First quarter summary:
- GAAP revenue increased 8.0% and GAAP operating income decreased
5.7% for the fiscal three months ended September 30, 2023, compared to the prior fiscal
year quarter.
- Non-GAAP adjusted revenue increased 7.7% and non-GAAP adjusted
operating income increased 13.0% for the fiscal three months ended
September 30, 2023, compared to the
prior fiscal year quarter.1
- GAAP EPS was $1.39 per diluted
share for the fiscal three months ended September 30, 2023, compared to $1.46 in the prior fiscal year quarter.
- Cash was $31 million at
September 30, 2023, and $32 million at September
30, 2022.
- Debt related to credit facilities was $245 million at September
30, 2023, and $245 million at
September 30, 2022.
Full year fiscal 2024 guidance:2
|
Current
|
|
Previous
|
GAAP
|
Low
|
High
|
|
Low
|
High
|
Revenue
updated
|
$2,211
|
$2,232
|
|
$2,208
|
$2,229
|
Operating margin
updated
|
21.8 %
|
21.9 %
|
|
21.6 %
|
21.7 %
|
EPS updated
|
$4.98
|
$5.04
|
|
$4.92
|
$4.99
|
|
|
|
|
|
|
Non-GAAP3
|
|
|
|
|
|
Adjusted revenue
updated
|
$2,193
|
$2,214
|
|
$2,190
|
$2,210
|
Adjusted operating
margin updated
|
22.2 %
|
22.3 %
|
|
22.1 %
|
22.2 %
|
MONETT,
Mo., Nov. 7, 2023 /PRNewswire/ -- Jack Henry & Associates, Inc. (Nasdaq:
JKHY), a leading financial technology provider, today announced
results for the fiscal first quarter ended September 30, 2023.
According to
David Foss, Board Chair and
CEO, "We are very pleased to report overall strong
financial performance for the first quarter of our new fiscal year.
Our sales teams continue to see strong demand for our innovative
financial technology solutions, including the Banno
Business™ and AI-powered Financial Crimes
Defender™ cloud-native solutions that we introduced in the
first quarter. Our sales pipeline is the highest it's ever been,
and we recently hosted a record number of clients and prospects at
our annual Jack Henry Connect conference in Indianapolis. We are
proud to help community and regional financial institutions across
the U.S. innovate, compete, and strengthen connections with their
accountholders through delivering a broad range of modern
technology and exceptional service."
|
1 See tables below on page 3 reconciling non-GAAP
financial measures to GAAP.
2 The full year guidance assumes no acquisitions are
made during fiscal year 2024.
3 See tables below on page 5 reconciling fiscal
year 2024 GAAP to non-GAAP guidance.
4 See tables below on page 10 reconciling Net Income
to non-GAAP EBITDA.
Operating Results
Revenue, operating expenses, operating income, and net income
for the three months ended September 30, 2023, compared to the
three months ended September 30, 2022, were as follows (all
dollar amounts in this section are in thousands, except per share
amounts):
Revenue
|
Three Months
Ended
September
30,
|
|
%
Change
|
(Unaudited, In
Thousands)
|
2023
|
|
2022
|
|
|
Revenue
|
|
|
|
|
|
Services and
Support
|
$ 342,205
|
|
$ 320,149
|
|
6.9 %
|
Percentage of Total
Revenue
|
59.9 %
|
|
60.5 %
|
|
|
Processing
|
229,163
|
|
209,053
|
|
9.6 %
|
Percentage of Total
Revenue
|
40.1 %
|
|
39.5 %
|
|
|
REVENUE
|
$ 571,368
|
|
$ 529,202
|
|
8.0 %
|
- Services and support revenue increased for the three months
ended September 30, 2023, primarily
driven by growth in data processing and hosting revenue of 10.4%.
Other drivers were increases in hardware revenue and software
usage/subscription revenues. Processing revenue increased for the
three months ended September 30,
2023, primarily driven by growth in card revenue of 5.6%.
Other drivers were increases in Jack
Henry digital revenue (including Banno), payment
processing, and other processing revenues.
- For the three months ended September 30,
2023, core segment revenue increased 7.6%, payments segment
revenue increased 6.9%, complementary segment revenue increased
8.7%, and corporate and other segment revenue increased 15.6%.
Non-GAAP adjusted core segment revenue increased 7.7%, non-GAAP
adjusted payments segment revenue increased 6.1%, non-GAAP adjusted
complementary segment revenue increased 8.7%, and non-GAAP adjusted
corporate and other segment revenue increased 15.7% (see revenue
lines of segment break-out tables on page 4 below).
Operating Expenses
and Operating Income
|
Three Months
Ended
September
30,
|
|
%
Change
|
(Unaudited, In
Thousands)
|
2023
|
|
2022
|
|
|
Cost of
Revenue
|
$ 323,002
|
|
$ 298,261
|
|
8.3 %
|
Percentage of Total
Revenue5
|
56.5 %
|
|
56.4 %
|
|
|
Research and
Development
|
36,892
|
|
32,993
|
|
11.8 %
|
Percentage of Total
Revenue5
|
6.5 %
|
|
6.2 %
|
|
|
Selling, General, and
Administrative
|
78,774
|
|
57,225
|
|
37.7 %
|
Percentage of Total
Revenue5
|
13.8 %
|
|
10.8 %
|
|
|
OPERATING
EXPENSES
|
438,668
|
|
388,479
|
|
12.9 %
|
|
|
|
|
|
|
OPERATING
INCOME
|
$ 132,700
|
|
$ 140,723
|
|
(5.7) %
|
Operating
Margin5
|
23.2 %
|
|
26.6 %
|
|
|
- Cost of revenue increased for the three months ended
September 30, 2023, primarily due to
higher direct costs consistent with increases in the related
revenue, higher personnel costs, including benefits expenses, and
increased internal licenses and fees.
- Research and development expense increased for the three months
ended September 30, 2023, primarily
due to higher personnel costs (net of capitalized personnel costs),
including benefits expenses, related to the Payrailz, LLC
("Payrailz") acquisition6 and Jack Henry Platform.
- Selling, general, and administrative expense increased for the
three months ended September 30,
2023, primarily due to higher personnel costs, including the
voluntary employee departure incentive payment (VEDIP) program
expenses of $16,443, commissions, and
benefits expenses.7
5 Operating margin is calculated by dividing
operating income by revenue. Operating margin plus operating
expense components as a percentage of total revenue may not
equal 100% due to rounding.
6 On August 31, 2022, the Company acquired all
of the equity interest in Payrailz.
7 The VEDIP program was a voluntary separation
program offered by the Company to certain eligible employees
beginning in July 2023.
Net Income
(Unaudited, In
Thousands,
Except Per Share
Data)
|
Three Months
Ended
September
30,
|
|
%
Change
|
|
|
2023
|
|
2022
|
|
|
|
Income Before Income
Taxes
|
$
133,248
|
|
$
139,299
|
|
(4.3) %
|
|
Provision for Income
Taxes
|
31,569
|
|
32,750
|
|
(3.6) %
|
|
NET
INCOME
|
$
101,679
|
|
$
106,549
|
|
(4.6) %
|
|
Diluted earnings per
share
|
$
1.39
|
|
$
1.46
|
|
(4.4) %
|
|
- Effective tax rates for the three months ended September 30, 2023, and 2022 were 23.7% and
23.5%, respectively.
According to
Mimi Carsley, CFO and Treasurer, "For the first quarter of the fiscal year, our
private cloud and processing services continued to drive strong
revenue growth. Overall, revenue grew 8% on both a GAAP and
non-GAAP basis. On a GAAP basis, operating income was down due to
the one-time effect of our VEDIP program in the current period
but was up 13% after removing the effect of that and our other
non-GAAP items from both periods. These results reflect the Jack
Henry team's continued focus on growing revenues and controlling
costs."
|
Impact of Non-GAAP Adjustments
The table below shows our revenue and operating income (in
thousands) for the three months ended September 30, 2023,
compared to the three months ended September 30, 2022,
excluding the impacts of deconversions, acquisitions, and the VEDIP
program expense.
On August 31, 2022, the Company acquired all the equity
interest in Payrailz (the "acquisition"). Payrailz related revenue,
operating expenses, operating income, and net income excluded in
the tables below in the columns for the three months ended
September 30, 2023, include only Payrailz activity for the
first two months of the quarter.
(Unaudited, In
Thousands)
|
Three Months Ended
September 30,
|
|
%
Change
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Revenue
(GAAP)
|
$
571,368
|
|
$
529,202
|
|
8.0 %
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Deconversion
revenue
|
(4,136)
|
|
(4,518)
|
|
|
Revenue from
acquisition
|
(1,945)
|
|
—
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
REVENUE
|
$
565,287
|
|
$
524,684
|
|
7.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(GAAP)
|
$
132,700
|
|
$
140,723
|
|
(5.7) %
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Operating income from
deconversions
|
(3,755)
|
|
(3,865)
|
|
|
Operating loss from
acquisition
|
2,237
|
|
—
|
|
|
VEDIP program expense
*
|
16,443
|
|
—
|
|
|
Gain on disposal of
assets, net
|
—
|
|
(6,176)
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
$
147,625
|
|
$
130,682
|
|
13.0 %
|
*The VEDIP program expense for the three months ended
September 30, 2023, was related to a
voluntary separation program offered by the Company to certain
eligible employees beginning in July
2023.
The tables below show the segment break-out of revenue and cost
of revenue for each period presented, as adjusted for the items
above, and include a reconciliation to non-GAAP adjusted operating
income presented above.
|
Three Months Ended
September 30, 2023
|
(Unaudited, In
Thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
REVENUE
|
$
186,439
|
|
$
199,358
|
|
$
161,366
|
|
$
24,205
|
|
$
571,368
|
Non-GAAP
adjustments*
|
(1,665)
|
|
(2,951)
|
|
(1,451)
|
|
(14)
|
|
(6,081)
|
NON-GAAP ADJUSTED
REVENUE
|
184,774
|
|
196,407
|
|
159,915
|
|
24,191
|
|
565,287
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUE
|
75,927
|
|
108,826
|
|
62,275
|
|
75,974
|
|
323,002
|
Non-GAAP
adjustments**
|
(103)
|
|
(3,361)
|
|
(118)
|
|
(22)
|
|
(3,604)
|
NON-GAAP ADJUSTED
COST OF REVENUE
|
75,824
|
|
105,465
|
|
62,157
|
|
75,952
|
|
319,398
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
SEGMENT INCOME
|
$
108,950
|
|
$
90,942
|
|
$
97,758
|
|
$
(51,761)
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
36,892
|
Selling, General,
and Administrative
|
|
|
|
|
|
|
|
|
78,774
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
(17,402)
|
NON-GAAP TOTAL
ADJUSTED OPERATING EXPENSES
|
|
|
|
|
|
|
|
417,662
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
|
|
|
|
|
|
$
147,625
|
*Revenue non-GAAP adjustments for the Core, Complementary, and
Corporate and Other segments were deconversion revenue. Revenue
non-GAAP adjustments for the Payments segment were deconversion
revenue of $(1,006) and acquisition
revenue of $(1,945).
**Cost of revenue non-GAAP adjustments for the Core and
Complementary segments were deconversion costs. Cost of revenue
non-GAAP adjustments for the Payments and Corporate and Other
segments were $(3,314) and
$(21), respectively, related to the
acquisition, and $(47) and
$(1), respectively, related to
deconversions.
***Non-GAAP adjustments unassigned to a segment were
$(16,443) related to VEDIP program
expense, $(848) related to the
acquisition, and $(111) related to
deconversions.
|
Three Months Ended
September 30, 2022
|
(Unaudited, In
Thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
REVENUE
(GAAP)
|
$
173,316
|
|
$
186,533
|
|
$
148,417
|
|
$
20,936
|
|
$
529,202
|
Non-GAAP
adjustments*
|
(1,818)
|
|
(1,435)
|
|
(1,235)
|
|
(30)
|
|
(4,518)
|
NON-GAAP ADJUSTED
REVENUE
|
171,498
|
|
185,098
|
|
147,182
|
|
20,906
|
|
524,684
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUE
|
70,604
|
|
100,553
|
|
58,105
|
|
68,999
|
|
298,261
|
Non-GAAP
adjustments**
|
(141)
|
|
(64)
|
|
(198)
|
|
(7)
|
|
(410)
|
NON-GAAP ADJUSTED
COST OF REVENUE
|
70,463
|
|
100,489
|
|
57,907
|
|
68,992
|
|
297,851
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
SEGMENT INCOME
|
$
101,035
|
|
$
84,609
|
|
$
89,275
|
|
$
(48,086)
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
32,993
|
Selling, General,
and Administrative
|
|
|
|
|
|
|
|
|
57,225
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
5,933
|
NON-GAAP TOTAL
ADJUSTED OPERATING EXPENSES
|
|
|
|
|
|
|
|
394,002
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
|
|
|
|
|
|
$
130,682
|
*Revenue non-GAAP adjustments were all deconversion
revenues.
**Cost of revenue non-GAAP adjustments were all related to
deconversions.
*** Non-GAAP adjustments unassigned to a segment were related to
deconversion costs of $(243) and the
gain on disposal of assets, net, of $6,176.
The table below shows our GAAP to non-GAAP guidance for the
fiscal year ending June 30, 2024.
Non-GAAP guidance excludes the impacts of deconversion revenue and
related operating expenses, acquisition revenue and costs related
to the August 31, 2022, Payrailz
acquisition,* costs related to the July
2023 VEDIP program, and assumes no acquisitions or
dispositions are made during fiscal year 2024.
GAAP to Non-GAAP
GUIDANCE (In Millions, except per share data)
|
|
Annual
FY24**
|
|
|
Low
|
|
High
|
REVENUE
(GAAP)
|
|
$
2,211
|
|
$
2,232
|
Growth
|
|
6.4 %
|
|
7.4 %
|
Deconversions***
|
|
$
16
|
|
$
16
|
Acquisition
|
|
2
|
|
2
|
NON-GAAP ADJUSTED
REVENUE**
|
|
$
2,193
|
|
$
2,214
|
Non-GAAP Adjusted
Growth
|
|
7.2 %
|
|
8.2 %
|
|
|
|
|
|
OPERATING EXPENSES
(GAAP)
|
|
$
1,729
|
|
$
1,744
|
Growth
|
|
8.3 %
|
|
9.2 %
|
Deconversion
costs***
|
|
$
3
|
|
$
3
|
Acquisition
costs
|
|
4
|
|
4
|
VEDIP
Program****
|
|
16
|
|
16
|
NON-GAAP ADJUSTED
OPERATING EXPENSES**
|
|
$
1,706
|
|
$
1,721
|
Non-GAAP Adjusted
Growth
|
|
6.8 %
|
|
7.7 %
|
|
|
|
|
|
OPERATING INCOME
(GAAP)
|
|
$
482
|
|
$
488
|
Growth
|
|
0.3 %
|
|
1.5 %
|
|
|
|
|
|
OPERATING MARGIN
(GAAP)
|
|
21.8 %
|
|
21.9 %
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
$
488
|
|
$
493
|
Non-GAAP Adjusted
Growth
|
|
8.7 %
|
|
10.0 %
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING MARGIN
|
|
22.2 %
|
|
22.3 %
|
|
|
|
|
|
EPS
(GAAP)
|
|
$
4.98
|
|
$
5.04
|
Growth
|
|
(0.7) %
|
|
0.5 %
|
*Excluded acquisition revenue and costs are for the first two
months of the fiscal year only (see "Impact of Non-GAAP
Adjustments") on page 3.
**GAAP to Non-GAAP revenue and operating expenses may not foot
due to rounding.
***Deconversion revenue and related operating expenses are based
on actual results for first quarter fiscal year 2024 and
estimates for the remainder of fiscal year 2024 based on the lowest
actual recent historical results. See the Company's Form 8-Ks filed
with the Securities and Exchange Commission on August 3, 2023, and October 30, 2023.
****This cost relates to the group of employees who participated
in a VEDIP program offered by the Company in July 2023 to certain employees of a specified
minimum age who had reached a specified minimum number of years of
service with the Company.
Balance Sheet and Cash Flow Review
- At September 30, 2023, cash and
cash equivalents decreased to $31
million from $32 million at
September 30, 2022.
- Trade receivables totaled $289
million at September 30, 2023,
compared to $248 million at
September 30, 2022.
- The Company had $245 million of
borrowings at September 30, 2023 and
2022.
- Total deferred revenue decreased to $333
million at September 30, 2023,
compared to $345 million a year
ago.
- Stockholders' equity increased to $1,660
million at September 30, 2023,
compared to $1,461 million a year
ago.
*See table below for Net Cash Provided by Operating Activities
and on page 10 for Return on Average Shareholders' Equity. Tables
reconciling the non-GAAP measures Free Cash Flow and Return on
Invested Capital (ROIC) to GAAP measures are also on page 10. See
the Use of Non-GAAP Financial Information section below for the
definitions of Free Cash Flow and ROIC.
The following table summarizes net cash from operating
activities:
(Unaudited, In
Thousands)
|
Three Months Ended
September 30,
|
|
2023
|
|
2022
|
Net income
|
$
101,679
|
|
$
106,549
|
Depreciation
|
12,052
|
|
12,416
|
Amortization
|
37,183
|
|
33,194
|
Change in deferred
income taxes
|
(10,178)
|
|
(12,345)
|
Other non-cash
expenses
|
7,037
|
|
874
|
Change in
receivables
|
72,519
|
|
101,509
|
Change in deferred
revenue
|
(66,322)
|
|
(65,130)
|
Change in other assets
and liabilities
|
3,169
|
|
(40,236)
|
NET CASH FROM
OPERATING ACTIVITIES
|
$
157,139
|
|
$
136,831
|
The following table summarizes net cash from investing
activities:
(Unaudited, In
Thousands)
|
Three Months Ended
September 30,
|
|
2023
|
|
2022
|
Payment for
acquisitions, net of cash acquired*
|
$
—
|
|
$
(228,986)
|
Capital
expenditures
|
(7,612)
|
|
(7,737)
|
Proceeds from
dispositions
|
852
|
|
26,252
|
Purchased
software
|
(2,280)
|
|
(408)
|
Computer software
developed
|
(41,486)
|
|
(38,715)
|
NET CASH FROM
INVESTING ACTIVITIES
|
$
(50,526)
|
|
$
(249,594)
|
*During first quarter fiscal 2023, the Company completed its
acquisition of Payrailz.
The following table summarizes net cash from financing
activities:
(Unaudited, In
Thousands)
|
Three Months Ended
September 30,
|
|
2023
|
|
2022
|
Borrowings on credit
facilities*
|
$
135,000
|
|
$
280,000
|
Repayments on credit
facilities and financing leases
|
(165,000)
|
|
(150,022)
|
Purchase of treasury
stock
|
(20,000)
|
|
—
|
Dividends
paid
|
(37,863)
|
|
(35,709)
|
Net cash from issuance
of stock and tax related to stock-based compensation
|
474
|
|
1,677
|
NET CASH FROM
FINANCING ACTIVITIES
|
$
(87,389)
|
|
$
95,946
|
*The Company's acquisition of Payrailz during first
quarter fiscal 2023 was primarily funded by new borrowings under
the Company's credit facilities.
Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used
to refer to the standard framework of guidelines for financial
accounting in the United States.
GAAP includes the standards, conventions, and rules accountants
follow in recording and summarizing transactions in the preparation
of financial statements. In addition to reporting financial
results in accordance with GAAP, we have provided certain non-GAAP
financial measures, including adjusted revenue, adjusted operating
income, adjusted segment income, adjusted cost of revenue, adjusted
operating expenses, non-GAAP earnings before interest, taxes,
depreciation, and amortization (non-GAAP EBITDA), free cash flow,
and return on invested capital (ROIC).
We believe non-GAAP financial measures help investors better
understand the underlying fundamentals and true operations of our
business. Adjusted revenue, adjusted operating income, adjusted
operating margin, adjusted segment income, adjusted cost of
revenue, and adjusted operating expenses, eliminate one-time
deconversion revenue and associated costs, the effects of
acquisitions and divestitures, and the VEDIP program expense, all
of which management believes are not indicative of the Company's
operating performance. Such adjustments give investors further
insight into our performance. Non-GAAP EBITDA is defined as net
income attributable to the Company before the effect of interest
expense, taxes, depreciation, and amortization, adjusted for net
income before the effect of interest expense, taxes, depreciation,
and amortization attributable to eliminated one-time deconversions,
acquisitions and divestitures, and the VEDIP program expense. Free
cash flow is defined as net cash from operating activities, less
capitalized expenditures, internal use software, and capitalized
software, plus proceeds from the sale of assets. ROIC is defined as
net income divided by average invested capital, which is the
average of beginning and ending long-term debt and stockholders'
equity for a given period. Management believes that non-GAAP EBITDA
is an important measure of the Company's overall operating
performance and excludes certain costs and other transactions that
management deems one time or non-operational in nature; free cash
flow is useful to measure the funds generated in a given period
that are available for debt service requirements and strategic
capital decisions; and ROIC is a measure of the Company's
allocation efficiency and effectiveness of its invested capital.
For these reasons, management also uses these non-GAAP financial
measures in its assessment and management of the Company's
performance.
Non-GAAP financial measures used by the Company may not be
comparable to similarly titled non-GAAP measures used by other
companies. Non-GAAP financial measures have no standardized meaning
prescribed by GAAP and therefore, are unlikely to be comparable
with calculations of similar measures for other companies.
Any non-GAAP financial measures should be considered in context
with the GAAP financial presentation and should not be considered
in isolation or as a substitute for GAAP measures. Reconciliations
of the non-GAAP financial measures to related GAAP measures are
included.
Quarterly Conference Call
The Company will hold a conference call on November 8, 2023, at 7:45
a.m. Central Time, and investors are invited to listen at
www.jackhenry.com. A webcast replay will be available approximately
one hour after the event at
ir.jackhenry.com/corporate-events-and-presentations and will
remain available for one year.
About Jack Henry &
Associates, Inc.®
Jack Henry™ (Nasdaq: JKHY) is a well-rounded financial
technology company that strengthens connections between financial
institutions and the people and businesses they serve. We are an
S&P 500 company that prioritizes openness, collaboration, and
user centricity — offering banks and credit unions a vibrant
ecosystem of internally developed modern capabilities as well as
the ability to integrate with leading fintechs. For more than 47
years, Jack Henry has provided
technology solutions to enable clients to innovate faster,
strategically differentiate, and successfully compete while serving
the evolving needs of their accountholders. We empower
approximately 7,500 clients with people-inspired innovation,
personal service, and insight-driven solutions that help reduce the
barriers to financial health. Additional information is available
at www.jackhenry.com.
Statements made in this news release that are not historical
facts are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Because forward-looking statements relate to
the future, they are subject to inherent risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied by such statements. Such risks and
uncertainties include, but are not limited to, those discussed in
the Company's Securities and Exchange Commission filings, including
the Company's most recent reports on Form 10-K and Form 10-Q,
particularly under the heading Risk Factors. Any forward-looking
statement made in this news release speaks only as of the date of
the news release, and the Company expressly disclaims any
obligation to publicly update or revise any forward-looking
statement, whether because of new information, future events or
otherwise.
Condensed
Consolidated Statements of Income (Unaudited)
|
(In Thousands, except
per share data)
|
|
Three Months Ended
September 30,
|
|
%
Change
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
$
571,368
|
|
$
529,202
|
|
8.0 %
|
|
|
|
|
|
|
|
Cost of
Revenue
|
|
323,002
|
|
298,261
|
|
8.3 %
|
Research and
Development
|
|
36,892
|
|
32,993
|
|
11.8 %
|
Selling, General, and
Administrative
|
|
78,774
|
|
57,225
|
|
37.7 %
|
EXPENSES
|
|
438,668
|
|
388,479
|
|
12.9 %
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
132,700
|
|
140,723
|
|
(5.7) %
|
|
|
|
|
|
|
|
Interest
income
|
|
4,745
|
|
152
|
|
3,021.7 %
|
Interest
expense
|
|
(4,197)
|
|
(1,576)
|
|
166.3 %
|
Interest Income
(Expense), net
|
|
548
|
|
(1,424)
|
|
(138.5) %
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
|
133,248
|
|
139,299
|
|
(4.3) %
|
|
|
|
|
|
|
|
Provision for Income
Taxes
|
|
31,569
|
|
32,750
|
|
(3.6) %
|
|
|
|
|
|
|
|
NET
INCOME
|
|
$
101,679
|
|
$
106,549
|
|
(4.6) %
|
|
|
|
|
|
|
|
Diluted net income per
share
|
|
$
1.39
|
|
$
1.46
|
|
|
Diluted weighted
average shares outstanding
|
|
73,014
|
|
73,138
|
|
|
|
|
|
|
|
|
|
Consolidated Balance
Sheet Highlights (Unaudited)
|
(In
Thousands)
|
|
September
30,
|
|
%
Change
|
|
|
2023
|
|
2022
|
|
|
Cash and cash
equivalents
|
|
$
31,467
|
|
$
31,970
|
|
(1.6) %
|
Receivables
|
|
288,733
|
|
247,541
|
|
16.6 %
|
Total assets
|
|
2,734,223
|
|
2,578,460
|
|
6.0 %
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
208,909
|
|
$
195,518
|
|
6.8 %
|
Current and long-term
debt
|
|
245,000
|
|
245,041
|
|
— %
|
Deferred
revenue
|
|
333,407
|
|
345,146
|
|
(3.4) %
|
Stockholders'
equity
|
|
1,659,948
|
|
1,461,138
|
|
13.6 %
|
Calculation of
Non-GAAP Earnings Before Income Taxes, Depreciation and
Amortization (Non-GAAP EBITDA)
|
|
|
Three Months Ended
September 30,
|
|
%
Change
|
(in
thousands)
|
|
2023
|
|
2022
|
|
|
Net income
|
|
$
101,679
|
|
$
106,549
|
|
|
Net interest
|
|
(548)
|
|
1,424
|
|
|
Taxes
|
|
31,569
|
|
32,750
|
|
|
Depreciation and
amortization
|
|
49,235
|
|
45,610
|
|
|
Less: Net income before
interest expense, taxes, depreciation and amortization attributable to
eliminated
one-time deconversions,
VEDIP program expense, the acquisition,
and a gain on
disposal
of assets, net.*
|
|
12,802
|
|
(10,041)
|
|
|
NON-GAAP
EBITDA
|
|
$
194,737
|
|
$
176,292
|
|
10.5 %
|
*The fiscal first
quarter adjustments for net income before interest expense, taxes,
depreciation and amortization were for deconversions,
VEDIP program expense,
and the acquisition, and were $(3,755), $16,443, and $114,
respectively, and the prior
fiscal year first quarter
adjustments were for
deconversions and a gain on disposal of assets, net, and were
$(3,865)and $(6,176).
|
|
|
|
|
|
|
|
|
|
Calculation of Free
Cash Flow (Non-GAAP)
|
|
Three Months Ended
September 30,
|
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
|
Net cash from operating
activities
|
|
$
157,139
|
|
$
136,832
|
|
|
Capitalized
expenditures
|
|
(7,612)
|
|
(7,737)
|
|
|
Internal use
software
|
|
(2,280)
|
|
(408)
|
|
|
Proceeds from sale of
assets
|
|
852
|
|
26,252
|
|
|
Capitalized
software
|
|
(41,486)
|
|
(38,715)
|
|
|
FREE CASH
FLOW
|
|
$
106,613
|
|
$
116,224
|
|
|
|
|
|
|
|
|
|
Calculation of the
Return on Average Shareholders' Equity
|
|
September
30,
|
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
|
Net income (trailing
four quarters)
|
|
$
361,776
|
|
$
367,352
|
|
|
Average stockholder's
equity (period beginning and ending balances)
|
|
1,560,543
|
|
1,428,401
|
|
|
RETURN ON AVERAGE
SHAREHOLDERS' EQUITY
|
|
23.2 %
|
|
25.7 %
|
|
|
|
|
|
|
|
|
|
Calculation of
Return on Invested Capital (ROIC) (Non-GAAP)
|
|
September
30,
|
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
|
Net income (trailing
four quarters)
|
|
$
361,776
|
|
$
367,352
|
|
|
|
|
|
|
|
|
|
Average stockholder's
equity (period beginning and ending balances)
|
|
1,560,543
|
|
1,428,401
|
|
|
Average current
maturities of long-term debt (period beginning and ending
balances)
|
|
21
|
|
76
|
|
|
Average long-term debt
(period beginning and ending balances)
|
|
245,000
|
|
155,028
|
|
|
Average invested
capital
|
|
$ 1,805,564
|
|
$ 1,583,505
|
|
|
|
|
|
|
|
|
|
ROIC
|
|
20.0 %
|
|
23.2 %
|
|
|
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SOURCE Jack Henry &
Associates, Inc.