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 September 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
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 5,759,842 on November 8, 1995.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COMPUTER DATA SYSTEMS, INC.
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
September 30
--------------------------
1995 1994
---- ----
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $59,873,000 $54,230,900
----------- -----------
Costs and Expenses:
Salaries, wages and employee benefits . . . . . . . . . . . . . 34,433,500 34,022,900
Subcontractors . . . . . . . . . . . . . . . . . . . . . . . . . 16,188,000 11,447,800
Travel, relocation and subsistence . . . . . . . . . . . . . . . 818,100 634,100
Rental of space and equipment . . . . . . . . . . . . . . . . . 645,600 954,300
Depreciation and amortization . . . . . . . . . . . . . . . . . 781,900 720,000
Other operating and administrative costs . . . . . . . . . . . . 3,287,300 3,893,400
----------- -----------
56,154,400 51,672,500
----------- -----------
Income from operations . . . . . . . . . . . . . . . . . . . . . . 3,718,600 2,558,400
Interest and other income, net . . . . . . . . . . . . . . . . . . (28,300) 203,700
----------- -----------
Income before income taxes . . . . . . . . . . . . . . . . . . . . 3,690,300 2,762,100
Provision for income taxes . . . . . . . . . . . . . . . . . . . . 1,439,300 1,087,500
----------- -----------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,251,000 $ 1,674,600
=========== ===========
Net Income per Common Share . . . . . . . . . . . . . . . . . . . . $ .38 $ .28
=========== ===========
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.
COMPUTER DATA SYSTEMS, INC.
Consolidated Balance Sheets
September 30, June 30,
1995 1995
Assets Unaudited Audited
--------- -------
Current Assets:
Cash and temporary cash investments . . . . . . . . . . . . . . $ 255,600 $ 1,237,000
Trade accounts receivable . . . . . . . . . . . . . . . . . . . 51,695,400 52,236,900
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . 456,600 456,600
Income tax refunds receivable . . . . . . . . . . . . . . . . . 151,400 151,400
Prepaid expenses and deposits . . . . . . . . . . . . . . . . . 2,250,100 1,948,300
----------- -----------
Total Current Assets . . . . . . . . . . . . . . . . . . . 54,809,100 56,030,200
Long-term investments . . . . . . . . . . . . . . . . . . . . . 1,590,500 1,584,800
Land, building and equipment . . . . . . . . . . . . . . . . . . 30,936,100 26,452,900
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . 890,800 855,100
----------- -----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . $88,226,500 $84,923,000
----------- -----------
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities . . . . . . . . . . . . $17,202,500 $15,652,600
Accrued wages and related benefits . . . . . . . . . . . . . . . 12,466,500 14,363,800
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . 1,387,000
----------- -----------
Total Current Liabilities . . . . . . . . . . . . . . . . 31,056,000 30,016,400
Long-Term Liabilities:
Note payable . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000
Deferred compensation . . . . . . . . . . . . . . . . . . . . . 3,970,600 4,245,500
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . 588,400 599,500
----------- -----------
Total Long-Term Liabilities . . . . . . . . . . . . . . . 5,059,000 4,845,000
----------- -----------
Stockholders' Equity:
Common Stock, par value $.10 . . . . . . . . . . . . . . . . . . 574,900 573,800
Capital in excess of par value . . . . . . . . . . . . . . . . . 6,099,200 6,014,500
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . 45,437,400 43,473,300
----------- -----------
Total Stockholders' Equity . . . . . . . . . . . . . . . . 52,111,500 50,061,600
----------- -----------
Total Liabilities and Stockholders' Equity . . . . . . . . $88,226,500 $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.
COMPUTER DATA SYSTEMS, INC.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended
September 30
--------------------------
1995 1994
---- ----
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,251,000 $ 1,674,600
Adjustments to reconcile income to net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 781,900 720,000
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . (11,100) (2,100)
Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . . 85,100 59,100
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,900) (23,600)
Net cash provided by (used in) changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . 541,500 282,300
Prepaid expenses and deposits . . . . . . . . . . . . . . . . . . . . . . (301,800) (121,900)
Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . 1,748,900 2,224,300
Accrued wages and related benefits . . . . . . . . . . . . . . . . . . . . (1,970,700) 144,400
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,387,000 843,200
---------- ----------
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . 4,468,900 5,800,300
---------- ----------
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,293,400) (942,600)
Proceeds from sale of equipment. . . . . . . . . . . . . . . . . . . . . . 21,700 1,300
Purchase of long-term investments . . . . . . . . . . . . . . . . . . . . (169,700) (184,600)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,200) (27,100)
---------- ----------
Net cash (used in) investing activities . . . . . . . . . . . . . . . . . . . . (5,462,600) (1,153,000)
---------- ----------
Cash flows from financing activities:
Payment on note payable . . . . . . . . . . . . . . . . . . . . . . . . . (6,133,300)
Borrowings on note payable . . . . . . . . . . . . . . . . . . . . . . . . 500,000
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (286,900) (285,500)
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . 85,800 127,400
Payment of deferred compensation . . . . . . . . . . . . . . . . . . . . . (286,600)
---------- ----------
Net cash (used in) financing activities . . . . . . . . . . . . . . . . . . . . 12,300 (6,291,400)
---------- ----------
Net (decrease) increase in cash and cash equivalents . . . . . . . . . . . . . (981,400) (1,644,100)
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . 1,237,000 8,182,100
---------- ----------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . $ 255,600 $6,538,000
========== ==========
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.
COMPUTER DATA SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 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
September 30, 1995 September 30, 1994
5,889,304 5,918,805
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations
September 30, 1995 vs September 30, 1994 - Three Months
Revenues for the quarter ended September 30, 1995 were $59,873,000 as
compared to the comparable quarter last year of $54,230,900. The 10% increase
in revenues was attributable primarily to expansion of the Department of
Education contract and other existing contracts offset in part by completed
Professional Services contracts.
Costs and expenses rose at a slightly lower rate compared to the increase
in revenues. Expenses increased by 8% due in part to reduced software
development costs and the absence of protest costs incurred in the prior period.
Income from operations increased due to the lower costs noted above and
improved contract margins.
Interest and other income, net decreased due to the lower available
investment balances and borrowings on the Company's line of credit during the
quarter versus a one-time $115,000 gain on the unwinding of an interest rate
swap associated with the note payable in the prior period.
The provision for income taxes increased as a result of higher federal and
state tax rates applied to a higher operating income.
Net income was above last year's comparable quarter due to higher
operating margins and the reduced costs noted above offset in part by the lower
interest and other income.
Comparison of Financial Condition
September 30, 1995 Compared to June 30, 1995
Total assets increased to $88,226,500 from $84,923,000 at June 30, 1995.
Working capital decreased by approximately $2,260,700 since June 30, 1995. The
decrease is attributed primarily to the retention of first quarter earnings
after payment of dividends being more than offset by additional commitments
under the cancelled Argentina contract.
Capital expenditures for the year are expected to be in the $7,000,000
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 November 14,
1995.
COMPUTER DATA SYSTEMS, INC.
By /s/ Wyatt D. Tinsley
------------------------------
Wyatt D. Tinsley
Executive Vice President
(Principal Financial and
Accounting Officer)