For the fiscal year ended June 30, 2002, the company generated total revenues of $396.7 million, compared to $366.9 million in fiscal 2001. Net income totaled $57.1 million, or $0.62 per diluted share, compared to $55.6 million, or $0.61 per diluted share, a year ago. Fourth quarter total revenues were $106.1 million, compared to $101.3 million, and net income was $15.9 million, or $0.17 per diluted share, compared to $15.5 million, or $0.17 per diluted share, in the like quarter a year ago. Prior periods have been reclassified to provide consistent presentation of reimbursements from customers as revenues.
FY02 Highlights
"The fact that we were able to beat last year's record results is quite a testament to the people at all levels of our company. In a market affected by both a capital goods recession and global political uncertainty, our people have met these challenges with stamina, confidence and old-fashioned hard work," said Michael E. Henry, Chairman and CEO. "While our growth was modest this year, it followed 2001's record of 53% revenue and EPS growth. I am very proud of our company's long-term record and the current positioning of our organization for future success."
The strongest parts of the company's revenue growth in fiscal 2002 were generated from outsourcing services, which JKHY entered in FY95 through an acquisition, cross-selling of our complementary products and services, which many have come to us through acquisitions, and sales to credit unions, which were jumpstarted in FY00 with the acquisition of Symitar Systems. "Acquisitions have proven to be highly successful, and we are very pleased with the competitive position in our markets," said Terry W. Thompson, President. "Our Symitar division continues to build its presence in the credit union market, and now serves over 390 of the credit unions in the country. The fourth quarter was a very strong period for all sales related activities."
Revenue Growth
Non-hardware revenues, which include licensing and installation, support and services and customer reimbursements generated revenues of $296.3 million, or 75% of total FY02 revenues, and increased 15%, compared to $256.8 million, or 70% of total FY01 revenues. In the fourth quarter, non-hardware revenues increased 13% to $79.6 million, or 75% of 4Q02 revenues, compared to $70.5 million, or 70% of 4Q01 revenues. In fiscal 2002, licensing and installation dropped 4% to $97.2 million, or 25% of total revenues, compared to $101.3 million, or 28% of total revenues a year ago. In the fourth quarter, however, licensing and install revenues grew 1% to $27.3 million, compared to $27.0 million in the fourth quarter a year ago.
Revenues from support and services more than offset the decline in licensing and installation, growing 28% for the year to $171.4 million, or 43% of FY02 revenues, compared to $134.1 million, or 37% of FY01 revenues. Support and services revenues increased to $45.0 million in the fourth quarter, compared to $37.2 million a year ago, representing an increase of 21%. The growth in support and services revenue, reflects the increase in all areas of recurring revenue; in-house support contracts, outsourcing and ATM and debit card processing.
Fiscal 2002 hardware revenues, following a year-long industry trend, decreased 9% compared to a year ago and 14% in the fourth quarter. Hardware revenues totaled $100.3 million, accounting for 25% of FY02 revenues, compared to $110.1 million or 30% of FY01 revenues. Fourth quarter hardware revenues totaled $26.5 million, or 25% of 4Q02 revenues, compared to $30.7 million or 30% of 4Q01 revenues. In keeping with new accounting guidelines the company is reporting customer reimbursements, both as revenues and as cost of sales, which serves to reduce gross margin slightly (approximately 3% for fourth quarter and fiscal year for both 2002 and 2001). The company will provide quarterly breakout for the past two years in its Form 10-K to be filed in September.
Backlog and deferred revenues, both measures of future business, continued to improve at year-end compared to last quarter and year-ago. At June 30, 2002, backlog increased to $141.7 million ($52.8 million in-house and $88.9 million outsourcing), compared to $136.5 million ($54.0 million in-house and $82.5 million outsourcing) at March 31, 2002, and $127.1 million ($49.5 million in-house and $77.6 outsourcing) at June 30, 2001. Deferred revenues increased 15% to $109.0 million, compared to $95.0 million at June 30, 2001.
Margin and Operations Review
Gross margin was 41% for the fourth quarter and fiscal year, compared to 42% in 4Q01 and 41% for FY01. Gross profit increased 6% to $161.2 million for the year and grew 1% in the fourth quarter to $43.1 million. Non-hardware margin was 46% in 4Q02 and 44% in FY02, compared to 47% in 4Q01 and 46% in FY01. Hardware margin was 25% in 4Q02 and 30% in FY02, compared to 31% in both the fourth quarter and full year of 2001. "The most significant change relates to the continued effect of reduced incentives from hardware suppliers. This year incentive payments were lower than last year, due to the threshold being established from much higher sales volumes in the prior year," stated Kevin D. Williams, CFO.
Year-to-date, depreciation and amortization expenses were $20.9 million and $6.6 million, respectively in fiscal 2002, compared to $12.5 million and $9.3 million, respectively in fiscal 2001.
Operating expenses rose 13% in FY02 to $74.6 million, and increased 3% in the fourth quarter to $19.2 million. "We've worked to keep our expenses in check and expense control has become a significant part of our company culture, especially since last September. Several factors impacted operating expenses during the year including increasing employee benefit costs and depreciation expense," explained Williams.
About Jack Henry & Associates
Jack Henry & Associates, Inc. provides integrated computer systems and processes ATM and debit card transactions for banks and credit unions. Jack Henry markets and supports its systems throughout the United States and has over 2,800 customers nationwide. For additional information on Jack Henry, visit the company's web site at www.jackhenry.com. The Company will host a conference call today to discuss fiscal fourth quarter and full year 2002 results at 8:15 a.m. CDT. The call can be accessed live and for one week thereafter at www.jackhenry.com.
Statements made in this news release that are not historical facts are forward-looking information. Actual results may differ materially from those projected in any forward-looking information. Specifically, there are a number of factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Additional information on these and other factors which could affect the Company's financial results are included in its Securities and Exchange Commission (SEC) filings on Form 10-K. Potential investors should review these statements. Finally, there may be other factors not mentioned above or included in the Company's SEC filings that may cause actual results to differ materially from any forward-looking information.
To access a Condensed Consolidated Statement of Income in PDF format, click here.
