NIC Inc. (NASDAQ: EGOV), the dominant provider of official
eGovernment services, today announced net income of $9.4 million
and earnings per share of 14 cents on total revenues of $65.4
million for the three months ended March 31, 2014. In the first
quarter of 2013, the Company reported net income of $10.0 million
and earnings per share of 15 cents on total revenues of $61.2
million.
Quarterly portal revenues were $61.5 million, a 6 percent
increase over first quarter 2013. On a same-state basis, portal
revenues were $56.6 million in the current quarter, a 7 percent
increase over the first quarter of 2013. Same-state,
transaction-based revenues from interactive government services
(IGS, formerly referred to as non-DMV) rose 7 percent over first
quarter 2013, with same-state driver history record (DHR, formerly
referred to as DMV) revenues up 4 percent. Same-state portal time
& materials revenues rose 22 percent and same-state portal
management revenues were up 3 percent for the quarter.
Current quarter revenues from the Company’s newer portals in
Pennsylvania and Wisconsin totaled $2.4 million and $1.2 million,
respectively. Revenues from the Pennsylvania portal were $2.6
million in the prior year quarter, while the Wisconsin portal began
generating revenues in the third quarter of 2013. Revenues from the
Virginia state agency partnerships were $0.6 million in the current
quarter, while revenues from the legacy Virginia state portal
contract in the prior year quarter were $1.5 million. Revenues from
the legacy Arizona portal contract were $0.8 million in the current
quarter compared to $0.9 million in the prior year quarter.
Portal gross profits were $25.1 million in the current quarter
compared to $25.3 million in the prior year quarter. NIC’s portal
gross profit percentage was 41 percent in the current quarter, down
from 44 percent in the prior year quarter, due mainly to higher
employee compensation costs related to the Pennsylvania portal,
which had not yet begun to significantly ramp its cost structure in
the prior year quarter, lower revenues from the Virginia portal
contracts, as further discussed above, and start-up costs from the
new Connecticut portal, which began generating DHR revenues in
April 2014.
Software & services revenues were $3.9 million in the
current quarter, up 23 percent from the first quarter of 2013,
driven by a 12 percent, or $0.3 million, increase in revenues from
the federal Pre-employment Screening Program, and $0.4 million of
revenues from the North Carolina construction lien service, which
launched in April 2013. These services contributed to a 42 percent
increase in software & services gross profits to $3.0 million
for the quarter.
“Providing the very best eGovernment solutions is not one
division among many or a side business. It is our only business,”
said Harry Herington, NIC CEO and Chairman of the Board. “This
single focus is one of the keys to our success, and I am pleased to
see 2014 off to a strong, steady start.”
As a percentage of total revenues, selling & administrative
expenses were 16 percent in both the current and prior year
quarters. Selling & administrative expenses in the prior
year quarter included $0.4 million of costs, net of insurance
reimbursement, related to the previously disclosed SEC matter,
which was successfully concluded in the fourth quarter of 2013.
The Company’s effective tax rate in the current quarter
increased to 39 percent from 37 percent in the prior year quarter,
due mainly to the expiration of the Federal research and
development tax credit on December 31, 2013. In the prior year
quarter, the Company recognized a favorable benefit from the tax
credit totaling $0.5 million. Legislation extending the research
and development tax credit beyond December 31, 2013 has not been
enacted.
“NIC continues to execute well and produce solid financial
results in line with our expectations,” said Steve Kovzan, NIC
Chief Financial Officer. “Our core business is as strong as ever
and continues to be the lifeblood of our success.”
Operational Highlights
During the first quarter, the state of Colorado signed a
five-year contract to continue its work with NIC's subsidiary,
Colorado Interactive, LLC. The agreement includes renewal options
that the state can exercise to extend the contract for an
additional four years.
First Quarter Earnings Call and Webcast Details
On the call, the Company will discuss its 2014 first quarter,
and answer questions from the investment community. The call may
also include discussion of Company developments, and
forward-looking and other material information about business and
financial matters.
Dial-In Information
Monday, May 5, 2014 4:30 p.m. (EDT) Call bridge:
877-941-8609 (U.S. callers) or 480-629-9692 (international callers)
Call leaders: Harry Herington, Chief Executive Officer and Chairman
of the Board Steve Kovzan, Chief Financial Officer Robert Knapp,
Chief Operating Officer
Webcast Information
To sign in and listen: The Webcast system is available at
http://www.egov.com/investors.
A replay of the Webcast will be available until 11 p.m. (EST) on
Nov. 7, 2014, by visiting http://www.egov.com/investors.
About NIC
NIC Inc. (NASDAQ: EGOV) is the leading provider of
enterprise-wide, official state eGovernment services and secure
government payment processing solutions. The Company's innovative
eGovernment services help reduce costs and increase efficiencies
for government agencies, citizens, and businesses across the
country. The NIC family of companies provides eGovernment solutions
for more than 3,500 federal, state, and local agencies across the
United States. Additional information is available at http://www.egov.com.
Cautionary Statement Regarding Forward-Looking
Information
Any statements contained in this release that do not relate to
historical or current facts constitute forward-looking statements.
These statements include statements regarding the Company’s
potential financial performance for the current fiscal year,
statements regarding the planned implementation of new portal
contracts and statements regarding continued implementation of
NIC’s business model and its development of new products and
services. Forward-looking statements are subject to inherent risks
and uncertainties and there can be no assurance that such
statements will prove to be correct. There are a number of
important factors that could cause actual results to differ
materially from those suggested or indicated by such
forward-looking statements. These include, among others, NIC’s
ability to successfully integrate into its operations recently
awarded eGovernment contracts; NIC's ability to implement its new
portal contracts in a timely and cost-effective manner; NIC’s
ability to successfully increase the adoption and use of
eGovernment services; the possibility of reductions in fees or
revenues as a result of budget deficits, government shutdowns or
changes in government policy; the success of the Company in
renewing existing contracts and in signing contracts with new
states and federal government agencies; continued favorable
government legislation; NIC’s ability to develop new services;
existing states and agencies adopting those new services;
acceptance of eGovernment services by businesses and citizens;
competition; the possibility of security breaches through cyber
attacks and any resulting liability; and general economic
conditions and the other important cautionary statements and risk
factors described in NIC's 2013 Annual Report on Form 10-K filed
with the Securities and Exchange Commission on February 27, 2014.
Any forward-looking statements made in this release speak only as
of the date of this release. NIC does not intend to update these
forward-looking statements and undertakes no duty to any person to
provide any such update under any circumstances.
NIC INC. FINANCIAL SUMMARY (UNAUDITED)
Thousands except per share amounts and percentages
Three months ended March 31,
2014 2013 Revenues: Portal revenues $ 61,482 $ 58,042
Software & services revenues 3,915 3,182
Total revenues 65,397 61,224
Operating expenses: Cost of portal revenues, exclusive of
depreciation & amortization 36,397 32,762
Cost of software & services revenues,
exclusive of depreciation & amortization
960 1,103 Selling & administrative 10,300 9,608 Depreciation
& amortization 2,250 2,027 Total
operating expenses 49,907 45,500
Operating income 15,490 15,724 Other expense, net (104 )
(19 ) Income before income taxes 15,386 15,705 Income tax
provision 6,010 5,748 Net income $
9,376 $ 9,957 Basic net income per share $
0.14 $ 0.15 Diluted net income per share $ 0.14
$ 0.15 Weighted average shares outstanding:
Basic 65,057 64,710 Diluted
65,057 64,710 Key Financial Metrics:
Revenue growth - outsourced portals 6 % 27 % Same state revenue
growth - outsourced portals 7 % 16 % Recurring portal revenue as a
% of total portal revenues 95 % 96 % Gross profit % - outsourced
portals 41 % 44 % Revenue growth - software & services 23 % 5 %
Gross profit % - software & services 75 % 65 % Selling &
administrative expenses as a % of total revenues 16 % 16 %
Operating income as a % of total revenue 24 % 26 % Portal
Revenue Analysis: IGS transaction-based $ 32,369 $ 30,170 DHR
transaction-based 23,476 22,762 Portal software development 3,027
2,545 Portal management 2,610 2,565
Total portal revenues $ 61,482 $ 58,042
NIC INC. CONSOLIDATED BALANCE SHEETS
(UNAUDITED) Thousands except par value amount
March 31,
2014
December 31, 2013 ASSETS Current
assets: Cash $ 81,598 $ 74,245 Cash restricted for payment of
dividend - 22,982 Trade accounts receivable, net 61,615 52,818
Deferred income taxes, net 1,007 1,038 Prepaid expenses & other
current assets 10,490 11,569 Total current assets
154,710 162,652 Property and equipment, net 14,140 15,167
Intangible assets, net 1,970 1,864 Other assets 324
290 Total assets $ 171,144 $ 179,973
LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $
47,099 $ 39,112 Accrued expenses 15,644 20,822 Dividend payable -
22,982 Other current liabilities 763 348 Total
current liabilities 63,506 83,264 Deferred income taxes, net
2,887 2,432 Other long-term liabilities 2,502 2,341
Total liabilities 68,895 88,037 Commitments
and contingencies - - Stockholders' equity:
Common stock, $0.0001 par, 200,000 shares
authorized, 65,217 and 64,993 shares issued and outstanding
6 6 Additional paid-in capital 89,334 88,397 Retained earnings
12,909 3,533 Total stockholders' equity
102,249 91,936 Total liabilities and stockholders' equity $
171,144 $ 179,973
NIC INC. CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
Thousands
Additional Common Stock
Paid-in
Shares
Amount
Capital Retained Earnings Total Balance,
January 1, 2014 64,993 $ 6 $ 88,397 $ 3,533 $ 91,936 Net income
- - - 9,376 9,376 Restricted stock vestings 247 - 73 - 73
Dividend equivalents cancelled upon
forfeiture of performance-based restricted stock awards
- - 35 - 35
Shares surrendered and cancelled upon
vesting of restricted stock to satisfy tax withholdings
(91 ) - (1,860 ) - (1,860 ) Stock-based compensation - - 1,000 -
1,000 Tax deductions relating to stock-based compensation - - 690 -
690
Shares issuable in lieu of dividend
payments on unvested performance-based restricted stock awards
- - (108 ) - (108 ) Issuance of common stock under employee stock
purchase plan 68 - 1,107 -
1,107
Balance, March 31, 2014 65,217 $
6 $ 89,334 $ 12,909 $ 102,249
NIC
INC. CASH FLOW SUMMARY (UNAUDITED)
Thousands Three months
ended March 31, 2014 2013 Cash
flows from operating activities: Net income $ 9,376 $ 9,957
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation & amortization 2,250 2,027
Stock-based compensation expense 1,000 878 Deferred income taxes
(676 ) (538 ) Loss on disposal of property and equipment 104 19
Changes in operating assets and liabilities: (Increase) in trade
accounts receivable, net (8,797 ) (10,683 ) Decrease in prepaid
expenses & other current assets 2,241 1,160 (Increase) in other
assets (34 ) (1 ) Increase in accounts payable 7,987 838 (Decrease)
in accrued expenses (7,227 ) (2,901 ) Increase in other current
liabilities 415 15 Increase in other long-term liabilities
161 485 Net cash provided by operating
activities 6,800 1,256 Cash flows from
investing activities: Purchases of property and equipment (919 )
(1,002 ) Capitalized internal use software development costs
(325 ) (380 ) Net cash used in investing activities
(1,244 ) (1,382 ) Cash flows from financing activities:
Proceeds from employee common stock purchases 1,107 904 Tax
deductions related to stock-based compensation 690
581 Net cash provided by financing activities
1,797 1,485 Net increase in cash 7,353 1,359
Cash, beginning of period 74,245 62,358
Cash, end of period $ 81,598 $ 63,717 Other cash flow
information: Non-cash investing activities: Capital expenditures
accrued but not yet paid $ 189 $ 128 Cash payments: Income
taxes paid $ 6,532 $ 3,001 Cash dividends on common stock
previously restricted for payment of dividend $ 22,982 $ -
NIC Inc.Angela Davied, 913-754-7054adavied@egov.com
NIC (NASDAQ:EGOV)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
NIC (NASDAQ:EGOV)
Historical Stock Chart
Von Jul 2023 bis Jul 2024