Jack Henry & Associates Inc.'s (JKHY, Financial) stock lost 3.4% in Wednesday morning trading, after the company reported fourth quarter EPS of 83 cents on revenue of $383.8 million (a 5% increase Tuesday when compared to fourth-quarter 2016), beating revenue estimates by $11.02 million while profit expectations were in line.
Despite the fall, Jack Henry shares have risen 15.7% on a year-to-date basis.
David Foss, president and CEO of the company, was pleased to report “another year of record revenue and operating income.” Further, he was pleased with the employee engagement and customer satisfaction.
In the trimester, gross profit increased 2% to $164.4 million, but net income decreased 23% to $64.7 million, or 83 cents per diluted share. For the fourth quarter, the bank systems and services segment revenue increased 2% to $277.4 million and a gross margin of 40%. Excluding Alogent from the fourth quarter of fiscal 2016, bank systems and services segment revenue doubled that figure, reaching an increase of 4% for the quarter. Moreover, the credit union systems and services segment revenue increased 13% to $106.4 million and a gross margin of 50%.
Because of the gain on the sale of Alogent that was recognized in the fourth quarter of fiscal 2016, operating income decreased 15% to $98.9 million, or 26% of fourth quarter fiscal 2017 revenue.
Revenue for the year ended in June increased 6% year over year to $1.431 billion. Further, gross profit increased 5% to $612.1 million, but net income reached $245.8 million, a decrease of 1%, with diluted earnings per share of $3.14. Net income for the year decreased 1% to $245.8 million, or $3.14 per diluted share, compared to $248.9 million, or $3.12 per diluted share, in fiscal 2016.
From the cash flow statement, we can appreciate that the company collected cash provided by operations for $357.3 million in fiscal 2017 compared to $366.4 million last year. Cash deployed in investing activities for fiscal 2017 totaled $141.6 million ($136.0 million for the same period in fiscal 2016) while in financing activities the cash used in fiscal 2017 was $171.3 million ($308.5 million in fiscal 2016).
Disclosure: The author holds no position in any stocks mentioned.
