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): April 16, 2003
JACK HENRY & ASSOCIATES, INC.
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(Exact name of Registrant as specified in its Charter)
Delaware 0-14112 43-1128385
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
663 Highway 60, P.O. Box 807, Monett, MO 65708
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(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code: (417) 235-6652
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated April 16, 2003.
Item 12. Results of Operations and Financial Condition.
On April 16, 2003, Jack Henry & Associates, Inc. issued a press release
announcing fiscal 2003 third quarter results, the text of which is attached
hereto as Exhibit 99.1.
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.
Date: April 16, 2003
JACK HENRY & ASSOCIATES, INC.
(Registrant)
By: /s/ Kevin D. Williams
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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: Becky Pendleton Reid
The Cereghino Group
(206) 762-0993
FOR IMMEDIATE RELEASE
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JACK HENRY & ASSOCIATES REPORTS FISCAL 2003 THIRD QUARTER RESULTS
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Monett, MO, April 16, 2003 -- Jack Henry & Associates, Inc. (Nasdaq: JKHY),
a leading provider of integrated technology solutions for financial
institutions, today reported solid fiscal third quarter profitability
and backlog. This has occurred in spite of the weakness in capital goods
spending that has continued to hamper sales of new core processing systems
while enhancing sales of outsourcing solutions. For its third fiscal
quarter, revenues were down 1% to $98.9 million, and net income was down
9% to $12.3 million, or $0.14 per share. Year-to-date, revenues are up 2%
to $295.4 million and net income is down 14% to $35.3 million or $0.40 per
share.
"Spending on technology continues to show the effects of the overall
decrease in the capital goods market as bankers have not yet returned to
the traditional spending on technology upgrades and systems," said Michael
E. Henry, Chairman and CEO. "Outsourcing continues to be a strong seller
as well as credit union systems and add on complementary solutions. Our
backlog has increased significantly this quarter for both in-house and
outsourcing, but it is still too early to determine if this is an actual
turn in the market. Until we are sure, we will continue to do the right
things for our company, customers and stockholders."
"We continue to have significant success in building the outsourcing part
of our business. As previously discussed we are continuing to focus on
expanding our geographic footprint for item capture sites, to help drive
data processing sales, through acquisition or development of new sites,"
said Jack Prim, President. "Therefore we are announcing that we have
committed to establish two new additional sites. One of these will be
located in New Jersey and the other in Connecticut. These additional sites
will bring our total number of item capture sites to seventeen by the end
of the calendar year."
Operating Results
To improve reporting disclosure, the company has changed its reporting line
items, with installation revenue moving from license revenue to support and
service revenue and a new line item for license cost of sales. This will
allow our investors to analyze the various gross margins based on the
applicable type of revenue.
Third quarter revenues were down slightly at $98.9 million compared to
$99.8 million in the third quarter a year ago. Year-to-date revenues
were up slightly at $295.4 million compared to $290.6 million in the
first nine months of fiscal 2002.
License revenue dropped to $10.4 million in the third quarter of fiscal
2003, off 41% from $17.7 million in 3Q02. Year-to-date license decreased to
$36.3 million down 25% from $48.4 million in the first nine months of fiscal
2002. Support and service revenue grew to $59.2 million up 18% from $50.1
million in the third quarter a year ago. Year-to-date support and service
revenue increased 15% to $170.3 million from $147.9 million in the first
nine months of fiscal 2002. Reflecting the reduced sales of new in-house
core systems, hardware sales were down 13% in 3Q03 to $21.7 million compared
to $24.8 million in the third quarter a year ago. Year-to-date hardware
sales were down 9% to $67.4 million from $73.9 million in the like period
a year ago.
Support and service revenue continues to be strong, posting 18% year-over-
year growth in the third quarter and 15% growth year to date. Recurring
revenue, which excludes installation revenue, accounted for 52% of total
third quarter revenues and 51% of revenues for the first nine months of
fiscal 2003.
Cost of sales increased 1% during the quarter and 7% year-to-date, primarily
due to increased headcount included in cost of services. Third quarter
gross profit was 39% this fiscal year compared to 40% in the third quarter
a year ago. Year-to-date gross profit was 37% compared to 41% in the
first nine months of fiscal 2002. Support and service margins continue to
strengthen to 38% up from 32% for the same quarter a year ago. Year-to-date
support and service margin increased to 35% this year-to-date from 32% for
the nine months ended March 2002. Hardware gross margin for the third
quarter was at 28% compared to 31% for the same quarter last year. Year to
date hardware margins decreased from 32% in prior year to 26% in the current
year. The decrease is primarily attributable to sales mix of products and
reduced vendor incentives.
Operating expenses declined slightly during the quarter and year-to-date
reflecting management's continued efforts to control expenses. Operating
income decreased 8% in the quarter to $19.3 million compared to $20.9
million in the third quarter a year ago. Year-to-date operating income
totaled $55.1 million, down 12% from $62.8 million in the first nine months
of fiscal 2002.
Third quarter pre-tax income totaled $19.4 million, down 8% from $21.2
million in the third quarter a year ago. Pre-tax income for the first nine
months of fiscal 2003 totaled $55.6 million, down 14% from $64.4 million
a year ago. Third quarter net income totaled $12.3 million, or $0.14 per
share, compared to $13.6 million or $0.15 per share in the same quarter of
fiscal 2002. Year-to-date net income was $35.3 million, or $0.40 per share,
compared to $41.2 million, or $0.45 per share, in the first nine months of
fiscal 2002.
"As we explained last quarter, we've shifted our annual maintenance billing
cycles for customers we gained through acquisitions to our fiscal year end
from a calendar year. As a result, comparisons of deferred revenue are not
particularly meaningful," said Kevin D. Williams, CFO. Deferred revenue
was $66.2 million at March 31, 2003, from $77.6 million a year ago.
"Backlog continued to strengthen in the quarter with new in-house sales,
continued success in contracting complementary products and outsourcing
services to both banks and credit unions," Williams noted. Backlog grew
27% during the quarter to $172.8 million ($64.2 million in-house and $108.5
million outsourcing) compared to $136.5 million ($54.0 million in-house and
$82.5 million outsourcing) at March 31, 2002. "We continue to make progress
on the integration of ARGO's CRM and Platform technology with our integrated
core solution and expect to begin installing backlog orders for this
product in the summer. As we noted last quarter, when these revenues are
recognized, they will carry somewhat lower gross profit margins than our
other software products due to the alliance agreement with ARGO."
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 3,000 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 today at 7:45 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 Nine Months Ended
March 31, March 31, % March 31, March 31, %
2003 2002 Change 2003 2002 Change
-------- ------------------ -------- ------------------
REVENUE
License $ 10,446 $ 17,657 -41% $ 36,322 $ 48,445 -25%
Support and service 59,168 50,070 18% 170,348 147,920 15%
Hardware sales 21,665 24,825 -13% 67,398 73,864 -9%
Customer reimbursements 7,619 7,232 5% 21,371 20,349 5%
-------- -------- -------- --------
Total 98,898 99,784 -1% 295,439 290,578 2%
COST OF SALES
Cost of license 829 1,070 -23% 2,595 1,458 78%
Cost of services 36,486 34,147 7% 111,503 100,126 11%
Cost of hardware 15,561 17,243 -10% 49,588 50,493 -2%
Customer reimbursement expenses 7,619 7,232 5% 21,371 20,349 5%
-------- -------- -------- --------
Total 60,495 59,692 1% 185,057 172,426 7%
-------- -------- -------- --------
GROSS PROFIT 38,403 40,092 - 4% 110,382 118,152 -7%
39% 40% 37% 41%
OPERATING EXPENSES
Selling and marketing 7,603 7,766 -2% 22,463 21,310 5%
Research and development 4,052 2,952 37% 11,565 9,405 23%
General and administrative 7,457 8,502 -12% 21,205 24,664 -14%
-------- -------- -------- --------
Total Operating Expenses 19,112 19,220 -1% 55,233 55,379 0%
-------- -------- -------- --------
OPERATING INCOME 19,291 20,872 -8% 55,149 62,773 -12%
INTEREST INCOME (EXPENSE)
Interest Income 134 365 -63% 512 1,755 -71%
Interest Expense (29) (53) -45% (84) (141) -40%
-------- -------- -------- --------
Total 105 312 -66% 428 1,614 -73%
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 19,396 21,184 -8% 55,577 64,387 -14%
PROVISION FOR INCOME TAXES 7,080 7,626 -7% 20,286 23,179 -12%
-------- -------- -------- --------
NET INCOME $ 12,316 $ 13,558 -9% $ 35,291 $ 41,208 -14%
======== ======== ======== ========
Diluted income per share $ 0.14 $ 0.15 -6% $ 0.40 $ 0.45 -11%
======== ======== ======== ========
Diluted weighted average
shares outstanding 88,940 92,483 89,110 92,485
======== ======== ======== ========
Consolidated Balance Sheet March 31, March 31, %
Highlights (in Thousands) 2003 2002 Change
-------- -------- --------
Cash, cash equivalents & investments $ 34,300 $ 48,806 -30%
Trade receivables $ 62,761 $ 76,947 -18%
Other current assets $ 30,650 $ 31,833 -4%
TOTAL ASSETS $ 455,805 $ 458,837 -1%
Accounts payable & accrued expenses $ 17,647 $ 17,426 1%
Deferred revenue $ 66,177 $ 77,545 -15%
STOCKHOLDERS' EQUITY $ 351,181 $ 349,160 1%
(thirty)
Note: Transmitted on PR Newswire on April 16, 2003, at 4:00 a.m. CDT.