Tyler Technologies Inc. (TYL, Financial) filed Quarterly Report for the period ended 2009-03-31.
Tyler Corporation is a major provider of technology software data warehousing electronic document management systems information management outsourcing services title plant and property records database information and other professional services for local governments andother enterprises. The company intends to pursue a consolidation strategy that if successful could lead to significant revenue growth for the company. Tyler Technologies Inc. has a market cap of $532.3 million; its shares were traded at around $15.1 with a P/E ratio of 24.8 and P/S ratio of 2. Tyler Technologies Inc. had an annual average earning growth of 25.2% over the past 10 years.
Research and development expense mainly consist of costs associated with the Microsoft Dynamics AX project, in addition to costs associated with other new product development efforts. In January 2007, we entered into a strategic alliance with Microsoft Corporation to jointly develop core public sector functionality for Microsoft Dynamics AX to address the accounting needs of public sector organizations worldwide. In the three months ended March 31, 2009 and 2008, we offset our research and development expense by $857,000 and $130,000, respectively, which were the amounts earned under the terms of our agreement with Microsoft. We amended this agreement in September 2008 to define the scope of reimbursable development through the balance of the project and now expect to offset research and development expense by approximately $850,000 each quarter through the end of 2010. The actual amount and timing of future research and development costs and related reimbursements and whether they are capitalized or expensed may vary.
As of March 31, 2009, we had cash and cash equivalents (including restricted cash equivalents) of $7.4 million and investments of $3.7 million, compared to cash and cash equivalents (including restricted cash equivalents) of $6.8 million and investments of $4.6 million at December 31, 2008. As of March 31, 2009, we had outstanding borrowings of $7.5 million and unused available borrowing capacity of $17.5 million under our revolving line of credit. In addition, as of March 31, 2009, our bank had issued outstanding letters of credit totaling $5.1 million to secure surety bonds required by some of our customer contracts. These letters of credit expire through early 2010 and have been collateralized by restricted cash balances.
For the three months ended March 31, 2009, operating activities provided net cash of $12.2 million, primarily generated from net income of $6.0 million, non-cash depreciation and amortization charges of $2.3 million, non-cash share-based compensation expense of $1.1 million, and a net decrease in operating assets and liabilities of $2.9 million. Net operating assets and liabilities declined mainly due to the collection of annual maintenance renewals that are billed near the end of December which were offset slightly by annual incentive payments and smaller customer deposits.
In association with this estimate of fair value, we have recorded an after tax temporary unrealized loss on our ARS of $30,000, net of related tax effects of $16,000 in the three months ended March 31, 2009, which is included in accumulated other comprehensive loss on our balance sheet. As of March 31, 2009, we have continued to earn and collect interest on all of our ARS. We believe that this temporary
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Tyler Corporation is a major provider of technology software data warehousing electronic document management systems information management outsourcing services title plant and property records database information and other professional services for local governments andother enterprises. The company intends to pursue a consolidation strategy that if successful could lead to significant revenue growth for the company. Tyler Technologies Inc. has a market cap of $532.3 million; its shares were traded at around $15.1 with a P/E ratio of 24.8 and P/S ratio of 2. Tyler Technologies Inc. had an annual average earning growth of 25.2% over the past 10 years.
Highlight of Business Operations:
In the three months ended March 31, 2009, we signed 15 significant, new contracts with average software license fees of approximately $397,000 compared to 18 significant, new contracts signed in the three months ended March 31, 2008 with average software license fees of approximately $296,000. We consider contracts with a license fee component of $100,000 or more to be significant. Although a contract is signed in a particular quarter, the period in which the revenue is recognized may be different because we recognize revenue according to our revenue recognition policy as described in Note 2 in the Notes to the Unaudited Condensed Financial Statements.Research and development expense mainly consist of costs associated with the Microsoft Dynamics AX project, in addition to costs associated with other new product development efforts. In January 2007, we entered into a strategic alliance with Microsoft Corporation to jointly develop core public sector functionality for Microsoft Dynamics AX to address the accounting needs of public sector organizations worldwide. In the three months ended March 31, 2009 and 2008, we offset our research and development expense by $857,000 and $130,000, respectively, which were the amounts earned under the terms of our agreement with Microsoft. We amended this agreement in September 2008 to define the scope of reimbursable development through the balance of the project and now expect to offset research and development expense by approximately $850,000 each quarter through the end of 2010. The actual amount and timing of future research and development costs and related reimbursements and whether they are capitalized or expensed may vary.
As of March 31, 2009, we had cash and cash equivalents (including restricted cash equivalents) of $7.4 million and investments of $3.7 million, compared to cash and cash equivalents (including restricted cash equivalents) of $6.8 million and investments of $4.6 million at December 31, 2008. As of March 31, 2009, we had outstanding borrowings of $7.5 million and unused available borrowing capacity of $17.5 million under our revolving line of credit. In addition, as of March 31, 2009, our bank had issued outstanding letters of credit totaling $5.1 million to secure surety bonds required by some of our customer contracts. These letters of credit expire through early 2010 and have been collateralized by restricted cash balances.
For the three months ended March 31, 2009, operating activities provided net cash of $12.2 million, primarily generated from net income of $6.0 million, non-cash depreciation and amortization charges of $2.3 million, non-cash share-based compensation expense of $1.1 million, and a net decrease in operating assets and liabilities of $2.9 million. Net operating assets and liabilities declined mainly due to the collection of annual maintenance renewals that are billed near the end of December which were offset slightly by annual incentive payments and smaller customer deposits.
In association with this estimate of fair value, we have recorded an after tax temporary unrealized loss on our ARS of $30,000, net of related tax effects of $16,000 in the three months ended March 31, 2009, which is included in accumulated other comprehensive loss on our balance sheet. As of March 31, 2009, we have continued to earn and collect interest on all of our ARS. We believe that this temporary
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