Good day and welcome to the Jack Henry & Associates Third Quarter Fiscal Year 2008 Conference Call. Today’s conference is being recorded. With us today is Chief Executive Officer, Mr. Jack Prim; Chief Financial Officer, Mr. Kevin Williams; and President, Mr. Tony Wormington. At this time I would like to turn the conference over to Mr. Kevin Williams.

Good morning. Welcome to the Jack Henry & Associates Third Quarter Fiscal 2008 Earnings Call. Statements or responses to the questions that may be made in this conversation which are forward-looking or deal with expectations about the future, like any statements 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 could potentially cause results to differ materially. Again, good morning. We are pleased on the call this morning to provide a company update and report our financial results for our third fiscal quarter ended March 31, 2008. With me this morning I have Jack Prim, CEO, and Tony Wormington, President, to provide some opening comments and after our prepared statements we will then open the call up for Q&A. However, before we begin, I would like to remind everyone that our annual Analyst Event is in Dallas next Monday evening, May 12, and all day Tuesday, May 13, and we will start it off with a mini-tech fair on Monday night to show off some of our hotter, newer products, including our complete JHA Broad Sweep, our recent acquisitions Gladiator and Remit Plus Product from the Audio-Tel acquisition, remote deposit capture products, our Margin Maximizer, which is the loan deposit pricing solution, Risk Manager, and our new Net Teller Look and Feel Home Banking and Bill Pay Solution, which you will hear a lot about next Tuesday. And the national forum presentations by the executives of the company, all three of our national sales managers, and our operations general managers will be on Tuesday beginning at 8:00 a.m. If you cannot attend in person, the entire day of presentations on Tuesday will be provided via WebEx. With that, I will now turn the call over to Jack Prim, CEO, for some opening comments.

Thanks, Kevin. Good morning. We are pleased to announce another quarter of solid revenue growth with new highs for revenue, net income for the fiscal third quarter, and backlog. Total revenue increased 11% with solid gains from both the bank and credit union segments. Bank segment revenue increased 10% and credit union revenue increased 16%. The organic component of total revenue was 9% in the quarter and 12% on a year-to-date basis. Revenue growth was again fueled by EFT and maintenance growth and continued strong core license sales, particularly in the credit union segment. The revenue backlog reached record levels, up 12% from a year ago and up 4% over the sequential quarter. Once again, driven entirely by the outsourcing business. Outsourcing and EFT growth also helped push recurring revenue to 71% in the quarter and 69% on a year-to-date basis. During the quarter we saw a continuation of the trend of strong growth in support services and challenging growth in license fees. Support and services, which currently represents 78% of total revenue, grew 15% over the record levels of a year ago, driven primarily by strong growth in EFT and in-house maintenance revenues. License fees increased 20% from year-ago levels, but were below our expectations going into the quarter. Additionally, hardware revenue was down 13% from year-ago levels due to fewer sales of checks orders as more banks have now implemented their Check 21 solutions, and some reduction in processor upgrades as IBM was transitioning to its latest line of iSeries processors. The growth in support and service revenue in the quarter, while strong, was not sufficient as in past quarters to offset the shortfall in license and hardware sales and allow us to reach the expected levels in earnings per share. While we were disappointed with this shortfall,…

Thank you, Jack. As Jack mentioned, our support and service revenue component continues to increase nicely. We are pleased with all the components of our recurring revenue, especially EFT services, which experienced the larges increase, along with in-house support and maintenance, outsourcing data and item processing and implementation services. We are continuing to see solid increases in all components of our electronic funds transfer transaction processing businesses. Our ATM debit card processing volumes increased 20% compared to the prior year’s quarter and Bill Payment transaction volumes increases at a nice pace of 34% in the same period. The number of financial institutions installed with our enterprise payments ASP solution for remote deposit processing increased 17% sequentially, quarter-over-quarter, and compared to the prior year quarter increased 96%. The financial institutions merchants installed and utilizing the solution increased by 21% sequentially, and 202% compared to the same quarter a year ago. Along with signing new institutions and their merchants, we saw solid increases in the volume of transactions being processed. Transactions increased by 27% sequentially and 220% compared to the same quarter a year ago. We continue to see demand for many of our complimentary products and services in both the banking and credit union markets, including our imaging solutions, CRM solutions, and risk management solutions, particularly our Yellow Hammer BSA solution. With that I will turn it over to Kevin for a further look at the numbers.

Thanks, Tony. As Jack previously mentioned, during the quarter just ended we had a revenue growth of 11%. It was $187.9 million in total revenue for the quarter, of which 9% or this was organic. Year-to-date total revenue was grown by 14% to $555 million and 12% was organic. License revenue increased, as Jack mentioned, 20% compared to the year-ago quarter, but also, as he mentioned, was below our expectations going into and during the most recent quarter. And license revenue has grown 6% year to date. Our support and services had an increase in every component within the line of revenue for the quarter and year-to-date respectively. Our implementation revenues increased 6% and 10% respectively compared to the periods a year ago, with a large portion of these being not tied to specific license revenue but rather for the implementation of recurring revenue type items and the convert and merge activity of our bank that are acquiring other banks. Our payment business was up 28% for the quarter and 32% for the year. Outlink and processing was up 9% for the quarter and 10% year-to-date. Our in-house performing services were up 13% for the quarter and 15% year-to-date. Hardware revenue decreased by 13% for the quarter, but still up slightly 4% for the year compared to a year ago due to the strong first half of the year. Our recurring revenue, which is in-house support and maintenance, EFT data processing, and Outlink data and item processing, or in other words our support and services line of revenue without the one-time implementation fees has continued to grow very nicely with growth of 16% for the quarter and 18% year-to-date. The products that are marketed under process service brands, both core and non-core customers, continued to increase their contribution to revenue…

(Operator Instructions) Your first question comes from David Koning with Robert W. Baird. David Koning – Robert W. Baird & Co., Inc.: My question is revenue growth decelerated this quarter and certainly it was the toughest comp in quite a while. The last year I guess Q3 2007 growth 15% organic was certainly a tough comp. Do you expect organic growth to resume in the double digit range over the next several quarters, giving the comps start to ease again a little bit?

At this point, David, I don’t know that I’m prepared to say in the next several quarters. I think we will finish up the fiscal year with about double digit top line growth and right at double digit organic growth. We’re still 12% year-to-date organic, so I think we’ll finish out the year, obviously, with more than double digit organic growth. But like I said, we’re right in the middle of next year’s budget and it’s a little tough for us to estimate what the organic growth is going to be for next year, especially with the challenges that Jack and I both mentioned on the predictability of software and hardware sales, at this time. David Koning – Robert W. Baird & Co., Inc.: And I guess that the most important business, still the support and service business growing very nicely. The margins were down, what 260 basis points or something like that year-over-year in that business. Was that a function, mainly, of a touch comp and we get back to kind of normal slight margin progression? Maybe you could talk a little about why the gross margin was down year-over-year.

Well, there was a couple of key factors in there, David, and one of them I mentioned in my prepared comment on the tough comps on one-time deconversion fees in our Outlink division. If you look back over the last 2+ years that I went back and looked, our average one-time deconversion fees in a given quarter averages between $1 million-$2 million and actually this quarter, last year was slightly higher than that and the quarter we just finished, the one-time deconversion fees were basically nonexistent. So that had about 150 basis points of that. Then we also had some large Passport, our ATM customers that renewed contracts in the first half of the fiscal year, and obviously there is huge competition in that market, so it’s kind of a good news/bad news. We resigned all the large customers for another five years, but it was obviously at a lower per-transaction-fee, which is going to have an impact on the margins which we saw in this quarter. So those are the two biggest components of that. And I guess it goes back, David, it’s kind of hard to predict the deconversion fees going forward. It was going pretty steady for the last 2+ years and I’m kind of challenged to even predict any of those for the upcoming quarter because I’m not aware of any right now.

Your next question comes from David Hines with Needham & Company. David Hines – Needham & Company: What was ProfitStar’s revenue contribution in the quarter and then the year-over-year revenue growth?

Do you have a question while I look that one up? David Hines – Needham & Company: On the acquisition front, have you seen valuation expectations in the pipeline come down at all in the past few months?

We have looked at a number of transactions from a distance. Quite frankly, none of them interested us enough to go that level, submit a bid, and then get into the due diligence phase to actually figure out whether expectations have come in line or not. Have not seen anything that would indicate to me that expectations have come down, but we can’t say from having first-hand experience and carrying transactions through far enough to have witnessed that first-hand.

David, through the quarter, and remember ProfitStar, this is both products sold inside the base through our banking and credit union sales team and also outside the base through our ProfitStar sales team, but I will tell you during the quarter, it represented about 13% of our total revenue, which is right where it is year-to-date.

Your next question comes from Tim Willi with Avondale Partners. Tim Willi – Avondale Partners LLC: Question on the backlog. Can you just give us any sort of color on sort of the pro forma margin, and I guess some of the pricing environment for that business, that you signed, obviously a nice step up there. And I guess just any additional color that Tony or Jack might be able to add around what appears to be probably one of the strongest jumps in backlog that you’ve seen for a while, relative to the commentary of cautious optimism. It just seems that that backlog doesn’t necessarily jive with maybe such a sanguine environment for bank spending.

While Kevin is mulling the details of what some of the numbers look like, I would just say that we have had solid growth in the support services line item. Again, the backlog is driven entirely by the outsourcing business. That continues to be de nova banks, on a somewhat smaller basis, probably some competitive take-aways. We have seen an increase in interest from customers that are currently in-house on our system that like the system but want to turn some of the technology management over to us. And I think that is probably reflected in the backlog as well. When a customer does that, there’s kind of a ramp to revenue to help them make that transition, but what we typically see is if we look at the revenue that would have come from that customer in year one, continuing as an in-house customer versus year one now as an outsource customer, the revenue increase in year one is probably 75%-80%, and probably 180% in year two and going forward. So some of those transactions I think certainly have helped to drive the backlog numbers up as well.

I guess the one thing I would add to Jack’s comment before I go to the margin, Tim, is understand that these customers that are going through in-house to outsource is kind of a trade-off. We’re going to get more revenue at the long-term contract but it is going to take away from our in-house maintenance, so the growth of the in-house maintenance could slow slightly. However, we haven’t seen enough of the banks move yet to really have any impact. But just kind of a heads-up. As far as the future margin on the backlog, I would have to say that the margins should actually be, an indication would be that they should be a little stronger going forward. And the reason I say that is, as we all know, our outsourcing backlog is for data and item processing and the majority of that is leaning now more and more towards data processing as item processing becomes a smaller piece, as more and more banks are using Check 21 and branching into our capture so that will continue to decrease as electronic payments overtake the payment check. So I think the increase in backlog if very defined and I really think that the margins going forward reflective in that backlog should actually be slightly higher.

I would also just add, Tim, as we point out a number of times, but because different people look at backlog different ways, I would again remind you that our backlog is in fact substantially understated as we don’t include some of the fastest growing support service line items, being ATM debit cards, electronic bill payment, and remote deposit capture, because of the transaction-oriented nature of those, it is difficult to accurately predict exactly what the number of transactions are going to be. But none of those revenues show up in the backlog and I would tell you that while we have nice growth in that backlog from what we did report, there’s other items contributing nicely as well that are not reflected in that backlog.

Plus the fact that once we sign an outsource customer, we don’t adjust backlog. So, we put a de novo in there and a de novo will typically grow pretty rapidly and we don’t adjust the backlog so revenue that we’re actually taking in that we’re billing on a monthly basis is typically considerably higher than what we’re taking out of backlog on a quarterly basis. Tim Willi – Avondale Partners LLC: And two quick questions to clarify something you just touched on. Would you say, or did you say, that the backlog for EFT and bill payment and things like that, while you’re not putting it in that number, would it be growing faster than this stated 12% for total backlog, 17% for outsourcing?

Absolutely. I mean, I’m not sure, we’re still trying to figure out exactly how to capture the backlog numbers on our remote deposit capture because that’s such a relatively new and fast growing product and trying to figure out how to estimate transactions per merchant and things like that, I can’t even go there. But I will tell you that both Passport and Bill Pay backlogs are growing significantly faster than the Outlink backlog has grown this year over prior year quarters. Tim Willi – Avondale Partners LLC: In the gross margin for the recurring and the maintenance and support, without getting into any I guess specific guidance on that line for next quarter beyond, but how do you feel about the cost structure of that division and the scalability from this standpoint, given what you’ve talked about with the backlogs and those kinds of margins. You did mention personnel and process costs maybe seemed to be a little higher than you had thought or that maybe some of us on the Street would have thought, coming into the quarter.

I think, Tim, part of the base impact on this quarter’s margins compared to either sequentially the same or even a year ago quarter was the one-time deconversion fees that had an impact. I mean, obviously the average comp to processing for our payments, which really is tied directly to the repricing of some of those large contracts we did in the first half of the year. But having said that, we don’t think there’s any more large contracts coming up in the near term that will require repricing to that degree that it will have any impact. We’re not predicting any deconversion, so the margins should not do anything but increase in the future quarter. Tim Willi – Avondale Partners LLC: So you still feel like the scalability of you cross structure is intact, nothing structurally changes as how you’re running the businesses?

No. Nothing has changed, Tim. We’ve still got the same number of data centers that we can continue to leverage and just add processing power as we add outsourcing customers, whether that’s new de novos or take-aways or in-house customers going to outsource, whatever. We might have to add a few people but we can leverage those resources very effectively. There’s still significant leverage in our remote deposit capture and our bill pay. Passport may have maxed out on margins because of pricing pressures, which should be over, at least compensate somewhat by increased volumes. But nothing’s broke within the organization. I mean there’s just a couple of one-time things that hopefully happened in this quarter that knocked the margins down a little bit, and it’s business as usual and we’re going to continue to look at ways to drive more efficiencies and get the margins right back up to where they were.

And certainly the personnel costs will be below the revenue growth line, for sure. I don’t see those personnel costs going that much higher.

Correct me if I’m wrong, Tony, but I’m thinking on a year-to-date basis, excluding the acquisitions, our head count growth is up 2.2%.

It is very low.

Against revenue growth year-to-date of 14%. So, again, our managers have done an excellent job of adding head count in the high-growth areas. We’re continuing to add pretty significant head count in enterprise payments just because to handle the growing volume of merchants that we continue to add there. But at the same time in other areas where we’re not seeing the kind of revenue growth, our managers have done a great job of keeping those costs in line.

Your next question comes from Bryan Keane with Credit Suisse. Bryan Keane – Credit Suisse : This is Norman sitting in for Bryan. Just had a couple of questions. One on license sales. Did you see any [inaudible] any changes for the quarter and did you think some of the slow down was based on just spending slow down or is it more due to outsourcing?

I apologize, I’m going to ask you to repeat that question. I think I missed part of that. Bryan Keane – Credit Suisse : I was wondering if you saw any changes in license sales projectory through the quarter, was it kind of weaker out or did it kind of accelerate at the end of the quarter and did you think that any of the slow down was due to just spending hold backs or was it more through outsourcing?

I would not attribute any of the slow down to any signatory of all to the cutbacks. There were several transactions, actually about three, that were deals that early in the quarter we had projected to close as in-house transactions on the banking side which ended up staying with their current processor in response to a deeply discounted retention strategy to keep those customers there. And that’s not unusual. I think you’ll find that we’ve been pretty consistent on these calls when asked what’s the competitive environment are we seeing anything particularly aggressive in the pricing area, I think our answer has pretty consistently been it’s highly competitive, it has been for years, it’s likely to continue to be, but as far as seeing anything new or different, we really aren’t. But the most aggressive pricing actions that you will see will be an incumbent trying to retain the customer who is giving serious thought to going somewhere else. In which case you can see commonly 30%-40% discounts to retain those customers. In the quarter we had three deals that we expected to see come our way as in-house transactions, which would have carried license fees, obviously, that responded to those types of offers late in the came from their current provider. There’s really nothing unusual about any of those transactions individually. What’s a little unusual is that you had three of those occur in the same quarter. But we really saw, and I can’t point to a single transaction of any significance where a customer has said, “Hey, I’m worried about the economy so I’m going to hold off for three to six months and see what happens.” The economy situations at this point is kind of like this nagging voice in the back of your head that just won’t go away. But in terms of something when we dive into, what did we think was going to happen in the quarter that didn’t, I can’t lay it off on the economy as being the issue. Bryan Keane – Credit Suisse : Can you give us some detail, I think you had said that there was some higher processing costs in support and services. Can you add a little color on that?

What I said was the higher processing costs were really related to some refining of some of the larger EFT debit contracts in the first half of the fiscal year, so as an average cost of the transaction, those processing costs were higher because, like I said, it’s kind of a good news/bad news thing. We finally barged customers up for another five years, the bad news is we had to give them significant discounts to keep them, which obviously impacted the margin on that. But probably the bigger thing is the one-time deconversion fees that we have for outsource customers that get acquired was basically non-existent this quarter when in other quarters they typically average between $1 million-$2 million, which pretty much drops straight to the bottom line.

Your next question comes from Gil Luria with Wedbush. Gil Luria – Wedbush Morgan Securities : The trends in license are pretty obvious. I think they are multi-year trends. My question is about the hardware mix. What’s the mix there between categories that are growing categories, such as remote deposit capture, versus check sorting, which is obviously you’ve got a multi-year declining category. What’s the mix there and how should that play out in terms of growth looking forward.

Let Kevin think whether we actually have kind of those number breakdowns. But I would tell you the general statement on hardware, I’m frankly surprised we haven’t seen decreases in hardware before now. A couple of factors there. Hardware, as you know, gets cheaper every year, it’s faster and it’s less cost per mixes of process capabilities every year, with every release that comes out. And combine that with the fact that for years now we’ve been seeing an accelerating trend towards preference for outsource on the banking side compared to in-house. That would, should, lead to a decline in hardware revenue. I think that’s been offset somewhat by the growth in sales [break in audio] for remote deposit and by sublimated purchases of checking, with the assessment that banks were moving to implement Check 21 solutions. Obviously, as you say, the Check 21 solutions are largely in place, there is some activity still taking place there because the bulk of it has probably moved. We’re continuing to see substantial ramp ups in the number of merchants that are doing remote deposit capture. I think we hit a record last month for the number of merchants that we installed in a single month. What has changed a little bit there is that the scanners are essentially a commodity item and can be purchased from other sources for less money, quite frankly, than we’re willing to sell them for so that some customers have gone in that direction. The other thing I would say is in comparable and scanner sales, typically the banks, not in all cases, but typically your larger banks were the first to move to remote deposit capture. Larger banks have more business customers and therefore buy more scanners. So your large scanner purchases from individual customers probably took place earlier in the cycle and so some of the folks that are buying now may be a little smaller in size and not buying quite as many scanners. So, frankly, when I look at the hardware revenues over the last several quarters, the surprising thing to me is that it’s kind of held steady in there until this quarter, at around $23 million in total revenue. And I can’t give you any reason why we would not expect hardware revenues to continue to decline as a percentage of the total revenue. Now whether Kevin has any specific breakouts on the numbers or not.

The one thing I find is remember that hardware revenue on our financial statement is basically everything we resell, other than software. So it’s not just iron that we’re selling. 10% roughly of that hardware revenue is actually forms and supplies business which we sell which is pretty nice margins which helps to hold the hardware margins up. About 20% of hardware is actually maintenance that we resell on the iSeries and pSeries and greeter sorters out there that we resell and we provide front line support. So you got 70%, and both those are, they’re not absolutely recurring but they’re pretty close recurrings. People are going to continue to buy forms and supplies at pretty much the same pace and hardware maintenance is usually a one year or longer contract. So that leaves 70% of the hardware, which that goes to iSeries, pSeries, xSeries check sorters, all the things we sell through our matrix network services, so it could be any number of things. But I will echo Jack’s thoughts on that. We’ve dealt with hardware revenue of about $23 million for I believe the previous four quarters, which we were kind of surprised that the first quarter went up and we were a little surprised that it continued at that level. So we weren’t overly shocked that it fell this quarter. I was a little surprised that it fell as fast as it did. I thought I came in a million or so short of where I thought it was going to be going into the quarter, but having said that, I don’t see any reason why it’s not going to continue to become a smaller total dollar amount of revenue and obviously a smaller percentage of our total revenue, which ultimately will have a positive impact on our margins. Gil Luria – Wedbush Morgan Securities : On remote deposits, it seems like we’re still on the steep end of the growth curve there. Is it still less than 5% of overall revenue?

Yes, it is still less than 5% of overall revenue. One of the items that we will comment on at the analysts meeting next week, Gil, is that the ABA Banking Journal did their annual survey and published that I think in March. You’ll probably find that on their website. We’ll have hard copy handouts for folks in attendance next week. But one of the things that they were questioning on, the banks this time, was in remote deposit growth. And essentially if you look at the percentage of the bank’s business customers that currently have remote deposit, and the percentage that they expect will have it within two years, the banks are indicating that roughly triple the number of their business customers they expect to have remote deposit in 2010 compared to where they are right now. So, again, the ramp curve of banks moving to offer this service has been extremely steep and probably begins to level off here before too much longer, but even when that occurs it sounds like that the organic growth of additional business is about being the solution. The outlook still looks pretty strong there the foreseeable future.

Currently, Gil, the remote deposit capture product, if you look at the entire revenue driven from that, which would be obviously the recurring revenue transactional fees and in the reselling of the hardware, that’s a little over 2% of our current revenue. Just the transaction fees is a little over 1%, or actually recurring revenue. Because remember, that pricing model that we charge a monthly minimum to the bank or credit union, of which they get a certain number of merchants as part of that, when they add additional merchants that monthly fee goes up. Then the merchants get a certain number of transactions, then once they go beyond that number of transactions, then we get additional transaction fees. So it’s a growth model that, you know, it’s been a lean grab, I hate it continues to be a somewhat lean grab, but now it’s more of a saturation of the business commercial customers of the bank and credit union and getting them to use the product more effectively.

Your next question comes from John Kraft with D.A. Davidson. John Kraft – D.A. Davidson & Co.: Jack, you just commented on three in-house deals that stayed at their existing processor. I guess on the license line, was there any, I know looking at your December quarter’s strong results, were there any deals that were maybe pulled into last quarter that was part of the reason for the weakness, or deals that may have been pushed out, that you’ll see next quarter?

John, there is always some slippage, coming in, moving out. I can’t recall anything in either of those. I’m trying to think back to Q2. Our guys are always trying to pull deals in. I mean, the sooner you get one in and get it off the street, the better off you are. But I can’t remember any specific transactions in the December quarter that would have made those results stronger as a result. And I can’t really name any that slipped out of the March quarter that would have made the license revenue weaker in that particular quarter. There’s some small items always, a $100,000 opportunity here and there, a few of those will slip in, as well as out. But I can’t point to anything specifically, John, that slipped out that would have made a difference in the quarter.

If you back up, though, I think there were a couple of deals that slipped out in our September quarter that we closed in the December quarter. There were a couple of sizeable deals that we thought we were going to have in the September quarter which did ultimately make the December quarter a little stronger, John. John Kraft – D.A. Davidson & Co.: And then regarding your margin, you cited that there were more deals sold by third parties. I was hoping you could discuss that. Is that something you see as a continuing trend and what exactly is happening there?

Are you talking about license revenue? John Kraft – D.A. Davidson & co.: Exactly.

A big part of that is our BSA product, which if you will remember, we contracted with the Red Eye Group of guys to build that product for us, we actually had a revenue split in it and we’ve had very good success since we’ve rolled that product out a little over a year ago in the bank segment and it’s just really taken off in the last quarter or two in the credit union segment, which [break in audio] that’s what pulled the credit union license fees down from 100% last year. There’s only about three products that we re-market on the credit union side. It’s BSA, it’s Inner Voice, and it’s OTG. We don’t really resell OTG anymore because we have our Century product. We do continue to upgrade but there weren’t hardly any of those, if any, in the quarter. Inner Voice was just kind of [break in audio] conference.

Your next question comes from Brad Eichler with Stephens, Inc. Brad Eichler – Stephens, Inc.: Three quick questions. Can you give us any sense for the support and services comp term fees comparisons for the June 2007 quarter versus what it’s going to be next quarter? Just to try and tease out some of that because it seems like that was a meaningful impact this quarter.

Are you talking about margins or revenue, Brad? Brad Eichler – Stephens, Inc.: Well I guess either. It seems like it impacted both, but maybe more margin.

As far as revenue, I don’t see anything in the mix that would change our quarter-to-quarter growth that we’ve been seeing basically for the last 8 quarters in support services. I don’t anything is going to change. I think the revenue growth will continue right on track in the fourth quarter. And just repeat it, the biggest challenge is trying to predict what software and hardware is going to be. And as far as support and service margin, I can’t imagine them getting any worse than this quarter and in fact, we should see some improvements as we gain efficiencies and that’s without it considering any revamp of deconversion fees or anything in the quarter. Brad Eichler – Stephens, Inc.: And on the G&A, it came in meaningful lower than at least what I expected. Was there anything going on there in particular and the sort of second part of that is, is that a good number going forward or who should we look at that?

There’s a couple of things that happened in there, Brad. There’s about $2.5 million of user costs in the fourth quarter that wasn’t in there this quarter, which I actually talked about on the last call. So that was the biggest part of it. There was also $500,000-$600,000 reduction in depreciation and amortization. We ran out of depreciation on some of the assets within the G&A grouping. And then just a spattering of other little things. That’s pretty much $3 million of the decrease right there. Brad Eichler – Stephens, Inc.: That’s a good number [break in audio] sort of seasonal user group stuff?

Yes, it should stay relatively where it is now, through June, then obviously the September quarter, we have the Craig end user meeting which will spike up a little bit and then we have the bankers group meeting in the fall, which obviously has the biggest impact, and then it will drop back down again next March. Brad Eichler – Stephens, Inc.: You all have a typically strong quarter heading into June. Given the commentary on the secular trends of switching from license to outsource, can you give us a sense of, will we still see, do you think, a secular good license quarter, or would that moderate or what’s the best way to think about that?

I think we will see a stronger quarter than we had this quarter. For a couple of reasons. One, it’s our fiscal year end, our sales guys are out there beating the bushes trying to pull out every deal they can to get their quotas in. But, because that is our fiscal year end, has been for years, a lot of our banks are kind of trained that that’s when they should be signing contracts. So, I think we’ll have a stronger quarter. Will we be as strong as the fourth quarter a year ago? There is no way I will go out on a limb and predict that.

Your next question comes from Tim Fox with Deutsche Bank. Tim Fox – Deutsche Bank Securities: Just a quick question on the deconversion just to be clear. It sounds like you’re not expecting any major deconversion in this fiscal quarter coming up. I’m just wondering what they may have looked like in last year’s June quarter. Are we going to have another tough comp?

We don’t really expect to have deconversions in any quarter, Tim. I think the fourth quarter last year, and I don’t have that right in front of me, but I think it somewhere around the average of $1 million or something, for the fourth quarter. Like the quarter we just had, I think there was $300,000. The problem was that the December quarter and the March quarter a year ago were actually unusually high quarters, both those had close to $3 million of deconversions in those quarters and every other quarter in the last 8 quarters was up slightly over $1 million. So we just kind of go into every quarter planning on $1 million and for whatever reason this quarter it just didn’t happen. Tim Fox – Deutsche Bank Securities: You mentioned you did have some good news/bad news on the resigning of those EFT contracts. I was just wondering, what drives the requirement that has to give significant discounts? Is it a competitive issue or is it more that they’re expecting discounts because what I’ll expect is much higher volumes going forward?

Tim, it really has more to do with competitive actions in the market place. These contracts that are coming up for renewal would have typically been put in place at least five years ago and it’s a pretty eased market and everybody is competing hard for every opportunity. So it’s really more of a reflection of the competitive environment. Tim Fox – Deutsche Bank Securities: And just to be clear, you said you don’t see any large renewals coming up in the near term?

No, none that I think would likely lead to any noticeable impact. There’s renewals that take place all the time and bigger ones are the bigger challenge, but again, I don’t think that we’ll see anything that’s likely to show up as a result. Tim Fox – Deutsche Bank Securities: On the in-house sales for competitive take-aways that were aggressively priced and stayed with the other vendor, I’m just trying to characterize your pipeline heading into the final quarter here. Do you have a certain percentage of your pipeline that includes possibly some more of these in-house take-aways, and the second part of that is, do you think this environment may be causing even more egregious pricing from the competitors and is there a risk there to the pipeline?

Tim, I don’t know that we have any, I’m thinking that there’s may a deal that we’re working where there’s potentially some exposure there, but by and large I certainly don’t see three where I think we have that kind of exposure in the current quarter. As far as the economy, again, the eleventh hour deeply-discounted offer from the incumbent to retain business, as we said, is not unusual. We still win some of those, even when that happens. We still sometimes win. Probably in these cases our in-house deliverable would have been a lower cost solution than the deeply-discounted-stay-with-your-outsource-provider solution might have been, however, there’s risk in changing vendors, there’s effort required to change vendors, so a lot of times that price will cause you to look at it and say, “Am I in enough pain with my current provider that I want to risk that?” So could there also be a factor to enter into those? This time that said, “You know the economy is a little questionable right now so maybe what I ought to do is just re-up here and stay.” Could be. I don’t think anybody gave us that indication, but I couldn’t tell you that it wouldn’t be a factor on somebody’s mind.

I will say, Tim, that one of the three did just sign up for one additional year, which means we’re going to have another shot at it this time a year from now. The other two I think resigned back up for the long-term contracts. So that one, specifically, that may be going through their mind, wait a year and see what’s going on with the economy before they make any significant changes.

Your next question is a follow up from Tim Willi with Avondale Partners. Tim Willi – Avondale Partners LLC: Kevin, on capital expenditures, just any thoughts you might have about the direction of that number relative to revenues or how you think about it. Particularly given some of the success you guys are seeing and it sounds like maybe even some acceleration in customer demand for more of the sort of outsourcing data set intensive services. Do you see your infrastructure with more than enough excess capacity right now, that CapEx may begin to trim back relative to revenues or will you be potentially in a fairly consistent investment mode for a while to support this growth?

I think we’re in a fairly consistent mode, but if you remember, Tim, in the last call, and actually I think back on the beginning of the year, I predicted that CapEx for this year was probably going to be somewhere in the low- to mid-40s because of some CapEx going on in some facilities in Springfield and Branson and Charlotte and different areas. Right now we’re just under $28 million, I think we’re probably going to end up the year somewhere in the mid-30s instead of the mid-40s. But that’s because that additional is going to slide over into FY 2009 because those projects are underway but they’re just delayed a little from where I thought they would be at this point. Springfield, we’ve just checked our general contractor there so probably in the next 60 days we’ll be breaking ground. So that’s an 18-month approximate project. I don’t want to say it too loud because I don’t our employees to get so excited that I’ve name a date they can move in. And then we also have the facility in Branson for the underground, which I’m sure we’ll talk a lot more about next week at analyst day, but that’s a much smaller CapEx. We’ve moved into our new facility in Charlotte, which we rented a complete facility and did all the upgrades. So I think FY 2009 will be up slightly. I don’t have final CapEx budgets in for next year, but I would predict that the $10 million from this year will slide over into next year and we’ll probably be back somewhere in the mid-40 mode for next year. But as far as the data centers, I don’t think we have much to do there. What we’re building is people space for support and development to support all of our products. As far as our Outlink group, the data centers are fine. It doesn’t take much room to add another iSeries or pSeries on the floor. So we’ve got a lot of room to grow in the environment we currently have.

There are no further questions.

Well, again we want to thank you for joining us today to review our third quarter fiscal 2008 results. We continue to be pleased with the overall financial performance during the quarter and year to date. Once again I would like to remind everyone that our annual analyst event is next Monday and Tuesday in Dallas and if you have not registered, please send John Segars or myself an e-mail and we will get a link sent to your for the registration. Again, thank you for joining us this morning.

A replay of today’s conference will be available starting today, May 7 at 10:45 am CT and will run through May 14, 2008, at 11:00 pm CT. To access the replay, please dial 719-457-0820 or 888-203-1112 and enter access code 3953439. Thank you for participating in today’s conference call. You may now disconnect.