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, 1996
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 5,984,734 on November 12, 1996.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COMPUTER DATA SYSTEMS, INC.
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
September 30
--------------------------
1996 1995
---- ----
Revenues ........................................ $ 70,073,200 $ 59,873,000
------------- -------------
Costs and Expenses:
Salaries, wages and employee benefits ......... 34,420,700 34,433,500
Subcontractors ................................ 24,521,000 16,188,000
Travel, relocation and subsistence ............ 638,300 818,100
Rental of space and equipment ................. 287,400 645,600
Depreciation and amortization ................. 934,700 781,900
Other operating and administrative costs ...... 3,652,800 3,287,300
------------- -------------
65,455,000 56,154,400
------------- -------------
Income from operations........................... 4,618,200 3,718,600
Interest and other income, net .................. 14,200 (28,300)
------------- -------------
Income before income taxes ...................... 4,632,400 3,690,300
Provision for income taxes ...................... 1,846,700 1,439,300
------------- -------------
Net Income ...................................... $ 2,785,700 $ 2,251,000
============= =============
Net Income per Common Share ..................... $ .46 $ .38
============= =============
Dividends per Common Share ...................... $ .06 $ .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,
1996 1996
Assets Unaudited Audited
- ------ --------- -------
Current Assets:
Cash and temporary cash investments .............. $ 2,575,800 $ 3,639,600
Trade accounts receivable ........................ 67,471,900 61,479,200
Deferred income taxes ............................ 1,252,300 1,252,300
Income tax refunds receivable .................... 124,000 151,100
Prepaid expenses and deposits .................... 1,424,900 1,255,300
------------- -------------
Total Current Assets ........................... 72,848,900 67,777,500
Long-term investments ............................ 1,865,400 1,922,000
Land, building and equipment ..................... 29,596,000 32,403,100
Other assets ..................................... 3,656,000 951,300
------------- -------------
Total Assets ................................... $ 107,966,300 $ 103,053,900
============= =============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities ......... $ 25,480,000 $ 23,149,400
Accrued wages and related benefits ............... 12,891,600 13,875,000
Income taxes payable ............................. 1,136,300 786,400
------------- -------------
Total Current Liabilities ...................... 39,507,900 37,810,800
============= =============
Long-Term Liabilities:
Deferred compensation ............................ 4,333,900 4,583,500
Deferred income taxes ............................ 300,700 409,900
------------- -------------
Total Long-Term Liabilities .................... 4,634,600 4,993,400
------------- -------------
Stockholders' Equity:
Common Stock, par value $.10 ..................... 595,800 586,700
Capital in excess of par value ................... 9,350,000 7,625,900
Retained earnings ................................ 53,878,000 52,037,100
------------- -------------
Total Stockholders' Equity ..................... 63,823,800 60,249,700
------------- -------------
Total Liabilities and Stockholders' Equity ..... $ 107,966,300 $ 103,053,900
============= =============
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
--------------------------
1996 1995
---- ----
Net Income .................................................................... $ 2,785,700 $ 2,251,000
Adjustments to reconcile income to net cash provided by operating activities:
Depreciation and amortization ............................................ 934,700 781,900
Deferred income taxes .................................................... (109,100) (11,100)
Deferred compensation .................................................... 16,900 85,100
Other .................................................................... (36,900) (42,900)
Net cash provided by (used in) changes in operating assets and liabilities:
Accounts receivable ...................................................... (5,965,700) 541,500
Prepaid expenses and deposits ............................................ (169,600) (301,800)
Accounts payable and accrued liabilities ................................. 2,573,700 1,748,900
Accrued wages and related benefits ....................................... (983,400) (1,970,700)
Income taxes payable ..................................................... 349,900 1,387,000
------------- -------------
Net cash provided by operating activities ..................................... 603,800 4,468,900
Cash flows from investing activities:
Capital expenditures ..................................................... (825,500) (5,293,400)
Proceeds from sale of equipment .......................................... 100 21,700
Purchase of long-term investments ........................................ (144,200) (169,700)
Other .................................................................... (12,100) (21,200)
------------- -------------
Net cash (used in) investing activities ....................................... (981,700) (5,462,600)
------------- -------------
Cash flows from financing activities:
Borrowings on note payable ............................................... 0 500,000
Cash dividends ........................................................... (355,700) (286,900)
Exercise of stock options ................................................ 1,144,000 85,800
Payment of deferred compensation ......................................... (266,600) (286,600)
------------- -------------
Net cash (used in) financing activities ....................................... 521,700 12,300
------------- -------------
Net (decrease) increase in cash and cash equivalents .......................... (1,063,800) (981,400)
Cash and cash equivalents at beginning of period .............................. 3,639,600 1,237,000
------------- -------------
Cash and cash equivalents at end of period .................................... $ 2,575,800 $ 255,600
============= =============
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, 1996
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, 1996 September 30, 1995
------------------ ------------------
6,117,870 5,889,304
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations
---------------------
September 30, 1996 vs September 30, 1995 - Three Months
Revenues for the quarter ended September 30, 1996 were $70,073,200 as
compared to $59,873,000 in the comparable quarter last year. The 17% increase
in revenues was attributable primarily to addition of requirements on the
Department of Education contract and expansion of the General Services
Administration contracts.
Costs and expenses rose at a slightly lower rate compared to the increase
in revenues due in part to reduced software development costs and leverage
resulting from higher volumes on the Department of Education contract.
Income from operations increased due to the lower costs noted above and
improved contract margins.
Interest and other income, net increased due to the larger available
investment balances and reduced borrowings on the Company's line of credit
during the quarter.
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 and by the higher interest
and other income.
Comparison of Financial Condition
---------------------------------
September 30, 1996 Compared to June 30, 1996
Total assets increased to $107,966,300 from $103,053,900 at June 30, 1996.
Working capital increased by approximately $3,374,300 since June 30, 1996. The
increase is attributed primarily to the decrease in capital expenditures over
the prior period and the increase in stock option exercises.
Capital expenditures for the year are expected to be in the $4,000,000
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,
1996.
COMPUTER DATA SYSTEMS, INC.
/s/ Wyatt D. Tinsley
By -------------------------------------
Wyatt D. Tinsley
Executive Vice President
(Principal Financial and
Accounting Officer)