-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MdheCHVNgjRAvIPZJ/wUaFePu6BjYHsUMVR00eK9cijmUD/jrbHDd1BFI9tFQv3i xgFfXhLEw20e7GwdZ31F7A== 0001157523-06-004190.txt : 20060427 0001157523-06-004190.hdr.sgml : 20060427 20060427080526 ACCESSION NUMBER: 0001157523-06-004190 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060427 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060427 DATE AS OF CHANGE: 20060427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NIC INC CENTRAL INDEX KEY: 0001065332 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT CONSULTING SERVICES [8742] IRS NUMBER: 522077581 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26621 FILM NUMBER: 06783028 BUSINESS ADDRESS: STREET 1: 12 CORPORATE WOODS 10975 BENSON STREET STREET 2: SUITE 390 CITY: OVERLAND PARK STATE: KS ZIP: 66210 MAIL ADDRESS: STREET 1: 12 CORPORATE WOODS 10975 BENSON STREET STREET 2: SUITE 390 CITY: OVERLAND PARK STATE: KS ZIP: 66210 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL INFORMATION CONSORTIUM DATE OF NAME CHANGE: 19990618 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL INFORMATION CONSORTIUM INC DATE OF NAME CHANGE: 19990504 8-K 1 a5134172.txt NIC INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): April 27, 2006 NIC INC. (Exact name of registrant as specified in its charter) Colorado 000-26621 52-2077581 -------- --------- ---------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation or organization) File Number) Identification No.) 10540 South Ridgeview Road Olathe, Kansas 66061 -------------------- (Address of principal executive offices, including zip code) (877) 234-3468 -------------- (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On April 27, 2006, NIC Inc. issued a press release announcing 2006 first quarter earnings information. A copy of the press release is furnished with this report on Form 8-K as Exhibit 99. ITEM 7.01 REGULATION FD DISCLOSURE On April 27, 2006, NIC Inc. issued a press release announcing 2006 first quarter earnings information. A copy of the press release is furnished with this report on Form 8-K as Exhibit 99. NIC will host a conference call, which will also be available by webcast, to discuss the 2006 first quarter earnings information at 9:00 a.m., EDT, on April 27, 2006. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99 - Press release issued by NIC Inc. dated April 27, 2006, announcing 2006 first quarter earnings information, furnished solely for purposes of incorporation by reference to Items 2.02 and 7.01 herein. -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NIC Inc. Date: April 27, 2006 /s/ Stephen M. Kovzan --------------------- Stephen M. Kovzan Vice President, Financial Operations Chief Accounting Officer -3- EX-99 2 a5134172ex99.txt EXHIBIT 99 Exhibit 99 NIC Earns Five Cents Per Share in the First Quarter; Record Operating Income of $4.9 Million Driven by 24 Percent Increase in Portal Revenues OLATHE, Kan.--(BUSINESS WIRE)--April 27, 2006--NIC Inc. (Nasdaq: EGOV) today reported net income of $2.9 million and earnings per share of five cents on total revenues of $15.7 million for the three months ended March 31, 2006. The strength of the core outsourced portal business and the continued ramp-up of first-year state portals contributed to record operating income of $4.9 million in the first quarter. In the prior year quarter, the Company posted a net loss of $0.9 million and a loss of two cents per share on total revenues of $11.3 million. First quarter 2005 results include a pretax charge of $5.0 million relating to NIC's software and services contract with the California Secretary of State. Absent this charge, operating income would have been $3.5 million and net income would have been $2.1 million, or four cents per share, in the prior year quarter. First quarter 2006 portal revenues of $17.0 million were the highest in the Company's history, up 24 percent over the prior year quarter. During the same period last year, portal revenues grew 12 percent. On a same state basis, portal revenues rose eight percent for the quarter. Strong usage of NIC's tax payment, limited criminal history search, Uniform Commercial Code filing, and professional licensing services helped same state revenues from non-driver record exchange (non-DMV) services to rise 22 percent. A full quarter of revenues from the Company's South Carolina and Colorado portals helped total revenues from driver record exchange (DMV) services grow 29 percent during the first quarter. In line with expectations, same state DMV revenues rose three percent during the quarter. "NIC's consistent performance in the first quarter is the result of our focus on building relevant online services that improve efficiencies for our government partners and the citizens and businesses they serve," said Jeff Fraser, Chief Executive Officer. The Company's state and local portals launched 72 new non-DMV revenue-generating services in the first quarter, and another 158 applications are in the development pipeline. "NIC continues to lead the industry in building and marketing value-added eGovernment solutions," said Chief Operating Officer Harry Herington. During the first quarter of 2006, the Company signed a contract amendment with the California Secretary of State that, among other changes, eliminated the business entity phase of the project. As a result of the amendment, the Company recorded an adjustment under percentage of completion accounting that reduced both software and services revenues and costs of software and services revenues by approximately $2.1 million. This adjustment had no effect on operating income, net income, or earnings per share. "This contract amendment is a positive development that will significantly reduce NIC's risk exposure and allow us to conclude the engagement with the California Secretary of State on a positive note," said Herington. Selling and administrative expenses in the first quarter were $3.4 million, a four percent increase from the prior year quarter. As a percentage of portal revenues, selling and administrative expenses were 20 percent, down from 24 percent in the prior year quarter. Beginning January 1, 2006, the Company began recognizing stock-based compensation expense for the cost of stock options and shares issued under the Company's employee stock purchase plan. Operating expenses in the first quarter include $0.2 million of non-cash stock-based compensation expense. NIC ended the first quarter with $65.7 million in cash and marketable securities, up $8.3 million from December 31, 2005. Operating Highlights In March, the state of Iowa and NIC signed a new portal management agreement for up to six years following a competitive rebid. During the same month, Virginia granted the Company a five-year renewal for portal management services. "We thank our partners in Iowa and Virginia for continuing to put their trust in NIC," concluded Fraser. Second Quarter Outlook For second quarter 2006, NIC expects total revenues of $17.7 - $18.1 million, portal revenues of $17.2 - $17.5 million, and software and services revenues of $0.5 - $0.6 million. The Company also anticipates operating income between $4.4 - $4.6 million and net income of $2.7 - $2.9 million. For full year 2006, NIC's projections have been updated to reflect expected total revenues of $66.8 - $67.7 million, portal revenues of $66.3 - $66.9 million, and software and services revenues of $0.5 - $0.8 million. The Company also expects operating income between $15.1 - - $15.6 million and net income of $9.5 - $9.8 million. NIC's second quarter and full year 2006 estimates do not include any new DMV fee increases or portal contracts. First Quarter Earnings Webcast Details Dial-In Information Thursday, April 27, 2006 9:00 a.m. (EDT) Webcast leaders: Jeff Fraser, Chief Executive Officer Eric Bur, Chief Financial Officer Harry Herington, Chief Operating Officer To sign in and listen: 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 5:00 p.m. (EDT) on July 26 by visiting www.nicusa.com/investor. A replay of NIC's first quarter earnings call will be available until 11:00 p.m. (EDT) on May 4 by dialing 877-289-8525 and using passcode 11058031. The conference call replay can also be accessed via Podcast download by visiting 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 2,200 state and local agencies that serve more than 60 million people in the United States. Additional 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 2005 Annual Report on Form 10-K filed on March 16, 2006, with the Securities and Exchange Commission. NIC INC. FINANCIAL SUMMARY (UNAUDITED) Thousands except for per share amounts Three months ended March 31, 2006 2005 --------- --------- Revenues: Portal revenues $16,989 $13,661 Software & services revenues (1,241) (2,381) --------- --------- Total revenues 15,748 11,280 --------- --------- Operating expenses: Cost of portal revenues, exclusive of depreciation & amortization 8,277 6,715 Cost of software & services revenues, exclusive of depreciation & amortization (1,329) 2,377 Selling & administrative 3,428 3,282 Depreciation & amortization 505 352 --------- --------- Total operating expenses 10,881 12,726 --------- --------- Operating income (loss) 4,867 (1,446) --------- --------- Other income (expense): Interest income 380 81 Equity in net loss of affiliates (97) - Other income (expense), net - (3) --------- --------- Total other income (expense) 283 78 --------- --------- Income (loss) before income taxes 5,150 (1,368) Income tax provision (benefit) 2,232 (471) --------- --------- Net income (loss) $2,918 $(897) --------- --------- Basic net income (loss) per share $0.05 $(0.02) --------- --------- Diluted net income (loss) per share $0.05 $(0.02) --------- --------- Weighted average shares outstanding: Basic 61,129 59,402 --------- --------- Diluted 61,596 59,402 --------- --------- Key Financial Metrics: Revenue growth - outsourced portals 24% 12% Same state revenue growth - outsourced portals 8% 16% Gross profit percentage - outsourced portals 51% 51% Selling & administrative costs as a percentage of portal revenues 20% 24% Portal Revenue Analysis (Thousands): DMV transaction-based $11,176 $8,650 Non-DMV transaction-based 5,263 4,371 Software development & portal management 550 640 --------- --------- Total $16,989 $13,661 --------- --------- NIC INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) Thousands except for share amounts March 31, December 31, 2006 2005 ------------- ------------- ASSETS Current assets: Cash and cash equivalents $40,171 $36,902 Marketable securities 25,500 20,500 Trade accounts receivable 26,627 22,269 Unbilled revenues 1,564 2,198 Deferred income taxes 669 421 Prepaid expenses & other current assets 1,730 1,632 ------------- ------------- Total current assets 96,261 83,922 Property and equipment, net 3,607 3,327 Unbilled revenues - 1,395 Deferred income taxes 26,597 28,916 Other assets 240 285 ------------- ------------- Total assets $126,705 $117,845 ------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $32,351 $24,458 Accrued expenses 4,659 6,642 Application development contracts 705 1,261 Other current liabilities 176 317 ------------- ------------- Total current liabilities 37,891 32,678 ------------- ------------- Commitments and contingencies - - Shareholders' equity: Common stock, no par, 200,000,000 shares authorized 61,221,904 and 61,073,595 shares issued and outstanding - - Additional paid-in capital 208,157 207,444 Accumulated deficit (119,175) (122,093) ------------- ------------- 88,982 85,351 Less treasury stock (168) (184) ------------- ------------- Total shareholders' equity 88,814 85,167 ------------- ------------- Total liabilities and shareholders' equity $126,705 $117,845 ------------- ------------- NIC INC. CASH FLOW SUMMARY (UNAUDITED) Thousands Three months ended March 31, 2006 2005 --------- --------- Cash flows from operating activities: Net income (loss) $2,918 $(897) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation & amortization 505 352 Stock-based compensation expense 200 - Application development contracts (556) 1,523 Deferred income taxes 2,071 (581) Equity in net loss of affiliates 97 - Changes in operating assets and liabilities (Increase) in trade accounts receivable (4,358) (2,838) Decrease in unbilled revenues 2,029 3,667 (Increase) decrease in prepaid expenses & other current assets (113) 281 (Increase) in other assets (37) (6) Increase in accounts payable 7,893 5,068 (Decrease) in accrued expenses (1,983) (994) (Decrease) in other current liabilities (141) (23) --------- --------- Net cash provided by operating activities 8,525 5,552 --------- --------- Cash flows from investing activities: Purchases of property and equipment (785) (134) Purchases of marketable securities (5,000) (7,000) Maturities of marketable securities - 3,000 --------- --------- Net cash used in investing activities (5,785) (4,134) --------- --------- Cash flows from financing activities: Proceeds from sale of treasury stock 65 - Proceeds from employee common stock purchases 157 122 Proceeds from exercise of employee stock options 307 612 --------- --------- Net cash provided by financing activities 529 734 --------- --------- Net increase in cash and cash equivalents 3,269 2,152 Cash and cash equivalents, beginning of period 36,902 30,769 --------- --------- Cash and cash equivalents, end of period $40,171 $32,921 --------- --------- CONTACT: NIC Inc. Chris Neff, 435-645-8898 cneff@nicusa.com -----END PRIVACY-ENHANCED MESSAGE-----