-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DHzoqMvJLA8w3WEXs/oouXz3HuzCDLyGs0nzf8qyzKCWSwqjFFaYT3b3AORJqQbS KGc0PB1lnT0hMF1G5CnH5A== 0000779152-96-000011.txt : 19961118 0000779152-96-000011.hdr.sgml : 19961118 ACCESSION NUMBER: 0000779152-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HENRY JACK & ASSOCIATES INC CENTRAL INDEX KEY: 0000779152 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 431128385 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11547 FILM NUMBER: 96662546 BUSINESS ADDRESS: STREET 1: 663 HWY 60 STREET 2: P O BOX 807 CITY: MONETT STATE: MO ZIP: 65708 BUSINESS PHONE: 4172356652 MAIL ADDRESS: STREET 1: PO BOX 807 STREET 2: 663 HWY 60 CITY: MONETT STATE: MO ZIP: 65708-0807 10-Q 1 QUARTERLY REPORT FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURI- TIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 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 principal 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 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. Class Outstanding at October 31, 1996 Common Stock, $.01 par value 11,946,032 JACK HENRY & ASSOCIATES, INC. CONTENTS Page No. PART I. FINANCIAL INFORMATION Item I - Financial Statements Condensed Consolidated Balance Sheets - September 30, 1996, (Unaudited) and June 30, 1996 3 Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 1996 and 1995 (Unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 1996 and 1995 (Unaudited) 6 Notes to the Condensed Consolidated Financial Statements 7 Item 2 - Management's Discussion and Analysis of Results of Operations and Financial Condition 8 Part II. OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders 10 Item 5 - Other Information 11 Item 6 - Exhibits and Reports on Form 8-K 11 Part I. Financial Information Item 1. Financial Statements JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars, Except Share Data) September 30, 1996 June 30, (Unaudited) 1996 ASSETS Current assets: Cash $10,662 $ 4,952 Held-to-maturity securities 3,082 3,128 Receivables 8,429 15,990 Income taxes receivable - 889 Prepaid expenses and other 3,248 3,187 Total current assets $25,421 $28,146 Property and equipment, net 16,705 13,612 Other assets: Intangible assets, net of amortization $16,694 $16,805 Computer software 1,348 1,375 Investments and other 618 463 Total other assets $18,660 $18,643 Total assets $60,786 $60,401 September 30, 1996 June 30, (Unaudited) 1996 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,586 $ 2,238 Accrued expenses 1,716 2,945 Income taxes 1,807 - Deferred revenue 13,694 16,068 Total current liabilities $18,803 $21,251 Deferred income taxes 1,732 1,732 Total liabilities $20,535 $22,983 Stockholders' equity: Preferred stock - $1.00 par value; 500,000 shares authorized; none issued - - Common stock - $0.01 par value; 30,000,000 shares authorized; 11,937,702 issued @ 9/30/96 11,867,593 issued @ 6/30/96 $ 119 $ 119 Additional paid-in capital 12,576 10,711 Retained earnings 27,556 26,588 Total stockholders' equity $40,251 $37,418 Total liabilities and stockholders' equity $60,786 $60,401 The accompanying notes are an integral part of these consolidated financial statements. JACK HENRY & ASSOCIATES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data) (Unaudited) Quarter Ended September 30, 1996 1995 Revenues: Software licensing & installation $ 5,833 $ 4,842 Maintenance/support & service 6,277 5,451 Hardware sales & commissions 6,240 5,857 Total revenues $18,350 $16,150 Cost of sales: Cost of hardware 4,318 4,007 Cost of services 4,025 3,904 Total cost of sales $ 8,343 $ 7,911 Gross profit $10,007 $ 8,239 55% 51% Operating expenses: Selling and marketing 2,202 1,832 Research and development 523 454 General and administrative 1,381 1,218 Total operating expenses $ 4,106 $ 3,504 Operating income 5,901 4,735 Other income (expense): Interest income 177 163 Other, net 74 76 Total other income $ 251 $ 239 Income before income taxes $ 6,152 $ 4,974 Provision for income taxes 2,349 1,879 Net income $ 3,803 $ 3,095 Net income per share $ .30 $ .25 Weighted Average Shares Outstanding 12,693 12,342
The accompanying notes are an integral part of these consolidated financial statements. JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (In Thousands of Dollars) Three Months Ended September 30, 1996 1995 Cash flows - operating activities: Cash received from customers $24,315 $24,093 Cash paid to suppliers and employees (13,508) (14,856) Interest and dividends received, net 222 191 Income taxes paid, net (343) (105) Other, net 26 69 Net cash flow provided by operating activities $10,712 $ 9,392 Cash flows from discontinued operations (107) - Cash flows from investing activities: Proceeds on sale of property & equipment $ 7 $ 2 Capital expenditures (3,524) (1,978) Short-term investment activity, net - 1,023 Capitalized software development (41) (101) Acquisition costs, net (314) (5,514) Net cash used in investing activities $(3,872) $(6,568) Cash flows from financing activities: Proceeds from issuance of common stock upon exercise of stock options $ 276 $ 229 Dividends paid (835) (673) Payment of long-term debt (129) - Purchase of Treasury Stock (335) (791) Net cash used in financing activities $(1,023) $ (1,235) Net increase (decrease) in cash $ 5,710 $ 1,589 Cash at beginning of period 4,952 3,423 Cash at end of period $10,662 $ 5,012 The accompanying notes are an integral part of these consolidated financial statements. JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Summary of Significant Accounting Policies Description of the Company - Jack Henry & Associates, Inc. ("JHA" or the "Company") is a computer software company which has developed several banking software systems. It markets those systems to financial institutions in the United States along with the computer equipment (hardware) and provides the conversion and software customization services necessary for a financial institution to install a JHA software system. It also provides continuing support and maintenance services to customers using the system. The Company also processes ATM transactions for financial institutions in the U.S. All of these related activities are considered a single business segment. Consolidation - The consolidated financial statements include the accounts of JHA and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidation. Other Significant Accounting Policies - The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its Annual Report on Form 10-K ("Form 10-K") for the fiscal year ended June 30, 1996. 2. Interim Financial Statements The accompanying condensed financial statements have been prepared in accor- dance with the instructions to Form 10-Q of the Securities and Exchange Commis- sion and in accordance with generally accepted accounting principles applicable to interim financial statements, and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes of the Company for the year ended June 30, 1996, which are included in its Form 10-K. In the opinion of management of the Company, the accompanying condensed financial statements reflect all adjustments necessary (consisting solely of normal recurring adjustments) to present fairly the financial position of the Company as of September 30, 1996 and the results of its operations and its cash flows for the three month period then ended. The results of operations for the period ended September 30, 1996 are not necessarily indicative of the results to be expected for the entire year. 3. Additional Interim Footnote Information The following additional information is provided to update the notes to the Company's annual financial statements for developments during the three months ended September 30, 1996: Effective September 1, 1996, the Company purchased all the outstanding stock of Liberty Banking Services, Inc. (LBSI). LBSI's primary offering is service bureau processing for financial institutions in the Rocky Mountain region. The total consideration paid to LBSI's stockholders was $2,000,000 in Company stock. The stock transaction was accounted for as a pooling of interests. 4. Income Per Share Information Earnings per common share are computed by dividing income by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding for the three month period ended September 30, 1996 and 1995. Item 2. - Management's Discussion and Analysis of Results of Operations and Financial Condition RESULTS OF OPERATIONS Background and Overview Jack Henry & Associates, Inc. ("JHA" or the "Company"), is a leading provider of integrated computer systems that perform data processing for banks and related financial institutions. These systems are available for in-house or outsourced applications. The Company was founded in 1976. Its proprietary applications software, which operates on IBM computers, is offered under two systems: CIF 20/20(TM), typically for banks with less than $300 million in assets, and the Silverlake System(R), for banks with assets up to $10 billion. JHA frequently sells hardware with its software products. It also provides customer support and related services. The Company's software systems have been installed at over 1260 banks and financial institutions worldwide. A detailed discussion of the major components of the results of operations for the quarter ended September 30, 1996, as compared to the same period in the previous year follows. Revenues Revenues increased 14% to $18,350,000 in the quarter ended September 30, 1996. Software licensing and installation increased 20%. Maintenance, support and service revenues increased 15%. Hardware sales were up 7% from last year's quarter. The Company's non-hardware products and services (higher margin sales) increased 18% over last year. The backlog of sales at September 30, 1996 was $16,547,000. This is down from the record June 30, 1996 level, and is consistent with management's expectations for the first quarter. Backlog at October 31, 1996 was $16,744,000. Cost of Sales The 5% increase in cost of sales for the first quarter of FY '97 is relatively consistent with the increase in revenues. A large portion of the increase results from the increase in hardware revenues and the related increase in cost of hardware sales. Cost of services increased significantly due to growth in the Company's core business. Gross Profit Gross profit increased to $10,007,000 in the first quarter ended September 30, 1996, a 21% increase over last year. The gross margin percentage was 55% of sales compared to 51% last year. Operating Expenses Total operating expenses increased 17%. This is a favorable picture, since gross profit increased 21%. Thus, the Company continues to gain efficiencies through growth. Selling expenses increased 20% while research & development and general & administrative expenses increased 15% and 13%, respectively. Other Income and Expense Other income for the quarter ended September 30, 1996 reflects a small increase when compared to the same period last year. Net Income Net income from continuing operations for the first quarter was $3,803,000, or $.30 earnings per share compared to $3,095,000, or $.25 earnings per share in the same period last year. FINANCIAL CONDITION Liquidity The Company's cash and held-to-maturity securities increased to $13,744,000 at September 30, 1996, from $8,080,000 at June 30, 1996. JHA has available credit lines totaling $2,215,000, although the Company expects their use to be minimal during FY '97. The Company currently has no short-term or long-term debt obligations. Capital Requirements and Resources JHA generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling $3,524,000 for the quarter ended September 30, 1996, were made for additional equipment. These were funded from cash generated by operations. The consolidated capital expenditures of JHA could exceed $4,500,000 for FY '97. The Company paid a $.07 per share cash dividend on September 24, 1996 to stockholders of record September 9, 1996 which was funded from working capital. In addition, the Company's Board of Directors, subsequent to September 30, 1996, declared a quarterly cash dividend of $.07 per share on its common stock payable December 10, 1996 to stockholders of record on November 19, 1996. This will be funded out of working capital. CONCLUSION JHA's results of operations and its financial position continued to be quite favorable during the quarter ended September 30, 1996. This reflects the continuing attitude of cooperation and commitment by each employee, management's ongoing cost control efforts and commitment to deliver top quality products and services to the markets served. Silverlake System(R) is a registered trademark of Jack Henry & Associates, Inc. CIF 20/20(TM) is a trademark of Jack Henry & Associates, Inc. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. The Annual Meeting of the Stockholders of Jack Henry & Associates, Inc. was held on October 29, 1996, for the purpose of electing a board of directors, to approve the adoption of the 1996 Stock Option Plan, to amend the Certificate of Incorporation to require two-thirds stockholder vote for stockholder amendment of By-Laws, to amend the Certificate of Incorporation to prohibit stockholder action by written consent and to amend the Certificate of Incorporation regard- ing consideration of relevant factors in certain business combinations. Proxies for the meeting were solicited pursuant to Section 14(a) of the Securities and Exchange Act of 1934 and there was no solicitation in opposition to management's solicitations. Management's nominees for director, all incumbents, were elected with the number of votes for and withheld as indicated below: For Withheld John W. Henry 10,286,767 283,833 Jerry D. Hall 10,286,767 283,833 Michael E. Henry 10,286,767 283,833 James J. Ellis 10,285,067 285,533 Burton O. George 10,286,717 283,883 George R. Curry 10,284,917 285,683 Michael R. Wallace 10,286,767 283,833 Also approved was the adoption of the 1996 Stock Option Plan with the number of votes as indicated below: For Against Withheld Broker Non-Votes 6,076,401 2,177,685 50,880 2,265,634 Also approved was to amend the Certificate of Incorporation to require two- thirds stockholder vote for stockholder amendment of By-Laws with the number of votes as indicated below: For Against Withheld Broker Non-Votes 7,200,120 1,063,116 41,730 2,265,634 Also approved was to amend the Certificate of Incorporation to prohibit stock- holder action by written consent with the number of votes as indicated below: For Against Withheld Broker Non-Votes 6,206,673 2,082,110 54,410 2,227,407 Also approved was to amend the Certificate of Incorporation regarding consider- ation of relevant factors in certain business combinations with the number of votes as indicated below: For Against Withheld Broker Non-Votes 6,214,456 2,073,632 112,735 2,169,777 SIGNATURES Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K None. 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 behalf of the undersigned thereunto duly authorized. JACK HENRY & ASSOCIATES, INC. Date: November 13, 1996 /s/ Michael E. Henry Michael E. Henry Chairman of the Board Chief Executive Officer Date: November 13, 1996 /s/ Terry W. Thompson Terry W. Thompson Vice President and Chief Financial Officer EX-27 2
5 3-MOS JUN-30-1997 SEP-30-1996 10662 3082 8429 0 0 25421 23204 6499 60786 18803 0 119 0 0 40132 60786 18350 18350 8343 4106 (251) 0 0 6152 2349 3803 0 0 0 3803 .30 .30
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