Jack Henry Unfazed by Financial Market Woes in Fiscal Q2
February 18, 2008 Timothy Prickett Morgan
Maybe sometimes it is not so bad to be a midrange company and to serve customers in credit unions and savings and loan banks. Financial application software and System i hardware vendor Jack Henry & Associates has not seen much of an effect in its fiscal second quarter financial results from the global financial services meltdown associated with bad mortgages written in the United States.
Jack Henry recently reported its financial results for the second quarter of fiscal 2008, ended December 31, booking $192.2 million in sales, up 15 percent, with gross profits of $84.8 million, up 16 percent. Costs rose a bit, however, and net income only rose by 5 percent, to $29.2 million, in the December quarter. For the first six months of fiscal 2008, Jack Henry has booked $367.6 million in sales, up 15.6 percent, with net income of $52.7 million, up 10.7 percent.
“We are pleased to announce another strong quarter with new records for revenue and net income,” said Jack Prim, the company’s chief executive officer, in a statement accompanying the financial results. “We experienced solid growth in both our banking and credit union segments with bank revenue increasing 14 percent and credit union revenue increasing 18 percent for the quarter compared to a year ago. In addition to this strong revenue growth, our gross margins remained relatively level in the bank segment at 44 percent, while our gross margins in the credit union segment increased to 45 percent this year compared to 39 percent a year ago quarter, reflecting continued strong license fee revenue in this segment.”
Jack Henry’s software licensing revenue during the second fiscal quarter was up 9.9 percent in the quarter, to $23.3 million, while support and services sales jumped 17 percent to $145.3 million. Hardware sales–which include System i servers as well as other gear used by banks and credit unions, accounted for $23.6 million in sales, up 8.3 percent.