Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 21, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | EGOV | |
Entity Registrant Name | NIC INC | |
Entity Central Index Key | 1,065,332 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 65,618,917 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 122,443 | $ 87,983 |
Trade accounts receivable, net (Note 1) | 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 |
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 (Notes 1 and 2) | ||
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 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Common stock, par | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 65,618,000 | 65,303,000 |
Common stock, shares outstanding | 65,618,000 | 65,303,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 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 (Note 1) | 41,058 | 39,091 | 125,367 | 116,201 |
Cost of software & services revenues, exclusive of depreciation & amortization (Note 1) | 1,365 | 1,287 | 3,976 | 3,525 |
Selling & administrative (Note 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 (loss) 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 (Note 1) | $ 0.19 | $ 0.16 | $ 0.50 | $ 0.47 |
Diluted net income per share (Note 1) | $ 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 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings |
Beginning Balance (in shares) at Dec. 31, 2014 | 65,303,000 | 65,303,000 | ||
Beginning Balance at Dec. 31, 2014 | $ 104,138 | $ 7 | $ 94,690 | $ 9,441 |
Net income | 32,994 | 32,994 | ||
Restricted stock vestings (in shares) | 336,000 | |||
Restricted stock vestings | 74 | 74 | ||
Dividend equivalents cancelled upon forfeiture of performance-based restricted stock awards | 75 | 18 | 57 | |
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings (in shares) | (96,000) | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings | (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 (in shares) | 75,000 | |||
Issuance of common stock under employee stock purchase plan | 1,131 | 1,131 | ||
Ending Balance at Sep. 30, 2015 | $ 142,239 | $ 7 | $ 99,740 | $ 42,492 |
Ending Balance (in shares) at Sep. 30, 2015 | 65,618,000 | 65,618,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 32,994 | $ 30,766 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation & amortization | 6,712 | 6,819 |
Stock-based compensation expense | 5,385 | 4,568 |
Deferred income taxes | (3,708) | (2,463) |
Loss on disposal of property and equipment | 26 | 147 |
Changes in operating assets and liabilities: | ||
(Increase) in trade accounts receivable, net | (21,153) | (9,080) |
Decrease in prepaid expenses & other current assets | 3,673 | 2,296 |
(Increase) decrease in other assets | 13 | (62) |
Increase in accounts payable | 13,833 | 2,402 |
(Decrease) in accrued expenses | (847) | (3,802) |
Increase (decrease) in other current liabilities | (432) | 2,404 |
Increase in other long-term liabilities | 475 | 602 |
Net cash provided by operating activities | 36,971 | 34,597 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (3,257) | (3,988) |
Proceeds from sale of property and equipment | 3 | |
Capitalized internal use software development costs | (624) | (1,071) |
Net cash used in investing activities | (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 | 236 | 1,065 |
Net cash provided by financing activities | 1,367 | 2,172 |
Net increase in cash | 34,460 | 31,710 |
Cash, beginning of period | 87,983 | 74,245 |
Cash, end of period | 122,443 | 105,955 |
Non-cash investing activities: | ||
Capital expenditures accrued but not yet paid | 86 | 75 |
Cash payments: | ||
Income taxes paid | $ 19,509 | 20,664 |
Cash dividends on common stock previously restricted for payment of dividend | $ 22,982 |
THE COMPANY AND SUMMARY OF SIGN
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company NIC is a leading provider of eGovernment services that helps governments use the Internet to reduce internal costs, increase efficiencies and provide a higher level of service to businesses and citizens. The Company accomplishes this currently through two channels: its primary outsourced portal businesses and its software & services businesses. In its primary outsourced portal businesses, the Company generally designs, builds, and operates Internet-based portals on an enterprise-wide basis on behalf of state and local governments desiring to provide access to government information and to complete secure government-based transactions through multiple online channels, including mobile devices. These portals consist of websites and applications the Company has built that allow businesses and citizens to access government information online and complete transactions, such as applying for a permit, retrieving government records, or filing a government-mandated form or report. Operating under multiple-year contracts (see Note 2), NIC markets the services and solicits users to complete government-based transactions and to enter into subscriber contracts permitting users to access the portal and the government information contained therein in exchange for transactional and/or subscription user fees. The Company typically manages operations for each contractual relationship through separate local subsidiaries that operate as decentralized businesses with a high degree of autonomy. NIC’s self-funded business model allows the Company to generate revenues by sharing in the fees the Company collects from eGovernment transactions. The Company’s government partners benefit through reducing their financial and technology risks, increasing their operational efficiencies, and gaining a centralized, customer-focused presence on the Internet, while businesses and citizens receive a faster, more convenient, and more cost-effective means to interact with governments. The Company is typically responsible for funding up-front investment and ongoing operations and maintenance costs of the outsourced government portals. The Company’s software & services businesses primarily include its subsidiaries that provide software development and services, other than outsourced portal services, to state and local governments as well as federal agencies (see Note 2). Basis of presentation The Company classifies its revenues and cost of revenues into two categories: (1) portal and (2) software & services. The portal category generally includes revenues and cost of revenues from the Company’s subsidiaries operating outsourced portals on behalf of state and local governments. The software & services category primarily includes revenues and cost of revenues from the Company’s subsidiaries that provide software development and services, other than outsourced portal services, to state and local governments as well as federal agencies. The primary categories of operating expenses include: cost of portal revenues, cost of software & services revenues, selling & administrative expenses and depreciation & amortization. Cost of portal revenues consists of all direct costs associated with operating government portals on an outsourced basis including employee compensation and benefits (including stock-based compensation), provision for losses on accounts receivable, subcontractor labor costs, gains and losses on disposal of assets, telecommunications, fees required to process credit/debit card and automated clearinghouse transactions, and all other costs associated with the provision of dedicated client service such as dedicated facilities. Cost of software & services revenues consists of all direct project costs to provide software development and services such as employee compensation and benefits (including stock-based compensation), subcontractor labor costs, gains and losses on disposal of assets and all other direct project costs including hardware, software, materials, travel and other out-of-pocket expenses. Selling & administrative expenses consist primarily of corporate-level expenses relating to human resource management, administration, information technology, security, legal, finance and accounting, internal audit and all costs of non-customer service personnel from the Company’s software & services businesses, including information systems and office rent. Selling & administrative expenses also consist of management incentive compensation, including stock-based compensation, corporate-level expenses for market development and public relations, and gains and losses on disposal of assets. 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. The reclassification had no effect on total operating expenses, operating income, net income, earnings per share or cash flows. Certain other income statement amounts for the three- and nine-month periods ended September 30, 2014 have been reclassified to conform to the 2015 presentation. Trade accounts receivable The Company records trade accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts. The Company calculates this allowance based on its history of write-offs, the level of past-due accounts, and its relationship with, and the economic status of, its customers. Trade accounts receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. One of the customers who does business with many of the Company’s subsidiaries filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in February 2015. In September 2015, this customer successfully emerged from Chapter 11 proceedings pursuant to a confirmed restructuring plan, and the Company’s related accounts receivable were paid in full. The Company’s allowance for doubtful accounts at both September 30, 2015 and December 31, 2014 was $0.5 million. Earnings per share Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method for all periods presented. The two-class method is an earnings allocation formula that treats a participating security as having rights to undistributed earnings that would otherwise have been available to common stockholders. The Company’s service-based restricted stock awards contain non-forfeitable rights to dividends and are considered participating securities. Accordingly, service-based restricted stock awards were included in the calculation of earnings per share using the two-class method for all periods presented. Unvested service-based restricted shares totaled approximately 0.7 million at both September 30, 2015 and 2014. Basic earnings per share is calculated by first allocating earnings between common stockholders and participating securities. Earnings attributable to common stockholders are divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by giving effect to dilutive potential common shares outstanding during the period. The dilutive effect of shares related to the Company’s employee stock purchase plan is determined based on the treasury stock method. The dilutive effect of service-based restricted stock awards is based on the more dilutive of the treasury stock method or the two-class method assuming a reallocation of undistributed earnings to common stockholders after considering the dilutive effect of potential common shares other than the participating unvested restricted stock awards. The dilutive effect of performance-based restricted stock awards is based on the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Numerator: Net income $ 12,750 $ 10,361 $ 32,994 $ 30,766 Less: Income allocated to participating securities (117 ) (94 ) (307 ) (297 ) Net income available to common stockholders $ 12,633 $ 10,267 $ 32,687 $ 30,469 Denominator: Weighted average shares - basic 65,618 65,288 65,532 65,197 Performance-based restricted stock awards 19 - 17 - Weighted average shares - diluted 65,637 65,288 65,549 65,197 Basic net income per share: Net income $ 0.19 $ 0.16 $ 0.50 $ 0.47 Diluted net income per share: Net income $ 0.19 $ 0.16 $ 0.50 $ 0.47 Concentration of credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. The Company limits its exposure to credit loss by depositing its cash with high credit quality financial institutions and monitoring the financial stability of those institutions. The Federal Deposit Insurance Corporation (“FDIC”) provides deposit insurance coverage up to $250,000 per depositor for deposit accounts at each FDIC-insured depository institution. At September 30, 2015, the amount of cash covered by FDIC deposit insurance was approximately $10.5 million, and approximately $111.9 million of cash was above the FDIC deposit insurance limit. The Company performs ongoing credit evaluations of its customers and generally requires no collateral to secure accounts receivable. Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued new authoritative literature, Revenue from Contracts with Customers, as part of a joint effort by FASB and the International Accounting Standards Board to enhance financial reporting by creating common revenue recognition guidance and improve the consistency of requirements, comparability of practices and usefulness of disclosures. The new standard will supersede much of the existing authoritative literature for revenue recognition. The standard and related amendments will be effective for the Company for its annual reporting period beginning January 1, 2018, including interim periods within that reporting period. Entities are allowed to transition to the new standard by either recasting prior periods presented or recognizing the cumulative effect of the change in accounting principle in beginning stockholders’ equity. Early adoption is permitted for an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the newly issued guidance, including which transition approach will be applied and the estimated impact it will have on the Company’s consolidated financial statements. |
OUTSOURCED GOVERNMENT CONTRACTS
OUTSOURCED GOVERNMENT CONTRACTS | 9 Months Ended |
Sep. 30, 2015 | |
OUTSOURCED GOVERNMENT CONTRACTS | 2. OUTSOURCED GOVERNMENT CONTRACTS Outsourced portal contracts The Company’s outsourced government portal contracts generally have an initial multi-year term with provisions for renewals for various periods at the option of the government. The Company’s primary business obligation under these contracts is generally to design, build, and operate Internet-based portals on an enterprise-wide basis on behalf of governments desiring to provide access to government information and to complete government-based transactions online. NIC typically markets the services and solicits users to complete government-based transactions and to enter into subscriber contracts permitting the user to access the portal and the government information contained therein in exchange for transactional and/or subscription user fees. The Company enters into separate agreements with various agencies and divisions of the government to provide specific services and to conduct specific transactions. These agreements preliminarily establish the pricing of the electronic transactions and data access services the Company provides and the division of revenues between the Company and the government agency. The government oversight authority must approve prices and revenue sharing agreements. The Company has limited control over the level of fees it is permitted to retain. Any changes made to the amount or percentage of fees retained by NIC, or to the amounts charged for the services offered, could materially affect the profitability of the respective contract to NIC. The Company is typically responsible for funding up-front investment and ongoing operations and maintenance costs of the government portals, and generally owns all of the intellectual property in connection with the applications developed under these contracts. After completion of a defined contract term, the government partner typically receives a perpetual, royalty-free license to use the software only in its own portal. However, certain customer management, billing and payment processing software applications that the Company has developed and standardized centrally and that are utilized by the Company’s portal businesses, are being provided to a number of government partners on a software-as-a-service, or “SaaS,” basis, and thus would not be included in any royalty-free license. If the Company’s contract was not renewed after a defined term or if its contract was terminated by a government partner for cause, the government agency would be entitled to take over the portal in place with no future obligation of the Company, except as otherwise provided in the contract and except for services provided by the Company on a SaaS basis, which would be available to the partner on a fee-for-service basis. Any renewal of these contracts beyond the initial term by the government is optional and a government may terminate its contract prior to the expiration date if the Company breaches a material contractual obligation and fails to cure such breach within a specified period or upon the occurrence of other events or circumstances specified in the contract. In addition, 17 contracts under which the Company provides services can be terminated by the other party without cause on a specified period of notice. Collectively, revenues generated from these contracts represented 64% and 63%, respectively, of the Company’s total consolidated revenues for the three- and nine-month periods ended September 30, 2015. In the event that any of these contracts is terminated without cause, the terms of the respective contract may require the government to pay a fee to the Company in order to continue to use the Company’s software in its portal. In addition, the loss of one or more of the Company’s larger state portal partners, such as Alabama, Arkansas, Colorado, Indiana, Kentucky, New Jersey, Pennsylvania, Tennessee, Texas, or Utah, as a result of the expiration, termination or failure to renew the respective contract, if such partner is not replaced, could significantly reduce the Company’s revenues and profitability. See the discussion below under “Expiring Contracts” regarding the expiration of the Company’s contracts with the states of Arizona and Delaware. Under a typical portal contract, the Company is required to fully indemnify its government clients against claims that the Company’s services infringe upon the intellectual property rights of others and against claims arising from the Company’s performance or the performance of the Company’s subcontractors under the contract. The Company has never had any defaults resulting in draws on performance bonds. At September 30, 2015, the Company was bound by performance bond commitments totaling approximately $6.6 million on certain outsourced portal contracts. The following is a summary of the portals in each state through which the Company provides enterprise-wide outsourced portal services to multiple government agencies as of September 30, 2015: NIC Portal Entity Portal Website (State) Year Services Commenced Contract Expiration Date (Renewal Options Through) Connecticut Interactive, LLC www.ct.gov (Connecticut) 2014 1/9/2017 (1/9/2020) Wisconsin Interactive Network, LLC www.wisconsin.gov (Wisconsin) 2013 5/13/2018 (5/13/2023) Pennsylvania Interactive, LLC www.pa.gov (Pennsylvania) 2012 11/30/2017 (11/30/2022) NICUSA, OR Division www.oregon.gov (Oregon) 2011 11/22/2021 NICUSA, MD Division www.maryland.gov (Maryland) 2011 8/10/2017 (8/10/2019) Mississippi Interactive, LLC www.ms.gov (Mississippi) 2011 12/31/2015 (12/31/2021) New Jersey Interactive, LLC www.nj.gov (New Jersey) 2009 5/1/2020 (5/1/2022) Texas NICUSA, LLC www.Texas.gov (Texas) 2009 8/31/2018 West Virginia Interactive, LLC www.WV.gov (West Virginia) 2007 3/31/2016 Vermont Information Consortium, LLC www.Vermont.gov (Vermont) 2006 6/8/2016 (6/8/2019) Colorado Interactive, LLC www.Colorado.gov (Colorado) 2005 4/30/2019 (4/30/2023) South Carolina Interactive, LLC www.SC.gov (South Carolina) 2005 7/15/2019 (7/15/2021) Kentucky Interactive, LLC www.Kentucky.gov (Kentucky) 2003 8/31/2016 Alabama Interactive, LLC www.Alabama.gov (Alabama) 2002 3/1/2016 (3/1/2017) Rhode Island Interactive, LLC www.RI.gov (Rhode Island) 2001 7/1/2017 (7/1/2019) Oklahoma Interactive, LLC www.OK.gov (Oklahoma) 2001 3/31/2016 (3/31/2020) Montana Interactive, LLC www.MT.gov (Montana) 2001 12/31/2017 (12/31/2020) NICUSA, TN Division www.TN.gov (Tennessee) 2000 3/31/2017 Hawaii Information Consortium, LLC www.eHawaii.gov (Hawaii) 2000 1/3/2016 (3-year renewal options) Idaho Information Consortium, LLC www.Idaho.gov (Idaho) 2000 6/30/2017 Utah Interactive, LLC www.Utah.gov (Utah) 1999 6/5/2019 Maine Information Network, LLC www.Maine.gov (Maine) 1999 7/1/2018 NIC Portal Entity Portal Website (State) Year Services Commenced Contract Expiration Date (Renewal Options Through) Arkansas Information Consortium, LLC www.Arkansas.gov (Arkansas) 1997 6/30/2018 Iowa Interactive, LLC www.Iowa.gov (Iowa) 1997 6/30/2016 (6/30/2020) Indiana Interactive, LLC www.IN.gov (Indiana) 1995 7/31/2016 Nebraska Interactive, LLC www.Nebraska.gov (Nebraska) 1995 1/31/2016 Kansas Information Consortium, LLC www.Kansas.gov (Kansas) 1992 12/31/2021 (annual 1-year renewal options) During the first quarter of 2015, the Company received two-year contract extensions from the states of Montana and Idaho. In addition, the Company executed one-year contract extensions with the states of Alabama and Tennessee. During the third quarter of 2015, the Company executed one-year contract extensions with the Commonwealth of Kentucky and the state of Maryland. During the fourth quarter of 2015, the Company executed a two-year contract extension with the state of Maine and a one-year contract extension with the state of Texas. Other outsourced state contracts During the third quarter of 2014, the Company’s subsidiary, Louisiana Interactive, LLC, signed a master contract with the state of Louisiana Division of Administration, Office of Technology Services (“Louisiana Division”) that creates a framework to provide certain eGovernment services for a pilot period. The pilot period commenced during the first quarter of 2015 and the Company anticipates it will conclude in approximately 12-18 months after the commencement of the pilot period. Subsequent to the pilot period, the Louisiana Division has the option to receive enterprise-wide eGovernment services pursuant to the master contract. The Company’s subsidiary, New Mexico Interactive, LLC, has a contract to manage eGovernment services for the New Mexico Motor Vehicle Division (“MVD”) and its parent, the New Mexico Taxation and Revenue Department. The current contract runs through June 30, 2016 and includes a renewal option for the government to extend the contract for two additional one-year periods. During the third quarter of 2015, the Company’s subsidiary, Virginia Interactive, LLC (“VI”), extended its agreement with the Virginia Department of Game and Inland Fisheries to provide eGovernment services through August 31, 2016. The agreement includes an option for the government agency to extend the contract for one additional one-year period. During the third quarter of 2015, VI extended its agreement with the Office of the Executive Secretary of the Supreme Court of Virginia to provide eGovernment services through August 31, 2016. The agreement includes an option for the government agency to extend the contract for seven additional one-year periods. Outsourced federal contracts The Company’s subsidiary, NIC Federal, LLC (“NIC Federal”, formerly NIC Technologies, LLC) has a contract with the Federal Motor Carrier Safety Administration (“FMCSA”) to develop and manage the FMCSA’s Pre-Employment Screening Program (“PSP”) for motor carriers nationwide, using the self-funded, transaction-based business model. During the third quarter of 2015, the Company signed a new one-year contract with the FMCSA that runs through August 31, 2016, which includes two one-year renewal options for the agency to extend the contract. Any renewal of the contract with the FMCSA beyond the current term is at the option of the FMCSA and the contract can be terminated by the FMCSA without cause on a specified period of notice. The loss of the contract as a result of the expiration, termination or failure to renew the contract, if not replaced, could significantly reduce the Company’s revenues and profitability. In addition, the Company has limited control over the level of fees it is permitted to retain under the contract with the FMCSA. Any changes made to the amount or percentage of fees retained by the Company, or to the amounts charged for the services offered, could materially affect the profitability of this contract. Expiring contracts As of September 30, 2015, there were 14 contracts under which the Company provides services that have expiration dates within the 12-month period following September 30, 2015. Collectively, revenues generated from these contracts represented 31% of the Company’s total consolidated revenues for each of the three- and nine-month periods ended September 30, 2015. As described above, if a contract is not renewed after a defined term, the government partner would be entitled to take over the portal in place with no future obligation of the Company, except as otherwise provided in the contract and except for the services the Company provides on a SaaS basis, which would be available to the government agency on a fee-for-service basis. During the first quarter of 2013, the Company’s subsidiary, NICUSA, Inc. (“NICUSA”), chose not to respond to a request for proposal issued by the state of Arizona for a new contract. NICUSA provided transition services as required by the contract through the March 26, 2014 final expiration date of the contract. The costs incurred in transitioning out of NICUSA’s contract with the state of Arizona, including employee retention bonuses, operating lease termination costs, and fixed asset impairment, did not have a material impact on the Company’s consolidated results of operations, cash flows, or financial condition. For the nine-month period ended September 30, 2014, revenues from the legacy Arizona portal contract were approximately $0.8 million. The contract under which the Company’s subsidiary, Delaware Interactive, LLC (“DI”), managed the state of Delaware’s official government portal expired on March 31, 2015. The primary revenue source for DI under the contract was an annual portal management fee paid to DI by the state. During the second quarter of 2014, the state informed DI that due to fiscal constraints, it did not intend to renew its contract with DI when the contract term expired. The costs incurred in transitioning out of DI’s contract with the state of Delaware, including employee retention bonuses, operating lease termination costs, and fixed asset impairment, did not have a material impact on the Company’s consolidated results of operations, cash flows, or financial condition. For the nine-month periods ended September 30, 2015 and 2014, revenues from the Delaware portal contract were approximately $0.6 million and $1.8 million, respectively. For the three-month period ended September 30, 2014, revenues from the Delaware portal contract were approximately $0.6 million. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2015 | |
STOCK BASED COMPENSATION | 3. STOCK BASED COMPENSATION During the three- and nine-month periods ended September 30, 2015, the Board of Directors of the Company granted to certain management-level employees and executive officers, service-based restricted stock awards totaling 7,276 shares and 269,431 shares, respectively, with a grant-date fair value totaling approximately $0.1 million and $4.6 million, respectively. Such restricted stock awards vest beginning one year from the date of grant in annual installments of 25%. In addition, during the second quarter of 2015, non-employee directors of the Company were granted service-based restricted stock awards totaling 45,619 shares with a grant-date fair value totaling approximately $0.8 million. These non-employee director restricted stock awards vest one year from the date of grant. Restricted stock is valued at the date of grant, based on the closing market price of the Company’s common stock, and expensed using the straight-line method over the requisite service period (generally the vesting period of the award). The Company estimates and excludes compensation cost related to awards not expected to vest based upon estimated forfeitures. During the first quarter of 2015, the Board of Directors of the Company also granted to certain executive officers performance-based restricted stock awards pursuant to the terms of the Company’s executive compensation program totaling 109,705 shares with a grant-date fair value totaling approximately $1.9 million, which represents the maximum number of shares able to be earned by the executive officers at the end of a three-year performance period ending December 31, 2017. The actual number of shares earned will be based on the Company’s performance related to the following performance criteria over the performance period: ● Operating income growth (three-year compound annual growth rate); ● Total consolidated revenue growth (three-year compound annual growth rate); and ● Cash flow return on invested capital, excluding income taxes paid (three-year average). At the end of the three-year period, the executive officers are eligible to receive up to a specified number of shares based upon the Company’s performance relative to these performance criteria over the performance period. In addition, the executive officers will accrue dividend equivalents for any cash dividend declared during the performance period, payable in the form of shares of Company common stock, based upon the maximum number of shares to be earned by the executive officers for each performance-based restricted stock award. Such hypothetical cash dividend payment shall be divided by the fair value of the Company’s common stock on the dividend payment date to determine the maximum number of notional shares to be awarded. At the end of the three-year performance period and on the date some or all of the shares are paid under the agreement, a pro rata number of notional dividend shares will be converted into an equivalent number of dividend shares paid and granted to the executive officers based upon the actual number of underlying shares earned during the performance period. At December 31, 2014, the three-year performance period related to the performance-based restricted stock awards granted to certain executive officers on January 30, 2012 ended. Based on the Company’s actual financial results from 2012 through 2014, 67,239 of the shares subject to the awards and 4,043 dividend shares were earned and vested on January 30, 2015. Stock-based compensation cost for performance-based restricted stock awards is measured at the grant date based on the fair value of shares expected to be earned at the end of the performance period, and is recognized as expense over the performance period based upon the probable number of shares expected to vest. The Company estimates and excludes compensation cost related to awards not expected to vest based upon estimated forfeitures. The following table presents stock-based compensation expense included in the Company’s unaudited consolidated statements of income (in thousands): Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Cost of portal revenues, exclusive of depreciation & amortization $ 317 $ 430 $ 1,086 $ 1,032 Cost of software & services revenues, exclusive of depreciation & amortization 32 13 54 39 Selling & administrative 1,240 1,711 4,245 3,497 Stock-based compensation expense before income taxes 1,589 2,154 5,385 4,568 Income tax benefit (573 ) (798 ) (2,047 ) (1,762 ) Net stock-based compensation expense $ 1,016 $ 1,356 $ 3,338 $ 2,806 |
DEBT OBLIGATIONS AND COLLATERAL
DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS | 9 Months Ended |
Sep. 30, 2015 | |
DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS | 4. DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS On July 9, 2015, the Company entered into Amendment No. 1 to Amended and Restated Credit Agreement (the “Amendment’), which amends the Amended and Restated Credit Agreement, dated as of August 6, 2014, by and between the Company and Bank of America, N.A. (the “Credit Agreement”). The material amendments to the Credit Agreement made by the Amendment include (a) extending the maturity date to May 1, 2017; and (b) decreasing the margin added to the LIBOR rate for any amounts selected by the Company to be borrowed at the LIBOR rate, and the fees payable on outstanding letters of credit, to either 1.15% (if the Company’s consolidated leverage ratio is less than 1.50:1) or 1.25% (if the Company’s consolidated leverage ratio is greater than or equal to 1.50:1) of face value per annum. The other material terms of the Credit Agreement remain unchanged, including customary representations and warranties, affirmative and negative covenants and events of default. The Amendment also continues to require the Company to maintain compliance with the following financial covenants (in each case, as defined in the Credit Agreement): ● Consolidated tangible net worth of at least $36 million (plus the amount of net proceeds from equity issued, or debt converted to equity, in each case after the date of the Credit Agreement); and ● Consolidated maximum leverage ratio of 1.5:1 (the ratio of total funded debt to EBITDA). The Company was in compliance with each of these covenants at September 30, 2015. The Company issues letters of credit as collateral for certain office leases, and to a much lesser extent, as collateral for performance on one of its outsourced government portal contracts. These irrevocable letters of credit are generally in force for one year. In total, the Company and its subsidiaries had unused outstanding letters of credit of approximately $1.2 million and $1.4 million, respectively, at September 30, 2015 and December 31, 2014. The Company is not currently required to cash collateralize these letters of credit. The Company had $3.8 million in available capacity to issue additional letters of credit and $8.8 million of unused borrowing capacity at September 30, 2015 under the facility. Letters of credit may have an expiration date of up to one year beyond the expiration date of the Credit Agreement. The Credit Agreement also includes an accordion feature that allows the Company to increase the available capacity under the Credit Agreement to $50.0 million, subject to securing additional commitments from the bank. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2015 | |
INCOME TAXES | 5. INCOME TAXES The Company’s effective tax rate was approximately 36% and 38%, respectively, for the three- and nine-month periods ended September 30, 2015, compared to 37% and 39%, respectively, in the corresponding prior year periods. The Company’s effective tax rate in the current quarter and year-to-date periods was lower than the prior year periods mainly due to the recognition of a favorable income tax benefit 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. |
REPORTABLE SEGMENT AND RELATED
REPORTABLE SEGMENT AND RELATED INFORMATION | 9 Months Ended |
Sep. 30, 2015 | |
REPORTABLE SEGMENT AND RELATED INFORMATION | 6. REPORTABLE SEGMENT AND RELATED INFORMATION The Outsourced Portals segment is the Company’s only reportable segment and generally includes the Company’s subsidiaries operating outsourced state and local government portals and the corporate divisions that directly support portal operations. The Other Software & Services category primarily includes the Company’s subsidiaries that provide software development and services, other than outsourced portal services, to state and local governments as well as federal agencies. Each of the Company’s businesses within the Other Software & Services category is an operating segment and has been grouped together to form the Other Software & Services category, as none of the operating segments meets the quantitative threshold of a separately reportable segment. Unallocated corporate-level expenses are reported in the reconciliation of the segment totals to the related consolidated totals as “Other Reconciling Items.” There have been no significant intersegment transactions for the periods reported. The summary of significant accounting policies applies to all reportable and operating segments. The measure of profitability by which management, including the Company’s chief operating decision maker, evaluates the performance of its segments and allocates resources to them is operating income (loss) before income taxes. Segment assets or other segment balance sheet information is not presented to the Company’s chief operating decision maker. Accordingly, the Company has not presented information relating to segment assets. The table below reflects summarized financial information for the Company’s reportable and operating segments for the three-month period ended September 30 (in thousands): Outsourced Portals Other Software & Services Other Reconciling Items Consolidated Total 2015 Revenues $ 70,123 $ 4,924 $ - $ 75,047 Costs & expenses 44,703 1,365 6,932 53,000 Depreciation & amortization 1,973 15 128 2,116 Operating income (loss) before income taxes $ 23,447 $ 3,544 $ (7,060 ) $ 19,931 2014 Revenues $ 65,304 $ 4,223 $ - $ 69,527 Costs & expenses (1) 42,529 1,316 6,930 50,775 Depreciation & amortization 2,201 8 83 2,292 Operating income (loss) before income taxes $ 20,574 $ 2,899 $ (7,013 ) $ 16,460 (1) The Company reclassified certain income statement employee benefit-related expenses for the three-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $1.0 million and a corresponding increase in costs & expenses in Outsourced Portals. See Note 1. The table below reflects summarized financial information for the Company’s reportable and operating segments for the nine-month period ended September 30 (in thousands): Outsourced Portals Other Software & Services Other Reconciling Items Consolidated Total 2015 Revenues $ 207,067 $ 14,151 $ - $ 221,218 Costs & expenses 136,201 3,975 21,100 161,276 Depreciation & amortization 6,322 33 357 6,712 Operating income (loss) before income taxes $ 64,544 $ 10,143 $ (21,457 ) $ 53,230 2014 Revenues $ 193,595 $ 12,484 $ - $ 206,079 Costs & expenses (1) 125,916 3,595 19,661 149,172 Depreciation & amortization 6,568 29 222 6,819 Operating income (loss) before income taxes $ 61,111 $ 8,860 $ (19,883 ) $ 50,088 (1) The Company reclassified certain income statement employee benefit-related expenses for the nine-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $3.2 million and corresponding increases in costs & expenses of $3.1 million and $0.1 million, respectively, in Outsourced Portals and Other Software & Services. See Note 1. The Company’s Texas portal contract accounted for approximately 21% of the Company’s total consolidated revenues for the three- and nine-month periods ended September 30, 2015 compared to 22% in the corresponding prior year periods. No other state portal contract accounted for more than 10% of the Company’s total consolidated revenues. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2015 | |
SUBSEQUENT EVENT | 7. SUBSEQUENT EVENT Special Cash Dividend On November 2, 2015, the Company’s Board of Directors declared a special cash dividend of $0.55 per share, payable to stockholders of record as of November 13, 2015. The dividend, which is expected to total approximately $36.5 million based on the current number of shares outstanding, will be paid on January 4, 2016, out of the Company’s available cash. In addition, holders of performance-based restricted stock on the record date will accrue dividend equivalents that may be earned and become payable in the form of shares of common stock at the end of the respective performance period to the extent that the underlying shares of restricted stock are earned. |
THE COMPANY AND SUMMARY OF SI14
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of presentation | Basis of presentation The Company classifies its revenues and cost of revenues into two categories: (1) portal and (2) software & services. The portal category generally includes revenues and cost of revenues from the Company’s subsidiaries operating outsourced portals on behalf of state and local governments. The software & services category primarily includes revenues and cost of revenues from the Company’s subsidiaries that provide software development and services, other than outsourced portal services, to state and local governments as well as federal agencies. The primary categories of operating expenses include: cost of portal revenues, cost of software & services revenues, selling & administrative expenses and depreciation & amortization. Cost of portal revenues consists of all direct costs associated with operating government portals on an outsourced basis including employee compensation and benefits (including stock-based compensation), provision for losses on accounts receivable, subcontractor labor costs, gains and losses on disposal of assets, telecommunications, fees required to process credit/debit card and automated clearinghouse transactions, and all other costs associated with the provision of dedicated client service such as dedicated facilities. Cost of software & services revenues consists of all direct project costs to provide software development and services such as employee compensation and benefits (including stock-based compensation), subcontractor labor costs, gains and losses on disposal of assets and all other direct project costs including hardware, software, materials, travel and other out-of-pocket expenses. Selling & administrative expenses consist primarily of corporate-level expenses relating to human resource management, administration, information technology, security, legal, finance and accounting, internal audit and all costs of non-customer service personnel from the Company’s software & services businesses, including information systems and office rent. Selling & administrative expenses also consist of management incentive compensation, including stock-based compensation, corporate-level expenses for market development and public relations, and gains and losses on disposal of assets. 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. The reclassification had no effect on total operating expenses, operating income, net income, earnings per share or cash flows. Certain other income statement amounts for the three- and nine-month periods ended September 30, 2014 have been reclassified to conform to the 2015 presentation. |
Trade accounts receivable | Trade accounts receivable The Company records trade accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts. The Company calculates this allowance based on its history of write-offs, the level of past-due accounts, and its relationship with, and the economic status of, its customers. Trade accounts receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. One of the customers who does business with many of the Company’s subsidiaries filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in February 2015. In September 2015, this customer successfully emerged from Chapter 11 proceedings pursuant to a confirmed restructuring plan, and the Company’s related accounts receivable were paid in full. The Company’s allowance for doubtful accounts at both September 30, 2015 and December 31, 2014 was $0.5 million. |
Earnings per share | Earnings per share Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method for all periods presented. The two-class method is an earnings allocation formula that treats a participating security as having rights to undistributed earnings that would otherwise have been available to common stockholders. The Company’s service-based restricted stock awards contain non-forfeitable rights to dividends and are considered participating securities. Accordingly, service-based restricted stock awards were included in the calculation of earnings per share using the two-class method for all periods presented. Unvested service-based restricted shares totaled approximately 0.7 million at both September 30, 2015 and 2014. Basic earnings per share is calculated by first allocating earnings between common stockholders and participating securities. Earnings attributable to common stockholders are divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by giving effect to dilutive potential common shares outstanding during the period. The dilutive effect of shares related to the Company’s employee stock purchase plan is determined based on the treasury stock method. The dilutive effect of service-based restricted stock awards is based on the more dilutive of the treasury stock method or the two-class method assuming a reallocation of undistributed earnings to common stockholders after considering the dilutive effect of potential common shares other than the participating unvested restricted stock awards. The dilutive effect of performance-based restricted stock awards is based on the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Numerator: Net income $ 12,750 $ 10,361 $ 32,994 $ 30,766 Less: Income allocated to participating securities (117 ) (94 ) (307 ) (297 ) Net income available to common stockholders $ 12,633 $ 10,267 $ 32,687 $ 30,469 Denominator: Weighted average shares - basic 65,618 65,288 65,532 65,197 Performance-based restricted stock awards 19 - 17 - Weighted average shares - diluted 65,637 65,288 65,549 65,197 Basic net income per share: Net income $ 0.19 $ 0.16 $ 0.50 $ 0.47 Diluted net income per share: Net income $ 0.19 $ 0.16 $ 0.50 $ 0.47 |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. The Company limits its exposure to credit loss by depositing its cash with high credit quality financial institutions and monitoring the financial stability of those institutions. The Federal Deposit Insurance Corporation (“FDIC”) provides deposit insurance coverage up to $250,000 per depositor for deposit accounts at each FDIC-insured depository institution. At September 30, 2015, the amount of cash covered by FDIC deposit insurance was approximately $10.5 million, and approximately $111.9 million of cash was above the FDIC deposit insurance limit. The Company performs ongoing credit evaluations of its customers and generally requires no collateral to secure accounts receivable. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued new authoritative literature, Revenue from Contracts with Customers, as part of a joint effort by FASB and the International Accounting Standards Board to enhance financial reporting by creating common revenue recognition guidance and improve the consistency of requirements, comparability of practices and usefulness of disclosures. The new standard will supersede much of the existing authoritative literature for revenue recognition. The standard and related amendments will be effective for the Company for its annual reporting period beginning January 1, 2018, including interim periods within that reporting period. Entities are allowed to transition to the new standard by either recasting prior periods presented or recognizing the cumulative effect of the change in accounting principle in beginning stockholders’ equity. Early adoption is permitted for an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the newly issued guidance, including which transition approach will be applied and the estimated impact it will have on the Company’s consolidated financial statements. |
THE COMPANY AND SUMMARY OF SI15
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Numerator: Net income $ 12,750 $ 10,361 $ 32,994 $ 30,766 Less: Income allocated to participating securities (117 ) (94 ) (307 ) (297 ) Net income available to common stockholders $ 12,633 $ 10,267 $ 32,687 $ 30,469 Denominator: Weighted average shares - basic 65,618 65,288 65,532 65,197 Performance-based restricted stock awards 19 - 17 - Weighted average shares - diluted 65,637 65,288 65,549 65,197 Basic net income per share: Net income $ 0.19 $ 0.16 $ 0.50 $ 0.47 Diluted net income per share: Net income $ 0.19 $ 0.16 $ 0.50 $ 0.47 |
OUTSOURCED GOVERNMENT CONTRAC16
OUTSOURCED GOVERNMENT CONTRACTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Enterprise-Wide Portal Outsourcing Services to Multiple Governments Agencies | The following is a summary of the portals in each state through which the Company provides enterprise-wide outsourced portal services to multiple government agencies as of September 30, 2015: NIC Portal Entity Portal Website (State) Year Services Commenced Contract Expiration Date (Renewal Options Through) Connecticut Interactive, LLC www.ct.gov (Connecticut) 2014 1/9/2017 (1/9/2020) Wisconsin Interactive Network, LLC www.wisconsin.gov (Wisconsin) 2013 5/13/2018 (5/13/2023) Pennsylvania Interactive, LLC www.pa.gov (Pennsylvania) 2012 11/30/2017 (11/30/2022) NICUSA, OR Division www.oregon.gov (Oregon) 2011 11/22/2021 NICUSA, MD Division www.maryland.gov (Maryland) 2011 8/10/2017 (8/10/2019) Mississippi Interactive, LLC www.ms.gov (Mississippi) 2011 12/31/2015 (12/31/2021) New Jersey Interactive, LLC www.nj.gov (New Jersey) 2009 5/1/2020 (5/1/2022) Texas NICUSA, LLC www.Texas.gov (Texas) 2009 8/31/2018 West Virginia Interactive, LLC www.WV.gov (West Virginia) 2007 3/31/2016 Vermont Information Consortium, LLC www.Vermont.gov (Vermont) 2006 6/8/2016 (6/8/2019) Colorado Interactive, LLC www.Colorado.gov (Colorado) 2005 4/30/2019 (4/30/2023) South Carolina Interactive, LLC www.SC.gov (South Carolina) 2005 7/15/2019 (7/15/2021) Kentucky Interactive, LLC www.Kentucky.gov (Kentucky) 2003 8/31/2016 Alabama Interactive, LLC www.Alabama.gov (Alabama) 2002 3/1/2016 (3/1/2017) Rhode Island Interactive, LLC www.RI.gov (Rhode Island) 2001 7/1/2017 (7/1/2019) Oklahoma Interactive, LLC www.OK.gov (Oklahoma) 2001 3/31/2016 (3/31/2020) Montana Interactive, LLC www.MT.gov (Montana) 2001 12/31/2017 (12/31/2020) NICUSA, TN Division www.TN.gov (Tennessee) 2000 3/31/2017 Hawaii Information Consortium, LLC www.eHawaii.gov (Hawaii) 2000 1/3/2016 (3-year renewal options) Idaho Information Consortium, LLC www.Idaho.gov (Idaho) 2000 6/30/2017 Utah Interactive, LLC www.Utah.gov (Utah) 1999 6/5/2019 Maine Information Network, LLC www.Maine.gov (Maine) 1999 7/1/2018 NIC Portal Entity Portal Website (State) Year Services Commenced Contract Expiration Date (Renewal Options Through) Arkansas Information Consortium, LLC www.Arkansas.gov (Arkansas) 1997 6/30/2018 Iowa Interactive, LLC www.Iowa.gov (Iowa) 1997 6/30/2016 (6/30/2020) Indiana Interactive, LLC www.IN.gov (Indiana) 1995 7/31/2016 Nebraska Interactive, LLC www.Nebraska.gov (Nebraska) 1995 1/31/2016 Kansas Information Consortium, LLC www.Kansas.gov (Kansas) 1992 12/31/2021 (annual 1-year renewal options) |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stock-based Compensation Expense | The following table presents stock-based compensation expense included in the Company’s unaudited consolidated statements of income (in thousands): Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Cost of portal revenues, exclusive of depreciation & amortization $ 317 $ 430 $ 1,086 $ 1,032 Cost of software & services revenues, exclusive of depreciation & amortization 32 13 54 39 Selling & administrative 1,240 1,711 4,245 3,497 Stock-based compensation expense before income taxes 1,589 2,154 5,385 4,568 Income tax benefit (573 ) (798 ) (2,047 ) (1,762 ) Net stock-based compensation expense $ 1,016 $ 1,356 $ 3,338 $ 2,806 |
REPORTABLE SEGMENT AND RELATE18
REPORTABLE SEGMENT AND RELATED INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Financial Information for Reportable Segments | The table below reflects summarized financial information for the Company’s reportable and operating segments for the three-month period ended September 30 (in thousands): Outsourced Portals Other Software & Services Other Reconciling Items Consolidated Total 2015 Revenues $ 70,123 $ 4,924 $ - $ 75,047 Costs & expenses 44,703 1,365 6,932 53,000 Depreciation & amortization 1,973 15 128 2,116 Operating income (loss) before income taxes $ 23,447 $ 3,544 $ (7,060 ) $ 19,931 2014 Revenues $ 65,304 $ 4,223 $ - $ 69,527 Costs & expenses (1) 42,529 1,316 6,930 50,775 Depreciation & amortization 2,201 8 83 2,292 Operating income (loss) before income taxes $ 20,574 $ 2,899 $ (7,013 ) $ 16,460 (1) The Company reclassified certain income statement employee benefit-related expenses for the three-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $1.0 million and a corresponding increase in costs & expenses in Outsourced Portals. See Note 1. The table below reflects summarized financial information for the Company’s reportable and operating segments for the nine-month period ended September 30 (in thousands): Outsourced Portals Other Software & Services Other Reconciling Items Consolidated Total 2015 Revenues $ 207,067 $ 14,151 $ - $ 221,218 Costs & expenses 136,201 3,975 21,100 161,276 Depreciation & amortization 6,322 33 357 6,712 Operating income (loss) before income taxes $ 64,544 $ 10,143 $ (21,457 ) $ 53,230 2014 Revenues $ 193,595 $ 12,484 $ - $ 206,079 Costs & expenses (1) 125,916 3,595 19,661 149,172 Depreciation & amortization 6,568 29 222 6,819 Operating income (loss) before income taxes $ 61,111 $ 8,860 $ (19,883 ) $ 50,088 (1) The Company reclassified certain income statement employee benefit-related expenses for the nine-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $3.2 million and corresponding increases in costs & expenses of $3.1 million and $0.1 million, respectively, in Outsourced Portals and Other Software & Services. See Note 1. |
The Company and Summary of Si19
The Company and Summary of Significant Accounting Policies - Additional Information (Detail) shares in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)Categories | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Categoriesshares | Sep. 30, 2014USD ($)shares | Dec. 31, 2014USD ($) | |
Organization and Summary of Significant Accounting Policies Disclosure [Line Items] | |||||
Number of business channels | Categories | 2 | 2 | |||
Number of revenue and cost categories | Categories | 2 | 2 | |||
Selling & administrative | $ 10,577,000 | $ 10,397,000 | $ 31,933,000 | $ 29,446,000 | |
Cost of portal revenues, exclusive of depreciation & amortization | 41,058,000 | 39,091,000 | 125,367,000 | 116,201,000 | |
Cost of software & services revenues, exclusive of depreciation & amortization | 1,365,000 | 1,287,000 | 3,976,000 | $ 3,525,000 | |
Allowance for doubtful accounts | 500,000 | $ 500,000 | $ 500,000 | ||
Unvested service-based restricted stock awards included in the calculation of earnings per share | shares | 0.7 | 0.7 | |||
Reclassification Adjustment | |||||
Organization and Summary of Significant Accounting Policies Disclosure [Line Items] | |||||
Selling & administrative | (1,000,000) | $ (3,200,000) | |||
Cost of portal revenues, exclusive of depreciation & amortization | $ 1,000,000 | 3,100,000 | |||
Cost of software & services revenues, exclusive of depreciation & amortization | $ 100,000 | ||||
Deposits Assets | |||||
Organization and Summary of Significant Accounting Policies Disclosure [Line Items] | |||||
Cash subject to FDIC insurance | 10,500,000 | $ 10,500,000 | |||
Cash not subject to FDIC insurance | 111,900,000 | 111,900,000 | |||
Deposits Assets | Maximum | |||||
Organization and Summary of Significant Accounting Policies Disclosure [Line Items] | |||||
FDIC deposit insurance coverage per depositor | $ 250,000 | $ 250,000 |
Computation of Basic and Dilute
Computation of Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Net income | $ 12,750 | $ 10,361 | $ 32,994 | $ 30,766 |
Less: Income allocated to participating securities | (117) | (94) | (307) | (297) |
Net income available to common stockholders | $ 12,633 | $ 10,267 | $ 32,687 | $ 30,469 |
Denominator: | ||||
Weighted average shares - basic | 65,618 | 65,288 | 65,532 | 65,197 |
Performance-based restricted stock awards | 19 | 17 | ||
Weighted average shares - diluted | 65,637 | 65,288 | 65,549 | 65,197 |
Basic net income per share: | ||||
Net income | $ 0.19 | $ 0.16 | $ 0.50 | $ 0.47 |
Diluted net income per share: | ||||
Net income | $ 0.19 | $ 0.16 | $ 0.50 | $ 0.47 |
Outsourced Government Contrac21
Outsourced Government Contracts - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2015 | Sep. 30, 2015USD ($)ContractCustomerOption | Jun. 30, 2015RenewalOptions | Mar. 31, 2015 | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)ContractCustomer | Sep. 30, 2014USD ($) | |
Contracts [Line Items] | |||||||
Number of portal outsourcing contracts that can be terminated by the other party without cause on period of notice | Contract | 17 | 17 | |||||
Performance bond commitments | $ 6,600 | $ 6,600 | |||||
Number of federal agencies the Company currently has contracts with to provide outsourced services | Customer | 1 | 1 | |||||
Number of outsourced portal services or software development and services contracts with expiration date within a 12-month period | Contract | 14 | 14 | |||||
Percentage of total consolidated revenues related to contracts with expiration dates within a 12-month period | 31.00% | 31.00% | |||||
Revenues | $ 75,047 | $ 69,527 | $ 221,218 | $ 206,079 | |||
Portal revenues | $ 70,123 | 65,304 | $ 207,067 | 193,595 | |||
Customer Concentration Risk | Consolidated Revenues | |||||||
Contracts [Line Items] | |||||||
Concentration risk percentage | 64.00% | 63.00% | |||||
New Mexico Interactive, LLC | |||||||
Contracts [Line Items] | |||||||
Contract renewal option | Option | 2 | ||||||
Option for the government to extend the contract | 1 year | ||||||
NICUSA, AZ Division | |||||||
Contracts [Line Items] | |||||||
Contract Expiration Date | Mar. 26, 2014 | ||||||
NICUSA, AZ Division | Consolidated Revenues | |||||||
Contracts [Line Items] | |||||||
Revenues | 800 | ||||||
Delaware Interactive, LLC | |||||||
Contracts [Line Items] | |||||||
Portal revenues | $ 600 | $ 600 | $ 1,800 | ||||
Montana | Extended Term | |||||||
Contracts [Line Items] | |||||||
Contract period | 2 years | ||||||
IDAHO | Extended Term | |||||||
Contracts [Line Items] | |||||||
Contract period | 2 years | ||||||
State of Alabama | Extended Term | |||||||
Contracts [Line Items] | |||||||
Contract period | 1 year | ||||||
TENNESSEE | Extended Term | |||||||
Contracts [Line Items] | |||||||
Contract period | 1 year | ||||||
US Department of Transportation, Federal Motor Carrier Safety Administration | |||||||
Contracts [Line Items] | |||||||
Contract Expiration Date | Aug. 31, 2016 | ||||||
State of Oklahoma | |||||||
Contracts [Line Items] | |||||||
Contract period | 1 year | ||||||
Contract renewal option | RenewalOptions | 4 | ||||||
State of Oklahoma | Renewal Term | |||||||
Contracts [Line Items] | |||||||
Contract period | 1 year | ||||||
State of New Jersey | |||||||
Contracts [Line Items] | |||||||
Contract period | 5 years | ||||||
Contract renewal option | RenewalOptions | 2 | ||||||
State of New Jersey | Renewal Term | |||||||
Contracts [Line Items] | |||||||
Contract period | 1 year | ||||||
State of Utah | Extended Term | |||||||
Contracts [Line Items] | |||||||
Contract period | 3 years | ||||||
KENTUCKY | Extended Term | |||||||
Contracts [Line Items] | |||||||
Contract period | 1 year | ||||||
State of Maryland | Extended Term | |||||||
Contracts [Line Items] | |||||||
Contract period | 1 year | ||||||
State of Maine | Extended Term | Scenario, Forecast | |||||||
Contracts [Line Items] | |||||||
Contract period | 2 years | ||||||
State of Texas | Extended Term | Scenario, Forecast | |||||||
Contracts [Line Items] | |||||||
Contract period | 1 year |
Summary of Enterprise-Wide Port
Summary of Enterprise-Wide Portal Outsourcing Services to Multiple Governments Agencies (Detail) | 9 Months Ended |
Sep. 30, 2015 | |
Connecticut Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.ct.gov (Connecticut) |
Year Service Commenced | 2,014 |
Contract Expiration Date | Jan. 9, 2017 |
Connecticut Interactive, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Jan. 9, 2020 |
Wisconsin Interactive Network, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.wisconsin.gov (Wisconsin) |
Year Service Commenced | 2,013 |
Contract Expiration Date | May 13, 2018 |
Wisconsin Interactive Network, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | May 13, 2023 |
Pennsylvania Interactive LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.pa.gov (Pennsylvania) |
Year Service Commenced | 2,012 |
Contract Expiration Date | Nov. 30, 2017 |
Pennsylvania Interactive LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Nov. 30, 2022 |
NICUSA, OR Division | |
Contracts [Line Items] | |
Portal Website (State) | www.oregon.gov (Oregon) |
Year Service Commenced | 2,011 |
Contract Expiration Date | Nov. 22, 2021 |
NICUSA, MD Division | |
Contracts [Line Items] | |
Portal Website (State) | www.maryland.gov (Maryland) |
Year Service Commenced | 2,011 |
Contract Expiration Date | Aug. 10, 2017 |
NICUSA, MD Division | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Aug. 10, 2019 |
Mississippi Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.ms.gov (Mississippi) |
Year Service Commenced | 2,011 |
Contract Expiration Date | Dec. 31, 2015 |
Mississippi Interactive, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Dec. 31, 2021 |
New Jersey Interactive LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.nj.gov (New Jersey) |
Year Service Commenced | 2,009 |
Contract Expiration Date | May 1, 2020 |
New Jersey Interactive LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | May 1, 2022 |
Texas NICUSA, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Texas.gov (Texas) |
Year Service Commenced | 2,009 |
Contract Expiration Date | Aug. 31, 2018 |
West Virginia Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.WV.gov (West Virginia) |
Year Service Commenced | 2,007 |
Contract Expiration Date | Mar. 31, 2016 |
Vermont Information Consortium, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Vermont.gov (Vermont) |
Year Service Commenced | 2,006 |
Contract Expiration Date | Jun. 8, 2016 |
Vermont Information Consortium, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Jun. 8, 2019 |
Colorado Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Colorado.gov (Colorado) |
Year Service Commenced | 2,005 |
Contract Expiration Date | Apr. 30, 2019 |
Colorado Interactive, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Apr. 30, 2023 |
South Carolina Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.SC.gov (South Carolina) |
Year Service Commenced | 2,005 |
Contract Expiration Date | Jul. 15, 2019 |
South Carolina Interactive, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Jul. 15, 2021 |
Kentucky Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Kentucky.gov (Kentucky) |
Year Service Commenced | 2,003 |
Contract Expiration Date | Aug. 31, 2016 |
Alabama Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Alabama.gov (Alabama) |
Year Service Commenced | 2,002 |
Contract Expiration Date | Mar. 1, 2016 |
Alabama Interactive, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Mar. 1, 2017 |
Rhode Island Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.RI.gov (Rhode Island) |
Year Service Commenced | 2,001 |
Contract Expiration Date | Jul. 1, 2017 |
Rhode Island Interactive, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Jul. 1, 2019 |
Oklahoma Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.OK.gov (Oklahoma) |
Year Service Commenced | 2,001 |
Contract Expiration Date | Mar. 31, 2016 |
Oklahoma Interactive, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Mar. 31, 2020 |
Montana Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.MT.gov (Montana) |
Year Service Commenced | 2,001 |
Contract Expiration Date | Dec. 31, 2017 |
Montana Interactive, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Dec. 31, 2020 |
NICUSA, TN Division | |
Contracts [Line Items] | |
Portal Website (State) | www.TN.gov (Tennessee) |
Year Service Commenced | 2,000 |
Contract Expiration Date | Mar. 31, 2017 |
Hawaii Information Consortium, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.eHawaii.gov (Hawaii) |
Year Service Commenced | 2,000 |
Contract Expiration Date | Jan. 3, 2016 |
Hawaii Information Consortium, LLC | Renewal Term | |
Contracts [Line Items] | |
Term of contract | 3-year renewal options |
Idaho Information Consortium, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Idaho.gov (Idaho) |
Year Service Commenced | 2,000 |
Contract Expiration Date | Jun. 30, 2017 |
Utah Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Utah.gov (Utah) |
Year Service Commenced | 1,999 |
Contract Expiration Date | Jun. 5, 2019 |
Maine Information Network, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Maine.gov (Maine) |
Year Service Commenced | 1,999 |
Contract Expiration Date | Jul. 1, 2018 |
Arkansas Information Consortium, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Arkansas.gov (Arkansas) |
Year Service Commenced | 1,997 |
Contract Expiration Date | Jun. 30, 2018 |
Iowa Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Iowa.gov (Iowa) |
Year Service Commenced | 1,997 |
Contract Expiration Date | Jun. 30, 2016 |
Iowa Interactive, LLC | Renewal Term | |
Contracts [Line Items] | |
Contract Expiration Date | Jun. 30, 2020 |
Indiana Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.IN.gov (Indiana) |
Year Service Commenced | 1,995 |
Contract Expiration Date | Jul. 31, 2016 |
Nebraska Interactive, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Nebraska.gov (Nebraska) |
Year Service Commenced | 1,995 |
Contract Expiration Date | Jan. 31, 2016 |
Kansas Information Consortium, LLC | |
Contracts [Line Items] | |
Portal Website (State) | www.Kansas.gov (Kansas) |
Year Service Commenced | 1,992 |
Contract Expiration Date | Dec. 31, 2021 |
Kansas Information Consortium, LLC | Renewal Term | |
Contracts [Line Items] | |
Term of contract | annual 1-year renewal options |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation award shares granted in period | 109,705 | ||||
Share based compensation award granted in period grant-date fair value | $ 1.9 | ||||
Share based compensation award vesting period | 3 years | ||||
Share based compensation award end date of the a three-year performance period | Dec. 31, 2017 | ||||
Performance criteria over the performance period | The actual number of shares earned will be based on the Company's performance related to the following performance criteria over the performance period Operating income growth (three-year compound annual growth rate); Total consolidated revenue growth (three-year compound annual growth rate); and Cash flow return on invested capital, excluding income taxes paid (three-year average). | ||||
Performance Shares | Performance Period 2012 to 2014 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation award shares earned in period | 67,239 | ||||
Share based compensation dividend earned on shares subject to the awards, shares | 4,043 | ||||
Share based compensation performance-based restricted stock awards, vesting date | Jan. 30, 2015 | ||||
Share based compensation performance-based restricted stock awards, grant date | Jan. 30, 2012 | ||||
Restricted Stock | Service Based Awards | Employees And Executives | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation award shares granted in period | 7,276 | 269,431 | |||
Share based compensation award granted in period grant-date fair value | $ 0.1 | $ 4.6 | |||
Share based compensation award vesting period | 1 year | 1 year | |||
Restricted Stock | Service Based Awards | Employees And Executives | Annual installment | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation award annual installment vesting rate | 25.00% | 25.00% | |||
Restricted Stock | Service Based Awards | Non Employee Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation award shares granted in period | 45,619 | ||||
Share based compensation award granted in period grant-date fair value | $ 0.8 | ||||
Share based compensation award vesting period | 1 year |
Stock Based Compensation Expens
Stock Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense before income taxes | $ 1,589 | $ 2,154 | $ 5,385 | $ 4,568 |
Income tax benefit | (573) | (798) | (2,047) | (1,762) |
Net stock-based compensation expense | 1,016 | 1,356 | 3,338 | 2,806 |
Cost of portal revenues, exclusive of depreciation & amortization | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense before income taxes | 317 | 430 | 1,086 | 1,032 |
Cost of software & services revenues, exclusive of depreciation & amortization | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense before income taxes | 32 | 13 | 54 | 39 |
Selling & administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense before income taxes | $ 1,240 | $ 1,711 | $ 4,245 | $ 3,497 |
Debt Obligations and Collater25
Debt Obligations and Collateral Requirements - Additional Information (Detail) - USD ($) $ in Millions | Jul. 09, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||
Debt instrument, covenant compliance | The Company was in compliance with each of these covenants at September 30, 2015. | ||
Letters of credit, maximum effective in force period | 1 year | ||
Unsecured Credit Agreement | Covenant Requirement | |||
Debt Instrument [Line Items] | |||
Consolidated leverage ratio | 150.00% | ||
Consolidated tangible net worth required | $ 36 | ||
Unsecured Credit Agreement | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility, amended expiration date | May 1, 2017 | ||
Credit facility, outstanding letters of credit | $ 1.2 | $ 1.4 | |
Credit facility, available capacity to issue additional letters of credit | 3.8 | ||
Credit facility, available borrowing capacity | 8.8 | ||
Credit facility, increase available capacity under the credit agreement | $ 50 | ||
Unsecured Credit Agreement | Revolving Credit Facility | Letter of Credit | If the Company's consolidated leverage ratio is less than or equal to 1.25:1 | |||
Debt Instrument [Line Items] | |||
Fees on outstanding letters of credit | 1.15% | ||
Consolidated leverage ratio | 150.00% | ||
Unsecured Credit Agreement | Revolving Credit Facility | Letter of Credit | If the Company's consolidated leverage ratio is greater than 1.25:1 | |||
Debt Instrument [Line Items] | |||
Fees on outstanding letters of credit | 1.25% | ||
Consolidated leverage ratio | 150.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Taxes [Line Items] | ||||
Effective tax rate | 36.00% | 37.00% | 38.00% | 39.00% |
Reportable Segments and Related
Reportable Segments and Related Information - Additional Information (Detail) - Segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | 1 | |||
Customer Concentration Risk | Consolidated Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 64.00% | 63.00% | ||
Texas NICUSA, LLC | Customer Concentration Risk | Consolidated Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 21.00% | 22.00% | 21.00% | 22.00% |
Summary of Financial Informatio
Summary of Financial Information for Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |||
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 75,047 | $ 69,527 | $ 221,218 | $ 206,079 | ||
Costs & expenses | 53,000 | 50,775 | [1] | 161,276 | 149,172 | [2] |
Depreciation & amortization | 2,116 | 2,292 | 6,712 | 6,819 | ||
Operating income (loss) before income taxes | 19,931 | 16,460 | 53,230 | 50,088 | ||
Total segment operating income | Outsourced Portals | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 70,123 | 65,304 | 207,067 | 193,595 | ||
Costs & expenses | 44,703 | 42,529 | [1] | 136,201 | 125,916 | [2] |
Depreciation & amortization | 1,973 | 2,201 | 6,322 | 6,568 | ||
Operating income (loss) before income taxes | 23,447 | 20,574 | 64,544 | 61,111 | ||
Total segment operating income | Other Software & Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 4,924 | 4,223 | 14,151 | 12,484 | ||
Costs & expenses | 1,365 | 1,316 | [1] | 3,975 | 3,595 | [2] |
Depreciation & amortization | 15 | 8 | 33 | 29 | ||
Operating income (loss) before income taxes | 3,544 | 2,899 | 10,143 | 8,860 | ||
Other Reconciling Items | ||||||
Segment Reporting Information [Line Items] | ||||||
Costs & expenses | 6,932 | 6,930 | [1] | 21,100 | 19,661 | [2] |
Depreciation & amortization | 128 | 83 | 357 | 222 | ||
Operating income (loss) before income taxes | $ (7,060) | $ (7,013) | $ (21,457) | $ (19,883) | ||
[1] | The Company reclassified certain income statement employee benefit-related expenses for the three-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $1.0 million and a corresponding increase in costs & expenses in Outsourced Portals. See Note 1. | |||||
[2] | The Company reclassified certain income statement employee benefit-related expenses for the nine-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $3.2 million and corresponding increases in costs & expenses of $3.1 million and $0.1 million, respectively, in Outsourced Portals and Other Software & Services. See Note 1. |
Summary of Financial Informat29
Summary of Financial Information for Reportable Segments (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |||
Segment Reporting Information [Line Items] | ||||||
Costs & expenses | $ 53,000 | $ 50,775 | [1] | $ 161,276 | $ 149,172 | [2] |
Other Reconciling Items | ||||||
Segment Reporting Information [Line Items] | ||||||
Costs & expenses | 6,932 | 6,930 | [1] | 21,100 | 19,661 | [2] |
Reclassification Adjustment | Other Reconciling Items | ||||||
Segment Reporting Information [Line Items] | ||||||
Costs & expenses | (1,000) | (3,200) | ||||
Outsourced Portals | Total segment operating income | ||||||
Segment Reporting Information [Line Items] | ||||||
Costs & expenses | 44,703 | 42,529 | [1] | 136,201 | 125,916 | [2] |
Outsourced Portals | Reclassification Adjustment | Total segment operating income | ||||||
Segment Reporting Information [Line Items] | ||||||
Increase in costs & expenses | 3,100 | |||||
Other Software & Services | Total segment operating income | ||||||
Segment Reporting Information [Line Items] | ||||||
Costs & expenses | $ 1,365 | $ 1,316 | [1] | $ 3,975 | 3,595 | [2] |
Other Software & Services | Reclassification Adjustment | Total segment operating income | ||||||
Segment Reporting Information [Line Items] | ||||||
Increase in costs & expenses | $ 100 | |||||
[1] | The Company reclassified certain income statement employee benefit-related expenses for the three-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $1.0 million and a corresponding increase in costs & expenses in Outsourced Portals. See Note 1. | |||||
[2] | The Company reclassified certain income statement employee benefit-related expenses for the nine-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $3.2 million and corresponding increases in costs & expenses of $3.1 million and $0.1 million, respectively, in Outsourced Portals and Other Software & Services. See Note 1. |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - Subsequent Event - Dividend Declared $ / shares in Units, $ in Millions | Nov. 02, 2015USD ($)$ / shares |
Subsequent Event [Line Items] | |
Special cash dividend declared, date | Nov. 2, 2015 |
Special cash dividend declared per share | $ 0.55 |
Special cash dividend record, date | Nov. 13, 2015 |
Special cash dividend paid | $ | $ 36.5 |
Special cash dividend paid, date | Jan. 4, 2016 |