Welcome!

News Feed Item

Tyler Technologies Reports Earnings for Fourth Quarter and Fiscal 2012

Tyler Technologies, Inc. (NYSE: TYL) today announced financial results for the fourth quarter and year ended December 31, 2012.

Fourth Quarter Financial Highlights:

  • Total revenue was $95.4 million in the fourth quarter of 2012, up 16.2 percent, of which 10.9 percent was organic and 5.3 percent was acquisition related, from $82.1 million in the fourth quarter of 2011.
  • Recurring software revenue from maintenance and subscriptions was $58.3 million for the quarter, an increase of 21.7 percent compared to the fourth quarter of 2011, and comprised 61.1 percent of fourth quarter 2012 revenue.
  • Operating income for the quarter was $15.4 million, an increase of 7.7 percent from the fourth quarter of 2011.
  • Net income for the quarter was $9.4 million, or $0.28 per diluted share, compared to $8.7 million, or $0.27 per diluted share, for the fourth quarter of 2011.
  • Cash flow from operations for the quarter was $16.4 million, compared to $11.3 million for the fourth quarter of 2011.
  • Non-GAAP operating income for the quarter was $18.9 million, up 9.7 percent from $17.3 million for the fourth quarter of 2011.
  • Adjusted EBITDA for the quarter was $20.3 million, compared to $18.8 million for the fourth quarter of 2011.
  • Non-GAAP net income for the quarter was $11.8 million, or $0.35 per diluted share, compared to $10.8 million, or $0.34 per diluted share, for the fourth quarter of 2011.

Full Year Financial Highlights:

  • Total revenue for 2012 was $363.3 million, up 17.4 percent, of which 11.1 percent was organic and 6.3 percent was acquisition related, from $309.4 million in 2011.
  • Recurring software revenue from maintenance and subscriptions was $216.5 million for the year, an increase of 21.8 percent compared to 2011, and comprised 59.6 percent of 2012 revenue.
  • Operating income for the year was $56.6 million, an increase of 21.6 percent from 2011.
  • Net income for the year was $33.0 million, or $1.00 per diluted share, compared to $27.6 million, or $0.83 per diluted share, in 2011.
  • Cash flow from operations for the year was $58.7 million, compared to $56.4 million in 2011.
  • Non-GAAP operating income for the year was $70.2 million, up 22.6 percent from $57.2 million in 2011.
  • Adjusted EBITDA for the year was $76.1 million, compared to $62.9 million in 2011.
  • Non-GAAP net income for the year was $42.4 million, or $1.29 per diluted share, compared to $35.2 million, or $1.06 per diluted share, in 2011.
  • Total backlog reached a new high of $380.6 million at December 31, 2012, up 12.0 percent from $339.8 million at December 31, 2011. Software-related backlog (excluding appraisal services) was $350.6 million, an increase of 9.6 percent compared to $319.9 million at December 31, 2011.

“We achieved solid results for the fourth quarter. Quarterly revenues reached a new high, with double-digit organic growth complemented by recent acquisitions,” said John S. Marr Jr., Tyler’s president and chief executive officer. “Recurring revenues continued to drive our growth. Subscription revenue increased approximately 43 percent from last year’s fourth quarter, reflecting increased adoption of our SaaS model as well as greater transaction-based revenues from our electronic filing solution for courts. During the fourth quarter we signed subscription-based agreements with 29 new software clients.

“We enter the new year with a strong balance sheet, a record backlog level, and an excellent competitive position coupled with a market environment that appears to be continuing to gradually improve,” said Mr. Marr. “Our guidance reflects our expectation that current business trends will continue in 2013,” continued Mr. Marr.

“Our guidance also includes costs of significant investments in our business that we believe will enhance our market leadership and improve long-term revenue and margin growth. These investments include expenses associated with the implementation of new electronic filing contracts, including our TexFile contract to provide a statewide e-filing system for Texas courts. The Texas Supreme Court recently issued an order mandating e-filing in civil cases, with a phase-in beginning January 2014, that we expect will significantly increase our transaction volumes and revenues from that contract. In addition, we plan to accelerate hiring in 2013 to ensure that we are well-positioned to deliver our current backlog and anticipated new business.”

Guidance for 2013

As of February 6, 2013, Tyler Technologies is providing the following guidance for the full year 2013:

  • Tyler expects total revenues for 2013 to be in the range of $409 million to $418 million.
  • Tyler expects 2013 diluted earnings per share to be approximately $1.06 to $1.14.
  • Tyler expects 2013 non-GAAP diluted earnings per share to be approximately $1.42 to $1.50.
  • Tyler expects pretax non-cash, share-based compensation expense to be approximately $10.5 million.
  • Tyler expects that its effective tax rate for 2013 will be approximately 40.0 percent.
  • Tyler expects that capital expenditures for the year will be between $23.0 million and $24.0 million, including approximately $14.8 million related to real estate, and that total depreciation and amortization expense is expected to be between $14.2 million and $14.7 million, including approximately $6.5 million of amortization of acquisition intangibles.

Conference Call

Tyler Technologies will hold a conference call on Thursday, February 7, at 10:00 a.m. Eastern Time to discuss the Company’s results. To participate in the teleconference, please dial into the call a few minutes before the start time: 877-317-6789 (U.S. callers) and 412-317-6789 (international callers), and reference confirmation code 10021871 when prompted. A replay will be available two hours after the completion of the call through February 14, 2013. To access the replay, please dial 877-344-7529 (U.S. callers) and 412-317-0088 (international callers) and reference passcode 10021871. The live webcast and archived replay can also be accessed in the Investor section of Tyler’s website at www.tylertech.com.

About Tyler Technologies, Inc.

Tyler Technologies is a leading provider of end-to-end information management solutions and services for local governments. Tyler partners with clients to empower the public sector — cities, counties, schools and other government entities — to become more efficient, more accessible and more responsive to the needs of citizens. Tyler’s client base includes more than 11,000 local government offices in all 50 states, Canada, the Caribbean and the United Kingdom. Forbes has named Tyler one of “America’s Best Small Companies” five times in the last six years. More information about Dallas-based Tyler Technologies can be found at www.tylertech.com.

Non-GAAP Financial Measures

Tyler Technologies has provided in this press release financial measures that have not been prepared in accordance with generally accepted accounting principles (GAAP) and are therefore considered non-GAAP financial measures. This information includes non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross margin, non-GAAP operating margin, EBITDA and adjusted EBITDA. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating Tyler’s ongoing operational performance. Tyler believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures. Non-GAAP financial measures discussed above exclude share-based compensation expense and expenses associated with amortization of intangibles arising from business combinations. We use these measures and believe they are useful to investors because they provide additional insight in comparing results from period to period.

Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial information prepared in accordance with GAAP. The non-GAAP measures used by Tyler Technologies may be different from non-GAAP measures used by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which has been provided in the financial statement tables included below in this press release.

Forward-looking Statements

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical in nature and typically address future or anticipated events, trends, expectations or beliefs with respect to our financial condition, results of operations or business. Forward-looking statements often contain words such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,” “plans,” “intends,” “continues,” “may,” “will,” “should,” “projects,” “might,” “could” or other similar words or phrases. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. We believe there is a reasonable basis for our forward-looking statements, but they are inherently subject to risks and uncertainties and actual results could differ materially from the expectations and beliefs reflected in the forward-looking statements. We presently consider the following to be among the important factors that could cause actual results to differ materially from our expectations and beliefs: (1) changes in the budgets or regulatory environments of our customers, primarily local and state governments, that could negatively impact information technology spending; (2) our ability to protect client information from security breaches and provide uninterrupted operations of data centers; (3) material portions of our business require the Internet infrastructure to be further developed or adequately maintained; (4) our ability to achieve our financial forecasts due to various factors, including project delays by our customers, reductions in transaction size, fewer transactions, delays in delivery of new products or releases or a decline in our renewal rates for service agreements; (5) economic, political and market conditions, including the recent global economic and financial crisis, and the general tightening of access to debt or equity capital; (6) technological and market risks associated with the development of new products or services or of new versions of existing or acquired products or services; (7) our ability to successfully complete acquisitions and achieve growth or operational synergies through the integration of acquired businesses, while avoiding unanticipated costs and disruptions to existing operations; (8) competition in the industry in which we conduct business and the impact of competition on pricing, customer retention and pressure for new products or services; (9) the ability to attract and retain qualified personnel and dealing with the loss or retirement of key members of management or other key personnel; and (10) costs of compliance and any failure to comply with government and stock exchange regulations. A detailed discussion of these factors and other risks that affect our business are described in our filings with the Securities and Exchange Commission, including the detailed “Risk Factors” contained in our most recent annual report on Form 10-K. We expressly disclaim any obligation to publicly update or revise our forward-looking statements.

 
 
 
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
       
 
 
Three Months Ended December 31, Twelve Months Ended December 31,
2012 2011 2012 2011
Revenues:
Software licenses $ 8,732 $ 9,833 $ 33,172 $ 32,594
Subscriptions 12,762 8,930 44,618 31,160
Software services 21,042 17,217 83,408 69,617
Maintenance 45,489 38,919 171,851 146,498
Appraisal services 5,496 5,283 22,543 23,228
Hardware and other   1,847   1,897   7,712   6,294
Total revenues 95,368 82,079 363,304 309,391
 
Cost of revenues:
Software licenses 475 714 1,983 3,034
Acquired software 518 343 1,888 1,125
Software services, maintenance and subscriptions 45,168 37,405 171,584 143,776
Appraisal services 3,619 3,248 14,889 14,550
Hardware and other   948   1,349   5,258   4,994
Total cost of revenues 50,728 43,059 195,602 167,479
 
Gross profit 44,640 39,020 167,702 141,912
 
Selling, general and administrative expenses 22,763 21,141 86,706 75,650
Research and development expense 5,365 2,634 20,140 16,414
Amortization of customer and trade name intangibles   1,093   923   4,279   3,331
Operating income 15,419 14,322 56,577 46,517
Other expense, net   384   818   2,709   2,404
Income before income taxes 15,035 13,504 53,868 44,113
Income tax provision   5,659   4,805   20,874   16,556
Net income $ 9,376 $ 8,699 $ 32,994 $ 27,557
 
 
 
Earnings per common share:
Basic $ 0.30 $ 0.29 $ 1.09 $ 0.88
Diluted $ 0.28 $ 0.27 $ 1.00 $ 0.83
 
 
Weighted average common shares outstanding:
Basic 30,779 29,823 30,327 31,267
Diluted 33,421 32,031 32,916 33,154
       
 
 
TYLER TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share data)
(Unaudited)
 
Three Months Ended December 31, Twelve Months Ended December 31,
2012 2011 2012 2011
Reconciliation of non-GAAP gross profit and margin
GAAP gross profit $ 44,640 $ 39,020 $ 167,702 $ 141,912
Non-GAAP adjustments:
Add: Share-based compensation expense included in cost of revenues 293 222 1,084 871
Add: Amortization of acquired software   518     343     1,888     1,125  
Non-GAAP gross profit $ 45,451   $ 39,585   $ 170,674   $ 143,908  
 
Non-GAAP gross margin   47.7 %   48.2 %   47.0 %   46.5 %
 
 
Reconciliation of non-GAAP operating income and margin
GAAP operating income $ 15,419 $ 14,322 $ 56,577 $ 46,517
Non-GAAP adjustments:
Add: Share-based compensation expense 1,905 1,668 7,411 6,253
Add: Amortization of acquired software 518 343 1,888 1,125
Add: Amortization of customer and trade name intangibles   1,093     923     4,279     3,331  
Non-GAAP adjustments subtotal $ 3,516   $ 2,934   $ 13,578   $ 10,709  
Non-GAAP operating income $ 18,935   $ 17,256   $ 70,155   $ 57,226  
 
Non-GAAP operating margin   19.9 %   21.0 %   19.3 %   18.5 %
 
 
Reconciliation of non-GAAP net income and earnings per share
GAAP net income $ 9,376 $ 8,699 $ 32,994 $ 27,557
Non-GAAP adjustments:
Add: Total non-GAAP adjustments affecting operating income 3,516 2,934 13,578 10,709
Less: Tax impact related to non-GAAP adjustments   (1,101 )   (882 )   (4,198 )   (3,087 )
Non-GAAP net income $ 11,791   $ 10,751   $ 42,374   $ 35,179  
 
Non-GAAP earnings per diluted share $ 0.35   $ 0.34   $ 1.29   $ 1.06  
 
 
Detail of share-based compensation expense
Cost of software services, maintenance and subscriptions $ 293 $ 222 $ 1,084 $ 871
Selling, general and administrative expenses   1,612     1,446     6,327     5,382  
Total share-based compensation expense $ 1,905   $ 1,668   $ 7,411   $ 6,253  
 
 
Reconciliation of adjusted EBITDA
GAAP net income $ 9,376 $ 8,699 $ 32,994 $ 27,557
Amortization of customer and trade name intangibles 1,093 923 4,279 3,331
Depreciation and other amortization included in
cost of revenues, SG&A and other expenses 2,002 1,975 8,432 7,345
Interest expense included in other expense, net 310 707 2,064 1,892
Income tax provision   5,659     4,805     20,874     16,556  
EBITDA $ 18,440   $ 17,109   $ 68,643   $ 56,681  
Share-based compensation expense   1,905     1,668     7,411     6,253  
Adjusted EBITDA $ 20,345   $ 18,777   $ 76,054   $ 62,934  
 
 
 
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
   
 
 
December 31, December 31,
2012 2011
ASSETS
 
Current assets:
Cash and cash equivalents $ 6,406 $ 1,326
Short-term investments available-for-sale - 25
Accounts receivable, net 100,327 90,012
Other current assets 10,480 10,634
Deferred income taxes   5,544   5,095
Total current assets 122,757 107,092
 
Accounts receivable, long-term portion 1,187 2,095
Property and equipment, net 45,381 40,915
Non-current investments available-for-sale 2,037 1,953
 
Other assets:
Goodwill and other intangibles, net 165,756 141,722
Other   1,197   1,614
 
Total assets $ 338,315 $ 295,391
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Accounts payable and accrued liabilities $ 29,245 $ 27,962
Deferred revenue   140,550   123,678
Total current liabilities 169,795 151,640
 
Revolving line of credit 18,000 60,700
Deferred income taxes 5,221 4,941
Shareholders' equity   145,299   78,110
 
Total liabilities and shareholders' equity $ 338,315 $ 295,391
 
 
 
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
       
 
Three months ended December 31, Twelve months ended December 31,
2012 2011 2012 2011
Cash flows from operating activities:
Net income $ 9,376 $ 8,699 $ 32,994 $ 27,557
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization 3,095 2,898 12,711 10,676
Share-based compensation expense 1,905 1,668 7,411 6,253
Provision for losses-accounts receivable 961 805 961 805
Excess tax benefit from exercise of share-based arrangements (5,481 ) (1,869 ) (8,764 ) (3,590 )
Deferred income taxes (215 ) (2,916 ) (215 ) (2,916 )
Changes in operating assets and liabilities, exclusive of
effects of acquired companies   6,773     2,045     13,570     17,650  
Net cash provided by operating activities   16,414     11,330     58,668     56,435  
 
Cash flows from investing activities:
Proceeds from sales of investments - - 75 50
Cost of acquisitions, net of cash acquired (10,451 ) (17,298 ) (25,680 ) (17,298 )
Additions to property and equipment (2,751 ) (2,352 ) (9,102 ) (12,278 )
(Increase) decrease in other   (70 )   518     (29 )   717  
Net cash used by investing activities   (13,272 )   (19,132 )   (34,736 )   (28,809 )
 
Cash flows from financing activities:
(Decrease) increase in net borrowings on revolving line of credit (10,000 ) 2,700 (42,700 ) 34,200
Purchase of treasury shares - (3,277 ) - (71,802 )
Contributions from employee stock purchase plan 809 573 2,641 2,045
Proceeds from exercise of stock options 6,871 1,983 12,443 3,553
Excess tax benefit from exercise of share-based arrangements   5,481     1,869     8,764     3,590  
Net cash provided (used) by financing activities   3,161     3,848     (18,852 )   (28,414 )
 
Net increase (decrease) in cash and cash equivalents 6,303 (3,954 ) 5,080 (788 )
Cash and cash equivalents at beginning of period   103     5,280     1,326     2,114  
 
Cash and cash equivalents at end of period $ 6,406   $ 1,326   $ 6,406   $ 1,326  

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Because IoT devices are deployed in mission-critical environments more than ever before, it’s increasingly imperative they be truly smart. IoT sensors simply stockpiling data isn’t useful. IoT must be artificially and naturally intelligent in order to provide more value In his session at @ThingsExpo, John Crupi, Vice President and Engineering System Architect at Greenwave Systems, will discuss how IoT artificial intelligence (AI) can be carried out via edge analytics and machine learning techn...
FinTechs use the cloud to operate at the speed and scale of digital financial activity, but are often hindered by the complexity of managing security and compliance in the cloud. In his session at 20th Cloud Expo, Sesh Murthy, co-founder and CTO of Cloud Raxak, showed how proactive and automated cloud security enables FinTechs to leverage the cloud to achieve their business goals. Through business-driven cloud security, FinTechs can speed time-to-market, diminish risk and costs, maintain continu...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
Existing Big Data solutions are mainly focused on the discovery and analysis of data. The solutions are scalable and highly available but tedious when swapping in and swapping out occurs in disarray and thrashing takes place. The resolution for thrashing through machine learning algorithms and support nomenclature is through simple techniques. Organizations that have been collecting large customer data are increasingly seeing the need to use the data for swapping in and out and thrashing occurs ...
As many know, the first generation of Cloud Management Platform (CMP) solutions were designed for managing virtual infrastructure (IaaS) and traditional applications. But that’s no longer enough to satisfy evolving and complex business requirements. In his session at 21st Cloud Expo, Scott Davis, Embotics CTO, will explore how next-generation CMPs ensure organizations can manage cloud-native and microservice-based application architectures, while also facilitating agile DevOps methodology. He wi...
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
SYS-CON Events announced today that GrapeUp, the leading provider of rapid product development at the speed of business, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market acr...
In the enterprise today, connected IoT devices are everywhere – both inside and outside corporate environments. The need to identify, manage, control and secure a quickly growing web of connections and outside devices is making the already challenging task of security even more important, and onerous. In his session at @ThingsExpo, Rich Boyer, CISO and Chief Architect for Security at NTT i3, discussed new ways of thinking and the approaches needed to address the emerging challenges of security i...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, will discuss th...
Docker containers have brought great opportunities to shorten the deployment process through continuous integration and the delivery of applications and microservices. This applies equally to enterprise data centers as well as the cloud. In his session at 20th Cloud Expo, Jari Kolehmainen, founder and CTO of Kontena, discussed solutions and benefits of a deeply integrated deployment pipeline using technologies such as container management platforms, Docker containers, and the drone.io Cl tool. H...
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business - from apparel to energy - is being rewritten by software. From planning to development to management to security, CA creates software that fuels transformation for companies in the applic...
In his opening keynote at 20th Cloud Expo, Michael Maximilien, Research Scientist, Architect, and Engineer at IBM, discussed the full potential of the cloud and social data requires artificial intelligence. By mixing Cloud Foundry and the rich set of Watson services, IBM's Bluemix is the best cloud operating system for enterprises today, providing rapid development and deployment of applications that can take advantage of the rich catalog of Watson services to help drive insights from the vast t...
There is only one world-class Cloud event on earth, and that is Cloud Expo – which returns to Silicon Valley for the 21st Cloud Expo at the Santa Clara Convention Center, October 31 - November 2, 2017. Every Global 2000 enterprise in the world is now integrating cloud computing in some form into its IT development and operations. Midsize and small businesses are also migrating to the cloud in increasing numbers. Companies are each developing their unique mix of cloud technologies and service...