Jack Henry reports 26% growth in net income

Monett-based Jack Henry and Associates Inc. reported increased fourth quarter revenues by 15 percent and increased revenues by 16 percent for fiscal year 2004, which ended June 30.

Gross profit and margins contributed to a 25 percent increase in net income for the fourth quarter and a 26 percent increase in net income for fiscal year 2004, according to a news release from the company.

Revenues increased to $467.4 million for fiscal year 2004 compared to $404.6 million for fiscal 2003.

"Jack Henry had an exceptional year in fiscal 2004, posting record revenues, earnings and operating cash flow," Chairman Michael E. Henry said in a news release. "The 16 percent increase in revenue was leveraged to a 26 percent increase in net income primarily due to the efforts of our employees to control costs, utilization of existing infrastructure and continuing to improve processes and procedures. I am very proud of our employees and of our company's position for future success."

Net income totaled $17.6 million, or 19 cents per diluted share, while revenues increased 15 percent to $126 million for the fourth quarter of fiscal 2004. For fiscal year 2004, net income increased 26 percent to $62.3 million, or 68 cents per diluted share, compared to $49.4 million or 55 cents per diluted share for the fiscal year ended June 2003.

"Contributing to the strong fiscal year was an increase of 30 percent in license revenue compared to last year and continued growth in our support and services revenue, which increased 20 percent this year and primarily is recurring revenue," CEO Jack F. Prim said in the release.

"Our credit union segment had a very impressive year with a 39 percent increase in revenue while expanding gross margins from 30 percent a year ago to 39 percent this year. We expect this growth to continue as we expand our geographic footprint for outsourcing, complete the integration of our recent acquisitions and continue to see improvements from the realignment of our sales force a year ago," Prim said.

For the fourth quarter, license revenue increased 83 percent to $21.9 million, or 17 percent of fourth-quarter revenues, compared to $12 million, or 11 percent of fourth-quarter revenues a year ago.

Cost of sales for the fourth quarter increased 10 percent, from $66.2 million for the three months ended June 30, 2003 to $72.7 million for the same period in 2004.

Fourth quarter gross profit increased 24 percent to $53.3 million, producing a gross margin of 42 percent, compared to $43 million with a gross margin of 39 percent in last year's final quarter.