EXHIBIT 99.1
Contact: Brian K. Miller
Vice President - Finance
Tyler Technologies, Inc.
(972) 713-3720
bmiller@tylerworks.com
FOR IMMEDIATE RELEASE
TYLER TECHNOLOGIES ANNOUNCES 86% INCREASE
IN NET INCOME FOR THIRD QUARTER 2003
EBITDA INCREASES 55% ON RECORD QUARTERLY REVENUES
DALLAS, OCTOBER 29, 2003 -- Dallas-based Tyler Technologies, Inc. (NYSE: TYL)
today reported that net income for the quarter ended September 30, 2003
increased 86% compared with the same quarter of 2002, driven by a 23% increase
in software-related revenues.
Net income for the three months ended September 30, 2003 was $3.2 million, or
$0.07 per diluted share, while net income for last year's third quarter was $1.7
million, or $0.04 per share.
Total revenues for the quarter ended September 30, 2003 increased 8% to $37.9
million from $35.0 million in the same period last year. Software-related
revenues (software licenses, software services and maintenance) grew in the
aggregate 23% for the quarter, while appraisal services revenues declined 20%.
Operating income for the quarter ended September 30, 2003 was $5.1 million, an
increase of 55%, compared with operating income of $3.3 million in the same
quarter of 2002.
Third quarter EBITDA, or earnings before interest, income taxes, depreciation
and amortization, increased 55% to $7.9 million, or $0.18 per share. EBITDA for
the third quarter of 2002 amounted to $5.1 million, or $0.10 per share.
For the nine months ended September 30, 2003, net income amounted to $22.5
million, or $0.50 per diluted share. Included in net income for the nine-month
period is an after-tax realized gain of $16.2 million, or $0.36 per share, 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 nine months ended September
30, 2002 was $3.6 million, or $0.07 per share.
Revenues for the nine months ended September 30, 2003 increased 9% to $106.3
million from $97.5 million in 2002. Operating income for the first nine months
of 2003 was $9.9 million, an increase of 51% compared to $6.6 million in the
first nine months of 2002.
EBITDA for the nine months ended September 30, 2003 was $40.2 million, or $0.89
per share (including $23.2 million, or $0.51 per share, relating to the gross
realized gain on the sale of Tyler's investment in HTE). EBITDA for the first
nine months of 2002 amounted to $12.3 million, or $0.25 per share.
Tyler ended the third quarter of 2003 with $39.3 million in cash and short-term
investments, and no debt. Free cash flow (cash provided by operating activities
minus capital expenditures) for the third quarter of 2003 was $11.7 million,
compared to $5.0 million for the third quarter of 2002. For the first nine
months of 2003, free cash flow was $13.2 million, compared to $6.8 million in
the same period last year.
-MORE-
Tyler Technologies Announces 86% Increase In Net Income
For Third Quarter 2003
October 29, 2003
Page 2
"As we anticipated, Tyler Technologies turned in great results in the third
quarter, with record quarterly revenues," said John M. Yeaman, Tyler's President
and Chief Executive Officer. "We continued to produce strong growth in our
software-related revenues, which in turn fueled an impressive improvement in
gross margin. We achieved significant milestones in connection with the
successful implementations of the new Odyssey courts system in the state of
Minnesota and in Lee County, Florida, which resulted in the recognition of $3.4
million of software license revenue related to those two contracts. We are
especially pleased to have recorded our eighth straight quarter of
year-over-year increases in software license revenues.
"Tyler's gross margin for the third quarter expanded to 40.8% from 35.2% last
year, the result of both a positive shift in revenue mix and a solid increase in
gross margins for software services and maintenance. In this year's third
quarter, 77.3% of our total revenues were software-related, compared to 67.9% of
our revenues in the same quarter last year," added Mr. Yeaman. "In addition,
more efficient utilization of our personnel, and increased operating leverage
relative to revenue growth, drove software services and maintenance margins up
to 32.6% in this year's third quarter from 23.8% in last year's third quarter."
"Tyler's appraisal services revenues declined in line with our expectations as
several large projects, including the initial contracts in Nassau County, New
York and Lake County, Indiana, have been completed or are winding down. While
2003 is already our best year ever for new appraisal contract signings, and our
outlook for that business remains very positive, we expect that in the long term
our software-related revenues will grow at a faster rate than appraisal services
revenues.
"Our outlook for the current year has not changed," noted Mr. Yeaman. "We
continue to expect that total revenues for 2003 will grow between 8% and 10%
over 2002. We still expect that fully diluted earnings per share for 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. Our results for the first nine months of the year suggest that we
will likely be closer to the upper ends of those ranges. Further, we now expect
that total capital expenditures for 2003 will be approximately $9 million.
Mr. Yeaman continued, "Although our market, particularly at the higher end,
continues to be impacted by the economy and government budget pressures, we are
seeing indications that demand is beginning to strengthen. With solid cash flow
and a strong balance sheet, Tyler has the resources and the commitment to
improve our products, and our competitive position, each and every quarter. By
doing so, we believe we are well-positioned to continue to grow and gain market
share."
-MORE-
Tyler Technologies Announces 86% Increase In Net Income
For Third Quarter 2003
October 29, 2003
Page 3
Tyler Technologies has scheduled a conference call for October 30 at 10:30 a.m.
Central Time to discuss the Company's third quarter 2003 earnings. The
conference call can be accessed by visiting the Company's homepage at
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 throughout all 50 states, Canada,
Puerto Rico and the United Kingdom. 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)
####
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Amounts in thousands, except per share data)
(unaudited)
<Table>
<Caption>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenues: (1)
Software licenses $ 8,400 $ 6,469 $ 20,017 $ 17,047
Software services 9,191 7,064 26,438 17,888
Maintenance 11,704 10,204 34,337 29,788
Appraisal services 7,440 9,309 21,547 28,080
Hardware and other 1,139 1,928 3,995 4,698
---------- ---------- ---------- ----------
Total revenues 37,874 34,974 106,334 97,501
Cost of revenues (1)
Software licenses 2,041 1,349 5,104 3,812
Software services and maintenance 14,090 13,161 41,937 36,912
Appraisal services 5,422 6,637 15,309 19,299
Hardware and other 851 1,515 3,007 3,724
---------- ---------- ---------- ----------
Total cost of revenues 22,404 22,662 65,357 63,747
Gross profit 15,470 12,312 40,977 33,754
Selling, general and administrative expenses 9,678 8,181 28,840 24,672
Amortization of acquisition intangibles 680 832 2,190 2,497
---------- ---------- ---------- ----------
Operating income 5,112 3,299 9,947 6,585
Realized gain on sale of investment in H.T.E., Inc. -- -- 23,233 --
Legal fees associated with investment in H.T.E., Inc. -- (365) -- (650)
Interest income (expense) 141 (12) 287 20
---------- ---------- ---------- ----------
Income before income tax provision 5,253 2,922 33,467 5,955
Income tax provision 2,020 1,183 10,957 2,364
---------- ---------- ---------- ----------
Net income $ 3,233 $ 1,739 $ 22,510 $ 3,591
========== ========== ========== ==========
Earnings per common share:
Basic $ 0.08 $ 0.04 $ 0.52 $ 0.08
========== ========== ========== ==========
Diluted $ 0.07 $ 0.04 $ 0.50 $ 0.07
========== ========== ========== ==========
EBITDA (2) $ 7,860 $ 5,071 $ 40,209 $ 12,290
========== ========== ========== ==========
EBITDA per diluted share $ 0.18 $ 0.10 $ 0.89 $ 0.25
========== ========== ========== ==========
Weighted average common shares outstanding:
Basic 40,464 47,173 43,078 47,401
Diluted 43,181 49,372 45,218 49,833
</Table>
(1) Previously reported net revenues and cost of revenues were recast to
reclassify certain expenses reimbursable from customers as revenues.
(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 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 September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net income $ 3,233 $ 1,739 $ 22,510 $ 3,591
Amortization of acquisition intangibles 680 832 2,190 2,497
Depreciation and other amortization included in
cost of revenues and selling, general and
administrative expenses 2,068 1,305 4,839 3,858
Interest (income) expense (141) 12 (287) (20)
Income tax provision 2,020 1,183 10,957 2,364
---------- ---------- ---------- ----------
EBITDA (Nine months ended September 30, 2003 includes
$23,233 gross realized gain on sale of investment
in H.T.E., Inc.) $ 7,860 $ 5,071 $ 40,209 $ 12,290
========== ========== ========== ==========
</Table>
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<Table>
<Caption>
SEPTEMBER 30,
2003 December 31,
(unaudited) 2002
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 14,561 $ 13,744
Short-term investments available-for-sale 24,701 --
Accounts receivable, net 30,002 33,510
Other current assets 3,881 4,009
Deferred income taxes 1,197 1,197
---------- ----------
Total current assets 74,342 52,460
Property and equipment, net 6,226 6,819
Investment in H.T.E., Inc. -- 27,196
Goodwill and other intangibles, net 82,873 82,886
Other 824 484
---------- ----------
Total assets $ 164,265 $ 169,845
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 49,409 $ 40,226
Long-term obligations, less current portion -- 2,550
Deferred income taxes 4,418 8,413
Shareholders' equity 110,438 118,656
---------- ----------
Total liabilities and shareholders' equity $ 164,265 $ 169,845
========== ==========
</Table>