Jack Henry's success endure volitile market

Growth and change, along with valuing employees and reputation are central to the success of Jack Henry & Associates Inc.

Founded in 1976 in Purdy, by Jack Henry and Jerry Hall to develop in-house banking systems, the company has become a whole solution provider for the banking industry. Today, Jack Henry's son Mike is chairman and chief execuive officer of a company with 25 locations in 16 states.

Mike Henry cites the company's culture and teamwork as central components of Jack Henry & Associates' success. About half of the 1,800 employees own stock in the company. "We have a real ownership mentality," Henry said. "That sort of culture and teamwork concept has allowed us to maintain phenomenal growth the last few years."

The company went public in 1985. In the economic crunch of 2001, Jack Henry & Associates seems unaffected.

Mike Henry is highly optimistic: "Our business isn't recession-proof, but it is pretty recession-resistant. Banks continue to spend on information technology. We've seen no downturn whatsoever," he said.

10-year growth

His optimism is well-founded. "We've grown 25 percent a year over the last 10 years," he said. "If you look at the numbers ... we've doubled the number of employees and customers. In 1995, our market cap went from $100 million to $2 billion. It's been good for us, our customers and our shareholders."

During the fiscal quarter ending Dec. 31, 2000, Jack Henry & Associates boasted record revenue and profits. According to a Jan. 17 company news release, "Revenues increased 49 percent to $80.7 million and grew 62 percent to $157.7 million in the first half of fiscal 2001." In March 2001, the stock split 2 for 1, as it had done in March 2000.

According to Henry, the company's strength is due to good decisions and the right acquisitions. "We've become a solution provider," he said. "We put a lot of work into customer satisfaction 75 percent of our revenue comes from existing customers so we continue to focus on that. Customer satisfaction coupled with team attitude and ownership mentality has combined to make us a successful, growing company."

The description of Jack Henry's employees on the company's official Web site www.jackhenry.com as "key" and its "most valuable asset" is another clue to its success. "We hire for attitude," Henry said. "We hire people who want to come work here for a career. We have less than 5 percent turnover. I like people who refer to the company as our company' or my company.'"

Reputation

Henry describes the atmosphere at Jack Henry as "laid back and casual," a no-suit kind of place. The company's headquarters in Monett provides employees a lake and walking trail. "We want them to have as relaxed a work atmosphere as possible," Henry said.

"The Jack Henry gospel is do whatever it takes, do the right thing and have fun. We know if we do those three things, we will continue to be successful.

Henry is proud of the company's reputation "the way we treat customers and our employees. We've worked hard to get a great rep in our marketplace and that's what we want people to see and focus on."

Henry sees the future as "More of the same. We're going to continue to grow the company the right way. The average age of our top line managers is 40 it's way too early to retire. We want to continue to grow. We don't want to grow to sell the company, but continue to grow the company in the right way, as we have in the past."

In pursuit of that future, Jack Henry & Associates continues to evolve in its offerings to customers. In June 2000, it acquired a company that provides software for credit unions, adding to its potential customer base.

The company also expanded its product line. "We've added complementary solutions things that banks had traditionally bought from other companies, such as teller software. This is good for banks because they can deal with one vendor; it's good for us because it provides a nice profitability," Henry said. He added that over the last six or seven years the company has transformed from a core software provider to more of a solution provider.

Another new product, 4sight, an imaging solution released in March, combines the best features of four imaging products into one solution Henry said. 4sight allows banks to save on postage and labor costs while providing customers with better services through faster retrieval of the images of checks.

Jack Henry & Associates Inc. appears to be doing it right. "I don't know if we're successful because we're having fun or having fun because we're successful," Henry said. "But we're not going to analyze it, we'll just keep going down that road."