1. Jack Henry & Associates, Inc
Presented By:
Matthew Thompson
&
Daniel DeRose Jr.
Presented April 17, 2007

2. Presentation Outline Company overview Industry Background
Firm strategy and development
Acquisition Strategy
RCMP position
Stock Performance
Portfolio fit
Firm Performance
Dupont analysis
Valuation
DCF
Recommendation

3. Company Overview Founded in 1976 Based in Monett, Mo.
Provides software and services for more than 8,700 financial institutions throughout the U.S.

4. Company Overview 3 Primary Brands: 3 Primary Sources of Revenue
Jack Henry & Associates
Sells core processing solutions and integrated complimentary products to US commercial banks with assets up to $30B
Symitar
Markets and sells same solutions to US credit unions
ProfitStars
Markets and sells specialized solutions to US banks and credit unions of all sizes, as well as international financial institutions and other diverse businesses
3 Primary Sources of Revenue
Software licenses
Support and service fees which include implementation services
Hardware sales, which include all non-software remarketed products 4

5. Company Overview Continued
Offer integrated suite of data processing system solutions to improve customers' management of internal/office applications and customer/member interaction processes, as well as specialized data processing solutions to meet specific business needs
Believe solutions enable customers to provide better service to their customers and compete more effectively against other banks, credit unions, and alternative financial institutions

6. Customer Options Install Jack Henry comprehensive system in house
Perform outsourcing services with the entire suite of products and services
5-10 year contracts

7. Industry Background
Financial Institutions (commercial banks, thrifts, and credit unions) have increased spending on hardware, software, services and telecommunications by an annual compound growth rate 6% from 2001 to 2005
Industry spending increased 9.5% from 2004 to 2005

8. Industry Effect
Approx. 9,000 commercial and savings banks in the US, saw a 2% decline due to industry consolidation1
80% of JKHY total revenues
Number of credit unions has declined at a 3% compound annual rate from 2001 to 2005, however these institutions aggregate assets have increased at a 9% compound annual growth rate2
20% of JKHY total revenues
1) 2006 Form 10-K, p.8
2) 2006 Form 10-K, p.8

9. Firm Strategy and Development
Offer the highest quality products and services
Developed reputation as premium brand name in the industry
Keep up with most cutting edge technology to continually serve clients with new products and services
Increase current customer relationships
Minimal marketing and sales costs
Increased product capability
Ability to integrate with other 3rd party services and products

10. Firm S&D Continued
Increased customer base through sales and marketing campaigns
Increased 211% from ’02-’06
Attract and retain high quality employees
Built into corporate culture
Make Strategic Acquisitions

11. Acquisitions Strategy
Reasons for:
More products and services that compliment existing offerings
New customers
Enter new markets w/in financial services and other vertical markets
Additional outsourcing capabilities
Acquisition Focus:
Products in high demand
Strong management team
Excellent customer relationships

12. Recent Key Acquisitions
*Since 2002 JKHY has made 17 successful acquisitions

13. RCMP Position Entered Position November 11, 1999: Stock splits:
BOT: 200 $36.00/share
Stock splits:
March 3, 2000 (2:1); March 5, 2001 (2:1)
Sold 400 shares last semester, fall 2006
Current Position:
Owned shares: 400
Stock Price as of April 16: $24.91

14. Stock Performance
Mkt. Cap. - $2.24B week range: $ $24.67

15. Portfolio fit

16. Correlation Matrix

17. Firm Performance
Dupont Analysis

18. Discounted Cash Flow Analysis
Basic assumptions
Revenues continue to grow at steady pace due to continued acquisitions
Revenues from Hardware to return to modest 1% growth per year.
Cost of Hardware as a % of Revenues remains almost flat in the future as the price of technology continues to fall
JKHY continues to pay a dividend of 20% of net income
Capital Expenditures stay in the $50 million range

19. Discounted Cash Flow Analysis
Step 1 Free Cash Flow

20. Discounted Cash Flow Analysis
Step 2 Calculate WACC
CAPM = 11.95%
Beta = 1.2
Rm = 10.75%
Rf = 4.75%
WACC = 11.75
Tax Rate = 36%
W(d) = 2.98%
W(e) = 97.02%
K(d) = 8.25%
BUT equity holders (such as ourselves) have experienced a % CAGR from 1999 – 2007
We believe the CAPM is not an appropriate way to capture the entire expected return of stockholders
A WACC of 13% is more appropriate

21. Discounted Cash Flow Analysis
Step 3 PV of FC
Step 4 & 5 Terminal Value

22. Discounted Cash Flow Analysis
Step 6 Find Intrinsic Value
Step 7 Price per Share

23. Sensitivity Analysis
The stock price increases over 22% when using a WACC of % instead of a more conservative 13%

24. Recommendation HOLD all 400 shares
JKHY is a good diversifier in the portfolio and leads to exposure in both technology and financial sectors
We believe a strong management team and a pointed acquisition strategy will overcome the recent trend of consolidation in the industry

25. Questions
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