Jack Henry Assc has a market cap of $2.64 billion; its shares were traded at around $30.81 with a P/E ratio of 21.4 and P/S ratio of 3.1. The dividend yield of Jack Henry Assc stocks is 1.3%. Jack Henry Assc had an annual average earning growth of 11% over the past 10 years. GuruFocus rated Jack Henry Assc the business predictability rank of 5-star.Hedge Fund Gurus that owns JKHY: Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns JKHY: 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:Electronic payment services continued to experience the largest percentage growth. The quarterly revenue increase is mostly attributable to the acquisitions of iPay and PTSI which added $16,520 of acquisition related growth. Combined, the acquisitions of GFSI, PTSI and iPay added $46,695 year-to-date. Revenue growth within electronic payment services, excluding the effect of the acquisitions, continues to be strong with a quarterly increase of 9.6% over the prior fiscal years second quarter and a year-to-date increase of 10.2% over the first 6 months of fiscal 2010.
Our backlog increased 8% at December 31, 2010 to $342,700 ($78,700 in-house and $264,000 outsourcing) from $316,300 ($76,600 in-house and $239,700 outsourcing) at December 31, 2009. The current quarter backlog increased 5% from September 30, 2010, when backlog was $327,300 ($73,100 in-house and $254,200 outsourcing).
Cost of support and service increased for the quarter commensurate with the increase in support and services revenue. However, support and service gross profits have increased over the prior year as a result of the acquisitions of GFSI and iPay, which combined to contribute gross profit of $11,923 for the current quarter and $23,609 year-to-date; representing a gross profit margin of 46.8% and 46.5% respectively.
INTEREST INCOME AND EXPENSE Interest income for the three and six-month periods ended December 31, 2010 fluctuated due to changes in invested balances and yields on invested balances. Interest expense increased $2,344 for the quarter and $5,147 for the year-to-date, due to increased borrowings on the revolving bank credit facility and term loan borrowings to fund the iPay acquisition, which as of December 31, 2010 totaled $240,000 bearing interest at 3.04%, compared to $60,000 balance as of December 31, 2009 bearing interest at a weighted-average rate of 0.65%.
PROVISION FOR INCOME TAXES The provision for income taxes was $16,489 and $34,618 for the three and six-month periods ended December 31, 2010 compared with $17,247 and $32,861 for the same periods last year. As of the end of the current quarter, the rate of income taxes is estimated at 31.4% of income before income taxes compared to 36.5% as reported for the same quarter in fiscal 2010. The percentage decrease was primarily due to the retroactive extension of the Credit for Increasing Research Activities (IRC Section 41). During the current quarter the credit was retroactively extended to January 1, 2010, which resulted in an income statement credit of $2,499.
NET INCOME Net Income increased 20% for the three months ended December 31, 2010. For the second quarter of fiscal 2011, it was $36,045 or $0.42 per diluted share compared to $29,977, or $0.35 per diluted share in the same period last year. Net Income also increased for the six-month period ended December 31, 2010 to $67,816 or $0.79 per diluted share compared to $56,251 or $0.66 per diluted share, for the same six month period last year.
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