Revenue for the quarter ended
Revenue for the nine months 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 |
|||||||||||||||||||
(In Thousands) |
Three Months Ended |
% |
Nine Months Ended |
% |
|||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||||||
Revenue |
|||||||||||||||||||
License |
$ |
516 |
$ |
292 |
77 |
% |
$ |
2,059 |
$ |
2,530 |
(19) |
% |
|||||||
Percentage of Total Revenue |
< 1 |
% |
< 1 |
% |
< 1 |
% |
< 1 |
% |
|||||||||||
Support and Service |
342,769 |
319,649 |
7 |
% |
1,013,331 |
947,615 |
7 |
% |
|||||||||||
Percentage of Total Revenue |
97 |
% |
96 |
% |
97 |
% |
96 |
% |
|||||||||||
Hardware |
10,482 |
13,245 |
(21) |
% |
31,959 |
37,532 |
(15) |
% |
|||||||||||
Percentage of Total Revenue |
3 |
% |
4 |
% |
3 |
% |
4 |
% |
|||||||||||
Total Revenue |
353,767 |
333,186 |
6 |
% |
1,047,349 |
987,677 |
6 |
% |
|||||||||||
Cost of Sales |
|||||||||||||||||||
Cost of License |
280 |
193 |
45 |
% |
591 |
873 |
(32) |
% |
|||||||||||
Cost of Support and Service |
198,844 |
184,527 |
8 |
% |
576,006 |
541,230 |
6 |
% |
|||||||||||
Cost of Hardware |
7,603 |
9,553 |
(20) |
% |
23,039 |
26,279 |
(12) |
% |
|||||||||||
Total Cost of Sales |
206,727 |
194,273 |
6 |
% |
599,636 |
568,382 |
5 |
% |
|||||||||||
Gross Profit |
|||||||||||||||||||
License Gross Profit |
236 |
99 |
138 |
% |
1,468 |
1,657 |
(11) |
% |
|||||||||||
License Gross Profit Margin |
46 |
% |
34 |
% |
71 |
% |
65 |
% |
|||||||||||
Support and Service Gross Profit |
143,925 |
135,122 |
7 |
% |
437,325 |
406,385 |
8 |
% |
|||||||||||
Support and Service Gross Profit Margin |
42 |
% |
42 |
% |
43 |
% |
43 |
% |
|||||||||||
Hardware Gross Profit |
2,879 |
3,692 |
(22) |
% |
8,920 |
11,253 |
(21) |
% |
|||||||||||
Hardware Gross Profit Margin |
27 |
% |
28 |
% |
28 |
% |
30 |
% |
|||||||||||
Total Gross Profit |
$ |
147,040 |
$ |
138,913 |
6 |
% |
$ |
447,713 |
$ |
419,295 |
7 |
% |
|||||||
Gross Profit Margin |
42 |
% |
42 |
% |
43 |
% |
42 |
% |
- Third quarter fiscal 2016 included revenue of
$7.7 million from Alogent, which was sold in the fourth quarter of fiscal 2016. However, this headwind was partially offset by increased deconversion fees in the third quarter of fiscal 2017. Excluding Alogent revenue and costs from the prior year, and deconversion fees from both periods, revenue increased 7% and gross profit increased 4%. - The nine months ended
March 31, 2016 included revenue of$22.3 million from Alogent, part of which was again set off by an increase in deconversion fees in fiscal 2017. Excluding the Alogent headwind, and deconversion fees from both periods, revenue and gross profit each grew 8% over the nine months endedMarch 31, 2016 . - For the third quarter of fiscal 2017, the bank systems and services segment revenue increased 6% to $260.0 million with a gross margin of 39% from $246.2 million with a gross margin of 39% in the same quarter last year. Excluding Alogent from the third quarter of fiscal 2016, bank systems and services segment revenue increased 9% for the quarter. The credit union systems and services segment revenue increased 8% to $93.8 million with a gross margin of 48% for the third quarter of fiscal 2017 from $87.0 million and a gross margin of 48% in the same period a year ago.
- For the nine months ended
March 31, 2017 , bank systems and services segment revenue increased 8% to$778.4 million with a gross margin of 41% from$723.9 million with a gross margin of 40% for the same nine months of fiscal 2016. Excluding Alogent revenue from the prior year period, bank systems and services revenue increased 11%. Credit union systems and services segment revenue increased 2% to$269.0 million with a gross margin of 48% for the year-to-date period, compared to revenue of$263.7 million with a gross margin of 49% for the nine months endedMarch 31, 2016 .
Operating Expenses and Operating Income
Operating income increased 11% to
(Unaudited, In Thousands) |
Three Months Ended |
% |
Nine Months Ended |
% |
|||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||||||
Selling and Marketing |
$ |
23,571 |
$ |
22,732 |
4 |
% |
$ |
67,601 |
$ |
66,714 |
1 |
% |
|||||||
Percentage of Total Revenue |
7 |
% |
7 |
% |
6 |
% |
7 |
% |
|||||||||||
Research and Development |
20,801 |
19,854 |
5 |
% |
61,413 |
57,269 |
7 |
% |
|||||||||||
Percentage of Total Revenue |
6 |
% |
6 |
% |
6 |
% |
6 |
% |
|||||||||||
General and Administrative |
13,937 |
16,497 |
(16) |
% |
49,944 |
50,157 |
— |
% |
|||||||||||
Percentage of Total Revenue |
4 |
% |
5 |
% |
5 |
% |
5 |
% |
|||||||||||
Total Operating Expenses |
58,309 |
59,083 |
(1) |
% |
178,958 |
174,140 |
3 |
% |
|||||||||||
Operating Income |
$ |
88,731 |
$ |
79,830 |
11 |
% |
$ |
268,755 |
$ |
245,155 |
10 |
% |
|||||||
Operating Margin |
25 |
% |
24 |
% |
26 |
% |
25 |
% |
- Selling and marketing expenses for the third quarter of fiscal 2017 increased over the prior year quarter due mainly to increased commission expense, but was a consistent percentage of total revenue in both quarters.
- The increases in research and development costs are mostly due to increased salaries and personnel costs.
- General and administrative expenses decreased compared to the prior quarter due mainly to a gain recognized on the sale of a business, as well as decreased spending on travel, meetings, and litigation. These factors also drove the year-to-date decrease.
- Excluding Alogent revenue and costs from fiscal 2016, and deconversion fees from both years, operating income increased 3% for the quarter and increased 7% for the year-to-date period.
Net Income
Third quarter net income totaled
Net income for the nine months ended
(Unaudited, In Thousands, Except Per Share Data) |
Three Months Ended |
% |
Nine Months Ended |
% |
|||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||||||
Income Before Income Taxes |
$ |
88,495 |
$ |
79,398 |
11 |
% |
$ |
268,360 |
$ |
244,430 |
10 |
% |
|||||||
Provision for Income Taxes |
28,451 |
25,515 |
12 |
% |
87,258 |
79,833 |
9 |
% |
|||||||||||
Net Income |
$ |
60,044 |
$ |
53,883 |
11 |
% |
$ |
181,102 |
$ |
164,597 |
10 |
% |
|||||||
Diluted earnings per share |
$ |
0.77 |
$ |
0.68 |
13 |
% |
$ |
2.31 |
$ |
2.06 |
12 |
% |
- Provision for income taxes increased in the third quarter, with an effective tax rate at 32.1% of income before income taxes, consistent with the 32.1% for the same quarter of the prior year.
- For the year-to-date period, the effective tax rate decreased to 32.5% of income before income taxes from 32.7% for the nine months ending
March 31, 2016 . - 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 nine months endedMarch 31, 2017 . - Excluding Alogent revenue and costs from the third quarter of fiscal 2016 and deconversion fees from both quarters, net income increased 4% and diluted earnings per share increased 5%. Excluding these same items for the year-to-date periods, net income increased 7% and diluted earnings per share increased 9%.
Balance Sheet and Cash Flow Review
- At
March 31, 2017 , cash and cash equivalents decreased to$42.9 million from$54.0 million atMarch 31, 2016 . - Trade receivables totaled
$139.5 million atMarch 31, 2017 compared to$137.4 million atMarch 31, 2016 . - Current and long term debt totaled
$50.0 million atMarch 31, 2017 , a decrease from$100.2 million a year ago. - Total deferred revenue decreased to
$338.7 million atMarch 31, 2017 , compared to$383.2 million a year ago. - Stockholders' equity increased to
$1,012.1 million atMarch 31, 2017 , compared to$948.9 million a year ago.
Cash provided by operations totaled
(Unaudited, In Thousands) |
Nine Months Ended |
||||||
2017 |
2016 |
||||||
Net income |
$ |
181,102 |
$ |
164,597 |
|||
Depreciation |
37,554 |
38,106 |
|||||
Amortization |
66,882 |
57,013 |
|||||
Other non-cash expenses |
23,634 |
32,860 |
|||||
Change in receivables |
114,420 |
108,172 |
|||||
Change in deferred revenue |
(182,309) |
(149,885) |
|||||
Change in other assets and liabilities |
(42,416) |
(43,492) |
|||||
Net cash provided by operating activities |
$ |
198,867 |
$ |
207,371 |
Cash used in investing activities for the first nine months of fiscal 2017 totaled
(Unaudited, In Thousands) |
Nine Months Ended |
||||||
2017 |
2016 |
||||||
Payment for acquisitions, net of cash acquired |
$ |
— |
$ |
(8,275) |
|||
Capital expenditures |
(28,150) |
(43,300) |
|||||
Proceeds from the sale of businesses |
2,286 |
— |
|||||
Proceeds from the sale of assets |
949 |
2,797 |
|||||
Internal use software |
(14,780) |
(10,157) |
|||||
Computer software developed |
(63,804) |
(74,662) |
|||||
Net cash from investing activities |
$ |
(103,499) |
$ |
(133,597) |
- The
$28.2 million in capital expenditures was mainly for the purchase of computer equipment.
Financing activities used cash of
(Unaudited, In Thousands) |
Nine Months Ended |
||||||
2017 |
2016 |
||||||
Borrowings on credit facilities |
$ |
80,000 |
$ |
100,000 |
|||
Repayments on credit facilities |
(30,200) |
(52,484) |
|||||
Purchase of treasury stock |
(103,885) |
(155,122) |
|||||
Dividends paid |
(67,641) |
(62,037) |
|||||
Net cash from issuance of stock and tax related to stock-based compensation |
(1,036) |
1,557 |
|||||
Net cash from financing activities |
$ |
(122,762) |
$ |
(168,086) |
According to
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 |
|||||||||||||||||||||
(In Thousands, Except Per Share Data) |
Three Months Ended |
% |
Nine Months Ended |
% |
|||||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||||||||
REVENUE |
|||||||||||||||||||||
License |
$ |
516 |
$ |
292 |
77 |
% |
$ |
2,059 |
$ |
2,530 |
(19) |
% |
|||||||||
Support and service |
342,769 |
319,649 |
7 |
% |
1,013,331 |
947,615 |
7 |
% |
|||||||||||||
Hardware |
10,482 |
13,245 |
(21) |
% |
31,959 |
37,532 |
(15) |
% |
|||||||||||||
Total |
353,767 |
333,186 |
6 |
% |
1,047,349 |
987,677 |
6 |
% |
|||||||||||||
COST OF SALES |
|||||||||||||||||||||
Cost of license |
280 |
193 |
45 |
% |
591 |
873 |
(32) |
% |
|||||||||||||
Cost of support and service |
198,844 |
184,527 |
8 |
% |
576,006 |
541,230 |
6 |
% |
|||||||||||||
Cost of hardware |
7,603 |
9,553 |
(20) |
% |
23,039 |
26,279 |
(12) |
% |
|||||||||||||
Total |
206,727 |
194,273 |
6 |
% |
599,636 |
568,382 |
5 |
% |
|||||||||||||
GROSS PROFIT |
147,040 |
138,913 |
6 |
% |
447,713 |
419,295 |
7 |
% |
|||||||||||||
Gross Profit Margin |
42 |
% |
42 |
% |
43 |
% |
42 |
% |
|||||||||||||
OPERATING EXPENSES |
|||||||||||||||||||||
Selling and marketing |
23,571 |
22,732 |
4 |
% |
67,601 |
66,714 |
1 |
% |
|||||||||||||
Research and development |
20,801 |
19,854 |
5 |
% |
61,413 |
57,269 |
7 |
% |
|||||||||||||
General and administrative |
13,937 |
16,497 |
(16) |
% |
49,944 |
50,157 |
— |
% |
|||||||||||||
Total |
58,309 |
59,083 |
(1) |
% |
178,958 |
174,140 |
3 |
% |
|||||||||||||
OPERATING INCOME |
88,731 |
79,830 |
11 |
% |
268,755 |
245,155 |
10 |
% |
|||||||||||||
INTEREST INCOME (EXPENSE) |
|||||||||||||||||||||
Interest income |
42 |
54 |
(22) |
% |
209 |
258 |
(19) |
% |
|||||||||||||
Interest expense |
(278) |
(486) |
(43) |
% |
(604) |
(983) |
(39) |
% |
|||||||||||||
Total |
(236) |
(432) |
(45) |
% |
(395) |
(725) |
(46) |
% |
|||||||||||||
INCOME BEFORE INCOME TAXES |
88,495 |
79,398 |
11 |
% |
268,360 |
244,430 |
10 |
% |
|||||||||||||
PROVISION FOR INCOME TAXES |
28,451 |
25,515 |
12 |
% |
87,258 |
79,833 |
9 |
% |
|||||||||||||
NET INCOME |
$ |
60,044 |
$ |
53,883 |
11 |
% |
$ |
181,102 |
$ |
164,597 |
10 |
% |
|||||||||
Diluted net income per share |
$ |
0.77 |
$ |
0.68 |
$ |
2.31 |
$ |
2.06 |
|||||||||||||
Diluted weighted average shares outstanding |
77,932 |
79,167 |
78,319 |
79,891 |
|||||||||||||||||
Consolidated Balance Sheet Highlights (Unaudited) |
|||||||||||||||||||||
(In Thousands) |
|
% |
|||||||||||||||||||
2017 |
2016 |
||||||||||||||||||||
Cash and cash equivalents |
$ |
42,916 |
$ |
54,001 |
(21) |
% |
|||||||||||||||
Receivables |
139,503 |
137,406 |
2 |
% |
|||||||||||||||||
Total assets |
1,686,983 |
1,702,622 |
(1) |
% |
|||||||||||||||||
Accounts payable and accrued expenses |
$ |
75,062 |
$ |
76,781 |
(2) |
% |
|||||||||||||||
Current and long term debt |
50,000 |
100,213 |
(50) |
% |
|||||||||||||||||
Deferred revenue |
338,744 |
383,171 |
(12) |
% |
|||||||||||||||||
Stockholders' equity |
1,012,112 |
948,867 |
7 |
% |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/jack-henry--associates-ends-third-quarter-fiscal-2017-with-6-increase-in-revenue-300449965.html
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