Company Website:
http://www.egov.com
OLATHE, Kan. -- (Business Wire)
NIC Inc. (NASDAQ: EGOV), the dominant provider of official eGovernment
services, today announced net income of $12.8 million and earnings per
share of 19 cents on total revenues of $75.0 million for the three
months ended September 30, 2015. Operating income increased 21 percent
to $19.9 million for the current quarter. In the third quarter of 2014,
the Company reported net income of $10.4 million and earnings per share
of 16 cents on total revenues of $69.5 million.
Quarterly portal revenues were $70.1 million, a 7 percent increase over
the third quarter of 2014. On a same-state basis, total revenues
increased 8 percent, with transaction-based revenues from Interactive
Government Services (IGS) up 11 percent over the third quarter of 2014,
driven by strong performance of digital government services across
several states, including vehicle registrations, vital records, and
criminal history searches. Transaction-based revenues from Driver
History Records (DHR) were up 7 percent due mainly to a new DHR
monitoring service in one state, which became effective in the second
quarter of 2015, and a price increase in another state, which became
effective in the first quarter of 2015. Same-state portal software
development revenues decreased 7 percent in the quarter.
NIC’s portal gross profit percentage was 41 percent in the current
quarter, up from 40 percent in the third quarter of 2014. Start-up costs
from the pilot program with the Louisiana Department of Public Safety
totaled $0.3 million during the current quarter. The portal gross profit
percentage in the prior year quarter was negatively impacted by start-up
dilution from the Company’s Wisconsin portal.
Software & services revenues were $4.9 million in the current quarter,
up 17 percent from the third quarter of 2014, driven primarily by an
increase in transactional revenues from the federal Pre-Employment
Screening Program (PSP).
The Company’s effective tax rate for the current quarter was 36 percent,
down from 37 percent in the third quarter of 2014. Results in the
current quarter include the recognition of a favorable income tax
benefit totaling $0.4 million (approximately 1 cent per share) resulting
from the reduction of uncertain tax positions in connection with the
expiration of the statute of limitations, the completion of an IRS
examination of the Company’s 2012 federal tax return, and other
adjustments related to the filing of the Company’s 2014 federal tax
return during the third quarter of 2015.
“Our business was founded more than 20 years ago on the premise of
recurring revenues driven by creating online efficiencies for citizens
and businesses,” said Harry Herington, NIC Chief Executive Officer and
Chairman of the Board. “I am very pleased that once again, the business
delivered steady growth during the third quarter through a business
model that is as solid as ever.”
Declaration of Special Cash Dividend
On November 2, 2015, NIC’s Board of Directors declared a special cash
dividend of 55 cents per share, payable on January 4, 2016 to
stockholders of record on November 13, 2015. The dividend payout will
total approximately $36.5 million based on the current number of shares
outstanding.
“NIC’s financial success has allowed us to again return capital to
stockholders with a meaningful special cash dividend,” said Steve
Kovzan, NIC Chief Financial Officer. “We and our Board of Directors also
recognize the merits of other methods for returning capital to
stockholders, and in the future we may consider the initiation of a
regular quarterly cash dividend and an opportunistic stock repurchase
program.”
Operational Highlights
During the third quarter of 2015, the U.S. Department of Transportation
Federal Motor Carrier Safety Administration (FMCSA) signed a new
one-year contract with the Company after a competitive re-bid to
continue operating the PSP. The agreement also includes two, one-year
renewal options the FMCSA can exercise, extending the contract through
August 2018.
During the fourth quarter, the Company received contract extensions from
the states of Texas and Maine. The state of Texas exercised the final
renewal option under its master contract taking the agreement through
August 2018. The state of Maine renewed its contract through July 2018.
Third Quarter Earnings Call and Webcast Details
On November 5, 2015, the Company will host a call to discuss its 2015
third quarter financial and operational results and to answer questions
from the investment community. The call may also include a discussion of
Company developments, forward-looking statements and other material
information about business and financial matters.
Dial-In Information
Thursday, November 5, 2015
|
|
|
| |
4:30 p.m. (EST)
| | | | |
| | | |
|
Call bridge:
| | | |
888-505-4375 (U.S. callers) or 719-457-1035 (international callers)
|
Conference ID:
| | | |
799665
|
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 (NASDAQ: EGOV) is the nation's leading provider of
official government websites, online services, and secure payment
processing solutions. The Company's innovative eGovernment services help
make government more accessible to everyone through technology. The
family of NIC companies provides eGovernment solutions for more than
3,500 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, most recently ranked at No. 36 (2014), 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 ours and our 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
recently filed Forms 10-K and 10-Q. 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 | | | Nine months ended |
| | | | September 30, | | | September 30, |
| | | | 2015 | | | 2014 | | | 2015 | | | 2014 |
Revenues:
| | | | | | | | | | | | | |
Portal revenues
| | | |
$
|
70,123
| | | |
$
|
65,304
| | | |
$
|
207,067
| | | |
$
|
193,595
| |
Software & services revenues
| | | |
|
4,924
|
| | |
|
4,223
|
| | |
|
14,151
|
| | |
|
12,484
|
|
Total revenues
| | | |
|
75,047
|
| | |
|
69,527
|
| | |
|
221,218
|
| | |
|
206,079
|
|
Operating expenses:
| | | | | | | | | | | | | |
Cost of portal revenues, exclusive of depreciation & amortization (1)
| | | | |
41,058
| | | | |
39,091
| | | | |
125,367
| | | | |
116,201
| |
Cost of software & services revenues, exclusive of depreciation &
amortization (1)
| | | | |
1,365
| | | | |
1,287
| | | | |
3,976
| | | | |
3,525
| |
Selling & administrative (1)
| | | | |
10,577
| | | | |
10,397
| | | | |
31,933
| | | | |
29,446
| |
Depreciation & amortization
| | | |
|
2,116
|
| | |
|
2,292
|
| | |
|
6,712
|
| | |
|
6,819
|
|
Total operating expenses
| | | |
|
55,116
|
| | |
|
53,067
|
| | |
|
167,988
|
| | |
|
155,991
|
|
Operating income before income taxes
| | | | |
19,931
| | | | |
16,460
| | | | |
53,230
| | | | |
50,088
| |
Income tax provision
| | | |
|
7,181
|
| | |
|
6,099
|
| | |
|
20,236
|
| | |
|
19,322
|
|
Net income
| | | |
$
|
12,750
|
| | |
$
|
10,361
|
| | |
$
|
32,994
|
| | |
$
|
30,766
|
|
| | | | | | | | | | | | |
|
Basic net income per share
| | | |
$
|
0.19
|
| | |
$
|
0.16
|
| | |
$
|
0.50
|
| | |
$
|
0.47
|
|
Diluted net income per share
| | | |
$
|
0.19
|
| | |
$
|
0.16
|
| | |
$
|
0.50
|
| | |
$
|
0.47
|
|
| | | | | | | | | | | | |
|
Weighted average shares outstanding:
| | | | | | | | | | | | | |
Basic
| | | |
|
65,618
|
| | |
|
65,288
|
| | |
|
65,532
|
| | |
|
65,197
|
|
Diluted
| | | |
|
65,637
|
| | |
|
65,288
|
| | |
|
65,549
|
| | |
|
65,197
|
|
| | | | | | | | | | | | |
|
Key Financial Metrics:
| | | | | | | | | | | | | |
Revenue growth - outsourced portals
| | | | |
7
|
%
| | | |
13
|
%
| | | |
7
|
%
| | | |
9
|
%
|
Same state revenue growth - outsourced portals
| | | | |
8
|
%
| | | |
9
|
%
| | | |
8
|
%
| | | |
8
|
%
|
Recurring portal revenue as a % of total portal revenues
| | | | |
96
|
%
| | | |
95
|
%
| | | |
96
|
%
| | | |
95
|
%
|
Gross profit % - outsourced portals
| | | | |
41
|
%
| | | |
40
|
%
| | | |
39
|
%
| | | |
40
|
%
|
Revenue growth - software & services
| | | | |
17
|
%
| | | |
17
|
%
| | | |
13
|
%
| | | |
17
|
%
|
Gross profit % - software & services
| | | | |
72
|
%
| | | |
70
|
%
| | | |
72
|
%
| | | |
72
|
%
|
Selling & administrative expenses as a % of total revenues
| | | | |
14
|
%
| | | |
15
|
%
| | | |
14
|
%
| | | |
14
|
%
|
Operating income as a % of total revenue
| | | | |
27
|
%
| | | |
24
|
%
| | | |
24
|
%
| | | |
24
|
%
|
| | | | | | | | | | | | |
|
Portal Revenue Analysis:
| | | | | | | | | | | | | |
IGS transaction-based
| | | |
$
|
39,536
| | | |
$
|
35,688
| | | |
$
|
116,318
| | | |
$
|
104,741
| |
DMV transaction-based
| | | | |
26,425
| | | | |
24,695
| | | | |
77,720
| | | | |
73,188
| |
Portal software development
| | | | |
2,887
| | | | |
3,101
| | | | |
8,659
| | | | |
9,416
| |
Portal management
| | | |
|
1,275
|
| | |
|
1,820
|
| | |
|
4,370
|
| | |
|
6,250
|
|
Total portal revenues
| | | |
$
|
70,123
|
| | |
$
|
65,304
|
| | |
$
|
207,067
|
| | |
$
|
193,595
|
|
| | | | | | | | | | | | |
|
(1) The Company reclassified certain income statement employee
benefit-related expenses for the three- and nine-month periods ended
September 30, 2014 to conform to the 2015 presentation. The
reclassification resulted in a reduction of selling & administrative
expenses of $1.0 million and $3.2 million, respectively, for the
three- and nine-month periods ended September 30, 2014 and
corresponding increases of $1.0 million and $3.1 million,
respectively, in cost of portal revenues for the same periods and an
increase of $0.1 million in cost of software & services revenues for
the nine-month period ended September 30, 2014. In addition, the
reclassification resulted in a reduction of selling & administrative
expenses as a percentage of total consolidated revenues of 1% and
2%, respectively, for the three- and nine-month periods ended
September 30, 2014 and corresponding decreases in portal gross
profit percentage for the same periods and a 1% decrease in software
& services gross profit percentage for the nine-month period ended
September 30, 2014. The reclassification had no effect on total
operating expenses, operating income, net income, earnings per share
or cash flows.
|
|
|
NIC INC. |
CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
Thousands except par value amount |
|
|
|
| |
|
| |
| | | | | | |
|
| | | | September 30, 2015 | | | December 31, 2014 |
ASSETS | | | | | | | |
Current assets:
| | | | | | | |
Cash
| | | |
$
|
122,443
| | |
$
|
87,983
|
Trade accounts receivable, net
| | | | |
78,621
| | | |
57,468
|
Deferred income taxes, net
| | | | |
1,046
| | | |
1,039
|
Prepaid expenses & other current assets
| | | |
|
9,710
| | |
|
11,502
|
Total current assets
| | | | |
211,820
| | | |
157,992
|
Property and equipment, net
| | | | |
9,693
| | | |
12,247
|
Intangible assets, net
| | | | |
2,174
| | | |
2,394
|
Deferred income taxes, net
| | | | |
284
| | | |
-
|
Other assets
| | | |
|
433
| | |
|
446
|
Total assets
| | | |
$
|
224,404
| | |
$
|
173,079
|
| | | | | | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |
Current liabilities:
| | | | | | | |
Accounts payable
| | | |
$
|
55,235
| | |
$
|
41,402
|
Accrued expenses
| | | | |
20,635
| | | |
19,751
|
Other current liabilities
| | | |
|
2,470
| | |
|
2,902
|
Total current liabilities
| | | | |
78,340
| | | |
64,055
|
| | | | | | |
|
Deferred income taxes, net
| | | | |
-
| | | |
1,536
|
Other long-term liabilities
| | | |
|
3,825
| | |
|
3,350
|
Total liabilities
| | | |
|
82,165
| | |
|
68,941
|
| | | | | | |
|
Commitments and contingencies
| | | | |
-
| | | |
-
|
| | | | | | |
|
Stockholders' equity:
| | | | | | | |
Common stock, $0.0001 par, 200,000 shares authorized, 65,618 and
65,303 shares issued and outstanding
| | | | |
7
| | | |
7
|
Additional paid-in capital
| | | | |
99,740
| | | |
94,690
|
Retained earnings
| | | |
|
42,492
| | |
|
9,441
|
Total stockholders' equity
| | | |
|
142,239
| | |
|
104,138
|
Total liabilities and stockholders' equity
| | | |
$
|
224,404
| | |
$
|
173,079
|
| | | | | | |
|
|
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, 2015 | | | |
65,303
| | | |
$
|
7
| | |
$
|
94,690
| | | |
$
|
9,441
| | |
$
|
104,138
| |
Net income
| | | |
-
| | | | |
-
| | | |
-
| | | | |
32,994
| | | |
32,994
| |
Restricted stock vestings
| | | |
336
| | | | |
-
| | | |
74
| | | | |
-
| | | |
74
| |
Dividend equivalents cancelled upon forfeiture of
performance-based restricted stock awards
| | | |
-
| | | | |
-
| | | |
18
| | | | |
57
| | | |
75
| |
Shares surrendered and cancelled upon vesting of restricted stock
to satisfy tax withholdings
| | | |
(96
|
)
| | | |
-
| | | |
(1,645
|
)
| | | |
-
| | | |
(1,645
|
)
|
Stock-based compensation
| | | |
-
| | | | |
-
| | | |
5,385
| | | | |
-
| | | |
5,385
| |
Tax deductions relating to stock-based compensation
| | | |
-
| | | | |
-
| | | |
236
| | | | |
-
| | | |
236
| |
Shares issuable in lieu of dividend payments on unvested
performance-based restricted stock awards
| | | |
-
| | | | |
-
| | | |
(149
|
)
| | | |
-
| | | |
(149
|
)
|
Issuance of common stock under employee stock purchase plan
| | | |
75
|
| | |
|
-
| | |
|
1,131
|
| | |
|
-
| | |
|
1,131
|
|
Balance, September 30, 2015 | | | |
65,618
|
| | |
$
|
7
| | |
$
|
99,740
|
| | |
$
|
42,492
| | |
$
|
142,239
|
|
| | | | | | | | | | | | | | | |
|
NIC INC. |
CASH FLOW SUMMARY |
(UNAUDITED) |
Thousands |
|
|
|
| |
|
| |
|
| |
|
| |
| | | | Three months ended | | | Nine months ended |
| | | | September 30, | | | September 30, |
| | | | 2015 | | | 2014 | | | 2015 | | | 2014 |
| | | | | | | | | | | | |
|
Cash flows from operating activities:
| | | | | | | | | | | | | |
Net income
| | | |
$
|
12,750
| | | |
$
|
10,361
| | | |
$
|
32,994
| | | |
$
|
30,766
| |
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | | | | | | | | | | |
Depreciation & amortization
| | | | |
2,116
| | | | |
2,292
| | | | |
6,712
| | | | |
6,819
| |
Stock-based compensation expense
| | | | |
1,589
| | | | |
2,154
| | | | |
5,385
| | | | |
4,568
| |
Deferred income taxes
| | | | |
(953
|
)
| | | |
(969
|
)
| | | |
(3,708
|
)
| | | |
(2,463
|
)
|
(Gain) loss on disposal of property and equipment
| | | | |
(3
|
)
| | | |
19
| | | | |
26
| | | | |
147
| |
Changes in operating assets and liabilities:
| | | | | | | | | | | | | |
(Increase) in trade accounts receivable, net
| | | | |
(2,145
|
)
| | | |
(687
|
)
| | | |
(21,153
|
)
| | | |
(9,080
|
)
|
(Increase) decrease in prepaid expenses & other current assets
| | | | |
1,811
| | | | |
(74
|
)
| | | |
3,673
| | | | |
2,296
| |
(Increase) decrease in other assets
| | | | |
5
| | | | |
(20
|
)
| | | |
13
| | | | |
(62
|
)
|
Increase (decrease) in accounts payable
| | | | |
(214
|
)
| | | |
(4,303
|
)
| | | |
13,833
| | | | |
2,402
| |
Increase (decrease) in accrued expenses
| | | | |
1,146
| | | | |
614
| | | | |
(847
|
)
| | | |
(3,802
|
)
|
Increase (decrease) in other current liabilities
| | | | |
201
| | | | |
2,302
| | | | |
(432
|
)
| | | |
2,404
| |
Increase (decrease) in other long-term liabilities
| | | |
|
(140
|
)
| | |
|
189
|
| | |
|
475
|
| | |
|
602
|
|
Net cash provided by operating activities
| | | |
|
16,163
|
| | |
|
11,878
|
| | |
|
36,971
|
| | |
|
34,597
|
|
Cash flows from investing activities:
| | | | | | | | | | | | | |
Purchases of property and equipment
| | | | |
(1,053
|
)
| | | |
(1,335
|
)
| | | |
(3,257
|
)
| | | |
(3,988
|
)
|
Proceeds from sale of property and equipment
| | | | |
3
| | | | |
-
| | | | |
3
| | | | |
-
| |
Capitalized internal use software development costs
| | | |
|
(85
|
)
| | |
|
(414
|
)
| | |
|
(624
|
)
| | |
|
(1,071
|
)
|
Net cash used in investing activities
| | | |
|
(1,135
|
)
| | |
|
(1,749
|
)
| | |
|
(3,878
|
)
| | |
|
(5,059
|
)
|
Cash flows from financing activities:
| | | | | | | | | | | | | |
Proceeds from employee common stock purchases
| | | | |
-
| | | | |
-
| | | | |
1,131
| | | | |
1,107
| |
Tax deductions related to stock-based compensation
| | | |
|
4
|
| | |
|
168
|
| | |
|
236
|
| | |
|
1,065
|
|
Net cash provided by financing activities
| | | |
|
4
|
| | |
|
168
|
| | |
|
1,367
|
| | |
|
2,172
|
|
Net increase in cash
| | | | |
15,032
| | | | |
10,297
| | | | |
34,460
| | | | |
31,710
| |
Cash, beginning of period
| | | |
|
107,411
|
| | |
|
95,658
|
| | |
|
87,983
|
| | |
|
74,245
|
|
Cash, end of period
| | | |
$
|
122,443
|
| | |
$
|
105,955
|
| | |
$
|
122,443
|
| | |
$
|
105,955
|
|
Other cash flow information:
| | | | | | | | | | | | | |
Non-cash investing activities:
| | | | | | | | | | | | | |
Capital expenditures accrued but not yet paid
| | | |
$
|
86
| | | |
$
|
75
| | | |
$
|
86
| | | |
$
|
75
| |
| | | | | | | | | | | | | | | | | | | | |
|
Cash payments:
| | | | | | | | | | | | | |
Income taxes paid
| | | |
$
|
6,436
| | | |
$
|
6,827
| | | |
$
|
19,509
| | | |
$
|
20,664
| |
Cash dividends on common stock previously restricted for payment of
dividend
| | | |
$
|
-
| | | |
$
|
-
| | | |
$
|
-
| | | |
$
|
22,982
| |
View source version on businesswire.com: http://www.businesswire.com/news/home/20151105005395/en/
Contacts:
NIC Inc.
Angela Davied, 913-754-7054
adavied@egov.com
Source: NIC Inc.
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