Exhibit 99.1
Contact: Brian K. Miller
Vice President - Finance
Tyler Technologies, Inc.
(972) 713-3720
bmiller@tylerworks.com
FOR IMMEDIATE RELEASE
TYLER TECHNOLOGIES REPORTS 54% INCREASE
IN NET INCOME FOR SECOND QUARTER 2003
BOARD APPOINTS JOHN MARR, JR. TO CHIEF OPERATING OFFICER POST AND INCREASES
SHARE REPURCHASE AUTHORIZATION BY ONE MILLION SHARES
DALLAS, JULY 31, 2003 -- Dallas-based Tyler Technologies, Inc. (NYSE: TYL) today
reported that net income for the quarter ended June 30, 2003 increased 54% over
the same quarter of 2002, fueled by a 28% increase in software-related revenues.
Tyler also announced that its Board has appointed John Marr, Jr. to the newly
created position of Chief Operating Officer of the Company and has increased the
Company's common stock repurchase authorization by one million shares.
Net income for the three months ended June 30, 2003 was $2.0 million, or $0.04
per diluted share. Net income for the quarter ended June 30, 2002 was $1.3
million, or $0.03 per share.
Total revenues for the quarter ended June 30, 2003 increased 8% to $36.1 million
from $33.6 million in the quarter ended June 30, 2002. Software-related revenues
(software licenses, software services and maintenance) grew in the aggregate 28%
for the quarter, while appraisal services revenues declined 33% following the
completion of the initial three-year reassessment contract with Nassau County,
New York.
Operating income for the quarter ended June 30, 2003 was $3.1 million, an
increase of 35%, compared with operating income of $2.3 million in the same
quarter of 2002.
For the second quarter of 2003, EBITDA, or earnings before interest, income
taxes, depreciation and amortization, amounted to $5.2 million, or $0.12 per
share. EBITDA for the second quarter of 2002 amounted to $4.2 million, or $0.08
per share.
Net income for the six months ended June 30, 2003 amounted to $19.3 million, or
$0.42 per diluted share. Included in net income for the first half of 2003 is a
gross realized gain of $23.2 million ($16.2 million, or $0.35 per share, after
income taxes) in connection with the cash sale of Tyler's entire investment in
H.T.E., Inc. (HTE) during the first quarter of 2003. Net income for the six
months ended June 30, 2002 was $1.9 million, or $0.04 per share.
For the six months ended June 30, 2003, revenues increased 9% to $68.5 million
from $62.5 million in 2002. Operating income for the first half of 2003 was $4.8
million, an increase of 47% compared to $3.3 million in the first half of 2002.
EBITDA for the six months ended June 30, 2003 was $32.3 million, or $0.70 per
share (including $23.2 million, or $0.50 per share, relating to the gross
realized gain on the sale of Tyler's investment in HTE). EBITDA for the first
half of 2002 amounted to $7.2 million, or $0.14 per share.
-MORE-
Tyler Technologies Reports 54% Increase In Net Income
For Second Quarter 2003
July 31, 2003
Page 2
Tyler ended the second quarter of 2003 with $27.5 million in cash and short-term
investments, and no debt. Free cash flow (cash provided by operating activities
minus capital expenditures) for the second quarter of 2003 was $3.5 million,
compared to $1.9 million in the second quarter of 2002.
During the second quarter, the Company successfully completed the repurchase of
5,107,000 shares of its common stock at a price of $4.00 per share under its
modified "Dutch auction" tender offer. Since August 16, 2002, the Company has
repurchased a total of 7,482,200 shares of its common stock at an average cash
cost of $3.99 per share. With the one million-share increase approved by Tyler's
Board on July 29, 2003, the Company is currently authorized to repurchase up to
an additional 2,017,800 shares of Tyler's common stock. The shares may be
repurchased from time to time in the open market or through negotiated
transactions. The amount and timing of purchases under the program will be
subject to, among other things, 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.
"The second quarter was another very solid quarter for Tyler Technologies," said
John M. Yeaman, Tyler's President and Chief Executive Officer. "Our results show
that Tyler works - for our customers and for our shareholders. Once again, we
experienced strong growth in software-related revenues, which is indicative of
the strength of our position in the local government market and the
competitiveness of our products."
"Tyler's gross margin for the second quarter improved to 38.4% from 34.8% last
year, reflecting a positive shift in our revenue mix to a greater proportion of
high-margin software revenues," continued Mr. Yeaman. "Gross margin improvement
was most evident with respect to software services and maintenance, as a result
of greater efficiency in the utilization of our personnel and increased
operating leverage."
"The reduction in our appraisal services revenues was in line with anticipated
results following the completion of the initial three-year appraisal contract
with Nassau County. However, we were very successful in signing new appraisal
contracts in the first half of the year, including a $28 million, six-year
follow-on contract with Nassau County and a $9 million contract with Franklin
County, Ohio, and the long-term outlook for our appraisal business appears
encouraging."
"During the second quarter we continued to sign new business at a very good
pace, and Tyler ended the quarter with a backlog of signed contracts at a record
high level of $131 million," added Mr. Yeaman. "Although the market,
particularly at the higher end, has clearly been impacted by the economy and
government budget pressures, we are encouraged by our ability to continue to
grow revenues and profits and gain market share during these uncertain times.
Our balance sheet continues to grow stronger and we believe that Tyler
Technologies is very well positioned to take advantage of emerging opportunities
as the overall economy strengthens."
-MORE-
Tyler Technologies Reports 54% Increase In Net Income
For Second Quarter 2003
July 31, 2003
Page 3
Mr. Yeaman noted, "Our confidence in the outlook for 2003 continues to increase
and our view of the second half of the year remains positive. We continue to
expect that total revenues for 2003 will grow between 8% and 10% over 2002, with
solid growth in software-related revenues and a decrease in appraisal services
revenues. We now expect that fully diluted earnings per share for the year 2003
will be between $0.53 and $0.55 per share, including $0.36 from the gain on the
sale of our investment in HTE. EBITDA for 2003 is expected to be in the range of
$44 million to $46 million, including the $23 million gain on the sale of the
HTE investment. This guidance reflects the reduction in shares outstanding
following our stock repurchases in the first half of 2003."
The naming of John Marr, Jr. to the newly created position of Chief Operating
Officer of Tyler Technologies is part of a leadership succession plan
established by Tyler's Board of Directors. Mr. Marr is scheduled to succeed Mr.
Yeaman, 62, as Chief Executive Officer of Tyler in July 2004. At the same time,
Mr. Yeaman will become Chairman of Tyler's Board of Directors, while remaining
an officer of the Company. Mr. Marr's appointment as COO is effective
immediately, and he will continue to serve as President of Tyler's MUNIS
division and as a member of Tyler's Board of Directors and its Executive
Committee.
Mr. Yeaman commented, "I'm very pleased that John Marr will take on this
expanded role in Tyler's corporate management, and I look forward to continuing
to work closely with him during and after this transition period. John has
strong leadership skills, as well as many years of operational experience in the
local government software market, which I believe will be extremely valuable as
Tyler continues to grow."
Mr. Marr, 43, has 20 years of experience in the local government technology
industry. He joined MUNIS, Inc. in 1983 and was President of MUNIS when Tyler
acquired it in 1999. Since May 2002, Mr. Marr has also served on Tyler's Board
of Directors. Mr. Marr holds a bachelor's degree in accounting from the
University of Massachusetts.
Tyler also announced that Dustin Womble and Glenn Smith were appointed Executive
Vice Presidents of the Company. Both men will take on expanded roles at the
corporate level in addition to their current positions as leaders of Tyler
divisions. Mr. Womble, 44, is President of Tyler's INCODE division and Mr.
Smith, 50, is President of Tyler's Justice and Courts division and is a member
of Tyler's Board of Directors.
"Tyler is very fortunate to have a great deal of depth and experience throughout
our senior management team," continued Mr. Yeaman. "Their industry experience,
understanding of our customers' needs, and technical expertise have been major
factors in Tyler's growth and success over the past few years. Our operating
units are working well together and we have the management team in place to take
advantage of the tremendous opportunities in our business. By assuming the
additional responsibilities of these new corporate roles, I am certain that
John, Glenn and Dusty will make increasingly important contributions to Tyler's
future success."
-MORE-
Tyler Technologies Reports 54% Increase In Net Income
For Second Quarter 2003
July 31, 2003
Page 4
Mr. Smith co-founded Tyler's Justice and Courts division in 1981 and joined
Tyler when it acquired his company in 1998. He has been a member of Tyler's
Board of Directors since June 2001 and is currently a member of the Board's
Executive Committee. Mr. Smith holds a bachelor's degree in computer science
from North Carolina State University.
Mr. Womble co-founded Tyler's INCODE division in 1981 and has served as
President of INCODE since Tyler acquired the company in 1998. Mr. Womble has a
bachelor's degree in management information systems from Texas Tech University.
Tyler Technologies has scheduled a conference call for July 31 at 10:00 a.m.
Central Time, to discuss the Company's second quarter 2003 earnings. The
conference call can be accessed by visiting the Company's homepage at
http://www.tylerworks.com. A replay will be available on Tyler's Web site
following the conference call.
Based in Dallas, Tyler Technologies is a leading provider of end-to-end
information management solutions and services to local governments. Tyler
partners with clients to make local government more accessible to the public,
more responsive to needs of citizens, and more efficient. 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.tylerworks.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)
####
16-03
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Amounts in thousands, except per share data)
(unaudited)
<Table>
<Caption>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenues:(1)
Software licenses $ 6,157 $ 5,264 $ 11,617 $ 10,578
Software services 9,541 5,832 17,247 10,824
Maintenance 11,698 10,269 22,633 19,584
Appraisal services 7,356 10,988 14,107 18,771
Hardware and other 1,383 1,252 2,856 2,770
---------- ---------- ---------- ----------
Total revenues 36,135 33,605 68,460 62,527
Cost of revenues(1)
Software licenses 1,519 1,394 3,063 2,463
Software services and maintenance 14,565 12,241 27,847 23,751
Appraisal services 5,139 7,257 9,887 12,662
Hardware and other 1,049 1,005 2,156 2,209
---------- ---------- ---------- ----------
Total cost of revenues 22,272 21,897 42,953 41,085
Gross profit 13,863 11,708 25,507 21,442
Selling, general and administrative expenses 10,061 8,596 19,162 16,491
Amortization of acquisition intangibles 725 831 1,510 1,665
---------- ---------- ---------- ----------
Operating income 3,077 2,281 4,835 3,286
Gain on sale of investment security available-for-sale -- -- 23,233 --
Legal fees associated with affiliated investment -- (160) -- (285)
Interest income (expense) 137 (5) 146 32
---------- ---------- ---------- ----------
Income before income tax provision 3,214 2,116 28,214 3,033
Income tax provision 1,233 826 8,937 1,181
---------- ---------- ---------- ----------
Net income $ 1,981 $ 1,290 $ 19,277 $ 1,852
========== ========== ========== ==========
Earnings per common share:
Basic $ 0.05 $ 0.03 $ 0.43 $ 0.04
========== ========== ========== ==========
Diluted $ 0.04 $ 0.03 $ 0.42 $ 0.04
========== ========== ========== ==========
EBITDA(2) $ 5,204 $ 4,246 $ 32,349 $ 7,218
========== ========== ========== ==========
EBITDA per diluted share $ 0.12 $ 0.08 $ 0.70 $ 0.14
========== ========== ========== ==========
Weighted average common shares outstanding:
Basic 42,881 47,647 44,408 47,517
Diluted 44,796 50,405 46,259 50,066
</Table>
- ----------
(1) Previously reported net revenues and cost of revenues were recast to
reclassify as revenues certain expenses reimbursable from customers.
(2) EBITDA consists of income before interest, income taxes, depreciation and
amortization. Although EBITDA is not a calculation in accordance with
accounting principles generally accepted in the United States (GAAP), we
believe 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 operating activities or any other measure
for determining operating performance or liquidity that is calculated in
accordance with GAAP. 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. The following reconciles
EBITDA to net income for the periods presented.
<Table>
<Caption>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2003 2002 2003 2002
---------- ---------- -------- ----------
Net income $ 1,981 $ 1,290 $ 19,277 $ 1,852
Amortization of acquisition intangibles 725 831 1,510 1,665
Depreciation and other amortization included in cost of revenues
and selling, general and administrative expenses 1,402 1,294 2,771 2,552
Interest (income) expense (137) 5 (146) (32)
Income tax provision 1,233 826 8,937 1,181
-------- -------- -------- --------
EBITDA (Six months ended June 30, 2003 includes $23,233
gross realized gain on sale of investment security available-for-sale) $ 5,204 $ 4,246 $ 32,349 $ 7,218
======== ======== ======== ========
</Table>
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<Table>
<Caption>
JUNE 30,
2003 December 31,
(unaudited) 2002
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 15,436 $ 13,744
Short-term investments 12,113 --
Accounts receivable, net 35,593 33,510
Other current assets 4,177 4,009
Deferred income taxes 1,197 1,197
---------- ----------
Total current assets 68,516 52,460
Property and equipment, net 6,418 6,819
Investment security available-for-sale -- 27,196
Goodwill and other intangibles, net 83,253 82,886
Other 755 484
---------- ----------
Total assets $ 158,942 $ 169,845
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 47,565 $ 40,226
Long-term obligations, less current portion -- 2,550
Deferred income taxes 4,418 8,413
Shareholders' equity 106,959 118,656
---------- ----------
Total liabilities and shareholders' equity $ 158,942 $ 169,845
========== ==========
</Table>