Good day, and welcome to today's Jack Henry Fourth Quarter 2013 Earnings Call. This call is being recorded. For opening remarks and introductions, I would like to introduce Kevin Williams, Chief Financial Officer. Please go ahead.

Thanks, Ben. Good morning, and thank you for joining us for the Jack Henry & Associates Fourth Quarter and Fiscal Year-end 2013 Conference Call. I'm Kevin Williams, CFO; and with me today are Jack Prim, our CEO; and Tony Wormington, our President. The agenda for the call this morning will be: Jack will start it off with an overview of the quarter; Tony will then provide some operational highlights; and then, I'll provide some additional comments on the press release we put out yesterday on the financials after market close to provide some additional comments. And finally, we'll try to answer any questions you have. 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 about the future. Like any statement about the future, these are subject to a number of factors, which could cause actual results or events to differ materially from those which we anticipate due to a number of risks and uncertainties, and the company undertakes no obligation to update or review these statements. For a summary of these risk factors and additional information, please refer to yesterday's press release and the sections in our 10-K entitled Risk Factors and Forward-Looking Statements. With that, I'll now turn the call over to Jack.

Thanks, Kevin. Good morning, and welcome to the call. We are pleased to again announce record revenue and earnings for the fourth fiscal quarter and fiscal year 2013. In addition to a strong financial performance, we significantly increased our dividend and reinitiated share repurchases during the year to return more cash to our shareholders. This performance was fairly balanced with our employees and customers as we saw solid gains and satisfaction measures from these major constituents as well. The continued trends of a slowly improving economy and declining number of bank failures led to another strong sales year. For the third consecutive year, all of our brands: JHA Banking, Symitar and ProfitStars, finished ahead of their sales targets for the year. We saw a strong banking core systems sales, including several in the mid-tier segment. Symitar continued to lead the Credit Union industry in new core systems sales, as it has for more than a decade. With 3 new signs of Credit Unions over $1 billion in assets, Symitar further extended its lead as the preferred solution for large credit unions with 39% of this segment of the market now committed to the Episys' platform. ProfitStars again had strong cross sales to its noncore customer base of almost 10,000 institutions. Our payments product had strong sales and transaction growth throughout the year, and corresponding revenue grew 17% for the year. We reached a record high number of current in-house customers committing to outsource processing. And that, combined with the high percentage of new core sales committing to outsourcing, allowed us to show an 8% sequential increase in our backlog and a 14% increase year-over-year. We saw solid progress on our major development initiatives during the year as customers began to see the delivery on various products and technology road map…

Thanks, Jack. Good morning, all. We are very pleased with the strong contribution from all components of support and services, which increased 14% for the quarter and 12% for the entire year compared to prior year periods. The largest contributor continues to be our electronic payments revenue, which grew 16% for the quarter and 17% for the entire year compared to the prior year period. Our outsourced data and item processing services increased 23% for the quarter and 12% for the entire year. Our in-house annual maintenance fees increased 4% for the quarter and 5% for the entire year. In addition, our onetime implementation revenues increased 25% for the quarter and 17% for the year compared to the prior year. Our electronic payments transaction volumes continued to experience very strong growth in the quarter compared to prior year quarter. Payment processing solutions, ATM, debit and credit transactions processing volumes increased 16% over the prior year quarter. Bill payment transaction volumes increased 18% over the prior year quarter. Financial institution merchants, installed and utilizing our Enterprise Payment Solutions, increased to over 53,000 merchants, representing a 24% increase compared to the prior year. Merchant-related transaction volumes increased 22% over the prior year quarter. In closing, I, as well, would like to thank our customers, our associates and our shareholders for their continued loyalty to JHA. I'll now turn it over to Kevin for a further look at the numbers.

Thanks, Tony. Total organic revenue increased by 12% for the quarter and 10% for the fiscal year compared to same periods a year ago. Components of that license forms of hardware. License revenue decreased by 14% for the quarter and was flat for the fiscal year compared to same period a year ago, and represents 4% of total revenue for the quarter and 5% for the fiscal year. Our support and services revenue increased 14% this quarter over the same quarter a year ago and represented 91% of our total revenue. For the fiscal year, it increased 12% and represented 90% of total revenue. We did have some unusual onetime impact from de-conversion fees, both in the quarter and for the year, as we've discussed in prior quarters' calls. In both OutLink and electronic payments, which combined for the quarter, was approximately $4 million increase over last year's quarter, which represented an EPS impact of a little under $0.03 for the quarter. For the fiscal year, these onetime events increased to approximately $8 million compared to the prior year and represented about $0.06 EPS during the year, which -- these obviously helped to offset the impact of Superstorm Sandy that Jack mentioned, that impacted our second first -- second fiscal quarter. However, without these increase in onetimes, our total organic revenue growth would still have been 10% for the quarter and a little over 9% for the year. Support and services breakdown compared to prior-year quarter, implementation revenue of $22.8 million increased 25% for the quarter. Our electronic payments of $109 million increased 16% over last year's quarter. OutLink item and data processing of 59.1 increased 23%, and in-house maintenance of $78.1 million increased 3% for the quarter compared to last year. And for the year, our implementation revenue of…

[Operator Instructions] Our first question comes from the line of David Togut of Evercore Partners.

Kevin, you gave some details on the onetime de-conversion fees in the quarter. But could you provide a little more detail on the underlying drivers of the acceleration in OutLink revenue growth? I believe it increased from about 6% year-over-year in Q3 to 23% in 4Q. And to what extent is this higher growth rate sustainable?

Well, the -- in the quarter, the increase in the onetimes was primarily in that line. And without the increase in the quarter, OutLink revenue would have grown about 12%, and so the 23% or 24%, whatever it was.

I see, but the 12% growth would still have been a doubling of the growth rate versus what we saw in Q3. Is there anything in particular to call out in that higher growth rate?

No.

Okay. And then, I didn't catch the data on software cap. Could you give that again, what it was for FY '13? And what are your thoughts on software cap for FY '14?

For the quarter -- or for the year, cap software was $51.3 million, up from $37.9 million last year. So our quarterly run rate has been pretty level on cap software for the entire fiscal year this year, which remember, we ramped that up about 5 quarters ago for some significant projects. I think that -- I think we are basically going to stay at that same run rate for this next fiscal year.

I see, and so should we expect R&D for FY '14 to grow in line with revenue? Or have you completed enough projects such that you actually might get margin leverage through R&D?

No, R&D will continue to grow with revenue.

Okay. And then, you gave some helpful detail on sort of interest expense versus the higher tax rate. But could you quantify what you expect interest expense to be for FY '14?

Very little because I mean, all we have is our unused line fee.

Okay. So close to 0?

Yes, well, it won't be 0, but it will be very insignificant.

Okay. Just a final question from me. Electronic payments growth was, once again, very strong in the fourth quarter. It did come down a little bit from the third quarter, I believe, where it was about 18%. Anything to highlight there? And what would you expect for electronic payments growth in FY '14?

The electronic payments growth that we experienced is seasonal in nature, and it does ebb and flow slightly from quarter-to-quarter. But we are continuing to see good solid strong growth in both the payment processing solutions for ATM, debit and credit, and as well, the bill payment transaction volumes and our merchant-related volumes. Merchant-related volumes have actually increased compared to the prior quarter, and I think we'll continue to see good strong growth in all those areas of electronic payments.

And as Jack mentioned, we had a very strong sales year, especially in electronic payments areas. So we've got a very healthy backlog of implementations yet to be put in place.

Our next question comes from the line of Peter Heckmann of Avondale Partners.

Can you comment -- we've seen -- I know you commented a little bit last quarter, but we've seen some additional consolidation of your competitors. Are you hearing much from the marketplace in terms of a changed attitude as regards some of these competitors, potentially, increased concerns about certain platform, since that's being accelerated? And generally, do you view the consolidation that has occurred in the industry as more of an opportunity or a threat?

Well, Pete, as you know, it takes a little bit of time after the announcement for these things to kind of settle in. Of course, system conversion is a difficult process to go through, and nobody wants to do that unless they've got a really good reason. So if your core provider is acquired, you want to believe that what they're telling you about how good everything is going to be is true, and you're usually willing to give them a little bit of time to prove that out. So immediately after an announcement, we don't see a lot of change unless there's a particular product being sunset, which was the case with one of those acquisitions, and we have picked up a couple of those. But generally, I think people are willing to wait and see. There have been a number of pretty sizable acquisitions. Any of those, at some price, would have been interesting to us but typically, not at the prices that they ended up going for. And again, I think that they probably solved a different problem for somebody else than they would solve for us, that we let them get to that number that it just didn't -- the math did not work for us. But to your question, I think it's a little bit more of a wait and see, for the most part, as to whether that will generate any additional activity. But they're all products that we were competing against very effectively before, and we would expect that to continue to be the case.

All right. That's great. And when we look at the 9% organic growth rate for the year, I mean, I think that's probably triple what some of the peers are doing on a domestic organic basis. And it appears -- at one point, it felt like your Credit Union business was really the source of outperformance. And now the last couple of quarters, it felt like that outperformance is really across the board. Where do you attribute some of the strength on the Bank side to beyond just strong growth of electronic payments?

Well, Pete, several things. The continued movement of in-house customers moving to outsourced processing represents an increase in revenues, our payments products, both the Banking and Credit Union sides have been very strong, core system sales have been very solid. The ProfitStars group continues to improve their effectiveness and particularly, their cross-sales effectiveness. It's really been the case, for a while now, that kind of all 3 of those areas have come together pretty nicely at pretty much the same time. So it's nice when a plan comes together.

The other thing, Pete, to add is the -- as Jack mentioned, the movement from our existing in-house customers outsourcing continues to be very solid, and actually, it was a record year this last year, but the average asset size of some of those banks that are moving over have gotten quite a bit bigger this last year.

Okay, okay. That makes sense. And then, Kevin, could you just aggregate for us, just for tracking purposes, on the onetimers? Can you talk about what portion was on the top line, and what portion was cost recovery?

All of that was in the top line.

Of about $4 million?

Yes.

Our next question comes from the line of Dave Koning of Baird. David J. Koning - Robert W. Baird & Co. Incorporated, Research Division: Yes, I guess, first of all just on guidance, just so we're clear, the guidance that you gave for margin expansion, is that on a reported basis? I think the 23.5% reported margins for this year or is that on the adjusted basis, like we used, I think 24.7%, for fiscal '13, just x-ing out some of the New Jersey cost?

Reported numbers. David J. Koning - Robert W. Baird & Co. Incorporated, Research Division: Okay, okay. So you're basically saying...

Well, Dave and here's our point. I mean, as I mentioned in my opening comments, the onetime revenue impact increase that we had this year primarily offset the lenders. David J. Koning - Robert W. Baird & Co. Incorporated, Research Division: Right, right. That makes sense.

So reported, it's pretty much what we should be seeing for the year, as adjusted, if you adjust for everything. Does that makes sense? David J. Koning - Robert W. Baird & Co. Incorporated, Research Division: Yes, it does. And so EPS, similarly, low double-digit growth off of the 204 base?

Yes. David J. Koning - Robert W. Baird & Co. Incorporated, Research Division: Got you. And then, I guess, just with your cash or your net cash position keeps improving. You used the buyback a little more. Is that going to be the continued pattern? I mean, it seems tough out there with -- on an M&A, on the M&A front, it seems like a lot of stuff has been bought up that was kind of, I think David Togut mentioned that a little bit too. But is there anything else to buy out there for you guys or is it going to be more just buybacks?

Well, first of all, I mean, remember that we increased our dividend 73% this year. So some of our free cash, going forward, is going to be used for dividend, now that we're paying an $0.80 a year dividend. The other thing is, we did increase our stock buyback. We bought back just under 1 million shares in the quarter. We bought back, I believe, about 1.3 million shares for the year. So we'll continue looking at that. But to your point about acquisitions, we continue looking. But with us growing at 9% organically, we don't feel like we have to buy something because we are performing extremely well. So we'll continue to be very opportunistic when it comes to acquisitions. We'll continue to look. And if we can find something that fits in our fold for the right price, then, I'm sure we'll jump all over it. But if not, we'll continue doing what we've done for the last 3 years.

[Operator Instructions] Our next question comes from the line of Brett Huff of Stephens Inc.

It's John Campbell in for Brett Huff. So it's clear that support and services rev has grown to the vast majority of total company rev. I believe you guys exited the year -- the fiscal year at about 90%, and that mix or percent of total rev has just steadily grown over the last several years. But if you guys can just maybe provide some color on kind of where you see that heading over time, and maybe kind of what the steady mix shift does to margins over time?

I think it continues at that level or inching up slightly. We've said for some time that hardware and license fees, while they will bounce around in any given quarter, the long-term trend for both of those line items is down. So the balance is shifting towards support and services. And certainly, the more customers move with their preference for outsourced processing rather than in-house, just kind of continues that trend. So again, think you're likely to see it jump up to 95% this year, but I think that you will continue to see the hardware and license fees represent a continuingly reduced percentage of total revenue.

And as far as the impact on our margins, obviously, with software being 4% of our revenue, it's very high margin. If that continues to trend down a little bit, it's not going to have a significant impact on our margins. But to -- and to more than offset that is the continued increase in our electronic payments, which had very good solid margins. And then also, as Jack pointed out, the continued shift of our in-house customers into outsourcing, where the revenue or loss here we take out of the institution basically doubled, and we're able to leverage our existing infrastructure of data processing centers to actually gain some margin improvement on those.

Okay, great. And then, just lastly, just an updated view on just kind of the bank failure and maybe just the de novo environment. I mean, has that changed much over the last, call it, 2 years?

Well, certainly, the number of failures continues to decline. The de novo market is still, for the most part, nonexistent. I think we signed one last quarter, which is, as far as I know, was the only de novo bank that's been granted a charter open in at least the last 2 years. I think at some point, we will see some increase in de novo bank activity, but I think it's a few years off, and doubt that it will get back to the previous levels, even when it does gather a little bit of steam. So not baking a lot of that into our forecast for the next year.

And our next question is a follow-up from the line of David Togut of Evercore Partners.

Just a couple of quick follow-ups. Jack, at the beginning of the call, you highlighted $3 billion plus asset Credit Union signings in the quarter. Were those direct competitive takeaways? And if they were, were they related to conversion around an acquisition?

They were all competitive takeaways. I'm -- let me think here. I don't know that any of those were related to -- if you're asking if it had to do with changed product direction from one of the other competitors. I don't have the list of names here in front of me to refresh my memory on which ones they were. But I think, for the most part, they were all existing platforms that were ready to make a change. There might have been one in there that was related to the discontinued platform. But for the -- but generally, just, we had 35 -- on the Credit Union side, 35 new core system sales last year, and all of them were competitive takeaways and across a wide range of different platforms out there. So I think, to some extent, it's credit unions updating their systems, refreshing their technology and us being in a good position to take advantage of that.

I see. And just as a quick follow-up for Kevin, what was the June 30 share count?

It was -- Dave, I don't have that right -- and I think it's this -- it was somewhere around 86 million shares. And also, to answer your other question on the interest, I actually looked that up, and we are budgeting for our total interest expense last year -- or next year to be a little over $1 million.

A little over $1 million.

Thank you. And I'm showing no further questions in queue. I'd like to turn the conference back over to Mr. Kevin Williams for any closing remarks.

Thanks, Ben. In summary of the call, we'd like to thank you for joining us today to review our fourth quarter and fiscal year-end 2013 results. We are very pleased with the results from our ongoing operations efforts of all our associates to take care of our customers. Our executive management, as always, continue to focus on what is best for our customers and shareholders. And I'd like to echo what Jack Prim said, and thank all of our customers and all of our associates for taking care of those customers. With that, Ben, I'd ask you to give the replay number.