 |
NEWS RELEASEFor Immediate Release |
| Contact: Chris Neff 435-645-8898 cneff@nicusa.com |
NIC Reclassifies Certain First Quarter 2005 Financial Information
Reclassifications have no impact on gross profits, earnings, or cash flows
OLATHE, Kan. – May 6, 2005 – NIC Inc. (Nasdaq: EGOV) today announced that it has reclassified certain financial information as of and for the three months ended March 31, 2005, that was reported in its first quarter 2005 earnings release issued on May 2, 2005. NIC changed its accounting treatment for the $5.0 million pre-tax charge relating to its software and services engagement with the California Secretary of State. The reclassification had no impact on operating loss, net loss, net loss per share, or operating cash flows.
Selected financial information affected by this reclassification is presented in a table that accompanies this news release.
About NIC
NIC manages more eGovernment services than any provider in the world. The company helps government communicate more effectively with citizens and businesses by putting essential services online. NIC provides eGovernment solutions for 2,000 state and local agencies that serve more than 55 million people in the United States. Additional information is available at www.nicusa.com.
The statements in this release regarding continued implementation of NIC's business model and its development of new products and services are forward-looking statements. There are a number of important factors that could cause actual results to differ materially from those suggested or indicated by such forward-looking statements. These include, among others, the success of the Company in signing contracts with new states and government agencies, including continued favorable government legislation; NIC's ability to develop new services; existing states and agencies adopting those new services; acceptance of eGovernment services by businesses and citizens; competition; and general economic conditions and the other important cautionary statements and risk factors described in NIC's 2004 Annual Report on Form 10-K/A filed on March 16, 2005, with the Securities and Exchange Commission.
(financial tables follow)
NIC Inc.
FINANCIAL SUMMARY
(UNAUDITED)
Thousands except for per share amounts
Three months ended
March 31,
2005 2004
----------- -----------
(Revised)
Revenues:
Portal revenues $ 13,661 $ 12,231
Software and services revenues (2,381) 2,188
---------- ----------
Total revenues 11,280 14,419
---------- ----------
Cost of revenues:
Cost of portal revenues, exclusive of
depreciation & amortization 6,715 5,853
Cost of software & services revenues,
exclusive of depreciation & amortization 2,377 2,080
Selling & administrative 3,282 3,232
Depreciation & amortization 352 388
---------- ----------
Total operating expenses 12,726 11,553
---------- ----------
Operating income (loss) (1,446) 2,866
---------- ----------
Other income (expense):
Interest income 81 21
Interest expense - (5)
Equity in net loss of affiliates - (69)
Other income (expense), net (3) -
---------- -----------
Total other income (expense) 78 (53)
---------- ----------
Income (loss) before income taxes (1,368) 2,813
Income tax provision (benefit) (471) 1,211
---------- ----------
Net income (loss) $ (897) $ 1,602
========== ==========
Basic earnings (loss) per share: $ (0.02) $ 0.03
========== ==========
Diluted earnings (loss) per share: $ (0.02) $ 0.03
========== ==========
Weighted average shares outstanding:
Basic 59,402 58,744
========== ==========
Diluted 59,402 61,016
========== ==========
Key Financial Metrics:
Revenue growth - outsourced portals 12% 25%
Same state revenue growth - outsourced portals 16% 21%
Revenue growth - software & services (209%) (20%)
Gross profit percentage - outsourced portals 51% 52%
Gross profit percentage - software & services N/A 5%
Selling & administrative costs as a
percentage of revenue 29% 22%
Operating income margin percentage (13%) 20%
Portal Revenue Analysis (thousands)
DMV transaction-based $ 8,650 $ 7,879
Non-DMV transaction-based 4,371 3,343
Portal management 48 102
Software development 592 907
---------- ----------
Total $ 13,661 $ 12,231
========== ==========
NIC Inc.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
Thousands except for share amounts
March 31, December 31,
2005 2004
------------- ------------
(Revised)
ASSETS
Current assets:
Cash and cash equivalents $ 32,921 $ 30,769
Cash and cash equivalents - restricted 3,000 3,000
Marketable securities 4,000 -
Trade accounts receivable 20,448 17,610
Unbilled revenues 1,171 3,400
Deferred income taxes 1,166 433
Prepaid expenses & other current assets 1,117 1,312
------------ -----------
Total current assets 63,823 56,524
Property and equipment, net 2,386 2,603
Unbilled revenues 966 2,404
Deferred income taxes 31,432 31,274
Other assets 272 266
------------ -----------
Total assets $ 98,879 $ 93,071
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,462 $ 14,394
Accrued expenses 5,272 6,266
Application development contracts 1,523 -
Other current liabilities 128 151
------------ -----------
Total current liabilities 26,385 20,811
------------ -----------
Commitments and contingencies - -
Shareholders' equity:
Common stock, no par, 200,000,000 shares
authorized 59,640,534 and 59,301,375
shares issued and outstanding - -
Additional paid-in capital 202,031 200,921
Accumulated deficit (129,353) (128,456)
------------ -----------
72,678 72,465
Less treasury stock (184) (205)
------------ -----------
Total shareholders' equity 72,494 72,260
------------ -----------
Total liabilities and shareholders'
equity $ 98,879 $ 93,071
============ ===========
NIC Inc.
CASH FLOW SUMMARY
(UNAUDITED)
Thousands
Three months ended
March 31,
2005 2004
--------- --------
(Revised)
Cash flows from operating activities:
Net income (loss) $ (897) $ 1,602
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation & amortization 352 388
Application development contracts 1,523 2
Deferred income taxes (271) 1,246
Deferred income tax benefit relating to
stock options (310) (98)
Equity in net loss of affiliates - 69
Changes in operating assets and liabilities
(Increase) in trade accounts receivable (2,838) (2,486)
(Increase) decrease in unbilled revenues 3,667 (1,518)
Decrease in prepaid expenses & other
current assets 281 363
(Increase) decrease in other assets (6) 2
Increase in accounts payable 5,068 863
Increase (decrease) in accrued expenses (994) 1,526
Increase (decrease) in other current
liabilities (23) 28
-------- -------
Net cash provided by operating activities 5,552 1,987
-------- -------
Cash flows from investing activities:
Purchases of property and equipment (134) (626)
Purchases of marketable securities (7,000) -
Maturities of marketable securities 3,000 -
-------- --------
Net cash used in investing activities (4,134) (626)
-------- -------
Cash flows from financing activities:
Cash and cash equivalents - restricted - 38
Payments on note payable - (38)
Proceeds from employee common stock purchases 122 117
Proceeds from exercise of employee stock options 612 142
-------- -------
Net cash provided by financing activities 734 259
-------- -------
Net increase in cash and cash equivalents 2,152 1,620
Cash and cash equivalents, beginning of period 30,769 13,540
-------- -------
Cash and cash equivalents, end of period $ 32,921 $15,160
======== =======
NIC Inc.
SELECTED REVISED FINANCIAL INFORMATION
(UNAUDITED)
Thousands except per share amounts
Three-months ended March 31, 2005
---------------------------------
Previously
Reported Revised Difference
----------- --------- ----------
Financial Summary:
Software & services revenues $ 1,047 $ (2,381) $ (3,428)
Total revenues 14,708 11,280 (3,428)
Cost of software & services
revenues,exclusive of
depreciation & amortization 5,805 2,377 (3,428)
Total operating expenses 16,154 12,726 (3,428)
Operating income (loss) (1,446) (1,446) -
Net income (loss) (897) (897) -
Basic & diluted loss per
share (0.02) (0.02) -
Cash Flow Summary:
Application development
contracts 4,951 1,523 (3,428)
Decrease in unbilled
revenues 239 3,667 3,428
Net cash provided by
operating activities 5,552 5,552 -
As of March 31, 2005
--------------------------------
Previously
Reported Revised Difference
----------- --------- ----------
Consolidated Balance Sheet:
Unbilled revenues-current
portion $ 3,161 $ 1,171 $ (1,990)
Deferred income taxes-
current portion 2,499 1,166 (1,333)
Total current assets 67,146 63,823 (3,323)
Unbilled revenues - long-
term portion 2,404 966 (1,438)
Deferred income taxes-long-
term portion 30,099 31,432 1,333
Total assets 102,307 98,879 (3,428)
Application development
contracts 4,951 1,523 (3,428)
Total current liabilities 29,813 26,385 (3,428)
Total liabilities and
shareholders' equity 102,307 98,879 (3,428)
-- 30 --