 47,469,900 31,791,900 26,237,200
Travel, relocation, and subsistence 2,600,500 2,293,200 1,940,200
Rental of space and equipment 4,058,000 3,295,100 2,800,200
Depreciation and amortization 2,937,500 2,089,400 2,981,300
Other operating and administrative
costs 12,079,700 12,659,400 13,648,500
----------- ----------- -----------
207,903,800 193,706,500 172,245,800
----------- ----------- -----------
Income from operations 12,763,200 12,216,800 8,712,700
Interest and other income, net 420,000 290,400 71,000
Income before income taxes 13,183,200 12,507,200 8,783,700
Provision for income taxes
Current 4,678,300 4,946,100 3,670,400
Deferred 454,000 (168,300) (394,100)
----------- ----------- -----------
5,132,300 4,777,800 3,276,300
Net Income $ 8,050,900 $ 7,729,400 $ 5,507,400
=========== =========== ===========
Net Income per Common Share $ 1.36 $ 1.31 $ .97
=========== =========== ===========
See notes to consolidated financial statements.
COMPUTER DATA SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
June 30
1995 ------- 1994
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $ 1,237,000 $ 8,182,100
Trade accounts receivable 52,236,900 42,197,400
Deferred income taxes 456,600 738,700
Income tax refunds receivable 151,400 188,700
Prepaid expenses and deposits 1,948,300 1,271,100
---------- ----------
Total Current Assets 56,030,200 52,578,000
Long-term investments 1,584,800 1,303,600
Land, building, and equipment 26,452,900 22,649,500
Other assets 855,100 764,800
---------- ----------
Total Assets $84,923,000 $77,295,900
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $15,652,600 $12,312,000
Accrued wages and related benefits 14,363,800 12,735,500
Note payable 1,600,000
---------- ----------
Total Current Liabilities 30,016,400 26,647,500
---------- ----------
Note payable 4,533,300
Deferred compensation 4,245,500 3,414,200
Deferred income taxes 599,500 427,800
Stockholders' Equity
Common stock, par value $.10; 30,000,000
shares authorized; 5,737,842 shares
outstanding in 1995 and 5,689,919
shares in 1994 573,800 569,000
Capital in excess of par value 6,014,500 5,564,200
Retained earnings 43,473,300 36,139,900
---------- ----------
Total Stockholders' Equity 50,061,600 42,273,100
---------- ----------
Commitments and contingencies (Note 10)
Total Liabilities and Stockholders'
Equity $84,923,000 $77,295,900
========== ==========
See notes to consolidated financial statements.
COMPUTER DATA SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended June 30
-------------------
1995 1994 1993
---- ---- ----
Net Income $ 8,050,900 $ 7,729,400 $ 5,507,400
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization 2,937,500 2,089,400 2,981,300
Deferred income taxes 454,000 (168,300) (394,100)
Deferred compensation 849,100 682,200 625,500
Other (121,800) (52,600) (112,100)
Net cash provided by (used in) changes in
operating assets and liabilities:
Accounts receivable (10,002,200) 3,498,300 (14,586,100)
Prepaid expenses and deposits (677,400) 104,200 (203,400)
Accounts payable and
accrued liabilities 3,326,200 1,352,000 6,001,400
Accrued wages and related
benefits 1,628,300 461,500 1,446,800
---------- ---------- ----------
Net cash provided by
operating activities 6,444,600 15,696,100 1,266,700
---------- ---------- ----------
Cash flows from investing activities:
Capital expenditures (6,982,800) (6,101,400) (1,926,800)
Proceeds from sale of equipment 207,100 23,800 28,300
Purchase of long-term investments (166,800) (165,000)
Other (33,700) (148,400) (10,600)
---------- ---------- ----------
Net cash used in investing activities (6,976,200) (6,391,000) (1,909,100)
---------- ---------- ----------
Cash flows from financing activities:
Payments on notes payable (7,633,300) (1,600,000) (11,223,900)
Borrowings on note payable 1,500,000 8,000,000
Cash dividends (571,600) (506,800) (440,800)
Exercise of stock options 309,200 951,200 747,600
Payment of deferred compensation (17,800) (68,600) (19,600)
---------- ---------- ----------
Net cash used in financing activities (6,413,500) (1,224,200) (2,936,700)
---------- ---------- ----------
Net (decrease) increase in cash
and cash equivalents (6,945,100) 8,080,900 (3,579,100)
Cash and cash equivalents at
beginning of year 8,182,100 101,200 3,680,300
Cash and cash equivalents at
end of year $ 1,237,000 $ 8,182,100 $ 101,200
========== ========== ==========
Supplemental cash flow information:
Interest paid $ 95,100 $ 448,500 $ 1,343,100
Income taxes paid $ 4,513,100 $ 4,627,200 $ 3,234,600
See notes to consolidated financial statements.
COMPUTER DATA SYSTEMS, INC.
Consolidated Statements of Changes in Stockholders' Equity
Capital in
Common Stock Excess of Retained
Shares Amount Par Value Earnings Total
------ ------ ---------- -------- -----
Balance at June 30, 1992 2,726,760 $272,700 $3,736,500 $24,275,900 $28,285,100
Exercise of stock options, net 58,179 5,800 686,400 (66,200) 626,000
Tax benefit arising from
exercise of non-
qualified stock options 121,600 121,600
Cash dividends (440,800) (440,800)
Stock spilt effected in
form of 100% dividend 2,784,939 278,500 (278,500)
Net income for the year 5,507,400 5,507,400
Balance at June 30, 1993 5,569,878 557,000 4,266,000 29,276,300 34,099,300
Exercise of stock options, net 120,041 12,000 926,600 (359,000) 579,600
Tax benefit arising from
exercise of non-
qualified stock options 371,600 371,600
Cash dividends (506,800) (506,800)
Net income for the year 7,729,400 7,729,400
Balance at June 30, 1994 5,689,919 569,000 5,564,200 36,139,900 42,273,100
Exercise of stock options, net 47,923 4,800 318,100 (145,900) 177,000
Tax benefit arising from
exercise of non-
qualified stock options 132,200 132,200
Cash dividends (571,600) (571,600)
Net income for the year 8,050,900 8,050,900
Balance at June 30, 1995 5,737,842 $573,800 $6,014,500 $43,473,300 $50,061,600
See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1995, 1994, and 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidtion. The consolidated financial statements include the
accounts of Computer Data Systems, Inc. and its wholly owned subsidiaries. All
intercompany transactions have been eliminated in consolidation.
Revenue Recognition. Revenues on time and material contracts are recorded at
the contractual rates as the labor hours and direct expenses are incurred.
Revenues on cost-type contracts are recorded as reimbursable costs are incurred.
Revenues on fixed-price contracts are recorded on the percentage of completion
basis, determined by the ratio of total incurred costs to anticipated total
costs of the project. Revenues on unit-price contracts are recorded at
contractual selling prices of work completed and accepted by the customer.
Contract award fees are recorded based on estimated current performance levels
and historical experience. Revenues on equipment and software sales are
recorded when the units are delivered and installed. Immediate recognition is
made of any anticipated losses.
Depreciation and Amortization. Furniture, equipment, and leasehold improvements
are recorded at cost and are depreciated over their estimated useful lives on
the straight-line basis. Building and improvements are depreciated over a
useful life of forty years. The useful lives of furniture and equipment range
from five to ten years.
Investments. Cash equivalents are carried at cost that approximated market.
Deferred annuity contracts included in long-term investments are carried at cost
plus accrued interest.
Income Taxes. Effective July 1, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109 (SFAS 109), "Accounting for Income
Taxes." SFAS 109 changed the computation of deferred income taxes from a
deferral to a liability method. Under the liability method, deferred taxes are
based on timing differences between financial statement and income tax purposes,
using the enacted tax rates in effect during the years in which the differences
are expected to reverse. Previously, under the deferral method, deferred income
taxes were provided using the rates in effect when the timing differences
occurred.
Net Income Per Common 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 year. Common stock equivalent shares include the number
of shares issuable upon exercise of outstanding stock options, reduced by the
number of shares that could have been repurchased with the proceeds of such
options.
Statements of Cash Flows. For purposes of the statements of cash flows, the
Company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.
Reclassifications. Certain reclassifications have been made to prior year
amounts to conform to current year classifications.
2. TRADE ACCOUNTS RECEIVABLE Trade accounts receivable contain no allowance for
doubtful accounts. The components of trade accounts receivable are as follows:
June 30, 1995 June 30, 1994
------------- -------------
U.S. Government $ 50,693,600 $ 40,901,200
Commercial 1,543,300 1,296,200
----------- -----------
$ 52,236,900 $ 42,197,400
=========== ===========
Trade accounts receivable include unbilled costs and accrued profits on
contracts as follows:
June 30, 1995 June 30, 1994
------------- -------------
Excess of actual indirect costs over
amounts currently billable under cost
reimbursable contracts $ 869,200 $ 578,600
Contract retainages not currently
billable 364,000 290,300
Fixed price work not currently billable 6,856,600 3,974,100
----------- ----------
$ 8,089,800 $ 4,843,000
========== ==========
To the extent not billable at June 30, 1995 and 1994, unbilled costs and
accrued profits above are billable upon delivery or acceptance of services, upon
receipt of contract funding, or upon contract completion. Of the above unbilled
costs and accrued profits at June 30, 1995, approximately $1,218,600 are not
expected to be billed and collected within one year.
3. LAND, BUILDING, AND EQUIPMENT
June 30, 1995 June 30, 1994
------------- -------------
Land $ 2,200,000 $ 2,200,000
Furniture 12,921,000 9,143,000
Computer equipment and software 13,900,000 12,012,300
Building and improvements 15,132,000 14,970,500
---------- ----------
44,153,000 38,325,800
Less accumulated depreciation
and amortization (17,700,100) (15,676,300)
---------- ----------
$26,452,900 $22,649,500
========== ==========
4. OTHER ASSETS The Company maintains a program to provide senior executives
with additional life insurance coverage, supplementing the coverage available
under the Company's group insurance plan. Under the program, officers
participate with the Company in the payment of premiums. The Company has an
interest in such policies to the extent of its premium payments.
5. NOTE PAYABLE In September 1994, the Company repaid $6,133,000, the balance
of an unsecured, five-year amortizing term loan at an interest rate of LIBOR
plus 140 basis points. Interest expense on the note for 1995, 1994, and 1993 of
$61,600; $432,200; and $1,164,300, respectively, is included in other operating
and administrative costs.
The Company has an $8 million, three-year revolving line of credit and a
$14 million demand facility. Interest rates on these unsecured facilities are
at LIBOR plus 110-120 basis points. Interest expense on the Company's line of
credit facilities was $1,600, $3,200, and $30,300 in 1995, 1994, and 1993,
respectively. Such interest expense is included in interest and other income,
net.
6. STOCK OPTIONS The Company has granted incentive and non-qualified stock
options to certain employees and non-employee directors under the 1982 plan,
which expired in 1992. The employee options are exercisable in cumulative
annual installments after one year and before the end of the fourth year from
date of grant. The non-employee director options become exercisable in annual
installments over a five-year period. At June 30, 1995, options to purchase
10,002 shares are exercisable.
The following table summarizes the changes in the number of common shares
under the 1982 option plan during fiscal years 1995, 1994, and 1993.
Number Per Share
1982 Plan of Shares Option Price
- --------- --------- ------------
Outstanding Balance at June 30, 1992 396,400 $4.32 - $7.69
Exercised (101,764) 4.32 - 7.69
Expired (104,800) 5.50 - 7.44
------- ------------
Outstanding Balance at June 30, 1993 189,836 4.88 - 7.69
Exercised (117,734) 4.88 - 7.69
Expired (29,700) 4.88 - 7.69
------- ------------
Outstanding Balance at June 30, 1994 42,402 4.88 - 5.50
Exercised (32,400) 5.50
------- ------------
Outstanding Balance at June 30, 1995 10,002 $ 4.88
======= ============
In November 1991, the stockholders approved a long-term incentive plan that
provides for the granting of incentive awards to various employees and officers
of the Company. The plan also provides for the annual grant of non-qualified
options for 1,500 shares to each of the non-employee directors. The employee
options are exercisable in cumulative annual installments after one year and
before the end of the fifth year. The non-employee options become exercisable
after one year and must be exercised before the end of the fifth year. At June
30, 1995, options to purchase 172,780 shares are exercisable. The following
table summarizes the changes in the number of common shares under the 1991
option plan during fiscal years 1995, 1994, and 1993.
Number Per Share
1991 Plan of Shares Option Price
- --------- --------- ------------
Outstanding Balance at June 30, 1992 151,600 $ 4.19
Granted 167,000 5.63 - 9.50
Exercised (14,600) 4.19
Expired (5,850) 4.19 - 9.50
------- ------------
Outstanding Balance at June 30, 1993 298,150 4.19 - 9.50
Granted 178,400 8.75
Exercised (35,983) 4.19 - 5.75
Expired (12,300) 4.19 - 9.50
------- --------------
Outstanding Balance at June 30, 1994 428,267 4.19 - 8.75
Granted 144,900 11.50 - 14.13
Exercised (29,600) 4.19 - 8.75
Expired (6,000) 8.75 - 14.13
------- --------------
Outstanding Balance at June 30, 1995 537,567 $ 4.19 - $14.13
======= ==============
Proceeds from the exercise of options are credited to the capital accounts
in the year the options are exercised. The Company received 14,077, 41,676, and
8,006 shares in payment for the exercise of 31,200, 61,200, and 10,500 shares
under option during the years ended June 30, 1995, 1994, and 1993,
respectively.
7. EMPLOYEE INCENTIVE PLANS The Company has incentive compensation plans for
officers and certain key employees. The incentive compensation plans' formulas
are reviewed and approved annually by the Board of Directors. Operations were
charged $2,546,600, $2,496,600, and $2,000,300 to fund the incentive
compensation plans for the years ended June 30, 1995, 1994, and 1993,
respectively. Under the terms of the incentive compensation plans, officers may
elect to defer payment of all or a portion of the amount awarded under the plan
until retirement or termination of employment with the Company. The deferred
amounts earn interest, compounded quarterly at the greater of the current 13-
week Treasury bill rate effective the beginning of each quarter, or 7%. The
Company has defined contribution retirement plans for eligible employees.
Contributions to the plans are discretionary as determined by the Board of
Directors. Operations were charged $1,974,500, $2,083,300, and $1,196,400 to
fund the plans in 1995, 1994, and 1993, respectively. Under terms of the plans,
contributions for the benefit of certain long-term employees are made to a non-
qualified supplemental deferred retirement account.
8. PROVISION FOR INCOME TAXES The impact of adopting SFAS 109 on the Company's
earnings and financial position was not material. The fiscal year 1993
financial statements have not been restated to apply the provisions of SFAS 109.
1995 1994 1993
---- ---- ----
Federal income taxes:
Current $4,210,500 $4,178,000 $3,178,400
Deferred 408,600 (150,600) (341,300)
--------- --------- ---------
Total federal
income taxes 4,619,100 4,027,400 2,837,100
--------- --------- ---------
State income taxes:
Current 467,800 768,100 492,000
Deferred 45,400 (17,700) (52,800)
--------- --------- ---------
Total state
income taxes 513,200 750,400 439,200
--------- --------- ---------
Total income taxes provided $5,132,300 $4,777,800 $3,276,300
========= ========= =========
The difference between the tax provision and the amount computed by
applying the federal statutory income tax rate to income before income taxes is
as follows:
1995 1994 1993
---- ---- ----
Income tax computed at
federal statutory rate $4,610,300 $4,274,900 $2,986,500
Add:
State income tax,
net of federal tax benefit 522,000 502,900 289,800
--------- --------- ---------
Total income taxes $5,132,300 $4,777,800 $3,276,300
--------- --------- ---------
Effective tax rate 38.9% 38.2% 37.3%
========= ========= =========
Deferred tax assets and liabilities on the balance sheets reflect the net
tax effect of temporary differences between carrying amounts of assets and
liabilities for financial statement purposes and the amounts used for income tax
purposes. The Company believes a valuation allowance is not required.
The components of the Company's deferred tax assets and liabilities at June 30,
1995 and 1994 are as follows:
Deferred Tax Assets (Liabilities)
---------------------------------
1995 1994
---- ----
Deferred compensation $1,613,300 $1,297,400
Depreciation and
amortization (1,958,700) (1,492,200)
Annuity interest (381,200) (362,500)
Accrued vacation benefits 674,200 710,100
Other (90,500) 158,100
--------- ---------
Total deferred taxes, net $ (142,900) $ 310,900
========= =========
9. BUSINESS SEGMENT INFORMATION The Company operates in two business segments:
professional services and data processing support services. Professional
services encompass consulting, systems development, and programming. Data
processing support services include a variety of activities primarily concerned
with the processing of data for customers who require computer-based support
services and equipment and software sales. Services range from the complete
processing and preparation of reports from data supplied by customers, including
related programming support, to individual specialized services such as data
entry.
Financial information by business segment for the years ended June 30 is
summarized as follows:
1995 1994 1993
---- ---- ----
Revenues:
Professional services $175,851,500 $179,519,200 $162,671,500
Data processing support services 54,879,000 34,683,800 25,075,900
Intersegment (10,063,500) (8,279,700) (6,788,900)
----------- ----------- -----------
Total Revenues $220,667,000 $205,923,300 $180,958,500
Income from operations:
Professional services $ 11,381,500 $ 10,332,700 $ 8,225,800
Data processing support services 1,381,700 1,884,100 486,900
----------- ----------- -----------
12,763,200 12,216,800 8,712,700
Interest and other income, net 420,000 290,400 71,000
----------- ----------- -----------
Income Before Income Taxes $ 13,183,200 $ 12,507,200 $ 8,783,700
=========== =========== ===========
Identifiable assets:
Professional services $ 42,293,200 $ 34,959,900 $ 45,548,000
Data processing support services 27,809,700 18,894,400 10,539,700
Corporate assets 14,820,100 23,441,600 12,101,600
----------- ----------- -----------
Total Assets $ 84,923,000 $ 77,295,900 $ 68,189,300
=========== =========== ===========
Depreciation and amortization expense:
Professional services $ 86,000 $ 27,000 $ 83,200
Data processing support services $ 2,165,800 $ 1,405,400 $ 2,300,600
Corporate assets $ 685,700 $ 657,000 $ 597,500
Capital expenditures:
Professional services $ 3,472,800 $ 120,800 $ 129,200
Data processing support services $ 2,882,800 $ 5,393,200 $ 1 ,603,200
Corporate assets $ 627,200 $ 587,400 $ 194,400
For the years ended June 30, 1995, 1994, and 1993, substantially all
professional services revenues and 89%, 81%, and 54%, respectively, of data
processing support services revenues were derived from federal government
agencies. Professional services revenues from two government agencies under
various contracts were $89,117,600 and $46,160,400 in 1995. Data processing
support services revenues from one government agency were $25,642,500 in 1995.
Professional services revenues from individual government agencies under various
contracts were $82,837,900, and $48,491,600 in 1994 and $48,674,300,
$72,467,400, and $19,489,000 in 1993. No other customers account for 10% or
more of total revenues. Intersegment revenues represent primarily unit price
costs billed for general corporate purposes.
10. COMMITMENTS AND CONTINGENCIES The Company leases office and warehouse space
and equipment under agreements that provide for minimum aggregate rentals
through 1998 as follows:
Fiscal Year Minimum Aggregate Rentals
---------- -------------------------
1996 $1,088,900
1997 342,900
1998 48,900
In addition, the office space leases provide for escalation and pass-through
of increases in operating expenses and renewal options.
Government contracts are subject to review and audit by various governmental
authorities in the normal course of the Company's business. Cost audits have
been completed through fiscal 1991. In management's opinion, any such reviews
and the results of cost audits for subsequent fiscal years will not have a
material effect on the Company's financial position.
The Company is a party to various legal proceedings arising in the normal
course of business. Management believes that the outcome of these proceedings
will not have a material adverse effect on the Company.
11. SUBSEQUENT EVENTS In July 1995, the Company's Argentine subsidiary, as
subcontractor, received notification of cancellation of a contract with an
Argentine government-owned bank to provide systems integration support for the
automation of a lottery game. The Company has incurred and capitalized costs of
approximately $4.3 million at June 30, 1995 included in land, building, and
equipment on the balance sheet. In addition to the incurred and capitalized
costs at June 30, 1995, the Company has total irrevocable commitments of
approximately $6.7 million in connection with the contract. Approximately $1.8
million of the $6.7 million are letters of credit which have been issued for
equipment purchases and would reduce the availability of the Company's lines of
credit.
The prime contractor and the Company have joined efforts to protest
vigorously the cancellation of the contract. No determination as to the
resolution of the contract or recovery of the costs can be made at this time.
12. QUARTERLY FINANCIAL DATA (UNAUDITED)
Income Before Net Net Income
Revenues Income Taxes Income Per Share
-------- ------------- ------ ----------
1994 - 1995
September 30 $54,230,900 $2,762,100 $1,674,600 $.28
December 31 51,968,400 2,362,400 1,426,600 .24
March 31 57,774,600 3,621,700 2,235,900 .38
June 30 56,693,100 4,437,000 2,713,800 .46
1993 - 1994
September 30 $51,388,200 $2,884,500 $1,810,200 $.31
December 31 48,938,500 2,529,000 1,584,100 .27
March 31 53,531,900 3,426,500 2,117,000 .35
June 30 52,064,700 3,667,200 2,218,100 .38
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
Information called for by this Item is set forth under the captions
"Item 1: Election of Directors," "Executive Officers," and "Other Matters" in
the Company's definitive proxy statement filed pursuant to Regulation 14A, which
information is hereby incorporated by reference and made a part hereof.
ITEM 11. EXECUTIVE COMPENSATION
Information called for by this Item is set forth under the captions
"Compensation of Directors," "Summary Compensation Table," "Options Grants in
Last Fiscal Year," "Aggregate Option Exercises in Last Fiscal Year and Year-End
Option Values," and "Five-Year Stockholder Return Comparison" in the Company's
definitive proxy statement filed pursuant to Regulation 14A, which information
is hereby incorporated by reference and made a part hereof.
ITEM 12. SECURITY OWNERSHIP OF MANAGEMENT
Information called for by this Item is set forth under the captions
"Information With Respect to Certain Stockholders" and "Securities Ownership of
Directors and Executive Officers" in the Company's definitive proxy statement
filed pursuant to Regulation 14A, which information is hereby incorporated by
reference and made a part hereof.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
(a) Index to Consolidated Financial Statements and Schedules
Data submitted herewith under Item 8:
Consolidated Statements of Operations for the years ended June 30,
1995, 1994 and 1993
Consolidated Balance Sheets as of June 30, 1995 and 1994
Consolidated Statements of Cash Flows for the years ended June 30,
1995, 1994 and 1993
Consolidated Statements of Changes in Stockholders' Equity for the
years ended June 30, 1995, 1994 and 1993
Notes to Consolidated Financial Statements for the years ended June
30, 1995, 1994 and 1993
Report of Independent Auditors
Report of Independent Accountants
(b) Reports on Form 8-K
None.
(c) Exhibits
3.1 Restated Articles of Incorporation of the Company, as amended,
included as an exhibit to the Company's Form 10-Q Quarterly Report for
the three months ended December 31, 1988 filed February 14, 1989 are
incorporated herein by reference.
3.2 By-laws of the Company, as amended, included as an exhibit to the
Company's Form 10-K Annual Report for the fiscal year ended June 30,
1988 filed September 14, 1988 are incorporated herein by reference.
10.1 Certificate of Limited Partnership and Limited Partnership Agreement -
M/GA Fields Roads Limited Partnership included as an exhibit on Form 8
to Form 10-K filed March 1, 1989 are incorporated herein by reference.
10.2 1982 Incentive Stock Option Plan, as amended and restated, which
appears as Exhibit A to the Prospectus in Registration Statement No.
33-27300 is incorporated herein by reference.
10.3 1991 Long-Term Incentive Plan, as amended and restated as of July 12,
1994, included as an exhibit to the Company's Form 10-K Annual Report
for the fiscal year ended June 30, 1994, filed September 28, 1994, is
incorporated herein by reference.
10.4 Incentive Compensation Plan, restated as of July 1, 1994, included as
an exhibit to the Company's Form 10-K Annual Report for the fiscal
year ended June 30, 1994, filed September 28, 1994, is incorporated
herein by reference.
10.5 U.S. Department of Education Contract No. PM94017001 (portions of
which are subject to an Order for Confidential Treatment pursuant to
Rule 24b-2) included as an exhibit to the Form 10-Q/A filed August 24,
1994 is incorporated herein by reference.
*11 Statement re: Computation of Per Share Earnings.
*13 1995 Definitive Proxy Materials of the Company (portions of which are
incorporated herein by reference).
*21 Significant Subsidiaries of the Company.
*23.1 Consent of Ernst & Young LLP, Independent Auditors.
*23.2 Consent of Deloitte & Touche LLP, Independent Accountants.
*27 Financial Data Schedule.
___________________
* = Filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 September 28, 1995.
Computer Data Systems, Inc.
By /s/ Gordon S. Glenn
_____________________
Gordon S. Glenn
President and Chief
Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Gordon S. Glenn
__________________________ President and Chief Executive September 28, 1995
Gordon S. Glenn Officer; Director
(Principal Executive Officer)
/s/ Wyatt D. Tinsley
__________________________ Executive Vice President; September 28, 1995
Wyatt D. Tinsley Director
(Principal Financial and
Accounting Officer)
/s/ Clifford M. Kendall
__________________________ Chairman of the Board of September 28, 1995
Clifford M. Kendall Directors; Director
/s/ Raymond B. Hoxeng
__________________________ Director September 28, 1995
Raymond B. Hoxeng
/s/ Hilliard W. Paige
__________________________ Director September 28, 1995
Hilliard W. Paige
/s/ Elmer B. Staats
__________________________ Director September 28, 1995
Elmer B. Staats
/s/ Paul R. Ignatius
__________________________ Director September 28, 1995
Paul R. Ignatius
/s/ James A. Parker
__________________________ Director September 28, 1995
James A. Parker
EXHIBIT INDEX
Page Number
-----------
11 Statement re: Computation of Per Share Earnings.
13 1995 Definitive Proxy Materials of the Company
(portions of which are incorporated by reference).
21 Significant Subsidiaries of the Company.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Deloitte & Touche LLP, Independent Accountants.
27 Financial Data Schedule.