UNAUDITED QUARTERLY OPERATING RESULTS

The unaudited quarterly information below is subject to seasonal fluctuations resulting in lower portal revenues in the fourth quarter of each calendar year due to the lower number of business days in the quarter and a lower volume of business-to-government and citizen-to-government transactions during the holiday periods.




	For the Year Ended December 31, 2017
(in thousands, except per share amount)	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Revenues:
Portal revenues	$	77,198	$	79,374	$	76,434	$	78,345
Software & services revenues	5,979		5,952		8,099		5,127
Total revenues	83,177		85,326		84,533		83,472
Operating expenses:
Cost of portal revenues, exclusive of depreciation & amortization	47,032		49,009		47,377		48,154
Cost of software & services revenues, exclusive of depreciation & amortization	1,763		1,779		3,169		2,179
Selling & administrative	11,660		13,131		12,091		13,898
Depreciation & amortization	1,613		1,688		1,810		1,818
Total operating expenses	62,068		65,607		64,447		66,049
Operating income before income taxes	21,109		19,719		20,086		17,423
Income tax provision	7,124		6,950		6,066		6,583
Net income	$	13,985	$	12,769	$	14,020	$	10,840

Basic net income per share	$	0.21	$	0.19	$	0.21	$	0.16
Diluted net income per share	$	0.21	$	0.19	$	0.21	$	0.16

Weighted average shares outstanding:
Basic	66,046		66,248		66,267		66,270
Diluted	66,046		66,248		66,267		66,334




	For the Year Ended December 31, 2016
(in thousands, except per share amount)	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Revenues:
Portal revenues	$	73,197	$	75,513	$	74,997	$	73,291
Software & services revenues	5,193		5,297		5,376		5,051
Total revenues	78,390		80,810		80,373		78,342
Operating expenses:
Cost of portal revenues, exclusive of depreciation & amortization	43,615		46,123		45,140		45,409
Cost of software & services revenues, exclusive of depreciation & amortization	1,413		1,445		1,495		1,605
Selling & administrative	11,342		11,165		11,676		12,880
Depreciation & amortization	1,664		1,736		1,674		1,675
Total operating expenses	58,034		60,469		59,985		61,569
Operating income before income taxes	20,356		20,341		20,388		16,773
Income tax provision (1) (2)	7,462		7,280		4,153		3,130
Net income	$	12,894	$	13,061	$	16,235	$	13,643

Basic net income per share	$	0.19	$	0.20	$	0.24	$	0.20
Diluted net income per share	$	0.19	$	0.20	$	0.24	$	0.20

Weighted average shares outstanding:
Basic	65,739		65,953		65,978		65,981
Diluted	65,739		65,967		66,005		66,041


(1)	The Company’s lower effective tax rate in the third quarter of 2016 (20%) was primarily attributable to favorable benefits related to the domestic production activities deduction and federal research and development credit, which increased basic and diluted earnings per share by approximately $0.05 during the quarter. (See Note 9)


(2)	The Company’s lower effective tax rate in the fourth quarter of 2016 (19%) was primarily attributable to the Company amending its 2014 and 2013 federal income tax returns to recognize favorable benefits related to the domestic production activities deduction, which increased basic and diluted earnings per share by approximately $0.03 during the quarter. (See Note 9)