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NIC Earns 21 Cents Per Share in Third Quarter 2017 on Total Revenues of $84.5 MillionNIC Inc. (NASDAQ: EGOV), the dominant provider of digital government services, today announced net income of $14.0 million and earnings per share of 21 cents on total revenues of $84.5 million for the three months ended September 30, 2017. In the third quarter of 2016, the Company reported net income of $16.2 million and earnings per share of 24 cents on total revenues of $80.4 million. Quarterly portal revenues were $76.4 million, a 2 percent increase over the third quarter of 2016. On a same-state basis, portal revenues were $76.4 million in the current quarter, a 5 percent increase over the third quarter of 2016. Same-state, transaction-based revenues from Interactive Government Services (IGS) rose 10 percent over the third quarter of 2016, due primarily to higher volumes from a variety of services including motor vehicle registrations and business registration filings, among others. Same-state, transaction-based revenues from Driver History Records (DHR) were up 1 percent, while same-state portal software development and services revenues decreased 41 percent, due to fewer project-based, time and material initiatives across several portals. In the prior year quarter, revenues from the legacy Tennessee portal contract totaled $1.7 million, while revenues from the legacy Iowa portal contract totaled $0.5 million. As previously announced, the Company's contract with the state of Tennessee expired on March 31, 2017, and the Company's contract with the state of Iowa expired on November 30, 2016. Software & services revenues were $8.1 million in the current quarter, up 51 percent from the third quarter of 2016, driven primarily by revenues from the sale of lifetime Senior Passes in the current quarter through the YourPassNow digital park pass service, managed by NIC on behalf of the National Park Service. Demand for the lifetime Senior Pass increased significantly in July and August of this year due to a pending legislative price increase that became effective August 28, 2017. NIC's operating income margin was 24 percent for the current quarter, down from 25 percent in the prior year quarter. This decrease mainly reflects higher development costs for the new enterprise licensing and permitting platform to be used for the state of Illinois and other NIC partner states, a decrease in profit contribution from the legacy Tennessee portal contract, and higher selling & administrative expenses due mainly to costs to enhance corporate-wide information technology, security and portal operations, including development of the citizen-centric Gov2Go enterprise platform. For the third quarter of 2017, the Company's effective tax rate was 30 percent, compared to 20 percent in the prior year quarter. NIC's 30 percent effective tax rate in the third quarter of 2017 reflects an increase in the previously estimated research and development tax credit for the 2016 and 2017 tax years upon the filing of the Company's 2016 federal tax return during the current quarter, and a release of reserves for unrecognized income tax benefits due to the expiration of the statutes of limitations for certain tax years. Combined, these tax items increased earnings per share in the current quarter by approximately two cents. The Company's lower effective tax rate of 20 percent in the prior year quarter 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 research and development tax credit for the 2015 year upon the filing of the Company's 2015 federal tax return during the prior year quarter. Combined, these tax items increased earnings per share in the prior year quarter by approximately 5 cents. "Our core services continued to drive solid growth during the third quarter of 2017," said Harry Herington, NIC Chief Executive Officer and Chairman of the Board. "In addition, we were able to expand the services offered on two of our newer ground-breaking solutions, YourPassNow and Gov2Go." Declaration of Quarterly Dividend On October 30, 2017, the Company's Board of Directors declared a regular quarterly cash dividend of $0.08 per share, payable to stockholders of record as of December 5, 2017. The dividend, which is expected to total approximately $5.4 million, will be paid on December 19, 2017 out of the Company's available cash. A dividend equivalent of $0.08 per share will also be paid simultaneously on unvested shares of service-based restricted stock. Operational Highlights During the quarter, the Company launched several new services on its citizen-centric Gov2Go platform, making government information accessible to people in all 50 states. The new Gov2Go services include an enhanced Amber Alert service, election information, and NIC's YourPassNow digital park pass service. In addition, the state of Indiana recently awarded the Company a new contract following a competitive rebid process. The new contract includes a four-year base contract, and a four-year renewal the state can exercise that could take the contract through October 2025. Third Quarter Earnings Call and Webcast Details On the November 1, 2017 call, the Company will discuss its 2017 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
Wednesday, November 1, 2017
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 celebrating 25 years as the nation's premier provider of innovative digital government solutions and secure payment processing, which help make government interactions more accessible for everyone through technology. The family of NIC companies has developed a library of more than 13,000 digital government services for more than 5,500 federal, state, and local government agencies. Among these solutions is the ground-breaking digital government personal assistant, Gov2Go, delivering citizens personalized reminders and a single access point for government interactions. More information is available at 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, statements relating to possible future dividends, 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.
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