Kevin Williams – Chief Financial Officer Jack Prim – Chief Executive Officer Tony Wormington – President

John Kraft – D. A. Davidson & Co. Kartik Mehta – Northcoast Res Tim Fox – Deutsche Bank Securities Jon Maietta – Needham & Company Gil Luria – Wedbush Morgan Securities Brett Huff – Stephens Inc Paul Bartolai – PB Investment Research Bryan Keane – Credit Suisse

Welcome to today's Jack Henry First Quarter 2010 Earnings call. This call is being recorded. For opening remarks and introductions, I would like to introduce Kevin William, Chief Financial Officer.

Statements or responses to questions may be made in this conversation which are forward-looking 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 to differ materially from those which we anticipate. Such factors are disclosed in our recent SEC filing. There can also be other factors not included but could potentially cause results to differ materially. We are pleased to host this call this morning to provide an overall company update and report on our financial results for our first fiscal quarter ended September 30, 2009. With me this morning are Jack Prim our CEO and Tony Wormington our President, who will provide opening comments regarding the state of the company and our quarterly financial performance. Then after our prepared comments, we will then open the call up for Q&A. With that, I'll turn it over to Jack Prim.

We continued to see a challenging economic environment and the continued impact on discretionary spending in the quarter, particularly related to hardware and software license items. Despite these challenges on top line growth, we saw solid growth in backlog and continued increases in recurring revenue. Our ongoing expense control efforts helped us realize an 18% growth in operating income and a 19% increase in earnings per share. Core system evaluation activity remained solid in both the bank and credit union segments of our business and we expect that will remain the case throughout the year. We completed our previously announced acquisition of Goldleaf in the quarter and also announced and completed our acquisition of the Pemco Technologies subsidiary of Pemco Mutual Insurance Company. Pemco provides a variety of ATM, debit and credit card transaction processing services, primarily to the credit union industry. Their business is highly complementary to our existing PassPort ATM/debit business and introduces new capabilities for us in the area of credit card transaction switching services. Their company has an excellent reputation for customer service and we believe will fit very well with our current PassPort and credit union offerings. Both of these transactions add to our current payments offerings. Goldleaf added to our strong remote deposit capture presence, which is the fastest growing component of our payment solutions with 54% year-over-year growth in the last fiscal year. It is expected to have approximately $48 million in revenue current fiscal year and $65 million to $67 million per year going forward. Pemco was added to our significant presence in ATM debit transaction processing, which currently represents 70% of the revenue of our payments business, while also inducing new capabilities in the area of credit card transaction routing. Pemco is expected to add $26 million in revenue in the current fiscal year and approximately $40 million per year going forward. Both businesses also provide opportunities for cost reduction in addition to the increased revenue contribution. Between them they add another 2,800 new customers that will also be candidates for other ProfitStars products and increase the number of core and non-core processing customers using one or more of our products to over 11,000. We are pleased and excited to welcome the customers and the 540 employees of these two companies to Jack Henry & Associates. We continue to believe the outlook for fiscal 2010 is better by comparison to 2009. As indicated on our last call, we and our customers remain cautious in this outlook. At our annual banking user conference last month, while attendance levels were encouraging, there was a more subdued tone compared to a year ago when it appeared that the problems in the economy while very serious were more likely to be confined to a small number of very large institutions. This year it appears that the collateral damage from those problems, specifically high unemployment and reduced consumer and business spending, are weighing on the minds of our customers. These same issues, along with recent comments about the NCUA that they do not expect credit union losses to peak until 2010 or possibly 2011, along with estimates for deposit insurance assessment provided for budgeting purposes for credit unions of between 15 and 30 basis points on assets, are similarly impacting spending decisions in credit unions. As we work our way through these current business challenges, we will continue to focus our efforts on the long-term best interests of our shareholders, customers and employees. We are confident that our business will perform well in the current environment and very strongly in a more normalized business environment. With that, I'll turn it over to Tony for some additional information on the business.

Our support and services revenue continues to generate growth and help offset the lack of discretionary complementary product licensees and hardware sales in the current economic environment. Within support and service, which was up 3% compared to prior year quarter, one-time implementation revenue was down 8% due to weak license sales. EFT revenue was up 7% compared to the prior year quarter. Our revenue from our OutLink data and item processing centers was up 7% and in-house software maintenance was up 3% in the same period. In addition to increased revenue, our EFT business continues to see nice growth in transaction volumes. As a reminder, our EFT revenue consists of ATM and debit card processing, bill payment processing, merchant capture and Check 21 image exchange. ATM and debit card processing volumes increased 12.1% over the prior year quarter and 1.8% sequentially. Bill payment transaction volumes increased 16.1% over the prior year quarter and 2.2% sequentially. Merchant related transaction volumes increased 46% over the prior year quarter and 10.8% sequentially. Financial institutions contracted to utilize our inner products payments ASP solution increased to 871 or an increase of 7.7% over the prior year quarter. Financial institution merchants installed and utilizing our enterprise payment solution increased to 21,308 entities representing a 39.4% increase over the prior year quarter. We continue to put a strong emphasis on customer satisfaction and the results of our monitoring indicate continued success within our demanding customer basis. In the current economic environment, we will remain diligent with expense controls while maintaining a long-term focus on the best interests of our shareholders, customers and associates. I'll now turn it over to Kevin for a further look at the numbers.

Our total revenue was essentially flat compared to the same quarter a year ago. License revenues are down 14% for the quarter compared to last year and down 35% sequentially, which typically is the case in our first quarter, but was down actually a little more than expected for all the reasons Jack and Tony previously mentioned. However, during the quarter, our core license revenue was up slightly compared to a year ago quarter. And as Jack mentioned, discretionary complementary product license revenue was down considerably during the quarter, as those are the items that are easiest to put off spending on by our customers. Our support and service revenue increased 3% year-over-year this quarter and was basically flat sequentially. For the quarter, as Tony mentioned implementation revenues decreased by 8% compared to the prior year and was down 13% sequentially which again was tied to the continued challenges of discretionary complementary license sales because core implementation revenues were up slightly compared to a year ago in line with core license revenue being up. Our electronic payments business was up 7% for the quarter compared to the prior year and increased 3% sequentially. OutLink data and item processing was also at 7% and increased 2% sequentially. Our total de-conversion fees for both electronic payments and OutLink combined were less than $100,000 this quarter compared to approximately $900,000 in the same quarter a year ago. There also continues to be a slight headwind in our electronic payments from the Check 21 where financial institutions are now going direct to the Fed and that headwind this quarter was about 550,000, which as we have discussed in the past, this continues to become a much smaller impact. Our in-house support and services was essentially flat for the quarter compared to last year and up 1% sequentially, which this is primarily due to the delayed work orders as customers again are pushing out discretionary spending. Our hardware revenue decreased by 16% for the quarter compared to a year ago and 21% sequentially due primarily to significant decreases in iSeries sales for both new and upgrades. And also declines in checks orders for all ties ranging from readers sorters for Check 21 to small numbers of desktop scanners. And we've also seen declines in servers, which goes along with just about all of our complementary products. Those were obviously down for the quarter. Recurring revenue consists of in-house support maintenance, our EFT or electronic payments business, which included all of our electronic bank business and OutLink data and item processing. In other words, this is our support and services line of revenue, less the one time implementation fee. Our recurring revenue experienced growth, 5% for the quarter compared to prior year and 3%, sequentially. So, we continue to see solid growth in our recurring revenue. Our consolidated gross margins improved 41% for the quarter compared to 40% in the same quarter a year ago and they were level sequentially. License margins decreased from 92% a year ago to 90% this quarter. Support and service margins improved to 39%, compared to 37% a year ago and hardware margins improved from 25% a year ago to 27% this quarter. To break this down into our two reporting segment, our banking segment's gross margins improved to 41% from 39% a year ago and our credit union segment margins decreased slightly to 39% from 40%. In the bank segment, in the license margins we saw a decrease from 91% to 89% due to a higher amount of third party software sold during the quarter. Support and service margins to the banks segment increased to 39% from 37% for the quarter, primarily due to lower personnel and travel costs and fringe load and our hardware margins increased 27% from 26% in the bank segment this quarter from a year ago due primarily to sales mix. In our credit union segment, license margins were 93% for the quarter compared to 94% a year ago, again due to more third party product sales this year. Support and service margins decreased to 34% from 37% a year ago, driven primarily by a decrease in work orders and a slight reduction in our electronic payments business in the credit union segment and hardware margins increased from 23% to 26% due to sales mix and better rebates. Total operating expense decreased 12% for the quarter and as a percentage of our total revenue decreased from 20% to 18% for the current quarter compared to the prior year. This was accomplished by holding headcount steady, cost and salary reductions and a lower health care cost this quarter compared to a year ago. Selling marketing down 13% compared to a year ago, which is primarily due to lower commissions related to lower license and hardware revenue. Our R&D decreased 12% from a year ago, primarily by lower personnel costs, reduced travel and using fewer outside contractors. G&A was down 11% due to lower health care costs and due to some of our user groups being done virtual this year compared to last year, so travel related costs were significantly within G&A. Our operating margin increased to 23% from 19% for the quarter compared to a year ago and was flat sequentially. The net result was increased operating income of 18% for the quarter compared to the prior year. The effective tax rate for the quarter was at 37.3% compared to 37% last year. This will most likely be the effective tax rate we will use at least through the first half of this year, or until we determine what Congress is going to do about the R&D credit, because until they renew the R&D credit we have to assume that it will not be renewed and therefore our effective tax rate will be higher. Therefore, I would suggest that you use approximate 37% rate for modeling going forward until we determine with the impact of the R&D credit will be. Our EBITDA increased 11.2% to $57.8 million from $51.9 million last year. Depreciation and amortization remained low at $15.8 million in this quarter, compared to the September quarter a year ago. During the quarter, we did not purchase any additional shares of stock to the treasury due to the pending acquisitions and the utilization of cash for those acquisitions, which will close during the second fiscal quarter, as Jack mentioned. Our backlog was 291.2 million with 61.7 million in house and 229.4 million outsourcing, which represents a 9% increase over that of a year ago. Remember that there are no transactional revenue represented for our EFT debt processing, online bill pay, or merchant remote capture contracts reflected in the backlog due to the difficulty in estimating the transactional revenue. However the backlog is obviously growing faster than other parts of our business since most of these are represented by long-term contracts. For guidance, as Jack mentioned, we continue to face economic conditions that are both challenging and caution does continue in our customer base due to the ongoing uncertainty around the timing and magnitude of potential of additional assessments from [inaudible], combined with the impact on our revenue of past and potential future failed financial institutions within our customer base. Obviously, this continues to make it extremely difficult to accurately forecast the discretionary sales to customers, which relates primarily to software, hardware, and implementation services revenue, which were all down this quarter compared to the same period a year ago and to some extent this creates challenges for forecasting our recurring revenue. Therefore, with a somewhat cautious approach based from the first quarter results, current backlog and sales pipeline, we believe that for FY '10 even with the first quarter revenue being flat that we will have organic revenue growth in the low single digits for the year and have operating income in the mid single digits growth for the continued operating leverage. However if the economy continues to stabilize, and our industry receives some clarity regarding the rates or assessments, then we can hopefully raise our guidance for organic growth in the future, possibly at our next earning's call. As for the recently announced acquisitions that Jack mentioned, Goldleaf showed approximately $48 million of revenue this year with an EPS contribution of $0.02 to $0.04, which sits contribution of EPS will double in contribution for FY '11 as we continue to achieve the identified cost synergies and utilize the NOL. Pemco Technologies should add approximately $26 million revenue this fiscal year and contribute $0.03 to $0.05 EPS and is believed also will conservatively double in contribution for EPS in FY '11. Therefore, between the two acquisitions we expect total contribution of approximately $75 million in revenue and $0.05 to $0.08 EPS this fiscal year. Also, as I mentioned on the last call, remember that we will have a onetime charge to earnings this year in the December quarter for the transaction fees related to the acquisition due to the new rule under FAS 141R, those expenses are now treated as a period cost and are no longer capitalized as part of the transaction. This concludes our prepared comments and with that we are now ready to take questions. Operator, will you please open the call line up for questions?

(Operator instructions) Your first question comes from John Kraft – D. A. Davidson & Company John Kraft – D. A. Davidson & Company: Jack, you discussed in the credit union space the special assessments and the uncertainty related to that area, but as far as the banks you didn't discuss that and we did hear some clarity on what the bank assessments were going to be like. Do you think you'll see a little bit less hesitation on spending in the bank area because of that clarity?

John, I don't know. You may be more current than I am. The last thing I heard on the banking side was there was a proposal for them to prepay three years worth of assessments. I'm not sure that that ever officially passed, but that was the last thing I remember hearing discussed, so I think unless and until you know something definitively it's hard to predict what's going to happen there. On the credit union side, the numbers that I threw out were thrown out by the NCUA as budgeting guidelines. So they said, well, we think the assessment is likely to be somewhere between 15 and 30 basis points on assets, but that one is still very gray in terms of what it will actually end up being. So, again, I guess we'll know a little bit more definitively as we get a little bit closer, but until then it's still just preliminary budgeting figures, I think that they're floating. John Kraft – D. A. Davidson & Co.: Then as far as pipeline specific to core deals, obviously you've had somewhat of a surprising success given the environment in the core deals. How does the future look in that market?

It continues to trend to somewhat surprising trend to me, John, that we saw last year where we actually had pretty solid core system sales activity, which I would have expected in the environment would have been considerably less. I think the level of activity continues to be very solid. I don't know in the quarter I think we probably did a few less credit union deals than we did a year ago, but they were somewhat larger deals. We've talked about that from year-to-year. You harvest what's available and sometimes they're larger credit unions and sometimes they're smaller and right now we've got a few that are a little bit larger in size, so that certainly helps. On the banking side, the activity remains very strong. We had several prospects at our National User Conference. I think we probably had seven competitive banking core system users that were there to find out a little bit more about us and have the opportunity to interact with our existing customers. So yes, somewhat to my surprise given the conditions, the banks and credit unions both still appear to be willing to look at moving forward with major core system changes if they feel their present system is not meeting their needs. John Kraft – D. A. Davidson & Co.: Tony, specific to the remote deposit numbers you threw out there you're seeing a pretty material growth in the merchants much less so on the number of financial institutions. Is there some sort of a marketing program that you guys are doing to help get the banks to in term get their merchants signing up or is that just more awareness in the market?

We have worked with the financial institutions to help them provide marketing programs to train them on how to sell merchants and etc. We've had sessions all along with the financial institutions as we bring them on to be able to do that, to drive additional merchant volume. I think we're seeing the fruits of our labors from those programs to continue to see additional merchants sign up at this point. So I think it's going well at this point, we haven't done anything different than we've done in the past though at this point.

John, we're seeing probably two kinds of sales right now and you've got the banks that are implementing remote deposit capture because they have to. It's more of a defensive move. If they haven't done it yet and most cases it's probably because they were trying to hold out and they've probably been pushed into it now by their customers who are coming to them saying they want the capability. The other kind of sales we're seeing is an increase in some of your early adopters who just got something in place to be in there early and are looking for a more fully featured offering such as the one that we offer in there actually seeing some replacement of their 1.0 implementation of whatever system that they implemented. So those folks probably have a pretty good feel for how to market and got out there early and it made some headway. The folks that are doing it as a defensive measure we can offer some help and have offered some marketing materials and things they can use, but it's kind of hard to get them to move if they're not so inclined to really promote it.

Your next question comes from Kartik Mehta – Northcoast Research Brokerage Firm. Kartik Mehta – Northcoast Research Brokerage Firm: Jack, I wanted to ask you a little bit about how you think financial institutions will react once their comfortable with the economy and kind of what's happening with the FDIC or at the insurance assessments? Do you see a bunch of pent up demand coming out, and financial institutions spending a lot of money at once or do you think when it does come back it will gradual and more normalized?

That's a great question Kartik and I wish I really had a good feel for it. I think it's going to be some of both. I think normal when we get back to normal is going to be different than what normal was a couple years ago. I don't know exactly what that means but I just think that banks are probably going to be a bit more conservative in some of their lending practices. And I don't' know what all that's going to ultimately mean for operational spending. I would tell you at the same time that we're seeing increased interest in some of the security related solutions that we developed with the Gladiator technology. We came out with a fairly advanced offering in that regard and we're seeing a fair amount of growing interest in that, which certainly is something that you could hold off on doing but it appears people are even now beginning to make some decisions about things that they just need to move forward with. So I want to believe that there's some pent up demand there that will come into play, but I think to whatever extent that there is some pent up demand I'm thinking it's a quarter or two once things get back to normal. And then a more normalized kind of a spend but really kind of hard to predict what that normalized level will be at this point. Kartik Mehta – Northcoast Research Brokerage Firm: Jack, the license spending obviously has been a little volatile over the last few quarters. I'm trying to get a sense of in the past when things weren't this volatile, what would you say software spending was as a percentage of CapEx spending for banks and what is it now? I'm trying to see if there's a way to quantify kind of what happened currently versus what happened in the past.

I don't know how much help I can give you on that, Kartik. There are secular trends like there are with hardware. I mean everything related to hardware says that those numbers should continue to decline. Processors are getting cheaper and faster and checks orders or the large checks orders that are no longer necessary and price competition for check scanners and some of the low end things. All of those things continue to say that hardware should decline over time in addition to the fact that, as we've talked about before, we've seen growing numbers of our existing in-house customers moving from the in-house environment to the outsource environment, which impacts not only hardware but will also impact license fees. And again from the standpoint of new customers, anything under $1 billion in assets these days the vast majority of the time that's going to be an outsource transaction rather than in-house. So I don't know that trying to compare, even if I knew, what percentage of their funds they spent on license three years ago I'm not sure it would be irrelevant comparison today because some of these other trends that we've been seeing. So it's really kind of hard to put your finger on.

Plus the fact, Kartik, that so many of the offerings we have today that three years ago the only offering we had was a license model where today almost all of our products can be delivered [AFT]. For example electronic document imaging our synergy product, three years ago that can only be offered through a licensed model and today we've got Synergy Express where you can basically do ASP and we host all of the hardware and software. So we've actually impacted to some extent also on top of everything Jack just mentioned. Kartik Mehta – Northcoast Research Brokerage Firm: Kevin, when you gave guidance would that have included the Goldleaf acquisition since it closed on October 1 when you said low single-digit revenue?

No, what I said was that was organic growth. That was organic growth and then I gave you Goldleaf and Pemco separately so you all can wire those on top in your models. Karik Mehta – Northcoast Research Brokerage Firm: What was Goldleaf just by itself?

Goldleaf is going to contribute about $48 million in revenue this year and EPF contribution will be $0.02 to $0.04.

Your next question comes from Tim Fox – Deutsche Bank. Tim Fox – Deutsche Bank: A follow-up question to an answer you gave, Kevin, about the in-house and outsourcing trends. Have you seen as customers are pinching back on budgets more of a move towards the outsourcing option, and not necessarily just for new customers but existing customers looking at cutting cost and this would be both for the banking and I guess more so for the credit unions banks where they haven't traditionally moved there?

Tim, I don't know that it's so much for budgeting or even cutting costs because obviously most of our customers are going to end up spending more money with us through an outsource offering than they would through an in-house offering over the life of the relationship. Having said that, typically they will be able to cut other costs like IT staff and computer rooms and hardware and things like that, but to move from in-house to outsource, I don't think it's so much as capital outlay or cash outlay through the bank because most of them have quite a bit of cash. It's more of all the other things that driving Tim, like security and keeping the systems up 24/7 and dealing with all the LANs and WANs, and just the large number of things that are out there. And a lot of the banks are just saying I'd rather rob a bank than let Jack Henry run my back office. So I don't know that you can really tie that directly to budgeting because I don't think the budgets are really forcing the banks to make this decision. Tim Fox – Deutsche Bank: Okay, and if you were to step back and look for a high level at the license number and in taking into that the context of this outsourcing trend. Is there any way to roughly quantify the effect of more outsourcing versus in-house on license and what kind of the quote unquote "new normal" may look like on the license side when discretionary spending starts to pick back up?

Well, I mean, I know there's some impact Tim, but the fact is in the last three years 5% of our in-house customers roughly have elected to move from in-house models to outsourcing, so that's not a big number but it does create some slight headwinds on discretionary spending for additional add on [inaudible] products, absolutely. But the real unknown is what percentage of the remaining in-house customers are contemplating going outsourcing. I mean we continue to hold WebEx's and seminars for our in-house customers to show them the benefits of going outsourcing. So if you've got a customer that's even thinking about going to the board to talk about doing [inaudible] outsourcing chances of them writing us a check for an add on [inaudible] products is pretty slim but I think that's probably creating as much head wind on license sales other than the customers have already made the decision to go from in house outsourcing. So is there some impact? Absolutely. Is there a way to measure it? Not to my knowledge. I just don't know how you would even predict that. Tim Fox – Deutsche Bank Securities: Okay and then just a question maybe for Tony around online bill pay and the bill pay trends. I'm just wondering if you could talk about what's been happening in recent quarters around adoption by customers. Is this something that's been impacted by the economy? Obviously the transaction volume is holding up nicely. But I'm just wondering from a penetration perspective and competitive perspective how are you fairing in the online and bill pay segment?

Yes, from a competitive perspective we continue to win our fair share of the bill pay business that we're competing with out there in the market place. We have a very tightly integrated solution with our internet banking solution and we're seeing strong winds there whenever we sell our internet banking. From an adoption standpoint, we're still seeing on an average basis the number of transactions that are being paid through bill pay are fairly consistent and have been for a couple of years by the end consumer on a month-to-month basis on the number of users we have on our ASB solution. What we are seeing some increase in the adoption of the existing clients that we have out there, the financial institutions where additional consumers are becoming bill pay users. The growth is consistent at this point, fairly consistent across our client base. We've seen continuing growth even though the economic environment is out there. Certainly there are some thoughts that less payments are going to be made or less spend is going to be spent in an economic environment that we have but we're still continuing to see increased payment volumes., so I think that speaks well to our position in the market place at this point with our bill pay solution.

Our next question will come from Jon Maietta - Needham & Company. Jon Maietta - Needham & Company: Kevin, could you just help us out with regards to the gross margin profile post acquisitions and what the kind of mix between license and support and services may look like going forward as compared to what we saw in this most recently recorded quarter.

Yes, the margins at lease for the balance of this year, Jon, we'll probably get a little pressure on them from the Goldleaf acquisition. There is costs to be taken out of both of those acquisitions and some of those costs will take three to nine months if not a little longer to get out of there, for example some leases that we need to get out of. As far as Pemco, there's some transitional services that we need to get moved off of their data center over on to ours which will take some time before we realize those synergies. So there will be some slight pressure on the growth and operating margins for the next couple of quarters, but I don't think it will be tremendous. Our gross margins could take a 100 bit hit in that quarter, but I don't think it would be significant. As far as the revenue mix, Pemco is primarily all services. They don't even sale software, so all of that will go into the support and services line as far as transactions and some installation services. Goldleaf, the way they were setup they were pretty heavily weighted recurring revenue. So I don't see the Goldleaf guy having a huge impact on our license or hardware margin line or revenue lines either. Jon Maietta - Needham & Company: Okay. Does Pemco have any monthly mediums or any recurring element or is it just primarily transaction as you said?

Well it's all transaction. I mean it's all ATM, debit and credit card processing, and it's per transaction fee just like we do on our passport business. Jon Maietta - Needham & Company: Got it, okay.

There's practically 100% recurring revenue. It probably isn't in our backlog because it is transactional in nature but it's all recurring revenue.

Our next question will come from Gil Luria - Wedbush. Gil Luria – Wedbush Morgan Securities: Could you remind us how you paid for – what the financing was for the two deals and what you have in your pipeline now? Do you still have similar deals and if you've used some cash how you would want to pay for those?

Well, for Goldleaf, we paid cash for that out of operating cash. For Pemco, we drew $60 million down on our line which we were paying 65 basis points interest on, so it's pretty cheap financing, so right now Gil we've got basically a $60 million draw on our line of credit. We've still got $90 million available with the expansion features, so we've still got $160 million available on our line that we could use. We've still got operating cash in the bank to basically fund operations as we move forward. As far as pipeline we constantly are looking at potential acquisitions and depending on the size of that acquisition it would obviously depend on how we'd finance it. I don't see us doing any stock deals so if there's a smaller deal like the ones you just did we'd just draw them more on our existing line of credit. Because of the significant deal we would look at termed loan financing. Gil Luria – Wedbush Morgan Securities: In general over the kind of previous couple of years before Goldleaf, it seems like you felt like valuations were not low enough, should we see the fact that you made these two acquisitions recently is a sign that you think maybe valuations of targets are now a little more reasonable?

I don't know about other ones, Gil. I mean Goldleaf was kind of a unique situation in that they had run into some problems. We bought that essentially at one times revenue which in our opinion anytime you buy a company with some synergies at one times revenue it's probably something you ought to look at. Pemco, we basically got it for one and half times or a little times revenue for payments processing company, which in our opinion is very reasonable valuation with some cost synergies. We also won the Pemco deal because the parent companies, the senior management, considered us as the right company to take care of their employees and their customers. I'm not sure; in fact, I know that we were not the high bidder in that deal, that we won that because they were convinced that we were the right company to take their baby and help it grow. So, but as far as other valuations Gil, yes, I'm not sure I've seen enough activity out there yet to really satisfy myself that the valuations have come down significantly, because three months ago we were looking at some deals that those valuations had not come down at all in line where we thought they were reasonable. Gil Luria – Wedbush Morgan Securities: And then operating expenses, you reduced very dramatically, I mean year-over-year at sequential basis. I think you've done a lot of that by keeping costs contained. I think you took some salary reductions to folks and froze matches and things like that. You didn't do without really cutting your headcount very much. How much of that will you be able to hang onto going forward? How much of that are you going to have to reverse? At what point of growth and performance are you going to have to start giving people back those pay cuts back, start giving them raises etc.?

Well we didn't cut any headcount. I mean, selling and marketing, as I mentioned in my opening comments, the majority of that decrease is directly related to commissions. I mean when license fees are down 14% and hardware's down 16%, you would expect your commissions to be down significantly and that's the lion's share of the decrease in selling and market. Research and development, part of that is due to the salary cuts. But the biggest part of that is due to reduced travel and also reducing using outside consultants for a lot of the things we had previously been using them for. And as far as G&A, part of that's the salary cut, but the bigger part of that is actually the benefit we got this quarter in reduced health care costs compared to a year ago. If you'll remember in this quarter a year ago, our compensation was only up 9%, but our health care was up like 35% because of a large number of large claims we had last year as to our stock loss. So between that and the Symitar user group meeting was the biggest reduction in the G&A. Now, I will tell you G&A will pop back up in the December quarter because the expenses for our national user group meeting will be in there. So it will probably be back up more in line with where G&A was in the December quarter a year ago. Maybe not quite that high, but that would be up more in the line.

To your broader point, Gil, on the particularly the salary reductions and the sustainability, it is clearly our intention to restore those salaries when we've gotten a little better visibility and clarity on operating income growth and exactly how we're tracking there. Again, we did that in lieu of staff reductions. I would suggest to you that even though a number of other folks have taken a different approach to that end result by reducing headcount, I'm not sure how sustainable that really is. When business comes back, I think you see people start to rehire for those positions that they downsized. There's the recruiting and the ramp-up costs, along with the lower productivity of a newly hired employee. So I think there are a lot of costs there that aren't as obvious as they might be. Ours is very clearly identifiable as to what came off of the salary line. But I think ours in fact in some ways are more sustainable than some alternative approaches.

Your next question comes from Brett Huff – Stephens Inc. Brett Huff – Stephens Inc.: Kevin, I think I'll ask you for just for some clarity on the guidance. When you talked about internal growth I understand what that is, but when you gave the operating income growth number, did you say that was pre the two deals or post the two deals?

Pre. Brett Huff – Stephens Inc.: Okay. And then on the support and the services leverage margin improvement, I think what I heard you say was the banking side was better than in the past, but the credit union side was a little bit lower than in the past. Did I hear that right?

Yes. Brett Huff – Stephens Inc.: Can you just articulate what that was again? I didn't get all of the puts and takes on that.

Well, the banking was driven by obviously the salary cuts a little bit and also continued increase in our payments business and leverage of that, including our OutLink group, and all those drove for improved margins. On the credit union side, the electronic payments actually dropped off a little bit this quarter compared to a year ago which obviously has an impact on margins. And then in the in-house maintenance line, the number of work orders and consulting time spent dropped off dramatically from this quarter a year ago. So we were not leveraging the resources quite as long and [crediting] inside in our support and services group as we were a year ago. Brett Huff – Stephens Inc.: As we look forward, since that's such a big chunk of your business, how should we think about margins going forward on that in particular? I guess I'm thinking X the deals. But do you think you could still sort of drive at least small incremental improvements in that because it has such a big impact on your overall margins?

I don't know how much improvement we can get out of that, Brett. I mean, 39% is pretty high margins in a support service business. I think there will continue to be some overall potential improvement. But again, as directly to the credit union because the work orders, which that impacted the banking side a little bit, too, that's clearly discretionary spend, that's additional work that they want done as part of our in-house maintenance. And when the banks and credit unions decide to spend a little money and want to do that and we can better utilize our resources, then that will help the margins. But with the acquisitions in there, there will probably be some pressure on the support and services margin until we can accomplish all of the cost interviews that we're looking for out of those two. But if we could just maintain the 38%-ish support and services margins for the year, I'd be pretty happy as we get the two acquisitions integrated in. Brett Huff – Stephens Inc.: You had mentioned that the Symitar user conference I think had gone virtual versus flying everybody in. What kind of chunk of cost is that that we should think about so we can kind of see apples to apples what the margin differences were either including or excluding that?

Well, that's a good question, Brett. I mean, there's probably $600,000 or $700,000 in G&A that wasn't there this year that would have been there last year, but there was also a few hundred thousand dollars that would be in support and service revenue for the vendors and customers to come up there because based on accounting rules, that's where we're required to stick it, that wasn't there this year that would have been there last year, too.

So are you netting the hotel costs that we incurred to cancel the hotel?

There was also a hotel cost that we had to pay, Brett, that was $400,000, that we had to pay just to cancel a hotel because we have to book these things four or five years in advance to get those properties reserved because we basically reserve the entire property. So there was clearly $1 million worth of cost between the fourth quarter and this quarter that were there a year ago that were not there this year. Brett Huff – Stephens Inc.: Lastly and then I'll get off and let other people go, can you just characterize for us, you did a little bit in terms of the sales and how the conversations are going it sounds like surprisingly the folks are interested in talking about core and kind of punting on ancillary because it seems easily avoidable right now. When you're engaging a client that you know that may be a new customer, how does that conversation usually come about right now and what's the driver? Is it we need to save money, we don't like our current core, we just merged with the bank and can't scale, can you give us a sense of how that goes in such a touch economic environment?

Brett, I would say that more often than not we get involved because the institution is – on the banking side I'd say it's because they're not satisfied with the level of service that they're getting from their provider. What they perceive as poor services causes them to look. Once they look, there's other factors that come into play, culture and product capabilities, functionalities and those kind of things, pricing comes in to play as well. But I think, and Ton, tell me if you disagree, but I think more often than not on the banking side, those discussions start because of service. On the credit union side, service is definitely a factor. I think that it has been a bigger issue on the credit union side has been as the credit union's business has evolved to take on more of the things that were traditionally done by community banks they needed functionality that was not originally ever intended to be part of the credit union systems when they were originally designed. And so I think in their case, it may be more functionality driven that service is definitely a very big part on the credit union side as well.

Your next question comes from Paul Bartolai – PB Investment Research. Paul Bartolai – PB Investment Research: Just a follow-up on the last question on kind of the core deals. Jack, I think you mentioned price as being a factor. I'm just curious how much you're seeing in terms of pricing in this environment for the core deals?

Yes, I would say at a high level, Paul, that it's very competitive. But I would've said the exact same thing two years ago. You will occasionally on a deal-by-deal basis see somebody pull out all of the stops, whether they're trying to save an incumbent or whether they just need to book a deal for whatever reason, but not in a consistent manner. In other words, we don't have any particular competitor who has come to the market with a win at all costs kind of a mentality. We'll see, as I said, an individual deal where that may seem to be how it plays out, but as a focused strategy it's very competitive but not necessarily any more so across the board than it's been for quite some time. Paul Bartolai – PB Investment Research: Kevin, if you could just give us maybe some thoughts on the organic growth profile of the new acquisitions and what you're seeing there and what you expect going forward.

Well, I think as Jack mentioned, we expect next year Goldleaf will contribute mid-60 million revenue and Pemco somewhere in the mid-40s, 45 million to 48 million in revenue. As far as organic growth beyond FY '11, we've got to get our arms around both of those a little bit more before I'm ready to talk about FY '12.

There's a couple of businesses in the Goldleaf offering in particular that have been challenged of late, their lending solutions business and their retail inventory management forecasting business. The lending solutions business I think very directly attributable to the lack of available credit in the marketplace has certainly been – if you look at what the organic growth has been it would be pretty strongly negative. Again, I think that that will likely stabilize and we're continuing to look at those businesses and make sure we understand how they fit and how we can get those businesses going again. But in particular those two businesses at Goldleaf we are just getting a better understanding of what drives that business and what makes it work. So it is kind of difficult for us to say at this point what kind of expectations are appropriate for that going forward. The remote deposit capture business at Goldleaf is one that we were certainly interested in. we've been pretty pleasantly surprised with some of the other businesses that they have that are very complimentary or overlapping with what we have or maybe added some new products that we think we can do some things with. Again, a little early in the cycle to be able to predict what those will generate, but we'll feel good and normally when you get in after the factor or deep into due diligence a lot of times you'll find surprises that weren't in the direction that you had hoped. I would say we've really not found any of that with Goldleaf and are probably more encouraged about some of the upside opportunities with some of their products. Paul Bartolai – PB Investment Research: That was my next question. So nothing new has come up and surprised you guys from Goldleaf? I know they had some issues going on but it seems like everything is at least as good as you expected?

Yes, I think frankly there are several things that are better than we expected and I think that by kind of moving some of their business units into a variety of business units in Jack Henry I think there's a number of areas where we just have a better fit and the management the focus that we'll be able to bring to some of those areas will definitely be stronger. So, yes, we still feel good about it. Paul Bartolai – PB Investment Research: Last one, it looks like OutLink's growth picked up a little bit in the quarter relative to last quarter. I was just curious what drove that.

Well, I'd say part of it is probably the in-house outsourced transitions some of those beginning to roll in. We've talked about that a good bit 27 in fiscal '08, 45 in fiscal '09 and so you've got a number of those that are starting to roll in. And the '08 folks, as we've mentioned, we see a pretty substantial jump in revenue the first year that they're on but it jumps again in the second year. So you've probably got some of those folks that were FY '08 signing that maybe been on a year or so now that are bumping up as well. And we've had a couple of nice competitive takeaways that have rolled in as well. So, Tony, I don't know if you want to add anything.

The only other thing I would add to that is that as the [de novo] market has pretty much dried up, a number of the [de novos] that we had in there from a year ago or so would have had some amount of incubation baked into those deals where we were providing processing at no cost to get the [de novo] up and running. Those [de novos] are now running and paying good minimum monthly processing fees, which are probably adding to the increase that we're seeing as well.

Plus the other thing planned is the good news is there were no early termination fees in there to distort that revenue. That was all true organic growth.

Your next question comes from Bryan Keane – Credit Suisse. Bryan Keane – Credit Suisse: Kevin, I just wanted to clarify something on the guidance. For fiscal year '10 you said that operating income growth would be in the mid single-digit range, yet I guess the first quarter operating income growth was 18% year-over-year. So I know you mentioned something about the second quarter had some extra expense in it, but just trying to make sure I understand why operating income growth will decline from that first quarter level.

Bryan, there's a couple of things in there. One, obviously the operating income margins were up nicely this quarter, but as Jack previously mentioned, at some point in this year we plan to restore the salary cuts, which obviously will have a negative impact on the operating margins. When we restore those obviously it'll have an impact on the balance of the year, but also as I said in that guidance, is we were trying to be extremely cautious in that guidance. Do I think it's possible that we could exceed the mid single digits? Absolutely, but I also don't want you all going out there and putting models out there and expectations that we're going to have organic growth at some ridiculous amount because we have made it very clear to our employees that we intend to restore their salaries as soon as possible. Bryan Keane – Credit Suisse: When those salary cuts get restored it's still unclear for this quarter, next quarter or when that might be?

We have not announced that yet. Bryan Keane – Credit Suisse: The other cost controls that you've done on the sales and marketing and some of the other areas, those are probably going to be maintained throughout the year or is there a chance you start spending more there as well?

We will continue to focus on the other areas of cost control. We've done an extremely good job of getting rid of a lot of travel costs. All of our employees are better utilizing technology for some of the things they have been using technology for installations so travel costs are pretty much down across the board. We will continue to focus on those. And then juts general operational costs, believe me all of our general managers are extremely focused on the P&L on a monthly basis to make sure they control those costs.

Your next question comes from Brett Huff – Stephens. Brett Huff – Stephens Inc: Kevin, in the past you had talked about how your banks are thinking about commercial real estate. That obviously continues to evolve and wondered if you guys had any updated thoughts on that.

While Kevin is pondering that, Brett, I guess the one comment I would make I don't know that we have any clear guidance on that. As I indicated in my opening comments, it was certainly a little more subdued tone at our banking user conference. Last fall as bleak as the news was in the October timeframe, I feel like the customers that we had at our user conference a year ago still thought hey, it's just going to be a handful of very large banks that were doing some exotic and crazy things and we're going to be just fine. Or maybe there's a half a dozen states where real estate prices that had steep run-ups and we're not in those states so we're going to be just fine. And I think that the reality, the ripple effect now with 5 million people unemployed and still growing, delinquencies rising and some of which are commercial real estate, some of them are just car loans, house loans, credit card payments, whatever the case might be. I think that the tone was a little more subdued. So there's good news and bad news to what I think is kind of a lagging effect. The bad news is a year ago people were probably too optimistic in their assessment of the marketplace, so this year it was a little more subdued. Well, hopefully that's a lagging indicating in all the green shoots that we hear about and the affect that Bernanke has declared that the recession is over. Maybe some of those things are starting to work in a positive direction, but unfortunately the reality is staring them in the face right this minute is high unemployment and reduced spending and those kinds of things. So that a quarter or two from now maybe we look back at this and say that they were overly pessimistic in their assessment. But I don't know that I could give you anything real specific to commercial real estate. I'm sure that some of the concern around that has increased just like the other concerns are a little stronger now than they were a year ago.

I will say, Brett, that obviously we had a number of prospects in here in month September and every one of those I think we asked and I asked just about every banker I could talk to at our user group meeting a couple of weeks ago. And is there some concern about the commercial real estate? Sure, but there's concern about all of our loans out there. But I will say that most of the banks, the vast majority of the banks that we've talked to they are pretty comfortable with their commercial loan portfolios because most of it is owner occupied type real estate and they know the owners and they've for customers for years. It's not the huge malls that are sitting there vacant that are causing a lot of the problems in the commercial real estate markets. So I'm sure there's some pockets within our customer base that is going to have more trouble than others, but from the bank and prospects I've talked to, are they a little concerned about it? Yes, but they're not overly nervous about it.

Due to no further questions, I would like to turn the call back over to Kevin Williams for any additional or closing remarks.

Again, we appreciate you joining us today to review our first quarter fiscal 2010 results. We remain committed to build on all of our competitive strength and to do what is right for the long-term for our customers, our associates and most of all our stockholders. Again, thank you very much for joining us. Operator, please provide the replay numbers.

Ladies and gentlemen, this conference will be available for a replay beginning November 4, 2009 at 10:45 am Central Time and will run through November 11, 2009 until 12:00 midnight Central Time. The phone number to access this replay is toll free at 1-888-203-1112. Once again that number is 1-888-203-1112. This does conclude today's conference. We thank you for your participation.