Exhibit 99.1
NIC Earns Four Cents Per Share as Same State Revenues
Increase 16 Percent in the First Quarter
OLATHE, Kan.--(BUSINESS WIRE)--April 30, 2007--NIC Inc.
(NASDAQ:EGOV) today announced net income of $2.7 million and earnings
per share of four cents on total revenues of $20.6 million for the
three months ended March 31, 2007. Operating income was $4.1 million
for the quarter. The Company reported net income of $2.9 million and
earnings per share of five cents on total revenues of $15.7 million in
first quarter 2006.
Quarterly portal revenues were a record $19.9 million, a 17
percent increase over first quarter 2006. On a same state basis,
portal revenues grew 16 percent in the first quarter, compared to an
eight percent increase during the same period a year ago. NIC's online
income tax payment, Uniform Commercial Code filing, and professional
license renewal services performed well in the first quarter, helping
same state transaction-based revenues from non-driver record exchange
(non-DMV) applications rise 38 percent. Total DMV revenues grew 10
percent on a same state basis in the first quarter, up from three
percent growth during the same period last year.
"Thanks to the efforts of our employees nationwide, NIC continues
to deliver valuable eGovernment services to our 19 state partners as
well as the citizens and businesses they serve," said Jeff Fraser,
Chief Executive Officer of NIC. "Taxpayers expect government to
provide a higher level of service, and we are well-positioned to help
our state partners meet these rising demands by building and managing
the next generation of innovative online government services."
In the first quarter, NIC's portals launched 84 new non-DMV
revenue-generating services and another 136 applications are in the
development pipeline. "We continue to see unlimited opportunity to
build new services and cross-sell existing applications across our
base of state and local government partners," said NIC President Harry
Herington.
Reflecting NIC's ongoing investment in long-term growth, selling
and administrative expenses rose to $5.1 million in the current
quarter compared to $3.4 million in the first quarter of 2006. As a
percentage of portal revenue, selling and administrative expenses were
26 percent in the current quarter, up from 20 percent in the first
quarter of 2006.
"NIC is making strategic investments to more effectively influence
the marketplace and elevate our presence in states that are most
likely to outsource their portal operations," continued Fraser. "We
are also enhancing several aspects of our operations to further
improve how we cross-sell promising non-DMV services."
The Company estimates the cost of these initiatives will be $4 -
$6 million in 2007, with associated revenue unlikely prior to 2008.
NIC ended the first quarter with approximately $33.1 million in
cash. The Company declared a $0.75 per share special dividend in the
first quarter that was paid to shareholders on February 20, 2007. The
$46.7 million dividend payout was paid from NIC's short-term
investments and cash reserves.
Operating Highlights
During the first quarter, a multiyear portal management contract
renewal was approved by the state of Kansas (www.Kansas.gov), and a
one-year contract extension was also granted by the state of Idaho
(www.Idaho.gov).
"We thank our partners in Kansas and Idaho for their continued
votes of confidence," concluded Fraser.
2007 Outlook
For full-year 2007, NIC's previous guidance remains unchanged:
total revenues of $80.0 - $81.5 million, portal revenues of $77.0 -
$78.0 million, and software and services revenues of $3.0 - $3.5
million. NIC also anticipates operating income between $11.8 - $12.2
million and net income of $7.5 - $8.0 million.
"Our portal business is on track for another solid year," said
Eric Bur, Chief Financial Officer of NIC. "Portal margins should range
from 45 - 47 percent in 2007 as we continue to reinvest in the portal
business. We also expect selling and administrative expenses to range
from 28 - 29 percent of portal revenue in 2007, which reflects our
strategic investment in sales, marketing, and operations to drive
future growth opportunities."
NIC's projections do not include any new portal contracts.
First Quarter Earnings Webcast and Podcast Details
Webcast and Podcast Information
Monday, April 30, 2007
4:30 p.m. (EDT)
Call leaders: Jeff Fraser, Chief Executive Officer
Harry Herington, President
Eric Bur, Chief Financial Officer
The Webcast system is available at www.nicusa.com/investor. Some
users may need to refresh their browsers to view the Webcast
information. A replay of the Webcast will be available until 11:00
p.m. (EDT) on July 30, 2007, by visiting www.nicusa.com/investor.
An audio replay of NIC's first quarter earnings call will be
available until 4:00 p.m. (EDT) on May 7 by dialing 1-800-405-2236 and
using passcode 11088240.
NIC's earnings announcements are also available via podcast
download. For more information, visit www.nicusa.com/investor.
About NIC
NIC manages more eGovernment services than any provider in the
world. The company is helping governments communicate more effectively
with citizens and businesses by putting essential services online. NIC
provides eGovernment solutions for 2,600 state and local agencies that
serve more than 61 million people in the United States. Additional
company information is available at www.nicusa.com.
The statements in this release regarding continued implementation
of NIC's business model and its development of new products and
services are forward-looking statements. There are a number of
important factors that could cause actual results to differ materially
from those suggested or indicated by such forward-looking statements.
These include, among others, the success of the Company in signing
contracts with new states and government agencies, including continued
favorable government legislation; NIC's ability to develop new
services; existing states and agencies adopting those new services;
acceptance of eGovernment services by businesses and citizens;
competition; and general economic conditions and the other important
cautionary statements and risk factors described in NIC's 2006 Annual
Report on Form 10-K filed on March 15, 2007, with the Securities and
Exchange Commission.
NIC INC.
FINANCIAL SUMMARY
(UNAUDITED)
Thousands except for per share amounts
Three months ended
March 31,
2007 2006
--------- ---------
Revenues:
Portal revenues $ 19,868 $ 16,989
Software & services revenues 766 (1,241)
--------- ---------
Total revenues 20,634 15,748
--------- ---------
Operating expenses:
Cost of portal revenues, exclusive of
depreciation & amortization 10,454 8,277
Cost of software & services revenues, exclusive
of depreciation & amortization 470 (1,329)
Selling & administrative 5,120 3,428
Depreciation & amortization 536 505
--------- ---------
Total operating expenses 16,580 10,881
--------- ---------
Operating income 4,054 4,867
--------- ---------
Other income (expense):
Interest income 580 380
Equity in net loss of affiliates - (97)
--------- ---------
Total other income (expense) 580 283
--------- ---------
Income before income taxes 4,634 5,150
Income tax provision 1,888 2,232
--------- ---------
Net income $ 2,746 $ 2,918
--------- ---------
Basic net income per share $ 0.04 $ 0.05
--------- ---------
Diluted net income per share $ 0.04 $ 0.05
--------- ---------
Weighted average shares outstanding:
Basic 61,652 61,129
--------- ---------
Diluted 61,969 61,596
--------- ---------
Key Financial Metrics:
Revenue growth - outsourced portals 17% 24%
Same state revenue growth - outsourced portals 16% 8%
Gross profit percentage - outsourced portals 47% 51%
Selling & administrative costs as a percentage of
portal revenues 26% 20%
Recurring portal revenue percentage 93% 97%
Portal Revenue Analysis (Thousands):
DMV $ 11,460 $ 11,176
Non-DMV 8,408 5,813
--------- ---------
Total $ 19,868 $ 16,989
--------- ---------
NIC INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
Thousands
March 31, December 31,
2007 2006
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 33,083 $ 36,745
Marketable securities - 45,008
Trade accounts receivable 37,437 28,729
Unbilled revenues 205 1,069
Deferred income taxes 817 711
Prepaid expenses & other current assets 1,196 1,645
----------- ------------
Total current assets 72,738 113,907
Property and equipment, net 4,324 3,790
Deferred income taxes 21,302 22,013
Other assets 459 424
----------- ------------
Total assets $ 98,823 $ 140,134
----------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,697 $ 34,202
Accrued expenses 5,970 5,911
Application development contracts 474 513
Other current liabilities 258 255
----------- ------------
Total current liabilities 41,399 40,881
Other long-term liabilities 1,119 -
----------- ------------
Total liabilities 42,518 40,881
----------- ------------
Commitments and contingencies - -
Shareholders' equity:
Common stock, no par, 200,000 shares
authorized 61,759 and 61,574 shares
issued and outstanding - -
Additional paid-in capital 164,584 210,210
Accumulated deficit (108,111) (110,789)
----------- ------------
56,473 99,421
Less treasury stock (168) (168)
----------- ------------
Total shareholders' equity 56,305 99,253
----------- ------------
Total liabilities and shareholders'
equity $ 98,823 $ 140,134
----------- ------------
NIC INC.
SUMMARY OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
Thousands
Common Stock
-------------- Additional
Paid-In Accumulated Treasury
Shares Amount Capital Deficit Stock Total
------- ------ ---------- ----------- -------- ---------
Balance,
January 1,
2007 61,574 $ - $ 210,210 $ (110,789) $ (168) $ 99,253
Cumulative
effect of
FIN 48 - - - (68) - (68)
Net income - - - 2,746 - 2,746
Cash
dividends on
common stock - - (46,730) - - (46,730)
Stock options
exercised 133 - 454 - - 454
Stock-
based
compensation - - 411 - - 411
Issuance of
common stock
under
employee
stock
purchase
plan 52 - 239 - - 239
-------- ------ ---------- ----------- -------- ---------
Balance,
March 31,
2007 61,759 $ - $ 164,584 $ (108,111) $ (168) $ 56,305
-------- ------ ---------- ----------- -------- ---------
NIC INC.
CASH FLOW SUMMARY
(UNAUDITED)
Thousands
Three months ended
March 31,
2007 2006
--------- --------
Cash flows from operating activities:
Net income $ 2,746 $ 2,918
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation & amortization 536 505
Stock-based compensation expense 411 200
Application development contracts (39) (556)
Deferred income taxes 1,656 2,071
Equity in net loss of affiliates - 97
Changes in operating assets and liabilities
(Increase) in trade accounts receivable (8,708) (4,358)
Decrease in unbilled revenues 864 2,029
(Increase) decrease in prepaid expenses &
other current assets 449 (113)
Decrease in other assets - 9
Increase in accounts payable 495 7,893
Increase (decrease) in accrued expenses 59 (1,983)
Increase (decrease) in other current
liabilities 3 (141)
--------- --------
Net cash provided by (used in) operating
activities (1,528) 8,571
--------- --------
Cash flows from investing activities:
Purchases of property and equipment (1,046) (785)
Capitalized internal use software development
costs (59) (46)
Purchases of marketable securities - (5,000)
Sales and maturities of marketable securities 45,008 -
--------- --------
Net cash provided by (used in) investing
activities 43,903 (5,831)
--------- --------
Cash flows from financing activities:
Cash dividends on common stock (46,730) -
Proceeds from sale of treasury stock - 65
Proceeds from employee common stock purchases 239 157
Proceeds from exercise of employee stock options 454 307
--------- --------
Net cash provided by (used in) by financing
activities (46,037) 529
--------- --------
Net increase (decrease) in cash and cash
equivalents (3,662) 3,269
Cash and cash equivalents, beginning of period 36,745 36,902
--------- --------
Cash and cash equivalents, end of period $ 33,083 $40,171
--------- --------
CONTACT: NIC Inc.
Chris Neff, 435-645-8898
cneff@nicusa.com