TYLER TECHNOLOGIES REPORTS 54% INCREASE IN NET INCOME FOR SECOND QUARTER 2003
Board Appoints John Marr, Jr. to Chief Operating Officer Post and Increases Share Repurchase Authorization by One Million Shares
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Dallas, July 31, 2003 -- Dallas-based Tyler Technologies, Inc. (NYSE: TYL) today reported that net income for the quarter ended June 30, 2003 increased 54% over the same quarter of 2002, fueled by a 28% increase in software-related revenues.
Tyler also announced that its Board has appointed John Marr, Jr. to the newly created position of Chief Operating Officer of the Company and has increased the Company’s common stock repurchase authorization by one million shares.
Net income for the three months ended June 30, 2003 was $2.0 million, or $0.04 per diluted share. Net income for the quarter ended June 30, 2002 was $1.3 million, or $0.03 per share.
Total revenues for the quarter ended June 30, 2003 increased 8% to $36.1 million from $33.6 million in the quarter ended June 30, 2002. Software-related revenues (software licenses, software services and maintenance) grew in the aggregate 28% for the quarter, while appraisal services revenues declined 33% following the completion of the initial three-year reassessment contract with Nassau County, New York.
Operating income for the quarter ended June 30, 2003 was $3.1 million, an increase of 35%, compared with operating income of $2.3 million in the same quarter of 2002.
For the second quarter of 2003, EBITDA, or earnings before interest, income taxes, depreciation and amortization, amounted to $5.2 million, or $0.12 per share. EBITDA for the second quarter of 2002 amounted to $4.2 million, or $0.08 per share.
Net income for the six months ended June 30, 2003 amounted to $19.3 million, or $0.42 per diluted share. Included in net income for the first half of 2003 is a gross realized gain of $23.2 million ($16.2 million, or $0.35 per share, after income taxes) in connection with the cash sale of Tyler’s entire investment in H.T.E., Inc. (HTE) during the first quarter of 2003. Net income for the six months ended June 30, 2002 was $1.9 million, or $0.04 per share.
For the six months ended June 30, 2003, revenues increased 9% to $68.5 million from $62.5 million in 2002. Operating income for the first half of 2003 was $4.8 million, an increase of 47% compared to $3.3 million in the first half of 2002.
EBITDA for the six months ended June 30, 2003 was $32.3 million, or $0.70 per share (including $23.2 million, or $0.50 per share, relating to the gross realized gain on the sale of Tyler’s investment in HTE). EBITDA for the first half of 2002 amounted to $7.2 million, or $0.14 per share.
Tyler ended the second quarter of 2003 with $27.5 million in cash and short-term investments, and no debt. Free cash flow (cash provided by operating activities minus capital expenditures) for the second quarter of 2003 was $3.5 million, compared to $1.9 million in the second quarter of 2002.
During the second quarter, the Company successfully completed the repurchase of 5,107,000 shares of its common stock at a price of $4.00 per share under its modified “Dutch Auction” tender offer. Since August 16, 2002, the Company has repurchased a total of 7,482,200 shares of its common stock at an average cash cost of $3.99 per share. With the one million-share increase approved by Tyler’s Board on July 29, 2003, the Company is currently authorized to repurchase up to an additional 2,017,800 shares of Tyler’s common stock. The shares may be repurchased from time to time in the open market or through negotiated transactions. The amount and timing of purchases under the program will be subject to, among other things, the price and availability of the Company’s shares and general market conditions. The repurchased shares may be reserved for later reissue in connection with employee benefit plans and other general corporate purposes.
“The second quarter was another very solid quarter for Tyler Technologies,” said John M. Yeaman, Tyler’s President and Chief Executive Officer. “Our results show that Tyler works – for our customers and for our shareholders. Once again, we experienced strong growth in software-related revenues, which is indicative of the strength of our position in the local government market and the competitiveness of our products.
“Tyler’s gross margin for the second quarter improved to 38.4% from 34.8% last year, reflecting a positive shift in our revenue mix to a greater proportion of high-margin software revenues,” continued Mr. Yeaman. “Gross margin improvement was most evident with respect to software services and maintenance, as a result of greater efficiency in the utilization of our personnel and increased operating leverage.
“The reduction in our appraisal services revenues was in line with anticipated results following the completion of the initial three-year appraisal contract with Nassau County. However, we were very successful in signing new appraisal contracts in the first half of the year, including a $28 million, six-year follow-on contract with Nassau County and a $9 million contract with Franklin County, Ohio, and the long-term outlook for our appraisal business appears encouraging.
“During the second quarter we continued to sign new business at a very good pace, and Tyler ended the quarter with a backlog of signed contracts at a record high level of $131 million,” added Mr. Yeaman. “Although the market, particularly at the higher end, has clearly been impacted by the economy and government budget pressures, we are encouraged by our ability to continue to grow revenues and profits and gain market share during these uncertain times. Our balance sheet continues to grow stronger and we believe that Tyler Technologies is very well positioned to take advantage of emerging opportunities as the overall economy strengthens.”
Mr. Yeaman noted, “Our confidence in the outlook for 2003 continues to increase and our view of the second half of the year remains positive. We continue to expect that total revenues for 2003 will grow between 8% and 10% over 2002, with solid growth in software-related revenues and a decrease in appraisal services revenues. We now expect that fully diluted earnings per share for the year 2003 will be between $0.53 and $0.55 per share, including $0.36 from the gain on the sale of our investment in HTE. EBITDA for 2003 is expected to be in the range of $44 million to $46 million, including the $23 million gain on the sale of the HTE investment. This guidance reflects the reduction in shares outstanding following our stock repurchases in the first half of 2003.”
Please see attachment for the full text of the release, which includes executive appointment bios and comparative results.
Based in Dallas, Tyler Technologies is a leading provider of end-to-end information management solutions and services to local governments. Tyler partners with clients to make local government more accessible to the public, more responsive to needs of citizens, and more efficient. Tyler's client base includes nearly 6,000 local government offices in 49 states, Canada and Puerto Rico. More information about Tyler Technologies can be found on the World Wide Web at www.tylerworks.com.
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Jul 31, 2003 |
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