Jack Henry & Associates Fiscal 2010 First Quarter Net Income Increases 17%

MONETT, Mo., Nov. 3 /PRNewswire-FirstCall/ -- Jack Henry & Associates, Inc.
(Nasdaq: JKHY), a leading provider of integrated technology solutions and
outsourced data processing services for financial institutions, today
announced first quarter fiscal 2010 results with a 17% increase in net income
and an increase of 3% in gross profit over the first quarter of fiscal 2009.
Revenue remained even and cost of sales was down 2% compared to last year.

For the quarter ended September 30, 2009, the company generated total revenue
of $182.3 million, compared to $183.1 million in the same quarter a year ago.
Gross profit increased to $74.4 million compared to $72.5 million in the first
quarter of fiscal 2009. Net income totaled $26.3 million, or $0.31 per
diluted share, compared to $22.5 million, or $0.26 per diluted share in the
same quarter a year ago.

According to Jack Prim, CEO, "Both of the recently announced acquisitions
support our strategy to acquire companies that provide proven solutions we can
cross sell to our core bank and credit union clients, that generate new
cross-sale opportunities among our respective client bases, and that expand
the specialized products and services ProfitStars can sell to virtually any
financial services organization regardless of core processing platform or
asset size. These two acquisitions also strategically expand our electronic
payment offerings and will provide additional points of competitive
distinction once our integration initiatives are complete. Integration
efforts of the Goldleaf acquisition, which closed on October first, are
tracking in accordance with our plan and we continue to discover additional
cost and operational synergies. The Pemco Technologies acquisition expands
our electronic payments footprint and adds credit card transaction processing
solutions that complement the ATM and debit card solutions we already provide.
We believe both of these acquisitions provide opportunities for significant
cost synergies and revenue growth going forward."

Operating Results

"Our support and services revenue continues to generate growth and offset the
lack of discretionary complementary product license fees and hardware sales
caused by the current economic environment," stated Tony Wormington,
president. "However, the weak license sales also have negatively impacted
one-time implementation fees and delayed some work orders. One-time
implementation revenue was down 8% for the quarter compared to last year. Our
electronic payments revenue grew 7% for the quarter compared to the prior year
and OutLink, which is our data and item processing revenue, also increased 7%
compared to a year ago. We have continued to diligently manage our costs so
our support and service margins increased to 39% compared to 37% in the same
quarter last year."

License revenue decreased 14% to $11.4 million, or 6% of first quarter total
revenue, compared to $13.3 million, or 7% of first quarter total revenue a
year ago. Growth of in-house support fees, outsourcing, and EFT support
contributed to the 3% increase in support and service revenue which expanded
to $155.9 million in the first quarter of fiscal 2010 from $151.9 million for
the same period a year ago. Support and service revenue grew to 86% of fiscal
2010 first quarter revenue from 83% of revenue last year. Hardware sales in
the first quarter of fiscal 2010 decreased 16% to $15.0 million or 8% of first
quarter total revenue, from $17.9 million, or 10% of total revenue for the
first quarter of fiscal 2009.

Cost of sales for the first quarter decreased 2%, from $110.6 million for the
three months ended September 30, 2008 to $107.9 million for the same period in
the current fiscal year. Gross profit in the current year first quarter
increased 3% to $74.4 million compared to $72.5 million last year. Gross
margin for the first quarter of fiscal 2010 was 41% compared to 40% a year ago
for the same period.

Gross margin on license revenue for the first quarter of fiscal 2010 was 90%
compared to 92% a year ago for the same period. The decrease is primarily due
to an increase in the amount of third party software delivered during the
quarter. Support and service gross margin increased to 39% for the first
quarter of fiscal 2010 compared to 37% a year ago for the same period.
Hardware gross margin increased to 27% for the first quarter of fiscal 2010
compared to 25% for the same quarter last year primarily due to the sales mix
of hardware sold.

Operating expenses decreased 12% to $32.5 million for the first quarter of
fiscal 2010 compared to $36.9 million for the same quarter a year ago
primarily due to decreased employee-related expenses. Selling and marketing
expenses decreased 13% in the first quarter to $12.1 million from $13.9
million in the prior year's quarter. Selling and marketing expenses were 7%
of revenue for the first quarter of fiscal 2010 compared to 8% of revenue for
the same quarter a year ago. Research and development expenses decreased 12%
to $10.1 million for the first quarter of fiscal 2010, from $11.5 million for
the same quarter of fiscal 2009. Research and development expenses remained
at 6% of revenue for both periods. General and administrative costs decreased
11% to $10.2 million in the first quarter of fiscal year 2010, from $11.5
million for the same quarter a year ago. General and administrative costs
remained at 6% of revenue for both periods.

Operating income increased 18% to $42.0 million, or 23% of revenue for the
first quarter of fiscal 2010, compared to $35.6 million, or 19% of revenue, a
year ago. Provision for income taxes remained at 37% of income from
continuing operations for both periods. The prior year rate does not include
any impact of the Research and Experimentation Credit ("R&E Credit") since it
had expired as of the end of the second quarter of fiscal 2008, but it has
been included in the current year's first quarter provision. The R&E Credit
is scheduled to expire on December 31, 2009, and accordingly, we are required
under generally accepted accounting principles to allocate the credits
generated prior to its expiration over the entire fiscal year. First quarter
net income totaled $26.3 million, or $0.31 per diluted share, compared to
$22.5 million, or $0.26 per diluted share, in the first quarter of fiscal
2009.

"Our managers and associates continue to do an outstanding job of controlling
our overall costs and specifically our headcount which is actually down 1%
from a year ago. At the same time our customer satisfaction ratings remain
very solid and we continue to exceed their expectations based on the customer
survey feedback," stated Kevin Williams, CFO.

For the first quarter of 2010, the bank systems and services segment revenue
increased to $150.4 million, with a gross margin of 41%, from $149.9 million
in revenue with a gross margin of 39% in the first quarter in fiscal 2009.
For the first quarter of 2010, the credit union systems and services segment
revenue decreased 4% to $31.9 million, with a gross margin of 39%, from $33.2
million in revenue with a gross margin of 40% in the first quarter in fiscal
year 2009.

Balance Sheet, Cash Flow, and Backlog Review

Cash and cash equivalents increased to $108.0 million from $24.8 million
compared to September 30, 2008. The current fiscal year started out with
$52.7 million more in cash and cash equivalents than the prior year, primarily
due to a greater portion of our annual maintenance billings being collected
prior to June 30 than in the previous year. The cash balances decreased less
from the July 1 beginning balances in the current year's first quarter because
no treasury stock was purchased, whereas $31.3 million of treasury stock was
purchased during the first quarter of fiscal 2009.

Deferred revenue increased 5% to $198.5 million at September 30, 2009 from
$188.2 million a year ago. Stockholders' equity increased 12% to $656.8
million at September 30, 2009, from $587.9 million at September 30, 2008.

Cash provided by operations totaled $65.7 million in the current quarter
compared to $59.2 million during last year's quarter. The following table
summarizes net cash (in thousands) from operating activities:

Three months ended
September 30,
------------
2009 2008
---- ----

Net income $26,274 $22,509
Non-cash expenses 16,852 17,398
Change in receivables 70,878 87,989
Change in deferred revenue (47,053) (35,395)
Change in other assets and
liabilities (1,294) (33,349)
------ -------

Net cash provided by operating
activities $65,657 $59,152
======= =======

Net cash used in investing activities in the current quarter was $17.3 million
and primarily included cash outflows for capital expenditures totaling $12.0
million. Another major use of cash was $5.3 million for the development of
software. In the first quarter in fiscal 2009, net cash used in investing
activities of $13.3 million and primarily included cash outflows for the
development of software totaling $6.1 million. Other major uses of cash
included $4.2 million of capital expenditures for facilities and equipment and
$3.0 million in acquisition-related payments.

Net cash used in financing activities in the current quarter was $58.6 million
and included net repayment of short-term borrowings of $60.6 million and
payment of dividends of $7.1 million. Cash used was partially offset by
proceeds of $9.1 million from the exercise of stock options, excess tax
benefits from stock-based compensation and sale of common stock. In the
first quarter of fiscal 2009, cash used in financing activities was $86.6
million and included net repayment of short-term borrowings of $50.0 million,
payment of dividends of $6.4 million and the purchase of treasury stock of
$31.3 million. Cash used was partially offset by proceeds of $1.1 million
from the exercise of stock options, excess tax benefits from stock-based
compensation and sale of common stock.

Backlog, which is a measure of future business and revenue, increased 9%
compared to year-ago levels to $291.2 million ($61.8 million in-house and
$229.4 million outsourcing) at September 30, 2009. Backlog at September 30,
2008, was $266.2 million ($65.1 million in-house and $201.1 million
outsourcing) and at June 30, 2009, it was $289.4 million ($66.8 million
in-house and $222.6 million outsourcing).

About Jack Henry & Associates

Jack Henry & Associates, Inc. provides integrated computer systems and
processes ATM and debit card transactions for banks and credit unions. Jack
Henry markets and supports its systems throughout the United States and has
over 9,800 customers nationwide. For additional information on Jack Henry,
visit the company's web site at www.jackhenry.com. The company will hold a
conference call on November 4th at 7:45 a.m. Central Time and investors are
invited to listen at www.jackhenry.com.

Statements made in this news release that are not historical facts are
forward-looking information. Actual results may differ materially from those
projected in any forward-looking information. Specifically, there are a
number of important factors that could cause actual results to differ
materially from those anticipated by any forward-looking information.
Additional information on these and other factors, which could affect the
Company's financial results, are included in its Securities and Exchange
Commission (SEC) filings on Form 10-K, and potential investors should review
these statements. Finally, there may be other factors not mentioned above or
included in the Company's SEC filings that may cause actual results to differ
materially from any forward-looking information.

Condensed Consolidated Statements of Income
(In Thousands, Except Per Share Data - unaudited)

Three Months Ended
September 30,
2009 2008 % Change
---- ---- --------
REVENUE
License $11,402 $13,294 -14%
Support and
service 155,926 151,947 3%
Hardware 15,003 17,857 -16%
------ ------ ---
Total 182,331 183,098 0%

COST OF SALES
Cost of license 1,120 1,089 3%
Cost of support and
service 95,810 96,132 0%
Cost of hardware 11,010 13,348 -18%
------ ------ ---
Total 107,940 110,569 -2%
------- ------- --

GROSS PROFIT 74,391 72,529 3%
Gross Profit
Margin 41% 40%

OPERATING EXPENSES
Selling and
marketing 12,125 13,932 -13%
Research and development 10,148 11,546 -12%
General and administrative 10,181 11,459 -11%
------ ------ ---
Total 32,454 36,937 -12%
------ ------ ---

OPERATING INCOME 41,937 35,592 18%

INTEREST INCOME (EXPENSE)
Interest income 41 563 -93%
Interest expense (90) (427) -79%
--- ---- ---
Total (49) 136 -136%
--- --- ----

INCOME BEFORE INCOME TAXES 41,888 35,728 17%

PROVISION FOR INCOME TAXES 15,614 13,219 18%
------ ------ --

NET INCOME $26,274 $22,509 17%
======= ======= ==

Diluted net income per
share $0.31 $0.26
Diluted weighted avg
shares outstanding 84,823 86,622

Consolidated Balance Sheet Highlights
(In Thousands-unaudited) Sept 30, % Change
------- --------
2009 2008
---- ----

Cash, cash equivalents and
investments $109,018 $25,831 322%
Receivables 124,633 125,958 -1%
TOTAL ASSETS 979,659 900,892 9%

Accounts payable and
accrued expenses $48,214 $36,343 33%
Deferred revenue 198,485 188,199 5%
STOCKHOLDERS' EQUITY 656,754 587,896 12%

SOURCE Jack Henry & Associates, Inc.

Analyst, Kevin D. Williams, Chief Financial Officer, or IR, Jon Seegert,
Director of Investor Relations, both of Jack Henry & Associates, Inc.,
+1-417-235-6652