News Details

OLATHE, Kan. - NIC Inc. (Nasdaq: EGOV), the leading provider of digital government services, announced results for the first quarter of 2020 that ended March 31, 2020, as compared to the first quarter of 2019.

• Total revenues of $91.1 million, a 7% increase.
• Operating income of $15.3 million, a 2% increase.
• Net income of $11.9 million, a 3% increase.
• Diluted earnings per share of 18 cents, a 6% increase.
• Adjusted EBITDA of $20.1 million, a 5% decrease.

Additional Financial Highlights:

• Same state revenues of $74.2 million, a 7% increase.
  • Same state transaction-based revenues from Interactive Government Services (IGS) increased 13%.
  • Same state transaction-based revenues from Driver History Records (DHR) decreased 4%.
  • Same state revenues from other services (development services & fixed fee management services) decreased 1%.
  • Revenues from the Company's operations in the state of Illinois were excluded from same state revenues in the current quarter because it did not generate comparable revenues for two full comparable periods.
• Financial results from the Company's Texas payment processing contract previously included in the State Enterprise category were included in the Software & Services category beginning in the first quarter of 2020. Financial results in the prior year quarter were reclassified to match the current quarter presentation.
• Software & Services revenues of $16.7 million, a 9% increase, driven by revenue growth from the Texas payment processing contract and by higher revenues from the Company's RxGov prescription drug monitoring business and recently acquired NIC Licensing Solutions business.
• During the first quarter of 2020, the Company purchased 241,180 shares of common stock under its $25 million repurchase program at a weighted average purchase price per share of $16.33 for a total purchase price of $3.9 million. The remaining $21.1 million authorized under the repurchase program is available for future share repurchases.
• On April 23, 2020, the Company's Board of Directors declared a regular quarterly cash dividend of 9 cents per share, payable to stockholders of record as of June 11, 2020. The dividend, which is expected to total approximately $6.1 million based on the current number of shares outstanding, will be paid on June 25, 2020 out of the Company's available cash.

"I commend our government partners and 1,000 employees across the country for the tremendous job they are doing to support the needs of citizens and businesses during a time when government offices are closed for the first time ever," said Harry Herington, NIC's Chief Executive Officer and Chairman of the Board. "Together, our teams have been working 24/7 to proactively address and respond to the onslaught of needs brought on by this pandemic and keep government open for business online. Since the beginning of the COVID-19 outbreak, we have launched more than 130 digital services in addition to dozens of cloud-based informational sites that connect government, citizens and businesses and address mission-critical areas such as unemployment filings, COVID-19 testing, nurse licensing and the procurement of personal protection equipment."

Operational Highlights:

Several of the Company's long-term government partners recently extended their relationships with the Company:

• Alabama extended its contract with the Company for one year.
• Kentucky extended its contract with the Company for two years. The extension includes four one-year renewal options, for a possible total of six years.
• The Company signed a new contract with the state of Louisiana Division of Administration, which allows the Company to continue providing digital services to the state for the next six years.
• New Jersey extended its contract with the Company for one year.
• Following a competitive rebid, the Company signed a new five-year contract with the state of New Mexico, which includes one five-year renewal term, which can be exercised at the state's option, for a possible total of ten years.
• The Federal Motor Carrier Safety Administration extended its contract with the Company to provide the Pre-Employment Screening Program for an additional six months through August 27, 2020. The contract has one sixth-month renewal option remaining.

The Company was also recently awarded a five-year contract with the state of Maine to provide RxGov as the state's prescription drug monitoring platform.

The Company recently finalized the implementation of its cannabis licensing solution for the state of Missouri and the state has contracted for an additional module, which NIC will be deploying over the next several months. The Company's contract in Missouri runs through mid-2024 with renewal options the state may exercise through mid-2026.

COVID-19 and Updated Full-Year 2020 Outlook:

NIC is evaluating the impact the COVID-19 pandemic will have on its business for the remainder of the year. Based on this ongoing evaluation, the Company currently expects to come in near the low end of its previously issued guidance for total revenues, which was $380.5 million, adjusted EBITDA, which was $88.5 million, and earnings per share, which was 76 cents. The Company's previous guidance for capital expenditures and capitalized software development costs for 2020 remains unchanged.

"Despite some unprecedented revenue softness resulting from the COVID-19 pandemic in the latter part of March, NIC is a stable, essential company helping government remain open for business. Furthermore, NIC is in a unique position of strength during these uncertain times with no debt, considerable cash in the bank and a resilient business model that is providing immense value to our government partners at a time when they need it the most," said Steve Kovzan, NIC's Chief Financial Officer.

First Quarter Earnings Call and Webcast Details

On April 27, 2020, the Company will host a call to discuss its 2020 first quarter financial and operational results, its updated full-year 2020 guidance, and to answer questions from the investment community. The call may also include a discussion of Company developments, and forward-looking and other material information about business and financial matters.

Dial-In Information

Webcast Information

To sign in and listen: The Webcast system is available at https://www.egov.com/investor-relations.html.

A replay of NIC's first quarter earnings call will be available by visiting https://www.egov.com/investor-relations.html.

About NIC

NIC Inc. (Nasdaq: EGOV) launched the digital government industry in 1992, and continues to lead it, providing a secure payment platform and thousands of digital government solutions across a network of more than 6,000 federal, state, and local government agencies. In addition, NIC is a leading provider of outdoor recreation solutions, with 1 out of 6 hunting and fishing licenses in the United States sold using an NIC service. The Company launched the nation's first personal assistant for government and comprehensive mobile device platform, Gov2Go^®, as well as the innovative, data-driven prescription drug monitoring platform, RxGov^®. More information is available at www.egov.com.

Non-GAAP Measures

In addition to the results presented in accordance with U.S. GAAP, the Company presents non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin. Adjusted EBITDA is defined as net income excluding interest, income tax expense, depreciation & amortization, stock-based compensation and other significant non-operating or non-recurring items that are considered expenses or income under U.S. GAAP. Adjusted EBITDA margin is defined as adjusted EBITDA divided by total revenues. These measures should be used in addition to, and not as a substitute for, revenues, operating income, operating income margin, net income, earnings per share or other measures of profitability, liquidity or other performance measures computed in accordance with U.S. GAAP. The Company believes the presentation of adjusted EBITDA and adjusted EBITDA margin is useful to investors and other users as these measures represent key supplemental information to compare and evaluate the Company's core underlying business results over time and with other companies. The non-GAAP measures used by the Company may not be comparable to similarly titled non-GAAP measures used by other companies. The attached schedule provides a full reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures. Adjusted EBITDA and adjusted EBITDA margin represent performance measures and are not intended to represent liquidity measures.

Cautionary Statement Regarding Forward-Looking Information

Any statements made in this release that do not relate to historical or current facts constitute forward-looking statements. These statements often address the Company's potential financial performance for the 2020 fiscal year or future fiscal years, estimates, projections, the expected length of contract terms, statements relating to the Company's business plans, objectives and expected operating results, statements relating to potential new contracts or renewals, statements relating to the Company's expected effective tax rate, statements relating to possible future dividends and share repurchases, statements related to the ongoing impact of the COVID-19 pandemic, and other possible future events, including potential acquisitions, and the assumptions upon which those statements are based. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. These risks include regional or national business, political, economic, competitive, social and market conditions, including various termination rights of the Company and its partners, the ability of the Company to renew existing contracts - in whole or in part, and to sign contracts with new federal, state, and local government agencies, the impact of potential information technology, cybersecurity or data security breaches or incidents, the Company's ability to identify and acquire suitable acquisition candidates and to successfully integrate any acquired businesses, and the impact the COVID-19 pandemic may have on demand for the Company's services, as well as its government agency partners, its workforce and the broader economy. You should not rely on any forward-looking statement as a prediction or guarantee about the future. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the sections titled "Risk Factors" and Cautions About Forward-Looking Statements" of the Company's most recent Forms 10-K and subsequent reports filed with the SEC. These filings are available at the SEC's website at www.sec.gov. Any forward-looking statements included in this release speak only as of the date of this release. Except as may be required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

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Angie Davids
Senior VP, Marketing and Communications
(913) 754-7054
angie.davids@egov.com