FISERV INC. 10-K Summary: Fiscal Year Ended December 31, 1994
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 1994, for FISERV, INC., a leading independent provider of data processing products and services to the financial industry. Headquartered in Brookfield, Wisconsin, the company serves banks, credit unions, savings institutions, and mortgage firms through service bureau processing, in-house software systems, and strategic outsourcing. The company operates 62 centers across the United States and international locations in London and Singapore.
Key Financial Metrics
Note: Specific financial statement values (Revenue, Net Income, Cash Flow, Debt) are incorporated by reference from the 1994 Annual Report to Shareholders (Exhibit 13) and are not explicitly detailed in the provided text.
- Market Capitalization: Aggregate market value of voting stock held by non-affiliates as of January 31, 1995, was $842,257,834.
- Shares Outstanding: 39,174,783 shares of Common Stock as of January 31, 1995.
- Employee Count: 6,195 specialists employed worldwide.
- First Trust Subsidiary Assets: Administers over 290,000 self-directed retirement plans with an asset value exceeding $12.56 billion.
- Product Development Investment: Resources applied to product development and maintenance are approximately 10% of company revenues, with half dedicated to software development.
- Debt Instruments: The company maintains a Credit Agreement dated September 30, 1994, and various Note Purchase Agreements with insurance companies.
Material Changes and Strategic Developments
The company continued its growth strategy through organic development and strategic acquisitions in 1994. Key acquisitions included:
- April 1994: National Embossing Company, Inc. (Automated card services).
- May 1994: Boatmen's Information Systems of Iowa (Data processing).
- August 1994: FHLB of Atlanta IP Services (Item processing).
- November 1994: CBIS Imaging Technology Banking Unit (Imaging technology).
- December 1994: RECOM Associates, Inc. (Network integration).
The company noted that while federally-mandated consolidations reduced the number of financial institutions, the total number of customer accounts serviced by the industry did not materially decline. The trend toward outsourcing data processing to third-party providers like FISERV continued to accelerate.
Outlook, Risks, and Management Commentary
Management Outlook: Management anticipates continued demand for data processing services as financial institutions require specialized computer systems and application software to support transaction-oriented, fee-based products. The company aims to capitalize on industry consolidation and the shift toward outsourcing to become the premier national provider.
Competitive Landscape: The market is highly competitive, with principal competitors including EDS, M&I, AT&T Global Information Solutions, and ISSC (IBM). FISERV competes on product quality, reliability, and its status as an independent vendor.
Risks and Contingencies:
- Legal Proceedings: The company is involved in various lawsuits in the normal course of business. Management believes potential liabilities will not have a material adverse effect on financial statements.
- Regulation: While not directly regulated as a financial institution, operations are observed by the FDIC, NCUA, and other authorities. The First Trust subsidiary is subject to Colorado banking regulations and FDIC coverage.
- Intellectual Property: The company relies on trade secrecy and non-disclosure agreements rather than patents or copyrights to protect its proprietary software.
Investor Verification Checklist
- Verify specific revenue, net income, and cash flow figures in the 1994 Annual Report to Shareholders (Exhibit 13), as these are incorporated by reference and not listed in the 10-K text.
- Review the definitive proxy statement (Exhibit 28) for details on executive compensation and security ownership.
- Confirm the terms of the Credit Agreement dated September 30, 1994, and outstanding Note Purchase Agreements to assess debt covenants and liquidity.
- Monitor the integration progress of 1994 acquisitions, particularly in imaging technology and network integration.
- Assess the impact of industry consolidation on the client base and the effectiveness of the outsourcing strategy.