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.