8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20459

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

April 29, 2004 (April 28, 2004)
Date of Report (Date of earliest event reported)

TYLER TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-10485	75-2303920
(State or other	(Commission	(I.R.S. Employer
jurisdiction of	File Number)	Identification No.)
incorporation or
organization)

5949 Sherry Lane, Suite 1400
Dallas, Texas 75225

(Address of principal executive offices)

(972) 713-3700

(Registrant’s telephone number, including area code)

TABLE OF CONTENTS

	Item 5. Other Events.
	Item 7. Financial Statements and Exhibits.
SIGNATURES
News Release

Item 5. Other Events.

On April 28, 2004, Tyler Technologies, Inc. issued an earnings news release announcing results of operations and financial condition as of and for the three months ended March 31, 2004, attached hereto as Exhibit 99.1, which news release is incorporated by reference herein.

Item 7. Financial Statements and Exhibits.

(c) Exhibits

99.1 News Release issued by Tyler Technologies, Inc. dated April 28, 2004.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TYLER TECHNOLOGIES, INC.
Date: April 29, 2004	By:	/s/ Theodore L. Bathurst
		Theodore L. Bathurst
		Vice President and Chief Financial Officer (principal financial officer)

EX-99.1

Exhibit 99.1

Contact: Brian K. Miller
Vice President — Finance
Tyler Technologies, Inc.
(972) 713-3720
bmiller@tylerworks.com

FOR IMMEDIATE RELEASE

TYLER TECHNOLOGIES REPORTS 92% INCREASE IN
OPERATING INCOME FOR FIRST QUARTER 2004

Quarterly Revenues Rose 28%

Dallas, April 28, 2004 — Tyler Technologies, Inc. (NYSE: TYL) today reported that operating income for the quarter ended March 31, 2004 increased 92% from the same quarter of 2003, as revenues grew 28%.

Total revenues for the quarter ended March 31, 2004 rose to $41.5 million from $32.3 million in the same period last year. Software-related revenues (software licenses, software services and maintenance) grew in the aggregate 33% for the quarter, while appraisal services revenues increased 18%.

Tyler’s results include the operations of Eden Systems, Inc. since its acquisition by Tyler in December 2003. Pro forma revenues, as if the acquisition of Eden had occurred as of the beginning of 2003, increased 19% in the first quarter of 2004.

Operating income for the quarter ended March 31, 2004 was $3.4 million, compared with operating income of $1.8 million in the same quarter of 2003.

Net income for the three months ended March 31, 2004 was $2.1 million, or $0.05 per diluted share. Net income for the three months ended March 31, 2003 amounted to $17.3 million, or $0.36 per diluted share. Excluding an after-tax realized gain of $16.2 million, or $0.34 per share, in connection with the cash sale of Tyler’s entire investment in H.T.E., Inc (HTE), net income in the quarter ended March 31, 2003 would have been $1.1 million, or $0.02 per share.

EBITDA, or earnings before interest, income taxes, depreciation and amortization, totaled $6.3 million, or $0.14 per share, in the first quarter of 2004. Excluding the realized gain on the HTE investment in the first quarter of 2003, EBITDA in the first quarter of 2004 would have increased 61% over EBITDA of $3.9 million, or $0.08 per share, in the first quarter of 2003. EBITDA for the first quarter of 2003, including the HTE gain of $23.2 million, totaled $27.1 million, or $0.57 per share.

Free cash flow for the first quarter of 2004 was $3.8 million (cash provided by operating activities of $5.6 million minus capital expenditures of $1.8 million.) For the first quarter of 2003, free cash flow was negative $2.0 million (cash provided by operating activities of $105,000 minus capital expenditures of $2.1 million.) Tyler has no debt and ended the first quarter of 2004 with $31.8 million in cash, short-term investments, and certificates of deposit.

“This was, by a wide margin, Tyler’s best first quarter in terms of revenues and operating income since entering the technology sector,” said John M. Yeaman, Tyler’s President and Chief Executive Officer. “Our top-line growth was solid, with organic growth of approximately 19%. In addition, the Eden Systems acquisition contributed growth of approximately 9%.”

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Tyler Technologies Reports 92% Increase In
Operating Income For First Quarter 2004
April 28, 2004
Page 2

Mr. Yeaman added, “Tyler’s overall gross margin was 35.8%, virtually unchanged from the first quarter of 2003. A continuation of the positive shift in our revenue mix helped overcome pressure on our appraisal services margins that resulted from increased use of subcontractors on certain appraisal projects. In the first quarter of 2004, 77.3% of our total revenues were software-related, compared to 74.6% of our revenues in the same quarter of 2003.

“Selling, general and administrative expenses declined to 25% of revenues in the current quarter from 28% in the same quarter last year. After a slight increase in amortization of acquisition intangibles, operating income nearly doubled from the first quarter of last year, and our operating margin grew to 8.1% from 5.4% last year.

“We are particularly pleased with the strong cash flow we experienced during the first quarter, which is historically our weakest quarter,” continued Mr. Yeaman. “As expected, our capital spending for software development this quarter was below last year’s level. In addition, we continued to repurchase our common stock on the open market under the existing board authorization. During the first quarter, Tyler repurchased 191,300 shares of common stock at an average cost of $9.33 per share.”

“Our outlook for 2004 remains positive, and our guidance has not changed,” said Mr. Yeaman. “We still expect that revenue growth for the year 2004 will be in a range of 20% to 24%, with approximately half of the growth coming from the acquisition of Eden Systems. Net earnings for 2004 are expected to be in the range of $12 million to $13 million, with fully diluted earnings per share of $0.27 to $0.29. As in the past two years, the majority of annual earnings for 2004 are expected to come in the second half of the year. Tyler’s effective income tax rate for 2004 is currently expected to be approximately 40%. In addition, we expect that total capital expenditures in 2004 will be below 2003 expenditures, with capital spending in the range of $8.0 million to $8.5 million.”

Tyler Technologies will hold a conference call on Thursday, April 29 at 11:00 a.m. Eastern time to discuss the Company’s results. A live webcast of the call can be accessed on the Company’s Web site at www.tylerworks.com. A replay will be available on Tyler’s Web site following the conference call.

Based in Dallas, Tyler Technologies is a leading provider of end-to-end information management solutions and services to local governments. Tyler partners with clients to make local government more accessible to the public, more responsive to needs of citizens, and more efficient. Tyler’s client base includes more than 6,000 local government offices throughout all 50 states, Canada, Puerto Rico and the United Kingdom. More information about Tyler Technologies can be found on the World Wide Web at www.tylerworks.com.

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Tyler Technologies Reports 92% Increase In
Operating Income For First Quarter 2004
April 28, 2004
Page 3

Tyler Technologies, Inc. has included in this press release “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 concerning its business and operations. Tyler Technologies expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements to reflect any change in its expectations. These expectations and the related statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to, changes in competition, changes in general economic conditions, changes in the budgets and regulatory environments of the Company’s customers, risks associated with the development of new products and the enhancement of existing products, the ability to attract and retain qualified personnel, and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission.

####

(Comparative results follow)

12-04

TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Amounts in thousands, except per share data)

	Three Months Ended March 31,
	2004		2003
Revenues:
Software licenses	$	6,852	$	5,460
Software services		11,602		7,706
Maintenance		13,581		10,935
Appraisal services		7,954		6,751
Hardware and other		1,473		1,473
Total revenues		41,462		32,325
Cost of revenues:
Software licenses		2,017		1,544
Software services and maintenance		17,324		13,282
Appraisal services		6,332		4,748
Hardware and other		964		1,107
Total cost of revenues		26,637		20,681
Gross profit		14,825		11,644
Selling, general and administrative expenses		10,527		9,101
Amortization of acquisition intangibles		922		785
Operating income		3,376		1,758
Realized gain on sale of investment in H.T.E., Inc.		—		23,233
Other income (expense), net		102		9
Income before income taxes		3,478		25,000
Income tax provision		1,387		7,704
Net income	$	2,091	$	17,296
Earnings per common share:
Basic	$	0.05	$	0.38
Diluted	$	0.05	$	0.36
EBITDA (1)	$	6,289	$	27,145
EBITDA per diluted share	$	0.14	$	0.57
Weighted average common shares outstanding:
Basic		41,468		45,951
Diluted		45,062		47,738

⁽¹⁾ EBITDA consists of net income before interest, income taxes, depreciation and amortization. Although EBITDA is not a calculation in accordance with accounting principles generally accepted in the United States (GAAP), we believe that EBITDA is widely used as a measure of operating performance. Nevertheless, the measure should not be considered in isolation or as a substitute for operating income, cash flows from operating activities or any other measure for determining operating performance or liquidity that is calculated in accordance with GAAP. In addition, since all companies do not calculate EBITDA in the same manner, this measure may not be comparable to similarly titled measures reported by other companies. The following reconciles EBITDA to net income for the periods presented:

	Three Months Ended March 31,
	2004			2003
Net income	$	2,091		$	17,296
Amortization of acquisition intangibles		922			785
Depreciation and other amortization included in cost of revenues and selling, general and administrative expenses		1,979			1,369
Interest (income) expense included in other income (expense), net		(90	)		(9	)
Income tax provision		1,387			7,704
EBITDA (2003 includes $23,233 gross realized gain on sale of investment in H.T.E., Inc.)	$	6,289		$	27,145

TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

	March 31,
	2004		December 31,
	(unaudited)		2003
ASSETS
Current assets:
Cash and cash equivalents	$	12,539	$	10,268
Short-term investments available-for-sale		11,747		11,669
Accounts receivable, net		36,727		38,411
Other current assets		4,681		4,237
Deferred income taxes		1,536		1,536
Total current assets		67,230		66,121
Property and equipment, net		6,238		6,505
Other assets:
Certificate of deposit		7,500		7,500
Goodwill and other intangibles, net		100,251		101,812
Other		331		314
Total assets	$	181,550	$	182,252
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	49,291	$	51,148
Deferred income taxes		13,182		13,182
Minority interest		4		15
Shareholders’ equity		119,073		117,907
Total liabilities and shareholders’ equity	$	181,550	$	182,252