Company Declares Special Cash Dividend of $0.65
per Share, Initiates Regular Quarterly Cash Dividend Beginning in
First Quarter 2017
NIC Inc. (NASDAQ: EGOV), the leading provider of digital
government services, today announced net income of $16.2 million
and earnings per share of 24 cents on total revenues of $80.4
million for the three months ended September 30, 2016. In the third
quarter of 2015, the Company reported net income of $12.8 million
and earnings per share of 19 cents on total revenues of $75.0
million.
For the third quarter of 2016, the Company’s effective tax rate
was 20 percent, compared to 36 percent in the prior year quarter.
The lower effective tax rate was primarily attributable to
favorable tax benefits related to the domestic production
activities deduction for the 2015 and 2016 tax years, and an
increase in the previously estimated federal research and
development tax credit for the 2015 tax year upon the filing of the
Company’s 2015 federal tax return during the current quarter.
Combined, these discrete tax items increased earnings per share for
the current quarter by approximately 5 cents.
Quarterly portal revenues were $75.0 million, a 7 percent
increase over the third quarter of 2015. On a same-state basis,
portal revenues were $73.6 million in the current quarter, a 5
percent increase over the third quarter of 2015. Same-state,
transaction-based revenues from Interactive Government Services
(IGS) rose 12 percent over the third quarter of 2015, due primarily
to higher volumes from a variety of services including motor
vehicle inspections and registrations, business registration
filings, and outdoor recreational licensing, among others.
Same-state, transaction-based revenues from Driver History Records
(DHR) were down 1 percent and same-state portal software
development revenues decreased 27 percent due to the timing of
project-based initiatives across several portals.
Current quarter revenues from the Company’s newest portal in
Louisiana totaled $1.4 million for the portal’s first full quarter
of providing enterprise-wide digital government services.
Software & services revenues were $5.4 million in the
current quarter, up 9 percent from the third 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 before taxes increased 2 percent to
$20.4 million, resulting in an operating margin of 25 percent for
the current quarter, compared to 27 percent in the prior year
quarter.
“This continues to be a year of solid, steady results for NIC,”
said Harry Herington, NIC’s Chief Executive Officer and Chairman of
the Board. “Every day our goal is to launch new digital government
solutions and to enhance existing online services in order to
deliver efficiencies to citizens and businesses – the third quarter
of 2016 was no exception.”
Declaration of Special Dividend and Initiation of Regular
Dividend in 2017
On November 1, 2016, NIC’s Board of Directors declared a special
cash dividend of 65 cents per share, payable on December 9, 2016 to
stockholders of record on November 16, 2016. The dividend payout
will total approximately $43.3 million based on the current number
of shares outstanding.
In addition, the Company’s Board of Directors approved the
initiation of a regular quarterly cash dividend at a rate of $0.08
per share. The Company currently intends to commence the regular
dividend in the first quarter of 2017. While the declaration of
future dividends is subject to final determination and approval of
the Company’s Board of Directors, the Company currently intends to
pay regular cash dividends for the foreseeable future.
“NIC’s financial success has allowed us to again return capital
to stockholders with the payment of a special cash dividend in
December 2016 and the initiation of a regular quarterly cash
dividend beginning in the first quarter of 2017,” said Mr.
Herington. “While we may pay special dividends from time to time in
the future as our liquidity permits, we believe the time is right
to initiate a regular quarterly cash dividend, as it solidifies our
commitment to providing ongoing value to stockholders and
reinforces our positive outlook.”
Operational Highlights
During the third quarter of 2016, the Company’s NICUSA Maryland
Division received a one-year contract extension which also includes
a one-year renewal option that can be exercised at the option of
the state of Maryland, which would take the contract through August
2019. The Company also signed a one-year contract extension with
the Federal Motor Carrier Safety Administration to manage the
Pre-Employment Screening Program. The contract runs through August
2017 and includes an additional one-year renewal option that can be
exercised to extend the contract through August 2018. In addition,
Virginia Interactive, LLC received a one-year contract extension
from Stafford County of the Commonwealth of Virginia, which
includes the agreement with the Supreme Court of Virginia to
provide digital government services through August 2017. The
contract also includes six, one-year renewal options that can be
exercised to extend the contract through August 2023.
Third Quarter Earnings Call and Webcast Details
On the November 3, 2016 call, the Company will discuss its 2016
third 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
Thursday, November 3, 2016 4:30 p.m. (EDT)
Call bridge: 888-287-5516 (U.S. callers) or 719-325-2173
(international callers) Conference ID: 9516928 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 and local 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. Except as required by applicable law, 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 Nine months ended September 30,
September 30, 2016 2015 2016
2015 Revenues: Portal revenues $ 74,997 $ 70,123 $ 223,707 $
207,067 Software & services revenues 5,376
4,924 15,866 14,151 Total
revenues 80,373 75,047 239,573
221,218 Operating expenses: Cost of portal
revenues, exclusive of depreciation & amortization 45,140
41,058 134,878 125,367 Cost of software & services revenues,
exclusive of depreciation & amortization 1,495 1,365 4,353
3,976 Selling & administrative 11,676 10,577 34,183 31,933
Depreciation & amortization 1,674 2,116
5,074 6,712 Total operating
expenses 59,985 55,116 178,488
167,988 Operating income before income taxes
20,388 19,931 61,085 53,230 Income tax provision 4,153
7,181 18,895 20,236
Net income $ 16,235 $ 12,750 $ 42,190 $
32,994 Basic net income per share $ 0.24 $
0.19 $ 0.63 $ 0.50 Diluted net income per
share $ 0.24 $ 0.19 $ 0.63 $ 0.50
Weighted average shares outstanding: Basic 65,978
65,618 65,890 65,532
Diluted 66,005 65,637
65,915 65,549 Key Financial Metrics:
Revenue growth - outsourced portals 7 % 7 % 8 % 7 % Same state
revenue growth - outsourced portals 5 % 8 % 7 % 8 % Recurring
portal revenue as a % of total portal revenues 97 % 96 % 96 % 96 %
Gross profit % - outsourced portals 40 % 41 % 40 % 39 % Revenue
growth - software & services 9 % 17 % 12 % 13 % Gross profit %
- software & services 72 % 72 % 73 % 72 % Selling &
administrative expenses as a % of total revenues 15 % 14 % 14 % 14
% Operating income as a % of total revenue 25 % 27 % 25 % 24 %
Portal Revenue Analysis: IGS transaction-based $ 44,356 $
39,536 $ 131,565 $ 116,318 DHR transaction-based 27,249 26,425
80,205 77,720 Portal software development 2,117 2,887 8,112 8,659
Portal management 1,275 1,275
3,825 4,370 Total portal revenues $ 74,997
$ 70,123 $ 223,707 $ 207,067
NIC INC. CONSOLIDATED BALANCE SHEETS
(UNAUDITED) Thousands except par value amount
September 30, 2016 December 31, 2015
ASSETS Current assets: Cash $ 151,430 $ 98,388 Cash
restricted for payment of dividend - 36,456 Trade accounts
receivable, net 82,022 80,362 Prepaid expenses & other current
assets 14,450 12,584 Total current assets 247,902 227,790 Property
and equipment, net 9,063 9,333 Intangible assets, net 3,139 2,267
Deferred income taxes, net 1,804 1,421 Other assets 457 426 Total
assets $ 262,365 $ 241,237
LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable $ 71,325 $ 61,133
Accrued expenses 20,623 20,986 Dividend payable - 36,456 Other
current liabilities 2,752 2,597 Total current liabilities 94,700
121,172 Other long-term liabilities 5,823 4,259 Total
liabilities 100,523 125,431 Commitments and contingencies -
- Stockholders' equity: Common stock, $0.0001 par, 200,000
shares authorized, 65,979 and 65,637 shares issued and outstanding
7 7 Additional paid-in capital 104,748 100,929 Retained earnings
57,087 14,870 Total stockholders' equity 161,842 115,806 Total
liabilities and stockholders' equity $ 262,365 $ 241,237
NIC INC. CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY (UNAUDITED) Thousands
Common Stock
AdditionalPaid-inCapital
Shares Amount Retained
Earnings
Total Balance, January 1, 2016 65,637 $ 7 $
100,929 $ 14,870 $ 115,806 Net income - - - 42,190 42,190
Restricted stock vestings 385 - 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 (118 ) - (2,105 ) -
(2,105 ) Stock-based compensation - - 4,402 - 4,402 Tax deductions
relating to stock-based compensation - - 435 - 435 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, September 30,
2016 65,979 $ 7 $ 104,748 $ 57,087 $ 161,842
NIC INC. CASH
FLOW SUMMARY (UNAUDITED) Thousands Nine
months ended September 30, 2016 2015
Cash flows from operating activities: Net income $ 42,190 $
32,994 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation & amortization 5,074 6,712
Stock-based compensation expense 4,402 5,385 Deferred income taxes
(2,702 ) (3,708 ) Loss on disposal of property and equipment 7 26
Changes in operating assets and liabilities: (Increase) in trade
accounts receivable, net (1,660 ) (21,153 ) Decrease in prepaid
expenses & other current assets 453 3,673 (Increase) decrease
in other assets (31 ) 13 Increase in accounts payable 10,192 13,833
(Decrease) in accrued expenses (2,468 ) (847 ) Increase (decrease)
in other current liabilities 155 (432 ) Increase in other long-term
liabilities 1,564 475 Net cash provided
by operating activities 57,176 36,971
Cash flows from investing activities: Purchases of property and
equipment (3,927 ) (3,257 ) Proceeds from sale of property and
equipment 6 3 Capitalized internal use software development costs
(1,762 ) (624 ) Net cash used in investing activities
(5,683 ) (3,878 ) Cash flows from financing
activities: Proceeds from employee common stock purchases 1,114
1,131 Tax deductions related to stock-based compensation 435
236 Net cash provided by financing activities
1,549 1,367 Net increase in cash 53,042
34,460 Cash, beginning of period 98,388 87,983
Cash, end of period $ 151,430 $ 122,443 Other
cash flow information: Non-cash investing activities: Capital
expenditures accrued but not yet paid $ - $ 86 Cash payments:
Income taxes paid $ 17,268 $ 19,509 Cash dividends on common stock
previously restricted for payment of dividend $ 36,456 $ -
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161103005072/en/
NIC Inc.Angela Davied913-754-7054adavied@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