A 21 percent increase in net profits was recorded by Jack Henry and Associates (JHA) for the first quarter of the Monett-based firm's fiscal year. The producer of integrated software systems for the banking industry reported revenues increased by 29 percent over a year ago at the same time the cost of sales rose by 28 percent.
For the quarter ending on Sept. 30, JHA generated total revenue of $234.8 million compared to $182.3 million for the same quarter a year ago. Gross profit increased to $97 million, up more than $22 million. Net income was $31.8 million, or $.37 per diluted share compared to $26.3 million, or $.31 per diluted share, for the same quarter a year ago.
"We are pleased with the results in the quarter with solid total and organic revenue growth, which resulted in record revenue, operating and net income for the quarter," said Jack Prim, chief executive officer for JHA. "We also continue to see increases in recurring revenue, which was at 81 percent for the quarter and another company record.
"This was accomplished in spite of the fact that the economic environment for our customers remains essentially unchanged," Prim added. "We expect to see gradual improvement in financial institution spending as the economy continues to slowly improve."
Tony Wormington, JHA president, said revenue from support and services offset the continued lack of spending on license fees and hardware sales by JHA customers.
"The biggest driver within this line is our EFT revenue, which grew $34.6 million or 87 percent compared to the prior year," Wormington said. "This represented 32 percent of total revenue for the quarter. Obviously, all three of the acquisitions we did last year contributed to this growth; however, we experienced organic growth in EFT revenue of 11 percent in the quarter compared to last year. These acquisitions are all contributing nicely to our revenue and earnings."
License revenue was down by 17 percent for the quarter. All the components of support and service revenue showed growth, adding up to a 35 percent increase. Operating income increased 26 percent or a little over $10 million. Operating expenses rose 36 percent or nearly $12 million for the quarter.
"The net results for the quarter were pretty much in line with our expectations," said Kevin Williams, chief financial officer for JHA. "License fees were less than anticipated. Our implementation revenues were significantly higher than projected due in large part to the continued convert/merger activity of our customers acquiring other financial institutions. Our gross and operating margins were both very solid for the quarter as our managers and associates continue to do an outstanding job of controlling our overall costs."
Jack Henry and Associates Inc. provides integrated computer systems and processes ATM and debit card transactions for banks and credit unions. JHA markets and supports its systems throughout the United States and has over 11,200 customers nationwide.