NIC Inc. (EGOV)
Q1 2008 Earnings Call
May 5, 2008 4:30 pm ET
Nancy Beaton - Director of Communications and IR
Harry Herington - CEO
Steve Kovzan - CFO
James Cakmak - Sidoti & Company
Jeff Evanson - Dougherty & Company
Herb Buchbinder - Wachovia Securities
Previous Statements by EGOV
» NIC Inc. Q4 2008 Earnings Call Transcript
» NIC Inc. Q3 2008 Earnings Call Transcript
» NIC Inc. Q2 2008 Earnings Call Transcript
I would now like to turn the conference to Nancy Beaton, Director of Communications and Investor Relations. Please go ahead, ma'am.
Thank you, operator. The press release for NIC’s first quarter earnings announcement was issued 30 minutes ago. For those of you that haven’t received the release, the announcement is available on our corporate website at nicusa.com. You may also call our headquarters at 1-877-234-3468 and Vanessa will fax the information to you.
Before we begin, let’s cover our customary Safe Harbor statement. Specifically, 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 2007 annual report on form 10-K filed March 17, 2008.
I would like to now introduce Harry Herington, Chief Executive Officer of NIC.
Thank you, Nancy. Welcome and Buenos Dias on this beautiful Cinco de Mayo afternoon. I want to thank everyone for joining us on our first quarter earnings call. I will begin with an overview of the company's performance and then our Chief Financial Officer, Steve Kovzan, will provide additional information about our finances. After that we will open up the call and take your questions.
But first, as you may have noticed, we have a new voice on the call. Nancy Beaton joined NIC in February, as the Director of Communications and Investor Relations. I have worked closely with Nancy over the past several months and believe she is a great addition to our team.
Before we get into the specifics for the first quarter, I would like to take this opportunity to remind everyone of the special dividend paid to shareholders in February. NIC paid a special cash dividend of $0.25 per share totaling approximately $15.7 million. The view of the executive team and the Board of Directors is the returning capital to the shareholders is a sound strategy and the special dividend demonstrates that. The tax treatment for the special dividend will be determined after the end of 2008 and will be dependent on our 2008 earnings.
In anticipation of your questions concerning future dividends, clearly we have demonstrated to our buyers for returning excess cash to investors. But we are not currently offering a regular dividend in order to maintain as much flexibility for the business as possible.
Now, back to the business at hand; 2008 is off to a solid start. First quarter numbers are inline with expectations and help to provide the momentum to meet our goals for the remainder of the year. On to the three topics of the first quarter, first our contract update, second is non-DMV growth and third I would like to talk about an interesting new alignment.
Let’s start with contract update. We are pleased to announce the three of our current partners have again awarded NIC the enterprise portal contract. In first quarter, NIC signed a long-term contract in both Hawaii and Maine following competitive rebids they issued in 2007 after original contract renewals were exhausted. In Hawaii NIC was awarded a five year contract through 2013 with multiple 3 year renewal opportunities. In Maine NIC was awarded a contract for up to 10 years which includes a four year contract with up to 6 years in extension.
Alabama has extended another annual renewal as part of its five year contract. We think these partners as well as all of our partners for their continued trust and look forward to providing the businesses and citizens of their states with improved ways to interact with government. We are placing extremely high value on keeping our existing business by being the best possible provider of eGovernment portals for our partners. We take every rebate and renewal very curiously.
As many of you know, I have directed the growth of the portal business for years, and I am passionate about the business and these relationships. A passion you will find in all of our employees. So, I would like to thank them for their efforts in the first quarter as well.
Now let's talk about the sales pipeline. As expected, 2008 is already a busy year for RFPs. I can tell you that we are seeing multiple signs of success from our sales investment and have a solid pipeline. As you may know, California and Texas have publicly stated their intention to award portal contracts in 2009. We know these opportunities will be fiercely competitive, but we firmly believe NICs enterprise portal model is superior and we are aggressively working to demonstrate the value we bring to these state.