Jack Henry & Associates Inc (JKHY) 2011 Q3 法說會逐字稿

Good day, and welcome to today's Jack Henry third quarter 2011 earnings conference call. This call is being recorded. For opening remarks and introductions, I would like to introduce Kevin Williams, Chief Financial Officer. Please go ahead.

Thank you Devin. Good morning, thank you for joining us for the Jack Henry & Associates third fiscal quarter 2011 conference call. I am Kevin Williams, CFO. With me today I have Jack Prim, our CFO and Tony Wormington, our President. The agenda for the call this morning will be as follows, Jack Prim will start with an overview of the quarter, Tony will then provide some operational highlights for the quarter, and I will provide some additional comments on the Press Release we put out yesterday, and provide some additional comments on the financials, and then finally we will open up for Q&A.

I need to remind you that remarks or responses to questions today concerning future expectations, events, objectives, strategies, trends, or results constitute Forward-looking statements, or deal with expectations of the future. Like any statement on the future, these are subject to a number of factors which could cause actual results of events to differ materially from those we anticipate. Due to a number of risks and uncertainties and the company undertakes no obligation to update or revise the statements. For a summary of these risk factors and additional information, please refer to yesterday's Press Release, and the section in our 10-K entitled Risk Factors and Forward-Looking Statements. With that I will turn the call over to Jack.

Thanks Kevin, good morning and welcome to the call. We are pleased to again announce record revenue and net income for our third fiscal quarter. As the economy shows increasing signs of stability, and our customer base is shown actually improving continents, we have seen improved sales results compared to a year ago. Total revenue increase of 11% and the quarter with an organic growth of 5%, Support and Services revenue drove all the growth in the quarter, increasing 15% with solid performance from both our Outsourcing and Payments businesses. The Licensing component of revenue continues to be difficult to predict, and as we have discussed previously, we expect those Licensing and Hardware to trend downward as a percentage of total revenue and total amount as well due to continuing customer preference for hosted solutions. Our managers and associates continue to effectively manage costs while handling increased business volumes, and allowed us to leverage the 11% revenue increase into a 16% increase in operating income.

Acquisition activity continues to go well, with our primary focus now on cross sales activity. In that regard we will transition management of the iPay business into our PROFITStar organization, effective July 1. The nature of the iPay products, specifically Best of Breed solutions that could be sold to Jack Henry core system customers as well as to users of competitive core solutions, adheres exactly to the strategy employed to our PROFITStar Organization. Additionally some of the cross sell opportunity with the iPay products are what products exists in the PROFITStar organization today.

We retain the iPay brand because of its recognition as an industry leader in bill payment solutions. Our focus is on continued execution of our business plans. We look forward to seeing many of you at our annual analyst day next week, and with that I will now turn it over to Tony for additional comments on the business.

Thank you Jack. We were very pleased with the strong contributions in all components of Support and Services. Support and Services revenue could 15% for the quarter, and 21% year-to-date compared to last year. The largest contributor to the growth in this line was our electronic payments revenue, which grew 35% compared to the prior-year quarter, and has increased 50% year-to-date compared to the last year. Electronic payments represent 33% of our total revenue for the quarter, and 32% year-to-date. Another large contributor to this line is our OutLink, or Outsourcing services, which grew 10% for the quarter, and 12% year-to-date , which is driven by both new customers electing this type of service delivery, but also due to the continued movement of our existing in-house customers electing to migrate to this model.

Both of these contribute to the overall increase of 15% for the quarter and 21% year-to-date, and our recurring revenue compared to the prior-year period. In addition, our one-time implementation revenue which represents 7% total revenue for both the quarter and the year-to-date has experienced significant growth this year of 13% for the quarter, and 17% year-to-date compared to the prior-year period. Along with the nice increase in revenue, our electronic payments transaction volumes continue to experience good growth. Passport, ATM, and debit processing volumes increased 16% over the prior-year quarter. Bill Payment transaction volumes increased 9% over the prior-year quarter, financial institutions merchants installed and utilizing our enterprise payment solution increased to over 35,000, representing a 12% increase compared to the prior-year quarter.

Merchant-related transaction volumes increased 15% over the prior-year quarter. We continue to be well positioned to take on increasing volumes in all Outsourcing and Payment areas with minimal additional investment required, due to the existing infrastructure and the nature of these electronic processing solutions. I'll now turn it over to Kevin for a further look at the

Total revenues for the quarter increased 11% compared to the same quarter a year ago, and our organic revenue within that increased by 5.5% year-over-year. License revenue decreased by 21% for the quarter compared with the prior-year, which obviously had an impact on our margins for the quarter compared to the quarter a year ago, and [lines driven in] represented 5% of total revenue. The primary decrease compared to prior-year was related to the SilverLake deals for the two large banks that we talked about a year ago, and also due to the decrease in overall imaging as Check 21 has started to run its course.

Our Support and Services revenue increased 15% this quarter over the same quarter a year ago, and represented a 87% of total revenue. Within the Support and Services, implementation increased 13%, electronic payments increased 35% as Tony mentioned, OutLink increased 10%, and in-house maintenance was up 2% for the quarter compared to a year ago. For comparative purposes, iPay contributed $13.1 million in gross revenue for the quarter, which would not be considered organic. All the revenue from the acquisition included Support and Services line revenue.

Our Hardware revenue was flat to the quarter compared to the prior-year. Recurring revenue experienced growth of 14% for the quarter compared to the prior-year, and our consolidated gross margins held steady at 40% for the quarter, compared to the same quarter a year ago. Our [wide lease] margins increased to 91% this quarter from 89% a year ago, due to the decrease in the third party software delivered during the quarter. Support and Service margins improved to 38%, compared to 37% a year ago, as we continue to leverage our infrastructure, and Hardware margins decreased to 25% from 26% a year ago due to sales mix. To break this down into two reporting segments, our Banking segment gross margins decreased slightly to 40% from 41% a year ago, primarily due to the impact of the decrease licensee, and our Credit Union segment margins improved to 38% from 36% a year ago, as Payments business continue to grow very well in that segment of our business.

In the Bank segment, License Merges increased to 91% from 88% a year ago, again just based on sales mix of third-party solutions. Support and Service margins for the Bank statement remained level at 39% for the quarter, and Hardware margins increased volume to 27%. In our Credit Union segment, License margins increased to 92% for the quarter, compared to 91% a year ago, Support and Service margins improved to 34% from 31% a year ago, and our Hardware margins decreased to 22% from 27% a year ago, again, primarily just due to sales mix within the Hardware line within the Credit Union segment.

Total operating expenses increased 5% for the quarter compared to the prior-year, and it's percentage of total revenue decreased to 19% of total revenue, from 20% a year ago. Our operating margins for the quarter improved to 21% from 20% a year ago, and net result with operating income increased 16% for the quarter compared to the prior-year. Obviously our interest expense is up this quarter compared to prior-year, due to the credit facility put in place last June for the iPay acquisition, as we have roughly $245 million total debt this year, compared to $76 million a year ago. Our all-end cost of debt was less than 3% for the quarter, which is down slightly from the first half of the year as we hit some thresholds in our cabinet so our barring rate actually decreased sometime in the first part of February. The effective tax rate for the quarter was 32.3% compared to 27.2% last year. Last year's was impacted by the new credits that were put in place that they impacted the March quarter.

Our EBITDA increased approximately 18% to $73.1 million, from $62 million a year-ago quarter. Depreciation and amortization expense of $22.6 million this quarter, with $10.5 million in depreciation and $12.1 million in amortization, compared to $18.4 million in D&A this quarter last year. Included in the total amortization is amortization of intangibles from prior acquisitions, which was $6.2 million for the quarter, and $19.3 million year-to-date. Our in-house backlog has remained relatively flat for the last four quarters with minimal fluctuations. Our Outsourcing backlog was down slightly sequentially, though still up 5% over the prior-year quarter, and still represented the second-highest report quarter in the history of the company. As I mentioned in prior quarters and prior years, at some point we would not only hit the law of large numbers with our outsourcing backlog, but at some point we would see some fluctuation in this line item for other reasons.

In the quarter just ended, we have failed banks that impact on the outsourcing backlog, and also the new business and renewals is not quite enough to offset the impact of that, and just the normal revenue flow that comes out of the outsourcing backlog on a quarterly basis. For guidance, based on where we are today, we anticipate ending at the fiscal year-end June 30, 2011 with revenue gross profit and operating income growth somewhere in the mid-teens compared to the prior-year, as we continue to do our operations and maintain the margins that we see in the first two quarters. Also just reminder, iPay will anniversary June 1, so that will be included in our organic growth from that point forward.

Although we have a slightly lower tax rate, which we anticipate to be approximately 34% for the year, with the interest expense and cost of debt, we anticipate net income to be dragged down slightly from the operating margin levels, but still in the low- to mid-teens for the year compared to FY '10. We are extremely early in our FY '12 budget process, but at this time, we don't see anything that would prevent us from continuing to see organic revenue grow in the mid-to high single digits next year. Obviously, as we continue to see growth in our electronic payments and the continued trend of in-house plans for (Inaudible) Outsourcing, we should continue to see some slight leverage to the margins as well. We will update and confirm this guidance on our FY '11 year-end earnings call in August. This concludes our opening comments, and we are now ready to take questions. Devin, will you please open the Q&A line up?

(Operator Instructions) Our first question comes from Glenn Greene of Oppenheimer.

Good morning, hey Jack, Kevin, and Tony. I guess the first question Jack, in your prepared comments you talked about improved sales results. I wonder if you could give some color on you're seeing, the order of magnitude of the improvement year-over-year, and sort of more broadly, the bank spending environment and your customer's propensity to increased your spending at this point?

Glenn, the Bank spending environment is somewhat improved. I think what we are seeing is recognition that the economy seems to be on a jumpy, but generally upward trend, and that we are seeing improvement in the Banking business in general. So, there is a little more of a propensity to set money aside.

I would say the environment is improved, and it hasn't shown itself in a huge budget flush or pent up demand for additional product, but we are seeing improved sales results, up double digits compared to same period a year ago. Same good upticks in both the Bank and Credit Union segments, and the PROFITStars business line as well.

Thanks. Maybe, Kevin, you can help me sort of triangulate that sort of comments in the tone up relative to the backlog? Sort of direction at least sequentially? Why do we see through the backlog decline a bit sequentially?

Obviously there was some sizable deals that came out again this quarter in Allegiant and some SilverLake deals that were in the quarter that were in the backlog 12/31. I don't know that Jack -- yes, we're seeing a lot more activity in sales, the forecast numbers a lot better than they did a year ago.

There is a lot of activity in the sales pipeline. We are working a number of SI ideals or the mid-tier bank deals above $1.5 billion in assets. So, there is just a lot of activity out there. For as far as closed deals, I don't know that you can tie that directly to the backlog, as we have just continued to kind of maintain our in-house backlog, Glenn.

Okay, and then just one more number question and I'll pass on. The Support and Services gross margin, which I know increased slightly year-over-year, but pretty meaningful downtick Q-to-Q?

There's a ,couple of things that impact that, Glenn. One, in the December quarter was our annual merit increases, which obviously that had an impact as all of our Support and Services people got pay raises, or the majority of them did. ,So that would have an impact sequentially compared to the December quarter.

And then also, if you look back historically, December quarter has always had a little higher margin in Support and Services because of some annual release fees that go into that quarter. As our invitation services continue to generate very good revenue and good margins, that helps hold those margins up there. But those are the 2 primary things that would cause margins to drop sequentially, which I think historically, they typically drop a little sequentially from the December to the March quarter.

Okay, great. See you next week.

Thank you, our next question comes from Bryan Keene of Credit Suisse.

Hi, good morning. Jack, I'd just be interested in your thoughts on the regulatory environment, especially the Durbin amendment. And how is that affecting bank spending patterns? Are people on hold right now in some areas, as a result of this? Or is it business as usual even with the regulatory environment?

Brian, uncertainty is never good, so I think there is certainly some amount of caution, but banks have credit unions, as well. From early 2009 for probably an 18-month period, were very conservative with our spending for the fear of where the economy was heading at that time. But you can only hold off on some of these expenditures for so long.

I think we started to see some of that, that they need to get out whether it is infrastructure spending, or just resigned itself to the fact that hey, if we are going to be in business 5 years from now, there is going to be some strategies that we need to take advantage of that will require us to spend some money. So, we see some of that going on.

The uncertainty that still is around the Durbin Amendment is not helping in any way. Certainly, if implemented as proposed, there are significant revenue impacts to most financial institutions. And if, in fact, the smaller institutions don't derive the benefit of the carve-out provisions of that amendment.

So, but again, whether Durbin will pass or not, is part of the uncertainty. If it passes, will they in fact benefited from the carve-out, or not benefit from the carve-out? Nobody's going to know until some number of months after the fact. So, again, none of that is helpful, but there is certainly spending that is taking place.

Given the regulatory environment in general, it certainly is -- continues to present challenges. Last-minute finalization of regulatory changes and expectations that all the banks would be in compliance in very short order, certainly causes a lot of scrambling around by all the providers of technology to make sure that we can enable our customers to be able to implement their regs on time. That certainly keeps all of us busy as well.

Okay, but most of the small banks are still concerned that they probably, through the Durbin Amendment at lease, they probably are worried that they won't be exempt, at least in some areas?

I think they are probably concerned. There certainly is a lot of press, certainly from the folks who do not want to see the Durbin Amendment implemented, that that is kind of the rallying cry, is that in spite of the fact that there was an intended carve-out, in reality it won't be able to be accommodated.

Is that the case or not? I don't know and I don't think anybody really knows, and won't know until some number of months after Durbin finally goes into affect. I think the prevailing thought process is that there will not be a benefit there for them.

Okay. Just comparing year-over-year this quarter to last quarter, I think one of the biggest differences is just the license sales, the year-over-year growth obviously. License sales are always lumpy. I guess I would just want to get some insights on what the pipeline looks like for license sales as we head into the June quarter, thanks.

License sales are just very difficult to predict. On the Credit Union side, we continue to see a pretty consistent flow of license sales. We are seeing more -- slightly more trending in the direction of outsourcing preference for core solutions, even on the credit union side.

But having said that, we have seen, still, some pretty consistent flow of license fees there. On the Banking side, License fees any more are almost entirely related to add-on product sales to existing in-house customers. But again, as we've talked about at some length on the number of these calls, we are seeing more and more of our in-house customers trending towards outsource, so there's certainly some dampening effect from that.

On the PROFITStars side, most of the licensing sales that we will see over there are going to be relatively small, as far as individual sales, w,ith the exception of some of the Allegiant sales, which are going to be larger in nature, but again very episodic in terms of how often you see those. So, again, our long-term predictions for Licensing is that it certainly, as a percentage of total revenue, that will trend down. And quite frankly, I suspect that the amount in total will trend down as time goes on for all of those reasons.

Okay, makes sense. Thank you.

Thank you. Our next question comes from Greg Smith of Duncan Williams.

Hi good morning guys. The G&A has bounced around, and I know you guys have some seasonal things, conferences and whatnot, but it did tick down sequentially quite a bit to $12 million. Is that a sustainable kind of level? How should we think about that?

You're right, Greg, it is going to continue to bounce around, and every year in the December quarter, we have our Bank User Group meeting, which the cost of that user group meeting go into the G&A line. So that was the primary driver for the downtick. We also have the Symitar User Group meeting in the September quarter, so G&A typically will always tick up a little bit in the September quarter, and pick up just a little more in the December quarter, and fall off in the March quarter, and should stay about here for the June quarter.

Okay, great. We've been hearing from some of your competitors about heavy investments in Mobile, and Prepaid, and maybe this is something you'll talk more about at the analyst day, but I just wanted to find out if you, on Prepaid specifically, well I guess on mobile and prepaid, are you seeing significant client interest, and do you have credible solutions in those 2 areas?

Greg, we are seeing frankly, very little real interest in prepaid at this point. We had a -- we have solutions available, but frankly, just don't see a lot of demand for those solutions at this point in time. From a mobile standpoint, we have a very successful mobile product installed and offered by more financial institutions than any other mobile banking product in the industry.

We are pretty early into that market, and it has continued to do quite well for us, well over 300 financial institutions, I believe totally in the neighbor of 350 financial institutions, at this point, that are offering our solution. I would tell you that, we are working on kind of the next generation, our next iteration if you will, of that set of solutions.

We are doing some incremental investment there. Certainly would not consider it to be a massive investment, but looking at some substantial improvements that we will be offering to those products that we think will extend that lead that we have, in terms of a number of financial institutions offering our product.

Not a huge revenue generator at this point. It is more about getting the financial institution business and getting some market share user growth we think will come with time. But again, our Mobile business has been profitable since the very beginning. And it continues to be so. We think the new initiatives that will be rolling out on the latter half of this calendar year will certainly help in that regard.

Okay, great. See you next week.

Thank you, our next question comes from John Kraft of D.A. Davidson.

Good morning gentlemen. First one for Kevin is really a follow-up to the question by Glenn. You mentioned in discussions about the outsourcing backlog, that there was some impact due to failed banks.

I guess my question is, looking at the support and services line, it ticked down sequentially. Is that the result of some failed banks? Or are starting to see, it looks like some seasonality in that line. I guess could you talk about -- ?

John, the failed banks, yes there will be some slight impact on support and services line of revenue, but that was more just the outsourcing backlog, because as the bank fails, by the FDIC we do not get any early termination fee, so basically you just flush whatever is left in backlog out, and there is really no impact to the financial statements except that you lose that bit of recurring revenue.

Probably the biggest impact, or the biggest impact to the downtick slightly and sequentially in support and services would be the annual release fees that we have in the December quarter. That is just a historical event that happens every year.

That's right, okay. Could you remind me on the -- on the salary compensation, did that all be reinstated with employees?

That was actually -- the reinstatement was actually done in March of last year. In the December quarter, we went back to our normal annual merit increases, so all of our employees are back where they should be.

So, we've anniversaried that, okay. Just 1 for Tony, I don't know if I missed this, but you have, in the past, given metrics growth, metrics on ATM and debit transactions. I didn't hear it this time.

Yes, ATM and debit increased 16% over the prior-year quarter.

Great, thanks guys. See you next week.

Thank you, our next question comes from Peter Heckmann of Avondale Partners.

Good morning everyone. Wanted to follow up on some of the PROFITStars areas, where it seems like we are seeing a lot of success from vendors outside of the financial institution vertical, areas of business intelligence, security, CRM. Can you give us an update on some of the activity there? I know that some of those PROFITStars had focus that overlapped.

I would say that the majority of the PROFITStars success outside the base, it's kind of an eclectic mix of things. A lot of that continues to be in the remote deposit capture arena. Increasing the number of merchants installed whether that 's by -- well again, financial institutions that are not Jack Henry core customers.

But outside of the Jack Henry core customer base, there' re a number of independent sales organizations, and other business partners that remarket our debt solution in conjunction with, in many cases, other payment processing solutions.

I would say that is the biggest part, that, and just leveraging some of our other payments-related capabilities by other software providers, for example, and other industries that still have a need to process payments and turn them into electronic checks, into electronics. Even if they are not remarketing those products specifically to do that, they typically leverage some of our products to accommodate that with associated transactions fees.

We are -- inside the (Inaudible) we are seeing a very strong demand, especially on the credit union side for our CRN products, or Synapsys products, and also from Security, the Gladiator acquisition that we did, I guess, 3 years ago now, it is having some very good success.

Okay good. And when we look at credit union margins, as that business has grown, I think at 1 point there was an expectation that gross margins could get up into the 40% range, maybe a little higher. Could you give us an update on that progress? You think that is still an attainable goal?

I think it still an attainable goal, Pete. Obviously when we did the Pemco acquisition, that pulled our margins down. As we continue to migrate their operating center into our data center in Houston, that had some ongoing impact to margins. There is still some of the things that are laid out to happen in the next 1 to 2 quarters that will also improve the margins on the creative side, and specifically directed to Pemco.

And also, just as the overall Payments business with iPay, and Pemco and Passport continues to grow in the creative space, obviously that will impact the margins. So, I think at some point, it is going to happen next quarter, no. But, could it happen by the end of next fiscal year? Could the Credit Union margins to be up to the 40% level? Yes, I think that is very possible.

That's helpful, thank you.

Our next question comes from Tim Fox of Deutsche Bank.

Thanks, good morning. Two questions, 1 just on the pricing environment. Any material change at all over the past quarter relative to the improving environment, albeit modest at this point, but how has pricing shaped up relative to the renewals as well as some of your new implementations?

Tim, I would say that pricing is, for the most part, essentially where it has been. It is highly competitive, I don't think there is anything about the economy that is changing any of that at this point. Essentially, we're seeing the same actions from the standard competitors.

We have seen, in a couple of instances, I wouldn't say widespread, but in a couple of instances, some considerably more aggressive bill payment pricing in a couple of cases from some folks who seem to be badly in need of winning a deal. So, we have seen a little bit of that, but again, not anything that I would characterize as a trend at this point. But other than the couple of isolated exceptions there, it seems to be pretty much what we've been seeing for a while.

Got it. And then, you called out the payments business, trending up nicely within the credit union space. I was wondering if you could give a little bit more color on maybe the penetration levels there, and what is driving that increased positive outlook for the Credit Union space relative to payments?

I think I couple things, One is, we have had very good success with the ipay bill payment offering in the credit union space. Again, that is going to be more a longer-term. When you sign one of those deals, they're transaction-based revenue so you're not going to get a big inflow of revenue right up front. That you will see over time.

But we have seen good adoption of the iPay bill payment product within our credit union base, and, of course, the Pemco acquisition business varies, but is entirely credit union related, and has also given us some additional capabilities inside the credit union base that we didn't have before. I think those would be probably the 2 primary areas where we were seeing the uptick on the credit union side.

Thank you.

Our next question comes from Brett Huff of Stephens Inc.

Good morning. Question a little bit on how the conversations are going with accounts. You talk a little about this in a couple of answers, but I wanted to ask it more directly. So, when you're talking with the bank now, what is the primary motivator?

Are we still looking to cut costs, or are we looking to grow, number 1, buy things to help us grow, and then, number 2, is it still the discussion of some core replacements that were taken off the table now back on the table, or are you seeing new efforts on that front? And how would, in general, the ancillary products stack up in terms of hotness, or how much people are demanding those? So, how are those conversations going?

It is going to be all across the board. Different financial institutions are going to have different requirements. The guys that limped along with server hardware, was getting some age on it, but they wanted to squeeze some extra mileage out, they're doing either new infrastructure investments, or in many cases, server virtualization, is a significant area of interest right now, which, of course, has cost savings as a driver, but it also has the simplicity of operations as a driver behind that.

We have seen very good adoption of our NetTeller, kind of our re-worked NetTeller Internet Banking offering in the credit union space, I think that there is kind of a refresh cycle in the credit union industry in particular, related to their online banking solutions, and we have seen good interest and good signings related to that product. And in many cases, in combination with that internet banking refresh, they are including the iPay bill payment as a significantly improved bill pay offering, as well.

CRM, as Kevin mentioned earlier, particularly in the credit space, has done quite well. I'm trying to call out if there are some other things in particular that are noteworthy, as far as complementary products. I will let Tony ponder that for a minute and I will comment on core. Interestingly, especially on the credit union side, core system decisions, again to my surprise, slowed down very little, if at all, through this entire recession.

They essentially have run and continue to run at the same average number of new core sales per year every year, for the last 3 - 4 years. We are not seeing it ramp up to a significantly greater number this year, but the numbers remain constant, right through the recession, and we continue to see very good competitive takeaway opportunities there.

I would tell you that the Banking core system sales has slowed down only, for the most part, only in the sense of the lack of de novo bank opportunities. It is, beyond that, not a significant amount of slow-down on the Banking side. It was, of course, not a hot market before the recession, but there were at least enough de novo bank opportunities that kept things interesting.

We are seeing some renewed interest, I think, with some of the consolidation activity that is taking place in the banking industry, some of the banks are getting larger, and feel like they need to revisit some of their core capabilities, and when they do that, that tends to play pretty well for us. .o, core system sales again, love to see de novo banks come back because they grow up and generate significant revenue at some point.

But we certainly don't see that happening anytime soon. Tony, I don't know if you've got anything else you can think of where we're seeing anything?

I would certainly echo your comments on some of the activity we are seeing on the banking side, is banks that are growing up or have strategy to grow as they are requiring failed FDIC institutions et cetera, T hey are on systems today that potentially won't meet their needs as they become a multibillion-dollar institution, and we are seeing a lot of activity in that area. From a complimentary side, on the banking side of the business, I would tell you that the things we are seeing, a desire for products that can bring efficiency with an accurate ROI from a sales perspective to allow them to reduce their costs and become more efficient.

Solutions such as becoming much more paperless in their branches with our combination of our front-end systems and our document imaging solutions, our electronic signature capabilities, those sort of things. So,systems that are bringing efficiencies are the ones that are gaining the majority of the opportunities right now.

Okay and then 1 last question. There are some competitors out there that are really trying to push new core systems in the credit union space. Any change in the competitiveness, not necessarily on price, but are you seeing any new set of competitors emerge there or gain some traction?

Not for the most part, I think. Certainly PlanServe has a new product offering, and they won a few deals there, mostly, not entirely, but mostly, I think within their existing core customer base. So, that is one to certainly keep an eye on. Other than that, I don't know that we've seen anybody do anything of significance in the marketplace recently.

That's what I needed, thanks for your time.

Thank you. (Operator Instructions) I'm showing no further questions at this time, sir.

Thanks, Devin. As a recap, first of all, I would like to remind everyone that our annual analyst Day will be held next Monday evening and Tuesday May 9 and 10. The event is being held again this year in Dallas, Texas at the airport, and we will also once again kick it off with a mini tech fairand dinner on Monday evening to highlight some of our newer and hotter products. We will have some product specials there like we've done in the past.

Tuesday, you'll obviously get to hear from the 3 of us, and all of our brand presidents and national sales managers. We have scheduled a little, so Tuesday events should conclude by about 12.30, so please schedule accordingly. A registration link was provided to you all, if you have not received that, or not registered and you still want to, just shoot me an email, and we will get you signed up.

In terms of call we wanted to thank you for joining us today to review our third fiscal quarter 2011 results. We are pleased with results and the efforts of all our associates to help control costs, and at the same time continue to take care of our customers. Our executives, managers, and all our associates continue to focus on what is best for our customers and our shareholders. Again, thank you all for joining us today, and Devin, would you please provide the replay number?

Yes Sir. To connect to the replay, ladies and gentlemen, you may dial 1-800-642-1687. Once again, to connect to the replay you may dial 1-800-642-1687, or he may dial 706-645-9291. Once again that as 706-645-9291. Ladies and gentleman thank you for your participation in today's conference, this concludes the program, you may all now disconnect. Thank you, and have a nice day.