Revenue for the quarter ended
According to
Operating Results
Revenue, cost of sales, and gross profit results for the quarter were as follows:
Revenue, Cost of Sales, and Gross Profit (Unaudited) |
|||||||||||||||||||
(In Thousands) |
Three Months Ended |
% Change |
Six Months Ended |
% Change |
|||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||||||
Revenue |
|||||||||||||||||||
License |
$ |
849 |
$ |
634 |
34 |
% |
$ |
1,543 |
$ |
2,237 |
(31)% |
||||||||
Percentage of Total Revenue |
< 1% |
< 1% |
< 1% |
< 1% |
|||||||||||||||
Support and Service |
337,515 |
320,219 |
5 |
% |
670,561 |
627,966 |
7 |
% |
|||||||||||
Percentage of Total Revenue |
97 |
% |
96 |
% |
97 |
% |
96 |
% |
|||||||||||
Hardware |
10,189 |
12,019 |
(15)% |
21,477 |
24,287 |
(12)% |
|||||||||||||
Percentage of Total Revenue |
3 |
% |
4 |
% |
3 |
% |
4 |
% |
|||||||||||
Total Revenue |
348,553 |
332,872 |
5 |
% |
693,581 |
654,490 |
6 |
% |
|||||||||||
Cost of Sales |
|||||||||||||||||||
Cost of License |
59 |
498 |
(88)% |
311 |
680 |
(54)% |
|||||||||||||
Cost of Support and Service |
191,269 |
181,989 |
5 |
% |
377,161 |
356,703 |
6 |
% |
|||||||||||
Cost of Hardware |
6,818 |
7,958 |
(14)% |
15,436 |
16,726 |
(8)% |
|||||||||||||
Total Cost of Sales |
198,146 |
190,445 |
4 |
% |
392,908 |
374,109 |
5 |
% |
|||||||||||
Gross Profit |
|||||||||||||||||||
License Gross Profit |
790 |
136 |
481 |
% |
1,232 |
1,557 |
(21)% |
||||||||||||
License Gross Profit Margin |
93 |
% |
21 |
% |
80 |
% |
70 |
% |
|||||||||||
Support and Service Gross Profit |
146,246 |
138,230 |
6 |
% |
293,400 |
271,263 |
8 |
% |
|||||||||||
Support and Service Gross Profit Margin |
43 |
% |
43 |
% |
44 |
% |
43 |
% |
|||||||||||
Hardware Gross Profit |
3,371 |
4,061 |
(17)% |
6,041 |
7,561 |
(20)% |
|||||||||||||
Hardware Gross Profit Margin |
33 |
% |
34 |
% |
28 |
% |
31 |
% |
|||||||||||
Total Gross Profit |
$ |
150,407 |
$ |
142,427 |
6 |
% |
$ |
300,673 |
$ |
280,381 |
7 |
% |
|||||||
Gross Profit Margin |
43 |
% |
43 |
% |
43 |
% |
43 |
% |
- Second quarter fiscal 2016 included revenue of
$8.3 million from Alogent, which was sold in the fourth quarter of fiscal 2016. Excluding Alogent from the prior year, revenues increased 7% and gross profit increased 9%. - The six months ended
December 31, 2015 included revenue of$14.7 million from Alogent. Excluding that headwind, revenue grew 8% and gross profit increased 10%. - For the second quarter of fiscal 2017, the bank systems and services segment revenue increased 8% to
$260.6 million with a gross margin of 41% from$241.0 million with a gross margin of 41% in the same quarter last year. Excluding Alogent from the second quarter of fiscal 2016, bank systems and services segment revenue increased 12% for the quarter. The credit union systems and services segment revenue decreased 4% to$88.0 million , primarily due to decreased deconversion fees compared to last year's second quarter, with a gross margin of 50% for the second quarter of fiscal 2017 from$91.8 million and a gross margin of 49% in the same period a year ago. - For the six months ended
December 31, 2016 , bank systems and services segment revenue increased 9% to$518.4 million with a gross margin of 42% from$477.7 million with a gross margin of 41% for the same six months of fiscal 2016. Excluding Alogent revenue from the prior year period, bank systems and services revenue increased 12%. Credit union systems and services segment revenue decreased 1% to$175.2 million with a gross margin of 48% for the year-to-date period, compared to revenue of$176.7 million with a gross margin of 49% for the six months endedDecember 31, 2015 .
Operating Expenses and Operating Income
Operating income increased 5% to
(Unaudited, In Thousands) |
Three Months Ended |
% Change |
Six Months Ended |
% Change |
|||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||||||
Selling and Marketing |
$ |
21,903 |
$ |
22,231 |
(1) |
% |
$ |
44,030 |
$ |
43,982 |
— |
% |
|||||||
Percentage of Total Revenue |
6 |
% |
7 |
% |
6 |
% |
7 |
% |
|||||||||||
Research and Development |
20,873 |
18,862 |
11 |
% |
40,611 |
37,416 |
9 |
% |
|||||||||||
Percentage of Total Revenue |
6 |
% |
6 |
% |
6 |
% |
6 |
% |
|||||||||||
General and Administrative |
19,025 |
16,547 |
15 |
% |
36,008 |
33,659 |
7 |
% |
|||||||||||
Percentage of Total Revenue |
5 |
% |
5 |
% |
5 |
% |
5 |
% |
|||||||||||
Total Operating Expenses |
61,801 |
57,640 |
7 |
% |
120,649 |
115,057 |
5 |
% |
|||||||||||
Operating Income |
$ |
88,606 |
$ |
84,787 |
5 |
% |
$ |
180,024 |
$ |
165,324 |
9 |
% |
|||||||
Operating Margin |
25 |
% |
25 |
% |
26 |
% |
25 |
% |
- The increases in research and development costs and general and administrative costs are mostly due to increased salaries and personnel costs.
Net Income
Second quarter net income totaled
Net income for the six months ended
(Unaudited, In Thousands, Except Per Share Data) |
Three Months Ended |
% Change |
Six Months Ended |
% Change |
|||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||||||
Income Before Income Taxes |
$ |
88,482 |
$ |
84,602 |
5 |
% |
$ |
179,865 |
$ |
165,032 |
9 |
% |
|||||||
Provision for Income Taxes |
29,668 |
25,254 |
17 |
% |
58,807 |
54,318 |
8 |
% |
|||||||||||
Net Income |
$ |
58,814 |
$ |
59,348 |
(1) |
% |
$ |
121,058 |
$ |
110,714 |
9 |
% |
|||||||
Diluted earnings per share |
$ |
0.75 |
$ |
0.74 |
1 |
% |
$ |
1.54 |
$ |
1.38 |
12 |
% |
- Provision for income taxes increased in the second quarter, with an effective tax rate at 33.5% of income before income taxes, compared to 29.9% for the same quarter of the prior year. The second quarter rate for fiscal 2016 was lowered by the recognition of a tax benefit from the retroactive extension of the federal Research and Experimentation Credit ("R&E Credit").
- For the year-to-date period, the effective tax rate decreased to 32.7% of income before income taxes from 32.9% for the six months ending
December 31, 2015 . - The adoption of ASU 2016-09 (Improvements to Employee Share-Based Payment Accounting) resulted in an increase in diluted earnings per share of
$0.03 for the six months endedDecember 31, 2016 .
According to
Balance Sheet and Cash Flow Review
- At
December 31, 2016 , cash and cash equivalents increased to$64.2 million from$55.1 million atDecember 31, 2015 . - Trade receivables totaled
$146.3 million atDecember 31, 2016 compared to$147.1 million atDecember 31, 2015 . - Current and long term debt totaled
$50.0 million atDecember 31, 2016 , a decrease from$100.3 million a year ago. - Total deferred revenue decreased to
$407.4 million atDecember 31, 2016 , compared to$440.1 million a year ago. - Stockholders' equity increased to
$971.4 million atDecember 31, 2016 , compared to$912.5 million a year ago.
Cash provided by operations totaled
(Unaudited, In Thousands) |
Six Months Ended |
||||||
2016 |
2015 |
||||||
Net income |
$ |
121,058 |
$ |
110,714 |
|||
Depreciation |
24,892 |
25,973 |
|||||
Amortization |
44,568 |
37,012 |
|||||
Other non-cash expenses |
13,646 |
11,089 |
|||||
Change in receivables |
107,667 |
98,487 |
|||||
Change in deferred revenue |
(113,612) |
(92,911) |
|||||
Change in other assets and liabilities |
(34,352) |
(43,084) |
|||||
Net cash provided by operating activities |
$ |
163,867 |
$ |
147,280 |
Cash used in investing activities for the second quarter of fiscal 2017 totaled
(Unaudited, In Thousands) |
Six Months Ended |
||||||
2016 |
2015 |
||||||
Payment for acquisitions, net of cash acquired |
$ |
— |
$ |
(8,275) |
|||
Capital expenditures |
(17,405) |
(31,506) |
|||||
Proceeds from the sale of assets |
830 |
2,747 |
|||||
Internal use software |
(11,455) |
(8,183) |
|||||
Computer software developed |
(41,673) |
(47,903) |
|||||
Net cash from investing activities |
$ |
(69,703) |
$ |
(93,120) |
- The
$17.4 million in capital expenditures was mainly for the purchase of computer equipment.
Financing activities used cash of
(Unaudited, In Thousands) |
Six Months Ended |
||||||
2016 |
2015 |
||||||
Borrowings on credit facilities |
$ |
50,000 |
$ |
100,000 |
|||
Repayments on credit facilities |
(200) |
(52,374) |
|||||
Purchase of treasury stock |
(103,885) |
(155,122) |
|||||
Dividends paid |
(43,582) |
(39,972) |
|||||
Net cash from issuance of stock and tax related to stock-based compensation |
(2,619) |
121 |
|||||
Net cash from financing activities |
$ |
(100,286) |
$ |
(147,347) |
Quarterly Conference Call
The company will hold a conference call on
About
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 important 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
Condensed Consolidated Statements of Income (Unaudited) |
|||||||||||||||||||||
(In Thousands, Except Per Share Data) |
Three Months Ended |
% Change |
Six Months Ended |
% Change |
|||||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||||||||
REVENUE |
|||||||||||||||||||||
License |
$ |
849 |
$ |
634 |
34 |
% |
$ |
1,543 |
$ |
2,237 |
(31)% |
||||||||||
Support and service |
337,515 |
320,219 |
5 |
% |
670,561 |
627,966 |
7 |
% |
|||||||||||||
Hardware |
10,189 |
12,019 |
(15)% |
21,477 |
24,287 |
(12)% |
|||||||||||||||
Total |
348,553 |
332,872 |
5 |
% |
693,581 |
654,490 |
6 |
% |
|||||||||||||
COST OF SALES |
|||||||||||||||||||||
Cost of license |
59 |
498 |
(88)% |
311 |
680 |
(54)% |
|||||||||||||||
Cost of support and service |
191,269 |
181,989 |
5 |
% |
377,161 |
356,703 |
6 |
% |
|||||||||||||
Cost of hardware |
6,818 |
7,958 |
(14)% |
15,436 |
16,726 |
(8)% |
|||||||||||||||
Total |
198,146 |
190,445 |
4 |
% |
392,908 |
374,109 |
5 |
% |
|||||||||||||
GROSS PROFIT |
150,407 |
142,427 |
6 |
% |
300,673 |
280,381 |
7 |
% |
|||||||||||||
Gross Profit Margin |
43 |
% |
43 |
% |
43 |
% |
43 |
% |
|||||||||||||
OPERATING EXPENSES |
|||||||||||||||||||||
Selling and marketing |
21,903 |
22,231 |
(1)% |
44,030 |
43,982 |
— |
% |
||||||||||||||
Research and development |
20,873 |
18,862 |
11 |
% |
40,611 |
37,416 |
9 |
% |
|||||||||||||
General and administrative |
19,025 |
16,547 |
15 |
% |
36,008 |
33,659 |
7 |
% |
|||||||||||||
Total |
61,801 |
57,640 |
7 |
% |
120,649 |
115,057 |
5 |
% |
|||||||||||||
OPERATING INCOME |
88,606 |
84,787 |
5 |
% |
180,024 |
165,324 |
9 |
% |
|||||||||||||
INTEREST INCOME (EXPENSE) |
|||||||||||||||||||||
Interest income |
60 |
91 |
(34)% |
167 |
204 |
(18)% |
|||||||||||||||
Interest expense |
(184) |
(276) |
(33)% |
(326) |
(496) |
(34)% |
|||||||||||||||
Total |
(124) |
(185) |
(33)% |
(159) |
(292) |
(46)% |
|||||||||||||||
INCOME BEFORE INCOME TAXES |
88,482 |
84,602 |
5 |
% |
179,865 |
165,032 |
9 |
% |
|||||||||||||
PROVISION FOR INCOME TAXES |
29,668 |
25,254 |
17 |
% |
58,807 |
54,318 |
8 |
% |
|||||||||||||
NET INCOME |
$ |
58,814 |
$ |
59,348 |
(1)% |
$ |
121,058 |
$ |
110,714 |
9 |
% |
||||||||||
Diluted net income per share |
$ |
0.75 |
$ |
0.74 |
$ |
1.54 |
$ |
1.38 |
|||||||||||||
Diluted weighted average shares outstanding |
78,180 |
79,770 |
78,512 |
80,252 |
|||||||||||||||||
Consolidated Balance Sheet Highlights (Unaudited) |
|||||||||||||||||||||
(In Thousands) |
|
% Change |
|||||||||||||||||||
2016 |
2015 |
||||||||||||||||||||
Cash and cash equivalents |
$ |
64,188 |
$ |
55,126 |
16 |
% |
|||||||||||||||
Receivables |
146,256 |
147,091 |
(1)% |
||||||||||||||||||
Total assets |
1,718,095 |
1,708,865 |
1 |
% |
|||||||||||||||||
Accounts payable and accrued expenses |
$ |
83,418 |
$ |
80,122 |
4 |
% |
|||||||||||||||
Current and long term debt |
50,000 |
100,323 |
(50)% |
||||||||||||||||||
Deferred revenue |
407,441 |
440,145 |
(7)% |
||||||||||||||||||
Stockholders' equity |
971,412 |
912,474 |
6 |
% |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/jack-henry--associates-ends-second-quarter-fiscal-2017-with-5-increase-in-revenue-300403672.html
SOURCE
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