EXHIBIT 99.3
Contact: Brian K. Miller
Vice President - Finance
Tyler Technologies, Inc.
(214) 547-4020
bmiller@tylertechnologies.com
FOR IMMEDIATE RELEASE
TYLER TECHNOLOGIES REPORTS RECORD QUARTERLY REVENUES AND EARNINGS
BOARD APPROVES STOCK REPURCHASE PLAN
DALLAS, TEXAS, OCTOBER 31, 2002 -- Dallas-based Tyler Technologies, Inc. (NYSE:
TYL) today reported record quarterly revenues and earnings for the three months
ended September 30, 2002. Tyler provides a broad array of software products and
related professional services to meet the information management needs of
counties, cities, schools and other local government offices nationwide.
Revenues for the quarter ended September 30, 2002 increased 22% to $34.7 million
from $28.4 million in the quarter ended September 30, 2001. For the third
quarter of 2002, EBITDA, or earnings from continuing operations before interest,
income taxes, depreciation and amortization, increased 45% to $5.1 million, or
$0.10 per diluted share, from $3.5 million, or $0.07 per diluted share, for the
third quarter of 2001.
Income from continuing operations before income taxes for the quarter ended
September 30, 2002 increased to $2.9 million, compared to $614,000 in the same
quarter of 2001. Net income for the third quarter of 2002 grew to $1.7 million,
or $0.04 per share, from $228,000, or $0.00 per share, for the third quarter of
2001.
For the nine months ended September 30, 2002, revenues from continuing
operations increased 12% to $96.7 million from $86.7 million in 2001. Income
from continuing operations before income taxes for the first nine months of 2002
was $6.0 million, compared to pretax income of $502,000 in the first nine months
of 2001. Net income for the nine months ended September 30, 2002 was $3.6
million, or $0.07 per share, compared to net income of $71,000, or $0.00 per
share, for the nine months ended September 30, 2001.
EBITDA for the nine months ended September 30, 2002 was $12.3 million, or $0.25
per share, an increase of 42% compared to EBITDA of $8.6 million, or $0.18 per
share, for the same period of 2001.
"The third quarter of 2002 was another quarter of solid financial performance
for Tyler Technologies, with results in line with our expectations," commented
John M. Yeaman, Tyler's President and Chief Executive Officer. "Our revenues and
net income from continuing operations for the quarter were records for the
Company, an exceptional achievement in the current economic climate."
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Tyler Technologies Reports Record Quarterly Revenues and Earnings
October 31, 2002
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"Once again, strong software license revenues, particularly those related to our
proprietary software products, paced our growth. Total software license revenues
showed a 28% increase over the third quarter of last year and were up 27% for
the first nine months of 2002. In fact, this quarter was our second highest ever
in terms of software license revenue, second only to the Y2K-related peak in the
fourth quarter of 1999. Revenues from our proprietary software products, as
opposed to resale of third-party products, increased 40% for the quarter and 38%
for the first nine months of the year."
"Tyler's gross profit margin for the quarter improved to 35.5% from 34.9% last
year. We are also pleased to report that our SG&A expense as a percentage of
revenues for the third quarter of 2002 declined to 24.6%, an improvement of
nearly two full percentage points from the same quarter of last year. We
achieved this reduction in SG&A costs despite legal expenses associated with our
litigation with H.T.E., Inc., which was resolved in Tyler's favor in September.
Our quarterly net income increased seven-fold over the same quarter of last
year, and our earnings per share of $0.04 were in line with expectations. Cash
flow for the quarter was once again very good, as we generated $7.4 million of
cash from operations and free cash flow of nearly $5 million, after capital
expenditures. Our strong cash position enabled us to repurchase 1.1 million
shares of Tyler common stock for $4 million in cash during the quarter, and we
ended the quarter with $10.5 million in cash."
Mr. Yeaman added, "We expect that the fourth quarter of 2002 will continue our
trend of year-over-year improvement in our operating results. While Tyler is not
immune to the effects of tough economic conditions, we continue to see an active
market in the local government IT sector, and our pipeline of new business is
good. Our competitive position in the marketplace is stronger than ever, as
evidenced by the continuing positive trend in our software license revenues and
by recent new contract awards that expand our geographic reach and build our
presence in larger cities and counties, such as Denver, CO and Allegheny County,
PA."
"Our earnings guidance for the year 2002 remains unchanged," continued Mr.
Yeaman, "with expected earnings per share from continuing operations for the
year of $0.12 to $0.13 and expected EBITDA of $17- $19 million. With an
increased focus on higher-margin software revenues, we expect that revenue
growth for the full year will most likely be in the 10-12% range."
Tyler also announced that it has exercised its option to repurchase an
additional 400,000 shares of Tyler common stock by assigning to eiStream, LLC
Tyler's rights and obligations under a Data License and Update Agreement
associated with its discontinued property records business. eiStream is an
affiliate of William D. Oates, a former director of Tyler. Accordingly,
effective October 30, 2002, the 400,000 shares of Tyler common stock are deemed
no longer outstanding.
The Company also announced that its Board of Directors has authorized the
repurchase of up to 1,000,000 additional shares of Tyler common stock. The
shares will be repurchased from time to time in the open market or through
negotiated transactions. The amount and timing of purchases under the program
will depend upon a number of factors, including the price and availability of
the Company's shares and general market conditions. The repurchased shares may
be reserved for later reissue in connection with employee benefit plans and
other general corporate purposes. Tyler currently has approximately 46.2 million
shares of common stock outstanding.
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Tyler Technologies Reports Record Quarterly Revenues and Earnings
October 31, 2002
Page 3
Tyler Technologies has scheduled a conference call for today at 10:30 a.m.
Central Time, to discuss the Company's third quarter 2002 earnings. The
conference call can be accessed by visiting the Company's homepage at
http://www.tylertechnologies.com or at http://www.companyboardroom.com. A replay
will be available on each of those Web sites following the conference call.
Based in Dallas, Tyler Technologies is a leading provider of end-to-end
information management solutions and services for local governments. Tyler
partners with clients to make local government more accessible to the public,
more responsive to needs of citizens, and more efficient in its operations.
Tyler's client base includes nearly 6,000 local government offices in 49 states,
Canada and Puerto Rico. More information about Tyler Technologies can be found
on the World Wide Web at www.tylertechnologies.com.
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)
####
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<Table>
<Caption>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2002 2001 2002 2001
------------- -------------- ------------ -------------
Revenues $ 34,693 $ 28,435 $ 96,665 $ 86,684
Cost of revenues 22,381 18,515 62,911 58,011
------------ ------------ ------------ ------------
Gross profit 12,312 9,920 33,754 28,673
Selling, general and administrative expenses 8,546 7,508 25,322 22,635
Amortization of acquisition intangibles(1) 832 1,721 2,497 5,177
Interest expense (income), net 12 77 (20) 359
------------ ------------ ------------ ------------
Income from continuing operations
before income taxes 2,922 614 5,955 502
Income tax provision 1,183 363 2,364 393
------------ ------------ ------------ ------------
Income from continuing operations 1,739 251 3,591 109
Loss from disposal of discontinued operations,
net of income taxes -- (23) -- (38)
------------ ------------ ------------ ------------
Net income $ 1,739 $ 228 $ 3,591 $ 71
============ ============ ============ ============
Basic earnings (loss) per common share:
Continuing operations $ 0.04 $ 0.01 $ 0.08 $ 0.00
Discontinued operations -- (0.01) -- (0.00)
------------ ------------ ------------ ------------
Net earnings per common share $ 0.04 $ 0.00 $ 0.08 $ 0.00
============ ============ ============ ============
Diluted earnings (loss) per common share:
Continuing operations $ 0.04 $ 0.01 $ 0.07 $ 0.00
Discontinued operations -- (0.01) -- (0.00)
------------ ------------ ------------ ------------
Net earnings per common share $ 0.04 $ 0.00 $ 0.07 $ 0.00
============ ============ ============ ============
EBITDA (2) $ 5,071 $ 3,501 $ 12,290 $ 8,632
EBITDA per diluted share $ 0.10 $ 0.07 $ 0.25 $ 0.18
Weighted average common shares outstanding:
Basic 47,173 47,171 47,401 47,167
Diluted 49,372 48,396 49,833 47,667
</Table>
(1) Effective January 1, 2002, Tyler adopted the provisions of SFAS No. 142
"Goodwill and Other Intangible Assets". Under the new standard, goodwill
and intangible assets with indefinite useful lives are no longer amortized
but instead tested for impairment at least annually. In accordance with the
new standard, results of operations for 2001 are reported under the
previous accounting standards for goodwill and intangible assets.
Amortization expense related to goodwill (including assembled workforce
subsumed into goodwill) no longer expensed under the new standard was
$895,000 ($651,000 after tax), or $0.02 per share, for the three months
ended September 30, 2001, and $2.7 million ($1.8 million after tax), or
$0.04 per share, for the nine months ended September 30, 2001.
(2) EBITDA consists of income from continuing operations before interest,
income taxes, depreciation, amortization and recovery of acquisition costs
previously expensed ($235,000 in the second quarter of 2001). Although
EBITDA is not calculated in accordance with accounting principles generally
accepted in the United States, the Company believes 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 the Company's operating performance or liquidity that is
calculated in accordance with accounting principles generally accepted in
the United States. 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.
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<Table>
<Caption>
SEPTEMBER 30, DECEMBER 31,
2002 2001
------------ ------------
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 10,534 $ 5,271
Accounts receivable, net 32,543 35,256
Other current assets 2,982 3,674
Deferred income taxes 1,329 1,329
------------ ------------
Total current assets 47,388 45,530
Property, plant and equipment, net 6,934 6,967
Investment securities available-for-sale 20,228 11,238
Goodwill and other intangibles, net 82,743 82,211
Other assets 461 1,234
------------ ------------
Total assets $ 157,754 $ 147,180
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 40,728 $ 39,811
Long-term obligations, less current portion 2,566 2,910
Deferred income taxes 4,755 3,575
Shareholders' equity 109,705 100,884
------------ ------------
Total liabilities and shareholders' equity $ 157,754 $ 147,180
============ ============
</Table>