View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 2004
JACK HENRY & ASSOCIATES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 0-14112 43-1128385
---------------------------- ------------------------ -------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
663 Highway 60, P.O. Box 807, Monett, MO 65708
---------------------------------------------------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (417) 235-6652
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a.-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On October 19, 2004, Jack Henry & Associates, Inc. issued a press
release announcing 2005 first quarter results, the text of which is attached
hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated October 19, 2004.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JACK HENRY & ASSOCIATES, INC.
(Registrant)
Date: October 19, 2004 By: /s/ Kevin D. Williams
-------------------------
Kevin D. Williams
Chief Financial Officer
Exhibit 99.1
Company: Jack Henry & Associates, Inc. Analyst Contact: Kevin D. Williams
663 Highway 60, P.O. Box 807 Chief Financial Officer
Monett, MO 65708 (417) 235-6652
IR Contact: Jon Seegert
Director Investor Relations
(417) 235-6652
FOR IMMEDIATE RELEASE
---------------------
JACK HENRY & ASSOCIATES FISCAL FIRST QUARTER NET INCOME INCREASES 20%
---------------------------------------------------------------------
Monett, MO. October 19, 2004 - Jack Henry & Associates, Inc. (Nasdaq: JKHY),
a leading provider of integrated technology solutions that performs data
processing for financial institutions, today reported solid fiscal year 2005
first quarter results with a 14% increase in revenues, a 19% increase in
gross profit, and a 20% increase in net income over the first quarter of the
prior year.
For the quarter ended September 30, 2004, the company generated total
revenue of $124.1 million, compared to $108.9 million in the same quarter a
year ago. Gross profit increased to $50.6 million compared to $42.7 million
in last year's first quarter. Net income totaled $16.7 million, or $0.18
per diluted share, compared to $13.9 million, or $0.15 per diluted share in
the same quarter a year ago.
"We are very pleased with our continued progress during the quarter as we
continue to see strong contracting and solid revenue. This was the second
strongest revenue quarter in the history of the company second only to the
fourth quarter of fiscal 2004. In addition to the 14% increase in revenue
compared to the first quarter last year we continue to get additional
leverage to both gross and operating margins which results in a 20% increase
in net income," said Jack F. Prim, CEO. "The acquisitions we have announced
since the beginning of the fiscal year will not only add to our suite of
products and services but also continue to differentiate our core systems
from that of our competitor's. The resulting impact should be to continue
driving both new core sales and sales of add on complementary products to
new and existing customers. In addition to these benefits the acquisitions
have allowed us to expand our addressable market and enter new markets."
"Contributing to the strong quarter was an increase of 51% in license
revenue compared to last year and continued growth in our support and
services revenue, which is primarily recurring revenue, increased 15% this
quarter compared to the prior year. Our credit union segment had a very
strong quarter with a 40% increase in revenues while expanding gross margins
from 35% a year ago to 37% this year," said Tony L. Wormington, President.
"The investments made last year for development of new and existing
products, the acquisitions made and the continued expansion of our
outsourcing offerings should allow this growth to continue."
Operating Results
License revenue increased 51% to $19.6 million, or 16% of first quarter
total revenue, compared to $13.0 million, or 12% of the first quarter total
revenue a year ago. Growth of in-house support fees, outsourcing, and
ATM/Debit card and switch fees contributed to the 15% increase in support
and service revenue which grew to $83.6 million in the first quarter of
fiscal 2005 from $72.5 million for the same period a year ago. Support and
service revenue remained even at 67% of total revenue for both years.
Hardware sales in the first quarter of fiscal 2005 decreased 11% to $20.9
million, or 17% of total revenue in the first quarter, from $23.5 million,
or 22% of total revenue in the prior year's quarter.
Cost of sales for the first quarter increased 11%, from $66.3 million for
the three months ended September 30, 2003 to $73.5 million for the same
period ended September 30, 2004. First quarter gross profit increased 19%
to $50.6 million, producing a gross margin of 41%, compared to $42.7 million
with a gross margin of 39% in last year's first quarter. Cost of sales
increased mainly due to growth in our headcount relating to the support
and service revenues, third party pass-through expenses and depreciation
expense.
Gross margin on license revenue for the first quarter of fiscal 2005 was 92%
compared to 93% a year ago for the same period. Support and service gross
margins improved slightly to 33% in the first quarter of fiscal 2005 from
32% a year ago. Hardware gross margins were lower for the first quarter at
24% compared to 30% for the same quarter last year primarily due to the
volume and sales mix of hardware and a decrease in rebates received on the
specific hardware sold.
For the first quarter of 2005, the bank systems and services segment revenue
increased 9% to $99.8 million from $91.6 million. The related gross margin
for the initial quarter of fiscal 2005 increased to 42% from 40% a year ago.
The credit union systems and services segment revenue increased 40% to $24.3
million for the initial quarter of 2005 from $17.4 million in the same
period a year ago. The related gross margin increased to 37% for the
current quarter from 35% for the prior year's first quarter. "The credit
union segment gross margin continues to show slight improvement year over
year due to the sales mix combined with our employees and managers
continuing to focus on efficiencies within the organization," said Kevin D.
Williams, CFO.
Operating expenses increased 15% for the first quarter of fiscal 2005
compared to the same quarter a year ago primarily due to employee related
expenses. Selling and marketing expenses rose 22% in the first quarter to
$10.7 million, or 9% of total revenue from $8.8 million or 8% of total
revenue. Research and development expenses increased 15% to $6.1 million
from $5.3 million, while remaining at 5% of total revenue for the first
quarters in fiscal 2005 and 2004. General and administrative costs
increased 7% to $7.5 million in the first quarter of fiscal year 2005, from
$7.0 million for the same quarter a year ago. General and administrative
expenses remained consistent at 6% of total revenue for both years.
Operating income increased 22% to $26.2 million, or 21% of first quarter
revenues, compared to $21.6 million, or 20% of revenues in the first quarter
of fiscal 2004. Provision for income taxes is 37.5% for this year's quarter
compared to 36.5% last year due to changes in the effective state tax rates.
First quarter net income totaled $16.7 million, or $0.18 per diluted share,
compared to $13.9 million, or $0.15 per diluted share in the first quarter
of fiscal 2004.
Cash Flow, Balance Sheet and Backlog Review
Cash, cash equivalents, and investments increased $16.8 million to $120.8
million compared to September 30, 2003. Trade receivables increased $9.7
million to $75.3 million compared to a year ago. Deferred revenue increased
4% to $115.2 million at September 30, 2004 compared to a year ago. There
continues to be no debt on the balance sheet as of September 30, 2004.
Stockholders' equity grew 19% to $459.2 million at September 30, 2004, from
$385.5 million at September 30, 2003.
Cash flow from operations increased to $87.7 million for the first quarter
of fiscal year 2005 from $84.7 million for the same period in fiscal 2004.
The $3.0 million increase consists mainly of the $2.8 million increase in
net income. Net cash used in investing activities in the current quarter
was $20.6 million and included capital expenditures of $12.5 million,
payment for acquisitions of $6.7 million and capitalized software
development of $1.5 million. In fiscal 2004, the first quarter used $18.1
million net cash from investing activities, primarily consisting of $17.7
million in capital expenditures and $0.5 million for capitalized software
development. Net cash from financing activities was a use of cash of $1.0
million and included proceeds of $2.6 million this quarter from the exercise
of stock options and sale of common stock offset by dividends paid of $3.6
million. For the first quarter in 2004, cash from financing activities was
$4.4 million, mainly from proceeds from the exercise of stock options and
sale of common stock of $7.5 million, offset by dividends paid of $3.1
million. "Subsequent to the end of the first quarter of fiscal 2005, we
used approximately $47.0 million of the available cash as of September 30,
2004 for the two acquisitions which were finalized and announced in a press
release on October 5, 2004," stated Williams.
Backlog, which is a measure of future business and revenue, was up 5% from
year-ago levels, but down 3% from the prior quarter at $185.1 million ($63.0
million in-house and $122.1 million outsourcing) at September 30, 2004.
Backlog at June 30, 2004, was $191.3 million ($67.2 million in-house and
$124.1 million outsourcing) and at September 30, 2003, it was $176.5 million
($60.2 million in-house and $116.3 million outsourcing).
About Jack Henry & Associates
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 5,900 customers nationwide. For additional information on Jack Henry,
visit the company's web site at www.jackhenry.com. The company will hold a
conference call on October 20th at 7:45 a.m. Central Time and investors are
invited to listen at www.jackhenry.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 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 Securities and Exchange
Commission (SEC) filings on Form 10-K, and potential investors should review
these statements. 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.
Condensed Consolidated Statements of Income
(In Thousands, Except Per Share Data - unaudited)
Three Months Ended % Change
--------------------- --------
September 30,
-------------
2004 2003
-------- --------
REVENUE
License $ 19,551 $ 12,960 51%
Support and service 83,648 72,524 15%
Hardware 20,897 23,456 -11%
-------- --------
Total 124,096 108,940 14%
COST OF SALES
Cost of license 1,609 913 76%
Cost of support and service 56,030 49,049 14%
Cost of hardware 15,895 16,321 -3%
-------- --------
Total 73,534 66,283 11%
-------- --------
GROSS PROFIT 50,562 42,657 19%
Gross Profit Margin 41% 39%
OPERATING EXPENSES
Selling and marketing 10,732 8,772 22%
Research and development 6,142 5,319 15%
General and administrative 7,465 7,005 7%
-------- --------
Total 24,339 21,096 15%
-------- --------
OPERATING INCOME 26,223 21,561 22%
INTEREST INCOME (EXPENSE)
Interest income 459 287 60%
Interest expense (3) (26) -88%
-------- --------
Total 456 261 75%
-------- --------
INCOME BEFORE INCOME TAXES 26,679 21,822 22%
PROVISION FOR INCOME TAXES 10,005 7,965 26%
-------- --------
NET INCOME $ 16,674 $ 13,857 20%
======== ========
Diluted net income per share $ 0.18 $ 0.15
======== ========
Diluted weighted avg shares outstanding 92,485 91,069
======== ========
Consolidated Balance Sheet Highlights
(In Thousands-unaudited) Sept 30, % Change
--------------------- --------
2004 2003
-------- --------
Cash, cash equivalents and investment $ 120,843 $ 104,030 16%
Trade receivables $ 75,294 $ 65,594 15%
TOTAL ASSETS $ 633,293 $ 543,352 17%
Accounts payable and accrued expenses $ 28,775 $ 21,180 36%
Deferred revenue $ 115,230 $ 110,743 4%
STOCKHOLDERS' EQUITY $ 459,233 $ 385,479 19%
(THIRTY)