JACK HENRY & ASSOCIATES, INC. This discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statements included in this Form 10-Q for the quarter endedMarch 31, 2020 . OVERVIEWJack Henry & Associates, Inc. ("JHA") is a leading provider of technology solutions and payment processing services primarily for financial services organizations. Its solutions are marketed and supported through three primary brands. Jack Henry Banking® is a top provider of information and transaction processing solutions toU.S. banks ranging from community banks to multi-billion-dollar asset institutions. Symitar® is a leading provider of information and transaction processing solutions for credit unions of all sizes. ProfitStars® provides specialized products and services that enable financial institutions of every asset size and charter, and diverse corporate entities outside the financial services industry, to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. JHA's integrated solutions are available for on-premise installation and outsourced delivery in our private cloud. Our two primary revenue streams are "Services and support" and "Processing." Services and support includes: "Outsourcing and cloud" fees that predominantly have contract terms of five years or longer at inception; "Product delivery and services" revenue, which includes revenue from the sales of licenses, implementation services, deconversion fees, consulting, and hardware; and "In-house support" revenue, which is composed of maintenance fees which primarily contain annual contract terms. Processing revenue includes: "Remittance" revenue from payment processing, remote capture, and automated clearing house (ACH) transactions; "Card" fees, including card transaction processing and monthly fees; and "Transaction and digital" revenue, which includes transaction and mobile processing fees. We continually seek opportunities to increase revenue while at the same time containing costs to expand margins. All dollar amounts in the following discussion are in thousands, except per share amounts. COVID-19 Impact and Response InMarch 2020 , theWorld Health Organization declared the outbreak of a novel coronavirus ("COVID-19") as a pandemic and the President ofthe United States declared the outbreak as a national emergency. As COVID-19 has rapidly spread, federal, state and local governments have responded by imposing restrictions, including widespread "stay-at-home" orders and travel limitations. Such restrictions have resulted in significant economic disruptions and uncertainty. The health, safety, and well-being of our employees and customers is of paramount importance to us. We have established an internal task force composed of executive officers and other members of management to frequently assess updates to the COVID-19 situation and recommend Company actions. Based on guidance from theU.S. Department of Homeland Security's Cybersecurity and Infrastructure Security Agency , the Company was designated as essential critical infrastructure because of our support of the financial services industry. Our internal task force determined that a subset of our employees could not work remotely because job duties necessary for our business operations to run seamlessly required these employees to work on-site at our facilities. For employees in our data, statement processing and item processing centers who are required by their job responsibilities to be on location daily, we are offering enhanced compensation. We have offered remote working as a recommended option to employees whose job duties allow them to work off-site and have suspended all non-essential business travel until at leastMay 15, 2020 . We have also updated the health benefits available to our employees by waiving out-of-pocket expenses related to testing and treatment of COVID-19. In addition, we plan to honor our 2020 summer internship program through virtual methods. Customers We are working closely with our customers who are scheduled for on-site visits to ensure their needs are met while taking necessary safety precautions when our employees are required to be at a customer site. Delays of customer system installations due to COVID-19 have been limited, and we have developed processes to handle remote installations when available. We expect these processes to provide flexibility and value both during and after the COVID-19 pandemic. We continue to work with our customers to support them during this difficult time, and, to that end, have waived certain late fees in connection with our products and services. We have also enhanced our lending service offerings to support the Paycheck Protection Program that was introduced by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law onMarch 27, 2020 . Even though a substantial portion of our workforce has worked remotely during the outbreak and business travel has been 24 -------------------------------------------------------------------------------- Table of Contents curtailed, we have not yet experienced significant disruption to our operations. We believe our technological capabilities are well positioned to allow our employees to work remotely for the foreseeable future without materially impacting our business. Financial impact We have seen an unfavorable trend due to COVID-19 in a decrease of card processing transactions through the second half of March and into the fourth quarter of fiscal 2020, which has put downward pressure on our processing revenue for the third quarter and which we expect will also impact our processing revenue for the fourth quarter. The duration of lower-than-normal card processing transaction rates is uncertain and will depend upon when requirements for business closures are lifted and normalization of economic restrictions occurs. Despite the changes and restrictions caused by COVID-19, the overall financial and operational impact on our business has been limited and our liquidity, balance sheet, and business trends remain strong. However, we are unable to accurately predict the future impact of COVID-19 due to a number of uncertainties, including further government actions, the duration and severity of the outbreak and the potential impact to our customers and vendors, as well as how the potential impact might affect future customer services and processing revenue. We will continue to monitor COVID-19 and its possible impact on the Company and to take steps necessary to protect the health and safety of our employees and customers. For a further discussion of the uncertainties and risks associated with COVID-19, see Part II, Item 1A "Risk Factors" in this Quarterly Report on Form 10-Q. RESULTS OF OPERATIONS In the third quarter of fiscal 2020, total revenue increased 13%, or$49,042 , compared to the same quarter in the prior year. Deconversion fees in the fiscal quarter increased$14,730 , to$22,781 , compared to the prior-year quarter. Revenue from the fiscal 2020 acquisition totaled$2,356 for the quarter. Excluding deconversion fee revenue and revenue from the fiscal 2020 acquisition, adjusted total revenue increased 9% for the quarter compared to the prior-year quarter. Operating expenses increased 11% compared to the third quarter of fiscal 2019, due to increased direct costs, higher personnel costs and increased depreciation and amortization. The increased direct costs were primarily related to our card payment processing platform and faster payments initiatives. Higher personnel costs were primarily due to a headcount increase of 4% atMarch 31, 2020 compared toMarch 31, 2019 , contributing to increased salaries and benefits. Increased depreciation and amortization was primarily related to internally-developed software. Operating income increased 20% for the third quarter of fiscal 2020 compared to the third quarter of fiscal 2019. Deconversion fee operating income was$21,512 in the fiscal quarter compared to$7,483 in the prior-year quarter. Operating income from the fiscal 2020 acquisition was$459 and the loss on disposal of certain assets, net, was$3,157 for the fiscal quarter and included the write-off of ERMS partially offset by the gain on sale of ourHouston, TX facility. Excluding operating income related to deconversion fees, the income from the fiscal 2020 acquisition and the loss on disposal of certain assets, net, adjusted operating income increased 6% for the third quarter of fiscal 2020 compared to the prior-year quarter. The provision for income taxes increased 6% compared to the prior-year third quarter, primarily due to the increase in operating income as stated above, partially offset by a decreased effective tax rate due to the difference in uncertain tax positions released, with the lapsing of statute of limitations, between the two periods. The effective tax rate for the third quarter was 19.7% compared to 22.4% in the same quarter a year ago. The above changes led to an increase in net income of 25% for the third quarter of fiscal 2020 compared to the third quarter of fiscal 2019. In the nine months endedMarch 31, 2020 , total revenue increased 11%, or$127,348 , over the nine months endedMarch 31, 2019 . Deconversion fees in the fiscal year-to-date period increased$22,839 , to$45,384 , compared to the same nine months in the prior fiscal year. Revenue from the fiscal 2020 acquisition totaled$6,787 for the fiscal year-to-date period. Excluding deconversion fee revenue and revenue from the fiscal 2020 acquisition from each period, adjusted total revenue increased 9% period over period. Operating expenses for the nine months endedMarch 31, 2020 increased 10% compared to the equivalent period in the prior year, primarily due to costs related to our card payment processing platform, increased headcount, and increased depreciation and amortization expense. Operating income increased 13% for the fiscal year-to-date period compared to the same period last year. Deconversion fee operating income was$41,960 in the fiscal year-to-date period compared to$21,509 in the prior-year-to-date period. Operating income from the fiscal 2020 acquisition was$697 and the loss on disposal of certain assets, net, was$3,157 for the fiscal year-to-date period. Excluding operating income related to deconversion fees, 25 -------------------------------------------------------------------------------- Table of Contents the income from the fiscal 2020 acquisition and the loss on disposal of certain assets, net, adjusted operating income increased 7% period over period. Provision for income taxes increased 21% compared to the prior year-to-date period, primarily due to an increase in operating income period over period, as stated above, as well as an effective tax rate increase driven by the difference in the tax benefits recognized from stock-based compensation between the two periods. The effective tax rate for the nine months endedMarch 31, 2020 was 22.7% compared to 21.3% in the prior-year period. The result of the above changes led to an increase in net income of 12% for the nine months endedMarch 31, 2020 compared to the same period in fiscal 2019. We move into the fourth quarter of fiscal 2020 with optimism following strong performance in the third quarter, but with limited visibility of the future impact of the COVID-19 pandemic. Significant portions of our business continue to come from recurring revenues and our sales pipeline also remains encouraging. Our customers continue to face regulatory and operational challenges which our products and services address, and in these uncertain times, we believe they have an even greater need for our solutions that directly address institutional profitability, efficiency, and security. Our strong balance sheet, access to extensive lines of credit, the continued strength of our existing lines of revenue, and an unwavering commitment to superior customer service should position us well to address current and future opportunities. A detailed discussion of the major components of the results of operations for the three and nine months endingMarch 31, 2020 follows. Discussions compare the current fiscal year's three and nine months endingMarch 31, 2020 to the prior year's three and nine months endingMarch 31, 2019 . REVENUE Services and Support % % Three Months Ended March 31, Change Nine Months Ended March 31, Change 2020 2019 2020 2019 Services and Support$ 270,204 $ 234,123 15 %$ 804,216 $ 718,014 12 % Percentage of total revenue 63 % 62 % 63 % 62 % Services and Support revenue increased 15% in the third quarter of fiscal 2020 compared to the same quarter last year. Excluding deconversion fees from each period, which increased$14,730 , to$22,781 , compared to the prior-year quarter, and$2,356 of revenue from Geezeo, acquired in fiscal 2020, services and support revenue grew 8% quarter over quarter. The adjusted increase was primarily driven by the growth in data processing and hosting fees, as well as increased software usage fees reflecting customer favorability of our term license model, quarter over quarter. In the nine months endedMarch 31, 2020 , services and support revenue grew 12% over the nine months endedMarch 31, 2019 . Excluding deconversion fees from each period presented, which increased$22,839 , to$45,384 , compared to the prior year-to-date period, and$6,787 of revenue from the acquisition in fiscal 2020, services and support revenue grew 8% period over period. The adjusted increase was driven primarily by growth in data processing and hosting fees, as well as increased software usage, hardware revenue, implementation fees primarily related to our private cloud offerings, and consulting fee revenue when compared to the prior year-to-date period. Processing % % Three Months Ended March 31, Change Nine Months Ended March 31, Change 2020 2019 2020 2019 Processing$ 159,202 $ 146,241 9 %$ 482,314 $ 441,168 9 % Percentage of total revenue 37 % 38 % 37 % 38 % Processing revenue increased 9% in the third quarter of fiscal 2020 compared to the same quarter last fiscal year, primarily due to overall increased transaction volumes within card processing, despite a COVID-19-related downturn toward the end of the quarter, complemented by increases in each of the other two components. Each component also experienced volume growth in the fiscal year-to-date period, leading to an increase in processing revenue of 9% for the nine months endedMarch 31, 2020 as compared to the nine months endedMarch 31, 2019 . 26 --------------------------------------------------------------------------------
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OPERATING EXPENSES
Cost of Revenue % %
Three Months Ended March 31, Change Nine Months Ended March 31, Change
2020 2019 2020 2019
Cost of Revenue $ 258,571 $ 235,594 10 % $ 753,629 $ 682,990 10 %
Percentage of total revenue 60 % 62 % 59 % 59 %
Cost of revenue for the third quarter of fiscal 2020 increased 10% over the
prior fiscal year third quarter, but decreased as a percentage of total revenue.
Excluding $1,693 of costs related to deconversion fees and fiscal 2020
acquisition revenue for the current quarter and $568 of costs related to
deconversion fees for the prior-year quarter, the adjusted cost of revenue
increase was 9% quarter over quarter. The adjusted increase was due to higher
costs associated with our card processing platform, higher salaries and benefits
due to increased headcount, and increased depreciation and amortization expense
primarily related to developed software.
For the fiscal year-to-date period, cost of revenue increased 10% over the same
prior-year period, but remained consistent as a percentage of revenue. Excluding
$5,657 of costs related to deconversion fees and fiscal 2020 acquisition revenue
for the current year-to-date period and $1,036 of costs related to deconversion
fees for the prior year-to-date period, the adjusted cost of revenue increase
remained 10% period over period. The adjusted increase was due to the factors
discussed above for the quarter, as well as increased cost of hardware related
to higher revenue.
Research and Development % %
Three Months Ended March 31, Change Nine Months Ended March 31, Change
2020 2019 2020 2019
Research and Development $ 28,308 $ 23,442 21 % $ 80,086 $ 71,458 12 %
Percentage of total revenue 7 % 6 % 6 % 6 %
Research and development expense increased 21% for the third quarter of fiscal
2020 over the prior fiscal year third quarter. Excluding $427 of costs in the
current quarter related to the fiscal 2020 acquisition, the adjusted research
and development increase was 19% quarter over quarter. The adjusted increase was
primarily due to increased personnel costs due to a headcount increase at
March 31, 2020 compared to a year ago and salary increases occurring within the
trailing twelve-month period. Research and development expense for the quarter
increased 1% compared to the prior fiscal-year quarter as a percentage of total
revenue.
For the fiscal year-to-date period, research and development expense increased
12% over the prior fiscal year-to-date period. Excluding $1,420 of costs in the
current period related to the fiscal 2020 acquisition, the adjusted research and
development increase was 10% period over period. The adjusted increase for the
fiscal year-to-date period was also primarily due to increased personnel costs
due to the headcount increase discussed above for the quarter and salary
increases occurring within the trailing twelve-month period. Research and
development expense for the nine months ended March 31, 2020 remained consistent
with the same period a year ago as a percentage of total revenue.
Selling, General, and Administrative %* %*
and Loss on Disposal of Assets, net Three Months Ended
Change Nine Months Ended March 31 , Change
2020 2019 2020 2019
Selling, General, and Administrative $ 47,391 $ 44,682 $ 145,890 $ 136,683
Loss on Disposal of Assets, net 3,198 205 13 % 3,095 183 9 %
Percentage of total revenue 12 % 12 % 12 % 12 %
* % Change includes selling, general, and administrative and loss on disposal of
assets, net.
Selling, general, and administrative expense including loss on disposal of
assets, net, increased 13% in the third quarter of fiscal 2020 over the same
quarter in the prior fiscal year. Excluding $4,203 of costs in the current
quarter related to deconversion fees, the fiscal 2020 acquisition and the loss
on disposal of certain assets, net, the adjusted selling, general, and
administrative expense increase was 3% quarter over quarter. The adjusted
increase was mainly due to increased salaries and benefits primarily due to a 2%
increase in headcount over the prior-year quarter and salary increases occurring
within the trailing twelve-month period. Selling, general, and administrative
expense including Loss on Disposal of Assets, net, remained consistent as a
percentage of total revenue this quarter versus the prior-year quarter due to
ongoing cost control efforts.
For the fiscal year-to-date period, selling, general, and administrative expense
including Loss on Disposal of Assets, net, increased 9% over the prior fiscal
year-to-date period. Excluding $5,594 of costs in the current year-to-date
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period related to deconversion fees, the fiscal 2020 acquisition and the loss on
disposal of certain assets, net, the adjusted selling, general and
administrative expense increase was 5% period over period. The adjusted increase
was primarily due to the factors listed above for the quarter. Selling, general,
and administrative expense including loss on disposal of assets, net, remained
consistent as a percentage of total revenue this period versus the prior-year
period due to ongoing cost control efforts.
INTEREST INCOME (EXPENSE) % %
Three Months Ended March 31, Change Nine Months Ended March 31, Change
2020 2019 2020 2019
Interest Income $ 197 $ 155 27 % $ 1,050 $ 697 51 %
Interest Expense $ (165) $ (224) (26) % $ (477) $ (520) (8) %
Interest income fluctuated due to changes in invested balances and yields on
invested balances during the third quarter and fiscal year-to-date period of
fiscal 2020 and 2019. Interest expense decreased when compared to the prior-year
period due to interest rate fluctuations and length of borrowing time. There was
$55,000 outstanding under the credit facility at March 31, 2020 and $35,000
outstanding at March 31, 2019 .
PROVISION FOR INCOME TAXES % %
Three Months Ended March 31, Change Nine Months Ended March 31, Change
2020 2019 2020 2019
Provision for Income Taxes $ 18,115 $ 17,120 6 % $ 69,080 $ 57,153 21 %
Effective Rate 19.7 % 22.4 % 22.7 % 21.3 %
The decrease in effective tax rate in the three months ended March 31, 2020 was
primarily due to the difference in uncertain tax positions released, with the
lapsing of statute of limitations, between the two periods. The effective tax
rate increased in the nine months ended March 31, 2020 , primarily due to the
difference in the tax benefits recognized from stock-based compensation between
the two periods. The tax benefits recognized from stock-based compensation in
the prior-year periods significantly exceeded the tax benefits recognized in the
current-year periods.
NET INCOME
Net income increased 25% to $73,855 , or $0.96 per diluted share, for the third
quarter of fiscal 2020 compared to $59,252 , or $0.77 per diluted share, in the
same period of fiscal 2019, resulting in a 25% increase in diluted earnings per
share. The increase in net income is primarily attributable to the growth in our
lines of revenue and higher deconversion fees, partially offset by the increase
in cost of revenue and income taxes as discussed above.
Net income increased 12% to $235,323 , or $3.06 per diluted share, for the nine
months ended March 31, 2020 , compared to $210,892 , or $2.72 per diluted share,
for the nine months ended March 31, 2019 , resulting in a 12% increase in diluted
earnings per share. The increase in net income was primarily attributable to the
growth in our lines of revenue and higher deconversion fees, partially offset by
the increase in cost of revenue and income taxes as discussed above.
REPORTABLE SEGMENT DISCUSSION
The Company is a leading provider of technology solutions and payment processing
services primarily for financial services organizations.
The Company's operations are classified into four reportable segments: Core,
Payments, Complementary, and Corporate and Other. The Core segment provides core
information processing platforms to banks and credit unions, which consist of
integrated applications required to process deposit, loan, and general ledger
transactions, and maintain centralized customer/member information. The Payments
segment provides secure payment processing tools and services, including ATM,
debit, and credit card processing services; online and mobile bill pay
solutions; ACH origination and remote deposit capture processing; and risk
management products and services. The Complementary segment provides additional
software, processing platforms, and services that can be integrated with our
core solutions or used independently. The Corporate and Other segment includes
revenue and costs from hardware and other products not attributed to any of the
other three segments, as well as operating costs not directly attributable to
the other three segments.
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Core
Three Months Ended March 31, % Change Nine Months Ended March 31, % Change
2020 2019 2020 2019
Revenue $ 146,440 $ 130,604 12 % $ 440,704 $ 399,488 10 %
Cost of Revenue $ 66,141 $ 63,977 3 % $ 190,689 $ 183,481 4 %
Revenue in the Core segment increased 12% and cost of revenue increased 3% for
the three months ended March 31, 2020 compared to the three months ended March
31, 2019 . Excluding deconversion fees, which totaled $10,810 for the third
quarter of fiscal 2020 and $4,020 for the third quarter of fiscal 2019, adjusted
revenue in the Core segment increased 7% quarter over quarter. The increase in
adjusted revenue was primarily driven by the growth in data processing and
hosting fees, as well as customer call support and item processing revenue. Cost
of revenue decreased 4% quarter over quarter as a percentage of revenue due to
ongoing cost control efforts.
For the nine months ended March 31, 2020 , revenue in the Core segment increased
10% compared to the prior year-to-date period. Excluding deconversion fees,
which totaled $21,571 and $10,749 for the year-to-date periods of fiscal 2020
and fiscal 2019, respectively, adjusted revenue in the Core segment increased 8%
period over period. The adjusted revenue increase was primarily driven by the
growth in data processing, customer call support, and hosting fees, as well as
increased implementation fees primarily related to our private cloud offerings.
Cost of revenue decreased 3% as a percentage of revenue for the year-to-date
period compared to the prior year-to-date period due to ongoing cost control
efforts.
Payments
Three Months Ended March 31, % Change Nine Months Ended March 31, % Change
2020 2019 2020 2019
Revenue $ 150,360 $ 135,491 11 % $ 452,151 $ 407,706 11 %
Cost of Revenue $ 80,836 $ 68,700 18 % $ 236,725 $ 199,506 19 %
Revenue in the Payments segment increased 11% for the third quarter of fiscal
2020 compared to the equivalent quarter of the prior fiscal year. Excluding
deconversion fee revenue of $6,442 from the third quarter of fiscal 2020 and
$2,187 from the third quarter of fiscal 2019, adjusted revenue still increased
8% quarter over quarter. The adjusted growth was primarily due to increased card
and remittance revenue within the processing line of revenue. Cost of revenue
increased 18% quarter over quarter primarily due to increased costs related to
our credit and debit card processing platform. Cost of revenue as a percentage
of revenue increased 3% for the third quarter of fiscal 2020 compared to the
same quarter of fiscal 2019.
For the nine months ended March 31, 2020 compared to the same prior-year period,
revenue in the Payments segment increased 11%, and 9% after excluding
deconversion fee revenue of $13,478 and $6,533 from each period, respectively.
The increase in adjusted revenue period over period was primarily driven by
increased card and remittance revenue within the processing line of revenue.
Cost of revenue increased 19% for the year-to-date period over the prior
year-to-date period, primarily due to the same factors as the quarter increase.
Cost of revenue as a percentage of revenue increased 3% period over period.
Complementary
Three Months Ended March 31, % Change Nine Months Ended March 31, % Change
2020 2019 2020 2019
Revenue $ 118,664 $ 102,061 16 % $ 349,342 $ 311,017 12 %
Cost of Revenue $ 48,691 $ 45,733 6 % $ 143,384 $ 131,731 9 %
Revenue in the Complementary segment increased 16% for the third quarter of
fiscal 2020 compared to the equivalent quarter of the prior fiscal year, and 11%
after excluding revenue of $2,356 from the fiscal 2020 acquisition and
deconversion fee revenue from each period, which totaled $5,255 and $1,841 for
the quarters ended March 31, 2020 and 2019, respectively. The adjusted increase
was primarily driven by increased hosting fees, as well as increased software
usage revenue and transaction and digital processing revenue. Cost of revenue
increased 6% for the third quarter of fiscal 2020 compared to the third quarter
of fiscal 2019 and decreased 4% as a percentage of revenue, quarter over
quarter, due to ongoing cost control efforts.
For the year-to-date period compared to the prior year-to-date period,
Complementary segment revenue increased 12%. Excluding $6,787 of revenue related
to the fiscal 2020 acquisition and deconversion fees totaling $10,010
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and $5,221 for the current and prior year-to-date periods, respectively,
adjusted Complementary revenue increased 9% period over period. The adjusted
increase was primarily driven by increased hosting fees, as well as increased
software usage revenue and transaction and digital processing revenue. Cost of
revenue for the year-to-date period increased 9% over the prior year-to-date
period, which was in line with the revenue increase, and decreased 1% as a
percentage of revenue, period over period, due to ongoing cost control efforts.
Corporate and Other
Three Months Ended March 31, % Change Nine Months Ended March 31, % Change
2020 2019 2020 2019
Revenue $ 13,942 $ 12,208 14 % $ 44,333 $ 40,971 8 %
Cost of Revenue $ 62,903 $ 57,184 10 % $ 182,831 $ 168,272 9 %
Revenue in the Corporate and Other segment increased for the third quarter of
fiscal 2020 compared to the equivalent quarter of the prior fiscal year, and
increased 8% for the fiscal year-to-date period compared to the prior fiscal
year-to-date period. The increase period over period was primarily due to
increased hardware revenue. Revenue classified in the Corporate and Other
segment includes revenue from hardware and other products and services not
specifically attributed to any of the other three segments.
Cost of revenue for the Corporate and Other segment includes operating cost not
directly attributable to any of the other three segments. The increased cost of
revenue in the third quarter of fiscal 2020 of 10% and fiscal year-to-date
period of 9% compared to the equivalent quarter and year-to-date period in the
prior fiscal year were primarily related to increased salaries and benefits from
an increase in headcount over the prior-year quarter and year-to-date period and
salary increases occurring within the trailing twelve-month period, as well as
increased direct costs.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents increased to $109,514 at March 31, 2020
from $93,628 at June 30, 2019 .
The following table summarizes net cash from operating activities in the
statement of cash flows:
Nine Months Ended
March 31,
2020 2019
Net income $ 235,323 $ 210,892
Non-cash expenses 151,837 131,448
Change in receivables 99,425 107,535
Change in deferred revenue (168,066) (162,742)
Change in other assets and liabilities (42,066) (53,764)
Net cash provided by operating activities
Cash provided by operating activities for the first nine months of fiscal 2020 increased 18% compared to the same period last year. Cash from operations is primarily used to repay debt, pay dividends, repurchase stock, and for capital expenditures. Cash used in investing activities for the first nine months of fiscal 2020 totaled$153,400 and included:$87,284 for the ongoing enhancements and development of existing and new product and service offerings; capital expenditures on facilities and equipment of$39,563 ; a payment for the acquisition of Geezeo totaling$30,376 , net of cash acquired;$6,133 for the purchase and development of internal use software; and$1,150 for purchase of investments. This was partially offset by$11,106 of proceeds from asset sales. Cash used in investing activities for the first nine months of fiscal 2019 totaled$148,027 and included$81,438 for the development of software; capital expenditures of$42,417 ;$19,981 , net of cash acquired, for the acquisitions of BOLTS and Agiletics;$4,266 for the purchase and development of internal use software; and$20 for customer contracts. This was partially offset by$95 of proceeds from the sale of assets. Financing activities used cash of$107,167 for the first nine months of fiscal 2020, including dividends paid to stockholders of$94,486 ,$71,549 for the purchase of treasury shares,$3,874 net cash inflow from the issuance of stock and tax withholding related to stock-based compensation, and$6 for payments on financing leases. This was partially offset by$55,000 of borrowings on our revolving credit facility. Financing activities used cash in the first nine months of fiscal 2019 totaling$81,384 , which included$87,970 for the payment of dividends,$21,276 for the 30 -------------------------------------------------------------------------------- purchase of treasury shares, and$7,138 net cash outflow from the issuance of stock and tax withholding related to stock-based compensation, partially offset by$35,000 of borrowings on our revolving credit facility. Capital Requirements and Resources The Company generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling$39,563 and$42,417 for the nine months endingMarch 31, 2020 andMarch 31, 2019 , respectively, were made primarily for additional equipment and the improvement of existing facilities. These additions were funded from cash generated by operations. Total consolidated capital expenditures on facilities and equipment for the Company for fiscal year 2020 are not expected to exceed$62,000 and will be funded from cash generated by operations. The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or borrowings on its existing line-of-credit. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. AtMarch 31, 2020 , there were 26,993 shares in treasury stock and the Company had the remaining authority to repurchase up to 2,998 additional shares. The total cost of treasury shares atMarch 31, 2020 is$1,181,673 . During the first nine months of fiscal 2020, the Company repurchased 485 treasury shares. AtJune 30, 2019 , there were 26,508 shares in treasury stock and the Company had authority to repurchase up to 3,483 additional shares. Revolving credit facility OnFebruary 10, 2020 , the Company entered into a new five-year senior, unsecured revolving credit facility. The new credit facility allows for borrowings of up to$300,000 , which may be increased by the Company at any time until maturity to$700,000 . The new credit facility bears interest at a variable rate equal to (a) a rate based on a eurocurrency rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% and (iv) the eurocurrency rate for a one-month interest period on such day for dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The new credit facility is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit facility agreement. As ofMarch 31, 2020 , the Company was in compliance with all such covenants. The new revolving credit facility terminatesFebruary 10, 2025 . There was$55,000 outstanding under the new credit facility atMarch 31, 2020 . The Company also terminated its prior unsecured credit agreement onFebruary 10, 2020 . There was no outstanding balance under the terminated credit facility atJune 30, 2019 . Other lines of credit The Company has an unsecured bank credit line which provides for funding of up to$5,000 and bears interest at the prime rate less 1%. The credit line was renewed inMay 2019 and expires onApril 30, 2021 . AtMarch 31, 2020 , no amount was outstanding. There was also no balance outstanding atJune 30, 2019 . 31
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