Jack Henry & Associates Reports Record Results in Third Fiscal Quarter 3Q01 Revenues Jump 59% and Earnings Up 51%
Apr 17, 2001, 01:00 ET from Jack Henry & Associates, Inc.
MONETT, Mo., April 17 /PRNewswire/ -- Jack Henry & Associates, Inc.
(Nasdaq: JKHY) today reported record revenues, earnings, and earnings per
share for its third fiscal quarter of 2001, fueled by continued strong demand
for technology solutions from financial institutions. Revenues rose 59% in
the third quarter and increased 61% for the first nine months of fiscal 2001.
Income from continuing operations rose 51% in the third quarter and increased
75% for the nine-month period ended March 31, 2001.
Third quarter income from continuing operations was $15.3 million, or
$.17 per diluted share, compared to $10.2 million, or $.12 per diluted share,
in the same quarter a year ago. Year-to-date income from continuing
operations increased 75% to $40.1 million, or $.44 per diluted share, compared
to $22.9 million, or $.27 per diluted share in the first nine months of fiscal
2000. Prior period numbers have been adjusted for stock splits and pooling
transactions and reflect the 1.5 million shares issued in a secondary offering
in August 2000.
"Demand for our integrated suite of banking and credit union solutions is
strong, in spite of the general economic slowdown," stated Michael E. Henry,
Chairman and CEO. "During strong economic cycles, community bankers are
looking to gain market share through technological innovation. During weak
economic cycles, financial institutions spend their technology budgets on
solutions that improve efficiency and reduce overhead. Because we offer a
full line of integrated products, our solutions address both needs in the
market. Consequently, we believe our business is minimally impacted by
fluctuations in the economy."
Revenues increased 59% to $92.8 million in the third quarter and grew
61% to $250.6 million in the first nine months of fiscal 2001 in comparison to
the like periods a year ago. "Systems integration, popularity of our
complementary products, and contributions from acquired operations continue to
generate strong revenue and earnings growth," stated Terry W. Thompson,
President and COO.
Third quarter non-hardware revenues, which includes software licensing and
installation, maintenance/support and services, increased 50% to $60.5 million
and only accounted for 65% of third quarter revenues compared to $40.4 million
or 69% of revenues in the third quarter a year ago. Year-to-date, these same
revenues jumped 62% to $171.2 million compared to $105.7 million or 68% of
revenues in the first nine months of both 2001 and 2000. Gross margin on non-
hardware revenues was 50% in the third quarter and 49% year-to-date compared
to 54% and 48%, respectively, for the same periods a year ago.
Hardware sales were especially strong in the third quarter primarily due
to increasing demand for imaging solutions and from credit unions. Hardware
sales rose 80% to $32.4 million, accounting for 35% of total revenues compared
to $18.0 million and 31% of revenues in the third quarter of 2000. Year-to-
date hardware sales increased 58% to $79.3 million, compared to $50.2 million,
or 32% of total revenues in both periods.
Overall gross margin was 43% of total third quarter revenues compared to
46% in the like quarter a year ago. For the first nine months of 2001 margins
improved to 44% from 42% in the like period a year ago. Third quarter gross
profit improved 46% to $39.7 million, and year-to-date gross profit was up
67% to $109.1 million.
"This quarter's results perfectly illustrate the impact of the revenue mix
on our gross margin. Gross margins vary widely within each product area, with
software licensing carrying the highest profit margin. Hardware sales carry
lower margins than our other products and services, typically in the range of
25% to 30%. Consequently, when non-hardware revenues increase as a percentage
of total revenues, overall gross margin increases and when hardware revenues
increase as a percentage of total revenues, overall gross margin declines,"
stated Kevin D. Williams, Treasurer and CFO. "Even the mix of products within
the hardware part of our business will influence margins on that area.
Similarly, the mix of revenues of software licensing and installation, and
maintenance/support and services also have a significant effect on our
margins."
Third quarter operating expenses were $16.3 million, a 41% increase above
last year's third quarter, reflecting the increased overhead from acquisitions
made during the year and higher commissions generated from strong sales. For
the first nine months of 2001, operating expenses increased 48% to
$47.2 million compared to $32.0 million in the like period a year ago.
Operating income from continuing operations increased 50% to $23.4 million
in the third quarter and improved 87% to $61.9 million year-to-date. Pre-tax
margins were 26%, equal to margins in the comparable quarter a year ago, and
were 25% year-to-date compared to 22% in the nine-month period a year ago.
The balance sheet remains strong with virtually no long-term debt. The
effects of strong cash flow from internally generated growth coupled with
contributions from acquisitions and a secondary offering, which raised
$60.5 million in equity, generated an increase in assets to $364 million from
$226 million and an increase in stockholders' equity to $261 million from
$137 million, at March 31, 2001 compared to year ago levels.
"The strength in the two measures of future business, deferred revenues
and backlog, reinforces our confidence in our ability to generate continued
growth," noted Williams. Deferred revenue increased 58% to $65 million from
$41 million. Backlog continued growing, jumping 12% over the 2nd quarter and
36% from a year ago. Backlog increased to $124 million at the end of the
quarter compared to $111 million at December 31, 2000 and $91 million at March
31, 2000. The backlog for in-house products and services totaled $51 million
and outsourcing backlog was $73 million at the end of the quarter compared to
$33 million and $58 million, respectively at March 31, 2000.
Jack Henry & Associates, Inc. provides integrated computer systems and
processes ATM and debit card transactions for banks and credit unions. Jack
Henry markets and supports its systems throughout the United States and has
over 2,800 customers nationwide. For additional information on Jack Henry,
visit the company's web site at www.jackhenry.com .
The company will host a conference call today to discuss third quarter
results at 7:45 a.m. CDT. The call can be accessed live and for one week
thereafter at www.streetfusion.com .
Statements made in this news release that are not historical facts are
forward-looking information. Actual results may differ materially from those
projected in any forward-looking information. Specifically, there are a
number of factors that could cause actual results to differ materially from
those anticipated by any forward-looking information. Additional information
on these and other factors which could affect the Company's financial results
are included in its Securities and Exchange Commission (SEC) filings on Form
10-K and its registration statement filing of August 11, 2000. These
statements should be reviewed by potential investors. Finally, there may be
other factors not mentioned above or included in the Company's SEC filings
that may cause actual results to differ materially from any forward-looking
information.
JACK HENRY & ASSOCIATES, INC
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
CONDENSED STATEMENTS OF INCOME
(In Thousands, Except
Per Share Data)
(Unaudited)
Quarter Ended % Nine Months Ended %
March 31 Change March 31, Change
Revenues: 2001 2000 2001 2000
Software licensing
& installation $26,233 $15,275 72% $74,281 $35,888 107%
Maintenance/support
& services 34,221 25,148 36% 96,933 69,812 39%
Hardware sales 32,357 17,998 80% 79,337 50,231 58%
Total
revenues $92,811 $58,421 59% $250,551 $155,931 61%
Cost of sales:
Cost of hardware 22,962 12,615 82% 54,566 35,920 52%
Cost of services 30,167 18,650 62% 86,904 54,865 58%
Total cost
of sales $53,129 $31,265 70% $141,470 $90,785 56%
Gross profit $39,682 $27,156 46% $109,081 $65,146 67%
Operating expenses:
Selling and
marketing 7,328 4,326 69% 20,726 12,514 66%
Research and
development 2,883 2,242 29% 8,095 5,780 40%
General and
administrative 6,115 5,033 21% 18,384 13,692 34%
Total
operating
expenses $16,326 $11,601 41% $47,205 $31,986 48%
Operating income $23,356 $15,555 50% $61,876 $33,160 87%
Other income (expense):
Interest income 381 223 71% 1,025 738 39%
Interest expense (74) (567) -87% (848) (1,143) -26%
Other, net 303 179 69% 607 1,629 -63%
Total other
income $610 $(165) $784 $1,224
Income before income
taxes $23,966 $15,390 56% $62,660 $34,384 82%
Provision for income
taxes 8,628 5,214 65% 22,558 11,468 97%
Income from continuing
operations $15,338 $10,176 51% $40,102 $22,916 75%
Loss from discontinued
operations - - - 332
Net income $15,338 $10,176 51% $40,102 $22,584 78%
Diluted earnings per
share:
Income from
continuing
operations $0.17 $0.12 40% $0.44 $0.27 63%
Loss from
discontinued
operations - - - -
Net income $0.17 $0.12 40% $0.44 $0.27 63%
Diluted weighted average
shares outstanding 91,966 85,699 7% 90,908 84,687 7%
CONDENSED BALANCE SHEETS March 31
(In Thousands) (Unaudited) 2001 2000
Current assets $114,444 $68,244
Property and equipment, net 126,985 80,520
Intangible assets, net 121,515 75,811
Other assets, net 1,059 1,289
Total assets $364,002 $225,864
Accounts payable and accrued
expenses $29,689 $44,681
Deferred revenue 65,286 41,300
Long-term debt 251 554
Deferred income taxes 7,677 1,907
Stockholders' equity 261,099 137,422
Total liabilities and
stockholders' equity $364,002 $225,864
SOURCE Jack Henry & Associates, Inc.
MONETT, Mo., April 17 /PRNewswire/ -- Jack Henry & Associates, Inc.
(Nasdaq: JKHY) today reported record revenues, earnings, and earnings per
share for its third fiscal quarter of 2001, fueled by continued strong demand
for technology solutions from financial institutions. Revenues rose 59% in
the third quarter and increased 61% for the first nine months of fiscal 2001.
Income from continuing operations rose 51% in the third quarter and increased
75% for the nine-month period ended March 31, 2001.
Third quarter income from continuing operations was $15.3 million, or
$.17 per diluted share, compared to $10.2 million, or $.12 per diluted share,
in the same quarter a year ago. Year-to-date income from continuing
operations increased 75% to $40.1 million, or $.44 per diluted share, compared
to $22.9 million, or $.27 per diluted share in the first nine months of fiscal
2000. Prior period numbers have been adjusted for stock splits and pooling
transactions and reflect the 1.5 million shares issued in a secondary offering
in August 2000.
"Demand for our integrated suite of banking and credit union solutions is
strong, in spite of the general economic slowdown," stated Michael E. Henry,
Chairman and CEO. "During strong economic cycles, community bankers are
looking to gain market share through technological innovation. During weak
economic cycles, financial institutions spend their technology budgets on
solutions that improve efficiency and reduce overhead. Because we offer a
full line of integrated products, our solutions address both needs in the
market. Consequently, we believe our business is minimally impacted by
fluctuations in the economy."
Revenues increased 59% to $92.8 million in the third quarter and grew
61% to $250.6 million in the first nine months of fiscal 2001 in comparison to
the like periods a year ago. "Systems integration, popularity of our
complementary products, and contributions from acquired operations continue to
generate strong revenue and earnings growth," stated Terry W. Thompson,
President and COO.
Third quarter non-hardware revenues, which includes software licensing and
installation, maintenance/support and services, increased 50% to $60.5 million
and only accounted for 65% of third quarter revenues compared to $40.4 million
or 69% of revenues in the third quarter a year ago. Year-to-date, these same
revenues jumped 62% to $171.2 million compared to $105.7 million or 68% of
revenues in the first nine months of both 2001 and 2000. Gross margin on non-
hardware revenues was 50% in the third quarter and 49% year-to-date compared
to 54% and 48%, respectively, for the same periods a year ago.
Hardware sales were especially strong in the third quarter primarily due
to increasing demand for imaging solutions and from credit unions. Hardware
sales rose 80% to $32.4 million, accounting for 35% of total revenues compared
to $18.0 million and 31% of revenues in the third quarter of 2000. Year-to-
date hardware sales increased 58% to $79.3 million, compared to $50.2 million,
or 32% of total revenues in both periods.
Overall gross margin was 43% of total third quarter revenues compared to
46% in the like quarter a year ago. For the first nine months of 2001 margins
improved to 44% from 42% in the like period a year ago. Third quarter gross
profit improved 46% to $39.7 million, and year-to-date gross profit was up
67% to $109.1 million.
"This quarter's results perfectly illustrate the impact of the revenue mix
on our gross margin. Gross margins vary widely within each product area, with
software licensing carrying the highest profit margin. Hardware sales carry
lower margins than our other products and services, typically in the range of
25% to 30%. Consequently, when non-hardware revenues increase as a percentage
of total revenues, overall gross margin increases and when hardware revenues
increase as a percentage of total revenues, overall gross margin declines,"
stated Kevin D. Williams, Treasurer and CFO. "Even the mix of products within
the hardware part of our business will influence margins on that area.
Similarly, the mix of revenues of software licensing and installation, and
maintenance/support and services also have a significant effect on our
margins."
Third quarter operating expenses were $16.3 million, a 41% increase above
last year's third quarter, reflecting the increased overhead from acquisitions
made during the year and higher commissions generated from strong sales. For
the first nine months of 2001, operating expenses increased 48% to
$47.2 million compared to $32.0 million in the like period a year ago.
Operating income from continuing operations increased 50% to $23.4 million
in the third quarter and improved 87% to $61.9 million year-to-date. Pre-tax
margins were 26%, equal to margins in the comparable quarter a year ago, and
were 25% year-to-date compared to 22% in the nine-month period a year ago.
The balance sheet remains strong with virtually no long-term debt. The
effects of strong cash flow from internally generated growth coupled with
contributions from acquisitions and a secondary offering, which raised
$60.5 million in equity, generated an increase in assets to $364 million from
$226 million and an increase in stockholders' equity to $261 million from
$137 million, at March 31, 2001 compared to year ago levels.
"The strength in the two measures of future business, deferred revenues
and backlog, reinforces our confidence in our ability to generate continued
growth," noted Williams. Deferred revenue increased 58% to $65 million from
$41 million. Backlog continued growing, jumping 12% over the 2nd quarter and
36% from a year ago. Backlog increased to $124 million at the end of the
quarter compared to $111 million at December 31, 2000 and $91 million at March
31, 2000. The backlog for in-house products and services totaled $51 million
and outsourcing backlog was $73 million at the end of the quarter compared to
$33 million and $58 million, respectively at March 31, 2000.
Jack Henry & Associates, Inc. provides integrated computer systems and
processes ATM and debit card transactions for banks and credit unions. Jack
Henry markets and supports its systems throughout the United States and has
over 2,800 customers nationwide. For additional information on Jack Henry,
visit the company's web site at www.jackhenry.com .
The company will host a conference call today to discuss third quarter
results at 7:45 a.m. CDT. The call can be accessed live and for one week
thereafter at www.streetfusion.com .
Statements made in this news release that are not historical facts are
forward-looking information. Actual results may differ materially from those
projected in any forward-looking information. Specifically, there are a
number of factors that could cause actual results to differ materially from
those anticipated by any forward-looking information. Additional information
on these and other factors which could affect the Company's financial results
are included in its Securities and Exchange Commission (SEC) filings on Form
10-K and its registration statement filing of August 11, 2000. These
statements should be reviewed by potential investors. Finally, there may be
other factors not mentioned above or included in the Company's SEC filings
that may cause actual results to differ materially from any forward-looking
information.
JACK HENRY & ASSOCIATES, INC
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
CONDENSED STATEMENTS OF INCOME
(In Thousands, Except
Per Share Data)
(Unaudited)
Quarter Ended % Nine Months Ended %
March 31 Change March 31, Change
Revenues: 2001 2000 2001 2000
Software licensing
& installation $26,233 $15,275 72% $74,281 $35,888 107%
Maintenance/support
& services 34,221 25,148 36% 96,933 69,812 39%
Hardware sales 32,357 17,998 80% 79,337 50,231 58%
Total
revenues $92,811 $58,421 59% $250,551 $155,931 61%
Cost of sales:
Cost of hardware 22,962 12,615 82% 54,566 35,920 52%
Cost of services 30,167 18,650 62% 86,904 54,865 58%
Total cost
of sales $53,129 $31,265 70% $141,470 $90,785 56%
Gross profit $39,682 $27,156 46% $109,081 $65,146 67%
Operating expenses:
Selling and
marketing 7,328 4,326 69% 20,726 12,514 66%
Research and
development 2,883 2,242 29% 8,095 5,780 40%
General and
administrative 6,115 5,033 21% 18,384 13,692 34%
Total
operating
expenses $16,326 $11,601 41% $47,205 $31,986 48%
Operating income $23,356 $15,555 50% $61,876 $33,160 87%
Other income (expense):
Interest income 381 223 71% 1,025 738 39%
Interest expense (74) (567) -87% (848) (1,143) -26%
Other, net 303 179 69% 607 1,629 -63%
Total other
income $610 $(165) $784 $1,224
Income before income
taxes $23,966 $15,390 56% $62,660 $34,384 82%
Provision for income
taxes 8,628 5,214 65% 22,558 11,468 97%
Income from continuing
operations $15,338 $10,176 51% $40,102 $22,916 75%
Loss from discontinued
operations - - - 332
Net income $15,338 $10,176 51% $40,102 $22,584 78%
Diluted earnings per
share:
Income from
continuing
operations $0.17 $0.12 40% $0.44 $0.27 63%
Loss from
discontinued
operations - - - -
Net income $0.17 $0.12 40% $0.44 $0.27 63%
Diluted weighted average
shares outstanding 91,966 85,699 7% 90,908 84,687 7%
CONDENSED BALANCE SHEETS March 31
(In Thousands) (Unaudited) 2001 2000
Current assets $114,444 $68,244
Property and equipment, net 126,985 80,520
Intangible assets, net 121,515 75,811
Other assets, net 1,059 1,289
Total assets $364,002 $225,864
Accounts payable and accrued
expenses $29,689 $44,681
Deferred revenue 65,286 41,300
Long-term debt 251 554
Deferred income taxes 7,677 1,907
Stockholders' equity 261,099 137,422
Total liabilities and
stockholders' equity $364,002 $225,864
SOURCE Jack Henry & Associates, Inc.
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