Jack Henry & Associates Inc. Reports Operating Results (10-Q)
Jack Henry & Associates Inc. has a market cap of $2.38 billion; its shares were traded at around $28.08 with a P/E ratio of 20 and P/S ratio of 2.7. The dividend yield of Jack Henry & Associates Inc. stocks is 1.4%. Jack Henry & Associates Inc. had an annual average earning growth of 11% over the past 10 years. GuruFocus rated Jack Henry & Associates Inc. the business predictability rank of 5-star.JKHY is in the portfolios of RS Investment Management, David Dreman of Dreman Value Management, Chuck Royce of Royce& Associates, Columbia Wanger of Columbia Wanger Asset Management, Jeremy Grantham of GMO LLC.
Highlight of Business Operations: Our backlog increased 12% at September 30, 2010 to $327,300 ($73,100 in-house and $254,200 outsourcing) from $291,200 ($61,800 in-house and $229,400 outsourcing) at September 30, 2009. The acquisition of GFSI contributed $15,565 to this increase. Backlog as of June 30, 2010 totaled $328,800 ($78,200 in-house and $250,600 outsourcing) which is comparable to the current quarter.
INTEREST INCOME AND EXPENSE Interest income for the three months ended September 30, 2010 reflects a decrease of $24 when compared to the same period last year. Interest income decreased due to lower invested balances and lower yields on invested balances. Interest expense increased $2,802, due to increased borrowings on the revolving bank credit facility and term loan borrowings to fund the iPay acquisition, which as of September 30, 2010 totaled $240,000, compared to no balance as of September 30, 2009.
PROVISION FOR INCOME TAXES The provision for income taxes was $18,129 for the three months ended September 30, 2010 compared with $15,614 for the same period last year. As of the end of the current quarter, the rate of income taxes is estimated at 36.3% of income before income taxes compared to 37.3% as reported for the same quarter in fiscal 2010. The percentage decrease was primarily due to additional benefits received from the Domestic Production Activities Deduction (IRC Section 199). Beginning with the 2010 tax year, this deduction increased from 6% to 9% of qualifying income.
NET INCOME Net Income increased 21% for the three months ended September 30, 2010. For the first quarter of fiscal 2011, it was $31,771 or $0.37 per diluted share compared to $26,274, or $0.31 per diluted share in the same period last year.
The Company's cash and cash equivalents decreased to $46,766 at September 30, 2010, from $125,518 at June 30, 2010, and also decreased from $108,018 at September 30, 2009. The decrease in the cash balance from June 30, 2010 is primarily due to the repayment of long and short term debt.
Cash used in investing activities for the current quarter totaled $16,181. The largest use of cash was capital expenditure for facilities and equipment, including the on-going construction of our new Branson, Missouri facility and other computer equipment purchases, totaling $10,023. Other major uses of cash included $6,159 for th
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