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Jack Henry’s profits fall 58%

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Jack Henry & Associates Inc. (Nasdaq: JKHY) posted net income of $68.1 million for its fiscal second quarter, a 58 percent drop from $161.2 million a year earlier.

Officials with the Monett-based financial industry software firm cited a windfall created by federal tax reform in the second quarter of fiscal 2018 that led to a 165 percent jump in earnings.

“Our operating margins are showing the headwinds created by the double costs related to the migration of our new electronic payments platform and the new pay-for-performance bonus program that we rolled out at the beginning of the year, which is utilizing a portion of the savings from the (Tax Cuts and Jobs Act),” Jack Henry Chief Financial Officer Kevin Williams said in a news release.

Fiscal 2019 second-quarter financial notes:
• Jack Henry’s revenue climbed 8 percent to $386.3 million compared with a year earlier.
• To start the quarter, the company purchased Agiletics Inc. for $6.3 million and Bolts Technologies Inc. for $13.7 million. Both figures are net of cash acquired, meaning Jack Henry subtracted the cash on the companies’ balance sheets to arrive at the numbers provided in its earnings release.
• Operating expenses rose 9 percent to $298.1 million.

As of Dec. 31, Jack Henry’s assets were nearly $2 billion. The company has more than 8,900 bank and credit union customers nationwide, according to the release.

JKHY shares were trading at $131.38 as of 9 a.m., compared with a 52-week range of $112.78 to $163.68.

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