Delaware | 52-2077581 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer ý | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Emerging growth company o |
June 30, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 172,725 | $ | 160,777 | ||||
Trade accounts receivable, net | 92,757 | 103,938 | ||||||
Prepaid expenses & other current assets | 13,013 | 12,843 | ||||||
Total current assets | 278,495 | 277,558 | ||||||
Property and equipment, net | 9,930 | 10,306 | ||||||
Intangible assets, net | 7,460 | 5,214 | ||||||
Deferred income taxes, net | 53 | 667 | ||||||
Other assets | 1,880 | 1,986 | ||||||
Total assets | $ | 297,818 | $ | 295,731 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 69,460 | $ | 88,920 | ||||
Accrued expenses | 22,274 | 26,501 | ||||||
Other current liabilities | 3,412 | 3,673 | ||||||
Total current liabilities | 95,146 | 119,094 | ||||||
Other long-term liabilities | 9,153 | 8,395 | ||||||
Total liabilities | 104,299 | 127,489 | ||||||
Commitments and contingencies (Notes 2 and 3) | — | — | ||||||
Stockholders' equity: | ||||||||
Common stock, $0.0001 par, 200,000 shares authorized, 66,556 and 66,271 shares issued and outstanding | 7 | 7 | ||||||
Additional paid-in capital | 114,507 | 111,275 | ||||||
Retained earnings | 79,005 | 56,960 | ||||||
Total stockholders' equity | 193,519 | 168,242 | ||||||
Total liabilities and stockholders' equity | $ | 297,818 | $ | 295,731 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues: | ||||||||||||||||
Portal revenues | $ | 86,555 | $ | 79,374 | $ | 167,346 | $ | 156,572 | ||||||||
Software & services revenues | 5,943 | 5,952 | 11,877 | 11,931 | ||||||||||||
Total revenues | 92,498 | 85,326 | 179,223 | 168,503 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of portal revenues, exclusive of depreciation & amortization | 51,711 | 49,009 | 100,353 | 96,041 | ||||||||||||
Cost of software & services revenues, exclusive of depreciation & amortization | 2,235 | 1,779 | 4,463 | 3,542 | ||||||||||||
Selling & administrative | 14,003 | 13,131 | 27,153 | 24,791 | ||||||||||||
Depreciation & amortization | 2,145 | 1,688 | 4,210 | 3,301 | ||||||||||||
Total operating expenses | 70,094 | 65,607 | 136,179 | 127,675 | ||||||||||||
Operating income | 22,404 | 19,719 | 43,044 | 40,828 | ||||||||||||
Other income: | ||||||||||||||||
Interest income | 57 | — | 58 | — | ||||||||||||
Income before income taxes | 22,461 | 19,719 | 43,102 | 40,828 | ||||||||||||
Income tax provision | 5,450 | 6,950 | 10,582 | 14,074 | ||||||||||||
Net income | $ | 17,011 | $ | 12,769 | $ | 32,520 | $ | 26,754 | ||||||||
Basic net income per share | $ | 0.25 | $ | 0.19 | $ | 0.48 | $ | 0.40 | ||||||||
Diluted net income per share | $ | 0.25 | $ | 0.19 | $ | 0.48 | $ | 0.40 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 66,541 | 66,248 | 66,432 | 66,147 | ||||||||||||
Diluted | 66,561 | 66,248 | 66,447 | 66,147 |
Common Stock | Additional Paid-in Capital | Retained Earnings | |||||||||||||||||
Shares | Amount | Total | |||||||||||||||||
Balance, January 1, 2018 | 66,271 | $ | 7 | $ | 111,275 | $ | 56,960 | $ | 168,242 | ||||||||||
Net cumulative effect of adoption of accounting standard | — | — | — | 208 | 208 | ||||||||||||||
Net income | — | — | — | 32,520 | 32,520 | ||||||||||||||
Restricted stock vestings | 246 | — | — | — | — | ||||||||||||||
Dividends declared | — | — | — | (10,755 | ) | (10,755 | ) | ||||||||||||
Dividend equivalents on unvested performance-based restricted stock awards | — | — | 68 | (68 | ) | — | |||||||||||||
Dividend equivalents cancelled upon forfeiture of performance-based restricted stock awards | — | — | (140 | ) | 140 | — | |||||||||||||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings | (83 | ) | — | (1,165 | ) | — | (1,165 | ) | |||||||||||
Stock-based compensation | — | — | 3,087 | — | 3,087 | ||||||||||||||
Issuance of common stock under employee stock purchase plan | 122 | — | 1,382 | — | 1,382 | ||||||||||||||
Balance, June 30, 2018 | 66,556 | $ | 7 | $ | 114,507 | $ | 79,005 | $ | 193,519 |
Six Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 32,520 | $ | 26,754 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Provision for losses on accounts receivable | 343 | 379 | ||||||
Depreciation & amortization | 4,210 | 3,301 | ||||||
Stock-based compensation expense | 3,087 | 3,178 | ||||||
Deferred income taxes | 614 | 796 | ||||||
Loss on disposal of property and equipment | — | 39 | ||||||
Changes in operating assets and liabilities: | ||||||||
Decrease in trade accounts receivable, net | 10,838 | 2,994 | ||||||
(Increase) decrease in prepaid expenses & other current assets | (170 | ) | 2,651 | |||||
Decrease (increase) in other assets | 262 | (1,507 | ) | |||||
(Decrease) in accounts payable | (19,460 | ) | (14,535 | ) | ||||
(Decrease) in accrued expenses | (4,393 | ) | (1,271 | ) | ||||
(Decrease) increase in other current liabilities | (209 | ) | 644 | |||||
Increase in other long-term liabilities | 758 | 1,010 | ||||||
Net cash provided by operating activities | 28,400 | 24,433 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (2,411 | ) | (2,395 | ) | ||||
Proceeds from sale of property and equipment | — | 7 | ||||||
Capitalized software development costs | (3,503 | ) | (1,692 | ) | ||||
Net cash used in investing activities | (5,914 | ) | (4,080 | ) | ||||
Cash flows from financing activities: | ||||||||
Cash dividends on common stock | (10,755 | ) | (10,692 | ) | ||||
Proceeds from employee common stock purchases | 1,382 | 1,330 | ||||||
Tax withholdings related to stock-based compensation awards | (1,165 | ) | (2,614 | ) | ||||
Net cash used in financing activities | (10,538 | ) | (11,976 | ) | ||||
Net increase in cash | 11,948 | 8,377 | ||||||
Cash, beginning of period | 160,777 | 127,009 | ||||||
Cash, end of period | $ | 172,725 | $ | 135,386 | ||||
Other cash flow information: | ||||||||
Non-cash investing activities: | ||||||||
Capital expenditures accrued but not yet paid | $ | 166 | $ | 83 | ||||
Cash payments: | ||||||||
Income taxes paid, net | $ | 8,883 | $ | 12,405 |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | |||||||||||||||||||||||
Outsourced Portals | Other Software & Services | Consolidated Total | Outsourced Portals | Other Software & Services | Consolidated Total | |||||||||||||||||||
IGS | $ | 55,111 | $ | — | $ | 55,111 | 105,379 | — | $ | 105,379 | ||||||||||||||
DHR | 26,645 | — | 26,645 | 53,883 | — | 53,883 | ||||||||||||||||||
Other | — | 5,943 | 5,943 | — | 11,877 | 11,877 | ||||||||||||||||||
Total transaction-based | 81,756 | 5,943 | 87,699 | 159,262 | 11,877 | 171,139 | ||||||||||||||||||
Portal software development & services | 3,562 | — | 3,562 | 5,609 | — | 5,609 | ||||||||||||||||||
Portal management | 1,237 | — | 1,237 | 2,475 | — | 2,475 | ||||||||||||||||||
Total revenues | $ | 86,555 | $ | 5,943 | $ | 92,498 | $ | 167,346 | $ | 11,877 | $ | 179,223 | ||||||||||||
Three Months Ended June 30, 2017 | Six Months Ended June 30, 2017 | |||||||||||||||||||||||
Outsourced Portals | Other Software & Services | Consolidated Total | Outsourced Portals | Other Software & Services | Consolidated Total | |||||||||||||||||||
IGS | $ | 50,217 | $ | — | $ | 50,217 | $ | 96,142 | $ | — | $ | 96,142 | ||||||||||||
DHR | 25,689 | — | 25,689 | 53,858 | — | 53,858 | ||||||||||||||||||
Other | — | 5,952 | 5,952 | — | 11,931 | 11,931 | ||||||||||||||||||
Total transaction-based | 75,906 | 5,952 | 81,858 | 150,000 | 11,931 | 161,931 | ||||||||||||||||||
Portal software development & services | 2,193 | — | 2,193 | 4,022 | — | 4,022 | ||||||||||||||||||
Portal management | 1,275 | — | 1,275 | 2,550 | — | 2,550 | ||||||||||||||||||
Total revenues | $ | 79,374 | $ | 5,952 | $ | 85,326 | $ | 156,572 | $ | 11,931 | $ | 168,503 |
NIC Enterprise Contract | State | Year Services Commenced | Contract Expiration Date | Renewal Options Through | ||||
NICUSA, IL Division | Illinois | 2017 | 6/29/2023 | 6/29/2027 | ||||
Louisiana Interactive, LLC | Louisiana | 2015 | 1/28/2020 | |||||
Connecticut Interactive, LLC | Connecticut | 2014 | 1/9/2020 | |||||
Wisconsin Interactive Network, LLC | Wisconsin | 2013 | 5/12/2021 | 5/13/2023 | ||||
Pennsylvania Interactive, LLC | Pennsylvania | 2012 | 11/30/2019 | 11/30/2022 | ||||
NICUSA, OR Division | Oregon | 2011 | 11/22/2021 | |||||
NICUSA, MD Division | Maryland | 2011 | 8/10/2019 | |||||
Mississippi Interactive, LLC | Mississippi | 2011 | 12/31/2019 | 12/31/2021 | ||||
NICUSA, NJ Division | New Jersey | 2009 | 4/30/2020 | 4/30/2022 | ||||
Texas NICUSA, LLC | Texas | 2009 | 8/31/2018 | |||||
West Virginia Interactive, LLC | West Virginia | 2007 | 6/30/2021 | 6/30/2024 | ||||
Vermont Information Consortium, LLC | Vermont | 2006 | 6/8/2019 | |||||
Colorado Interactive, LLC | Colorado | 2005 | 4/30/2019 | 4/30/2023 | ||||
South Carolina Interactive, LLC | South Carolina | 2005 | 7/15/2019 | 7/15/2021 | ||||
Kentucky Interactive, LLC | Kentucky | 2003 | 8/31/2020 | |||||
Alabama Interactive, LLC | Alabama | 2002 | 3/19/2020 | 3/19/2022 | ||||
Rhode Island Interactive, LLC | Rhode Island | 2001 | 7/1/2019 | |||||
Oklahoma Interactive, LLC | Oklahoma | 2001 | 3/31/2019 | 3/31/2020 | ||||
Montana Interactive, LLC | Montana | 2001 | 12/31/2019 | 12/31/2020 | ||||
Hawaii Information Consortium, LLC | Hawaii | 2000 | 1/3/2020 | |||||
Idaho Information Consortium, LLC | Idaho | 2000 | 6/30/2019 | |||||
Utah Interactive, LLC | Utah | 1999 | 6/5/2019 | |||||
Maine Information Network, LLC | Maine | 1999 | 12/31/2018 | |||||
Arkansas Information Consortium, LLC | Arkansas | 1997 | 6/30/2019 | |||||
Indiana Interactive, LLC | Indiana | 1995 | 10/24/2021 | |||||
Nebraska Interactive, LLC | Nebraska | 1995 | 3/31/2019 | 3/31/2021 | ||||
Kansas Information Consortium, LLC | Kansas | 1992 | 12/31/2022 | 12/31/2026 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 17,011 | $ | 12,769 | $ | 32,520 | $ | 26,754 | ||||||||
Less: Income allocated to participating securities | (187 | ) | (117 | ) | (355 | ) | (245 | ) | ||||||||
Net income available to common stockholders | $ | 16,824 | $ | 12,652 | $ | 32,165 | $ | 26,509 | ||||||||
Denominator: | ||||||||||||||||
Weighted average shares - basic | 66,541 | 66,248 | 66,432 | 66,147 | ||||||||||||
Performance-based restricted stock awards | 20 | — | 15 | — | ||||||||||||
Weighted average shares - diluted | 66,561 | 66,248 | 66,447 | 66,147 | ||||||||||||
Basic net income per share: | ||||||||||||||||
Net income | $ | 0.25 | $ | 0.19 | $ | 0.48 | $ | 0.40 | ||||||||
Diluted net income per share: | ||||||||||||||||
Net income | $ | 0.25 | $ | 0.19 | $ | 0.48 | $ | 0.40 |
Declaration Date | Dividend per Share | Record Date | Payment Date | Payment |
May 1, 2018 | $0.08 | June 5, 2018 | June 19, 2018 | $5.4 |
January 29, 2018 | $0.08 | March 6, 2018 | March 20, 2018 | $5.4 |
May 2, 2017 | $0.08 | June 6, 2017 | June 20, 2017 | $5.4 |
January 30, 2017 | $0.08 | March 7, 2017 | March 21, 2017 | $5.3 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Statutory federal income tax rate | 21.0 | % | 35.0 | % | 21.0 | % | 35.0 | % | ||||
Tax deficit (benefit) from restricted stock vestings | 0.2 | % | (0.3 | )% | 0.6 | % | (1.2 | )% | ||||
Domestic production activities deductions | — | % | (2.8 | )% | — | % | (2.7 | )% | ||||
Federal and state tax credits | (1.5 | )% | (1.3 | )% | (1.6 | )% | (1.3 | )% | ||||
State income taxes | 2.3 | % | 1.9 | % | 2.3 | % | 1.8 | % | ||||
Uncertain tax positions | 1.6 | % | 2.0 | % | 1.6 | % | 2.2 | % | ||||
Nondeductible and other expenses | 0.7 | % | 0.7 | % | 0.7 | % | 0.7 | % | ||||
Effective federal and state income tax rate | 24.3 | % | 35.2 | % | 24.6 | % | 34.5 | % |
• | Operating income growth (three-year compound annual growth rate); |
• | Total consolidated revenue growth (three-year compound annual growth rate); and |
• | Return on invested capital (three-year average). |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Cost of portal revenues, exclusive of depreciation & amortization | $ | 359 | $ | 345 | $ | 802 | $ | 657 | ||||||||
Cost of software & services revenues, exclusive of depreciation & amortization | 36 | 27 | 76 | 44 | ||||||||||||
Selling & administrative | 1,177 | 1,332 | 2,209 | 2,477 | ||||||||||||
Stock-based compensation expense | $ | 1,572 | $ | 1,704 | $ | 3,087 | $ | 3,178 |
Outsourced Portals | Other Software & Services | Other Reconciling Items | Consolidated Total | |||||||||||||
2018 | ||||||||||||||||
Revenues | $ | 86,555 | $ | 5,943 | $ | — | $ | 92,498 | ||||||||
Costs & expenses | 51,711 | 2,235 | 14,003 | 67,949 | ||||||||||||
Depreciation & amortization | 930 | 28 | 1,187 | 2,145 | ||||||||||||
Operating income (loss) before income taxes | $ | 33,914 | $ | 3,680 | $ | (15,190 | ) | $ | 22,404 | |||||||
2017 | ||||||||||||||||
Revenues | $ | 79,374 | $ | 5,952 | $ | — | $ | 85,326 | ||||||||
Costs & expenses | 49,009 | 1,779 | 13,131 | 63,919 | ||||||||||||
Depreciation & amortization | 668 | 23 | 997 | 1,688 | ||||||||||||
Operating income (loss) before income taxes | $ | 29,697 | $ | 4,150 | $ | (14,128 | ) | $ | 19,719 |
Outsourced Portals | Other Software & Services | Other Reconciling Items | Consolidated Total | |||||||||||||
2018 | ||||||||||||||||
Revenues | $ | 167,346 | $ | 11,877 | $ | — | $ | 179,223 | ||||||||
Costs & expenses | 100,353 | 4,463 | 27,153 | 131,969 | ||||||||||||
Depreciation & amortization | 1,807 | 55 | 2,348 | 4,210 | ||||||||||||
Operating income (loss) before income taxes | $ | 65,186 | $ | 7,359 | $ | (29,501 | ) | $ | 43,044 | |||||||
2017 | ||||||||||||||||
Revenues | $ | 156,572 | $ | 11,931 | $ | — | $ | 168,503 | ||||||||
Costs & expenses | 96,041 | 3,542 | 24,791 | 124,374 | ||||||||||||
Depreciation & amortization | 1,353 | 46 | 1,902 | 3,301 | ||||||||||||
Operating income (loss) before income taxes | $ | 59,178 | $ | 8,343 | $ | (26,693 | ) | $ | 40,828 |
• | Transaction-based: |
▪ | IGS: our portal business earns transaction-based fees from interactive government services, referred to as IGS, from sources other than digital access to motor vehicle driver history records, for transactions conducted by business users and consumer users through our portals and which are generally recurring. For a representative listing of the IGS applications we currently offer through our portals, refer to Part I, Item 1 in our 2017 Annual Report on Form 10-K, filed with the SEC on February 22, 2018. |
▪ | DHR: our portal business earns transaction-based fees from driver history records, referred to as DHR, for providing digital access to motor vehicle driver history records from our state portals to data resellers, insurance companies, and other pre-authorized customers on behalf of our state partners, and which are generally recurring. |
▪ | Other: our software & services business earns a significant portion of its revenues from transaction-based fee contracts, most notably is NIC Federal's contract with the FMCSA to develop and manage the PSP for motor carriers nationwide. |
• | Portal software development and services: these are revenues from the performance of software development projects and other time and materials services for our government partners. While we actively market these services, they do not have the same degree of predictability as our transaction-based or portal management revenues and are not generally recurring. As a result, these revenues are excluded from our recurring portal revenue percentage. |
• | Portal management: these are revenues from the performance of fixed fee portal management services for our government partner in the state of Indiana which are generally recurring. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
Key Financial Metrics | 2018 | 2017 | 2018 | 2017 | ||||||||
Revenue growth - outsourced portals | 9 | % | 5 | % | 7 | % | 5 | % | ||||
Same state revenue growth - outsourced portals | 8 | % | 7 | % | 8 | % | 6 | % | ||||
Recurring portal revenue as a % of total portal revenues | 96 | % | 97 | % | 97 | % | 97 | % | ||||
Gross profit % - outsourced portals | 40 | % | 38 | % | 40 | % | 39 | % | ||||
Revenue growth - software & services | — | % | 12 | % | — | % | 14 | % | ||||
Gross profit % - software & services | 62 | % | 70 | % | 62 | % | 70 | % | ||||
Selling & administrative expenses as a % of total revenues | 15 | % | 15 | % | 15 | % | 15 | % | ||||
Operating income margin % (operating income as a % of total revenues) | 24 | % | 23 | % | 24 | % | 24 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
Portal Revenue Analysis | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||
IGS transaction-based | $ | 55,111 | $ | 50,217 | 10 | % | $ | 105,379 | $ | 96,142 | 10 | % | ||||||||||
DHR transaction-based | 26,645 | 25,689 | 4 | % | 53,883 | 53,858 | — | % | ||||||||||||||
Portal software development and services | 3,562 | 2,193 | 62 | % | 5,609 | 4,022 | 39 | % | ||||||||||||||
Portal management | 1,237 | 1,275 | (3 | )% | 2,475 | 2,550 | (3 | )% | ||||||||||||||
Total | $ | 86,555 | $ | 79,374 | 9 | % | $ | 167,346 | $ | 156,572 | 7 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
Cost of Portal Revenue Analysis | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||
Fixed costs | $ | 29,153 | $ | 28,135 | 4 | % | $ | 57,281 | $ | 56,015 | 2 | % | ||||||||||
Variable costs | 22,558 | 20,874 | 8 | % | 43,072 | 40,026 | 8 | % | ||||||||||||||
Total | $ | 51,711 | $ | 49,009 | 6 | % | $ | 100,353 | $ | 96,041 | 4 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
Software & Services Revenue Analysis | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||
NIC Federal | $ | 4,207 | $ | 4,278 | (2)% | $ | 8,304 | $ | 8,202 | 1% | ||||||||||
Other | 1,736 | 1,674 | 4% | 3,573 | 3,729 | (4)% | ||||||||||||||
Total | $ | 5,943 | $ | 5,952 | —% | $ | 11,877 | $ | 11,931 | —% |
• | fund operations if unforeseen costs arise; |
• | support our expansion into other federal, state and local government agencies beyond what is contemplated if unforeseen opportunities arise; |
• | expand our product and service offerings beyond what is contemplated if unforeseen opportunities arise; |
• | fund acquisitions; |
• | respond to unforeseen competitive pressures; and |
• | acquire technologies beyond what is contemplated. |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1) | |||||||
April 19, 2018 | 190 | $ | 14.40 | N/A | N/A | ||||||
April 20, 2018 | 197 | 14.30 | N/A | N/A | |||||||
April 30, 2018 | 397 | 14.85 | N/A | N/A | |||||||
May 5, 2018 | 753 | 15.45 | N/A | N/A | |||||||
May 6, 2018 | 640 | 15.45 | N/A | N/A | |||||||
Total | 2,177 | 15.14 |
10.1* | |
31.1* | |
31.2* | |
32.1** | |
101 | The following financial information from NIC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, formatted in XBRL (Extensible Business Reporting Language) includes (i) Consolidated Balance Sheets at June 30, 2018 (unaudited) and December 31, 2017, (ii) Consolidated Statements of Income (unaudited) for the three and six months ended June 30, 2018 and 2017, (iii) Consolidated Statement of Changes in Stockholders’ Equity (unaudited) for the six months ended June 30, 2018, (iv) Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2018 and 2017, and (v) the Notes to the Unaudited Consolidated Financial Statements (submitted electronically herewith). |
NIC INC. | ||
Dated: | August 1, 2018 | /s/ Stephen M. Kovzan |
Stephen M. Kovzan | ||
Chief Financial Officer |
1. | EMPLOYMENT BY THE COMPANY. |
2. | COMPENSATION. |
(i) | provide the benefits specified in Section 5.1; |
(ii) | pay Executive a lump sum severance payment equal to the sum of (A) two (2) times Executive's Base Salary in effect on the date of Executive's termination, (B) two (2) times the largest of the Annual Cash Incentive Bonuses paid by the Company to Executive during the immediately preceding three annual incentive periods, and (C) the amount of any award for the year of such termination as if target performance for such plan year had been achieved; |
(iii) | notwithstanding any contrary provisions of any stock option agreement, restricted stock agreement or other equity or equity-based award agreement held by Executive at the time of Executive's termination (and provided that any change of control provisions in such agreements, whether entered into before or after the date of this Agreement, shall be of no force and effect), (A) for any equity or equity-based award that is subject to time-based or service- |
(iv) | pay Executive a lump sum payment equal to one hundred fifty percent (150%) of Company's portion of the annual costs (determined based on such costs as of the Executive's termination date) associated with (A) providing Executive with medical and health benefits coverage under the Company's group health plans, and (B) providing Executive's eligible family members who are also receiving medical and health benefits coverage under the Company's group health plan on the date of Executive's termination of employment. |
(i) | A "Change of Control" of the Company shall be deemed to have occurred if: |
(1) | any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Act")), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of capital stock of the Company representing thirty (30) percent or more of the total voting power represented by the Company's then outstanding capital stock; |
(2) | the consummation of a merger or consolidation of the Company with any other company, other than a merger or consolidation in which the shareholders, at the date of announcement, of the Company would own 50% or more of the voting stock of the surviving corporation; |
(3) | Continuing Directors (as defined below) no longer constitute at least a majority of the Board or a similar body of any successor to Company. For purposes of this Agreement, "Continuing Director" means any individual who either (i) is a member of Company’s Board of Directors on the Effective Date, or (ii) becomes a member of Company’s Board of Directors after the Effective Date and whose election or nomination for election was approved by a vote of at least a majority of the then Continuing Directors (either by a specific vote or by approval of the proxy statement of Company in which such person |
(4) | the sale of all or substantially all of the assets of the Company; or |
(5) | the liquidation or dissolution of the Company. |
(ii) | Termination for Good Reason means Executive’s termination of his employment as a result of the occurrence of any of the following without Executive’s written consent, unless within thirty (30) days following the Company’s receipt of Executive’s written notice of termination of employment for Good Reason, in accordance with Section 8.1, specifying in reasonable detail any facts and circumstances claimed to provide a basis for Executive’s termination for Good Reason, the Company cures any such occurrence: |
(1) | any material reduction by the Company in Executive’s Base Salary, Annual Cash Incentive Bonus opportunity, long-term incentive opportunity, or standard Company benefits (except for across-the-board reductions generally applicable to all senior executives of the Company); |
(2) | a relocation of Executive’s principal office to a location that is in excess of sixty (60) miles from its location as of the date of this Agreement; or |
(3) | without limiting the generality or effect of any of the foregoing, any material breach of this Agreement by the Company. |
EXECUTIVE | NIC INC. | ||
/s/ William A. Van Asselt | By: | /s/ Harry H. Herington | |
Name: William A. Van Asselt | Name: Harry H. Herington | ||
Title: Chief Executive Officer |
/s/ William A. Van Asselt | |
William A. Van Asselt | |
Address: |
By: | /s/ Harry H. Herington | ||
Name: | Harry H. Herington | ||
Title: | Chief Executive Officer |
Invention or Improvement | Party(ies) | Relationship | ||||
1. | ||||||
2. | ||||||
3. |
A. | Employer is in the business generally of designing, building, and furnishing to government clients and private entities, egovernment applications and services online, including but not limited to Software As A Service, stand-alone online applications, system management and hosting, e-payment processing, database management, and enterprise wide management of such services and payment streams. |
B. | The parties recognize that, in the course of employment with Employer, Employee will learn Employer’s techniques, procedures, and development, management, and marketing strategies and will be exposed to the Employer’s clients and prospects, all of which Employer has a legitimate business interest in protecting. Employee is expected to work diligently and to develop good will with clients and prospects and other of Employer’s employees for the benefit of the Employer. Employee agrees that it would be unfair and improper to disclose or use Employer’s Confidential Information, training, or relationships to solicit Employer’s clients, prospects, or employees either during the Employee’s employment with Employer or for a limited period thereafter. |
C. | The parties desire to enter into this Agreement in order to induce the Employer to share or continue to share its information and resources with Employee during the course of employment and to insure that the Employer’s business will not be harmed during or after Employee’s employment. |
D. | Employee acknowledges and agrees that the promises in this Agreement are of material importance to Employer and the promises are a material inducement for Employer to employ and continue to employ the Employee. |
1. | Definitions |
2. | Services to Conflicting Organizations |
3. | Confidentiality |
4. | Non-Solicitation of Employees |
5. | Non-Solicitation of Clients or Prospects |
6. | Work Product and Inventions |
7. | Tolling of Period of Restriction |
8. | Enforcement |
9. | Attorneys’ Fees and Costs |
10. | Obligations Survive Termination of Employment |
11. | Non-Waiver |
12. | Binding Effect |
13. | Severability |
14. | Term of Employment |
15. | Merger |
16. | Applicable Law |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 19, 2018 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | EGOV | |
Entity Registrant Name | NIC INC | |
Entity Central Index Key | 0001065332 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 66,559,859 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 66,556,000 | 66,271,000 |
Common stock, shares outstanding (in shares) | 66,556,000 | 66,271,000 |
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenues: | ||||
Revenues | $ 92,498 | $ 85,326 | $ 179,223 | $ 168,503 |
Operating expenses: | ||||
Cost of portal revenues, exclusive of depreciation & amortization | 51,711 | 49,009 | 100,353 | 96,041 |
Cost of software & services revenues, exclusive of depreciation & amortization | 2,235 | 1,779 | 4,463 | 3,542 |
Selling & administrative | 14,003 | 13,131 | 27,153 | 24,791 |
Depreciation & amortization | 2,145 | 1,688 | 4,210 | 3,301 |
Total operating expenses | 70,094 | 65,607 | 136,179 | 127,675 |
Operating income (loss) before income taxes | 22,404 | 19,719 | 43,044 | 40,828 |
Operating income | 22,461 | 19,719 | 43,102 | 40,828 |
Other income: | ||||
Interest income | 57 | 0 | 58 | 0 |
Income tax provision | 5,450 | 6,950 | 10,582 | 14,074 |
Net income | $ 17,011 | $ 12,769 | $ 32,520 | $ 26,754 |
Basic net income per share (in usd per share) | $ 0.25 | $ 0.19 | $ 0.48 | $ 0.40 |
Diluted net income per share (in usd per share) | $ 0.25 | $ 0.19 | $ 0.48 | $ 0.40 |
Weighted average shares outstanding | ||||
Basic (in shares) | 66,541 | 66,248 | 66,432 | 66,147 |
Diluted (in shares) | 66,561 | 66,248 | 66,447 | 66,147 |
Portal revenues | ||||
Revenues: | ||||
Revenues | $ 86,555 | $ 79,374 | $ 167,346 | $ 156,572 |
Software & services revenues | ||||
Revenues: | ||||
Revenues | $ 5,943 | $ 5,952 | $ 11,877 | $ 11,931 |
THE COMPANY |
6 Months Ended |
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Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
THE COMPANY | THE COMPANY NIC Inc., together with its subsidiaries (the "Company" or "NIC") is a leading provider of digital government services that help governments use technology to provide a higher level of service to businesses and citizens and increase efficiencies. 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 consumers, such as businesses and citizens, to access government information online and complete transactions. The Company typically manages operations for each contractual relationship through separate local subsidiaries that operate as decentralized businesses with a high degree of autonomy. The Company is typically responsible for funding the up-front investments 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 digital government services, other than outsourced portal services, to federal agencies as well as state and local governments. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. ("U.S. GAAP"). The consolidated financial statements include all of the Company's direct and indirect wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring adjustments) necessary to fairly present the consolidated financial position and the results of operations and cash flows of the Company as of the dates and for the interim periods presented. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2017, including the notes thereto, set forth in the Company’s 2017 Annual Report on Form 10-K. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2018. Recently issued accounting pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers ("ASC 606"), a new standard related to revenue recognition. Under this standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires expanded disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. On January 1, 2018, the Company adopted ASC 606, and all the related amendments, using the modified retrospective method for all contracts not completed as of the date of adoption. The adoption of ASC 606 represents a change in accounting principle for portal software development and services contracts that will more closely align revenue recognition with the delivery of Company’s services, which under certain contracts will result in the recognition of revenue over time as opposed to at a point in time. Upon adoption, there was not a significant cumulative adjustment to retained earnings on the Company’s balance sheet for this change in accounting principle. Under the modified retrospective method, the comparative information was not restated and continues to be reported under the accounting standards in effect for those periods. The impact to revenues for the three and six months ended June 30, 2018 was not significant as a result of applying ASC 606. Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which will update the existing guidance on accounting for leases and require new qualitative and quantitative disclosures about the Company’s leasing activities. The new standard requires the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. The new standard will become effective for the Company beginning with the first quarter 2019 and requires a modified retrospective transition approach. The Company is currently evaluating the effects that the standard will have on its consolidated financial statements, which the Company anticipates could be significant, due mainly to its non-cancellable operating leases for office space. As further described in Note 7, Commitments and Contingencies, to the Company’s 2017 Annual Report on Form 10-K, filed with the SEC on February 22, 2018, as of December 31, 2017, the Company had minimum lease commitments under non-cancellable operating leases totaling $16.0 million. Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The ASU will be effective for the Company beginning January 1, 2020, with early adoption permitted beginning January 1, 2019. Application of the standard will be through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the new standard and the estimated impact it will have on the Company’s consolidated financial statements. Revenue recognition The Company accounts for revenue in accordance with ASC 606, which the Company adopted on January 1, 2018. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales and usage-based taxes, if applicable, are excluded from revenues. Disaggregation of Revenue The Company currently earns revenues from three main sources: (i) transaction-based fees, which consist of interactive government services (“IGS”), driver history records (“DHR”) and other transaction based revenues, (ii) portal software development & services and (iii) fixed fees for portal management services. The following table summarizes, by reportable and operating segment, our principal activities from which the Company generates revenue (in thousands):
Transaction-based revenues The Company recognizes revenue from providing outsourced digital services to its government partners. Under these contracts, the Company agrees to provide continuous access to digital government services that allow consumers to complete secure transactions, such as applying for a permit, retrieving government records, or filing a government-mandated form or report. The contractual promise to provide continuous access to each of these digital government services is a single stand-ready performance obligation. Transaction-based fees earned by the Company are typically usage-based and calculated based on the number of transactions processed each day at the contractual net fee earned by the Company for each transaction. These usage-based fees are deemed to be variable consideration that meets the practical expedient within ASC 606-10-50-14(a) whereby the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these arrangements, the usage-based fees are fully constrained and recognized once the uncertainties associated with the constraint are resolved, which is when the related transactions occur each day. The Company satisfies its performance obligation by providing access to applications over the contractual term, and by processing transactions as they are initiated by consumers. The performance obligation is satisfied on the day in which the Company provides the access and it is used by the consumer. In most of its transaction-based revenue arrangements, the Company acts as an agent and recognizes revenue on a net basis. The gross transaction fees collected by the Company from consumers on behalf of its government partners are not recognized as revenue but are accrued as accounts payable when the services are provided at the time of the transactions. The Company must remit a certain amount or a percentage of these fees to government agencies regardless of whether the Company ultimately collects the fees from the consumer. As a result, trade accounts receivable and accounts payable reflect the gross amounts outstanding at the balance sheet dates. Under certain contracts, the Company’s government partners may receive consideration for a portion of the gross transaction fees. In circumstances where the Company receives a discernible benefit in the arrangement, the consideration paid to the government partner is recorded on a gross basis within costs of revenues. Otherwise, the consideration paid to the government partner is accounted for on a net basis as a reduction in the transaction-based fee recorded within net revenue. Portal software development and services revenues The Company’s portal software development and services revenues primarily include revenues from providing software development and other time and materials services to our government partners. The Company identifies each performance obligation in its software development and services contracts at contract inception, which are generally combined into a single promise. The contract pricing is either at stated billing rates per hour or a fixed amount. These contracts are generally short-term in nature and not longer than one year in duration. For services provided under software development and services agreements that result in the transfer of control over time, the underlying deliverable is owned and controlled by the customer and does not create an asset with an alternative use to the Company. The Company recognizes revenue on rate per hour contracts based on the amount billable to the customer, as the Company has the right to invoice the customer in an amount that directly corresponds with the value to the customer of the Company’s performance to date. For fixed fee contracts, the Company utilizes the input method and recognizes revenue based on the labor hours expended to date relative to the total hours expected to satisfy the contract performance obligation. This input measure of progress is used because it best depicts the transfer of assets to the customer, which occurs as the Company incurs costs to deliver the promise in the contracts. Certain software development and service contracts include substantive customer acceptance provisions. In contracts that include substantive customer acceptance provisions, the Company recognizes revenue at a point in time upon customer acceptance. Under its portal software development and services contracts, the Company typically does not have significant future performance obligations that extend beyond one year. As of June 30, 2018, the total transaction price allocated to unsatisfied performance obligations was approximately $4.6 million. Portal management revenues Portal management revenues primarily consist of revenues from providing recurring fixed fee portal management services for the Company’s government partner in Indiana. This contract has a single performance obligation to provide a broad scope of services to manage the digital government services for the state of Indiana. The Company satisfies its performance obligation by providing services to the state over time. The contract can be terminated without a penalty by the state with a 30-day notice, and accordingly, the period over which the Company performs services is commensurate with a month to month contract. Consideration consists of a fixed-monthly fee that is recognized monthly as the performance obligation is satisfied. As of June 30, 2018, the Company’s Indiana portal management contract had unsatisfied performance obligations for one month. The total transaction price allocated to the unsatisfied performance obligation is not significant. Unearned Revenues The Company records unearned revenues when cash payments are received or due in advance of the Company’s satisfaction of the performance obligation(s). At each balance sheet date, the Company determines the portion of unearned revenues that will be earned within one year and records that amount in other current liabilities in the consolidated balance sheets. The remainder, if any, is recorded in other long-term liabilities. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Unearned revenues at June 30, 2018 and December 31, 2017 were approximately $1.5 million and $1.4 million, respectively. The change in the deferred revenue balance for the six months ended June 30, 2018 is primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $2.4 million of revenues recognized that were included in the deferred revenue balance at the beginning of the period. |
OUTSOURCED GOVERNMENT CONTRACTS |
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OUTSOURCED GOVERNMENT CONTRACTS | OUTSOURCED GOVERNMENT CONTRACTS State enterprise contracts The Company’s outsourced state master 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 digital government services on an enterprise-wide basis on behalf of governments desiring to provide access to government information and to digitally complete government-based transactions. NIC typically markets the services and solicits consumers 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 statements of work with various agencies and divisions of the government to provide specific services and to conduct specific transactions. These statements of work preliminarily establish the pricing of the online 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. The Company is typically responsible for funding the up-front investments and ongoing operations and maintenance costs of digital government services, and generally owns all the intellectual property in connection with the applications developed under these contracts. After completion of a defined contract term or upon termination for cause, the government partner typically receives a perpetual, royalty-free license to use the applications and digital government services built by the Company only in its own state. However, certain enterprise applications, proprietary customer management, billing, payment processing and other software applications that the Company has developed and standardized centrally are provided to its government partners on a software-as-a-service (“SaaS”) basis, and thus would not be included in any royalty-free license. If the Company’s contract expires after a defined term or if its contract is terminated by a government partner for cause, the government agency would be entitled to take over the portal in place, and NIC would have no future revenue from, or obligation to, such former government partner, except as otherwise provided in the contract. 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, 16 contracts under which the Company provides enterprise-wide digital government services, as well as the Company’s contract with the Federal Motor Carrier Safety Administration (“FMCSA”), can be terminated by the other party without cause on a specified period of notice. Collectively, revenues generated from these contracts represented approximately 64% and 63% of the Company’s total consolidated revenues for the three and six months ended June 30, 2018, respectively. If any of these contracts is terminated without cause, the terms of the respective contract may require the government to pay the Company a fee to continue to use the Company’s applications in its portal. Under a typical state master 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. At June 30, 2018, the Company was bound by performance bond commitments totaling approximately $5.8 million on certain outsourced portal contracts. The following is a summary of the government contracts through which the Company currently generates significant revenue and has the ability to provide enterprise-wide outsourced digital government services to multiple government agencies:
Outsourced federal contract The Company’s subsidiary NIC Federal, LLC has a contract with the FMCSA to develop and manage the FMCSA’s Pre-Employment Screening Program (“PSP”) for motor carriers nationwide, using a transaction-based business model. In 2017, the FMCSA exercised the second of its two one-year renewal options, extending the current contract through August 31, 2018. The contract can be terminated by the FMCSA without cause on a specified period of notice. Expiring contracts There are currently 8 contracts under which the Company provides state enterprise-wide outsourced digital government services that have expiration dates within the 12-month period following June 30, 2018. Collectively, revenues generated from these contracts represented approximately 41% and 42% of the Company’s total consolidated revenues for the three and six months ended June 30, 2018, respectively. Although certain of these contracts have renewal provisions, any renewal is at the option of the Company’s government partner. 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, and NIC would have no future revenue from, or obligation to, such former government partner, except as otherwise provided in the contract. As previously disclosed, Texas NICUSA, LLC (“Texas NICUSA”) was selected to provide payment processing services set forth in the Texas.gov 3.0 Procurement RFO (the “Texas RFO”), but was not selected to provide the portal operations, maintenance and development services set forth in the Texas RFO. The current agreement between the state of Texas and Texas NICUSA expires on August 31, 2018 and the new payment processing services contract commences on September 1, 2018. On April 16, 2018, Texas NICUSA submitted a protest with the Texas Department of Information Resources (the "DIR") of the DIR's decision to award the contract relating to the portal operations, maintenance and development services to another vendor. In the protest, Texas NICUSA cited flaws in the procurement process and award decision. The protest was initially denied by the procurement department on May 10, 2018 and appealed by Texas NICUSA to DIR on May 24, 2018. There can be no assurance that the appeal submitted by Texas NICUSA will be successful, or that Texas NICUSA will ultimately be awarded a contract relating to portal operations, maintenance and development services if the appeal is upheld. The Texas portal accounted for approximately 20% of the Company's total consolidated revenues for the three and six months ended June 30, 2018 and 2017. Should the Company no longer provide portal operations, maintenance and development services after final resolution of the protest and the completion of the current Texas enterprise contract on August 31, 2018, the Company expects to substantially reduce its workforce in Texas. The Company will recognize employee termination expenses at the date the employee is notified, unless the employee is required to provide future service, in which case the benefits will be expensed ratably over the future service period. Total one-time severance-related and transition costs, which will be recognized in cost of portal revenues in the unaudited consolidated statement of income in the outsourced portal segment, are currently anticipated to approximate $1.0 million. The Company incurred $0.6 million in one-time severance-related and transition costs during the three months ended June 30, 2018. The Company expects the remainder to be incurred and paid out during the third quarter of 2018. The contract under which the Company’s subsidiary, NICUSA Inc. (“NICUSA”), managed digital government services for the state of Tennessee expired on March 31, 2017. For the six months ended June 30, 2017 revenues from the Tennessee portal contract were approximately $1.8 million. |
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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 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 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 0.6 million for three and six months ended June 30, 2017 and 0.7 million for the three and six months ended June 30, 2018. 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):
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STOCKHOLDERS' EQUITY |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||
STOCKHOLDER'S EQUITY | STOCKHOLDERS’ EQUITY The Company's Board of Directors declared and paid the following dividends (payment in millions) during the periods presented:
On July 30, 2018, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.08 per share, payable to stockholders of record as of September 5, 2018. The dividend, which is expected to total approximately $5.4 million, will be paid on September 19, 2018, out of the Company’s available cash. |
INCOME TAXES |
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INCOME TAXES | INCOME TAXES As previously disclosed, on December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law. The Tax Act, among other changes, reduces the statutory federal corporate income tax rate from 35.0% to 21.0%. The Company received the benefit of the reduced statutory federal corporate income tax rate starting January 1, 2018, which is partially offset by changes in certain deductions (most notably the elimination of the domestic production activities deduction). Due to the complexities of the new tax legislation, the SEC has issued Staff Accounting Bulletin 118 which allows for the recognition of provisional amounts during a measurement period similar to the measurement period used when accounting for business combinations. The Company will continue to assess the impact of the new tax legislation, as well as any related future regulations and rules, and will record any additional impacts as identified during the measurement period, if necessary. The following table reconciles the statutory federal tax rate and the Company's effective tax rate for the periods indicated:
The Company’s effective tax rate was approximately 24.3% and 24.6% for the three and six months ended June 30, 2018, respectively, compared to 35.2% and 34.5% for the three and six months ended June 30, 2017, respectively. The Company’s effective tax rate for the three and six months ended June 30, 2018 reflects the reduction of the statutory federal corporate income tax rate to 21% resulting from the Tax Act, the repeal of the domestic production activities deduction resulting from Tax Act and a tax deficit related to lower tax deductions for the vesting of restricted stock awards. The Company’s effective tax rate for the three and six months ended June 30, 2017 was not significantly different than the federal rate of 35%. |
STOCK BASED COMPENSATION |
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STOCK BASED COMPENSATION | STOCK BASED COMPENSATION During the first half of 2018, the Compensation Committee of the Board of Directors of the Company granted to certain management-level employees and executive officers, service-based restricted stock awards totaling 336,891 shares with a grant-date fair value totaling approximately $4.7 million. Such restricted stock awards vest beginning one year from the date of grant in annual installments of 25%. In addition, during the first half of 2018, non-employee directors of the Company were granted service-based restricted stock awards totaling 54,584 shares with a grant-date fair value of approximately $0.8 million. Such 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 records forfeitures when they occur. During the first half of 2018, the Compensation Committee of the Board of Directors of the Company granted to certain executive officers performance-based restricted stock awards pursuant to the terms of the Company’s executive compensation program totaling 177,730 shares with a grant-date fair value totaling approximately $2.4 million. This represents the maximum number of shares the executive officers can earn at the end of a three-year performance period ending December 31, 2020. The actual number of shares earned will be based on the Company’s performance related to the following performance criteria over the performance period:
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 dividends declared during the performance period, payable in the form of additional 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, 2017, the three-year performance period related to the performance-based restricted stock awards granted to certain executive officers on February 23, 2015 ended. Based on the Company’s actual financial results from 2015 through 2017, no shares or dividend equivalent shares were earned. The 91,820 shares subject to the awards were forfeited in the first quarter of 2018. 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 following table presents stock-based compensation expense included in the Company’s unaudited consolidated statements of income (in thousands):
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REPORTABLE SEGMENT AND RELATED INFORMATION |
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REPORTABLE SEGMENT AND RELATED INFORMATION | 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 under state enterprise contracts. The Other Software & Services category primarily includes the Company’s subsidiaries that provide software development and digital government services to federal agencies as well as other state and local governments. 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. There have been no significant intersegment transactions for the periods reported. The summary of significant accounting policies applies to all 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 months ended June 30, (in thousands):
The table below reflects summarized financial information for the Company’s reportable and operating segments for the six months ended June 30, (in thousands):
For each of the three and six months ended June 30, 2018 and June 30, 2017, the Company’s Texas portal contract accounted for approximately 20% of the Company’s total consolidated revenues. No other state portal contract accounted for more than 10% of the Company’s total consolidated revenues. |
SUBSEQUENT EVENT |
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Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT As previously announced, the Company signed and closed an Asset Purchase Agreement (“APA”) in July 2018 with a Maryland-based, privately held company, Leap Orbit LLC, to purchase a prescription drug monitoring program software technology platform, RxOrbit. The purchase price of the software technology platform and all ancillary and all associated incidental intangible assets consisted of an up-front payment of approximately $3.5 million and the potential of an additional approximately $3.5 million of future payments if certain conditions under the APA are met. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. ("U.S. GAAP"). The consolidated financial statements include all of the Company's direct and indirect wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring adjustments) necessary to fairly present the consolidated financial position and the results of operations and cash flows of the Company as of the dates and for the interim periods presented. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2017, including the notes thereto, set forth in the Company’s 2017 Annual Report on Form 10-K. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers ("ASC 606"), a new standard related to revenue recognition. Under this standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires expanded disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. On January 1, 2018, the Company adopted ASC 606, and all the related amendments, using the modified retrospective method for all contracts not completed as of the date of adoption. The adoption of ASC 606 represents a change in accounting principle for portal software development and services contracts that will more closely align revenue recognition with the delivery of Company’s services, which under certain contracts will result in the recognition of revenue over time as opposed to at a point in time. Upon adoption, there was not a significant cumulative adjustment to retained earnings on the Company’s balance sheet for this change in accounting principle. Under the modified retrospective method, the comparative information was not restated and continues to be reported under the accounting standards in effect for those periods. The impact to revenues for the three and six months ended June 30, 2018 was not significant as a result of applying ASC 606. Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which will update the existing guidance on accounting for leases and require new qualitative and quantitative disclosures about the Company’s leasing activities. The new standard requires the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. The new standard will become effective for the Company beginning with the first quarter 2019 and requires a modified retrospective transition approach. The Company is currently evaluating the effects that the standard will have on its consolidated financial statements, which the Company anticipates could be significant, due mainly to its non-cancellable operating leases for office space. As further described in Note 7, Commitments and Contingencies, to the Company’s 2017 Annual Report on Form 10-K, filed with the SEC on February 22, 2018, as of December 31, 2017, the Company had minimum lease commitments under non-cancellable operating leases totaling $16.0 million. Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The ASU will be effective for the Company beginning January 1, 2020, with early adoption permitted beginning January 1, 2019. Application of the standard will be through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the new standard and the estimated impact it will have on the Company’s consolidated financial statements. |
Revenue recognition | Revenue recognition The Company accounts for revenue in accordance with ASC 606, which the Company adopted on January 1, 2018. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales and usage-based taxes, if applicable, are excluded from revenues. Unearned Revenues The Company records unearned revenues when cash payments are received or due in advance of the Company’s satisfaction of the performance obligation(s). At each balance sheet date, the Company determines the portion of unearned revenues that will be earned within one year and records that amount in other current liabilities in the consolidated balance sheets. The remainder, if any, is recorded in other long-term liabilities. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Unearned revenues at June 30, 2018 and December 31, 2017 were approximately $1.5 million and $1.4 million, respectively. The change in the deferred revenue balance for the six months ended June 30, 2018 is primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $2.4 million of revenues recognized that were included in the deferred revenue balance at the beginning of the period. Transaction-based revenues The Company recognizes revenue from providing outsourced digital services to its government partners. Under these contracts, the Company agrees to provide continuous access to digital government services that allow consumers to complete secure transactions, such as applying for a permit, retrieving government records, or filing a government-mandated form or report. The contractual promise to provide continuous access to each of these digital government services is a single stand-ready performance obligation. Transaction-based fees earned by the Company are typically usage-based and calculated based on the number of transactions processed each day at the contractual net fee earned by the Company for each transaction. These usage-based fees are deemed to be variable consideration that meets the practical expedient within ASC 606-10-50-14(a) whereby the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these arrangements, the usage-based fees are fully constrained and recognized once the uncertainties associated with the constraint are resolved, which is when the related transactions occur each day. The Company satisfies its performance obligation by providing access to applications over the contractual term, and by processing transactions as they are initiated by consumers. The performance obligation is satisfied on the day in which the Company provides the access and it is used by the consumer. In most of its transaction-based revenue arrangements, the Company acts as an agent and recognizes revenue on a net basis. The gross transaction fees collected by the Company from consumers on behalf of its government partners are not recognized as revenue but are accrued as accounts payable when the services are provided at the time of the transactions. The Company must remit a certain amount or a percentage of these fees to government agencies regardless of whether the Company ultimately collects the fees from the consumer. As a result, trade accounts receivable and accounts payable reflect the gross amounts outstanding at the balance sheet dates. Under certain contracts, the Company’s government partners may receive consideration for a portion of the gross transaction fees. In circumstances where the Company receives a discernible benefit in the arrangement, the consideration paid to the government partner is recorded on a gross basis within costs of revenues. Otherwise, the consideration paid to the government partner is accounted for on a net basis as a reduction in the transaction-based fee recorded within net revenue. Portal software development and services revenues The Company’s portal software development and services revenues primarily include revenues from providing software development and other time and materials services to our government partners. The Company identifies each performance obligation in its software development and services contracts at contract inception, which are generally combined into a single promise. The contract pricing is either at stated billing rates per hour or a fixed amount. These contracts are generally short-term in nature and not longer than one year in duration. For services provided under software development and services agreements that result in the transfer of control over time, the underlying deliverable is owned and controlled by the customer and does not create an asset with an alternative use to the Company. The Company recognizes revenue on rate per hour contracts based on the amount billable to the customer, as the Company has the right to invoice the customer in an amount that directly corresponds with the value to the customer of the Company’s performance to date. For fixed fee contracts, the Company utilizes the input method and recognizes revenue based on the labor hours expended to date relative to the total hours expected to satisfy the contract performance obligation. This input measure of progress is used because it best depicts the transfer of assets to the customer, which occurs as the Company incurs costs to deliver the promise in the contracts. Certain software development and service contracts include substantive customer acceptance provisions. In contracts that include substantive customer acceptance provisions, the Company recognizes revenue at a point in time upon customer acceptance. Under its portal software development and services contracts, the Company typically does not have significant future performance obligations that extend beyond one year. As of June 30, 2018, the total transaction price allocated to unsatisfied performance obligations was approximately $4.6 million. Portal management revenues Portal management revenues primarily consist of revenues from providing recurring fixed fee portal management services for the Company’s government partner in Indiana. This contract has a single performance obligation to provide a broad scope of services to manage the digital government services for the state of Indiana. The Company satisfies its performance obligation by providing services to the state over time. The contract can be terminated without a penalty by the state with a 30-day notice, and accordingly, the period over which the Company performs services is commensurate with a month to month contract. Consideration consists of a fixed-monthly fee that is recognized monthly as the performance obligation is satisfied. As of June 30, 2018, the Company’s Indiana portal management contract had unsatisfied performance obligations for one month. The total transaction price allocated to the unsatisfied performance obligation is not significant. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Summary of Disaggregation of Revenue | The following table summarizes, by reportable and operating segment, our principal activities from which the Company generates revenue (in thousands):
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OUTSOURCED GOVERNMENT CONTRACTS (Tables) |
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Summary of Enterprise-Wide Outsourced Digital Government Services to Multiple Governments Agencies | The following is a summary of the government contracts through which the Company currently generates significant revenue and has the ability to provide enterprise-wide outsourced digital government services to multiple government agencies:
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EARNINGS PER SHARE (Tables) |
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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):
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STOCKHOLDERS' EQUITY (Tables) |
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Dividends Declared | The Company's Board of Directors declared and paid the following dividends (payment in millions) during the periods presented:
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INCOME TAXES Income Taxes (Tables) |
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Schedule of the Statutory Federal Tax Rate and Effective Tax Rate Reconciliation | The following table reconciles the statutory federal tax rate and the Company's effective tax rate for the periods indicated:
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STOCK BASED COMPENSATION (Tables) |
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Stock-based Compensation Expense | The following table presents stock-based compensation expense included in the Company’s unaudited consolidated statements of income (in thousands):
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REPORTABLE SEGMENT AND RELATED INFORMATION (Tables) |
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Schedule of Reportable and Operating Segments | The table below reflects summarized financial information for the Company’s reportable and operating segments for the three months ended June 30, (in thousands):
The table below reflects summarized financial information for the Company’s reportable and operating segments for the six months ended June 30, (in thousands):
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THE COMPANY - Additional Information (Detail) |
Jun. 30, 2018
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Accounting Policies [Abstract] | |
Number of business channels | 2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions |
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Accounting Policies [Abstract] | ||
Total minimum lease commitments | $ 16.0 | |
Transaction price allocated to unsatisfied performance obligation | $ 4.6 | |
Unearned revenue | 1.5 | $ 1.4 |
Revenue recognized that was included in the deferred revenue balance | $ 2.4 |
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Earnings Per Share [Abstract] | ||||
Unvested service-based restricted shares (in shares) | 700 | 600 | 700 | 600 |
Numerator | ||||
Net income | $ 17,011 | $ 12,769 | $ 32,520 | $ 26,754 |
Less: Income allocated to participating securities | (187) | (117) | (355) | (245) |
Net income available to common stockholders | $ 16,824 | $ 12,652 | $ 32,165 | $ 26,509 |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||||
Weighted average shares - basic (in shares) | 66,541 | 66,248 | 66,432 | 66,147 |
Performance-based restricted stock awards (in shares) | 20 | 0 | 15 | 0 |
Weighted average shares - diluted (in shares) | 66,561 | 66,248 | 66,447 | 66,147 |
Basic net income per share | ||||
Net income (in usd per share) | $ 0.25 | $ 0.19 | $ 0.48 | $ 0.40 |
Diluted net income per share | ||||
Net income (in usd per share) | $ 0.25 | $ 0.19 | $ 0.48 | $ 0.40 |
STOCKHOLDERS' EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 30, 2018 |
Jun. 19, 2018 |
May 01, 2018 |
Mar. 20, 2018 |
Jan. 29, 2018 |
Jun. 20, 2017 |
May 02, 2017 |
Mar. 21, 2017 |
Jan. 30, 2017 |
Jun. 30, 2018 |
|
Subsequent Event [Line Items] | ||||||||||
Dividends declared (in usd per share) | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | ||||||
Dividend payments | $ 5,400 | $ 5,400 | $ 5,400 | $ 5,300 | $ 10,755 | |||||
Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Dividends declared (in usd per share) | $ 0.08 | |||||||||
Dividend payments | $ 5,400 |
INCOME TAXES - Statutory Federal Income Tax and the Effective Income Tax Rate Reconciliation (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Statutory federal income tax rate | 21.00% | 35.00% | 21.00% | 35.00% |
Tax deficit (benefit) from restricted stock vestings | 0.20% | (0.30%) | 0.60% | (1.20%) |
Domestic production activities deductions | (0.00%) | (2.80%) | (0.00%) | (2.70%) |
Federal and state tax credits | (1.50%) | (1.30%) | (1.60%) | (1.30%) |
State income taxes | 2.30% | 1.90% | 2.30% | 1.80% |
Uncertain tax positions | 1.60% | 2.00% | 1.60% | 2.20% |
Nondeductible and other expenses | 0.70% | 0.70% | 0.70% | 0.70% |
Effective federal and state income tax rate | 24.30% | 35.20% | 24.60% | 34.50% |
INCOME TAXES - Additional Information (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Statutory federal income tax rate | 21.00% | 35.00% | 21.00% | 35.00% |
Effective tax rate | 24.30% | 35.20% | 24.60% | 34.50% |
STOCK BASED COMPENSATION - Stock Based Compensation Expenses (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 1,572 | $ 1,704 | $ 3,087 | $ 3,178 |
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 | 359 | 345 | 802 | 657 |
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 | 36 | 27 | 76 | 44 |
Selling & administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 1,177 | $ 1,332 | $ 2,209 | $ 2,477 |
REPORTABLE SEGMENT AND RELATED INFORMATION - Additional Information (Details) - segment |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Number of reportable segment | 1 | |||
Texas NICUSA, LLC | Customer Concentration Risk | Consolidated Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 20.00% | 20.00% | 20.00% | 20.00% |
SUBSEQUENT EVENT (Details) - Subsequent Event - Leap Orbit LLC $ in Millions |
1 Months Ended |
---|---|
Jul. 31, 2018
USD ($)
| |
Business Acquisition [Line Items] | |
Purchase price upfront payment | $ 3.5 |
Scenario, Forecast | |
Business Acquisition [Line Items] | |
Purchase price upfront payment | $ 3.5 |
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