Business Context and Reporting Period
Company: Jack Henry & Associates, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: March 25, 2026
Event: Entry into a new material definitive credit agreement and termination of a prior agreement.
Key Financial Metrics and Debt Structure
This filing details a refinancing transaction rather than operational financial results. Key debt metrics include:
- New Credit Facility: $1.0 billion, five-year, revolving, unsecured Credit Agreement.
- Prior Facility: $600 million revolving credit agreement (terminated).
- Outstanding Balance Refinanced: Approximately $80 million outstanding under the prior agreement was refinanced.
- Interest Rate: Variable rate based on adjusted Term SOFR or an alternate base rate plus an applicable percentage determined by the Company's leverage ratio.
- Financial Covenants:
- Minimum Consolidated EBITDA to Consolidated Interest Expense ratio: 3.50 to 1.00.
- Maximum Net Leverage Ratio: 3.50 to 1.00 (step-up to 4.00 to 1.00 for four quarters following an acquisition of at least $100 million).
Material Changes Versus Prior Period
The primary material change is the expansion of the Company's credit capacity and the extension of the maturity profile:
- Capacity Increase: Revolving credit limit increased from $600 million to $1.0 billion.
- Maturity Extension: The new agreement has a five-year term from March 25, 2026, replacing the prior agreement which matured on August 31, 2027.
- Cost of Termination: No early termination penalties were incurred.
Guidance, Outlook, and Risks
Permitted Uses of Proceeds: Refinancing existing indebtedness, capital expenditures, repurchasing equity interests, and general corporate purposes.
Expansion Option: The agreement permits the Company to obtain additional revolving credit or term loan commitments subject to limitations.
Risks and Contingencies:
- Covenant Compliance: The Company must maintain specific leverage and interest coverage ratios; failure to do so constitutes an event of default.
- Events of Default: Include nonpayment, non-compliance with covenants, bankruptcy, and change of control, which could accelerate all outstanding obligations.
- Guarantees: The agreement is guaranteed by the Company's wholly owned Material Domestic Subsidiaries.
Investor Verification Checklist
- Verify the current leverage ratio and interest coverage ratio to ensure compliance with the new 3.50:1.00 covenants.
- Review the specific "applicable percentage" pricing grid in the full Credit Agreement (Exhibit 10.82) to understand interest rate costs at various leverage levels.
- Confirm the status of the $80 million refinanced balance and any immediate drawdowns on the new $1.0 billion facility.
- Assess the impact of the step-up leverage ratio (4.00:1.00) if the Company pursues acquisitions exceeding $100 million.