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NIC Inc. (EGOV)
Q4 2008 Earnings Call
February 4, 2009 4:30 p.m. ET
Nancy Beaton – Director of Communications and Investor Relations
Harry Herington – Chairman and Chief Executive Officer
Steve Kovzan – Chief Financial Officer
Charlie Anderson – Dougherty & Co.
Chad Bennett – Northland Securities
James Cakmak – Sidoti & Company
Previous Statements by EGOV
» NIC Inc. Q3 2008 Earnings Call Transcript
» NIC Inc. Q2 2008 Earnings Call Transcript
» NIC Inc. Q1 2008 Earnings Call Transcript
With that I'd like to turn the conference over to Ms. Nancy Beaton, Director of Investor Relations. Please go ahead.
Thank you, David. The press release for NIC's fourth quarter earnings announcement was issued 30 minutes ago. For those of you who haven't received the release, the announcement is available on our corporate web site at www.nicusa.com. You may also call our headquarters at 1-877-234-3468, and we will email you the information.
Before we begin, let's cover our customary Safe Harbor statement. Any statements contained in this release that do not relate to historical or current facts constitute forward-looking statements. These statements include NIC's financial guidance for the current fiscal year and statements regarding continued implementation of NIC's business model and its development of new products and services. Forward-looking statements are subject to inherent risks and uncertainties and there could be no assurance that such statements will prove to be correct. 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 with the SEC on March 17, 2008 and NIC's Form 10-Q for the quarter ended September 30, 2008 filed with the SEC on November 6, 2008.
And now I would now like to introduce Harry Herington, Chairman of the Board and Chief Executive Officer of NIC.
Thank you, Nancy. Good afternoon and I want to thank everyone for joining us. I am very pleased with the news we are going to share today about our 2008 performance and NIC's outlook for 2009. Given the current economic climate, I think it is important to remind everyone that NIC is in a very different place strategically and financially than many other companies. We are in a great place. It's a good time to partner with NIC. It's a good time to work for NIC. And in my opinion, it's a great time to invest in NIC.
When we first started the company, we established three very straightforward principles to live by. We want to, number one, be the best government partner that our partners have worked with. Number two, be the best place our employees have ever worked. And number three, be the best investment our shareholders have ever made. I always say, if we deliver flawlessly on number one and number two, number three will take care of itself.
We have delivered on our partnerships through the strength of our self-funded model that provides revenue and cost savings to the State without using limited State budget dollars for support. As we will later discuss in these hard economic times, partners lain heavily on NIC for more services. And new states are even more interested in our model.
As for employees, let me just say we have the brightest and most dedicated team that has continued to step up to the plate for our partners. I have repeatedly told them it is their hard work and commitment that has enabled NIC to secure a strong hold in the market and continue to create opportunities for this company. The payoff of both of these is the positive results that we will share with you today.
On our last quarterly earnings call, we started with the obvious question, what impact has the economic downturn had on NIC? As much as we all wish this global crisis was behind us, it clearly is not. Every sector of the economy is facing challenges as a result. Yet NIC is fortunate that our business model and the manner in which we manage our business have largely insulated us from these issues. The business model we pioneered 17 years ago continues to succeed today. We are debt-free, generate consistent free cash flow and deliver growth.
However, we also recognize that the economy has taken its toll on our state partners and the business and citizens they serve. Reports of state budget shortfalls are commonplace as the discouraging series of private sector layoff, budget cuts and restructuring in the news everyday. We take this very seriously. If we're going to be the best partner government has ever worked with, we cannot ignore major challenges they face.
We believe our self-funded model places us in the perfect spot to assist our partners with the issues they are dealing with daily. Our solutions offer them tremendous savings and efficiencies and drives additional revenues into state coffers. We work with our state partners everyday to expand the services they provide to the citizens and businesses they serve through a proven model that does not require tax dollars or draws from the limited agency budgets. And because these end users are the ones who ultimately pay us, we look at the services they need and the impact of the economy on them as well. We have to provide them solution that saves them time and money.