-----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, NXVTIOjLMErqIr85J7jx15IhJE2DM6QVpq7qKffQoILoerJFsNg6b7RKtQtLLgAG fDbiicqyMi4CakykvU+2Mg== 0000926236-05-000091.txt : 20050803 0000926236-05-000091.hdr.sgml : 20050803 20050802192529 ACCESSION NUMBER: 0000926236-05-000091 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050802 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050803 DATE AS OF CHANGE: 20050802 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14112 FILM NUMBER: 05993481 BUSINESS ADDRESS: STREET 1: PO BOX 807 STREET 2: 663 HWY 60 CITY: MONETT STATE: MO ZIP: 65708-0807 BUSINESS PHONE: 4172356652 MAIL ADDRESS: STREET 1: PO BOX 807 STREET 2: 663 HWY 60 CITY: MONETT STATE: MO ZIP: 65708-0807 8-K 1 jha05q4-8k.txt CURRENT REPORT 2005 FOURTH QUARTER AND YEAR END RESULTS 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): August 2, 2005 JACK HENRY & ASSOCIATES, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its Charter) Delaware 0-14112 43-1128385 ---------------------------- ------------------------ ------------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 663 Highway 60, P.O. Box 807, Monett, MO 65708 --------------------------------------------------- (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (417) 235-6652 (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a.-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On August 2, 2005, Jack Henry & Associates, Inc. issued a press release announcing 2005 fourth quarter and year end results, the text of which is attached hereto as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits. (c) Exhibits 99.1 Press release dated August 2, 2005. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. JACK HENRY & ASSOCIATES, INC. (Registrant) Date: August 2, 2005 By: /s/ Kevin D. Williams ------------------------- Kevin D. Williams Chief Financial Officer EX-99.1 2 exh99-1.txt PRESS RELEASE DATED AUGUST 2, 2005 Exhibit 99.1 Company: Jack Henry & Associates, Inc. Analyst Contact: Kevin D. Williams 663 Highway 60, P.O. Box 807 Chief Financial Officer Monett, MO 65708 (417) 235-6652 IR Contact: Jon Seegert Director Investor Relations (417) 235-6652 FOR IMMEDIATE RELEASE --------------------- JACK HENRY & ASSOCIATES FISCAL YEAR 2005 RESULTS IN 21% NET INCOME GROWTH ------------------------------------------------------------------------- Monett, MO. August 2, 2005 - Jack Henry & Associates, Inc. (Nasdaq: JKHY), a leading provider of integrated technology solutions that perform data processing for financial institutions, today reported fiscal 2005 year end results with a 15% growth in revenue, an 18% increase in gross profit, and a 21% increase in net income compared to fiscal 2004. For the quarter ended June 30, 2005, the company generated total revenue of $141.4 million compared to $126.0 million in the same quarter a year ago. Gross profit increased to $59.9 million compared to $53.3 million in the final quarter of last fiscal year. Net income totaled $21.7 million, or $0.23 per diluted share, compared to $17.6 million, or $0.19 per diluted share in the fourth quarter a year ago. Fiscal year 2005 total revenue increased to $535.9 million compared to $467.4 million in total revenue for fiscal year 2004. Gross profit grew $34.5 million to $222.5 million in fiscal 2005 compared to $188.0 million in fiscal 2004. Net income for the year increased 21% to $75.5 million or $0.81 per diluted share, compared to $62.3 million, or $0.68 per diluted share in fiscal 2004. "We are very pleased with the fiscal year just ended. In addition to having an extremely solid year for contracting new core bank and credit union clients, we continued doing a stellar job cross selling our complementary products and services to our existing core clients," said Jack F. Prim, CEO. "The companies we acquired during the year that support our focused diversification strategy also generated new market opportunities. The best- of-breed solutions these companies provide can be sold to our existing clients, to financial services organizations outside our core customer base, and selectively sold outside the financial services industry. These companies and the products and services that they provide continue to gain momentum in terms of licensing and implementation backlog." Operating Results License revenue decreased 10% to $19.7 million, or 14% of fourth quarter total revenue, compared to $21.9 million, or 17% of fourth quarter total revenue a year ago. This change is primarily due to a decrease in the license revenue in the credit union segment compared to the prior year fourth quarter which was a record quarter for that segment. This decrease was offset somewhat by an increase in the bank segment license revenue. Support and service revenue increased 20% to $100.2 million, or 71% of total revenue in the fourth quarter of fiscal 2005, from $83.7 million, or 66% of total revenue for the same period a year ago. There was solid growth in every component in this line which includes installation, ATM/debit card processing, outsourcing and in-house support revenues due to new customers, additional implementations of complementary products and increased volumes. Hardware sales in the fourth quarter of fiscal 2005 increased 5% to $21.5 million from $20.4 million in the final quarter of fiscal 2004. For fiscal year 2005, license revenue grew by $19.8 million with an increase of 32% to $82.4 million, or 15% of total revenue, compared to $62.6 million, or 13% of total revenue a year ago. Increase in license revenues is from all of the core products related to new core customers and migrations and significant cross selling of many of our complementary products to both new and existing customers. Support and service revenue increased 17% and contributed 68% to total revenue, or $364.1 million for the current year compared to $311.3 million, or 67% of total revenue for fiscal year 2004. The fourth quarter described above mirrors the growth in each component within this line of revenue for the entire fiscal year. Hardware sales for fiscal 2005 decreased 4% to $89.4 million, which represented 17% of total revenue, compared to $93.5 million, or 20% of total revenue for fiscal 2004. "Our support and service revenue continues to show strong growth which for the fourth quarter had a 20% increase and a 17% increase for the fiscal year compared to the prior year periods as discussed above. Our recurring revenue, which consists of our ATM and debit card processing, in-house support and outsourcing revenue, represented 61% of total revenue for the quarter and 59% of total revenue for the 2005 fiscal year, while last fiscal year, it was 57% for both the fourth quarter and fiscal 2004" said Tony L. Wormington, President. "We believe that the increase in our recurring revenue is directly attributable to the quality of our products we provide and the commitment of our employees to service our customers." Cost of sales for the fourth quarter increased 12% from $72.7 million for the three months ended June 30, 2004 to $81.6 million for the three months ended June 30, 2005. This increase is primarily related to employee-related expenses and depreciation and amortization. Fourth quarter gross profit in fiscal 2005 increased 12% to $59.9 million compared to $53.3 million in fiscal 2004; both fourth quarters resulted in a 42% gross margin. Cost of sales for fiscal year 2005 increased 12%, to $313.4 million from $279.4 million for fiscal year 2004. Increase in cost of sales for the fiscal year is primarily related to employee-related expenses and depreciation and amortization. Gross profit for the current fiscal year increased $34.5 million or 18% to $222.5 million producing a 42% gross margin, compared to $188.0 million with a 40% gross margin for fiscal year 2004. Gross margin on license revenue for the fourth quarter of fiscal 2005 increased to 94% compared to 89% a year ago for the same period due to the mix of products. Support and service gross margin remained at 34% for the fourth quarter of fiscal 2005 and fiscal 2004. Hardware gross margins increased to 31% in the current fourth quarter compared to 25% in the same quarter last year, primarily due to sales mix and vendor rebates received in the fourth quarter. Gross margin on license revenue for fiscal year 2005 improved to 93% compared to 92% in fiscal 2004 due to decreased license revenue delivered through reseller agreements in prior quarters of this year. Support and service gross margin remained at 33% for both fiscal years. Hardware gross margins increased slightly for the fiscal year to 29% compared to 28% for fiscal 2004, primarily due to the sales mix of hardware and vendor rebates. For the fourth quarter of 2005, the bank systems and services segment revenue increased 14% to $113.3 million, with a gross margin of 43% from $99.6 million in revenue with a gross margin of 41% in the final quarter in fiscal 2004. The credit union systems and services segment revenue increased 6% to $28.1 million with a gross margin of 41% for the fourth quarter of 2005 from revenue of $26.4 million and a gross margin of 47% in the same quarter a year ago. The credit union systems and services segment gross margin decreased predominantly due to a decrease in the amount of software delivered during the prior year fourth quarter compared to the fourth quarter of fiscal 2005. For the twelve months ended June 30, 2005, the bank systems and services segment revenue increased 12% to $428.7 million, with a gross margin of 42% from $382.1 million with a gross margin of 40% a year ago. The credit union systems and services segment revenue increased 26% to $107.2 million for fiscal year 2005, with a gross margin of 38% from $85.3 million with a gross margin of 39% for the fiscal year 2004. Operating expenses increased 8% to $26.0 million for the fourth quarter of fiscal 2005 compared to $24.1 million for the same quarter a year ago primarily due to increased employee-related expenses. Selling and marketing expenses rose 23% in the fourth quarter to $12.4 million, or 9% of total revenue, from $10.0 million, or 8% of total revenue a year ago. Research and development expenses increased 15% to $7.0 million or 5% of total revenue for the fourth quarter of fiscal 2005, from $6.1 million, also 5% of total revenue for the same quarter of fiscal 2004. General and administrative costs decreased 18% to $6.6 million, or 5% of revenue, in the fourth quarter of fiscal year 2005, from $8.0 million, or 6% of revenue for the same quarter a year ago primarily due to loss on assets disposed of in the prior year. Operating expenses increased 16% to $103.4 million for fiscal 2005 compared to $89.2 million for fiscal 2004 mainly due to increased employee-related expenses. Selling and marketing expenses rose 30% for the current year to $46.6 million, or 9% of total revenue, from $36.0 million, or 8% of total revenue. Research and development expenses increased 17% to $27.7 million from $23.7 million, while remaining at 5% of total revenue for both fiscal years. General and administrative costs decreased 2% to $29.1 million, or 5% of fiscal 2005 revenue compared to $29.5 million, or 6% of fiscal 2004 revenue. "We continue to leverage our resources which is indicated by our continued gross and operating margin improvement over the prior year," stated Kevin D. Williams, CFO. "We believe there is opportunity for continued improvement, especially in the areas of the acquired companies as they gain additional market share and expand their customer base, from our newly developed products and continued cross-selling of complementary offerings to our customers." Operating income grew 16% to $33.9 million, or 24% of fourth quarter total revenue, compared to $29.2 million, or 23% of total revenue in the fourth quarter of fiscal 2004. Fourth quarter net income totaled $21.7 million, or $0.23 per diluted share, compared to $17.6 million, or $0.19 per diluted share in the fourth quarter of fiscal 2004. Fiscal 2005 operating income increased 21% to $119.1 million, or 22% of total revenue, compared to $98.8 million, or 21% of total revenue in fiscal 2004. Provision for income taxes was decreased in the fourth quarter to adjust the annual rate to 37.0% from 37.5% for the fiscal year due to changes in the effective state tax provision. Year-to-date net income totaled $75.5 million, or $0.81 per diluted share, compared to $62.3 million, or $0.68 per diluted share in the prior year. Cash Flow, Balance Sheet and Backlog Review Cash, cash equivalents, and investments decreased to $12.6 million at June 30, 2005 from $54.8 million at June 30, 2004 primarily due to amounts paid for acquisitions during the year. Trade receivables increased $40.5 million to $210.4 million compared to a year ago primarily due to the increase in annual maintenance billings for newly installed core customers and products compared to a year ago and normal growth in monthly billings due to increased customers and volume of transactions processed. Deferred revenue increased $26.4 million or 18% to $171.4 million at June 30, 2005 compared to $145.0 million at June 30, 2004. Stockholders' equity grew 17% to $517.2 million at June 30, 2005 from $442.9 million at June 30, 2004. Cash flow from operations decreased to $108.3 million for fiscal year 2005 from $112.8 million for fiscal year 2004. The decrease of $4.5 million in net cash from operating activities consists primarily of an increase in net income of $13.2 million, an increase in depreciation and amortization expense of $5.4 million, plus / (minus) changes in trade receivables of ($17.6) million, prepaid expenses of ($8.7) million, accounts payable and accrued expenses of $5.5 million, income taxes of ($7.6) million and deferred revenues of $6.7 million. Fiscal year 2005 net cash used in investing activities includes $119.5 million for acquisitions, capital expenditures of $58.0 million, which includes $12.9 million for an additional facility purchased on June 30, 2005, and capitalized software development of $7.8 million for a total of $185.1 million. In fiscal year 2004, net cash used in investing activities was $100.0 million and mainly consisted of $48.3 million for acquisitions, $49.1 million in capital expenditures and $4.4 million for capitalized software development. Net cash from financing activities totaled $34.6 million for fiscal 2005 and includes proceeds of $15.1 million from the exercise of stock options and sale of common stock, proceeds from a short term note of $45.0 million, offset by dividends paid of $15.5 million and the purchase of treasury stock of $10.0 million. On April 29, 2005, the Board of Directors authorized an increase to the existing stock repurchase plan to a total authorization of 5.0 million shares. For fiscal 2004, net cash from financing activities was $9.0 million and mainly consisted of the proceeds from the exercise of stock options and sale of common stock of $22.4 million, offset by dividends paid of $13.4 million. Backlog, which is a measure of future business and revenue, increased 4% at June 2005 from June 2004 and remained almost even from March 2005. Backlog at June 30, 2005 was $199.1 million ($64.0 million in-house and $135.1 million outsourcing). Backlog at June 30, 2004, was $191.3 million ($67.2 million in-house and $124.1 million outsourcing) and at March 31, 2005, was $198.2 million ($67.1 million in-house and $131.1 million outsourcing). About Jack Henry & Associates Jack Henry & Associates, Inc. provides integrated computer systems and processes ATM and debit card transactions for banks and credit unions. Jack Henry markets and supports its systems throughout the United States and has over 6,900 customers nationwide. For additional information on Jack Henry, visit the company's web site at www.jackhenry.com. The company will hold a conference call on August 3rd, 2005; at 7:45 a.m. Central Time and investors are invited to listen at www.jackhenry.com. Statements made in this news release that are not historical facts are forward-looking information. Actual results may differ materially from those projected in any forward-looking information. Specifically, there are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Additional information on these and other factors, which could affect the Company's financial results, are included in its Securities and Exchange Commission (SEC) filings on Form 10-K, and potential investors should review these statements. Finally, there may be other factors not mentioned above or included in the Company's SEC filings that may cause actual results to differ materially from any forward-looking information. Condensed Consolidated Statements of Income (In Thousands, Except Per Share Data -unaudited) Three Months Ended % Change Twelve Months Ended % Change ------------------ -------- ------------------- -------- June 30, June 30, 2005 2004 2005 2004 -------- -------- -------- -------- REVENUE License $ 19,732 $ 21,890 -10% $ 82,374 $ 62,593 32% Support and service 100,193 83,693 20% 364,076 311,287 17% Hardware 21,500 20,454 5% 89,413 93,535 -4% -------- -------- -------- -------- Total 141,425 126,037 12% 535,863 467,415 15% COST OF SALES Cost of license 1,119 2,442 -54% 5,547 4,738 17% Cost of support and service 65,685 54,912 20% 244,097 207,730 18% Cost of hardware 14,759 15,390 -4% 63,769 66,969 -5% -------- -------- -------- -------- Total 81,563 72,744 12% 313,413 279,437 12% -------- -------- -------- -------- GROSS PROFIT 59,862 53,293 12% 222,450 187,978 18% Gross Profit Margin 42% 42% 42% 40% OPERATING EXPENSES Selling and marketing 12,380 10,027 23% 46,630 35,964 30% Research and development 7,043 6,099 15% 27,664 23,674 17% General and administrative 6,580 8,014 -18% 29,087 29,534 -2% -------- -------- -------- -------- Total 26,003 24,140 8% 103,381 89,172 16% -------- -------- -------- -------- OPERATING INCOME 33,859 29,153 16% 119,069 98,806 21% INTEREST INCOME (EXPENSE) Interest income 173 190 -9% 1,162 1,006 16% Interest expense (261) (26) >100% (388) (107) >100% -------- -------- -------- -------- Total (88) 164 >100% 774 899 -14% -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 33,771 29,317 15% 119,843 99,705 20% PROVISION FOR INCOME TAXES 12,065 11,698 3% 44,342 37,390 19% -------- -------- -------- -------- NET INCOME $ 21,706 $ 17,619 23% $ 75,501 $ 62,315 21% ======== ======== ======== ======== Diluted net income per share $ 0.23 $ 0.19 $ 0.81 $ 0.68 ======== ======== ======== ======== Diluted weighted avg shares outstanding 93,127 92,291 92,998 91,859 ======== ======== ======== ======== Consolidated Balance Sheet Highlights (In Thousands-unaudited) June 30, % Change ---------------------- -------- 2005 2004 -------- -------- Cash, cash equivalents and investments $ 12,601 $ 54,756 -77% Trade receivables 210,421 169,873 24% TOTAL ASSETS 810,692 653,614 24% Accounts payable and accrued expenses $ 44,328 $ 36,938 20% Deferred revenue 171,435 144,996 18% Note payable 45,000 - 0% STOCKHOLDERS' EQUITY 517,154 442,918 17%
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