FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 0-14112
JACK HENRY & ASSOCIATES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 43-1128385
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(State or other jurisdiction I.R.S. Employer
of incorporation) Identification No.)
663 Highway 60, P. O. Box 807, Monett, MO 65708
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(Address of principal executive offices)
(Zip Code)
417-235-6652
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [ x ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at April 30, 2001
---------------------------- -----------------------------
Common Stock, $.01 par value 88,465,849
JACK HENRY & ASSOCIATES, INC.
CONTENTS
Page No.
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PART I. FINANCIAL INFORMATION
Item I - Financial Statements
Condensed Consolidated Balance Sheets -
March 31, 2001, (Unaudited) and June 30, 2000 3
Condensed Consolidated Statements of
Income for the Three and Nine Months Ended
March 31, 2001 and 2000 (Unaudited) 5
Condensed Consolidated Statements of Cash
Flows for the Nine Months Ended March 31,
2001 and 2000 (Unaudited) 6
Notes to the Condensed Consolidated Financial
Statements (Unaudited) 7 - 10
Item 2 - Management's Discussion and Analysis of
Results of Operations and Financial
Condition 10 - 13
Item 3 - Quantitative and Qualitative Disclosure
about Market Risk 13
Part II. OTHER INFORMATION
Item 5 - Other information 13 - 14
Item 6 - Exhibits and Reports on Form 8-K 14
Part I. Financial Information
Item 1. Financial Statements
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Data)
March 31,
2001 June 30,
(Unaudited) 2000
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ASSETS
------
Current assets:
Cash and cash equivalents $ 25,145 $ 5,186
Investments, at amortized cost 990 946
Trade receivables 62,347 73,940
Income taxes receivable - 3,478
Prepaid cost of product 15,661 10,645
Prepaid expenses and other 9,581 8,980
Deferred income taxes 720 825
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Total $114,444 $104,000
Property and equipment $161,007 $118,749
Accumulated depreciation 34,022 25,464
------- -------
$126,985 $ 93,285
Other assets:
Intangible assets, net of amortization $103,368 $109,282
Computer software, net of amortization 5,686 5,813
Prepaid cost of product 12,461 7,694
Other non-current assets 1,058 1,008
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Total $122,573 $123,797
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Total assets $364,002 $321,082
======= =======
March 31,
2001 June 30,
(Unaudited) 2000
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LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 9,474 $ 9,255
Short-term borrowings - 70,500
Accrued expenses 7,423 9,750
Accrued income taxes 12,706 -
Current portion of long-term debt 85 123
Deferred revenues 49,030 61,512
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Total $ 78,718 $151,140
Long-term debt 251 320
Deferred revenue 16,257 9,945
Deferred income taxes 7,677 5,132
------- -------
Total liabilities $102,903 $166,537
Stockholders' equity:
Preferred stock - $1 par value;
500,000 shares authorized;
none issued - -
Common stock - $0.01 par value;
250,000,000 shares authorized;
88,239,384 issued @ 03/31/01
41,357,852 issued @ 6/30/00 $ 882 $ 414
Additional paid-in capital 116,689 43,753
Retained earnings 143,528 110,378
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Total stockholders' equity $261,099 $154,545
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Total liabilities and
stockholders' equity $364,002 $321,082
======= =======
The accompanying notes are an integral part of these condensed
consolidated financial statements.
JACK HENRY & ASSOCIATES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
2001 2000 2001 2000
------ ------ ------- -------
Revenues:
Software licensing and installation $26,233 $15,275 $ 74,281 $ 35,888
Maintenance/support and service 34,221 25,148 96,933 69,812
Hardware sales 32,357 17,998 79,337 50,231
------ ------ ------- -------
Total revenues $92,811 $58,421 $250,551 $155,931
Cost of sales:
Cost of hardware 22,962 12,615 54,566 35,920
Cost of services 30,167 18,650 86,904 54,865
------ ------ ------- -------
Total cost of sales $53,129 $31,265 $141,470 $ 90,785
------ ------ ------- -------
Gross profit $39,682 $27,156 $109,081 $ 65,146
43% 46% 44% 42%
Operating expenses:
Selling and marketing 7,328 4,326 20,726 12,514
Research and development 2,883 2,242 8,095 5,780
General and administrative 6,115 5,033 18,384 13,692
------ ------ ------- -------
Total operating expenses $16,326 $11,601 $ 47,205 $ 31,986
------ ------ ------- -------
Operating income from continuing operations $23,356 $15,555 $ 61,876 $ 33,160
Other income (expense):
Interest income 381 223 1,025 738
Interest expense (74) (567) (848) (1,143)
Other, net 303 179 607 1,629
------ ------ ------- -------
Total other income (expense) $ 610 $ (165) $ 784 $ 1,224
------ ------ ------- -------
Income from continuing
operations before income taxes $23,966 $15,390 $ 62,660 $ 34,384
Provision for income taxes 8,628 5,214 22,558 11,468
------ ------ ------- -------
Income from continuing operations $15,338 $10,176 $ 40,102 $ 22,916
Loss from discontinued operations - - - (332)
------ ------ ------- -------
Net income $15,338 $10,176 $ 40,102 $ 22,584
====== ====== ======= =======
Diluted earnings per share:
Income from continuing operations $ .17 $ .12 $ .44 $ .27
Loss from discontinued operations - - - -
------ ------ ------- -------
Net income $ .17 $ .12 $ .44 $ .27
====== ====== ======= =======
Diluted weighted average shares outstanding 91,966 85,699 90,908 84,687
====== ====== ======= =======
Basic earnings per share:
Income from continuing operations $ .17 $ .12 $ .46 $ .28
Loss from discontinued operations - - - (.01)
------ ------ ------- -------
Net income $ .17 $ .12 $ .46 $ .27
====== ====== ======= =======
Basic weighted average shares outstanding 87,935 81,900 86,254 81,542
====== ====== ======= =======
The accompanying notes are an integral part of these condensed
consolidated financial statements.
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
March 31,
----------------------
2001 2000
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Cash flows from operating activities
Income from continuing operations $ 40,102 $ 22,916
Adjustments to reconcile income from
continuing operations to cash from
operating activities:
Depreciation and amortization 15,668 10,662
Gain on sale of investments - (1,105)
Other (13) 4
Deferred income taxes 2,650 -
Changes in:
Trade receivables 11,593 21,723
Prepaid expenses and other (10,291) (6,885)
Accounts payable 219 1,370
Accrued expenses (2,327) (2,966)
Accrued income taxes 16,184 2,900
Deferred revenues (6,170) (7,047)
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Net cash from continuing operations $ 67,615 $ 41,572
Cash flows from discontinued operations $ - $ 700
Cash flows from investing activities:
Capital expenditures $(42,380) $(18,733)
Proceeds from maturity of investments - 5,668
Proceeds from sale of investments - 3,605
Proceeds from note receivable 250 -
Advances on note receivable (350) -
Computer software developed/purchased (960) (632)
Payment for acquisitions, net - $(51,215)
Other, net (60) 216
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Net cash from investing activities $(43,500) $(61,091)
Cash flows from financing activities:
Proceeds from issuance of common stock
upon exercise of stock options $ 12,274 $ 3,700
Proceeds from sale of common stock 61,130 325
Short-term borrowings, net (70,500) 29,456
Principal payments on notes payable (108) (28)
Dividends paid (6,952) (5,249)
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Net cash from financing activities $ (4,156) $ 28,204
------- -------
Net cash activity for the three months
ended September 30, 1999-Sys-Tech, Inc. - $ 264
------- -------
Net increase in cash and cash equivalents $ 19,959 $ 9,649
Cash and cash equivalents
at beginning of period 5,186 3,376
------- -------
Cash and cash equivalents
at end of period $ 25,145 $ 13,025
======= =======
Net cash paid for income taxes was $5,138 and $9,061 for the nine months
ended March 31, 2001 and 2000, respectively.
The Company paid interest of $1,081 and $793 for the nine months ended March
31, 2001 and 2000, respectively.
The accompanying notes are an integral part of these condensed
consolidated financial statements.
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies
Description of the Company - Jack Henry & Associates, Inc. ("JHA" or
the "Company") is a computer software company which has developed or
acquired several banking and credit union software systems. The Company
markets these systems to financial institutions in the United States along
with the computer equipment (hardware), and provides the conversion and
software customization services necessary for a financial institution to
install a JHA software system. The institution can elect to have this
system in-house or outsourced through one of the Company's service bureau
locations which provides continuing support and maintenance services to
customers using the system. The Company also processes ATM and debit
card transactions and provides internet banking solutions for financial
institutions in the U.S.
Consolidation - The consolidated financial statements include the
accounts of JHA and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in the
consolidation.
Comprehensive Income - Comprehensive income for each of the three and
nine month periods ended March 31, 2001 and 2000, equals the Company's net
income.
Restatement - The consolidated financial statements for the three and
nine month periods ended March 31, 2000 have been restated to include Sys-
Tech, Inc. of Kansas and Big Sky Marketing, Inc. (collectively referred to
as Sys-Tech) which were acquired on June 1, 2000. The acquisitions were
accounted for as a pooling of interests and therefore all prior periods have
been adjusted to reflect the acquisitions as if they had occurred at the
beginning of the earliest period reported.
Common Stock Split - On January 29, 2001, the Company's Board of
Directors declared a 100% stock dividend on its common stock, effectively a
2 for 1 stock split. The stock dividend was paid March 2, 2001 to
stockholders of record at the close of business on February 15, 2001. All
per share and shares outstanding data in the consolidated statements of
income and the notes to the consolidated financial statements have been
retroactively restated to reflect the stock split.
Reclassification - Where appropriate, prior period's financial
information has been reclassified to conform with the current period's
presentation.
Other Significant Accounting Policies - The accounting policies
followed by the Company are set forth in Note 1 to the Company's
consolidated financial statements included in its Annual Report on Form 10-K
("Form 10-K") for the fiscal year ended June 30, 2000.
2. Interim Financial Statements
The accompanying condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q of the Securities
and Exchange Commission and in accordance with accounting principles
generally accepted in the United States of America applicable to interim
consolidated financial statements, and do not include all of the information
and footnotes required by accounting principles generally accepted in the
United States of America for complete consolidated financial statements.
The consolidated financial statements should be read in conjunction with the
Company's audited consolidated financial statements and accompanying notes
which are included in its Form 10-K for the year ended June 30, 2000.
In the opinion of management of the Company, the accompanying condensed
consolidated financial statements reflect all adjustments necessary
(consisting solely of normal recurring adjustments) to present fairly the
financial position of the Company as of March 31, 2001 and the results of
its operations and its cash flows for the three and nine month periods then
ended.
The results of operations for the period ended March 31, 2001 are not
necessarily indicative of the results to be expected for the entire year.
3. Additional Interim Footnote Information
The following additional information is provided to update the notes to
the Company's annual consolidated financial statements for developments
during the nine months ended March 31, 2001:
Purchase Transactions
On June 7, 2000, the Company completed the acquisition of Symitar
Systems, Inc. (Symitar). On September 8, 1999, the Company's wholly-owned
subsidiary Open Systems Group (OSG), completed the acquisition of BancTec,
Inc.'s community banking business. These acquisitions were accounted for by
the purchase method of accounting. Accordingly, the accompanying condensed
statement of income for the three and nine month periods ended March 31,
2000 does not include any revenues and expenses related to these
acquisitions prior to the respective closing date. The following unaudited
proforma consolidated information is presented as if these acquisitions had
occurred as of the beginning of the period presented.
(In Thousands) (In Thousands)
Three Months Ended Nine Months Ended
March 31, 2000 March 31, 2000
Revenues $ 65,422 $178,897
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Income from continuing operations $ 10,877 $ 21,880
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Net income $ 10,877 $ 21,548
======= =======
Diluted earnings per share:
Income from continuing operations $ .13 $ .26
======= =======
Net income $ .13 $ .25
======= =======
Secondary Offering
On August 16, 2000, the Company completed a secondary offering of 3.0
million shares (split adjusted) of its common stock at $21.50 per share less
a 5% underwriters discount and offering expenses paid by the Company. Of
the net proceeds of approximately $60,500,000, a portion was used to retire
the remaining outstanding short-term borrowings under lines of credit as of
that date, and the balance will be used for working capital, capital
expenditures, potential future acquisitions and other general corporate
purposes.
Recent Accounting Pronouncements
The Securities and Exchange Commission ("SEC") issued Staff Accounting
Bulletin ("SAB") No.101, "Revenue Recognition in Financial Statements", on
December 3, 1999. SAB No.101, as amended, provides the SEC Staff's views on
selected revenue recognition issues and is effective no later than the
fourth fiscal quarter for years beginning after December 15, 1999, which for
the Company is the beginning of its fourth quarter of fiscal 2001. The
Company has not completed the process of evaluating the impact that will
result from adopting SAB No.101 and therefore, is unable to determine the
impact that the adoption will have on its financial position and results of
operations.
4. Shares used in computing net income per share:
(In Thousands)
Three Months Ended Nine Months Ended
March 31, March 31,
---------------- ----------------
2001 2000 2001 2000
------ ------ ------ ------
Weighted average number
of common shares
outstanding - basic 87,935 81,900 86,254 81,542
Common stock equivalents 4,031 3,799 4,654 3,145
------ ------ ------ ------
Weighted average number
of common and common
equivalent shares
outstanding - diluted 91,966 85,699 90,908 84,687
====== ====== ====== ======
Per share information is based on the weighted average number of common
shares outstanding for the three and nine month periods ended March 31, 2001
and 2000. Stock options have been included in the calculation of income per
share to the extent they are dilutive. The reconciling item from basic to
diluted weighted average shares outstanding is the dilutive effect of
outstanding stock options.
5. Business Segment Information
The Company is a leading provider of integrated computer systems that
perform data processing (available for in-house or service bureau
installations) for banks and credit unions. The Companies operations were
classified as one business segment in the prior year. The acquisition of
Symitar Systems, Inc. entrenched the Company more significantly into the
credit union marketplace. The Company's operations have been classified
into two business segments: bank systems and services and credit union
systems and services. The Company evaluates the performance of its segments
and allocates resources to them based on various factors, including
prospects for growth, return on investment and return on revenues.
(In Thousands)
Three Months Ended Nine Months Ended
March 31, March 31,
----------------- ------------------
2001 2000 2001 2000
------- ------- ------- -------
Revenues:
Bank systems and services $ 78,662 $ 58,104 $218,602 $154,908
Credit union systems
and services 14,149 317 31,949 1,023
------- ------- ------- -------
Total $ 92,811 $ 58,421 $250,551 $155,931
======= ======= ======= =======
Gross Profit:
Bank systems and services $ 35,879 $ 27,037 $101,420 $ 64,801
Credit union systems
and services 3,803 119 7,661 345
------- ------- ------- -------
Total $ 39,682 $ 27,156 $109,081 $ 65,146
======= ======= ======= =======
The Company has not disclosed asset information by segment, as the
information is not produced internally and its preparation is impracticable.
Item 2. - Management's Discussion and Analysis of Results of
Operations and Financial Condition
RESULTS OF OPERATIONS
Background and Overview
The Company is a leading provider of integrated computer systems that
perform data processing (available for in-house or service bureau
installations) for banks and credit unions. The Company also processes ATM
and debit card transactions and provides internet banking solutions for
these financial institutions. The Company was founded in 1976. Its
developed proprietary applications software for IBM AS/400 computers is
offered under two systems: CIF 20/20[TM](1), typically for banks with less
than $400 million in assets, and the Silverlake System[R](2), for banks with
assets up to $10 billion. The Company also has acquired proprietary
software for banks and credit unions, which operate on various hardware
platforms in the UNIX and NT client-server environments. JHA frequently
sells hardware with its software products. It also provides installation,
customer support and related services. The Company has over 2,800 banks and
credit unions as customers.
A detailed discussion of the major components of the results of operations
for the three and nine month periods ended March 31, 2001, as compared to
the same period in the previous year follows:
Revenues
Revenues increased 59% to $92,811,000 in the quarter ended March 31,
2001 from the prior year third quarter. Software licensing and installation
increased 72% and maintenance, support and service revenues increased 36%
over the same period. The non-hardware growth is attributable to the
demand for complementary products and growth from acquired operations.
Hardware sales were especially strong in the third quarter primarily due to
increasing demand for imaging solutions and from sale of computers and other
equipment to credit unions. Hardware sales increased 80% to 32,357,000,
accounting for 35% of total revenues compared to 17,998,000 and 31% of
revenues in the third quarter of 2000.
(1) CIF 20/20[TM] is a trademark of Jack Henry & Associates, Inc.
(2) Silverlake System[R] is a registered trademark of Jack Henry
& Associates, Inc.
Nine month revenues this year were $250,551,000, an increase of 61% compared
to last year's corresponding period. Software licensing and installation
increased 107%. Maintenance, support and service revenues increased 39%.
Hardware sales increased 58%, compared to last year.
The backlog of sales at March 31, 2001 was $124,048,000 ($50,872,000 In-
House and $73,176,000 Outsourcing). This is up 19% from the June 30, 2000
level, and is consistent with management's expectations for the third
quarter. Backlog at April 30, 2001 was $123,794,000 ($48,211,000 In-House
and $75,583,000 Outsourcing).
Cost of Sales
Cost of sales increased 70% in the third quarter ended March 31, 2001
compared to the prior year third quarter. Cost of hardware increased 82%,
compared to the 80% increase in hardware revenue. Cost of services
increased 62% primarily due to acquisitions and the significant increase in
outsourcing and other services provided compared with a 50% increase in non-
hardware revenues.
Cost of sales increased 56% for the first nine months of fiscal year 2001
compared to the prior year nine months. Cost of hardware increased 52%,
compared to 58% increase in hardware revenues. Cost of services increased
58%, compared to the 62% increase in non-hardware revenues.
Gross Profit
Gross profit increased to $39,682,000 in the third quarter ended March 31,
2001, a 46% increase from last year. The gross profit percentage was 43% of
sales compared to 46% last year, primarily reflecting increased hardware
sales as a percentage of total revenue.
The nine month gross profit this year increased 67% compared to the prior
year nine months to $109,081,000. The gross profit percentage for the first
nine months of fiscal 2001 was 44% of sales, compared to last years rate of
42%.
Gross profit percentage varies widely within each area of revenue, with
software licensing carrying the highest margin, followed by
maintenance/support and services and hardware sales carrying a significant
lower margin. This is reflected by the gross profit percentage in the
current quarter in which hardware sales represented 35% of total revenue
compared to 31% in the same quarter last year.
Operating Expenses
Total operating expenses increased 41%, from last year's third quarter.
Selling expenses increased 69%, research and development expenses increased
29% and general and administrative expenses increased 21%.
Total operating expenses increased 48% in the nine months ended March 31,
2001 from the prior year first nine months. Selling expenses increased 66%,
research and development increased 40% and general and administrative
expenses 34% compared to the same period last year. Operating expenses
increased due to higher overhead from acquisitions, overall growth,
continued development and refinement of new and existing products and higher
commissions generated on stronger sales.
Other Income and Expense
Other income for the quarter ended March 31, 2001 reflects an increase
compared to the same period last year. This is primarily due to interest
income this year from cash investments, compared to interest expense last
year from short-term borrowings.
Other income for the nine months ended March 31, 2001 reflects a 36%
decrease primarily due to the one-time $1,105,000 gain on sale of stock
acquired in the Peerless acquisition in the first quarter ended September
30, 1999.
Provision for Income Taxes
The effective tax rate for the nine months ended March 31, 2001 as compared
to the same period in the prior year, reflects the effect of a capital gain
partially offset by federal and state tax benefits realized in the prior
year.
Net Income
Net income from continuing operations for the third quarter was $15,338,000,
or $.17 per diluted share. This is an increase of 51% compared to
$10,176,000, or $.12 per diluted share in the same period last year.
Net income from continuing operations for the nine months ended March 31,
2001 was $40,102,000, or $.44 per diluted share. This is an increase of 75%
compared to $22,916,000 or $.27 per diluted share during the same period
last year.
Discontinued Operations
The Company incurred a $332,000 loss from discontinued operations for the
nine months ended March 31, 2000 due to the sale of the Bankvision
subsidiary on September 7, 1999. There was no loss from discontinued
operations for the nine months ended March 31, 2001.
Business Segment Discussion
Revenues in the bank systems and services business segment increased from
$58,104,000 in the third quarter of 2000 to $78,662,000, or 35%, in the
quarter ended march 31, 2001. Gross profit in this business segment
increased from $27,037,000 in the third quarter of 2000 to $35,879,000, or
33% in the quarter ended march 31, 2001.
Revenues in the credit union systems and services business segment increased
from $317,000 in the third quarter of 2000 to $14,149,000 in the quarter
ended March 31, 2001. Revenue growth was derived from Symitar Systems,
Inc., which was acquired on June 7, 2000. Gross profit in this business
segment increased from $119,000 in the third quarter of 2000 to $3,803,000
in the quarter ended march 31, 2001.
Revenues in the bank systems and services business segment increased from
$154,908,000 in the nine months ended March 31, 2000 to $218,602,000 for the
nine months ended March 31, 2001. Gross profit in this business segment
increased from $64,801,000 in the nine months ended March 31, 2000 to
$101,420,000 for the nine months ended March 31, 2001.
Revenues in the credit union systems and services business segment increased
from $1,023,000 in the nine months ended March 31, 2000 to $31,949,000 in
the nine months ended March 31, 2001. Gross profit in this segment
increased from $345,000 in nine months ended March 31, 2000 to $7,661,000
for in the nine months ended March 31, 2001.
FINANCIAL CONDITION
Liquidity
The Company's cash and cash equivalents and investments increased to
$25,145,000 at March 31, 2001, from $5,186,000 at June 30, 2000. This
reflects the seasonal influx of cash due to the receipt of annual
maintenance fees billed June 30, 2000 and December 31, 2000.
JHA has available credit lines totaling $58,000,000, although the Company
expects additional borrowing to be minimal during fiscal year 2001. The
Company currently has no short-term obligations outstanding. Short-term
borrowings were all retired with a portion of the proceeds from the
secondary offering on August 16, 2000.
Capital Requirements and Resources
JHA generally uses existing resources and funds generated from operations to
meet its capital requirements. Capital expenditures totaling $42,380,000
for the nine months ended March 31, 2001, were made for expansion of
facilities and additional equipment. These were funded from cash generated
by operations. The consolidated capital expenditures of JHA, excluding
acquisition costs, could exceed $55,000,000 for the fiscal year 2001.
The Company paid a $.03 per share cash dividend on March 1, 2001 to
stockholders of record as of February 14, 2001. Subsequent to March 31,
2001, the Company's Board of Directors declared a quarterly cash dividend of
$.03 per share on its common stock payable May 18, 2001, to stockholders of
record as of May 3, 2001. This will be funded from operations.
Forward Looking statements
The Management's Discussion and Analysis of Financial Condition and Results
of Operations and other portions of this report contain forward-looking
statements within the meaning of federal securities laws. Actual results
are subject to risks and uncertainties, including both those specific to the
Company and those specific to the industry, which could cause results to
differ materially from those contemplated. The risks and uncertainties
include, but are not limited to, the matters detailed at Risk Factors in its
Annual Report on Form 10-K for the fiscal year ended June 30, 2000. Undue
reliance should not be placed on the forward-looking statements. The
Company does not undertake any obligation to update any forward-looking
statements.
Conclusion
JHA's results of operations and its financial position continued to be
favorable during the three and nine month periods ended March 31, 2001.
This reflects the continuing attitude of cooperation and commitment by each
employee, management's ongoing cost control efforts and commitment to
deliver top quality products to the markets it serves.
Item 3. Quantitative and qualitative Disclosure about Market Risk
Market risk refers to the risk that a change in the level of one or more
market prices, interest rates, indices, volatilities, correlations or other
market factors such as liquidity, will result in losses for certain
financial instrument or group of financial instruments. We are currently
exposed to credit risk on credit extended to customers, interest risk on
investments in U.S. government securities and long-term debt. We actively
monitor these risks through a variety of controlled procedures involving
senior management. We do not currently use any derivative financial
instruments. Based on the controls in place, credit worthiness of the
customer base and the relative size of these financial instruments, we
believe the risk associated with these instruments will not have a material
adverse affect on our consolidated financial position or results of
operations.
PART II. OTHER INFORMATION
Item 5. Other Information
On May 7, 2001 the Company issued a press release announcing that the Board
of Directors had promoted Jack Prim to the position of Chief Operating
Officer of the corporation. His prior position was General Manager of the
E-Services Division. Terry Thompson, who formerly held the title of Chief
Operating Officer, continues as President. Also, Ed Rhea was promoted to
Vice President and remains National Sales Manager. Both promotions are to
be effective July 1, 2001.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
99.1 Press Release dated May 7, 2001 announcing the promotion of Jack
Prim to Chief Operating Officer and Ed Rhea to Vice President.
(b) Reports on Form 8-K
On January 18, 2001, the Company filed a Current Report on Form 8-K to
announce the resignation of Michael R. Wallace as President, Chief Operating
Officer and director, and the appointment former Chief Financial Officer,
Terry W. Thompson to serve as President and Chief Operating Officer of the
Company effective January 18, 2001. Former Controller Kevin D. Williams was
appointed Chief Financial Officer and Treasurer, effective January 18, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Quarterly Report on Form 10-Q to be
signed on behalf of the undersigned thereunto duly authorized.
JACK HENRY & ASSOCIATES, INC.
Date: May 14, 2001 /s/ Michael E. Henry
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Michael E. Henry
Chairman of the Board
Chief Executive Officer
Date: May 14, 2001 /s/ Kevin D. Williams
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Kevin D. Williams
Chief Financial Officer