NIC Inc. (NASDAQ: EGOV), the dominant provider of digital
government services, today announced net income of $12.9 million
and earnings per share of 19 cents on total revenues of $78.4
million for the three months ended March 31, 2016. In the first
quarter of 2015, the Company reported net income of $8.9 million
and earnings per share of 14 cents on total revenues of $70.4
million.
Quarterly portal revenues were a record $73.2 million, an 11
percent increase over the first quarter of 2015. On a same-state
basis, portal revenues were $73.0 million in the current quarter, a
12 percent increase over the first quarter of 2015. Same-state,
transaction-based revenues from Interactive Government Services
(IGS) rose 16 percent over the first quarter of 2015, due primarily
to higher volumes from a variety of services, including motor
vehicle inspections and registrations, tax filings and professional
licensing, among others. Same-state, transaction-based revenues
from Driver History Records (DHR) were up 6 percent due mainly to
higher transaction volumes in several states and to a DHR
monitoring service in one state, which became effective in the
second quarter of 2015. Same-state portal software development
revenues increased 25 percent, driven mainly by a stronger quarter
of project-based, time and materials revenues in a few states.
For the quarter, portal management revenues were down 30 percent
from the prior year reflecting the expiration of the Delaware
contract in March 2015.
NIC’s portal gross profit percentage was 40 percent in the
current quarter, up from 37 percent in the first quarter of 2015,
driven mainly by strong organic revenue growth and higher gross
profits across several states including Texas, Wisconsin, and
Maryland.
Software & services revenues were $5.2 million in the
current quarter, up 17 percent from the first quarter of 2015,
driven by an increase in transactional revenues from the federal
Pre-employment Screening Program and other payment processing
services.
Quarterly operating income increased 38 percent to a record
$20.4 million, contributing to an operating margin of 26 percent
for the current quarter, up from 21 percent in the prior year
quarter.
“The year is off to an exceptional start, and I am very pleased
with our strong financial results for the quarter,” said NIC Inc.
CEO Harry Herington. “It is great to see our core business of
offering convenient digital government services continue to perform
so well.”
Operational Highlights
During the quarter, three NIC subsidiaries received contract
extensions. The Company’s Kansas Information Consortium, LLC
subsidiary received a one-year contract extension from the State of
Kansas, taking the contract through 2022. Alabama Interactive, LLC
received a one-year contract renewal from the State of Alabama
through March 2017, and the State of Oklahoma extended its contract
with Oklahoma Interactive, LLC for one year through March 2017.
First Quarter Earnings Call and Webcast Details
On the May 2, 2016 call, the Company will discuss its 2016 first
quarter financial and operational results, 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 2, 2016 4:30 p.m. (EDT)
Call bridge: 888-438-5519 (U.S. callers) or 719-457-2689
(international callers) Conference ID: 6964685 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
https://www.egov.com/investor-relations.
A replay of the Webcast will be available by visiting
https://www.egov.com/investor-relations.
About NIC
Founded in 1992, NIC Inc. (NASDAQ: EGOV) is the nation's leading
provider of official government websites, online services, and
secure payment processing solutions. The Company's innovative
digital government services help make government more accessible to
everyone through technology. The family of NIC companies provides
digital government solutions for more than 4,500 federal, state,
and local agencies in the United States. Forbes has named NIC as
one of the “100 Best Small Companies in America” six times, and the
Company has been included four times on the Barron’s 400 Index.
Additional information is available at
https://www.egov.com.
Cautionary Statement Regarding Forward-Looking
Information
Any statements included in this release that do not relate to
historical or current facts constitute forward-looking statements.
These statements include estimates, projections, the expected
length of contract terms, statements relating to the Company’s
business plans, objectives and expected operating results, and the
assumptions upon which those statements are based. Forward-looking
statements are based on current expectations and assumptions that
are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements,
including regional or national business, political, economic,
competitive, social and market conditions, including various
termination rights of the Company and its partners, the ability of
the Company to renew existing contracts, and to sign contracts with
new states and federal government agencies, as well as possible
data security incidents. You should not rely on any forward-looking
statement as a prediction or guarantee about the future. A detailed
discussion of risks and uncertainties that could cause actual
results and events to differ materially from such forward-looking
statements is included in the sections titled “Risk Factors” and
“Caution About Forward-Looking Statements” of the Company’s most
recent Forms 10-K and 10-Q filed with the SEC. These filings are
available at the SEC's web site at www.sec.gov. Any forward-looking
statements made in this release speak only as of the date of this
release. We undertake no obligation to update or revise publicly
any forward-looking statements, whether as a result of new
information, future events, or otherwise.
NIC INC. FINANCIAL SUMMARY (UNAUDITED)
Thousands except per share amounts and percentages
Three months ended March 31,
2016 2015 Revenues: Portal revenues $ 73,197 $
65,914 Software & services revenues 5,193 4,445
Total revenues 78,390 70,359 Operating expenses: Cost
of portal revenues, exclusive of depreciation & amortization
43,615 41,494 Cost of software & services revenues, exclusive
of depreciation & amortization 1,413 1,290 Selling &
administrative 11,342 10,538 Depreciation & amortization
1,664 2,292 Total operating expenses 58,034
55,614 Operating income before income taxes 20,356 14,745 Income
tax provision 7,462 5,804 Net income $ 12,894 $ 8,941
Basic net income per share $ 0.19 $ 0.14 Diluted net income
per share $ 0.19 $ 0.14 Weighted average shares outstanding:
Basic 65,739 65,387 Diluted 65,739
65,387 Key Financial Metrics: Revenue growth - outsourced
portals 11% 7% Same state revenue growth - outsourced portals 12%
7% Recurring portal revenue as a % of total portal revenues 96% 97%
Gross profit % - outsourced portals 40% 37% Revenue growth -
software & services 17% 14% Gross profit % - software &
services 73% 71% Selling & administrative expenses as a % of
total revenues 14% 15% Operating income as a % of total revenue 26%
21% Portal Revenue Analysis: IGS transaction-based $ 41,933
$ 36,147 DHR transaction-based 27,126 25,652 Portal software
development 2,863 2,295 Portal management 1,275 1,820
Total portal revenues $ 73,197 $ 65,914
NIC
INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Thousands except par value amount
March 31, 2016
December 31, 2015 ASSETS Current assets: Cash $
105,783 $ 98,388 Cash restricted for payment of dividend - 36,456
Trade accounts receivable, net 79,187 80,362 Prepaid expenses &
other current assets 13,961 12,584 Total current
assets 198,931 227,790 Property and equipment, net 9,462 9,333
Intangible assets, net 2,523 2,267 Deferred income taxes, net 828
1,421 Other assets 446 426 Total assets $ 212,190 $
241,237
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $ 57,743 $ 61,133 Accrued expenses
17,347 20,986 Dividend payable - 36,456 Other current liabilities
2,842 2,597 Total current liabilities 77,932 121,172
Other long-term liabilities 4,646 4,259 Total
liabilities 82,578 125,431 Commitments and
contingencies - - Stockholders' equity: Common stock,
$0.0001 par, 200,000 shares authorized, 65,911 and 65,637 shares
issued and outstanding 7 7 Additional paid-in capital 101,814
100,929 Retained earnings 27,791 14,870 Total
stockholders' equity 129,612 115,806 Total
liabilities and stockholders' equity $ 212,190 $ 241,237
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, 2016 65,637 $ 7 $ 100,929 $ 14,870 $ 115,806 Net
income - - - 12,894 12,894 Restricted stock vestings 314 - 135 -
135 Dividend equivalents cancelled upon forfeiture of
performance-based restricted stock awards - - - 27 27 Shares
surrendered and cancelled upon vesting of restricted stock to
satisfy tax withholdings (115 ) - (2,034 ) - (2,034 ) Stock-based
compensation - - 1,622 - 1,622 Tax deductions relating to
stock-based compensation - - 210 - 210 Shares issuable in lieu of
dividend payments on unvested performance-based restricted stock
awards - - (162 ) - (162 ) Issuance of common stock under employee
stock purchase plan 75 - 1,114 -
1,114
Balance, March 31, 2016 65,911 $
7 $ 101,814 $ 27,791 $ 129,612
NIC INC. CASH FLOW SUMMARY (UNAUDITED)
Thousands Three months ended March 31,
2016 2015 Cash
flows from operating activities: Net income $ 12,894 $ 8,941
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation & amortization 1,664 2,292
Stock-based compensation expense 1,622 2,159 Deferred income taxes
(1,263 ) (1,436 ) Loss on disposal of property and equipment - 27
Changes in operating assets and liabilities: (Increase) decrease in
trade accounts receivable, net 1,175 (10,354 ) Decrease in prepaid
expenses & other current assets 479 395 (Increase) decrease in
other assets (20 ) 2 Increase (decrease) in accounts payable (3,390
) 6,916 (Decrease) in accrued expenses (5,696 ) (4,960 ) Increase
(decrease) in other current liabilities 245 (444 ) Increase in
other long-term liabilities 387 213 Net
cash provided by operating activities 8,097
3,751 Cash flows from investing activities: Purchases of
property and equipment (1,485 ) (677 ) Proceeds from sale of
property and equipment 2 - Capitalized internal use software
development costs (543 ) (288 ) Net cash used in
investing activities (2,026 ) (965 ) Cash flows from
financing activities: Proceeds from employee common stock purchases
1,114 1,131 Tax deductions related to stock-based compensation
210 204 Net cash provided by financing
activities 1,324 1,335 Net increase in
cash 7,395 4,121 Cash, beginning of period 98,388
87,983 Cash, end of period $ 105,783 $ 92,104
Other cash flow information: Non-cash investing activities:
Capital expenditures accrued but not yet paid $ 23 $ 126 Cash
payments: Income taxes paid $ 6,853 $ 6,414 Cash dividends paid on
common stock previously restricted for payment of dividend $ 36,456
$ -
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NIC Inc.Angela Davied, 913-754-7054adavied@egov.com
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