-----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, O+yuDgKt1oUMGOzR5+oTGupZL6Ht/V+yhgD/V7WBgLrqgKIG7hZC8F82QsPzE71b qxL84Upb/OzurGsX4kg7kA== 0001157523-06-007445.txt : 20060727 0001157523-06-007445.hdr.sgml : 20060727 20060727080027 ACCESSION NUMBER: 0001157523-06-007445 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060727 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060727 DATE AS OF CHANGE: 20060727 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: 06982918 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 a5197016.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): July 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 July 27, 2006, NIC Inc. issued a press release announcing 2006 second 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 July 27, 2006, NIC Inc. issued a press release announcing 2006 second 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 second quarter earnings information at 9:00 a.m., EDT, on July 27, 2006. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99 - Press release issued by NIC Inc. dated July 27, 2006, announcing 2006 second quarter earnings information, furnished solely for purposes of incorporation by reference to Items 2.02 and 7.01 herein. 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: July 27, 2006 /s/ Stephen M. Kovzan --------------------- Stephen M. Kovzan Vice President, Financial Operations Chief Accounting Officer EX-99 2 a5197016ex99.txt EXHIBIT 99 Exhibit 99 NIC Earns 5 Cents Per Share on Record Operating Income of $5.0 Million During the Second Quarter OLATHE, Kan.--(BUSINESS WIRE)--July 27, 2006--NIC Inc. (NASDAQ:EGOV) today reported net income of $3.2 million and earnings per share of 5 cents on total revenues of $18.8 million for the three months ended June 30, 2006. Driven by strong performance in NIC's core portal business, net income rose 31 percent over the same period last year. Operating income was a record $5.0 million in the second quarter, up 27 percent over second quarter 2005. The Company posted net income of $2.5 million and earnings per share of 4 cents on total revenues of $15.6 million in second quarter 2005. For the second quarter of 2006, portal revenues of $17.8 million were the highest in the Company's history, up 24 percent over the prior year quarter. On a same-state basis, portal revenues grew 9 percent in the second quarter. NIC's online hunting & fishing license, professional license renewal, and income tax filing services performed well in the second quarter, helping same-state revenues from non-driver record exchange (non-DMV) services to increase 18 percent over the prior year quarter. Driven partially by strong performance from the Company's two newest portals in South Carolina and Colorado, revenues from driver record exchange (DMV) services grew 25 percent during the quarter. In line with expectations, same-state DMV revenues increased 2 percent over second quarter 2005. "The consistent performance of our core portal business is reflected in our second quarter results," said Jeff Fraser, Chief Executive Officer of NIC. "We continue to reinforce our position as the market leader in building and marketing eGovernment services that deliver value to our government partners and the citizens and businesses they serve." In the second quarter, NIC's portals launched 66 new non-DMV revenue-generating services and another 140 applications are in the development pipeline. "We continue to see great opportunity to both build new services and cross-sell existing applications across our base of 18 state partners," said Harry Herington, President of NIC. Reflecting the continued wind-down of the software and services business, software and services revenues in the second quarter were $1.0 million, down 21 percent from the prior year quarter. Selling and administrative expenses for the current quarter were $3.6 million, a 9 percent increase from the prior year quarter. As a percentage of portal revenues, selling and administrative expenses were 20 percent, down from 23 percent in second quarter 2005. NIC ended the quarter with $68.3 million in cash and marketable securities, up $2.7 million from March 31, 2006. Operating Highlights In late June, the state of Indiana and NIC signed a new portal development and maintenance contract with a funding model that includes recurring fixed monthly fees as well as transaction- and project-based pricing. The contract has a baseline value of $18 million and a potential value of $44 million over the initial four-year term. During the second quarter, a multiyear portal management contract renewal was issued by the state of Maine, and one-year contract extensions were also granted by the states of Oklahoma and South Carolina. "There is significant upside potential in the Indiana contract and we are eager to continue developing innovative solutions for the state. We believe our success in Indiana will generate new growth opportunities in states that want to work with NIC but have not yet been able to initiate self-funded procurements. I also want to thank our partners in Maine, Oklahoma, and South Carolina for their ongoing votes of confidence. We look forward to further expanding our eGovernment efforts in each of these states," concluded Fraser. Third Quarter 2006 Outlook For third quarter 2006, NIC expects total revenues of $17.0 - $17.3 million, portal revenues of $16.5 - $16.8 million, and software and services revenues of approximately $0.5 million. The Company also anticipates operating income between $3.0 - $3.2 million and net income of $2.0 - $2.2 million. "NIC's third quarter guidance reflects two items that we expect will impact our performance over the next two quarters," said Eric Bur, NIC's Chief Financial Officer. "Retaining our key employees is an important component of NIC's future growth, and we adjusted compensation for top producers at the end of the second quarter to better align with the market. We also anticipate reduced revenues from the Indiana contract while we ramp up variable services through the year." NIC's third quarter estimates do not include any new portal contracts. Second Quarter Earnings Webcast Details Webcast Information Thursday, July 27, 2006 9:00 a.m. (EDT) Call leaders: Jeff Fraser, Chief Executive Officer Harry Herington, President Eric Bur, Chief Financial 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 October 26, 2006, by visiting www.nicusa.com/investor. An audio replay of NIC's second quarter earnings call will be available until 11:00 p.m. (EDT) on August 3 by dialing 1-800-405-2236 and using passcode 11065538. The conference call replay will also be available 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 company information is available at www.nicusa.com. The statements in this release regarding continued implementation of NIC's business model and its development of new products and services are forward-looking statements. There are a number of important factors that could cause actual results to differ materially from those suggested or indicated by such forward-looking statements. These include, among others, the success of the Company in signing contracts with new states and government agencies, including continued favorable government legislation; NIC's ability to develop new services; existing states and agencies adopting those new services; acceptance of eGovernment services by businesses and citizens; competition; and general economic conditions and the other important cautionary statements and risk factors described in NIC's 2005 Annual Report on Form 10-K filed on March 16, 2006, with the Securities and Exchange Commission. (financial tables follow) NIC Inc. FINANCIAL SUMMARY (UNAUDITED) Thousands except for per share amounts Three months ended Six months ended June 30, June 30, 2006 2005 2006 2005 -------- -------- -------- -------- Revenues: Portal revenues $17,794 $14,386 $34,783 $28,047 Software & services revenues 968 1,231 (274) (1,150) -------- -------- -------- -------- Total revenues 18,762 15,617 34,509 26,897 -------- -------- -------- -------- Operating expenses: Cost of portal revenues, exclusive of depreciation & amortization 8,931 7,093 17,208 13,808 Cost of software & services revenues, exclusive of depreciation & amortization 767 948 (563) 3,325 Selling & administrative 3,560 3,277 6,988 6,559 Depreciation & amortization 525 368 1,030 720 -------- -------- -------- -------- Total operating expenses 13,783 11,686 24,663 24,412 -------- -------- -------- -------- Operating income 4,979 3,931 9,846 2,485 -------- -------- -------- -------- Other income (expense): Interest income 498 155 878 236 Equity in net loss of affiliates - - (97) - Other income (expense), net - - - (3) -------- -------- -------- -------- Total other income (expense) 498 155 781 233 -------- -------- -------- -------- Income before income taxes 5,477 4,086 10,627 2,718 Income tax provision 2,232 1,616 4,464 1,145 -------- -------- -------- -------- Net income $3,245 $2,470 $6,163 $1,573 ======== ======== ======== ======== Basic net income per share $0.05 $0.04 $0.10 $0.03 ======== ======== ======== ======== Diluted net income per share $0.05 $0.04 $0.10 $0.03 ======== ======== ======== ======== Weighted average shares outstanding: Basic 61,370 59,832 61,250 59,618 ======== ======== ======== ======== Diluted 61,828 60,794 61,713 60,736 ======== ======== ======== ======== Key Financial Metrics: Revenue growth - outsourced portals 24% 17% 24% 15% Same state revenue growth - outsourced portals 9% 18% 9% 17% Gross profit percentage - outsourced portals 50% 51% 51% 51% Selling & administrative costs as a percentage of revenue 20% 23% 20% 23% Portal Revenue Analysis (thousands): DMV transaction-based $10,837 $8,650 $22,014 $17,300 Non-DMV transaction-based 6,297 5,295 11,559 9,647 Software development & portal management 660 441 1,210 1,100 -------- -------- -------- -------- Total $17,794 $14,386 $34,783 $28,047 ======== ======== ======== ======== NIC Inc. CONSOLIDATED BALANCE SHEETS (UNAUDITED) Thousands except for share amounts June 30, December 31, 2006 2005 ----------- -------------- ASSETS Current assets: Cash and cash equivalents $34,826 $36,902 Marketable securities 33,500 20,500 Trade accounts receivable 26,732 22,269 Unbilled revenues 494 2,198 Deferred income taxes 759 421 Prepaid expenses & other current assets 1,440 1,632 --------- --------- Total current assets 97,751 83,922 Property and equipment, net 3,573 3,327 Unbilled revenues - 1,395 Deferred income taxes 24,508 28,916 Other assets 278 285 --------- --------- Total assets $126,110 $117,845 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $27,536 $24,458 Accrued expenses 4,811 6,642 Application development contracts 606 1,261 Other current liabilities 254 317 --------- --------- Total current liabilities 33,207 32,678 --------- --------- Commitments and contingencies - - Shareholders' equity: Common stock, no par, 200,000,000 shares authorized, 61,488,309 and 61,073,595 shares issued and outstanding - - Additional paid-in capital 209,001 207,444 Accumulated deficit (115,930) (122,093) --------- --------- 93,071 85,351 Less treasury stock (168) (184) --------- --------- Total shareholders' equity 92,903 85,167 --------- --------- Total liabilities and shareholders' equity $126,110 $117,845 ========= ========= CONTACT: NIC Inc. Chris Neff, 435-645-8898 cneff@nicusa.com -----END PRIVACY-ENHANCED MESSAGE-----