Jack Henry and Associates has announced earnings for the second quarter of its fiscal year. Sales and service generated an 11 percent increase in revenue and an increase of 15 percent in gross profit, representing a 7 percent increase in net income compared to the second quarter of fiscal 2009.
For the quarter ended Dec. 31, 2009, the company generated total revenue of $210.9 million compared to $190.2 million in the same quarter a year ago. Gross profit increased to $89.1 million compared to $77.4 million in the second quarter of last fiscal year. Net income totaled $30 million, or 35 cents per diluted share, compared to $28 million, or 33 cents per diluted share, in the same quarter a year ago.
For the first half of fiscal year 2010, total revenue of $393.2 million was generated compared to $373.3 million for the first half of fiscal year 2009. Gross profit increased to $163.5 million compared to $149.9 million during the same period last fiscal year. Net income for the first half of fiscal 2010 was $56.3 million, or 66 cents per diluted share, compared to $50.5 million, or 59 cents per diluted share, for the same six months in fiscal 2009.
"We are generally pleased with the overall performance in the quarter," said Jack Prim, chief executive officer. "We continued to see positive impacts resulting from our cost control initiatives with a 14 percent improvement in operating income compared to the prior year, even with the inclusion of the one-time expenses related to the acquisitions.
"The integration of both acquisitions during the quarter continues to progress in line with original plans and the cost synergies and EPS contributions from these acquisitions are also tracking in line with the original guidance provided," Prim added.
|"Support and services revenue grew 19 percent for the quarter compared to last year, which a large part of this was related to the recently announced acquisitions," stated Tony Wormington, president.||"However, organically this line of revenue grew 5 percent compared to the prior year quarter and increased 4 percent sequentially," Wormington continued. "This is due to the continued demand for the components that make up our recurring revenue. As these offerings continue to grow, they also have the ability to expand our gross margins through additional leverage of the existing infrastructure. In addition to this our managers and all of our associates continue to focus on improving margins through the control of operating costs."|
License revenue for the second quarter represented 6 percent of total revenue, compared to 8 percent for the same period last year. Support and service revenue increased 5 percent to 87 percent of total revenue in second quarter. Hardware sales in the second quarter of fiscal year 2010 decreased 4 percent to 7 percent of total revenue.
Cost of sales for the second quarter increased $8.3 million for the quarter, compared to the previous year. Second quarter gross profit increased 15 percent. Gross margin increased by 1 percent from a year ago.
Operating expenses rose 17 percent for the quarter due to increases in costs resulting largely from the acquisition of Goldleaf Financial Solutions, Inc., and PEMCO Technology Services, Inc., during the current quarter. Operating income increased 16 percent for the first six months of fiscal year 2010 compared to the same period a year ago.
"We continue to see interest from our existing in-house customers to migrate to our OutLink model," said Kevin Williams, chief financial officer. "In-house backlog jumped up 25 percent compared to a year ago, which is primarily due to some rather large license sales during the quarter."