JKHY-2012.9.30-10Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
For the quarterly period ended September 30, 2012
OR
 
 
( )
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ______________ to ________________

Commission file number 0-14112

JACK HENRY & ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
43-1128385
(State or Other Jurisdiction of Incorporation)
 
(I.R.S Employer Identification No.)

663 Highway 60, P.O. Box 807, Monett, MO 65708
(Address of Principle Executive Offices)
(Zip Code)

417-235-6652
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]   No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X]   No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  [X]
  
Accelerated filer  [  ]
 
 
 
Non-accelerated filer    [  ]
(Do not check if a smaller reporting company)
Smaller reporting company [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   
Yes [  ]   No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of November 2, 2012, Registrant has 86,073,164 shares of common stock outstanding ($0.01 par value).



JACK HENRY & ASSOCIATES, INC.
CONTENTS
 
 
 
Page Reference
 
PART I
 
 
 
 
 
 
ITEM 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 2
 
 
 
 
 
ITEM 3
 
 
 
 
 
ITEM 4
 
 
 
 
 
PART II
 
 
 
 
 
 
ITEM 2
 
 
 
 
 
ITEM 6
 
 
 
 
 
 

In this report, all references to “JHA”, the “Company”, “we”, “us”, and “our”, refer to Jack Henry & Associates, Inc., and its consolidated subsidiaries.



Table of Contents

PART I.  FINANCIAL INFORMATION
ITEM 1.   FINANCIAL STATEMENTS
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Data)
(Unaudited)
 
September 30,
2012
 
June 30,
2012
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
223,688

 
$
157,313

Receivables, net
136,827

 
218,305

Income tax receivable
1,711

 
8,476

Prepaid expenses and other
59,342

 
61,261

Prepaid cost of product
29,161

 
23,294

Total current assets
450,729

 
468,649

PROPERTY AND EQUIPMENT, net
279,055

 
276,730

OTHER ASSETS:
 
 
 
Non-current prepaid cost of product
22,660

 
21,344

Computer software, net of amortization
118,534

 
115,785

Other non-current assets
28,873

 
30,523

Customer relationships, net of amortization
159,110

 
162,561

Trade names, net of amortization
10,203

 
10,380

Goodwill
533,520

 
533,520

Total other assets
872,900

 
874,113

Total assets
$
1,602,684

 
$
1,619,492

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Accounts payable
$
10,518

 
$
16,317

Accrued expenses
47,475

 
58,260

Deferred income tax liability
26,256

 
26,256

Accrued income taxes
10,945

 

Notes payable and current maturities of long term debt
31,474

 
25,503

Deferred revenues
228,703

 
275,907

Total current liabilities
355,371

 
402,243

LONG TERM LIABILITIES:
 
 
 
Non-current deferred revenues
18,905

 
20,093

Non-current deferred income tax liability
104,003

 
100,932

Debt, net of current maturities
101,231

 
106,166

Other long-term liabilities
7,159

 
7,002

Total long term liabilities
231,298

 
234,193

Total liabilities
586,669

 
636,436

STOCKHOLDERS' EQUITY
 
 
 
Preferred stock - $1 par value; 500,000 shares authorized, none issued

 

Common stock - $0.01 par value; 250,000,000 shares authorized;
      Shares issued at 09/30/12 were 101,727,379
      Shares issued at 06/30/12 were 101,482,461
1,017

 
1,015

Additional paid-in capital
387,088

 
381,919

Retained earnings
976,642

 
944,078

Less treasury stock at cost
      15,580,261 shares at 09/30/12, 15,452,064 shares at 06/30/12
(348,732
)
 
(343,956
)
Total stockholders' equity
1,016,015

 
983,056

Total liabilities and equity
$
1,602,684

 
$
1,619,492

See notes to condensed consolidated financial statements

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Table of Contents

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
 
Three Months Ended
 
September 30,
 
2012
 
2011
REVENUE
 
 
 
License
$
12,864

 
$
12,264

Support and service
244,585

 
220,270

Hardware
13,552

 
15,804

Total revenue
271,001

 
248,338

COST OF SALES
 
 
 
Cost of license
1,077

 
1,127

Cost of support and service
143,418

 
131,124

Cost of hardware
10,578

 
11,661

Total cost of sales
155,073

 
143,912

GROSS PROFIT
115,928

 
104,426

OPERATING EXPENSES
 
 
 
Selling and marketing
20,189

 
18,754

Research and development
14,645

 
14,936

General and administrative
13,578

 
12,939

Total operating expenses
48,412

 
46,629

OPERATING INCOME
67,516

 
57,797

INTEREST INCOME (EXPENSE)
 
 
 
Interest income
187

 
129

Interest expense
(1,341
)
 
(1,456
)
Total interest income (expense)
(1,154
)
 
(1,327
)
INCOME BEFORE INCOME TAXES
66,362

 
56,470

PROVISION FOR INCOME TAXES
23,887

 
19,995

NET INCOME
$
42,475

 
$
36,475

Diluted earnings per share
$
0.49

 
$
0.42

Diluted weighted average shares outstanding
86,605

 
87,134

Basic earnings per share
$
0.49

 
$
0.42

Basic weighted average shares outstanding
86,109

 
86,403

Cash dividends paid per share
$
0.115

 
$
0.105


See notes to condensed consolidated financial statements

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JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
 
Three Months Ended
 
September 30,
 
2012
 
2011
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net Income
$
42,475

 
$
36,475

Adjustments to reconcile net income from operations
     to net cash from operating activities:
 
 
 
Depreciation
12,088

 
11,069

Amortization
12,130

 
12,625

Change in deferred income taxes
3,071

 
1,936

Expense for stock-based compensation
1,734

 
1,244

(Gain)/loss on disposal of assets
632

 
11

Changes in operating assets and liabilities:
 
 
 
Change in receivables  
81,478

 
72,862

Change in prepaid expenses, prepaid cost of product and other
(3,614
)
 
(9,983
)
Change in accounts payable
(5,799
)
 
(2,513
)
Change in accrued expenses
(11,796
)
 
(6,447
)
Change in income taxes
17,842

 
17,770

Change in deferred revenues
(48,392
)
 
(56,586
)
Net cash from operating activities
101,849

 
78,463

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Capital expenditures
(6,794
)
 
(10,652
)
Proceeds from sale of assets
131

 

Customer contracts acquired
(186
)
 
(670
)
Computer software developed
(11,646
)
 
(7,517
)
Proceeds from investments

 
1,000

Purchase of investments

 
(999
)
Net cash from investing activities
(18,495
)
 
(18,838
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Repayments on credit facilities
(5,726
)
 
(6,340
)
Purchase of treasury stock
(4,776
)
 

Dividends paid
(9,911
)
 
(9,074
)
Excess tax benefits from stock-based compensation
1,743

 
289

Proceeds from issuance of common stock upon exercise of stock options
2,942

 
526

Minimum tax withholding payments related to share based compensation
(2,200
)
 
(926
)
Proceeds from sale of common stock, net
949

 
830

Net cash from financing activities
(16,979
)
 
(14,695
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
$
66,375

 
$
44,930

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$
157,313

 
$
63,125

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
223,688

 
$
108,055


Net cash paid for income taxes was $1,229 for the three months ended September 30, 2012, compared to $6 net cash received for the same period last year. The Company paid interest of $938 and $1,008 for the three months ended September 30, 2012 and 2011, respectively. Capital expenditures exclude property and equipment additions totaling $7,801 and $10,576 that were in accrued liabilities or were acquired via capital lease during the three months ended September 30, 2012 and 2011, respectively.

See notes to condensed consolidated financial statements

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JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Per Share Amounts)
(Unaudited)

NOTE 1.    NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the company
Jack Henry & Associates, Inc. and Subsidiaries (“JHA” or the “Company”) is a provider of integrated computer systems and services that has developed and acquired a number of banking and credit union software systems. The Company's revenues are predominately earned by marketing those systems to financial institutions nationwide together with computer equipment (hardware), by providing the conversion and software implementation services for financial institutions to utilize JHA software systems, and by providing other related services. JHA also provides continuing support and services to customers using in-house or outsourced systems.
Consolidation
The consolidated financial statements include the accounts of JHA and all of its subsidiaries, which are wholly-owned, and all intercompany accounts and transactions have been eliminated.
Fair value of financial instruments
For cash equivalents, amounts receivable or payable and short-term borrowings, fair values approximate carrying value, based on the short-term nature of the assets and liabilities. The fair value of long term debt also approximates carrying value as estimated using discounted cash flows based on the Company’s current incremental borrowing rates or quoted prices in active markets.
The Company's estimates of the fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets, and requires that observable inputs be used in the valuations when available. The three levels of the hierarchy are as follows:
Level 1: observable inputs such as quoted prices in active markets
Level 2: inputs other than the quoted prices in active markets that are observable either directly or indirectly
Level 3: unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions
Fair value of financial assets, included in cash and cash equivalents, is as follows:
 
 
Estimated Fair Value Measurements
 
 
 
 
Quoted Prices
 
Significant
 
Significant
 
 
 
 
in Active
 
Observable
 
Unobservable
 
 
 
 
Markets
 
Other Inputs
 
Inputs
 
Total Fair
 
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Value
September 30, 2012
 
 
 
 
 
 
 
 
Financial Assets:
 
 
 
 
 
 
 
 
Money market funds
 
$
181,186

 
$

 
$

 
$
181,186

June 30, 2012
 
 

 
 
 
 
 
 

Financial Assets:
 
 
 
 
 
 
 
 
Money market funds
 
$
116,013

 
$

 
$

 
$
116,013

Comprehensive income
Comprehensive income for the three-month periods ended September 30, 2012 and 2011 equals the Company’s net income.
Interim financial statements
The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States of America applicable to interim condensed consolidated financial statements, and do not include all of the information and footnotes required by accounting principles generally accepted in the

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United States of America for complete consolidated financial statements. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes, which are included in its Annual Report on Form 10-K  (“Form 10-K”) for the year ended June 30, 2012. The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its Form 10-K for the fiscal year ended June 30, 2012.
In the opinion of the management of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to present fairly the financial position of the Company as of September 30, 2012, the results of its operations for the three-month periods ended September 30, 2012 and 2011, and its cash flows for the three-month periods ended September 30, 2012 and 2011.
The results of operations for the period ended September 30, 2012 are not necessarily indicative of the results to be expected for the entire year.

NOTE 2.    ADDITIONAL INTERIM FOOTNOTE INFORMATION
The following additional information is provided to update the notes to the Company’s annual consolidated financial statements for developments during the period ended September 30, 2012.
Common stock
The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or short-term borrowings on its existing credit facilities. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At September 30, 2012, there were 15,580 shares in treasury stock and the Company had the remaining authority to repurchase up to 4,411 additional shares. The total cost of treasury shares at September 30, 2012 is $348,732. During fiscal 2013, the Company repurchased 128 treasury shares for $4,776. At June 30, 2012, there were 15,452 shares in treasury stock and the Company had the authority to repurchase up to 4,539 additional shares.
Commitments and contingencies
For fiscal 2013, the Board of Directors approved bonus plans for its executive officers and general managers. Under the plan, bonuses may be paid following the end of the current fiscal year based upon achievement of operating income and individually tailored performance targets. For general managers, one half of each manager’s bonus is contingent upon meeting individual business unit objectives established by the executive officer to whom the general manager reports.
The Company has entered into agreements that provide its executive officers with compensation totaling two years’ base salary and target bonus in the event the Company terminates the executive without cause within the period from 90 days before to two years after a change in control of the Company. The Company has also entered into agreements that provide its general managers with compensation totaling one year of base salary and target bonus under circumstances identical to those contained in the executive officer agreements.

NOTE 3.    RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-05, Comprehensive Income in June 2011, which was effective for the Company beginning July 1, 2012. The updated guidance requires non-owner changes in stockholders' equity to be reported either in a single continuous statement of comprehensive income or in two separate but consecutive statements, rather than as part of the statement of changes in stockholders' equity. No changes in disclosure were required as a result of the update.
In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment, which was effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The amendments in the update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The provisions in this update were effective for the Company beginning July 1, 2012 and its adoption did not have any impact on the financial statements.
In July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other. The amendments in the update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The provisions in this update will be effective for the Company beginning July 1, 2013.


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NOTE 4.    DEBT
The Company’s outstanding long and short term debt is as follows:
 
September 30,
 
June 30,
 
2012
 
2012
LONG TERM DEBT
 
 
 
Term loan
$
121,875

 
$
127,500

Capital leases
8,538

 
3,518

Other borrowings
303

 
445

 
130,716

 
131,463

Less current maturities
29,485

 
25,297

Debt, net of current maturities
$
101,231

 
$
106,166


SHORT TERM DEBT
 
 
 
Capital leases
$
1,989

 
$
206

Current maturities of long-term debt
29,485

 
25,297

Notes payable and current maturities of long term debt
$
31,474

 
$
25,503


The Company has a bank credit facility agreement that includes a revolving credit facility and a term loan.
Revolving credit facility
The long term revolving loan allows for borrowings of up to $150,000, which may be increased by the Company at any time until maturity to $250,000. The revolving loan terminates June 4, 2015. At September 30, 2012, there was no outstanding revolving loan balance.
Term loan
The term loan had an original principal balance of $150,000, with quarterly principal payments of $5,625 that began on September 30, 2011. The remaining outstanding balance on June 4, 2015 is due and payable on that date. At September 30, 2012, the outstanding balance of $121,875 was bearing interest at a rate of 2.37%, and $22,500 will be maturing within the next twelve months.
Each of the above loans bear interest at a variable rate equal to (a) a rate based on LIBOR or (b) an alternate base rate (the greater of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate or (c) LIBOR plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The loans are secured by pledges of capital stock of certain subsidiaries of the Company. The loans are also guaranteed by certain subsidiaries of the Company. The credit facility is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the agreement. As of September 30, 2012, the Company was in compliance with all such covenants.
Capital leases
The Company has entered into various capital lease obligations for the use of certain computer equipment. Long term capital lease obligations were entered into of which $8,538 remains outstanding at September 30, 2012 and $6,797 will be maturing within the next twelve months. The Company also has short term capital lease obligations totaling $1,989 at September 30, 2012.
Other lines of credit
The Company renewed an unsecured bank credit line on April 29, 2012 which provides for funding of up to $5,000 and bears interest at the prime rate less 1% (2.25% at September 30, 2012). The credit line was renewed through April 29, 2014. At September 30, 2012, no amount was outstanding.

NOTE 5.    INCOME TAXES
The effective tax rate of 36.0% of income before income taxes for the quarter ended September 30, 2012 is slightly higher than 35.4% for the same quarter in fiscal 2012 primarily due to the effect of the Research and Experimentation Credit (“R&E Credit”) which expired December 31, 2011.
At September 30, 2012, the Company had $5,755 of gross unrecognized tax benefits, $4,807 of which, if recognized, would affect our effective tax rate. Our policy is to include interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of September 30, 2012, we had accrued interest and penalties of $760 related

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to uncertain tax positions.
During the fiscal year ended June 30, 2012, the Internal Revenue Service initiated an examination of the Company’s U.S. federal income tax returns for fiscal years ended June 30, 2010 and June 30, 2011. This audit is expected to be completed in fiscal 2013. At this time, it is anticipated that the examination will not result in a material change to the Company’s financial statements. The U.S. federal and state income tax returns for June 30, 2009 and all subsequent years remain subject to examination as of September 30, 2012 under statute of limitations rules. We anticipate potential changes resulting from the expiration of statutes of limitations could reduce the unrecognized tax benefits balance by $2,000 - $3,000 within twelve months of September 30, 2012.

NOTE 6.    STOCK-BASED COMPENSATION
For the three months ended September 30, 2012 and 2011, there was $1,734 and $1,244, respectively, in compensation expense from equity-based awards.
2005 NSOP and 1996 SOP
The Company previously issued options to employees under the 1996 Stock Option Plan (“1996 SOP”) and to outside directors under the 2005 Non-Qualified Stock Option Plan (“2005 NSOP”). No stock options were issued under the 1996 SOP or the 2005 NSOP during the three months ended September 30, 2012.
Changes in stock options outstanding and exercisable are as follows:
2005 NSOP & 1996 SOP – Stock options
 
 
 
 
 
 
Number of
 Shares
 
Weighted
 Average
 Exercise
 Price
 
Aggregate
 Intrinsic
 Value
Outstanding July 1, 2012
464

 
$
16.19

 
 
Granted

 

 
 
Forfeited

 

 
 
Exercised
(141
)
 
14.63

 
 
Outstanding September 30, 2012
323

 
$
16.86

 
$
6,780

Vested September 30, 2012
323

 
$
16.86

 
$
6,780

Exercisable September 30, 2012
323

 
$
16.86

 
$
6,780

Compensation cost related to outstanding options has been fully recognized. The weighted-average remaining contractual term on options currently exercisable as of September 30, 2012 was 2.62 years.
Restricted Stock Plan
The Company issues both unit awards and share awards under the Restricted Stock Plan. The following table summarizes non-vested unit awards as of September 30, 2012, as well as activity for the three months then ended:
Unit awards
Shares
 
Weighted
Average
Grant Date
Fair Value
Outstanding July 1, 2012
672

 
18.05

Granted
174

 
42.39

Vested

 

Forfeited

 

Outstanding September 30, 2012
846

 
$
23.05

The weighted average assumptions used in this model to estimate fair value at the measurement date and resulting values are as follows:
Volatility
23.3
%
Risk free interest rate
0.33
%
Dividend yield
1.2
%
Stock Beta
0.864

At September 30, 2012, there was $13,205 of compensation expense that has yet to be recognized related to non-

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vested restricted stock unit awards, which will be recognized over a weighted-average period of 1.82 years.
The following table summarizes non-vested share awards as of September 30, 2012, as well as activity for the three months then ended:
Share awards
Shares
 
Weighted
Average
Grant Date
Fair Value
Outstanding July 1, 2012
332

 
$
23.13

Granted
18

 
33.81

Vested
(108
)
 
22.10

Forfeited

 

Outstanding September 30, 2012
242

 
$
24.33

At September 30, 2012, there was $2,602 of compensation expense that has yet to be recognized related to non-vested restricted stock share awards, which will be recognized over a weighted-average period of 1.43 years.

NOTE 7.    EARNINGS PER SHARE
The following table reflects the reconciliation between basic and diluted earnings per share:
 
Three Months Ended
 
September 30,
 
2012
 
2011
Net Income
$
42,475

 
$
36,475

Common share information:
 
 
 
Weighted average shares outstanding for basic earnings per share
86,109

 
86,403

Dilutive effect of stock options and restricted stock
496

 
731

Weighted average shares outstanding for diluted earnings per share
86,605

 
87,134

Basic earnings per share
$
0.49

 
$
0.42

Diluted earnings per share
$
0.49

 
$
0.42

Per share information is based on the weighted average number of common shares outstanding for the three-month periods ended September 30, 2012 and 2011. Stock options and restricted stock have been included in the calculation of earnings per share to the extent they are dilutive. 32 anti-dilutive stock options and restricted stock were excluded from the computation of diluted earnings per share for the three-month period ended September 30, 2012 (89 shares were excluded from the computation for the three-month period ended September 30, 2011).

NOTE 8.    BUSINESS SEGMENT INFORMATION
The Company is a provider of integrated computer systems that perform data processing (available for in-house installations or outsourced services) for banks and credit unions. The Company’s operations are classified into two reportable segments: bank systems and services (“Bank”) and credit union systems and services (“Credit Union”). The Company evaluates the performance of its segments and allocates resources to them based on various factors, including prospects for growth, return on investment, and return on revenue.


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Three Months Ended
 
Three Months Ended
 
September 30, 2012
 
September 30, 2011
 
Bank
 
Credit Union
 
Total
 
Bank
 
Credit Union
 
Total
REVENUE
 
 
 
 
 
 
 
 
 
 
 
License
$
7,281

 
$
5,583

 
$
12,864

 
$
7,674

 
$
4,590

 
$
12,264

Support and service
186,065

 
58,520

 
244,585

 
169,075

 
51,195

 
220,270

Hardware
9,080

 
4,472

 
13,552

 
10,359

 
5,445

 
15,804

Total revenue
202,426

 
68,575

 
271,001

 
187,108

 
61,230

 
248,338

COST OF SALES
 
 
 
 
 
 
 
 
 
 
 
Cost of license
687

 
390

 
1,077

 
901

 
226

 
1,127

Cost of support and service
108,723

 
34,695

 
143,418

 
99,773

 
31,351

 
131,124

Cost of hardware
7,211

 
3,367

 
10,578

 
7,448

 
4,213

 
11,661

Total cost of sales
116,621

 
38,452

 
155,073

 
108,122

 
35,790

 
143,912

GROSS PROFIT
$
85,805

 
$
30,123

 
115,928

 
$
78,986

 
$
25,440

 
104,426

 
 
 
 
 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
48,412

 
 
 
 
 
46,629

 
 
 
 
 
 
 
 
 
 
 
 
INTEREST INCOME (EXPENSE)
 
 
 
 
(1,154
)
 
 
 
 
 
(1,327
)
 
 
 
 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAXES
 
 
 
 
$
66,362

 
 
 
 
 
$
56,470


 
September 30,
 
June 30,
 
2012
 
2012
Property and equipment, net
 
 
 
Bank systems and services
$
249,247

 
$
245,069

Credit Union systems and services
29,808

 
31,661

Total
$
279,055

 
$
276,730

Intangible assets, net
 
 
 
Bank systems and services
$
590,809

 
$
591,857

Credit Union systems and services
230,558

 
230,389

Total
$
821,367

 
$
822,246


The Company has not disclosed any additional asset information by segment, as the information is not produced internally and its preparation is impracticable.

NOTE 9.    SUBSEQUENT EVENTS
In late October, subsequent to the end of the fiscal period reported, widespread flooding caused by Hurricane Sandy rendered our Lyndhurst, New Jersey item processing center inoperable.  This impacted item processing for over 100 bank customers and we continue to work diligently to resolve the situation for our customers.  At this time the financial impact on the Company cannot be estimated.


11

Table of Contents

ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statements included in this Form 10-Q.
RESULTS OF OPERATIONS
Background and Overview
Jack Henry & Associates, Inc. (JHA) is a leading provider of technology solutions and payment processing services primarily for financial services organizations. Its solutions are marketed and supported through three primary brands. Jack Henry Banking® supports banks ranging from community to mid-tier, multi-billion dollar institutions with information and transaction processing solutions. Symitar® is a leading provider of information and transaction processing solutions for credit unions of all sizes. ProfitStars® provides specialized products and services that enable financial institutions of every asset size and charter, and diverse corporate entities outside the financial services industry, to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. JHA's integrated solutions are available for in-house installation and outsourced and hosted delivery.
The majority of our revenue is derived from recurring outsourcing fees and transaction processing fees that predominantly have contract terms of five years or greater. Support and service fees also include in-house maintenance fees on primarily annual contract terms. Less predictable software license fees and hardware sales complement our primary revenue sources. We continually seek opportunities to increase revenue while at the same time containing costs to expand margins.
In the first quarter of fiscal 2013, revenues increased 9% or $22,663 compared to the same period in the prior year, with strong growth continuing in our support & service revenue component, particularly in our electronic payment services. The growth in revenue and the Company's continued focus on cost management, partially offset by a slightly higher tax rate, has resulted in a 16% increase in net income for the quarter.
The current condition of the U.S. financial markets continues to impact the overall demand and spending for new products and services by some of our customers. The profitability of many financial institutions continues to improve, but in many cases remains low and this appears to have resulted in some reduction of demand for new products and services. During the past four years, a number of financial institutions have closed or merged due to regulatory action. We believe that regulatory closings will continue to decline through fiscal 2013, absent a significant downturn in the economy. Furthermore, the increase in bank failures and forced consolidations has been, to some extent, offset by a general decline in the level of acquisition activity among financial institutions.
We continue into fiscal 2013 with cautious optimism following strong first quarter results. Significant portions of our business continue to come from recurring revenue and our healthy sales pipeline is also encouraging. Our customers continue to face regulatory and operational challenges which our products and services address, and in these times they have an even greater need for our solutions that directly address institutional profitability and efficiency. Our strong balance sheet, access to extensive lines of credit, the strength of our existing product line and an unwavering commitment to superior customer service position us well to address current and future opportunities to extend our customer base and produce returns for our stockholders.
A detailed discussion follows of the major components of the results of operations for the three month period ended September 30, 2012. All amounts are in thousands and discussions compare the current three month period ended September 30, 2012, to the prior year three month period ended September 30, 2011.
REVENUE
License Revenue
Three Months Ended
 
%
 
September 30,
 
Change
 
2012
 
2011
 
 
License
$
12,864

 
$
12,264

 
5
%
Percentage of total revenue
5
%
 
5
%
 
 
License revenue for core products remains consistent compared to the same period last year, with the current quarter increase being driven by a slight increase in revenue from our complementary products compared to the last fiscal year.
While license fees will fluctuate, recent trends indicate that our customers are increasingly electing to contract for our products via outsourced delivery rather than a traditional license as our outsourced delivery does not require an up-front capital investment in license fees. We expect this trend to continue in the long term.

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Support and Service Revenue
Three Months Ended
 
%
 
September 30,
 
Change
 
2012
 
2011
 
 
Support and service
$
244,585

 
$
220,270

 
11
%
Percentage of total revenue
90
%
 
89
%
 
 
 
Qtr over Qtr Change
 
 
 
$ Change
 
% Change
 
 
In-House Support & Other Services
$
4,765

 
6
%
 
 
Electronic Payment Services
12,267

 
15
%
 
 
Outsourcing Services
4,152

 
9
%
 
 
Implementation Services
3,131

 
18
%
 
 
Total Increase
$
24,315

 
 
 
 
There was growth in all support and service revenue components for the current quarter.
In-house support and other services revenue increased due to annual maintenance fee increases (as our customers’ assets have grown) and increased revenues from our system conversion services. Revenue from our complementary products has also grown as the total number of supported in-house products has grown.
Electronic payment services continue to experience the largest growth. The quarterly revenue increases are attributable to strong performance across our electronic payment products, particularly from debit/credit card processing services, online bill payment services and ACH processing.
Outsourcing services for banks and credit unions continue to drive revenue growth as customers continue to show a preference for outsourced delivery of our solutions. We expect the trend towards outsourced product delivery to benefit outsourcing services revenue for the foreseeable future. Revenues from outsourcing services are typically earned under multi-year service contracts and therefore provide a long-term stream of recurring revenues.
Implementation services revenue increased for the quarter due mainly to increased implementations of our core banking platform products and related complementary products, coupled with higher merger conversion revenues from our core banking platform products.
Hardware Revenue
Three Months Ended
 
%
 
September 30,
 
Change
 
2012
 
2011
 
 
Hardware
$
13,552

 
$
15,804

 
(14
)%
Percentage of total revenue
5
%
 
6
%
 
 
Hardware revenue continues to fluctuate from quarter to quarter. Revenue has decreased for the three month period due to a decrease in the number of third party hardware systems and components delivered. Although there will be continuing quarterly fluctuations, we expect there to be an overall decreasing trend in hardware sales due to the change in sales mix towards outsourcing contracts, which typically do not include hardware, and the deflationary trend of computer prices generally.
BACKLOG
Our backlog of $423,352 ($92,153 in-house and $331,199 outsourcing) at September 30, 2012 increased 17% from $361,222 ($73,221 in-house and $288,001 outsourcing) at September 30, 2011. The current quarter backlog decreased 3% from June 30, 2012, when backlog was $435,344 ($92,741 in-house and $342,603 outsourcing).

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COST OF SALES AND GROSS PROFIT
 
Three Months Ended
 
%
 
September 30,
 
Change
 
2012
 
2011
 
 
 
 
 
 
 
 
Cost of License
$
1,077

 
$
1,127

 
(4
)%
Percentage of  total revenue
<1%

 
<1%

 
 
License Gross Profit
$
11,787

 
$
11,137

 
6
 %
Gross Profit Margin
92
%
 
91
%
 
 
Cost of support and service
$
143,418

 
$
131,124

 
9
 %
Percentage of  total revenue
53
%
 
53
%
 
 
Support and Service Gross Profit
$
101,167

 
$
89,146

 
13
 %
Gross Profit Margin
41
%
 
40
%
 
 
Cost of hardware
$
10,578

 
$
11,661

 
(9
)%
Percentage of  total revenue
4
%
 
5
%
 
 
Hardware Gross Profit
$
2,974

 
$
4,143

 
(28
)%
Gross Profit Margin
22
%
 
26
%
 
 
TOTAL COST OF SALES
$
155,073

 
$
143,912

 
8
 %
Percentage of  total revenue
57
%
 
58
%
 
 
TOTAL GROSS PROFIT
$
115,928

 
$
104,426

 
11
 %
Gross Profit Margin
43
%
 
42
%
 
 
Cost of license depends greatly on third party reseller agreement software vendor costs. During the quarter, sales of these third party vendor licenses decreased as a percentage of total license revenue leading to lower related costs and slightly increased gross profit margins.
Cost of support and service increased for the three months commensurate with the increase in support and services revenue, as evidenced by the gross profit margins only increasing slightly.
In general, changes in cost of hardware trend consistently with hardware revenue. For the current quarter however, reduced sales of higher margin products related to hardware upgrades has driven lower hardware margins.

OPERATING EXPENSES
Selling and Marketing
Three Months Ended
 
%
 
September 30,
 
Change
 
2012
 
2011
 
 
Selling and marketing
$
20,189

 
$
18,754

 
8
%
Percentage of  total revenue
7
%
 
8
%
 
 
Selling and marketing expenses for the quarter has increased mainly due to higher commission expenses. This is in line with increased sales volume of long term service contracts on which commissions are paid as a percentage of total revenue.
Research and Development
Three Months Ended
 
%
 
September 30,
 
Change
 
2012
 
2011
 
 
Research and development
$
14,645

 
$
14,936

 
(2
)%
Percentage of  total revenue
5
%
 
6
%
 
 
Research and development expenses decreased for the three month period ended September 30, 2012 primarily due to increased capitalization of costs for ongoing software development projects, which has also driven the decreases in the percentage of total revenue for the quarter.

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General and Administrative
Three Months Ended
 
%
 
September 30,
 
Change
 
2012

2011
 
 
General and administrative
$
13,578

 
$
12,939

 
5
%
Percentage of  total revenue
5
%
 
5
%
 
 
General and administrative expenses for the quarter have increased slightly compared to last year due mainly to increased salary costs in line with a 6% increase in general and administrative headcount.
INTEREST INCOME AND EXPENSE
 
 
 
 
 
 
Three Months Ended
 
%
 
September 30,
 
Change
 
2012
 
2011
 
 
Interest Income
$
187

 
$
129

 
45
 %
Interest Expense
$
(1,341
)
 
$
(1,456
)
 
(8
)%
Interest income for the three month period ended September 30, 2012 fluctuated due to changes in invested balances and yields on invested balances. Interest expense decreased for the quarter due to the lower outstanding balance on our term loan compared to last year.
PROVISION FOR INCOME TAXES
The provision for income taxes was $23,887 or 36.0% for the three month period ended September 30, 2012 compared with $19,995 or 35.4% for the same period last year. The prior year income tax rate was slightly lower primarily due to the effect of the Research and Experimentation Credit (“R&E Credit”), which expired effective December 31, 2011.
NET INCOME
Net income increased 16% for the three months ended September 30, 2012. For the first quarter of fiscal 2013, it was $42,475 or $0.49 per diluted share compared to $36,475, or $0.42 per diluted share in the same period last year.

BUSINESS SEGMENT DISCUSSION
The Company is a provider of integrated computer systems that perform data processing (available for in-house installations or outsourced services) for banks and credit unions. The Company’s operations are classified into two reportable segments: bank systems and services (“Bank”) and credit union systems and services (“Credit Union”). The Company evaluates the performance of its segments and allocates resources to them based on various factors, including prospects for growth, return on investment, and return on revenue.
Bank Systems and Services
 
 
 
 
 
 
Three Months Ended
 
%
 
September 30,
 
Change
 
2012

2011
 
 
Revenue
$
202,426

 
$
187,108

 
8
%
Gross Profit
$
85,805

 
$
78,986

 
9
%
Gross Profit Margin
42
%
 
42
%
 
 
Revenue in the Bank segment increased 8% compared to the equivalent quarter last fiscal year. This was primarily due to growth in all areas of support and service revenue, particularly a 13% increase in electronic payment transaction processing services revenue.
Gross profit margins have remained consistent.


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Credit Union Systems and Services
 
 
 
 
 
Three Months Ended
 
%
 
September 30,
 
Change
 
2012
 
2011
 
 
Revenue
$
68,575

 
$
61,230

 
12
%
Gross Profit
$
30,123

 
$
25,440

 
18
%
Gross Profit Margin
44
%
 
42
%
 
 
Revenue in the Credit Union segment increased 12% from the same quarter last year mainly due to support & service revenue which grew 14%, coupled with a small increase in complementary product license revenues. Support & service revenue increased due mainly to an 18% increase in electronic payment services from continuing growth of our online bill payment processing and debit/credit card processing services in the Credit Union segment. Also, continued growth of our outsourcing solutions in the Credit Union segment led to a 35% increase in outsourcing services revenues compared to the same quarter last year.
Gross profit margins for the Credit Union segment for the three month period have increased mainly due to the increase in license revenue noted above. License revenues achieve higher margins relative to the other components of revenue.

FINANCIAL CONDITION
Liquidity
The Company's cash and cash equivalents totaled $223,688 at September 30, 2012, increasing from $157,313 at June 30, 2012, and from $108,055 at September 30, 2011. The increase from June 30, 2012 is primarily due to continued receipts from our annual maintenance billings.
The following table summarizes net cash from operating activities in the statement of cash flows:
 
Three Months Ended
 
September 30,
 
2012
 
2011
Net income
$
42,475

 
$
36,475

Non-cash expenses
29,655

 
26,885

Change in receivables
81,478

 
72,862

Change in deferred revenue
(48,392
)
 
(56,586
)
Change in other assets and liabilities
(3,367
)
 
(1,173
)
Net cash provided by operating activities
$
101,849

 
$
78,463

Cash provided by operating activities for the fiscal year to date increased 30% compared to last year. Cash from operations is primarily used to repay debt, pay dividends and fund acquisitions and other capital expenditures. The increase compared to last year reflects increased earnings driven by continued strong revenue growth, ongoing cost control and decreased interest costs.
Cash used in investing activities for the current year totaled $18,495. The largest use of cash included $11,646 for the development of software and capital expenditures on facilities and equipment of $6,794, including spending on our online bill payment data center migration. Other uses of cash included $186 for the acquisition of customer contracts. These expenditures have been partially offset by proceeds of $131 from the sale of property. In the first three months of fiscal 2012, cash used in investing activities totaled $18,838 which included capital expenditures for facilities and equipment of $10,652, related to computer equipment and related purchased software, with other major uses of cash being $7,517 for the development of software and $670 for the acquisition of customer contracts.
Financing activities used cash of $16,979 during the current year. There were cash outflows to repay long and short term borrowings on our credit facilities of $5,726, dividends paid to stockholders of $9,911, and purchase of treasury shares of $4,776. Cash used was partially offset by $3,434 net proceeds from the issuance of stock and tax related to stock-based compensation. Net cash used by financing activities in the first three months of last year, was $14,695 and includes $6,340 repayments on our lines of credit and $9,074 in dividend payments to shareholders, partially offset by $719 of net proceeds from the issuance of stock and tax related to stock-based compensation.
While the current condition of the U.S. financial markets continues to impact our customers, we have not experienced any significant issues with our current collection efforts. Furthermore, we believe that any future impact to our liquidity

16

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would be minimized by our access to available lines of credit.
Capital Requirements and Resources
The Company generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling $6,794 and $10,652 for the three-month periods ended September 30, 2012 and 2011, respectively, were made primarily for additional equipment and the improvement of existing facilities. These additions were funded from cash generated by operations. Total consolidated capital expenditures for the Company for fiscal year 2013 are not expected to exceed $40,000 and will be funded from cash generated by operations.
The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or short-term borrowings on its existing credit facilities. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At September 30, 2012, there were 15,580 shares in treasury stock and the Company had the remaining authority to repurchase up to 4,411 additional shares. The total cost of treasury shares at September 30, 2012 is $348,732. During fiscal 2013, the Company repurchased 128 treasury shares for $4,776. At June 30, 2012, there were 15,452 shares in treasury stock and the Company had the authority to repurchase up to 4,539 additional shares.
The Company has entered into a bank credit facility agreement that includes a revolving loan and a term loan.
Revolving credit facility
The long term revolving loan allows for borrowings of up to $150,000, which may be increased by the Company at any time until maturity to $250,000. The revolving loan terminates June 4, 2015. At September 30, 2012, there was no outstanding revolving loan balance.
Term loan
The term loan had an original principal balance of $150,000, with quarterly principal payments of $5,625 that began on September 30, 2011. The remaining outstanding balance on June 4, 2015 is due and payable on that date. At September 30, 2012, the outstanding balance of $121,875 was bearing interest at a rate of 2.37%, and $22,500 will be maturing within the next twelve months.
Each of the above loans bear interest at a variable rate equal to (a) a rate based on LIBOR or (b) an alternate base rate (the greater of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate or (c) LIBOR plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The loans are secured by pledges of capital stock of certain subsidiaries of the Company. The loans are also guaranteed by certain subsidiaries of the Company. The credit facility is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the agreement. As of September 30, 2012, the Company was in compliance with all such covenants.
Capital leases
The Company has entered into various capital lease obligations for the use of certain computer equipment. Long term capital lease obligations were entered into of which $8,538 remains outstanding at September 30, 2012 and $6,797 will be maturing within the next twelve months. The Company also has short term capital lease obligations totaling $1,989 at September 30, 2012.
Other lines of credit
The Company renewed an unsecured bank credit line on April 29, 2012 which provides for funding of up to $5,000 and bears interest at the prime rate less 1% (2.25% at September 30, 2012). The credit line was renewed through April 29, 2014. At September 30, 2012, no amount was outstanding.
Critical Accounting Policies
The Company regularly reviews its selection and application of significant accounting policies and related financial disclosures. The application of these accounting policies requires that management make estimates and judgments. The estimates that affect the application of our most critical accounting policies and require our most significant judgments are outlined in Management’s Discussion and Analysis of Financial Condition and Results of Operations – “Critical Accounting Policies” – contained in our annual report on Form 10-K for the year ended June 30, 2012.
Forward Looking Statements
The Management's Discussion and Analysis of Results of Operations and Financial Condition and other portions of this report contain forward-looking statements within the meaning of federal securities laws. Actual results are subject to risks and uncertainties, including both those specific to the Company and those specific to the industry, which could cause results to differ materially from those contemplated. The risks and uncertainties include, but are not limited to,

17

Table of Contents

the matters detailed at Risk Factors in its Annual Report on Form 10-K for the fiscal year ended June 30, 2012. Undue reliance should not be placed on the forward-looking statements. The Company does not undertake any obligation to publicly update any forward-looking statements.
CONCLUSION
The Company’s results of operations and its financial position continue to be solid, with increased gross profit and net income for the three month period ended September 30, 2012, compared to the same period a year ago. We continue to be cautiously optimistic, as we maintain significant levels of recurring revenue and continue to see a strong backlog of contracts for products and services yet to be delivered. Our overall results reflect the continuing attitude of cooperation and commitment by each employee, management's ongoing cost control efforts and our commitment to continue delivering top quality products and superior services to all of our customers in the markets we serve. We believe that we are well positioned to address current and future opportunities which will arise to extend our customer base and produce returns for our stockholders.

ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk refers to the risk that a change in the level of one or more market prices, interest rates, indices, volatilities, correlations or other market factors such as liquidity, will result in losses for a certain financial instrument or group of financial instruments. We are currently exposed to credit risk on credit extended to customers and interest risk on outstanding debt. We do not currently use any derivative financial instruments. We actively monitor these risks through a variety of controlled procedures involving senior management.
Based on the controls in place and the credit worthiness of the customer base, we believe the credit risk associated with the extension of credit to our customers will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.
Based on our outstanding debt with variable interest rates as of September 30, 2012, a 1% increase in our borrowing rate would increase annual interest expense in fiscal 2013 by less than $1,300.

ITEM 4.        CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of our management, including our Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the CEO and CFO concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. For this purpose, disclosure controls and procedures include controls and procedures designed to ensure that information that is required to be disclosed under the Exchange Act is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
There was no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


18

Table of Contents

PART II.  OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(c) Issuer Purchases of Equity Securities
The following shares of the Company were repurchased during the quarter ended September 30, 2012:
 
Total Number of Shares Purchased
 
Average Price of Share
 
Total Number of Shares Purchased as Part of Publicly Announced Plans
 
Maximum Number of Shares that May Yet Be Purchased Under the Plans (1)
July 1 - July 31, 2012

 
$

 

 
4,538,552

August 1 - August 31, 2012

 

 

 
4,538,552

September 1 - September 30, 2012
128,197

 
37.26

 
128,197

 
4,410,355

Total
128,197

 
37.26

 
128,197

 
4,410,355

(1) Purchases made under the stock repurchase authorization approved by the Company's Board of Directors on October 4, 2002 with respect to 3.0 million shares, increased by 2.0 million shares on April 29, 2005, by 5.0 million shares on August 28, 2006, by 5.0 million shares on February 4, 2008, and by 5.0 million shares on August 25, 2008. These authorizations have no specific dollar or share price targets and no expiration dates.

ITEM 6. EXHIBITS
    
31.1        Certification of the Chief Executive Officer dated November 7, 2012.

31.2        Certification of the Chief Financial Officer dated November 7, 2012.

32.1        Written Statement of the Chief Executive Officer dated November 7, 2012.

32.2        Written Statement of the Chief Financial Officer dated November 7, 2012.

101.INS*    XBRL Instance Document

101.SCH*    XBRL Taxonomy Extension Schema Document

101.CAL*    XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*    XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*    XBRL Taxonomy Extension Label Linkbase Document

101.PRE*    XBRL Taxonomy Extension Presentation Linkbase Document

* Furnished with this quarterly report on Form 10-Q are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at September 30, 2012 and June 30, 2012, (ii) the Condensed Consolidated Statements of Income for the three-month periods ended September 30, 2012 and 2011, (iii) the Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2012 and 2011, and (iv) Notes to Condensed Consolidated Financial Statements.

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Table of Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
 
JACK HENRY & ASSOCIATES, INC.
 
 
 
 
Date:
November 7, 2012
 
/s/ John F. Prim
 
 
 
John F. Prim
 
 
 
Chief Executive Officer and Chairman
 
 
 
 
Date:
November 7, 2012
 
/s/ Kevin D. Williams
 
 
 
Kevin D. Williams
 
 
 
Chief Financial Officer and Treasurer


20
JKHY-2012.9.30-ex31.1


EXHIBIT 31.1
CERTIFICATION
I, John F. Prim, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Jack Henry & Associates, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter, (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the  registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information ; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
Date: November 7, 2012
 
 
/s/ John F. Prim
 
 
John F. Prim
 
 
Chief Executive Officer
 
 
 
 
 
 



JKHY-2012.9.30-ex31.2


EXHIBIT 31.2
CERTIFICATION
I, Kevin D. Williams, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Jack Henry & Associates, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter, (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the  registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information ; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
Date: November 7, 2012
 
 
/s/ Kevin D. Williams
 
 
Kevin D. Williams
 
 
Chief Financial Officer
 
 
 
 
 
 



JKHY-2012.9.30-ex32.1


EXHIBIT 32.1

Written Statement of the Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350

Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Chief Executive Officer of Jack Henry & Associates, Inc. (the "Company"), hereby certify that the Quarterly Report on Form 10-Q of the Company for the three-month period ended September 30, 2012 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated:  November 7, 2012
 
 
*/s/ John F. Prim
 
 
John F. Prim
 
 
Chief Executive Officer
 
 
 
 
 
 



*A signed original of this written statement required by Section 906 has been provided to Jack Henry & Associates, Inc. and will be retained by Jack Henry & Associates, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.


JKHY-2012.9.30-ex32.2


EXHIBIT 32.2

Written Statement of the Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350

Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Chief Financial Officer of Jack Henry & Associates, Inc. (the "Company"), hereby certify that the Quarterly Report on Form 10-Q of the Company for the three month period ended September 30, 2012 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated:  November 7, 2012
 
 
*/s/ Kevin D. Williams
 
 
Kevin D. Williams
 
 
Chief Financial Officer
 
 
 
 
 
 



*A signed original of this written statement required by Section 906 has been provided to Jack Henry & Associates, Inc. and will be retained by Jack Henry & Associates, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.