Good day, and welcome to the Jack Henry & Associates' Fourth Quarter Fiscal Year 2007 Earnings Conference Call. This call is being recorded. At this I would like to turn the call over to the Chief Financial Officer, Mr. Kevin Williams. Please go ahead, sir.

Thank you, Roushelle. Good morning and welcome to the Jack & Associates fourth quarter and fiscal year end 2007 earnings call. Statements or responses to questions that we made in this conversation would be forward-looking or view of the expectations of the future. Like any statement about the future, these are subject to a number of factors which could cause actual results to differ materially from those which we anticipate. Such factors are disclosed in our recent SEC filings. There could also be other factors not included that can potentially cause results to differ materially. Again, good morning, we are please to host this call this morning to provide our company update and report our record financial results for our fourth fiscal quarter and fiscal year ended June 30, 2007. With that I will now turn the call over to Jack Prim, our CEO.

Thanks Jeff. We are very pleased to announce another strong quarter and year-to-date performance. Strong quarterly performances by both the Bank and Credit Union segments, particularly in support and services revenue, allowed us to again report record revenue and record net income for the quarter and year-to-date. The revenue increased 12% for the quarter to a $181 million and $668 million for the year, a 13% year-over-year increase. The increases were primarily organic in nature at 11% for the quarter and 12% for the year-to-date. We continue to reduce our dependence on the license fees as a percentage of total revenue, ending the year with 11% of total revenue compared with 14% in previous year. Nonetheless, this was still the second highest quarter for license fee sales in company history. Support and services revenue increased 17% for the quarter and 18% for the year. The backlog increased 8% on both a year-over-year and a sequential basis and recurring revenue increased to 66% of total revenue for the year. While the quarter was strong in both the Bank and Credit Union segments, we were particularly pleased to announce the signing of another $1 billion plus Credit Union on the Symitar/Episys system. The $1.3 billion technology Credit Union in San Jose became the 500th client to license the Episys system following an extensive review of competitive systems in the market. As announced previously, we are on three of the five Annual Technology Best Practice Awards given out by CUNA at their Annual Technology Center. Tech CU has selected Episys as the platform on which to base their aggressive future growth plans. In addition, after the close of the June quarter, we followed this significant win by signing the rapidly growing $1.2 billion Western Credit Union to implement Episys. We continue to lead…

As Jack mentioned, we are very pleased with our support and service line, especially with the strong contribution in all the components of our recurring revenue which includes outsourcing data and item processing, in-house support and maintenance and our ESP services. Our support and services revenue increased 17% for the quarter and 18% for the year compared to prior year quarter and fiscal year. We are continuing to see solid increases in all components of our electronic funds transfer transaction processing businesses. Our ATM/debit card processing volumes continue to increase nicely compared to the prior year quarter, increasing at a rate of 35% and our bill payment transaction volumes increased at a nice pace of 49% in the same period. Compared to last sequential quarter, the number of financial institutions installed with our enterprise payment ASP solution for deposit processing increased 28% as well as the financial institution merchants increased by 53% in the same period. We are seeing solid increases in the volume of transactions being processed. Transactions increased by 43% in the same sequential period. As I mentioned in our last quarter call and again in this quarter, we experienced strong implementation revenue due to the implementation of mid-tier bank sold in previous quarters and the volume of convert merge activity in the banking market, due to the number of bank acquisitions, implementation of our imaging products as well as the large increase in the number of financial institutions and the respective merchant implementations of our enterprise payment solutions. Strong demand continues for many of our complementary products and services in both the banking and credit union markets supported by our core processing customers as well as our non-core customers through our ProfitStars brand. I'll now turn it over to Kevin for a further list of numbers.

Thanks Tony. As Jack previously mentioned, during the quarter just ended we have revenue growth of 12% to $181.3 million in total revenue for the quarter of which 11% of this is organic. This is compared to the consensus estimated revenues of $178.4 million in total revenue. Our license revenue did decreased by 5%, compared to the earlier quarter and is down 9% to the fiscal year. However, this quarter a year ago was the highest in the history of the Company, and it had several large mid-tier bank deals. We also feel our sell teams have some very good momentum going into fiscal 2008, under all three of our brands we go to market based on recent successes and based on sale pipeline. Our support and services had an increase in every component, as Tony mentioned, within the line of revenue. For the quarter and fiscal year implementation revenues increased 24% compared to the respective periods a year ago, as large portion of this was tied to specific license revenue in the quarter. The majority of results was also high [ph] the implementation of recurring revenue type items such as our outsourcing for data and item processing and convert mergers of banks that our customers have acquired. Our payment business was up 33% for the quarter and 38% year-to-date. Outlined date and item processing was up 18% for the quarter and 16% year-to-date, and our in-house support and other services were up 9% for the quarter and 11% for the year. Software revenue increased about 3% for the quarter and 7% for the year compared to year ago due to very strong sales in stores, such as our Check Imaging product and scanner sales related to our Remote Deposit Capture offerings. We also had a very strong quarter and…

Thank you. [Operator Instructions]. And our first question will come from Dave Koning with Baird. David Koning - Robert W. Baird & Co.: Yes. Good morning and nice results here.

Good morning, David. David Koning - Robert W. Baird & Co.: I guess just a few questions. First of all, the support and service continues to be very strong in driving the growth profile here. Is that something that you expected to continue to drive growth in maybe kind of mid-teens or maybe just a little better then that again in fiscal '08?

Yes. Dave, I mean that has been our fastest growing part of our business for the last several years, every component on that continues to do extremely well, implementation continues to be strong not only for the additional license sales but also convert mortgages and then as we continue to see the shift to outsourcing, as we've mentioned on previous calls, eight out of ten new customers on the bank side are going for outsourcing. Today we are seeing a lot of our long-term existing in-house customers now going to outsourcing which also drives increase [ph] revenue. Our EST data transaction continues to grow nicely although at our bill pay and our most preferred deposit cash versus [ph] EST just continue to grow at similar levels and we see no slowing in our outsourcing and the in-house maintenance just continues to be pretty stable at 10% level. So, we would expect support and service to continue grow in the mid-teens next year. David Koning - Robert W. Baird & Co.: Okay, great. And then I guess with the tax rate commentary, first of all, what do you expect the tax rate to be without the credit which is what it sounds like you are guiding to, and then what would the tax rate potentially be with the credit, and then finally EPS growth, it sounds like you are sort of implying kind of low-teens type EPS growth?

Yes. I mean, we think that the operating income is going to be somewhere in the mid-teens, similar to where it was this year. But the R&D credit, the challenge is, right now we have to assume here for half a year. So, under the current accounting rule, we have to assume a half a year basically adjust our effective tax-rate for the whole year. So it is going to be somewhere around 36.5% or just slightly higher than that. If they extend the credit then it should go down to about 36%. But if we didn't have the credit at all, it will be about 37.5%, David. And as far as EPS guidance, yes, if they don't renew the tax credit then we think that EPS growth to be somewhere in the low teens, because it will loose any leverage factor we get to the operating income line. David Koning - Robert W. Baird & Co.: Great. And just one final question. Capitalized software expectations in fiscal '08?

Similar to what they were in FY07. David Koning - Robert W. Baird & Co.: Great. Thank you.

You bet. Thanks Dave.

And next we'll move to Paul Bartolai with Credit Suisse.

Thanks. Good morning guys.

Hey Paul. Good morning.

So just to clarify in the tax-rate. So we should be assuming the 36.5% each quarter for the full year, unless we don't depend on the credit?

Yes. I would say for your models you just go ahead and stick 36.5% in there, because that's about what it is going to work out with a half a year of R&D, and obviously if they extend it before 12/31 then the tax potential going down slightly.

Got you. Okay. And is there any allowance for share repurchases assumed in the guidance?

No.

So, that would potentially provide some upside?

Yes.

Okay. And then you guys finished the quarter with I think about $30 million in net cash was it? Or 10 million in net cash?

Yes roughly... that kind of... that's a timing, Paul, of our annual maintenance billing that went out in June which we collected, funded out of cash, similar to what we did in prior year. We had about $70 million in loss drawn down on our revolver at June 30th that we used for acquisition and the repurchase of accretive shares, and I would tell you that the debt was all paid off in the month of June and currently we are sitting on around $50 million in cash.

Okay great. And last question I mean the Credit Union margin are obviously are very strong, I mean it seem like that was mostly, mix with the strong license sales, I was just curious any comments in general on the Credit Union margins and I guess also just the Credit Union market in general, I mean this a kind of the second quarter in a row where we have seen a little bit of improvement on the sale side, so just curious to get thoughts on the Credit Union market?

Hi, Paul, it's Jack... the Credit Union market certainly first three quarter of the year last year was slower than we had expected, we did see some nice pick up in a number of nice closed deal than the fourth quarter, continued in the first quarter of this year with second Credit Union over $1 billion in assets and as you know our Credit Union business tends to be more license fee oriented than outsourcing. We just haven't seen the same adoption of outsourcing preference for core systems on the Credit Union side, yet that we've seen on the banking side. We do expect to see it move more in that direction but so far it's still predominately a preference rate in-house. So, in a quarter where you have a number of those product assignings, certainly can make the big difference in your license fee and as a result pretty good difference in the margins in the business units. But feel like that that business is moving certainly better than it did... was at this time a year ago and feel good about where we are.

And one other comment on the margins. I think we'll just continue to see... compared to the special in support and services overlying within the Credit Union segment as the ESP continues to grow in that side which obviously shared some pretty even margin and also as we continued to add new core customers in-house maintenance will also grow which will allow us to leverage some of our existing infrastructure on resources [ph].

Okay. Thank you.

[Operator Instructions]. Next we'll move to Gil Luria with Wedbush Security.

Good morning.

Good morning, Gil.

First question is, can you confirm the guidance that you laid out in the Analyst Day in May that EBITDA margins are going to expand 50 to 100 basis points?

Gil,I think that there will be some expansion on EBITDA, it won't be a 100 basis points, I don't know, this last year we saw about 35 basis points during the year, and so I think we should see something comparable to that in FY08 as what we saw in FY07.

That's great. And can you tell us kind of looking back at 2007, what percent of sales was from ProfitStars.

Roughly 12% of total revenues was ProfitStars' product. Now understand that includes both inside and outside the base of the ProfitStars related products.

Sure.

Which is right on track with where we said we were going to be at the Analyst Day.

Right. And then last question, can you talk about the absolute numbers for Remote Deposit Capture, how many banks you have? How many merchants? What the trends and action were in the most recent period?

Gil, we got that; I'll take just a second to find it; Jack is looking it up right now.

Great. Then while we wait, there is some concern regarding the environment in the banking sector and whether the recent events and activities are going to slowdown banking spending going forward, could you see that bank technology spending is going to slowdown going forward, do you see any signs of that?

Gil, it's Jack. I... we have not seen a slowdown in that regard at this point in time. These things come and go. I don't think that most of our banks are all that affected by the specific sub-prime issue that have driven lot of the issues. Interest rate changes, certainly, do have some impact. But again a lot of the products that we sell helped the bank, both Jack Henry core customers and non-core customers, improve their net interest margins and run their operations more effectively. In terms of what we are seeing in the area; of course, there is some sales activity. A lot of that is driven by new de novo bank startups. I think those will in all likelihood continue. The first you [ph] need to make a core system change, existing banks that need to make a change, first of all, they're not going to change unless they get a really good reason. If they got a good reason, it's likely going to still be there regardless of what interest rates these have. We don't anticipate that being a big factor and haven't seen any indications of it at this point. I think Tony was able to beat me to the drill on finding the number of banks with merchants on our enterprise payment offering, the Remote Deposit, I'll let Tony give those numbers now.

Yes, Gil, the number of banks installed at the end of fiscal year at June 30, were 432. And the number of banking merchants installed were 5,489.

And then we also had over little over 400 direct merchants that we sold to that did not go through a bank. And also, at June, this fiscal year, June 30, there were roughly a 100 banks into the backlog to be installed on that product.

Right, and still see a pretty strong pipeline for banks that are still valuing.

Great. Thank you very much.

And we'll move on to Nick Fisken with Stephens Inc.

Good morning, everybody.

Hey Nick.

Good morning.

On the revenue outlook for hardware, should stay at that $23 million, $24 million a quarter?

Nick, we have been predicting for several years that hardware revenue is going to get down. One of the... the two main drivers in that right now is scanners for Remote Deposit Capture and stores for all the Check Image solutions that we're selling. There will continue to be some nice hardware upgrades. We're seeing right now iDEN just came out with a new upgrade to the iSeries, so it will be some of that. And as we continue to sell in-house core deals on the Credit Union side, there will continue to be some nice sales of pSeries, so. But hardware is going to bounce around a little bit and it's hard for me to predict that it is going to maintain at that level, but I would guess for the year, it may stay flat to '07 because of some of the things that I just mentioned.

I think, it would, the predictions of hardware declining were certainly have been accurate if it was not for the Remote Deposit phenomenon that we've seen here in last 18 months which kind of started suddenly and moved at a very rapid rate. We think there is probably still another 12 to 18 months minimum rapid growth in that area. But again as that starts to vain; I think we would, certainly, predict the decline in hardware revenues that we've been expecting.

And as you guys see this shift to outsourced; should the license revenue be basically flat year-on-year?

You know that, we continue to see growth in the pipeline at Credit Union side, with the majority of that is in-house deal. We've got a lot of account management solutions on the banking side with our Bank Secrecy Act product and other things. The ProfitStars' group is doing extremely well, and lot of that is license-driven outside the base. So, if you want to model license to be flat FY08, going forward '07, that's probably reasonable.

And then on the first quarter earnings guidance, you just gave, you said some of the... the street is too high at $0.27. How much --

They are probably... it's probably not too much high, Nick; probably a $0.01 or so high.

Okay. Then the only other question I got is on the M&A pipeline given the market turbulence, have you guys seen properties that have been priced... has pricing gotten better? Do you guys seeing some bigger deals where you are getting included now?

We haven't seen a lot of change there, Nick, we expect that that we will see some change. We have been including in a lot of deals, we haven't doing well in the pay [ph] what some of the... particularly the private equity firms have been willing to pay, although there has certainly been some strategic buys off late that were pretty aggressive as well. But I don't think as a result of the changes in the debt marketplace that we've seen a lot of change in deals that we're seeing at this point. But I do think that it will make a difference on deal here for the next six months or so that we do get engaged in, that I believe there will be more reasonable pricing levels likely to be associated with those deals. Now, is the debt environment a temporary... we are looking at a six month kind of window there or something longer term. Don't really have a good feel for that. But I think that, again, the next six months or so, some of the pricing is likely to come down on some of these deals.

How about the volume of deals?

I would say it's roughly --

It's roughly the same. I haven't seen a big change, Nick, there was so much activity there in a 12 to 18 month widow, that a lot of the good properties were gone, there is still a fairly steady stream, a bit... a lot of the deals we're seeing now is just... you just can't just scratch your head and say, this road only makes sense for us in our long term strategy.

Great. Thank you so much, and congrats on the another good quarter.

Thanks Nick.

And that will conclude the question-and-answer session. I'll turn... I'm sorry we do have one more question from Craig Richard with A. G. Edwards. Craig A. Richard - A. G. Edwards & Sons, Inc.: Good morning, guys.

Hi Craig. Craig A. Richard - A. G. Edwards & Sons, Inc.: Yes. Could you give us a breakdown of license revenue between the Bank and Credit Union segment in the quarter first --

Sure, the quarter banking license revenue was $17.8 million and Credit Union was $6.5 million. Craig A. Richard - A. G. Edwards & Sons, Inc.: Okay. And the two large competitive takeaways that you got from price over in the Credit Union space. Were those reflected in last quarter's license revenue number?

You are probably referring, Craig, to the $2 billion credit use that I mentioned. Tech CU was signed in the fourth quarter of deferred... I don't know how much of that may have converted to the actual revenue in the quarter. Western Credit Union was not signed until July so it would not have been reflected in Q4.

Right. So Western is not in the backlog at June 30th. Tech CU there was some of the license revenues that would have been recognized as the license would have been delivered but there is still more license and the majority of implementation, specifically in backlog at June 30th. Craig A. Richard - A. G. Edwards & Sons, Inc.: Okay. Great. And then regarding your technology can you provide a approximate revenue run rate for '08?

Roughly I think it's somewhere around $6 million gross revenue. Craig A. Richard - A. G. Edwards & Sons, Inc.: That will come through primarily support and services?

It will all come to support and services. That's truly a monitoring service, however that service will marry up well with our existing Matrix product line which is in installation, in networks and LANs and WANs through banks and then will tie the security drive on top of those networks, as we install. So, it's a very good cross-sell opportunity for us. But it will all be in support and services. Craig A. Richard - A. G. Edwards & Sons, Inc.: Okay. And then lastly can you just repeat CapEx expectations for '08 and basically the majority increase coming from the Springfield campus build-out at the beginning of that?

CapEx is going to be roughly just somewhere between $40 million and $45 million depending on when some of these project get kicked off, we are still trying to finalize plans for the facilities we are building in Springfield, Missouri. But those should be... grants should be broken on those. This fall we are leasing a new facility in Charlotte which should allow us for growth for the next five years. And those... that the lease facility, because a lot of leasehold improvement is building into that facility and in the same way with Birmingham which... that should start sometime later this fall also. Craig A. Richard - A. G. Edwards & Sons, Inc.: Hey, great. Nice job.

Thanks, Craig.

And that will conclude the question-and-answer session. I will turn the call back over to the speakers for any additional or closing remarks.

Thank you, Roushelle. Again we want to thank you for joining us today to view our fourth quarter and fiscal year end 2007 results. We are very pleased with the overall financial performance during the quarter and year and remain very confident that we are well positioned and that we have the right product and services for both the Bank and Credit Union markets and other financial services markets. We also believe we have the proper resources in both people and technology for these continued future opportunities. We continue to expand and improve our product and services and are committed to build on all of our competitive strength. Our executive, managers and all the member of our team continue to focus to do what's right for our customers and you, our shareholder. Again thank you very much for joining us this morning and with that, Roushelle, would you please provide the replay number.

Thank you for joining today's conference call. If you would like to listen to a replay of this call it will be available from 11:45 AM Eastern Time through, today, through Midnight Wednesday, August 29. The dial-in number in the US is 888-203-1112; internationally is 719-457-0820 and the confirmation code is 4295715. Those numbers again in the US is 888-203-1112; internationally 719-457-0820 and the confirmation code is 4295715. Thank you and you may disconnect at this time.