By a News Reporter-Staff News Editor at Computer Weekly News -- NIC Inc. (NASDAQ: EGOV), the dominant provider of official eGovernment services, announced net income of $11.0 million and earnings per share of 17 cents on total revenues of $71.2 million for the three months ended June 30, 2014. In the second quarter of 2013, the Company reported net income of $10.8 million and earnings per share of 16 cents on total revenues of $65.9 million.
Quarterly portal revenues were a record $66.8 million, an 8 percent increase over second quarter 2013. On a same-state basis, portal revenues were $61.4 million in the current quarter, an 8 percent increase over the second quarter of 2013. Same-state, transaction-based revenues from Interactive Government Services (IGS, formerly referred to as non-DMV) rose 8 percent over second quarter 2013, with same-state revenues from driver history records (DHR, formerly referred to as DMV) up 9 percent, driven by DHR price increases in three states and continued transaction volume growth across several states. Same-state portal time & materials revenues rose 1 percent and same-state portal management revenues were up 3 percent for the quarter.
Current quarter revenues from the Company's newer portals in Pennsylvania, Wisconsin, and Connecticut totaled $2.3 million, $1.2 million, and $1.1 million, respectively. In the prior year quarter, revenues from the Pennsylvania portal were $2.5 million. The Wisconsin portal began generating revenues in the third quarter of 2013, and the Connecticut portal began generating revenues in the current quarter. Revenues from the Virginia state agency partnerships were $0.7 million in the current quarter, while revenues from the legacy Virginia state portal contract in the prior year quarter were $1.6 million. The legacy Arizona state portal contract expired on March 26, 2014, while revenues from this contract in the prior year quarter were $1.1 million.
"Adding a new partner is one of the most exciting times at NIC," said Harry Herington, NIC Chief Executive Officer and Chairman of the Board. "In January, it was great to welcome Connecticut as our newest partner. And, this quarter I was pleased to see Connecticut contributing to our solid financial results."
Portal gross profits were $28.3 million in the current quarter compared to $27.2 million in the prior year quarter. NIC's portal gross profit percentage was 42 percent in the current quarter, down from 44 percent in the prior year quarter, due mainly to lower gross profits from the Texas portal and from the expiration of the legacy Virginia and Arizona portal contracts.
Software & services revenues were $4.3 million in the current quarter, up 13 percent from the second quarter of 2013, driven in part by an increase in revenues from the federal Pre-employment Screening Program. As a result, software & services gross profits increased 18 percent from the prior year quarter to $3.1 million.
"Given our positive trajectory through the first half of 2014, we are currently on pace to comfortably meet or exceed the high end of our previously issued total revenue and earnings estimates for the year," said Steve Kovzan, NIC's Chief Financial Officer. Operational Highlights NIC subsidiaries recently won competitive bids for new, long-term contracts with several current government partners. The state of Iowa signed a two-year contract with Iowa Interactive, LLC to continue providing self-funded eGovernment services. The contract also includes renewals that the state can exercise to extend the contract through June 2020. Rhode Island Interactive, LLC signed a new contract with the state of Rhode Island. The new agreement includes a three-year base contract and renewal opportunities that could extend the contract to July 2019. The New Mexico Motor Vehicle Division (MVD) signed a new contract with New Mexico Interactive, LLC. The two-year contract includes renewal options that the MVD can exercise to extend the contract through June 2018. And, South Carolina Interactive, LLC was awarded a new five-year contract by the state of South Carolina that includes renewal options that the state can exercise to extend the contract through July 2021.
Kansas Information Consortium, Inc. was also awarded a new, long-term contract by the state of Kansas, ahead of its contract expiration date. The portal was awarded a new seven-year contract, which includes renewal options.
In addition to signing new long-term contracts, two NIC subsidiaries received contract extensions. Kentucky Interactive, LLC received a one-year contract extension from the Commonwealth of Kentucky and Indiana Interactive, LLC received a two-year contract extension from the state of Indiana. Second Quarter Earnings Call and Webcast Details On the call, the Company will discuss its 2014 second quarter, and answer questions from the investment community. The call may also include discussion of Company developments, and forward-looking and other material information about business and financial matters. Dial-In Information Thursday, August 7, 2014
4:30 p.m. (EDT)
Keywords for this news article include: Finance, NIC Inc., Software.
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