COVER PAGE
COVER PAGE - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 26, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 000-26621 | |
Entity Registrant Name | NIC INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 52-2077581 | |
Entity Address, Address Line One | 25501 West Valley Parkway | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Olathe | |
Entity Address, State or Province | KS | |
Entity Address, Postal Zip Code | 66061 | |
City Area Code | 877 | |
Local Phone Number | 234-3468 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | EGOV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 66,959,777 | |
Entity Central Index Key | 0001065332 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 186,535 | $ 191,700 |
Trade accounts receivable, net | 113,116 | 80,904 |
Prepaid expenses & other current assets | 12,603 | 13,730 |
Total current assets | 312,254 | 286,334 |
Property and equipment, net | 10,956 | 10,256 |
Right of use lease assets, net | 11,924 | 0 |
Intangible assets, net | 23,195 | 13,604 |
Goodwill | 5,965 | 0 |
Other assets | 353 | 332 |
Total assets | 364,647 | 310,526 |
Current liabilities: | ||
Accounts payable | 83,708 | 60,092 |
Accrued expenses | 22,713 | 24,150 |
Lease liabilities | 4,077 | 0 |
Other current liabilities | 5,441 | 4,883 |
Total current liabilities | 115,939 | 89,125 |
Deferred income taxes, net | 1,757 | 781 |
Lease liabilities | 8,263 | 0 |
Other long-term liabilities | 9,346 | 8,931 |
Total liabilities | 135,305 | 98,837 |
Commitments and contingencies (Notes 2, 3, 4 and 6) | 0 | 0 |
Stockholders' equity: | ||
Common stock, $0.0001 par, 200,000 shares authorized, 66,956 and 66,569 shares issued and outstanding | 7 | 7 |
Additional paid-in capital | 120,204 | 117,763 |
Retained earnings | 109,131 | 93,919 |
Total stockholders' equity | 229,342 | 211,689 |
Total liabilities and stockholders' equity | $ 364,647 | $ 310,526 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (PARENTHETICAL) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 66,956,000 | 66,569,000 |
Common stock, shares outstanding (in shares) | 66,956,000 | 66,569,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Revenues | $ 91,566 | $ 92,498 | $ 176,747 | $ 179,223 |
Operating expenses: | ||||
Selling & administrative | 8,356 | 8,268 | 18,320 | 15,771 |
Enterprise technology & product support | 6,745 | 5,735 | 13,190 | 11,382 |
Depreciation & amortization | 3,130 | 2,145 | 5,551 | 4,210 |
Total operating expenses | 73,837 | 70,094 | 144,043 | 136,179 |
Operating income (loss) | 17,729 | 22,404 | 32,704 | 43,044 |
Other income: | ||||
Interest income | 577 | 57 | 1,181 | 58 |
Income before income taxes | 18,306 | 22,461 | 33,885 | 43,102 |
Income tax provision | 3,846 | 5,450 | 7,923 | 10,582 |
Net income | $ 14,460 | $ 17,011 | $ 25,962 | $ 32,520 |
Basic net income per share (in usd per share) | $ 0.21 | $ 0.25 | $ 0.38 | $ 0.48 |
Diluted net income per share (in usd per share) | $ 0.21 | $ 0.25 | $ 0.38 | $ 0.48 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 66,940 | 66,541 | 66,806 | 66,432 |
Diluted (in shares) | 66,940 | 66,561 | 66,806 | 66,447 |
State enterprise | ||||
Revenues: | ||||
Revenues | $ 82,829 | $ 86,555 | $ 160,085 | $ 167,346 |
Operating expenses: | ||||
Cost of revenues, exclusive of depreciation & amortization | 52,277 | 51,711 | 100,933 | 100,353 |
Software & services | ||||
Revenues: | ||||
Revenues | 8,737 | 5,943 | 16,662 | 11,877 |
Operating expenses: | ||||
Cost of revenues, exclusive of depreciation & amortization | $ 3,329 | $ 2,235 | $ 6,049 | $ 4,463 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net cumulative effect of adoption of accounting standard | $ 208 | $ 208 | ||
Beginning balance (in shares) at Dec. 31, 2017 | 66,271 | |||
Beginning balance at Dec. 31, 2017 | 168,242 | $ 7 | $ 111,275 | 56,960 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 15,508 | 15,508 | ||
Dividends declared | (5,370) | (5,370) | ||
Dividend equivalents on unvested performance-based restricted stock awards | 0 | 34 | (34) | |
Dividend equivalents cancelled upon forfeiture of performance-based restricted stock awards | 0 | (140) | 140 | |
Restricted stock vestings (in shares) | 202 | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings (in shares) | (81) | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings | (1,132) | (1,132) | ||
Stock-based compensation | 1,511 | 1,511 | 0 | |
Issuance of common stock under employee stock purchase plan (in shares) | 122 | |||
Issuance of common stock under employee stock purchase plan | 1,382 | 1,382 | 0 | |
Ending balance (in shares) at Mar. 31, 2018 | 66,514 | |||
Ending balance at Mar. 31, 2018 | 180,349 | $ 7 | 112,930 | 67,412 |
Beginning balance (in shares) at Dec. 31, 2017 | 66,271 | |||
Beginning balance at Dec. 31, 2017 | 168,242 | $ 7 | 111,275 | 56,960 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 32,520 | |||
Ending balance (in shares) at Jun. 30, 2018 | 66,556 | |||
Ending balance at Jun. 30, 2018 | 193,519 | $ 7 | 114,507 | 79,005 |
Beginning balance (in shares) at Mar. 31, 2018 | 66,514 | |||
Beginning balance at Mar. 31, 2018 | 180,349 | $ 7 | 112,930 | 67,412 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 17,011 | 17,011 | ||
Dividends declared | (5,385) | (5,385) | ||
Dividend equivalents on unvested performance-based restricted stock awards | 0 | 33 | (33) | |
Restricted stock vestings (in shares) | 44 | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings (in shares) | (2) | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings | (32) | (32) | ||
Stock-based compensation | 1,576 | 1,576 | 0 | |
Ending balance (in shares) at Jun. 30, 2018 | 66,556 | |||
Ending balance at Jun. 30, 2018 | $ 193,519 | $ 7 | 114,507 | 79,005 |
Beginning balance (in shares) at Dec. 31, 2018 | 66,569 | 66,569 | ||
Beginning balance at Dec. 31, 2018 | $ 211,689 | $ 7 | 117,763 | 93,919 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 11,502 | 11,502 | ||
Dividends declared | (5,402) | (5,402) | ||
Dividend equivalents on unvested performance-based restricted stock awards | 0 | 27 | (27) | |
Dividend equivalents cancelled upon forfeiture of performance-based restricted stock awards | 0 | (122) | 122 | |
Restricted stock vestings (in shares) | 364 | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings (in shares) | (153) | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings | (2,609) | (2,609) | ||
Stock-based compensation | 2,272 | 2,272 | 0 | |
Shares issuable in lieu of dividend payments on performance-based restricted stock awards (in shares) | 3 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 128 | |||
Issuance of common stock under employee stock purchase plan | 1,443 | 1,443 | ||
Ending balance (in shares) at Mar. 31, 2019 | 66,911 | |||
Ending balance at Mar. 31, 2019 | $ 218,895 | $ 7 | 118,774 | 100,114 |
Beginning balance (in shares) at Dec. 31, 2018 | 66,569 | 66,569 | ||
Beginning balance at Dec. 31, 2018 | $ 211,689 | $ 7 | 117,763 | 93,919 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | $ 25,962 | |||
Ending balance (in shares) at Jun. 30, 2019 | 66,956 | 66,956 | ||
Ending balance at Jun. 30, 2019 | $ 229,342 | $ 7 | 120,204 | 109,131 |
Beginning balance (in shares) at Mar. 31, 2019 | 66,911 | |||
Beginning balance at Mar. 31, 2019 | 218,895 | $ 7 | 118,774 | 100,114 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 14,460 | 14,460 | ||
Dividends declared | (5,416) | (5,416) | ||
Dividend equivalents on unvested performance-based restricted stock awards | 0 | 27 | (27) | |
Restricted stock vestings (in shares) | 47 | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings (in shares) | (2) | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings | (28) | (28) | ||
Stock-based compensation | $ 1,431 | 1,431 | 0 | |
Ending balance (in shares) at Jun. 30, 2019 | 66,956 | 66,956 | ||
Ending balance at Jun. 30, 2019 | $ 229,342 | $ 7 | $ 120,204 | $ 109,131 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 25,962 | $ 32,520 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation & amortization | 5,551 | 4,210 |
Stock-based compensation expense | 3,703 | 3,087 |
Deferred income taxes | 976 | 614 |
Provision for (recoveries) losses on accounts receivable | (148) | 343 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable, net | (31,613) | 10,838 |
Prepaid expenses & other current assets | 1,130 | (170) |
Other assets | 2,191 | 262 |
Accounts payable | 23,616 | (19,460) |
Accrued expenses | (1,439) | (4,393) |
Other current liabilities | 32 | (209) |
Other long-term liabilities | (2,190) | 758 |
Net cash provided by operating activities | 27,771 | 28,400 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,831) | (2,411) |
Business combination | (10,000) | 0 |
Asset acquisition | (3,486) | 0 |
Capitalized software development costs | (4,607) | (3,503) |
Net cash used in investing activities | (20,924) | (5,914) |
Cash flows from financing activities: | ||
Cash dividends on common stock | (10,818) | (10,755) |
Proceeds from employee common stock purchases | 1,443 | 1,382 |
Tax withholdings related to stock-based compensation awards | (2,637) | (1,165) |
Net cash used in financing activities | (12,012) | (10,538) |
Net (decrease) increase in cash | (5,165) | 11,948 |
Cash, beginning of period | 191,700 | 160,777 |
Cash, end of period | 186,535 | 172,725 |
Non-cash investing activities: | ||
Contingent consideration - business combination | 960 | 0 |
Capital expenditures accrued but not yet paid | 0 | 166 |
Cash payments: | ||
Income taxes paid, net | $ 6,925 | $ 8,883 |
THE COMPANY
THE COMPANY | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
THE COMPANY | THE COMPANY NIC Inc., together with its subsidiaries (the "Company" or "NIC") is a leading provider of digital government services that help governments use technology to provide a higher level of service to businesses and citizens and increase efficiencies. The Company accomplishes this currently through two channels: its state enterprise businesses and its software & services businesses. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”). The consolidated financial statements include all the Company's direct and indirect wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring adjustments) necessary to fairly present the consolidated financial position and the results of operations, changes in stockholders' equity and cash flows of the Company as of the dates and for the interim periods presented. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2018 , including the notes thereto, set forth in the Company’s 2018 Annual Report on Form 10-K. Certain amounts in the consolidated statements of income for the three and six months ended June 30, 2018 were reclassified to conform to the current year presentation. The reclassification had no impact on net income or cash flows for the period ended June 30, 2018 . Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 . Recently issued accounting pronouncements Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which requires the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Expenses are recognized in the statement of income in a manner similar to current accounting guidance. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. On January 1, 2019, the Company adopted the standard and all the related amendments, using a modified retrospective approach at the beginning of the period of adoption. Under this approach, the comparative information was not restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company not to reassess (i) whether expired or existing contracts contain a lease under the new standard, or (ii) the lease classification for expired or existing leases. In addition, the Company did not elect to use hindsight and excluded any lease contracts with terms of twelve months or less during transition. The adoption of the standard resulted in the recognition of ROU lease assets and lease liabilities of $12.6 million and $12.9 million , respectively, as of January 1, 2019. The adoption of the standard did not have a significant impact on the Company’s consolidated earnings or cash flows for the three and six months ended June 30, 2019 . Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The ASU will be effective for the Company beginning January 1, 2020, with early adoption permitted beginning January 1, 2019. Application of the standard will be through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the new standard and the estimated impact it will have on the Company’s consolidated financial statements. Revenue recognition The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to receive in exchange for those goods or services. Disaggregation of Revenue The Company currently earns revenues from three main sources: (i) transaction-based fees, which consist of interactive government services (“IGS”), driver history records (“DHR”) and other transaction-based revenues, (ii) development services and (iii) fixed fee management services. The following table summarizes, by reportable and operating segment, the principal activities from which the Company generates revenue (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 State Enterprise Software & Services Consolidated Total State Enterprise Software & Services Consolidated Total IGS $ 55,537 $ — $ 55,537 105,691 — $ 105,691 DHR 23,413 — 23,413 47,098 — 47,098 Other — 8,737 8,737 — 16,662 16,662 Total transaction-based 78,950 8,737 87,687 152,789 16,662 169,451 Development services 2,642 — 2,642 4,821 — 4,821 Fixed fee management services 1,237 — 1,237 2,475 — 2,475 Total revenues $ 82,829 $ 8,737 $ 91,566 $ 160,085 $ 16,662 $ 176,747 Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 State Enterprise Software & Services Consolidated Total State Enterprise Software & Services Consolidated Total IGS $ 55,111 $ — $ 55,111 $ 105,379 $ — $ 105,379 DHR 26,645 — 26,645 53,883 — 53,883 Other — 5,943 5,943 — 11,877 11,877 Total transaction-based 81,756 5,943 87,699 159,262 11,877 171,139 Development services 3,562 — 3,562 5,609 — 5,609 Fixed fee management services 1,237 — 1,237 2,475 — 2,475 Total revenues $ 86,555 $ 5,943 $ 92,498 $ 167,346 $ 11,877 $ 179,223 Transaction-based revenues Under certain contracts with its government partners, the Company agrees to provide continuous access to digital government services that allow consumers to complete secure transactions, such as applying for a permit, retrieving government records, or filing a government-mandated form or report. The Company satisfies its performance obligation by providing access to applications over the contractual term and by processing transactions as they are initiated by consumers. The performance obligation is satisfied when the Company provides the access and it is used by the consumer. Development services revenues The Company earns development services revenues primarily under contracts to provide software development and other time and materials services to its government partners. These contracts are generally not longer than one year in duration. For services provided under development contracts, the performance obligation is either satisfied over time or at a point in time upon customer acceptance. Under its development services contracts, the Company typically does not have significant future performance obligations that extend beyond one year. As of June 30, 2019 , the total transaction price allocated to unsatisfied performance obligations was approximately $6.2 million . Fixed-fee management services revenues Fixed-fee management services revenues primarily consist of revenues from providing recurring fixed fee digital government services for the Company’s government partner in Indiana. As of June 30, 2019 , the Company’s Indiana contract had unsatisfied performance obligations for one month. The total transaction price allocated to the unsatisfied performance obligation is not significant. Unearned Revenues Unearned revenues at June 30, 2019 and December 31, 2018 were approximately $2.6 million and $1.7 million , respectively. The change in the deferred revenue balance for the six months ended June 30, 2019 is primarily driven by cash payments received or due in advance of satisfying the Company's performance obligations, offset by $4.7 million of revenues recognized that were included in the deferred revenue during the period. Leases All of the Company's lease arrangements are considered operating leases and are included in right of use lease assets and lease liabilities in the consolidated balance sheet. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the term of the lease. On the commencement date of a lease, the Company recognizes a lease liability and corresponding right of use lease asset based on the present value of lease payments over the lease term. Lease agreements generally do not provide an implicit rate and therefore the Company's incremental borrowing rate at the commencement date is used to determine the present value of lease payments. Accretion of the discount on the lease liability is calculated under the effective interest method and included in operating lease cost. The right of use asset also includes any initial direct costs and prepaid lease payments and excludes any lease incentives received by the lessor. The right of use asset is amortized over the lease term and is included in operating lease cost. The result is a single operating lease cost recognized on a straight-line basis over the term of the lease. Certain of the Company's leases have both lease and non-lease components. The Company has elected the practical expedient to account for these components as a single lease component for all leases. Business Combinations Assets acquired and liabilities assumed as part of a business acquisition are generally recorded at their fair value at the date of acquisition. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining the fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires the Company to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. The Company anticipates that its annual goodwill impairment test will be performed during the fourth quarter of its fiscal year. |
GOVERNMENT CONTRACTS
GOVERNMENT CONTRACTS | 6 Months Ended |
Jun. 30, 2019 | |
Contractors [Abstract] | |
GOVERNMENT CONTRACTS | GOVERNMENT CONTRACTS State enterprise contracts The Company’s state enterprise contracts generally have an initial multi-year term with provisions for renewals for various periods at the option of the government. The Company’s primary business obligation under these contracts is generally to design, build, and operate digital government services on an enterprise-wide basis on behalf of governments desiring to provide access to government information and to digitally complete government-based transactions. NIC typically markets the services and solicits consumers to complete government-based transactions and to enter into subscriber contracts permitting the user to access online applications and the government information contained therein in exchange for transactional and/or subscription user fees. The Company enters into statements of work with various agencies and divisions of the government to provide specific services and to conduct specific transactions. These statements of work preliminarily establish the pricing of the online transactions and data access services the Company provides and the division of revenues between the Company and the government agency. The government oversight authority must approve prices and revenue sharing agreements. The Company has limited control over the level of fees it is permitted to retain. The Company is typically responsible for funding the up-front development and ongoing operations and maintenance costs of digital government services and generally owns all the intellectual property in connection with the applications developed under these contracts. After completion of a defined contract term or upon termination for cause, the government partner typically receives a perpetual, royalty-free license to use the applications built by the Company only in its own state. However, certain enterprise applications, proprietary customer management, billing, payment processing and other software applications that the Company has developed and standardized centrally are provided to government partners on a software-as-a-service (“SaaS”) basis, and thus would not be included in any royalty-free license. If the Company’s contract expires after a defined term or if its contract is terminated by a government partner for cause, the government agency would be entitled to take over the applications in place, and NIC would have no future revenue from, or obligation to, such former government partner, except as otherwise provided in the contract. Any renewal of these contracts beyond the initial term by the government is optional and a government may terminate its contract prior to the expiration date if the Company breaches a material contractual obligation and fails to cure such breach within a specified period or upon the occurrence of other events or circumstances specified in the contract. In addition, 16 contracts under which the Company provides enterprise-wide digital government services, as well as the Company’s contract with the Federal Motor Carrier Safety Administration (“FMCSA”), can be terminated by the other party without cause on a specified period of notice. Collectively, revenues generated from these contracts represented approximately 59% of the Company’s total consolidated revenues for both the three and six months ended June 30, 2019 . If any of these contracts is terminated without cause, the terms of the respective contract may require the government to pay the Company a fee to continue to use the Company’s applications. Under a typical state enterprise contract, the Company is required to fully indemnify its government partners against claims that the Company’s services infringe upon the intellectual property rights of others and against claims arising from the Company’s performance or the performance of the Company’s subcontractors under the contract. At June 30, 2019 , the Company was bound by performance bond commitments totaling approximately $10.8 million on certain state enterprise contracts. Software & services contract The Company’s subsidiary NIC Federal, LLC has a contract with the FMCSA to develop and manage the FMCSA’s Pre-Employment Screening Program (“PSP”) for motor carriers nationwide, using a transaction-based business model. Expiring contracts There are currently 13 state enterprise contracts, as well as the Company's contract with the FMCSA, that have expiration dates within the 12 -month period following June 30, 2019 . Collectively, revenues generated from these contracts represented approximately 38% and 39% of the Company’s total consolidated revenues for the three and six months ended June 30, 2019 . Although four of these state enterprise contracts have renewal provisions, any renewal is at the option of the Company’s government partner. As described above, if a contract is not renewed after a defined term, the government partner would be entitled to take over the applications in place, and NIC would have no future revenue from, or obligation to, such former government partner, except as otherwise provided in the contract. The contract under which the Company managed digital government services for the state of Texas expired on August 31, 2018. The Texas contract accounted for approximately 20% of the Company's total consolidated revenue for both the three and six months ended June 30, 2018 . For the six months ended June 30, 2018 revenues from the Texas contract were $35.8 million |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations and Asset Acquisitions [Abstract] | |
ACQUISITIONS | ACQUISITIONS Complia, LLC On May 1, 2019, the Company completed the stock acquisition of Complia, LLC ("Complia"), a regulatory licensing platform business, which the Company rebranded as NIC Licensing Solutions. The Company acquired all outstanding equity of Complia, LLC for initial consideration of $10 million in cash. The sellers are eligible to earn additional cash consideration, up to $5 million , on new contracts that utilize the licensing platform through April 2022. The Company has recorded a liability of $1.0 million for the fair value of this contingent consideration at the date of acquisition as part of the consideration transferred. The fair value of the contingent consideration was determined using a scenario-based model, which includes inputs such as actual and projected earnings‑based measures, probability of achievement and a discount rate, that are not observable in the market. At each reporting period, the contingent consideration liability is recorded at fair value with any changes reflected in selling & administrative expenses. As of June 30, 2019, the Company estimated the total purchase consideration was $11.0 million . This transaction was accounted for as a business combination, and the purchase price was allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective fair values at the date of acquisition. The valuation of the acquired net assets remains preliminary while management completes its valuation, particularly the valuation of acquired intangible assets. The consolidated financial statements include the results of Complia's operations from the date of acquisition. Pro-forma results of operations, assuming this acquisition was made at the beginning of the earliest period presented, have not been presented because the effect of this acquisition was not material to the Company's results. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands). As of May 1, 2019 Current assets $ 451 Software 4,200 Customer relationships 425 Non-compete agreements 250 Trade name 35 Goodwill 5,965 Other assets 11 Total assets acquired 11,337 Accrued expenses and other liabilities (377 ) Net assets acquired $ 10,960 The goodwill was included within the Software & Services category, which is further described in Note 12, and represents future economic benefits that the Company expects to achieve as a result of the acquisition. The acquired capitalized software has an estimated amortization period of five years . The acquired customer relationships have an estimated amortization period of seven years . The non-compete and trade names each have an estimated amortization period of three years . The goodwill and intangible assets associated with this acquisition are deductible for tax purposes. Leap Orbit LLC During 2018, the Company entered into a purchase agreement to acquire certain prescription drug monitoring software technology assets of a Maryland-based, privately held company, Leap Orbit LLC ("Leap Orbit"). The purchase price consisted of initial cash consideration of approximately $3.6 million and potential additional consideration of approximately $3.5 million if certain conditions under the agreement were met. The transaction was accounted for as an asset acquisition, as substantially all the value related to the prescription drug monitoring software technology acquired. The Company paid the additional consideration of $3.5 million in the first half of 2019, which was included in the cost of the acquired assets in the consolidated balance sheet. The acquired software has an estimated amortization period of three years . The Company rebranded its prescription drug monitoring platform as RxGov. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET The Company recognized goodwill of $6.0 million as a result of the acquisition of Complia. See Note 4, Asset Acquisition, for additional information. Excluding goodwill, intangible assets, net consisted of the following (in thousands): June 30, 2019 December 31, 2018 Gross Carrying Value Accumulated Amortization Net Book Value Gross Carrying Value Accumulated Amortization Net Book Value Software development cost $ 26,767 $ (13,931 ) $ 12,836 $ 22,190 $ (11,647 ) $ 10,543 Purchased software 11,271 (1,589 ) 9,682 $ 3,555 $ (494 ) 3,061 Customer relationships 425 (17 ) 408 — — — Non-compete agreements 250 (14 ) 236 — — — Trade name 35 (2 ) 33 — — — Total $ 38,748 $ (15,553 ) $ 23,195 $ 25,745 $ (12,141 ) $ 13,604 During the six months ended June 30, 2019, the Company recorded approximately $7.7 million of intangible asset software purchases in connection with the Complia and Leap Orbit acquisitions, as further discussed in Note 4, Asset Acquisition. Amortization expense for intangible assets with finite lives was $2.0 million and $3.4 million for the three and six months ended June 30, 2019 , respectively, and $0.6 million and $1.3 million for the three and six months ended June 30, 2018 , respectively. Intangible asset amortization expense is currently expected to total $5.0 million for the remainder of 2019, $8.9 million for fiscal year 2020, $6.1 million for fiscal year 2021, $1.8 million for fiscal year 2022 and $0.9 million for fiscal year 2023. |
DEBT OBLIGATIONS AND COLLATERAL
DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS | DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS The Company has a revolving bank credit facility with Bank of America, N.A. Under the Amended and Restated Credit Agreement ("Credit Agreement"), the credit facility provides $10 million of unsecured financings available to finance working capital, issue letters of credit and finance general corporate purposes. The Credit Agreement also includes an accordion feature that allows the Company to increase the available capacity under the Credit Agreement to $50 million , subject to securing additional commitments from the bank. The Company can obtain letters of credit in an aggregate amount of $5 million , which reduces the maximum amount available for borrowing under the Credit Agreement. On May 1, 2019, the Company entered into Amendment No. 4 to Amended and Restated Credit Agreement (the “Amendment’), which amended the Credit Agreement, dated as of August 6, 2014, as previously amended, between the Company and Bank of America, N.A. The Amendment extended the maturity date of the Credit Agreement to May 1, 2021, and increased the purchase price of a permitted acquisition, as well as the aggregate purchase price of all such permitted acquisitions during the term of the Credit Agreement. Additionally, the Amendment removed the previous two-tier structure on interest rates and provided that the interest rate on any amounts borrowed by the Company under the Credit Agreement will be at (i) an annual rate adjusted daily and benchmarked to one-month LIBOR, plus a margin of 1.15% per annum, or (ii) an annual rate benchmarked to LIBOR with a term equivalent to such borrowing, plus a margin of 1.15% |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases office space and certain equipment under noncancelable operating leases. Leases have terms which range from one year to nine years , some of which include options to renew the lease. The exercise of lease renewal options are at the Company’s sole discretion and are included in the lease term when it is reasonably certain the Company will exercise the option based on economic factors. The weighted average remaining lease term for operating leases as of June 30, 2019 was 3.7 years . The aggregate future lease payments for operating leases as of June 30, 2019 and December 31, 2018 (which is under previous accounting standards), are as follows (in thousands): June 30, 2019 December 31, 2018 Fiscal Year 2019 (1) $ 2,384 $ 4,673 2020 3,770 3,403 2021 2,913 2,604 2022 2,389 2,082 2023 1,008 698 Thereafter 752 690 Total future minimum lease payments 13,216 14,150 Less: interest (876 ) N/A Total lease liabilities $ 12,340 N/A (1) The June 30, 2019 column excludes the six months ended June 30, 2019 . Other information related to operating leases is as follows (in thousands): June 30, 2019 Operating lease cost (1) $ 2,871 Weighted-average discount rate 3.7 % Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities 2,247 Right of use assets obtained in exchange for new lease liabilities (2) 14,136 (1) Includes short-term and variable lease costs, which are not significant. (2) Includes $12.6 million for operating leases existing on January 1, 2019 and $1.5 million for operating leases that commenced in the six months ended June 30, 2019 . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method for all periods presented. The two-class method is an earnings allocation formula that treats a participating security as having rights to undistributed earnings that would otherwise have been available to common stockholders. The Company’s service-based restricted stock awards contain non-forfeitable rights to dividends and are participating securities. Accordingly, service-based restricted stock awards were included in the calculation of earnings per share using the two-class method for all periods presented. Unvested service-based restricted shares totaled 0.7 million for both the three and six months ended June 30, 2019 and 2018. Basic earnings per share is calculated by first allocating earnings between common stockholders and participating securities. Earnings attributable to common stockholders are divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by giving effect to dilutive potential common shares outstanding during the period. The dilutive effect of shares related to the Company’s employee stock purchase plan is determined based on the treasury stock method. The dilutive effect of service-based restricted stock awards is based on the more dilutive of the treasury stock method or the two-class method assuming a reallocation of undistributed earnings to common stockholders after considering the dilutive effect of potential common shares other than the participating unvested restricted stock awards. The dilutive effect of performance-based restricted stock awards is based on the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended Six Months Ended 2019 2018 2019 2018 Numerator: Net income $ 14,460 $ 17,011 $ 25,962 $ 32,520 Less: Income allocated to participating securities (160 ) (187 ) (286 ) (355 ) Net income available to common stockholders $ 14,300 $ 16,824 $ 25,676 $ 32,165 Denominator: Weighted average shares - basic 66,940 66,541 66,806 66,432 Performance-based restricted stock awards — 20 — 15 Weighted average shares - diluted 66,940 66,561 66,806 66,447 Basic net income per share: $ 0.21 $ 0.25 $ 0.38 $ 0.48 Diluted net income per share: $ 0.21 $ 0.25 $ 0.38 $ 0.48 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
STOCKHOLDER'S EQUITY | STOCKHOLDERS’ EQUITY The Company's Board of Directors declared and paid the following dividends (payment in millions): Declaration Date Dividend per Share Record Date Payment Date Payment May 7, 2019 $0.08 June 11, 2019 June 25, 2019 $5.4 January 28, 2019 $0.08 March 5, 2019 March 19, 2019 $5.4 May 1, 2018 $0.08 June 5, 2018 June 19, 2018 $5.4 January 29, 2018 $0.08 March 6, 2018 March 20, 2018 $5.4 On July 29, 2019 , the Company’s Board of Directors declared a regular quarterly cash dividend of $0.08 per share, payable to stockholders of record as of September 6, 2019 . The dividend, which is expected to total approximately $5.4 million , will be paid on September 20, 2019 , out of the Company’s available cash. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's effective tax rate was 21.0% and 23.4% for the three and six months ended June 30, 2019 , respectively, compared to 24.3% and 24.6% three and six months ended June 30, 2018 , respectively. The decrease in the Company's effective tax rate for the three months ended June 30, 2019 was primarily driven by the release of uncertain tax positions as a result of the completion of an IRS examination of the Company's 2016 consolidated U.S. federal income tax return, which resulted in no changes to the Company's previously filed return. The Company remains subject to U.S. federal examination for amended tax returns filed in 2016 and the tax years ending after December 31, 2016. For the six months ended June 30, 2019, the effective tax rate was impacted by approximately $2.6 million |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION During the six months ended June 30, 2019 , the Compensation Committee of the Board of Directors of the Company granted to certain management-level employees and executive officers, service-based restricted stock awards totaling 305,743 shares with a grant-date fair value totaling approximately $5.2 million . Such restricted stock awards vest beginning one year from the date of grant in annual installments of 25% . In addition, during the first half of 2019, non-employee directors of the Company were granted service-based restricted stock awards totaling 47,560 shares with a grant-date fair value of approximately $0.8 million . Such restricted stock awards vest one year from the date of grant. Restricted stock is valued at the date of grant, based on the closing market price of the Company’s common stock, and expensed using the straight-line method over the requisite service period (generally the vesting period of the award). The Company records forfeitures when they occur. During the six months ended June 30, 2019 , the Compensation Committee of the Board of Directors of the Company granted performance-based restricted stock awards to certain executive officers pursuant to the terms of the Company’s executive compensation program totaling 111,135 shares with a grant-date fair value totaling approximately $1.9 million . This represents the maximum number of shares the executive officers can earn at the end of a three -year performance period ending December 31, 2021 . The actual number of shares earned will be based on the Company’s performance related to the following performance criteria over the performance period: • Operating income growth (three-year compound annual growth rate); and • Total consolidated revenue growth (three-year compound annual growth rate). At the end of the three -year period, the executive officers are eligible to receive up to a specified number of shares based on the Company’s performance relative to these performance criteria over the performance period. In addition, the executive officers will accrue dividend equivalents for any cash dividends declared during the performance period, payable in the form of additional shares of Company common stock, based on the maximum number of shares to be earned by the executive officers for each performance-based restricted stock award. Such hypothetical cash dividend payment shall be divided by the fair value of the Company’s common stock on the dividend payment date to determine the maximum number of notional shares to be awarded. At the end of the three -year performance period and on the date some or all the shares are paid under the agreement, a pro rata number of notional dividend shares will be converted into an equivalent number of dividend shares paid and granted to the executive officers based on the actual number of underlying shares earned during the performance period. At December 31, 2018 , the three-year performance period related to the performance-based restricted stock awards granted to certain executive officers on February 22, 2016 ended. Based on the Company’s actual financial results from 2016 through 2018 , 64,846 of the shares and 4,226 of dividend equivalent shares were earned. The remaining 73,345 shares subject to the awards were forfeited in the first quarter of 2019 . Stock-based compensation cost for performance-based restricted stock awards is measured at the grant date based on the fair value of shares expected to be earned at the end of the performance period and is recognized as expense over the performance period based on the probable number of shares expected to vest. The following table presents stock-based compensation expense included in the Company’s unaudited consolidated statements of income (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 State enterprise cost of revenues, exclusive of depreciation & amortization $ 395 $ 362 $ 757 $ 805 Software & services cost of revenues, exclusive of depreciation & amortization 21 36 56 76 Selling & administrative 857 1,021 2,572 1,858 Enterprise technology & product support 158 157 318 348 Stock-based compensation expense $ 1,431 $ 1,576 $ 3,703 $ 3,087 |
REPORTABLE SEGMENT AND RELATED
REPORTABLE SEGMENT AND RELATED INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
REPORTABLE SEGMENT AND RELATED INFORMATION | REPORTABLE SEGMENT AND RELATED INFORMATION The State Enterprise segment is the Company’s only reportable segment and generally includes the Company’s subsidiaries operating digital government services on an enterprise-wide basis for state and local governments. The Software & Services category primarily includes the Company’s subsidiaries that provide software development and digital government services, other than those provided on an enterprise-wide basis, to federal agencies as well as other state and local governments. Each of the Company’s businesses within the Software & Services category is an operating segment and has been grouped together to form the Software & Services category, as none of the operating segments meets the quantitative threshold of a separately reportable segment. There have been no significant intersegment transactions for the periods reported. The summary of significant accounting policies applies to all operating segments. The measure of profitability by which management, including the Company’s chief operating decision maker, evaluates the performance of its segments and allocates resources to them is operating income (loss). Segment assets or other segment balance sheet information is not presented to the Company’s chief operating decision maker. Accordingly, the Company has not presented information relating to segment assets. The table below reflects summarized financial information for the Company’s reportable and operating segments for the three months ended June 30, (in thousands): State Enterprise Software & Services Other Reconciling Items Consolidated Total 2019 Revenues $ 82,829 $ 8,737 $ — $ 91,566 Costs & expenses 52,277 3,329 15,101 70,707 Depreciation & amortization 647 196 2,287 3,130 Operating income (loss) $ 29,905 $ 5,212 $ (17,388 ) $ 17,729 2018 Revenues $ 86,555 $ 5,943 $ — $ 92,498 Costs & expenses 51,711 2,235 14,003 67,949 Depreciation & amortization 930 28 1,187 2,145 Operating income (loss) $ 33,914 $ 3,680 $ (15,190 ) $ 22,404 The table below reflects summarized financial information for the Company’s reportable and operating segments for the six months ended June 30, (in thousands): State Enterprise Software & Services Other Reconciling Items Consolidated Total 2019 Revenues $ 160,085 $ 16,662 $ — $ 176,747 Costs & expenses 100,933 6,049 31,510 138,492 Depreciation & amortization 1,283 217 4,051 5,551 Operating income (loss) $ 57,869 $ 10,396 $ (35,561 ) $ 32,704 2018 Revenues $ 167,346 $ 11,877 $ — $ 179,223 Costs & expenses 100,353 4,463 27,153 131,969 Depreciation & amortization 1,807 55 2,348 4,210 Operating income (loss) $ 65,186 $ 7,359 $ (29,501 ) $ 43,044 The legacy contract under which the Company managed digital government services for the state of Texas expired on August 31, 2018 and accounted for approximately 20% of the Company's total consolidated revenues for the three and six months ended June 30, 2018 . The Company's enterprise contract with the state of Colorado accounted for approximately 10% of the Company's total consolidated revenues for the three and six months ended June 30, 2019 . No other government partner accounted for more than 10% of the Company's total consolidated revenues for any period presented. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”). The consolidated financial statements include all the Company's direct and indirect wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring adjustments) necessary to fairly present the consolidated financial position and the results of operations, changes in stockholders' equity and cash flows of the Company as of the dates and for the interim periods presented. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2018 , including the notes thereto, set forth in the Company’s 2018 Annual Report on Form 10-K. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 |
Recently issued accounting pronouncements | Recently issued accounting pronouncements Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which requires the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Expenses are recognized in the statement of income in a manner similar to current accounting guidance. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. On January 1, 2019, the Company adopted the standard and all the related amendments, using a modified retrospective approach at the beginning of the period of adoption. Under this approach, the comparative information was not restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company not to reassess (i) whether expired or existing contracts contain a lease under the new standard, or (ii) the lease classification for expired or existing leases. In addition, the Company did not elect to use hindsight and excluded any lease contracts with terms of twelve months or less during transition. The adoption of the standard resulted in the recognition of ROU lease assets and lease liabilities of $12.6 million and $12.9 million , respectively, as of January 1, 2019. The adoption of the standard did not have a significant impact on the Company’s consolidated earnings or cash flows for the three and six months ended June 30, 2019 . Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The ASU will be effective for the Company beginning January 1, 2020, with early adoption permitted beginning January 1, 2019. Application of the standard will be through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the new standard and the estimated impact it will have on the Company’s consolidated financial statements. |
Revenue recognition | Revenue recognition The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to receive in exchange for those goods or services. Unearned Revenues Unearned revenues at June 30, 2019 and December 31, 2018 were approximately $2.6 million and $1.7 million , respectively. The change in the deferred revenue balance for the six months ended June 30, 2019 is primarily driven by cash payments received or due in advance of satisfying the Company's performance obligations, offset by $4.7 million of revenues recognized that were included in the deferred revenue during the period. Leases All of the Company's lease arrangements are considered operating leases and are included in right of use lease assets and lease liabilities in the consolidated balance sheet. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the term of the lease. On the commencement date of a lease, the Company recognizes a lease liability and corresponding right of use lease asset based on the present value of lease payments over the lease term. Lease agreements generally do not provide an implicit rate and therefore the Company's incremental borrowing rate at the commencement date is used to determine the present value of lease payments. Accretion of the discount on the lease liability is calculated under the effective interest method and included in operating lease cost. The right of use asset also includes any initial direct costs and prepaid lease payments and excludes any lease incentives received by the lessor. The right of use asset is amortized over the lease term and is included in operating lease cost. The result is a single operating lease cost recognized on a straight-line basis over the term of the lease. Certain of the Company's leases have both lease and non-lease components. The Company has elected the practical expedient to account for these components as a single lease component for all leases. Business Combinations Assets acquired and liabilities assumed as part of a business acquisition are generally recorded at their fair value at the date of acquisition. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining the fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires the Company to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. The Company anticipates that its annual goodwill impairment test will be performed during the fourth quarter of its fiscal year. Transaction-based revenues Under certain contracts with its government partners, the Company agrees to provide continuous access to digital government services that allow consumers to complete secure transactions, such as applying for a permit, retrieving government records, or filing a government-mandated form or report. The Company satisfies its performance obligation by providing access to applications over the contractual term and by processing transactions as they are initiated by consumers. The performance obligation is satisfied when the Company provides the access and it is used by the consumer. Development services revenues The Company earns development services revenues primarily under contracts to provide software development and other time and materials services to its government partners. These contracts are generally not longer than one year in duration. For services provided under development contracts, the performance obligation is either satisfied over time or at a point in time upon customer acceptance. Under its development services contracts, the Company typically does not have significant future performance obligations that extend beyond one year. As of June 30, 2019 , the total transaction price allocated to unsatisfied performance obligations was approximately $6.2 million . Fixed-fee management services revenues Fixed-fee management services revenues primarily consist of revenues from providing recurring fixed fee digital government services for the Company’s government partner in Indiana. As of June 30, 2019 , the Company’s Indiana contract had unsatisfied performance obligations for one month. The total transaction price allocated to the unsatisfied performance obligation is not significant. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of disaggregation of revenue | The following table summarizes, by reportable and operating segment, the principal activities from which the Company generates revenue (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 State Enterprise Software & Services Consolidated Total State Enterprise Software & Services Consolidated Total IGS $ 55,537 $ — $ 55,537 105,691 — $ 105,691 DHR 23,413 — 23,413 47,098 — 47,098 Other — 8,737 8,737 — 16,662 16,662 Total transaction-based 78,950 8,737 87,687 152,789 16,662 169,451 Development services 2,642 — 2,642 4,821 — 4,821 Fixed fee management services 1,237 — 1,237 2,475 — 2,475 Total revenues $ 82,829 $ 8,737 $ 91,566 $ 160,085 $ 16,662 $ 176,747 Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 State Enterprise Software & Services Consolidated Total State Enterprise Software & Services Consolidated Total IGS $ 55,111 $ — $ 55,111 $ 105,379 $ — $ 105,379 DHR 26,645 — 26,645 53,883 — 53,883 Other — 5,943 5,943 — 11,877 11,877 Total transaction-based 81,756 5,943 87,699 159,262 11,877 171,139 Development services 3,562 — 3,562 5,609 — 5,609 Fixed fee management services 1,237 — 1,237 2,475 — 2,475 Total revenues $ 86,555 $ 5,943 $ 92,498 $ 167,346 $ 11,877 $ 179,223 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations and Asset Acquisitions [Abstract] | |
Schedule of fair value of acquisition | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands). As of May 1, 2019 Current assets $ 451 Software 4,200 Customer relationships 425 Non-compete agreements 250 Trade name 35 Goodwill 5,965 Other assets 11 Total assets acquired 11,337 Accrued expenses and other liabilities (377 ) Net assets acquired $ 10,960 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of finite-lived intangible assets | Excluding goodwill, intangible assets, net consisted of the following (in thousands): June 30, 2019 December 31, 2018 Gross Carrying Value Accumulated Amortization Net Book Value Gross Carrying Value Accumulated Amortization Net Book Value Software development cost $ 26,767 $ (13,931 ) $ 12,836 $ 22,190 $ (11,647 ) $ 10,543 Purchased software 11,271 (1,589 ) 9,682 $ 3,555 $ (494 ) 3,061 Customer relationships 425 (17 ) 408 — — — Non-compete agreements 250 (14 ) 236 — — — Trade name 35 (2 ) 33 — — — Total $ 38,748 $ (15,553 ) $ 23,195 $ 25,745 $ (12,141 ) $ 13,604 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of future minimum lease payments | The aggregate future lease payments for operating leases as of June 30, 2019 and December 31, 2018 (which is under previous accounting standards), are as follows (in thousands): June 30, 2019 December 31, 2018 Fiscal Year 2019 (1) $ 2,384 $ 4,673 2020 3,770 3,403 2021 2,913 2,604 2022 2,389 2,082 2023 1,008 698 Thereafter 752 690 Total future minimum lease payments 13,216 14,150 Less: interest (876 ) N/A Total lease liabilities $ 12,340 N/A (1) The June 30, 2019 column excludes the six months ended June 30, 2019 . |
Schedule of other lease information | Other information related to operating leases is as follows (in thousands): June 30, 2019 Operating lease cost (1) $ 2,871 Weighted-average discount rate 3.7 % Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities 2,247 Right of use assets obtained in exchange for new lease liabilities (2) 14,136 (1) Includes short-term and variable lease costs, which are not significant. (2) Includes $12.6 million for operating leases existing on January 1, 2019 and $1.5 million for operating leases that commenced in the six months ended June 30, 2019 . |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended Six Months Ended 2019 2018 2019 2018 Numerator: Net income $ 14,460 $ 17,011 $ 25,962 $ 32,520 Less: Income allocated to participating securities (160 ) (187 ) (286 ) (355 ) Net income available to common stockholders $ 14,300 $ 16,824 $ 25,676 $ 32,165 Denominator: Weighted average shares - basic 66,940 66,541 66,806 66,432 Performance-based restricted stock awards — 20 — 15 Weighted average shares - diluted 66,940 66,561 66,806 66,447 Basic net income per share: $ 0.21 $ 0.25 $ 0.38 $ 0.48 Diluted net income per share: $ 0.21 $ 0.25 $ 0.38 $ 0.48 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of dividends declared | The Company's Board of Directors declared and paid the following dividends (payment in millions): Declaration Date Dividend per Share Record Date Payment Date Payment May 7, 2019 $0.08 June 11, 2019 June 25, 2019 $5.4 January 28, 2019 $0.08 March 5, 2019 March 19, 2019 $5.4 May 1, 2018 $0.08 June 5, 2018 June 19, 2018 $5.4 January 29, 2018 $0.08 March 6, 2018 March 20, 2018 $5.4 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | The following table presents stock-based compensation expense included in the Company’s unaudited consolidated statements of income (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 State enterprise cost of revenues, exclusive of depreciation & amortization $ 395 $ 362 $ 757 $ 805 Software & services cost of revenues, exclusive of depreciation & amortization 21 36 56 76 Selling & administrative 857 1,021 2,572 1,858 Enterprise technology & product support 158 157 318 348 Stock-based compensation expense $ 1,431 $ 1,576 $ 3,703 $ 3,087 |
REPORTABLE SEGMENT AND RELATE_2
REPORTABLE SEGMENT AND RELATED INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of reportable and operating segments | The table below reflects summarized financial information for the Company’s reportable and operating segments for the three months ended June 30, (in thousands): State Enterprise Software & Services Other Reconciling Items Consolidated Total 2019 Revenues $ 82,829 $ 8,737 $ — $ 91,566 Costs & expenses 52,277 3,329 15,101 70,707 Depreciation & amortization 647 196 2,287 3,130 Operating income (loss) $ 29,905 $ 5,212 $ (17,388 ) $ 17,729 2018 Revenues $ 86,555 $ 5,943 $ — $ 92,498 Costs & expenses 51,711 2,235 14,003 67,949 Depreciation & amortization 930 28 1,187 2,145 Operating income (loss) $ 33,914 $ 3,680 $ (15,190 ) $ 22,404 |
THE COMPANY (Detail)
THE COMPANY (Detail) | Jun. 30, 2019channel |
Accounting Policies [Abstract] | |
Number of business channels | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Right of use lease assets, net | $ 11,924 | $ 12,600 | $ 0 |
Lease liability | 12,340 | $ 12,900 | |
Transaction price allocated to unsatisfied performance obligation | 6,200 | ||
Unearned revenues | 2,600 | $ 1,700 | |
Revenues recognized that was included in the deferred revenue balance | $ 4,700 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 91,566 | $ 92,498 | $ 176,747 | $ 179,223 |
IGS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 55,537 | 55,111 | 105,691 | 105,379 |
DHR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 23,413 | 26,645 | 47,098 | 53,883 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 8,737 | 5,943 | 16,662 | 11,877 |
Total transaction-based | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 87,687 | 87,699 | 169,451 | 171,139 |
Development services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,642 | 3,562 | 4,821 | 5,609 |
Fixed fee management services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,237 | 1,237 | 2,475 | 2,475 |
Software & Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 8,737 | 5,943 | 16,662 | 11,877 |
Software & Services | IGS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Software & Services | DHR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Software & Services | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 8,737 | 5,943 | 16,662 | 11,877 |
Software & Services | Total transaction-based | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 8,737 | 5,943 | 16,662 | 11,877 |
Software & Services | Development services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Software & Services | Fixed fee management services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
State Enterprise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 82,829 | 86,555 | 160,085 | 167,346 |
State Enterprise | IGS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 55,537 | 55,111 | 105,691 | 105,379 |
State Enterprise | DHR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 23,413 | 26,645 | 47,098 | 53,883 |
State Enterprise | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
State Enterprise | Total transaction-based | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 78,950 | 81,756 | 152,789 | 159,262 |
State Enterprise | Development services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,642 | 3,562 | 4,821 | 5,609 |
State Enterprise | Fixed fee management services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,237 | $ 1,237 | $ 2,475 | $ 2,475 |
GOVERNMENT CONTRACTS (Details)
GOVERNMENT CONTRACTS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($)contract | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)contract | Jun. 30, 2018USD ($) | |
Contracts [Line Items] | ||||
Number of contracts that can be terminated (in contracts) | contract | 16 | 16 | ||
Performance bond commitments | $ 10,800 | $ 10,800 | ||
Revenues | 91,566 | $ 92,498 | 176,747 | $ 179,223 |
State enterprise | ||||
Contracts [Line Items] | ||||
Revenues | $ 82,829 | $ 86,555 | $ 160,085 | $ 167,346 |
Expiring contracts | ||||
Contracts [Line Items] | ||||
Number of contracts with renewal provisions (in contracts) | contract | 4 | |||
Number of services with expiration dates within 12-month period (in contracts) | contract | 13 | 13 | ||
Contract expiration period | 12 months | |||
Consolidated revenues | Customer concentration risk | Texas Legacy Contract | ||||
Contracts [Line Items] | ||||
Concentration risk percentage | 20.00% | 20.00% | ||
Consolidated revenues | Contracts that can be terminated without cause | Government contracts concentration risk | ||||
Contracts [Line Items] | ||||
Concentration risk percentage | 59.00% | 59.00% | ||
Consolidated revenues | Expiring contracts | Texas Legacy Contract | State enterprise | ||||
Contracts [Line Items] | ||||
Revenues | $ 35,800 | |||
Consolidated revenues | Expiring contracts | Government contracts concentration risk | ||||
Contracts [Line Items] | ||||
Concentration risk percentage | 38.00% | 39.00% |
ACQUISITIONS - Complia, LLC (De
ACQUISITIONS - Complia, LLC (Details) - USD ($) $ in Thousands | May 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Cash consideration transferred | $ 10,000 | $ 0 | ||
Complia LLC | ||||
Business Acquisition [Line Items] | ||||
Cash consideration transferred | $ 10,000 | |||
Potential max payout for earn-out | 5,000 | |||
Contingent consideration liability | 1,000 | |||
Consideration transferred | $ 11,000 | |||
Trade name | Complia LLC | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 3 years | |||
Non-compete agreements | Complia LLC | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 3 years | |||
Software | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 3 years | |||
Software | Complia LLC | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 5 years | |||
Customer relationships | Complia LLC | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 7 years |
ACQUISITIONS - Net Assets Acqui
ACQUISITIONS - Net Assets Acquired (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | May 01, 2019 | Dec. 31, 2018 |
Net Assets Acquired [Line Items] | |||
Goodwill | $ 5,965 | $ 0 | |
Complia LLC | |||
Net Assets Acquired [Line Items] | |||
Current assets | $ 451 | ||
Other assets | 11 | ||
Total assets acquired | 11,337 | ||
Accrued expenses and other liabilities | (377) | ||
Net assets acquired | 10,960 | ||
Software | Complia LLC | |||
Net Assets Acquired [Line Items] | |||
Intangible assets | 4,200 | ||
Customer relationships | Complia LLC | |||
Net Assets Acquired [Line Items] | |||
Intangible assets | 425 | ||
Non-compete agreements | Complia LLC | |||
Net Assets Acquired [Line Items] | |||
Intangible assets | 250 | ||
Trade name | Complia LLC | |||
Net Assets Acquired [Line Items] | |||
Intangible assets | $ 35 |
ACQUISITIONS - Leap Orbit LLC (
ACQUISITIONS - Leap Orbit LLC (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Asset Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 3.6 | |
Contingent consideration | $ 3.5 | |
Contingent consideration, decrease from payment | $ 3.5 | |
Software | ||
Asset Acquisition [Line Items] | ||
Amortization period | 3 years |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | May 01, 2019 | Dec. 31, 2018 | |
Intangible Assets [Line Items] | ||||||
Goodwill | $ 5,965 | $ 5,965 | $ 0 | |||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Gross Carrying Value | 38,748 | 38,748 | 25,745 | |||
Accumulated Amortization | (15,553) | (15,553) | (12,141) | |||
Net Book Value | 23,195 | 23,195 | 13,604 | |||
Amortization expense | 2,000 | $ 600 | 3,400 | $ 1,300 | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||||
2019 | 5,000 | 5,000 | ||||
2020 | 8,900 | 8,900 | ||||
2021 | 6,100 | 6,100 | ||||
2022 | 1,800 | 1,800 | ||||
2023 | 900 | 900 | ||||
Software development cost | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Gross Carrying Value | 26,767 | 26,767 | 22,190 | |||
Accumulated Amortization | (13,931) | (13,931) | (11,647) | |||
Net Book Value | 12,836 | 12,836 | 10,543 | |||
Purchased software | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Gross Carrying Value | 11,271 | 11,271 | 3,555 | |||
Accumulated Amortization | (1,589) | (1,589) | (494) | |||
Net Book Value | 9,682 | 9,682 | 3,061 | |||
Purchased software | Comlpia LLC and Leap Orbit | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Net Book Value | 7,700 | 7,700 | ||||
Customer relationships | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Gross Carrying Value | 425 | 425 | 0 | |||
Accumulated Amortization | (17) | (17) | 0 | |||
Net Book Value | 408 | 408 | 0 | |||
Non-compete agreements | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Gross Carrying Value | 250 | 250 | 0 | |||
Accumulated Amortization | (14) | (14) | 0 | |||
Net Book Value | 236 | 236 | 0 | |||
Trade name | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Gross Carrying Value | 35 | 35 | 0 | |||
Accumulated Amortization | (2) | (2) | 0 | |||
Net Book Value | $ 33 | $ 33 | $ 0 | |||
Software & services | Complia LLC | ||||||
Intangible Assets [Line Items] | ||||||
Goodwill | $ 5,965 |
DEBT OBLIGATIONS AND COLLATER_2
DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS (Details) - USD ($) | May 01, 2019 | Jun. 30, 2019 |
Debt Instrument [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 10,000,000 | |
Credit facility, increase available capacity under the credit agreement | 50,000,000 | |
Letter of credit | ||
Debt Instrument [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 5,000,000 | |
Line of Credit | LIBOR | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable rate | 1.15% |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Leases [Abstract] | |||
2019 | $ 2,384 | ||
2020 | 3,770 | ||
2021 | 2,913 | ||
2022 | 2,389 | ||
2023 | 1,008 | ||
Thereafter | 752 | ||
Total future minimum lease payments | 13,216 | ||
Less: imputed interest | (876) | ||
Total lease liabilities | $ 12,340 | $ 12,900 | |
2019 | $ 4,673 | ||
2020 | 3,403 | ||
2021 | 2,604 | ||
2022 | 2,082 | ||
2023 | 698 | ||
Thereafter | 690 | ||
Total future minimum lease payments | $ 14,150 |
LEASES - Other Information (Det
LEASES - Other Information (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 | Jun. 30, 2019 |
Lessee, Lease, Description [Line Items] | |||
Weighted-average remaining lease term | 3 years 8 months 12 days | 3 years 8 months 12 days | |
Operating lease cost | $ 2,871 | ||
Weighted-average discount rate | 3.70% | 3.70% | |
Cash paid for amounts included in the measurement of lease liabilities | $ 2,247 | ||
Right of use assets obtained in exchange for new lease liabilities | $ 1,500 | $ 12,600 | $ 14,136 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 1 year | 1 year | |
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 9 years | 9 years |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||||
Unvested service-based restricted shares (in shares) | 700,000 | 700,000 | 700,000 | 700,000 | ||
Numerator: | ||||||
Net income | $ 14,460 | $ 11,502 | $ 17,011 | $ 15,508 | $ 25,962 | $ 32,520 |
Less: Income allocated to participating securities | (160) | (187) | (286) | (355) | ||
Net income available to common stockholders | $ 14,300 | $ 16,824 | $ 25,676 | $ 32,165 | ||
Denominator: | ||||||
Weighted average shares - basic (in shares) | 66,940,000 | 66,541,000 | 66,806,000 | 66,432,000 | ||
Performance-based restricted stock awards (in shares) | 0 | 20,000 | 0 | 15,000 | ||
Weighted average shares - diluted (in shares) | 66,940,000 | 66,561,000 | 66,806,000 | 66,447,000 | ||
Basic net income per share (in usd per share) | $ 0.21 | $ 0.25 | $ 0.38 | $ 0.48 | ||
Diluted net income per share (in usd per share) | $ 0.21 | $ 0.25 | $ 0.38 | $ 0.48 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Subsequent Event [Line Items] | |||||
Dividends declared (in usd per share) | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | |
Dividend payments | $ 5,416 | $ 5,402 | $ 5,385 | $ 5,370 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared (in usd per share) | $ 0.08 | ||||
Dividend payments | $ 5,400 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Effective federal and state income tax rate | 21.00% | 24.30% | 23.40% | 24.60% | |
Severance costs | $ 2.6 |
STOCK BASED COMPENSATION - Addi
STOCK BASED COMPENSATION - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Restricted stock | Service Based | Employees and Executives | |||
Stock Based Compensation [Line Items] | |||
Share based compensation award shares granted in period (in shares) | 305,743 | ||
Share based compensation award granted in period grant-date fair value (in USD) | $ 5.2 | ||
Share based compensation award annual installment vesting rate | 25.00% | ||
Restricted stock | Service Based | Non-Employee Directors | |||
Stock Based Compensation [Line Items] | |||
Share based compensation award shares granted in period (in shares) | 47,560 | ||
Share based compensation award granted in period grant-date fair value (in USD) | $ 0.8 | ||
Restricted stock | Performance Based | Executives | |||
Stock Based Compensation [Line Items] | |||
Share based compensation award shares granted in period (in shares) | 111,135 | ||
Share based compensation award granted in period grant-date fair value (in USD) | $ 1.9 | ||
Share based compensation award vesting period from date of grant (in years) | 3 years | ||
Performance-based restricted stock | Performance Based, 2018 | |||
Stock Based Compensation [Line Items] | |||
Share based compensation, award shares earned in period (in shares) | 64,846 | ||
Share based compensation, dividend earned on shares subject to the awards (in shares) | 4,226 | ||
Share based compensation award forfeited shares (in shares) | 73,345 |
STOCK BASED COMPENSATION - Stoc
STOCK BASED COMPENSATION - Stock Based Compensation Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 1,431 | $ 1,576 | $ 3,703 | $ 3,087 |
Selling & administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 857 | 1,021 | 2,572 | 1,858 |
Enterprise technology & product support | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 158 | 157 | 318 | 348 |
State enterprise | Sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 395 | 362 | 757 | 805 |
Software & services | Sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 21 | $ 36 | $ 56 | $ 76 |
REPORTABLE SEGMENT AND RELATE_3
REPORTABLE SEGMENT AND RELATED INFORMATION - Additional Information (Details) - segment | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | 1 | |||
Customer concentration risk | Consolidated revenues | State of Texas | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 20.00% | 20.00% | ||
Customer concentration risk | Consolidated revenues | State of Colorado | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 10.00% | 10.00% |
REPORTABLE SEGMENT AND RELATE_4
REPORTABLE SEGMENT AND RELATED INFORMATION - Summary of Financial Information for Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 91,566 | $ 92,498 | $ 176,747 | $ 179,223 |
Costs & expenses | 70,707 | 67,949 | 138,492 | 131,969 |
Depreciation & amortization | 3,130 | 2,145 | 5,551 | 4,210 |
Operating income (loss) | 17,729 | 22,404 | 32,704 | 43,044 |
State Enterprise | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 82,829 | 86,555 | 160,085 | 167,346 |
Software & Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 8,737 | 5,943 | 16,662 | 11,877 |
Operating segments | State Enterprise | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 82,829 | 86,555 | 160,085 | 167,346 |
Costs & expenses | 52,277 | 51,711 | 100,933 | 100,353 |
Depreciation & amortization | 647 | 930 | 1,283 | 1,807 |
Operating income (loss) | 29,905 | 33,914 | 57,869 | 65,186 |
Operating segments | Software & Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 8,737 | 5,943 | 16,662 | 11,877 |
Costs & expenses | 3,329 | 2,235 | 6,049 | 4,463 |
Depreciation & amortization | 196 | 28 | 217 | 55 |
Operating income (loss) | 5,212 | 3,680 | 10,396 | 7,359 |
Other reconciling items | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Costs & expenses | 15,101 | 14,003 | 31,510 | 27,153 |
Depreciation & amortization | 2,287 | 1,187 | 4,051 | 2,348 |
Operating income (loss) | $ (17,388) | $ (15,190) | $ (35,561) | $ (29,501) |