Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 14, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 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, 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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 1.1 | ||
Entity Common Stock, Shares Outstanding | 66,977,642 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement to be issued in connection with its Annual Meeting of Stockholders to be held in 2020 are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0001065332 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 214,380 | $ 191,700 |
Trade accounts receivable, net | 85,399 | 80,904 |
Prepaid expenses & other current assets | 12,944 | 13,730 |
Total current assets | 312,723 | 286,334 |
Property and equipment, net | 10,091 | 10,256 |
Right of use lease assets, net | 10,778 | |
Intangible assets, net | 22,398 | 13,604 |
Goodwill | 5,965 | 0 |
Other assets | 404 | 332 |
Total assets | 362,359 | 310,526 |
Current liabilities: | ||
Accounts payable | 63,685 | 60,092 |
Accrued expenses | 25,940 | 24,150 |
Lease liabilities | 3,776 | |
Other current liabilities | 7,191 | 4,883 |
Total current liabilities | 100,592 | 89,125 |
Deferred income taxes, net | 2,463 | 781 |
Lease liabilities | 7,373 | |
Other long-term liabilities | 6,003 | 8,931 |
Total liabilities | 116,431 | 98,837 |
Commitments and Contingencies | 0 | 0 |
Stockholders' equity: | ||
Common stock, 0.0001 par, 200,000 shares authorized, 66,968 and 66,569 shares issued and outstanding | 7 | 7 |
Additional paid-in capital | 123,208 | 117,763 |
Retained earnings | 122,713 | 93,919 |
Total stockholders' equity | 245,928 | 211,689 |
Total liabilities and stockholders' equity | $ 362,359 | $ 310,526 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 66,968,000 | 66,569,000 |
Common stock, shares outstanding (in shares) | 66,968,000 | 66,569,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | $ 354,205 | $ 344,900 | $ 336,508 |
Operating expenses: | |||
Depreciation & amortization | 12,610 | 9,117 | 6,929 |
Total operating expenses | 291,786 | 269,840 | 258,171 |
Operating income (loss) | 62,419 | 75,060 | 78,337 |
Other income: | |||
Interest income | 2,514 | 616 | 0 |
Income before income taxes | 64,933 | 75,676 | 78,337 |
Income tax provision | 14,503 | 17,407 | 26,723 |
Net income | $ 50,430 | $ 58,269 | $ 51,614 |
Basic net income per share (in usd per share) | $ 0.75 | $ 0.87 | $ 0.77 |
Diluted net income per share (in usd per share) | $ 0.75 | $ 0.87 | $ 0.77 |
Weighted average shares outstanding: | |||
Basic (in shares) | 66,884 | 66,499 | 66,209 |
Diluted (in shares) | 66,884 | 66,560 | 66,266 |
State Enterprise Revenues | |||
Revenues: | $ 320,700 | $ 320,584 | $ 311,351 |
Operating expenses: | |||
State enterprise cost of revenues, exclusive of depreciation & amortization | 203,694 | 194,989 | 191,572 |
Software & services | |||
Revenues: | 33,505 | 24,316 | 25,157 |
Operating expenses: | |||
State enterprise cost of revenues, exclusive of depreciation & amortization | 13,432 | 9,043 | 8,890 |
Selling and administrative | |||
Operating expenses: | |||
Selling & administrative and product support | 35,200 | 32,747 | 31,351 |
Enterprise technology & product support | |||
Operating expenses: | |||
Selling & administrative and product support | $ 26,850 | $ 23,944 | $ 19,429 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2016 | 65,982 | |||
Beginning balance at Dec. 31, 2016 | $ 133,903 | $ 7 | $ 106,669 | $ 27,227 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 51,614 | 51,614 | ||
Dividends declared | (21,393) | (21,393) | ||
Dividend equivalents on unvested performance-based restricted stock awards | 0 | 110 | (110) | |
Dividend equivalents canceled upon forfeiture of performance-based restricted stock awards | 0 | (31) | 31 | |
Restricted stock vestings (in shares) | 319 | |||
Restricted stock vestings | 0 | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings (in shares) | (122) | |||
Shares surrendered and canceled upon vesting of restricted stock to satisfy tax withholdings | (2,676) | (2,676) | ||
Stock-based compensation | 5,464 | 5,464 | ||
Shares issuable in lieu of dividend payments on performance-based restricted stock awards (in shares) | 5 | |||
Shares issuable in lieu of dividend payments on performance-based restricted stock awards | 0 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 87 | |||
Issuance of common stock under employee stock purchase plan | 1,330 | 1,330 | ||
Ending balance (in shares) at Dec. 31, 2017 | 66,271 | |||
Ending balance at Dec. 31, 2017 | 168,242 | $ 7 | 111,275 | 56,960 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 58,269 | 58,269 | ||
Dividends declared | (21,521) | (21,521) | ||
Dividend equivalents on unvested performance-based restricted stock awards | 0 | 137 | (137) | |
Dividend equivalents canceled upon forfeiture of performance-based restricted stock awards | 0 | (140) | 140 | |
Restricted stock vestings (in shares) | 263 | |||
Restricted stock vestings | 0 | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings (in shares) | (87) | |||
Shares surrendered and canceled upon vesting of restricted stock to satisfy tax withholdings | (1,229) | (1,229) | ||
Stock-based compensation | 6,338 | 6,338 | ||
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 | ||
Ending balance (in shares) at Dec. 31, 2018 | 66,569 | 66,569 | ||
Ending balance at Dec. 31, 2018 | $ 211,689 | $ 7 | 117,763 | 93,919 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 50,430 | 50,430 | ||
Dividends declared | (21,649) | (21,649) | ||
Dividend equivalents on unvested performance-based restricted stock awards | 0 | 109 | (109) | |
Dividend equivalents canceled upon forfeiture of performance-based restricted stock awards | 0 | (122) | 122 | |
Restricted stock vestings (in shares) | 427 | |||
Restricted stock vestings | 0 | |||
Shares surrendered and cancelled upon vesting of restricted stock to satisfy tax withholdings (in shares) | (159) | |||
Shares surrendered and canceled upon vesting of restricted stock to satisfy tax withholdings | (2,754) | (2,754) | ||
Stock-based compensation | 6,769 | 6,769 | ||
Shares issuable in lieu of dividend payments on performance-based restricted stock awards (in shares) | 3 | |||
Shares issuable in lieu of dividend payments on performance-based restricted stock awards | 0 | |||
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 Dec. 31, 2019 | 66,968 | 66,968 | ||
Ending balance at Dec. 31, 2019 | $ 245,928 | $ 7 | $ 123,208 | $ 122,713 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 50,430 | $ 58,269 | $ 51,614 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation & amortization | 12,610 | 9,117 | 6,929 |
Stock-based compensation expense | 6,769 | 6,338 | 5,464 |
Deferred income taxes | 1,682 | 1,448 | 1,640 |
Provision for losses on accounts receivable | 782 | 852 | 552 |
Loss on disposal of property and equipment | 89 | 88 | 49 |
Changes in operating assets and liabilities: | |||
Trade accounts receivable, net | (4,826) | 22,182 | (21,769) |
Prepaid expenses & other current assets | 789 | (887) | 2,191 |
Other assets | 4,430 | 1,810 | (1,509) |
Accounts payable | 3,593 | (28,828) | 15,669 |
Accrued expenses | 1,788 | (2,351) | 2,251 |
Other current liabilities | 1,132 | 1,262 | 522 |
Other long-term liabilities | (7,218) | 536 | 1,233 |
Net cash provided by operating activities | 72,050 | 69,836 | 64,836 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (4,253) | (5,410) | (4,771) |
Business combination | (10,000) | 0 | 0 |
Asset acquisition | (3,486) | (3,555) | 0 |
Proceeds from sale of property and equipment | 0 | 0 | 7 |
Capitalized software development costs | (8,671) | (8,580) | (3,565) |
Net cash used in investing activities | (26,410) | (17,545) | (8,329) |
Cash flows from financing activities: | |||
Cash dividends on common stock | (21,649) | (21,521) | (21,393) |
Proceeds from employee common stock purchases | 1,443 | 1,382 | 1,330 |
Tax withholdings related to stock-based compensation awards | (2,754) | (1,229) | (2,676) |
Net cash used in financing activities | (22,960) | (21,368) | (22,739) |
Net increase in cash | 22,680 | 30,923 | 33,768 |
Cash, beginning of period | 191,700 | 160,777 | 127,009 |
Cash, end of period | 214,380 | 191,700 | 160,777 |
Non-cash investing activities: | |||
Contingent consideration - business combination | 960 | 0 | 0 |
Capital expenditures accrued but not yet paid | 0 | 0 | 855 |
Cash payments: | |||
Income taxes paid, net of refunds | $ 16,035 | $ 13,707 | $ 21,303 |
THE COMPANY
THE COMPANY | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY | THE COMPANY NIC Inc. (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. In the Company's state enterprise businesses, it generally provides services to design, build, and operate digital government services on an enterprise-wide basis on behalf of state and local governments desiring to provide access to government information and to complete secure government-based transactions through multiple online channels. These digital government services consist of websites and applications the Company has built that allow consumers, such as businesses and citizens, to access government information online, complete transactions, such as applying for a permit, retrieving government records, or filing a government-mandated form or report and make electronic payments. The Company typically manages operations for each contractual relationship through separate local subsidiaries that operate as decentralized businesses with a high degree of autonomy. The Company is typically responsible for funding the up-front investments and ongoing operations and maintenance costs of the digital government services. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The Company classifies its revenues and cost of revenues into two categories: (1) state enterprise and (2) software & services. The state enterprise category generally includes revenues and cost of revenues from the Company’s subsidiaries operating enterprise-wide digital government services on behalf of state and local governments. The software & services category primarily includes revenues and cost of revenues from the Company’s subsidiaries that provide digital government services, other than those services provided on an enterprise-wide basis, to federal agencies as well as state and local governments. The primary categories of operating expenses include: state enterprise cost of revenues, software & services cost of revenues, selling & administrative, enterprise technology & product support and depreciation & amortization. State enterprise cost of revenues consists of all direct costs associated with operating digital government services including employee compensation and benefits (including stock-based compensation), payment processing fees required to process credit/debit card and automated clearinghouse transactions, subcontractor labor costs, telecommunications, provision for losses on accounts receivable, and all other costs associated with the provision of dedicated client service such as dedicated facilities. Software & services cost of revenues consists of all direct project costs to provide services such as employee compensation and benefits (including stock-based compensation), subcontractor labor costs, and all other direct project costs including hardware, software, materials, travel and other out-of-pocket expenses. Selling & administrative expenses consist primarily of corporate-level expenses relating to market development and sales, marketing, human resource management, corporate communications and public relations, administration, legal, finance and accounting, internal audit and all non-customer service-related costs. Enterprise technology & product support consist primarily of corporate-level expenses relating to information technology, product and security teams that support the centrally hosted infrastructure and platforms and payment processing and vertical platform solutions. Certain amounts within selling & administrative expenses in the consolidated statements of income for December 31, 2018 and 2017 were reclassified to enterprise technology & product support to conform to the current year presentation. In 2019, the Company began classifying the historical selling & administrative expenses into two line items: selling & administrative and enterprise technology & product support. The new selling & administrative category consists of traditional corporate-level expenses for sales and marketing, human resources, legal, finance, internal audit and executive administration, among others. The new enterprise technology & product support category consists primarily of expenses related to our corporate-level IT, product and security teams that develop, manage and secure centrally hosted data center infrastructure and centrally developed payment processing and vertical platform solutions. The reclassification had no impact on net income or cash flows for the years ended December 31, 2018 and 2017. Basis of consolidation The consolidated financial statements include all the Company's direct and indirect wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Segment reporting The Company reports segment information in accordance with authoritative accounting guidance for segment disclosures based upon the “management” approach, which designates the internal organization that is used by management for making operating decisions and assessing performance as the source of the Company’s segments. The state enterprise segment is the Company’s only reportable segment and generally includes the Company’s subsidiaries operating digital government services for state and local governments on an enterprise-wide basis. Authoritative guidance for segment disclosures also requires disclosures about products and services and major customers. See Note 13, Reportable Segments and Related Information, for additional information regarding the Company's segment reporting. Cash and cash equivalents Cash and cash equivalents primarily include cash on hand in the form of bank deposits. For purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all non-restricted highly liquid instruments purchased with an original maturity of one month or less to be cash equivalents. Trade accounts receivable The Company records trade accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts. The Company calculates this allowance based on its history of write-offs, the level of past-due accounts, and its relationship with, and the economic status of, its customers. Trade accounts receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. The Company’s allowance for doubtful accounts at December 31, 2019 and 2018 was approximately $1.2 million and $1.0 million, respectively. Property and equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives of 8 years for furniture and fixtures, 3-10 years for equipment, 3-5 years for purchased software, and the lesser of the term of the lease or 5 years for leasehold improvements. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in results of operations for the period. The cost of maintenance and repairs is charged to expense as incurred. Significant betterments are capitalized. The Company periodically evaluates the carrying value of property and equipment to be held and used when events and circumstances indicate the carrying value may not be fully recoverable. The carrying value of property and equipment is considered impaired when the anticipated undiscounted cash flow from the asset group is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset. Fair value is determined primarily using the anticipated cash flow discounted at a rate commensurate with the risk involved. Losses on assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose. The Company did not record any impairment losses on property and equipment during the periods presented. Software development costs and intangible assets, net The Company has finite-lived intangible assets that consist of capitalized software development costs and acquired software. In accordance with authoritative accounting guidance, intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method, unless another method of amortization is more appropriate. Such costs are included in depreciation & amortization in the consolidated statements of income. The estimated economic life for finite-lived intangible assets is typically 3 to 5 years from the date the software is placed in production. Intangible assets are recorded at cost, less accumulated amortization and are evaluated for recoverability of possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts of the asset group to the future undiscounted cash flows the assets are expected to generate. If such review indicated that the carrying amount of an intangible asset group was not recoverable, an impairment loss would be recognized for the amount by which the carrying value of the intangible asset group exceeds its estimated fair value. The Company has not recorded any impairment losses on intangible assets during the periods presented. The majority of the costs incurred by the Company to obtain a contract, which primarily consist of salaries of business development employees working to obtain the contract, are fixed in nature, occur regardless of whether a contract is obtained and are expensed as incurred. The Company expenses as incurred all employee costs to start up, operate, and maintain digital government services on an enterprise-wide basis as costs of performance under the contracts because, after the completion of a defined contract term, the government entity with which the Company contracts typically receives a perpetual, royalty-free license to the applications the Company developed, excluding applications provided on a SaaS basis. Such costs are included in state enterprise cost of revenues in the consolidated statements of income. Other costs to fulfill a contract, such as the procurement of property and equipment and certain software development costs, are accounted for under other authoritative guidance. Goodwill and intangible assets In accordance with ASC 350, Intangibles - Goodwill and Other, the Company evaluates the carrying value of goodwill, at least annually or more frequently whenever events or changes in circumstances indicate that the fair value of the reporting unit may be less than its carrying amount. Impairment tests are performed annually during the fourth quarter and are performed at the reporting unit level. As of December 31, 2019, no impairment of goodwill was identified. Accrued expenses As of each balance sheet date, the Company estimates expenses which have been incurred but not yet paid or for which invoices have not yet been received. Significant components of accrued expenses consist primarily of payment processing fees, employee compensation and benefits (including incentive compensation, bonuses, vacation, health insurance and employer 401(k) contributions) and third-party professional service fees. Revenue recognition The Company accounts for revenue in accordance with ASC 606 , which the Company adopted on January 1, 2018. In accordance with ASC 606, 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. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales and usage-based taxes, if applicable, are excluded from revenues. Disaggregation of Revenue The Company currently earns revenues from three main sources: (i) transaction-based fees, which consist of IGS, DHR and other transaction-based revenues, (ii) development services and (iii) fixed-fee services. The following table summarizes, by reportable and operating segment, the principal activities from which the Company generates revenue (in thousands): Reportable and Operating Segments State Enterprise Software Consolidated December 31, 2019 IGS $ 214,406 $ — $ 214,406 DHR 91,059 — 91,059 Other — 29,575 29,575 Total transaction-based 305,465 29,575 335,040 Development services 10,285 — 10,285 Fixed-fee services 4,950 3,930 8,880 Total revenues $ 320,700 $ 33,505 $ 354,205 December 31, 2018 IGS $ 203,247 $ — $ 203,247 DHR 100,241 — 100,241 Other — 22,634 22,634 Total transaction-based 303,488 22,634 326,122 Development services 12,146 — 12,146 Fixed-fee services 4,950 1,682 6,632 Total revenues $ 320,584 $ 24,316 $ 344,900 December 31, 2017 IGS $ 192,200 $ — $ 192,200 DHR 103,899 — 103,899 Other — 23,527 23,527 Total transaction-based 296,099 23,527 319,626 Development services 10,180 — 10,180 Fixed-fee services 5,072 1,630 6,702 Total revenues $ 311,351 $ 25,157 $ 336,508 Transaction-based Revenues The Company recognizes revenue from providing outsourced digital services to its government partners. Under these contracts, 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 contractual promise to provide continuous access to each of these digital government services is a single stand-ready performance obligation. Transaction-based fees earned by the Company are typically usage-based and calculated based on the number of transactions processed each day at the contractual net fee earned by the Company for each transaction. These usage-based fees are deemed to be variable consideration that meets the practical expedient within ASC 606 whereby the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these arrangements, the usage-based fees are fully constrained and recognized once the uncertainties associated with the constraint are resolved, which is when the related transactions occur each day. The Company satisfies its performance obligation by providing access to digital solutions 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. In most of its transaction-based revenue arrangements, the Company acts as an agent and recognizes revenue on a net basis. The gross transaction fees collected by the Company from consumers on behalf of its government partners are not recognized as revenue but are accrued as accounts payable when the services are provided at the time of the transactions. The Company must remit a certain amount or a percentage of these fees to government agencies regardless of whether the Company ultimately collects the fees from the consumer. As a result, trade accounts receivable and accounts payable reflect the gross amounts outstanding at the balance sheet dates. Under certain contracts, the Company’s government partners may receive consideration for a portion of the transaction fee remitted to the Company. In circumstances where the Company receives a discernible benefit equal to or greater than the fair value of the consideration in the arrangement, the consideration paid to the government partner is recorded on a gross basis within costs of revenues. Otherwise, the consideration paid to the government partner is accounted for on a net basis as a reduction in the transaction-based fee recorded within revenue. Development Services Revenues The Company’s development services revenues primarily include revenues from providing software development and other time and materials services to the Company's government partners. The Company identifies each performance obligation in its software development and services contracts at contract inception, which are generally combined into a single promise. The contract pricing is either at stated billing rates per hour or a fixed amount. These contracts are generally short-term in nature and not longer than one For services provided under development contracts that result in the transfer of control over time, the underlying deliverable is owned and controlled by the customer and does not create an asset with an alternative use to the Company. The Company recognizes revenue on rate per hour contracts based on the amount billable to the customer, as the Company has the right to invoice the customer in an amount that directly corresponds with the value to the customer of the Company’s performance to date. For fixed fee contracts, the Company utilizes the input method and recognizes revenue based on the labor expended to date relative to the total labor expected to satisfy the contract performance obligation. This input measure of progress is used because it best depicts the transfer of assets to the customer, which occurs as the Company incurs costs to deliver the promise in the contracts. Certain development contracts include substantive customer acceptance provisions. In contracts that include substantive customer acceptance provisions, the Company recognizes revenue at a point in time upon customer acceptance. Under its development contracts, the Company typically does not have significant future performance obligations that extend beyond one year. As of December 31, 2019, the total transaction price allocated to unsatisfied performance obligations was approximately $6.2 million. Fixed-fee Services Revenues Fixed-fee services revenues primarily consist of revenues from providing recurring fixed fee services for the Company’s government partner in Indiana and smaller contracts for subscription-based services in the Company's software & services businesses. The Indiana contract has a single performance obligation to provide a broad scope of services to manage the digital government services for the state of Indiana. The Company satisfies its performance obligation by providing services to the state over time. The contract can be terminated without a penalty by the state with a 30-day notice, and accordingly, the period over which the Company performs services is commensurate with a month to month contract. Consideration consists of a fixed-monthly fee that is recognized monthly as the performance obligation is satisfied. As of December 31, 2019, the Company’s Indiana state enterprise contract had unsatisfied performance obligations for one month. The total transaction price allocated to the unsatisfied performance obligation is not significant. The subscription-based service contracts in the Company's software & services businesses are a fixed-fee single performance obligation to provide government partners continuous access to digital services. The Company satisfies its performance obligation by providing access to digital services over the contractual term. The Company recognizes revenue for the fixed subscription fees ratably over the non-cancelable term of the contract, commencing on the date the customer has access to the solution. As of December 31, 2019, the unsatisfied performance obligations related to these subscription obligations was $17.1 million, which will be recognized over the term of such contracts, generally 1 - 5 years. Unearned and Unbilled Revenues The Company records unearned revenues when cash payments are received or due in advance of the Company’s satisfaction of the performance obligation(s). At each balance sheet date, the Company determines the portion of unearned revenues that will be earned within one year and records that amount in other current liabilities in the consolidated balance sheets. The remainder, if any, is recorded in other long-term liabilities. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Unearned revenues at December 31, 2019 and 2018 were approximately $3.8 million and $1.7 million, respectively. The change in the deferred revenue balance for the year primarily reflects $10.7 million of cash payments received or due in advance of satisfying performance obligations, offset by $8.5 million of revenues recognized that were previously included in deferred revenue. Unbilled revenues is recorded when revenue is recognized in advance of the amounts invoiced to the customer. Unbilled revenues at December 31, 2019 and 2018 were approximately $3.4 million and $2.5 million, respectively. Leases All of the Company's lease arrangements are considered operating leases and are included in right of use lease assets and lease liabilities on the consolidated balance sheet. Leases with an initial term of 12 months or less are not recorded in 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. Stock-based compensation The Company measures stock-based compensation cost for service-based restricted stock awards at the grant date based on the fair value of the award and recognizes expense on a straight-line basis over the employee’s requisite service period for the entire award (generally the vesting period of the grant). The Company measures stock-based compensation cost for performance-based restricted stock awards at the date of grant, based on the fair value of shares expected to be earned at the end of the performance period, and recognizes expense ratably over the performance period based upon the probable number of shares expected to vest. See Note 12 , Stock-based Compensation and Employee Benefit Plans, for additional information. Income taxes The Company, along with its wholly owned subsidiaries, files a consolidated federal income tax return. Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. The Company does not recognize a tax benefit for uncertain tax positions unless management’s assessment concludes that it is “more likely than not” that the position is sustainable, based on its technical merits. If the recognition threshold is met, the Company recognizes a tax benefit based upon the largest amount of the tax benefit that is more likely than not probable, determined by cumulative probability, of being realized upon settlement with the taxing authority. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense in the consolidated statements of income. Business combinations The Company accounts for the acquisition of a business in accordance with ASC 805, Business Combinations, which requires the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquired business to be recorded at their fair values as of the date of acquisition. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. Fair value measurements require extensive use of estimates and assumptions, particularly with respect to intangible assets, which are based on all available information at the date of acquisition, including estimates of future cash flows to be generated by the acquired assets, useful lives and discount rates. The use of different valuation techniques and assumptions could change the amounts and useful lives assigned to the assets and liabilities acquired and related amortization expense. During the measurement period, which is not to exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Comprehensive income The Company has no components of other comprehensive income or loss and, accordingly, the Company’s comprehensive income is the same as its net income for all periods presented. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company performs ongoing credit evaluations of its customers and generally requires no collateral to secure accounts receivable. At December 31, 2019 and 2018, LexisNexis Risk Solutions accounted for approximately 14% and 15%, respectively, of the Company’s total accounts receivable. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recently issued accounting pronouncements Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), to replace the incurred loss impairment methodology in current U.S. Generally Accepted Accounting Principles (“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. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The adoption of the new standard will not have a significant impact on the Company’s financial statements. 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 previous 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. 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 12 months or less during transition. |
OUTSOURCED GOVERNMENT CONTRACTS
OUTSOURCED GOVERNMENT CONTRACTS | 12 Months Ended |
Dec. 31, 2019 | |
Contractors [Abstract] | |
OUTSOURCED GOVERNMENT CONTRACTS | OUTSOURCED 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 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 and payments. NIC typically markets the services and solicits consumers to complete government-based transactions and to enter into subscriber contracts permitting the user to access digital 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 digital 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 investments 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 as platforms are provided to government partners on a 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, 15 contracts under which the Company provides enterprise-wide digital government services, as well as the Company’s contract with the 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 the year ended December 31, 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 master contract, the Company is required to fully indemnify its government clients 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 December 31, 2019, the Company was bound by performance bond commitments totaling approximately $10.9 million on certain state enterprise contracts. Software & services contract The Company’s subsidiary NIC Federal has a contract with the FMCSA to develop and manage the FMCSA’s PSP for motor carriers nationwide, using the Company’s transaction-based business model. Expiring contracts There are currently 11 state enterprise contracts, as well as the Company’s contract with the FMCSA, that have expiration dates within the 12-month period following December 31, 2019. Collectively, revenues generated from these contracts represented approximately 42% of the Company’s total consolidated revenues for the year ended December 31, 2019. Although six of these contracts have renewal provisions, any renewal is at the option of the Company’s government partners. 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 enterprise-wide digital government services for the state of Texas expired on August 31, 2018. The contract accounted for approximately 14% and 20% of the Company's total consolidated revenues for the years ended December 31, 2018 and 2017, respectively. For the years ended December 31, 2018 and 2017, revenues from the contract were approximately $49.0 million and $65.7 million, respectively. In connection with the completion of the legacy Texas contract, the Company substantially reduced its workforce in Texas. Total one-time severance-related and transition costs, which have been recognized in state enterprise cost of revenues in the consolidated statement of income in the state enterprise segment, were approximately $1.0 million in 2018. The contract under which the Company’s subsidiary, NICUSA Inc. (“NICUSA”), managed the state of Tennessee’s enterprise-wide digital government services expired on March 31, 2017. For the year ended December 31, 2017, revenues from the Tennessee contract were approximately $1.8 million. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHAREUnvested 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 Company’s service-based restricted stock awards contain non-forfeitable rights to dividends and are participating securities. 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. 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 approximately 0.7 million at December 31, 2019 and 2018, and 0.6 million at December 31, 2017. 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): December 31, 2019 2018 2017 Numerator: Net income $ 50,430 $ 58,269 $ 51,614 Less: Income allocated to participating securities (546) (629) (479) Net income available to common stockholders $ 49,884 $ 57,640 $ 51,135 Denominator: Weighted average shares - basic 66,884 66,499 66,209 Performance-based restricted stock awards — 61 57 Weighted average shares - diluted 66,884 66,560 66,266 Basic net income per share: $ 0.75 $ 0.87 $ 0.77 Diluted net income per share: $ 0.75 $ 0.87 $ 0.77 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 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 for initial consideration of $10.0 million in cash. The sellers are eligible to earn additional cash consideration, up to $5.0 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 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 earnings. As of December 31, 2019, there have been no significant changes in the fair value of the contingent consideration liability from the acquisition date, and the Company estimated the total purchase consideration to be $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 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 13 , 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 and 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 In 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 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. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS, NET | INTANGIBLE ASSETS, NET Intangible assets, net consisted of the following (in thousands): December 31, 2019 December 31, 2018 Gross Carrying Accumulated Net Book Gross Carrying Accumulated Net Book Software development cost $ 30,861 $ (16,951) $ 13,910 $ 22,190 $ (11,647) $ 10,543 Acquired software 11,241 (3,359) 7,882 3,555 (494) 3,061 Customer relationships 425 (40) 385 — — — Non-compete agreements 250 (56) 194 — — — Trade name 35 (8) 27 — — — Total $ 42,812 $ (20,414) $ 22,398 $ 25,745 $ (12,141) $ 13,604 During 2019, the Company recorded approximately $8.4 million of intangible assets in connection with the Complia and Leap Orbit acquisitions, as further discussed in Note 5, Acquisitions. Amortization expense for intangible assets with finite lives was $8.3 million, $3.7 million and $1.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. The total estimated intangible asset amortization expense in future years is as follows (in thousands): Fiscal Year 2020 $ 10,269 2021 7,466 2022 3,341 2023 901 2024 341 Thereafter 80 $ 22,398 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following at December 31 (in thousands): 2019 2018 Equipment $ 24,936 $ 24,548 Purchased software 8,769 8,971 Furniture and fixtures 5,922 5,614 Leasehold improvements 2,181 2,221 41,808 41,354 Less accumulated depreciation (31,717) (31,098) Property and equipment, net $ 10,091 $ 10,256 Depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $4.3 million, $5.4 million and $5.0 million, respectively. |
DEBT OBLIGATIONS AND COLLATERAL
DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS | DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS The Company has a revolving 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% per annum. The other material terms of the Credit Agreement remain unchanged, including customary representations and warranties, affirmative and negative covenants and events of default. The Credit Agreement requires the Company to maintain compliance with the following financial covenants (in each case, as defined in the Credit Agreement): • Consolidated tangible net worth of at least $36 million (plus the amount of net proceeds from equity issued, or debt converted to equity, in each case after the date of the Credit Agreement); and • Consolidated maximum leverage ratio of 1.50:1 (the ratio of total funded debt to EBITDA, as defined in the Credit Agreement). The Company was in compliance with each of these covenants at December 31, 2019. The Company has issued a letter of credit as collateral for performance on one of its state enterprise contracts. Irrevocable letters of credit are generally in force for one year. In total, the Company and its subsidiaries had unused outstanding letters of credit of approximately $0.2 million at December 31, 2019. The Company was not required to cash collateralize these letters of credit at December 31, 2019. The Company had $4.8 million in available capacity to issue additional letters of credit and $9.8 million of unused borrowing capacity at December 31, 2019 under the Credit Agreement. Letters of credit may have an expiration date of up to one year beyond the expiration date of the Credit Agreement. At December 31, 2019, the Company has a $1.0 million line of credit with a bank in conjunction with a corporate credit card agreement. At December 31, 2019, the Company was bound by performance bond commitments totaling approximately $10.9 million on certain state enterprise contracts. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES 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 a lease renewal option is at the Company’s sole discretion and is 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 December 31, 2019 was 3.5 years. The operating lease cost for the years ended December 31, 2019, 2018 and 2017 was approximately $5.8 million, $5.3 million and $5.1 million, respectively. Operating lease cost includes short-term and variable lease cost, which are not significant. The aggregate future lease payments for operating leases as of December 31, 2019 and December 31, 2018 (which is under previous accounting standards), are as follows (in thousands): 2019 2018 Fiscal Year 2020 $ 4,139 $ 4,673 2021 3,181 3,403 2022 2,598 2,604 2023 1,157 2,082 2024 613 698 Thereafter 248 690 Total minimum lease payments 11,936 14,150 Less: interest (787) N/A Total lease liabilities $ 11,149 N/A Other information related to operating leases is as follows (in thousands): 2019 Weighted-average discount rate 3.7 % Supplement cash flow information Cash paid for amounts included in the measurement of lease liabilities $ 4,483 Right of use assets obtained in exchange for new lease liabilities (1) $ 15,280 (1) Includes $12.6 million for operating leases existing on January 1, 2019 and $2.7 million for operating leases that commenced in 2019. Litigation From time to time, the Company is involved in legal proceedings and litigation arising in the ordinary course of business. However, the Company is not currently a party to any material legal proceedings. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividend policy In 2016, the Company’s Board of Directors approved a dividend policy pursuant to which it plans to make, subject to subsequent declaration, regular quarterly cash dividends, beginning with the declaration and payment of a cash dividend in the first quarter of 2017. For each dividend paid, a dividend equivalent is paid simultaneously on unvested shares of service-based restricted stock. All dividends on unvested shares of service-based restricted stock have been paid out of the Company's available cash. In addition, holders of performance-based restricted stock accrue dividend equivalents, for each dividend declared, that could be earned and become payable in the form of additional shares of common stock at the end of the respective performance period to the extent that the underlying shares of performance-based restricted stock were earned. Dividends On January 27, 2020, the Company's Board of Directors declared a regular quarterly cash dividend of $0.09 per share, payable to stockholders of record as of March 4, 2020. The dividend, which is expected to total approximately $6.1 million, will be paid on March 18, 2020. The Company's Board of Directors declared the following dividends during the years ended December 31, 2019 and 2018: Declaration Date Dividend per Share Record Date Payment Date Amount (in thousands) January 28, 2019 $0.08 March 5, 2019 March 19, 2019 $5,402 May 7, 2019 0.08 June 11, 2019 June 25, 2019 5,416 July 29, 2019 0.08 September 6, 2019 September 20, 2019 5,416 October 28, 2019 0.08 December 4, 2019 December 18, 2019 5,415 January 29, 2018 0.08 March 6, 2018 March 20, 2018 5,370 May 1, 2018 0.08 June 5, 2018 June 19, 2018 5,384 July 30, 2018 0.08 September 5, 2018 September 19, 2018 5,384 October 28, 2018 0.08 December 4, 2018 December 18, 2018 5,383 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law. The Tax Act, among other changes, reduced the statutory federal corporate income tax rate from 35% to 21% effective January 1, 2018. The Tax Act also included a number of other provisions including the elimination of net operating loss carrybacks and limitations on the use of future losses and the repeal of the domestic production activities deduction, among others. The provision for income taxes consists of the following (in thousands): Year Ended December 31, 2019 2018 2017 Current income taxes: Federal $ 10,343 $ 13,704 $ 22,533 State 2,478 2,255 2,550 Total 12,821 15,959 25,083 Deferred income taxes: Federal 1,182 1,466 1,576 State 500 (18) 64 Total 1,682 1,448 1,640 Total income tax provision $ 14,503 $ 17,407 $ 26,723 Deferred income taxes on the balance sheet result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows at December 31 (in thousands): 2019 2018 Deferred tax assets: Stock-based compensation $ 983 $ 1,156 Federal benefit of state uncertain tax positions 746 954 Accrued vacation 521 550 Deferred rent 95 81 State net operating loss carryforwards 228 272 Allowance for doubtful accounts 311 240 Right of use lease liability 2,840 — Other 465 662 Gross deferred tax assets 6,189 3,915 Less: Valuation allowance (335) (367) Total deferred tax assets 5,854 3,548 Deferred tax liabilities: Property and equipment (2,027) (1,834) Capitalized software development costs (3,544) (2,495) Right of use lease asset (2,746) — Total deferred tax liabilities (8,317) (4,329) Net deferred tax (liability) asset $ (2,463) $ (781) Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. The Company has identified certain estimated state net operating loss (“NOL”) carryforwards that it might be unable to use. Based on a review of applicable state tax statutes, the Company concluded that there is substantial doubt it would be able to realize the full amount of certain estimated NOL carryforwards in states where the Company cannot file a consolidated income tax return or where future taxable income will not be sufficient to utilize the state NOL before it expires. As a result, the Company recorded a deferred tax asset valuation allowance of $0.3 million and $0.4 million at December 31, 2019 and 2018, respectively. The following table reconciles the statutory federal income tax rate and the effective income tax rate indicated by the consolidated statements of income: Year Ended December 31, 2019 2018 2017 Statutory federal income tax rate 21.0 % 21.0 % 35.0 % Domestic production activities deductions — % — % (2.6) % Federal and state tax credits (0.8) % (2.3) % (2.0) % Tax deficit (benefit) from restricted stock vestings (0.1) % 0.3 % (0.7) % State income taxes 5.0 % 2.3 % 1.8 % Uncertain tax positions (release) (5.2) % 0.8 % 1.6 % Nondeductible expenses 2.2 % 0.8 % 0.7 % Other, net 0.2 % 0.1 % 0.3 % Effective federal and state income tax rate 22.3 % 23.0 % 34.1 % The Company’s effective tax rate in 2019 was higher than the statutory federal income tax rate due to the effect of state income taxes and nondeductible expenses, partially offset by the favorable impact of the release of reserves for unrecognized income tax benefits resulting from the expiration of the statutes of limitations for certain tax years and from the completion of an IRS tax 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 effective tax rate was also impacted by approximately $2.6 million of executive severance costs, a significant portion of which is not deductible for income tax purposes. The Company’s effective tax rate in 2018 was higher than the statutory federal income tax rate due to the effect of state income taxes, uncertain tax positions, and nondeductible expenses, partially offset by favorable benefits related to the federal research and development credit. The Company's effective tax rate in 2017 was lower than the statutory federal income tax rate due mainly to favorable benefits related to the domestic production activities deduction, the federal research and development credit, and excess tax benefits from restricted stock vestings. The Company recognized $0.1 million and $0.3 million in tax deficits and $0.5 million in excess tax benefits from restricted stock vestings within income tax expense for the years ended December 31, 2019, 2018 and 2017, respectively. The following table provides a reconciliation of the beginning and ending amount of the consolidated liability for unrecognized income tax benefits (included in other long-term liabilities in the consolidated balance sheets) for the years ended December 31, 2019, 2018 and 2017 (in thousands): 2019 2018 2017 Balance at January 1 $ 8,651 $ 8,020 $ 6,599 Additions for tax positions of prior years 208 459 576 Additions for tax positions of current years 393 1,248 1,646 Expiration of the statute of limitations (3,182) (1,024) (788) Reductions for tax positions of prior years (217) (52) (13) Settlements (805) — — Balance at December 31 $ 5,048 $ 8,651 $ 8,020 The decrease in the amount of the consolidated liability for unrecognized income tax benefits in 2019 was mainly due to the release of reserves for unrecognized income tax benefits described above. At December 31, 2019 and 2018, there were approximately $4.3 million and $7.7 million, respectively, of unrecognized tax benefits that if recognized would affect the Company’s annual effective tax rate. It is reasonably possible that events will occur during the next 12 months that would cause the total amount of unrecognized tax benefits to increase or decrease. However, the Company does not expect such increases or decreases to be material to its financial condition or results of operations. The Company, along with its wholly owned subsidiaries, files a consolidated U.S. federal income tax return and separate income tax returns in many states throughout the U.S. The Company remains subject to U.S. federal examination for the tax years ended on or after December 31, 2017. State income tax returns are generally subject to examination for a period of three The Company recognizes accrued interest and penalties associated with uncertain tax positions as part of income tax expense in the consolidated statements of income. Accrued interest and penalty amounts were not significant at December 31, 2019, 2018 and 2017. |
STOCK-BASED COMPENSATION AND EM
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS The following table presents stock-based compensation expense included in the Company’s consolidated statements of income (in thousands): Year Ended December 31, 2019 2018 2017 State enterprise cost of revenues, exclusive of depreciation & amortization $ 1,499 $ 1,516 $ 1,276 Software & services cost of revenues, exclusive of depreciation & amortization 101 151 86 Selling & administrative 4,495 3,994 3,456 Enterprise technology & product support 674 677 636 Stock-based compensation expense before income taxes $ 6,769 $ 6,338 $ 5,454 Stock option and restricted stock plans The Company has a stock compensation plan (the “NIC Plan”) to provide for the granting of restricted stock awards, incentive stock options or non-qualified stock options to encourage certain employees of the Company and its subsidiaries and directors of the Company to participate in the ownership of the Company and to provide additional incentive for such employees and directors to promote the success of its business through sharing in the future growth of such business. The Company did not grant any stock options in 2019, 2018, or 2017 and has no stock options currently outstanding. As approved by the Company’s Board of Directors and stockholders, the Company is authorized to grant 15,825,223 common shares under the NIC Plan. At December 31, 2019, a total of 3,143,694 shares were available for future grants under the NIC Plan. Restricted stock During 2019, the Compensation Committee of the Board of Directors of the Company (the “Committee”) granted to certain management-level employees and executive officers, service-based restricted stock awards totaling 311,566 shares with a grant-date fair value totaling approximately $5.3 million. Such restricted stock awards vest beginning one one During the first quarter of 2019, the Committee also granted to certain executive officers performance-based restricted stock awards 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, which represents the maximum number of shares the executive officers can earn at the end of a three 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 three At December 31, 2019, the three 2017 through 2019, no shares or dividend equivalent shares were earned, and the 87,241 shares subject to the awards were forfeited. 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 dividend shares were earned. The remaining 73,345 shares subject to the awards were forfeited in the first quarter of 2019. At December 31, 2017, the three During 2019, the Company's former Chief Operating Officer departed from the Company. Pursuant to the terms of his employment agreement, the Company provided severance and other related benefits. The Company incurred a total one-time cost of $2.6 million, which consisted of a one-time cash payment of $1.5 million and $1.1 million of stock-based compensation expense associated with the accelerated vesting of certain restricted stock awards. Included in the stock-based compensation expense was the acceleration of 44,507 service-based restricted stock awards and 37,463 performance-based restricted stock awards. A summary of service-based restricted stock activity for the year ended December 31, 2019 is presented below: Service-based Restricted Weighted Outstanding at January 1, 2019 717,079 $ 16.58 Granted 362,459 $ 16.96 Vested (329,343) $ 16.79 Canceled (38,033) $ 17.30 Outstanding at December 31, 2019 712,162 $ 16.81 Expected to vest at December 31, 2019 712,162 $ 16.81 The fair value of service-based restricted stock vested during the years ended December 31, 2019, 2018 and 2017 was approximately $5.5 million, $5.1 million and $4.7 million, respectively. The weighted average grant date fair value per share of service-based restricted stock granted during the years ended December 31, 2019, 2018 and 2017 was $16.96, $14.15 and $21.46, respectively. A summary of performance-based restricted stock activity for the year ended December 31, 2019 is presented below: Performance- Weighted Outstanding at January 1, 2019 426,599 $ 17.12 Granted 111,135 $ 17.27 Vested (102,309) $ 17.62 Canceled (96,955) $ 17.62 Outstanding at December 31, 2019 338,470 $ 17.01 Expected to vest at December 31, 2019 40,789 $ 15.89 The fair value of performance-based restricted stock vested during the years ended December 31, 2019, 2018 and 2017 was approximately $1.8 million, $0 million and $1.2 million, respectively. The weighted average grant date fair value per share of performance-based restricted stock granted during the years ended December 31, 2019, 2018 and 2017 was $17.27, $13.70 and $22.00, respectively. At December 31, 2019, the total intrinsic value of unvested restricted stock awards expected to vest was approximately $16.8 million. At December 31, 2019, the Company had approximately $8.3 million of total unrecognized compensation cost related to unvested restricted stock awards. The Company expects to recognize this cost over a weighted average period of approximately two Employee stock purchase plan In 1999, the Company’s Board of Directors approved an employee stock purchase plan (“ESPP”) intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. A total of 2,321,688 shares of NIC common stock have been reserved for issuance under this plan. Terms of the plan permit eligible employees to purchase NIC common stock through payroll deductions up to the lesser of 15% of each employee’s compensation or $25,000. Amounts deducted and accumulated by the participant are used to purchase shares of NIC’s common stock at 85% of the lower of the fair value of the common stock at the beginning or the end of the offering period, as defined in the plan. At December 31, 2019, a total of 890,981 shares were available for future grants under the ESPP. In the offering period commencing on April 1, 2018 and ending on March 31, 2019, 127,600 shares were purchased at a price of $11.31 per share, resulting in total cash proceeds to the Company of approximately $1.4 million. The current offering period under this plan commenced on April 1, 2019. In the offering period commencing on April 1, 2017 and ending on March 31, 2018, 122,152 shares were purchased at a price of $11.31 per share, resulting in total cash proceeds to the Company of approximately $1.4 million. In the offering period commencing on April 1, 2016 and ending on March 31, 2017, 86,998 shares were purchased at a price of $15.29 per share, resulting in total cash proceeds to the Company of approximately $1.3 million. The closing fair market value of NIC common stock on the first day of the current offering period was $17.13 per share. The fair values of the offerings were estimated on the dates of grant using the Black-Scholes model using the assumptions in the following table. March 31, 2019 March 31, 2018 March 31, 2017 Risk-free interest rate 2.41 % 2.08 % 1.02 % Expected dividend yield 1.93 % 2.06 % 2.69 % Expected life 1.0 year 1.0 year 1.0 year Expected stock price volatility 29.94 % 35.51 % 23.07 % Weighted average fair value of ESPP rights $ 4.49 $ 3.75 $ 4.58 The Black-Scholes option-pricing model was not developed for use in valuing employee ESPP rights but was developed for use in estimating the fair value of traded stock options that have no vesting restrictions and are fully transferable. In addition, it requires the use of subjective assumptions including expectations of future dividends and stock price volatility. Such assumptions are only used for making the required fair value estimate and should not be considered as indicators of future dividend policy or stock price appreciation or should not be used to predict the value ultimately realized by employees who receive equity awards. Because changes in the subjective assumptions can materially affect the fair value estimate and because employee stock options have characteristics significantly different from those of traded options, the use of the Black-Scholes option-pricing model may not provide a reliable estimate of the fair value of ESPP rights. Defined contribution 401(k) profit sharing plan The Company and its subsidiaries sponsor a defined contribution 401(k) profit sharing plan. In accordance with the plan, all full-time employees are eligible immediately upon employment and non full-time employees are eligible upon reaching 1,000 hours of service in the relevant period. A discretionary match by the Company of an employee’s contribution of up to 5% of base salary and a discretionary contribution may be made to the plan as determined by the Board of Directors. Expense related to Company matching contributions totaled approximately $2.9 million, $2.7 million and $2.7 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
REPORTABLE SEGMENTS AND RELATED
REPORTABLE SEGMENTS AND RELATED INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
REPORTABLE SEGMENTS AND RELATED INFORMATION | REPORTABLE SEGMENTS 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 st ate and local governments. The software & services category primarily includes the Company’s businesses that provide software development and digital government services, other than 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 have 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 Company’s Chief Executive Officer has been identified as the chief operating decision maker ("CODM"). The measure of profitability by which management, including the CODM, 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 CODM. 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 years ended December 31 (in thousands): State Enterprise Software Other Consolidated 2019 Revenues $ 320,700 $ 33,505 $ — $ 354,205 Costs & expenses 203,694 13,432 62,050 279,176 Depreciation & amortization 2,724 1,619 8,267 12,610 Operating income (loss) $ 114,282 $ 18,454 $ (70,317) $ 62,419 2018 Revenues $ 320,584 $ 24,316 $ — $ 344,900 Costs & expenses 194,989 9,043 56,691 260,723 Depreciation & amortization 2,985 100 6,032 9,117 Operating income (loss) $ 122,610 $ 15,173 $ (62,723) $ 75,060 2017 Revenues $ 311,351 $ 25,157 $ — $ 336,508 Costs & expenses 191,572 8,890 50,780 251,242 Depreciation & amortization 2,698 97 4,134 6,929 Operating income (loss) $ 117,081 $ 16,170 $ (54,914) $ 78,337 The following table identifies each type of service, consumer and state that accounted for 10% or more of the Company’s total consolidated revenues for the years ended December 31: Percentage of Total Revenues 2019 2018 2017 Type of Service Motor Vehicle Driver History Record Retrieval 26 % 29 % 31 % Motor Vehicle Registrations 11 % 14 % 14 % Consumer LexisNexis Risk Solutions 15 % 19 % 19 % (provides motor vehicle driver history records to the insurance industry) State Partner Colorado 10 % N/A N/A Texas N/A 17 % 20 % (2018 consists of the legacy and new payment processing contracts) |
UNAUDITED QUARTERLY OPERATING R
UNAUDITED QUARTERLY OPERATING RESULTS | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
UNAUDITED QUARTERLY OPERATING RESULTS | UNAUDITED QUARTERLY OPERATING RESULTS The unaudited quarterly information below is subject to seasonal fluctuations resulting in lower revenues in the fourth quarter of each calendar year due to the lower number of business days in the quarter and a lower volume of business-to-government and citizen-to-government transactions during the holiday periods. For the Year Ended December 31, 2019 (in thousands, except per share amount) First Quarter Second Quarter Third Quarter Fourth Quarter Revenues: State enterprise revenues $ 77,255 $ 82,829 $ 81,084 $ 79,532 Software & services revenues 7,925 8,737 9,301 7,542 Total revenues 85,180 91,566 90,385 87,074 Operating expenses: State enterprise cost of revenues, exclusive of depreciation & amortization 48,655 52,277 50,408 52,354 Software & services cost of revenues, exclusive of depreciation & amortization 2,720 3,329 3,586 3,797 Selling & administrative 9,964 8,356 8,153 8,727 Enterprise technology & product support 6,445 6,745 6,743 6,917 Depreciation & amortization 2,421 3,130 3,524 3,535 Total operating expenses 70,205 73,837 72,414 75,330 Operating income 14,975 17,729 17,971 11,744 Other income: Interest income 604 577 729 604 Income before income taxes 15,579 18,306 18,700 12,348 Income tax provision 4,077 3,846 4,190 2,390 Net income $ 11,502 $ 14,460 $ 14,510 $ 9,958 Basic net income per share $ 0.17 $ 0.21 $ 0.21 $ 0.15 Diluted net income per share $ 0.17 $ 0.21 $ 0.21 $ 0.15 Weighted average shares outstanding: Basic 66,670 66,940 66,960 66,967 Diluted 66,670 66,940 66,960 66,967 For the Year Ended December 31, 2018 (in thousands, except per share amount) First Quarter Second Quarter Third Quarter Fourth Quarter Revenues: State enterprise revenues $ 80,791 $ 86,555 $ 80,884 $ 72,354 Software & services revenues 5,934 5,943 6,144 6,295 Total revenues 86,725 92,498 87,028 78,649 Operating expenses: State enterprise cost of revenues, exclusive of depreciation & amortization 48,642 51,711 48,224 46,412 Software & services cost of revenues, exclusive of depreciation & amortization 2,228 2,235 2,226 2,354 Selling & administrative 7,503 8,268 8,514 8,462 Enterprise technology & product support 5,647 5,735 6,176 6,386 Depreciation & amortization 2,065 2,145 2,441 2,466 Total operating expenses 66,085 70,094 67,581 66,080 Operating income 20,640 22,404 19,447 12,569 Other income: Interest income — 57 153 406 Income before income taxes 20,640 22,461 19,600 12,975 Income tax provision 5,132 5,450 3,698 3,127 Net income $ 15,508 $ 17,011 $ 15,902 $ 9,848 Basic net income per share $ 0.23 $ 0.25 $ 0.24 $ 0.15 Diluted net income per share $ 0.23 $ 0.25 $ 0.24 $ 0.15 Weighted average shares outstanding: Basic 66,323 66,541 66,562 66,569 Diluted 66,323 66,561 66,598 66,641 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The Company classifies its revenues and cost of revenues into two categories: (1) state enterprise and (2) software & services. The state enterprise category generally includes revenues and cost of revenues from the Company’s subsidiaries operating enterprise-wide digital government services on behalf of state and local governments. The software & services category primarily includes revenues and cost of revenues from the Company’s subsidiaries that provide digital government services, other than those services provided on an enterprise-wide basis, to federal agencies as well as state and local governments. The primary categories of operating expenses include: state enterprise cost of revenues, software & services cost of revenues, selling & administrative, enterprise technology & product support and depreciation & amortization. State enterprise cost of revenues consists of all direct costs associated with operating digital government services including employee compensation and benefits (including stock-based compensation), payment processing fees required to process credit/debit card and automated clearinghouse transactions, subcontractor labor costs, telecommunications, provision for losses on accounts receivable, and all other costs associated with the provision of dedicated client service such as dedicated facilities. Software & services cost of revenues consists of all direct project costs to provide services such as employee compensation and benefits (including stock-based compensation), subcontractor labor costs, and all other direct project costs including hardware, software, materials, travel and other out-of-pocket expenses. Selling & administrative expenses consist primarily of corporate-level expenses relating to market development and sales, marketing, human resource management, corporate communications and public relations, administration, legal, finance and accounting, internal audit and all non-customer service-related costs. Enterprise technology & product support consist primarily of corporate-level expenses relating to information technology, product and security teams that support the centrally hosted infrastructure and platforms and payment processing and vertical platform solutions. Certain amounts within selling & administrative expenses in the consolidated statements of income for December 31, 2018 and 2017 were reclassified to enterprise technology & product support to conform to the current year presentation. In 2019, the Company began classifying the historical selling & administrative expenses into two line items: selling & administrative and enterprise technology & product support. The new selling & administrative category consists of traditional corporate-level expenses for sales and marketing, human resources, legal, finance, internal audit and executive administration, among others. The new enterprise technology & product support category consists primarily of expenses related to our corporate-level IT, product and security teams that develop, manage and secure centrally hosted data center infrastructure and centrally developed payment processing and vertical platform solutions. The reclassification had no impact on net income or cash flows for the years ended December 31, 2018 and 2017. |
Basis of consolidation | Basis of consolidation The consolidated financial statements include all the Company's direct and indirect wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. |
Segment reporting | Segment reporting The Company reports segment information in accordance with authoritative accounting guidance for segment disclosures based upon the “management” approach, which designates the internal organization that is used by management for making operating decisions and assessing performance as the source of the Company’s segments. The state enterprise segment is the Company’s only reportable segment and generally includes the Company’s subsidiaries operating digital government services for state and local governments on an enterprise-wide basis. Authoritative guidance for segment disclosures also requires disclosures about products and services and major customers. See Note 13, Reportable Segments and Related Information, for additional information regarding the Company's segment reporting. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents primarily include cash on hand in the form of bank deposits. For purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all non-restricted highly liquid instruments purchased with an original maturity of one month or less to be cash equivalents. |
Trade accounts receivable | Trade accounts receivable The Company records trade accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts. The Company calculates this allowance based on its history of write-offs, the level of past-due accounts, and its relationship with, and the economic status of, its customers. Trade accounts receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. |
Property and equipment | Property and equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives of 8 years for furniture and fixtures, 3-10 years for equipment, 3-5 years for purchased software, and the lesser of the term of the lease or 5 years for leasehold improvements. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in results of operations for the period. The cost of maintenance and repairs is charged to expense as incurred. Significant betterments are capitalized. The Company periodically evaluates the carrying value of property and equipment to be held and used when events and circumstances indicate the carrying value may not be fully recoverable. The carrying value of property and equipment is considered impaired when the anticipated undiscounted cash flow from the asset group is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset. Fair value is determined primarily using the anticipated cash flow discounted at a rate commensurate with the risk involved. Losses on assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose. The Company did not record any impairment losses on property and equipment during the periods presented. |
Software development costs and intangible assets | Software development costs and intangible assets, net The Company has finite-lived intangible assets that consist of capitalized software development costs and acquired software. In accordance with authoritative accounting guidance, intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method, unless another method of amortization is more appropriate. Such costs are included in depreciation & amortization in the consolidated statements of income. The estimated economic life for finite-lived intangible assets is typically 3 to 5 years from the date the software is placed in production. Intangible assets are recorded at cost, less accumulated amortization and are evaluated for recoverability of possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts of the asset group to the future undiscounted cash flows the assets are expected to generate. If such review indicated that the carrying amount of an intangible asset group was not recoverable, an impairment loss would be recognized for the amount by which the carrying value of the intangible asset group exceeds its estimated fair value. The Company has not recorded any impairment losses on intangible assets during the periods presented. The majority of the costs incurred by the Company to obtain a contract, which primarily consist of salaries of business development employees working to obtain the contract, are fixed in nature, occur regardless of whether a contract is obtained and are expensed as incurred. The Company expenses as incurred all employee costs to start up, operate, and maintain digital government services on an enterprise-wide basis as costs of performance under the contracts because, after the completion of a defined contract term, the government entity with which the Company contracts typically receives a perpetual, royalty-free license to the applications the Company developed, excluding applications provided on a SaaS basis. Such costs are included in state enterprise cost of revenues in the consolidated statements of income. Other costs to fulfill a contract, such as the procurement of property and equipment and certain software development costs, are accounted for under other authoritative guidance. |
Goodwill and intangible assets | Goodwill and intangible assetsIn accordance with ASC 350, Intangibles - Goodwill and Other, the Company evaluates the carrying value of goodwill, at least annually or more frequently whenever events or changes in circumstances indicate that the fair value of the reporting unit may be less than its carrying amount. Impairment tests are performed annually during the fourth quarter and are performed at the reporting unit level. As of December 31, 2019, no impairment of goodwill was identified. |
Accrued expenses | Accrued expenses As of each balance sheet date, the Company estimates expenses which have been incurred but not yet paid or for which invoices have not yet been received. Significant components of accrued expenses consist primarily of payment processing fees, employee compensation and benefits (including incentive compensation, bonuses, vacation, health insurance and employer 401(k) contributions) and third-party professional service fees. |
Revenue recognition | Revenue recognition The Company accounts for revenue in accordance with ASC 606 , which the Company adopted on January 1, 2018. In accordance with ASC 606, 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. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales and usage-based taxes, if applicable, are excluded from revenues. Disaggregation of Revenue The Company currently earns revenues from three main sources: (i) transaction-based fees, which consist of IGS, DHR and other transaction-based revenues, (ii) development services and (iii) fixed-fee services. The following table summarizes, by reportable and operating segment, the principal activities from which the Company generates revenue (in thousands): Reportable and Operating Segments State Enterprise Software Consolidated December 31, 2019 IGS $ 214,406 $ — $ 214,406 DHR 91,059 — 91,059 Other — 29,575 29,575 Total transaction-based 305,465 29,575 335,040 Development services 10,285 — 10,285 Fixed-fee services 4,950 3,930 8,880 Total revenues $ 320,700 $ 33,505 $ 354,205 December 31, 2018 IGS $ 203,247 $ — $ 203,247 DHR 100,241 — 100,241 Other — 22,634 22,634 Total transaction-based 303,488 22,634 326,122 Development services 12,146 — 12,146 Fixed-fee services 4,950 1,682 6,632 Total revenues $ 320,584 $ 24,316 $ 344,900 December 31, 2017 IGS $ 192,200 $ — $ 192,200 DHR 103,899 — 103,899 Other — 23,527 23,527 Total transaction-based 296,099 23,527 319,626 Development services 10,180 — 10,180 Fixed-fee services 5,072 1,630 6,702 Total revenues $ 311,351 $ 25,157 $ 336,508 Transaction-based Revenues The Company recognizes revenue from providing outsourced digital services to its government partners. Under these contracts, 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 contractual promise to provide continuous access to each of these digital government services is a single stand-ready performance obligation. Transaction-based fees earned by the Company are typically usage-based and calculated based on the number of transactions processed each day at the contractual net fee earned by the Company for each transaction. These usage-based fees are deemed to be variable consideration that meets the practical expedient within ASC 606 whereby the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these arrangements, the usage-based fees are fully constrained and recognized once the uncertainties associated with the constraint are resolved, which is when the related transactions occur each day. The Company satisfies its performance obligation by providing access to digital solutions 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. In most of its transaction-based revenue arrangements, the Company acts as an agent and recognizes revenue on a net basis. The gross transaction fees collected by the Company from consumers on behalf of its government partners are not recognized as revenue but are accrued as accounts payable when the services are provided at the time of the transactions. The Company must remit a certain amount or a percentage of these fees to government agencies regardless of whether the Company ultimately collects the fees from the consumer. As a result, trade accounts receivable and accounts payable reflect the gross amounts outstanding at the balance sheet dates. Under certain contracts, the Company’s government partners may receive consideration for a portion of the transaction fee remitted to the Company. In circumstances where the Company receives a discernible benefit equal to or greater than the fair value of the consideration in the arrangement, the consideration paid to the government partner is recorded on a gross basis within costs of revenues. Otherwise, the consideration paid to the government partner is accounted for on a net basis as a reduction in the transaction-based fee recorded within revenue. Development Services Revenues The Company’s development services revenues primarily include revenues from providing software development and other time and materials services to the Company's government partners. The Company identifies each performance obligation in its software development and services contracts at contract inception, which are generally combined into a single promise. The contract pricing is either at stated billing rates per hour or a fixed amount. These contracts are generally short-term in nature and not longer than one For services provided under development contracts that result in the transfer of control over time, the underlying deliverable is owned and controlled by the customer and does not create an asset with an alternative use to the Company. The Company recognizes revenue on rate per hour contracts based on the amount billable to the customer, as the Company has the right to invoice the customer in an amount that directly corresponds with the value to the customer of the Company’s performance to date. For fixed fee contracts, the Company utilizes the input method and recognizes revenue based on the labor expended to date relative to the total labor expected to satisfy the contract performance obligation. This input measure of progress is used because it best depicts the transfer of assets to the customer, which occurs as the Company incurs costs to deliver the promise in the contracts. Certain development contracts include substantive customer acceptance provisions. In contracts that include substantive customer acceptance provisions, the Company recognizes revenue at a point in time upon customer acceptance. Under its development contracts, the Company typically does not have significant future performance obligations that extend beyond one year. As of December 31, 2019, the total transaction price allocated to unsatisfied performance obligations was approximately $6.2 million. Fixed-fee Services Revenues Fixed-fee services revenues primarily consist of revenues from providing recurring fixed fee services for the Company’s government partner in Indiana and smaller contracts for subscription-based services in the Company's software & services businesses. The Indiana contract has a single performance obligation to provide a broad scope of services to manage the digital government services for the state of Indiana. The Company satisfies its performance obligation by providing services to the state over time. The contract can be terminated without a penalty by the state with a 30-day notice, and accordingly, the period over which the Company performs services is commensurate with a month to month contract. Consideration consists of a fixed-monthly fee that is recognized monthly as the performance obligation is satisfied. As of December 31, 2019, the Company’s Indiana state enterprise contract had unsatisfied performance obligations for one month. The total transaction price allocated to the unsatisfied performance obligation is not significant. The subscription-based service contracts in the Company's software & services businesses are a fixed-fee single performance obligation to provide government partners continuous access to digital services. The Company satisfies its performance obligation by providing access to digital services over the contractual term. The Company recognizes revenue for the fixed subscription fees ratably over the non-cancelable term of the contract, commencing on the date the customer has access to the solution. As of December 31, 2019, the unsatisfied performance obligations related to these subscription obligations was $17.1 million, which will be recognized over the term of such contracts, generally 1 - 5 years. Unearned and Unbilled Revenues The Company records unearned revenues when cash payments are received or due in advance of the Company’s satisfaction of the performance obligation(s). At each balance sheet date, the Company determines the portion of unearned revenues that will be earned within one year and records that amount in other current liabilities in the consolidated balance sheets. The remainder, if any, is recorded in other long-term liabilities. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Unearned revenues at December 31, 2019 and 2018 were approximately $3.8 million and $1.7 million, respectively. The change in the deferred revenue balance for the year primarily reflects $10.7 million of cash payments received or due in advance of satisfying performance obligations, offset by $8.5 million of revenues recognized that were previously included in deferred revenue. |
Leases | Leases All of the Company's lease arrangements are considered operating leases and are included in right of use lease assets and lease liabilities on the consolidated balance sheet. Leases with an initial term of 12 months or less are not recorded in 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. |
Stock-based compensation | Stock-based compensation The Company measures stock-based compensation cost for service-based restricted stock awards at the grant date based on the fair value of the award and recognizes expense on a straight-line basis over the employee’s requisite service period for the entire award (generally the vesting period of the grant). The Company measures stock-based compensation cost for performance-based restricted stock awards at the date of grant, based on the fair value of shares expected to be earned at the end of the performance period, and recognizes expense ratably over the performance period based upon the probable number of shares expected to vest. See Note 12 |
Income taxes | Income taxes The Company, along with its wholly owned subsidiaries, files a consolidated federal income tax return. Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. The Company does not recognize a tax benefit for uncertain tax positions unless management’s assessment concludes that it is “more likely than not” that the position is sustainable, based on its technical merits. If the recognition threshold is met, the Company recognizes a tax benefit based upon the largest amount of the tax benefit that is more likely than not probable, determined by cumulative probability, of being realized upon settlement with the taxing authority. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense in the consolidated statements of income. |
Business combinations | Business combinations The Company accounts for the acquisition of a business in accordance with ASC 805, Business Combinations, which requires the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquired business to be recorded at their fair values as of the date of acquisition. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. Fair value measurements require extensive use of estimates and assumptions, particularly with respect to intangible assets, which are based on all available information at the date of acquisition, including estimates of future cash flows to be generated by the acquired assets, useful lives and discount rates. The use of different valuation techniques and assumptions could change the amounts and useful lives assigned to the assets and liabilities acquired and related amortization expense. During the measurement period, which is not to exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Comprehensive income | Comprehensive income The Company has no components of other comprehensive income or loss and, accordingly, the Company’s comprehensive income is the same as its net income for all periods presented. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company performs ongoing credit evaluations of its customers and generally requires no collateral to secure accounts receivable. At December 31, 2019 and 2018, LexisNexis Risk Solutions accounted for approximately 14% and 15%, respectively, of the Company’s total accounts receivable. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), to replace the incurred loss impairment methodology in current U.S. Generally Accepted Accounting Principles (“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. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The adoption of the new standard will not have a significant impact on the Company’s financial statements. 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 previous 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. 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 12 months or less during transition. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of revenue | The Company currently earns revenues from three main sources: (i) transaction-based fees, which consist of IGS, DHR and other transaction-based revenues, (ii) development services and (iii) fixed-fee services. The following table summarizes, by reportable and operating segment, the principal activities from which the Company generates revenue (in thousands): Reportable and Operating Segments State Enterprise Software Consolidated December 31, 2019 IGS $ 214,406 $ — $ 214,406 DHR 91,059 — 91,059 Other — 29,575 29,575 Total transaction-based 305,465 29,575 335,040 Development services 10,285 — 10,285 Fixed-fee services 4,950 3,930 8,880 Total revenues $ 320,700 $ 33,505 $ 354,205 December 31, 2018 IGS $ 203,247 $ — $ 203,247 DHR 100,241 — 100,241 Other — 22,634 22,634 Total transaction-based 303,488 22,634 326,122 Development services 12,146 — 12,146 Fixed-fee services 4,950 1,682 6,632 Total revenues $ 320,584 $ 24,316 $ 344,900 December 31, 2017 IGS $ 192,200 $ — $ 192,200 DHR 103,899 — 103,899 Other — 23,527 23,527 Total transaction-based 296,099 23,527 319,626 Development services 10,180 — 10,180 Fixed-fee services 5,072 1,630 6,702 Total revenues $ 311,351 $ 25,157 $ 336,508 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation 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): December 31, 2019 2018 2017 Numerator: Net income $ 50,430 $ 58,269 $ 51,614 Less: Income allocated to participating securities (546) (629) (479) Net income available to common stockholders $ 49,884 $ 57,640 $ 51,135 Denominator: Weighted average shares - basic 66,884 66,499 66,209 Performance-based restricted stock awards — 61 57 Weighted average shares - diluted 66,884 66,560 66,266 Basic net income per share: $ 0.75 $ 0.87 $ 0.77 Diluted net income per share: $ 0.75 $ 0.87 $ 0.77 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 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 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible assets, net | Intangible assets, net consisted of the following (in thousands): December 31, 2019 December 31, 2018 Gross Carrying Accumulated Net Book Gross Carrying Accumulated Net Book Software development cost $ 30,861 $ (16,951) $ 13,910 $ 22,190 $ (11,647) $ 10,543 Acquired software 11,241 (3,359) 7,882 3,555 (494) 3,061 Customer relationships 425 (40) 385 — — — Non-compete agreements 250 (56) 194 — — — Trade name 35 (8) 27 — — — Total $ 42,812 $ (20,414) $ 22,398 $ 25,745 $ (12,141) $ 13,604 |
Estimated amortization expense in future years | The total estimated intangible asset amortization expense in future years is as follows (in thousands): Fiscal Year 2020 $ 10,269 2021 7,466 2022 3,341 2023 901 2024 341 Thereafter 80 $ 22,398 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net consisted of the following at December 31 (in thousands): 2019 2018 Equipment $ 24,936 $ 24,548 Purchased software 8,769 8,971 Furniture and fixtures 5,922 5,614 Leasehold improvements 2,181 2,221 41,808 41,354 Less accumulated depreciation (31,717) (31,098) Property and equipment, net $ 10,091 $ 10,256 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future lease payments | 2019 2018 Fiscal Year 2020 $ 4,139 $ 4,673 2021 3,181 3,403 2022 2,598 2,604 2023 1,157 2,082 2024 613 698 Thereafter 248 690 Total minimum lease payments 11,936 14,150 Less: interest (787) N/A Total lease liabilities $ 11,149 N/A |
Schedule of other lease information | Other information related to operating leases is as follows (in thousands): 2019 Weighted-average discount rate 3.7 % Supplement cash flow information Cash paid for amounts included in the measurement of lease liabilities $ 4,483 Right of use assets obtained in exchange for new lease liabilities (1) $ 15,280 (1) Includes $12.6 million for operating leases existing on January 1, 2019 and $2.7 million for operating leases that commenced in 2019. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of dividends declared | The Company's Board of Directors declared the following dividends during the years ended December 31, 2019 and 2018: Declaration Date Dividend per Share Record Date Payment Date Amount (in thousands) January 28, 2019 $0.08 March 5, 2019 March 19, 2019 $5,402 May 7, 2019 0.08 June 11, 2019 June 25, 2019 5,416 July 29, 2019 0.08 September 6, 2019 September 20, 2019 5,416 October 28, 2019 0.08 December 4, 2019 December 18, 2019 5,415 January 29, 2018 0.08 March 6, 2018 March 20, 2018 5,370 May 1, 2018 0.08 June 5, 2018 June 19, 2018 5,384 July 30, 2018 0.08 September 5, 2018 September 19, 2018 5,384 October 28, 2018 0.08 December 4, 2018 December 18, 2018 5,383 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The provision for income taxes consists of the following (in thousands): Year Ended December 31, 2019 2018 2017 Current income taxes: Federal $ 10,343 $ 13,704 $ 22,533 State 2,478 2,255 2,550 Total 12,821 15,959 25,083 Deferred income taxes: Federal 1,182 1,466 1,576 State 500 (18) 64 Total 1,682 1,448 1,640 Total income tax provision $ 14,503 $ 17,407 $ 26,723 |
Schedule of deferred income tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows at December 31 (in thousands): 2019 2018 Deferred tax assets: Stock-based compensation $ 983 $ 1,156 Federal benefit of state uncertain tax positions 746 954 Accrued vacation 521 550 Deferred rent 95 81 State net operating loss carryforwards 228 272 Allowance for doubtful accounts 311 240 Right of use lease liability 2,840 — Other 465 662 Gross deferred tax assets 6,189 3,915 Less: Valuation allowance (335) (367) Total deferred tax assets 5,854 3,548 Deferred tax liabilities: Property and equipment (2,027) (1,834) Capitalized software development costs (3,544) (2,495) Right of use lease asset (2,746) — Total deferred tax liabilities (8,317) (4,329) Net deferred tax (liability) asset $ (2,463) $ (781) |
Schedule of effective tax rates | The following table reconciles the statutory federal income tax rate and the effective income tax rate indicated by the consolidated statements of income: Year Ended December 31, 2019 2018 2017 Statutory federal income tax rate 21.0 % 21.0 % 35.0 % Domestic production activities deductions — % — % (2.6) % Federal and state tax credits (0.8) % (2.3) % (2.0) % Tax deficit (benefit) from restricted stock vestings (0.1) % 0.3 % (0.7) % State income taxes 5.0 % 2.3 % 1.8 % Uncertain tax positions (release) (5.2) % 0.8 % 1.6 % Nondeductible expenses 2.2 % 0.8 % 0.7 % Other, net 0.2 % 0.1 % 0.3 % Effective federal and state income tax rate 22.3 % 23.0 % 34.1 % |
Schedule of unrecognized tax benefits | The following table provides a reconciliation of the beginning and ending amount of the consolidated liability for unrecognized income tax benefits (included in other long-term liabilities in the consolidated balance sheets) for the years ended December 31, 2019, 2018 and 2017 (in thousands): 2019 2018 2017 Balance at January 1 $ 8,651 $ 8,020 $ 6,599 Additions for tax positions of prior years 208 459 576 Additions for tax positions of current years 393 1,248 1,646 Expiration of the statute of limitations (3,182) (1,024) (788) Reductions for tax positions of prior years (217) (52) (13) Settlements (805) — — Balance at December 31 $ 5,048 $ 8,651 $ 8,020 |
STOCK-BASED COMPENSATION AND _2
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 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 consolidated statements of income (in thousands): Year Ended December 31, 2019 2018 2017 State enterprise cost of revenues, exclusive of depreciation & amortization $ 1,499 $ 1,516 $ 1,276 Software & services cost of revenues, exclusive of depreciation & amortization 101 151 86 Selling & administrative 4,495 3,994 3,456 Enterprise technology & product support 674 677 636 Stock-based compensation expense before income taxes $ 6,769 $ 6,338 $ 5,454 |
Schedule of service-based restricted stock activity | A summary of service-based restricted stock activity for the year ended December 31, 2019 is presented below: Service-based Restricted Weighted Outstanding at January 1, 2019 717,079 $ 16.58 Granted 362,459 $ 16.96 Vested (329,343) $ 16.79 Canceled (38,033) $ 17.30 Outstanding at December 31, 2019 712,162 $ 16.81 Expected to vest at December 31, 2019 712,162 $ 16.81 |
Schedule of performance-based restricted stock activity | A summary of performance-based restricted stock activity for the year ended December 31, 2019 is presented below: Performance- Weighted Outstanding at January 1, 2019 426,599 $ 17.12 Granted 111,135 $ 17.27 Vested (102,309) $ 17.62 Canceled (96,955) $ 17.62 Outstanding at December 31, 2019 338,470 $ 17.01 Expected to vest at December 31, 2019 40,789 $ 15.89 |
Schedule of assumptions used to estimate fair value of offerings | The fair values of the offerings were estimated on the dates of grant using the Black-Scholes model using the assumptions in the following table. March 31, 2019 March 31, 2018 March 31, 2017 Risk-free interest rate 2.41 % 2.08 % 1.02 % Expected dividend yield 1.93 % 2.06 % 2.69 % Expected life 1.0 year 1.0 year 1.0 year Expected stock price volatility 29.94 % 35.51 % 23.07 % Weighted average fair value of ESPP rights $ 4.49 $ 3.75 $ 4.58 |
REPORTABLE SEGMENTS AND RELAT_2
REPORTABLE SEGMENTS AND RELATED INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of financial information for reportable and operating segments | The table below reflects summarized financial information for the Company’s reportable and operating segments for the years ended December 31 (in thousands): State Enterprise Software Other Consolidated 2019 Revenues $ 320,700 $ 33,505 $ — $ 354,205 Costs & expenses 203,694 13,432 62,050 279,176 Depreciation & amortization 2,724 1,619 8,267 12,610 Operating income (loss) $ 114,282 $ 18,454 $ (70,317) $ 62,419 2018 Revenues $ 320,584 $ 24,316 $ — $ 344,900 Costs & expenses 194,989 9,043 56,691 260,723 Depreciation & amortization 2,985 100 6,032 9,117 Operating income (loss) $ 122,610 $ 15,173 $ (62,723) $ 75,060 2017 Revenues $ 311,351 $ 25,157 $ — $ 336,508 Costs & expenses 191,572 8,890 50,780 251,242 Depreciation & amortization 2,698 97 4,134 6,929 Operating income (loss) $ 117,081 $ 16,170 $ (54,914) $ 78,337 |
Schedule of concentration risk by total consolidated revenues | The following table identifies each type of service, consumer and state that accounted for 10% or more of the Company’s total consolidated revenues for the years ended December 31: Percentage of Total Revenues 2019 2018 2017 Type of Service Motor Vehicle Driver History Record Retrieval 26 % 29 % 31 % Motor Vehicle Registrations 11 % 14 % 14 % Consumer LexisNexis Risk Solutions 15 % 19 % 19 % (provides motor vehicle driver history records to the insurance industry) State Partner Colorado 10 % N/A N/A Texas N/A 17 % 20 % (2018 consists of the legacy and new payment processing contracts) |
UNAUDITED QUARTERLY OPERATING_2
UNAUDITED QUARTERLY OPERATING RESULTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited quarterly operating results | The unaudited quarterly information below is subject to seasonal fluctuations resulting in lower revenues in the fourth quarter of each calendar year due to the lower number of business days in the quarter and a lower volume of business-to-government and citizen-to-government transactions during the holiday periods. For the Year Ended December 31, 2019 (in thousands, except per share amount) First Quarter Second Quarter Third Quarter Fourth Quarter Revenues: State enterprise revenues $ 77,255 $ 82,829 $ 81,084 $ 79,532 Software & services revenues 7,925 8,737 9,301 7,542 Total revenues 85,180 91,566 90,385 87,074 Operating expenses: State enterprise cost of revenues, exclusive of depreciation & amortization 48,655 52,277 50,408 52,354 Software & services cost of revenues, exclusive of depreciation & amortization 2,720 3,329 3,586 3,797 Selling & administrative 9,964 8,356 8,153 8,727 Enterprise technology & product support 6,445 6,745 6,743 6,917 Depreciation & amortization 2,421 3,130 3,524 3,535 Total operating expenses 70,205 73,837 72,414 75,330 Operating income 14,975 17,729 17,971 11,744 Other income: Interest income 604 577 729 604 Income before income taxes 15,579 18,306 18,700 12,348 Income tax provision 4,077 3,846 4,190 2,390 Net income $ 11,502 $ 14,460 $ 14,510 $ 9,958 Basic net income per share $ 0.17 $ 0.21 $ 0.21 $ 0.15 Diluted net income per share $ 0.17 $ 0.21 $ 0.21 $ 0.15 Weighted average shares outstanding: Basic 66,670 66,940 66,960 66,967 Diluted 66,670 66,940 66,960 66,967 For the Year Ended December 31, 2018 (in thousands, except per share amount) First Quarter Second Quarter Third Quarter Fourth Quarter Revenues: State enterprise revenues $ 80,791 $ 86,555 $ 80,884 $ 72,354 Software & services revenues 5,934 5,943 6,144 6,295 Total revenues 86,725 92,498 87,028 78,649 Operating expenses: State enterprise cost of revenues, exclusive of depreciation & amortization 48,642 51,711 48,224 46,412 Software & services cost of revenues, exclusive of depreciation & amortization 2,228 2,235 2,226 2,354 Selling & administrative 7,503 8,268 8,514 8,462 Enterprise technology & product support 5,647 5,735 6,176 6,386 Depreciation & amortization 2,065 2,145 2,441 2,466 Total operating expenses 66,085 70,094 67,581 66,080 Operating income 20,640 22,404 19,447 12,569 Other income: Interest income — 57 153 406 Income before income taxes 20,640 22,461 19,600 12,975 Income tax provision 5,132 5,450 3,698 3,127 Net income $ 15,508 $ 17,011 $ 15,902 $ 9,848 Basic net income per share $ 0.23 $ 0.25 $ 0.24 $ 0.15 Diluted net income per share $ 0.23 $ 0.25 $ 0.24 $ 0.15 Weighted average shares outstanding: Basic 66,323 66,541 66,562 66,569 Diluted 66,323 66,561 66,598 66,641 |
THE COMPANY (Detail)
THE COMPANY (Detail) | Dec. 31, 2019channel |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business channels (in channels) | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)category | Dec. 31, 2018USD ($) | Jan. 01, 2019USD ($) | |
Significant Accounting Policies [Line Items] | |||
Number of revenue and cost categories (in categories) | category | 2 | ||
Allowance for doubtful accounts | $ 1,200,000 | $ 1,000,000 | |
Impaired goodwill | 0 | ||
Unearned revenue | 3,800,000 | 1,700,000 | |
Cash payments received | 10,700,000 | ||
Revenues recognized, previously included in deferred revenues | 8,500,000 | ||
Unbilled revenues | 3,400,000 | $ 2,500,000 | |
Right of use lease assets, net | 10,778,000 | ||
Total lease liabilities | $ 11,149,000 | ||
Accounting Standards Update 2016-02 | |||
Significant Accounting Policies [Line Items] | |||
Right of use lease assets, net | $ 12,600,000 | ||
Total lease liabilities | $ 12,900,000 | ||
Accounts receivable | Credit concentration risk | LexisNexis Risk Solutions | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 14.00% | 15.00% | |
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of intangible asset | 3 years | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of intangible asset | 5 years | ||
Furniture and Fixtures | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 8 years | ||
Equipment | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 3 years | ||
Equipment | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 10 years | ||
Purchased Software | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 3 years | ||
Purchased Software | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 5 years | ||
Leasehold Improvements | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 5 years | ||
Development Services | |||
Significant Accounting Policies [Line Items] | |||
Development services revenues, contract period | 1 year | ||
Remaining performance obligation | $ 6,200,000 | ||
Subscriptions | |||
Significant Accounting Policies [Line Items] | |||
Remaining performance obligation | $ 17,100,000 | ||
Subscriptions | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Performance obligation, description of timing | 1 | ||
Subscriptions | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Performance obligation, description of timing | 5 years | ||
Indiana | State Enterprise Revenues | |||
Significant Accounting Policies [Line Items] | |||
Performance obligation, description of timing | one month |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue | |||||||||||
Total revenues | $ 87,074 | $ 90,385 | $ 91,566 | $ 85,180 | $ 78,649 | $ 87,028 | $ 92,498 | $ 86,725 | $ 354,205 | $ 344,900 | $ 336,508 |
IGS | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 214,406 | 203,247 | 192,200 | ||||||||
DHR | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 91,059 | 100,241 | 103,899 | ||||||||
Other | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 29,575 | 22,634 | 23,527 | ||||||||
Total transaction-based | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 335,040 | 326,122 | 319,626 | ||||||||
Development services | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 10,285 | 12,146 | 10,180 | ||||||||
Fixed-fee services | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 8,880 | 6,632 | 6,702 | ||||||||
State Enterprise | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 320,700 | 320,584 | 311,351 | ||||||||
State Enterprise | IGS | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 214,406 | 203,247 | 192,200 | ||||||||
State Enterprise | DHR | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 91,059 | 100,241 | 103,899 | ||||||||
State Enterprise | Other | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
State Enterprise | Total transaction-based | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 305,465 | 303,488 | 296,099 | ||||||||
State Enterprise | Development services | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 10,285 | 12,146 | 10,180 | ||||||||
State Enterprise | Fixed-fee services | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 4,950 | 4,950 | 5,072 | ||||||||
Software & Services | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 33,505 | 24,316 | 25,157 | ||||||||
Software & Services | IGS | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Software & Services | DHR | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Software & Services | Other | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 29,575 | 22,634 | 23,527 | ||||||||
Software & Services | Total transaction-based | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 29,575 | 22,634 | 23,527 | ||||||||
Software & Services | Development services | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Software & Services | Fixed-fee services | |||||||||||
Disaggregation of Revenue | |||||||||||
Total revenues | $ 3,930 | $ 1,682 | $ 1,630 |
OUTSOURCED GOVERNMENT CONTRAC_2
OUTSOURCED GOVERNMENT CONTRACTS (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)contract | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Contracts [Line Items] | |||
Number of contracts with renewal provisions | contract | 6 | ||
Performance bond commitments | $ 10.9 | ||
NICUSA, TN Division | |||
Contracts [Line Items] | |||
Portal revenues | $ 1.8 | ||
Contracts that can be terminated without cause | |||
Contracts [Line Items] | |||
Number of contracts that can be terminated | contract | 15 | ||
Contracts that can be terminated without cause | Government contracts concentration risk | Consolidated revenues | |||
Contracts [Line Items] | |||
Concentration risk percentage | 59.00% | ||
Expiring contracts | |||
Contracts [Line Items] | |||
Number of contracts that expire within the 12-month period | contract | 11 | ||
Contract expiration period following year end | 12 months | ||
Expiring contracts | Government contracts concentration risk | Consolidated revenues | |||
Contracts [Line Items] | |||
Concentration risk percentage | 42.00% | ||
Texas Legacy Contract | |||
Contracts [Line Items] | |||
Severance costs | $ 1 | ||
Texas Legacy Contract | Government contracts concentration risk | Consolidated revenues | |||
Contracts [Line Items] | |||
Concentration risk percentage | 14.00% | 20.00% | |
Portal revenues | $ 49 | $ 65.7 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Unvested service-based restricted stock awards included in the calculation of earnings per share (in shares) | 700 | 700 | 600 | ||||||||
Numerator: | |||||||||||
Net income | $ 9,958 | $ 14,510 | $ 14,460 | $ 11,502 | $ 9,848 | $ 15,902 | $ 17,011 | $ 15,508 | $ 50,430 | $ 58,269 | $ 51,614 |
Less: Income allocated to participating securities | (546) | (629) | (479) | ||||||||
Net income available to common stockholders | $ 49,884 | $ 57,640 | $ 51,135 | ||||||||
Denominator: | |||||||||||
Basic (in shares) | 66,967 | 66,960 | 66,940 | 66,670 | 66,569 | 66,562 | 66,541 | 66,323 | 66,884 | 66,499 | 66,209 |
Shares issuable in lieu of dividend payments on performance-based restricted stock awards (in shares) | 0 | 61 | 57 | ||||||||
Weighted average shares - diluted (in shares) | 66,967 | 66,960 | 66,940 | 66,670 | 66,641 | 66,598 | 66,561 | 66,323 | 66,884 | 66,560 | 66,266 |
Basic net income per share: | |||||||||||
Basic net income per share (in usd per share) | $ 0.15 | $ 0.21 | $ 0.21 | $ 0.17 | $ 0.15 | $ 0.24 | $ 0.25 | $ 0.23 | $ 0.75 | $ 0.87 | $ 0.77 |
Diluted net income per share: | |||||||||||
Diluted net income per share (in usd per share) | $ 0.15 | $ 0.21 | $ 0.21 | $ 0.17 | $ 0.15 | $ 0.24 | $ 0.25 | $ 0.23 | $ 0.75 | $ 0.87 | $ 0.77 |
ACQUISITIONS - Complia, LLC (De
ACQUISITIONS - Complia, LLC (Details) - Complia LLC $ in Millions | May 01, 2019USD ($) |
Business Acquisition [Line Items] | |
Cash consideration transferred | $ 10 |
Potential max payout for earn-out | 5 |
Contingent consideration liability | 1 |
Consideration transferred | $ 11 |
Software | |
Business Acquisition [Line Items] | |
Amortization period | 5 years |
Customer Relationships | |
Business Acquisition [Line Items] | |
Amortization period | 7 years |
Non-compete agreements | |
Business Acquisition [Line Items] | |
Amortization period | 3 years |
ACQUISITIONS - Net Assets Acqui
ACQUISITIONS - Net Assets Acquired (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | May 01, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,965 | $ 0 | |
Complia LLC | |||
Business Acquisition [Line Items] | |||
Current assets | $ 451 | ||
Other assets | 11 | ||
Accrued expenses and other liabilities | (377) | ||
Total assets acquired | 11,337 | ||
Net assets acquired | 10,960 | ||
Software | Complia LLC | |||
Business Acquisition [Line Items] | |||
Intangible assets | 4,200 | ||
Customer Relationships | Complia LLC | |||
Business Acquisition [Line Items] | |||
Intangible assets | 425 | ||
Non-compete agreements | Complia LLC | |||
Business Acquisition [Line Items] | |||
Intangible assets | 250 | ||
Trade Names | Complia LLC | |||
Business Acquisition [Line Items] | |||
Intangible assets | 35 | ||
Software & services | Complia LLC | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 5,965 |
ACQUISITIONS - Leap Orbit LLC (
ACQUISITIONS - Leap Orbit LLC (Details) - Leap Orbit LLC - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Acquisition [Line Items] | ||
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 |
INTANGIBLE ASSETS, NET - Schedu
INTANGIBLE ASSETS, NET - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 42,812 | $ 25,745 |
Accumulated Amortization | (20,414) | (12,141) |
Net Book Value | 22,398 | 13,604 |
Complia and Leap Orbit Acquisitions | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | 8,400 | |
Software development cost | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 30,861 | 22,190 |
Accumulated Amortization | (16,951) | (11,647) |
Net Book Value | 13,910 | 10,543 |
Acquired software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 11,241 | 3,555 |
Accumulated Amortization | (3,359) | (494) |
Net Book Value | 7,882 | 3,061 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 425 | 0 |
Accumulated Amortization | (40) | 0 |
Net Book Value | 385 | 0 |
Noncompete Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 250 | 0 |
Accumulated Amortization | (56) | 0 |
Net Book Value | 194 | 0 |
Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 35 | 0 |
Accumulated Amortization | (8) | 0 |
Net Book Value | $ 27 | $ 0 |
INTANGIBLE ASSETS, NET - Amorti
INTANGIBLE ASSETS, NET - Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 8,300 | $ 3,700 | $ 1,900 |
2020 | 10,269 | ||
2021 | 7,466 | ||
2022 | 3,341 | ||
2023 | 901 | ||
2024 | 341 | ||
Thereafter | 80 | ||
Net Book Value | 22,398 | 13,604 | |
Software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Net Book Value | $ 7,882 | $ 3,061 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Equipment | $ 24,936 | $ 24,548 | |
Purchased software | 8,769 | 8,971 | |
Furniture and fixtures | 5,922 | 5,614 | |
Leasehold improvements | 2,181 | 2,221 | |
Property and equipment, gross | 41,808 | 41,354 | |
Less accumulated depreciation | (31,717) | (31,098) | |
Property and equipment, net | 10,091 | 10,256 | |
Depreciation expense | $ 4,300 | $ 5,400 | $ 5,000 |
DEBT OBLIGATIONS AND COLLATER_2
DEBT OBLIGATIONS AND COLLATERAL REQUIREMENTS (Details) - USD ($) | May 01, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 10,000,000 | |
Option to increase borrowing capacity | $ 50,000,000 | |
Letters of credit, maximum effective in force period | 1 year | |
Performance bond commitments | $ 10,900,000 | |
Letter of credit | ||
Debt Instrument [Line Items] | ||
Credit facility, maximum borrowing capacity | 5,000,000 | |
Forth Amended Credit Agreement | Revolving credit facility | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable rate | 1.15% | |
Unsecured Credit Agreement | Covenant Requirement | ||
Debt Instrument [Line Items] | ||
Consolidated tangible net worth required | $ 36,000,000 | |
Consolidated leverage ratio | 150.00% | |
Unsecured Credit Agreement | Letter of credit | ||
Debt Instrument [Line Items] | ||
Credit facility, available borrowing capacity | 4,800,000 | |
Unsecured Credit Agreement | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Credit facility, outstanding letters of credit | 200,000 | |
Credit facility, available borrowing capacity | 9,800,000 | |
Credit card | ||
Debt Instrument [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 1,000,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Weighted average remaining lease term | 3 years 6 months | ||
Lease cost | $ 5.8 | $ 5.3 | $ 5.1 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Future Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
2020 | $ 4,139 | |
2021 | 3,181 | |
2022 | 2,598 | |
2023 | 1,157 | |
2024 | 613 | |
Thereafter | 248 | |
Total minimum lease payments | 11,936 | |
Less: interest | (787) | |
Total lease liabilities | $ 11,149 | |
Leases, Operating [Abstract] | ||
2019 | $ 4,673 | |
2020 | 3,403 | |
2021 | 2,604 | |
2022 | 2,082 | |
2023 | 698 | |
Thereafter | 690 | |
Total lease liabilities | $ 14,150 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Other Lease Information (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Weighted-average discount rate | 3.70% | |
Cash paid for amounts included in the measurement of lease liabilities | $ 4,483 | |
Right of use assets obtained in exchange for new lease liabilities | 15,280 | |
Existing Leases | ||
Lessee, Lease, Description [Line Items] | ||
Right of use assets obtained in exchange for new lease liabilities | $ 12,600 | |
Commenced Leases | ||
Lessee, Lease, Description [Line Items] | ||
Right of use assets obtained in exchange for new lease liabilities | $ 2,700 |
STOCKHOLDERS' EQUITY (Detail)
STOCKHOLDERS' EQUITY (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jan. 27, 2020 | Dec. 04, 2019 | Oct. 28, 2019 | Sep. 06, 2019 | Jul. 29, 2019 | Jun. 11, 2019 | May 07, 2019 | Mar. 05, 2019 | Jan. 28, 2019 | Dec. 04, 2018 | Oct. 28, 2018 | Sep. 05, 2018 | Jul. 30, 2018 | Jun. 05, 2018 | May 01, 2018 | Mar. 06, 2018 | Jan. 29, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | ||||||||||||||||||||
Dividends declared (in usd per share) | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | ||||||||||||
Dividend payment | $ 5,415 | $ 5,416 | $ 5,416 | $ 5,402 | $ 5,383 | $ 5,384 | $ 5,384 | $ 5,370 | $ 21,649 | $ 21,521 | $ 21,393 | |||||||||
Subsequent event | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Dividends declared (in usd per share) | $ 0.09 | |||||||||||||||||||
Dividend payment | $ 6,100 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current income taxes: | |||||||||||
Federal | $ 10,343 | $ 13,704 | $ 22,533 | ||||||||
State | 2,478 | 2,255 | 2,550 | ||||||||
Total | 12,821 | 15,959 | 25,083 | ||||||||
Deferred income taxes: | |||||||||||
Federal | 1,182 | 1,466 | 1,576 | ||||||||
State | 500 | (18) | 64 | ||||||||
Total | 1,682 | 1,448 | 1,640 | ||||||||
Total income tax provision | $ 2,390 | $ 4,190 | $ 3,846 | $ 4,077 | $ 3,127 | $ 3,698 | $ 5,450 | $ 5,132 | $ 14,503 | $ 17,407 | $ 26,723 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Stock-based compensation | $ 983 | $ 1,156 |
Federal benefit of state uncertain tax positions | 746 | 954 |
Accrued vacation | 521 | 550 |
Deferred rent | 95 | 81 |
State net operating loss carryforwards | 228 | 272 |
Allowance for doubtful accounts | 311 | 240 |
Right of use lease liability | 2,840 | |
Other | 465 | 662 |
Gross deferred tax assets | 6,189 | 3,915 |
Less: Valuation allowance | (335) | (367) |
Total deferred tax assets | 5,854 | 3,548 |
Deferred tax liabilities: | ||
Property and equipment | (2,027) | (1,834) |
Capitalized software development costs | (3,544) | (2,495) |
Right of use lease asset | (2,746) | |
Total deferred tax liabilities | (8,317) | (4,329) |
Net deferred tax (liability) asset | $ 2,463 | $ 781 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||
Deferred tax asset valuation allowance | $ 335 | $ 367 | |
Executive severance costs | 2,600 | ||
Tax deficit recognized within income tax expense | 100 | 300 | |
Excess tax benefits related to share-based compensation recognized within income tax expense | $ 500 | ||
Unrecognized tax benefits | $ 4,300 | $ 7,700 | |
State income tax returns | Minimum | |||
Income Taxes [Line Items] | |||
Tax examination period | 3 years | ||
State income tax returns | Maximum | |||
Income Taxes [Line Items] | |||
Tax examination period | 5 years |
INCOME TAXES - Statutory Federa
INCOME TAXES - Statutory Federal Income Tax Rate and Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 21.00% | 21.00% | 35.00% |
Domestic production activities deductions | 0.00% | 0.00% | (2.60%) |
Federal and state tax credits | (0.80%) | (2.30%) | (2.00%) |
Tax deficit (benefit) from restricted stock vestings | (0.10%) | 0.30% | (0.70%) |
State income taxes | 5.00% | 2.30% | 1.80% |
Uncertain tax positions (release) | (5.20%) | 0.80% | 1.60% |
Nondeductible expenses | 2.20% | 0.80% | 0.70% |
Other, net | 0.20% | 0.10% | 0.30% |
Effective federal and state income tax rate | 22.30% | 23.00% | 34.10% |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Unrecognized Income Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 8,651 | $ 8,020 | $ 6,599 |
Additions for tax positions of prior years | 208 | 459 | 576 |
Additions for tax positions of current years | 393 | 1,248 | 1,646 |
Expiration of the statute of limitations | (3,182) | (1,024) | (788) |
Reductions for tax positions of prior years | (217) | (52) | (13) |
Settlements | (805) | 0 | 0 |
Unrecognized tax benefits, ending balance | $ 5,048 | $ 8,651 | $ 8,020 |
STOCK-BASED COMPENSATION AND _3
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2019 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 1999 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Options outstanding (in shares) | 0 | 0 | 0 | |||||
Share based compensation, shares authorized (in shares) | 15,825,223 | |||||||
Share based compensation, shares authorized for future grant (in shares) | 3,143,694 | |||||||
Intrinsic value of nonvested restricted stock awards expected to vest | $ 16,800 | |||||||
Unrecognized compensation related to non-vested awards | $ 8,300 | |||||||
Unrecognized compensation costs, weighted average period expected to be recognized (years) | 2 years | |||||||
Proceeds from employee common stock purchases | $ 1,443 | $ 1,382 | $ 1,330 | |||||
One-time Termination Benefits | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
One time cash payment | 1,500 | |||||||
Stock based compensation expense | $ 1,100 | |||||||
Service-based Restricted Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation, award shares granted in period (in shares) | 362,459 | |||||||
Forfeited shares (in shares) | 38,033 | |||||||
Vested (in shares) | 329,343 | |||||||
Share based compensation, fair value of restricted stock vested | $ 5,500 | $ 5,100 | $ 4,700 | |||||
Granted (in usd per share) | $ 16.96 | $ 14.15 | $ 21.46 | |||||
Service-based Restricted Shares | One-time Termination Benefits | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vested (in shares) | 44,507 | |||||||
Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation, award shares granted in period (in shares) | 111,135 | |||||||
Share based compensation, annual award vesting period from date of grant | 3 years | 3 years | 3 years | |||||
Forfeited shares (in shares) | 96,955 | |||||||
Vested (in shares) | 102,309 | |||||||
Share based compensation, fair value of restricted stock vested | $ 1,800 | $ 0 | $ 1,200 | |||||
Granted (in usd per share) | $ 17.27 | $ 13.70 | $ 22 | |||||
Performance Shares | One-time Termination Benefits | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vested (in shares) | 37,463 | |||||||
Performance Period 2016 to 2018 | Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [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 | |||||||
Forfeited shares (in shares) | 73,345 | |||||||
Performance Period 2015 to 2017 | Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Forfeited shares (in shares) | 91,820 | |||||||
Performance Period 2017 to 2019 | Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Forfeited shares (in shares) | 87,241 | |||||||
Employees and executives | Service based awards | Service-based Restricted Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation, award shares granted in period (in shares) | 311,566 | |||||||
Share based compensation, award granted in period grant-date fair value | $ 5,300 | |||||||
Share based compensation, annual award vesting period from date of grant | 1 year | |||||||
Employees and executives | Service based awards | Service-based Restricted Shares | Share-based Compensation Award, Tranche One | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation, award annual installment vesting rate | 25.00% | |||||||
Employees and executives | Performance based awards | Service-based Restricted Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [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 | $ 1,900 | |||||||
Share based compensation, annual award vesting period from date of grant | 3 years | |||||||
Non employee directors | Service based awards | Service-based Restricted Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [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 | $ 800 | |||||||
Share based compensation, annual award vesting period from date of grant | 1 year | |||||||
Employee stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation, shares authorized (in shares) | 2,321,688 | |||||||
Share based compensation, shares authorized for future grant (in shares) | 890,981 | |||||||
Proceeds from employee common stock purchases | $ 1,400 | $ 1,400 | $ 1,300 |
STOCK-BASED COMPENSATION AND _4
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 6,769 | $ 6,338 | $ 5,454 |
Cost of revenues | State Enterprise | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 1,499 | 1,516 | 1,276 |
Cost of revenues | Software & services | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 101 | 151 | 86 |
Selling & administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 4,495 | 3,994 | 3,456 |
Enterprise technology & product support | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 674 | $ 677 | $ 636 |
STOCK-BASED COMPENSATION AND _5
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Summary of Service-Based Restricted Activity (Details) - Service-based Restricted Shares - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Performance- based Restricted Shares | |||
Outstanding beginning of period (in shares) | 717,079 | ||
Granted (in shares) | 362,459 | ||
Vested (in shares) | (329,343) | ||
Canceled (in shares) | (38,033) | ||
Outstanding end of period (in shares) | 712,162 | 717,079 | |
Expected to vest (in shares) | 712,162 | ||
Weighted Average Grant Date Fair Value | |||
Outstanding beginning of period (in usd per share) | $ 16.58 | ||
Granted (in usd per share) | 16.96 | $ 14.15 | $ 21.46 |
Vested (in usd per share) | 16.79 | ||
Canceled (in usd per share) | 17.30 | ||
Outstanding end of period (in usd per share) | 16.81 | $ 16.58 | |
Expected to vest (in usd per share) | $ 16.81 |
STOCK-BASED COMPENSATION AND _6
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Summary of Performance-Based Restricted Stock Activity (Details) - Performance Shares - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Performance- based Restricted Shares | |||
Outstanding beginning of period (in shares) | 426,599 | ||
Granted (in shares) | 111,135 | ||
Vested (in shares) | (102,309) | ||
Canceled (in shares) | (96,955) | ||
Outstanding end of period (in shares) | 338,470 | 426,599 | |
Expected to vest (in shares) | 40,789 | ||
Weighted Average Grant Date Fair Value | |||
Outstanding beginning of period (in usd per share) | $ 17.12 | ||
Granted (in usd per share) | 17.27 | $ 13.70 | $ 22 |
Vested (in usd per share) | 17.62 | ||
Canceled (in usd per share) | 17.62 | ||
Outstanding end of period (in usd per share) | 17.01 | $ 17.12 | |
Expected to vest (in usd per share) | $ 15.89 |
STOCK-BASED COMPENSATION AND _7
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Employee Stock Purchase Plan (Details) - USD ($) | 12 Months Ended | |||||||
Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Apr. 01, 2019 | Dec. 31, 1999 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation, shares authorized (in shares) | 15,825,223 | |||||||
Share based compensation, shares authorized for future grant (in shares) | 3,143,694 | |||||||
Proceeds from employee common stock purchases | $ 1,443,000 | $ 1,382,000 | $ 1,330,000 | |||||
Employee stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation, shares authorized (in shares) | 2,321,688 | |||||||
Percentage of compensation eligible employees can use to purchase common stock, maximum | 15.00% | |||||||
Compensation amount that eligible employees can use to purchase common stock | $ 25,000 | |||||||
Percentage of fair market value eligible employees can purchase common stock as defined, minimum | 85.00% | |||||||
Share based compensation, shares authorized for future grant (in shares) | 890,981 | |||||||
Employee stock purchase plan, shares purchased (in shares) | 127,600 | 122,152 | 86,998 | |||||
Employee stock purchase plan, per share price (in usd per share) | $ 11.31 | $ 11.31 | $ 15.29 | $ 17.13 | ||||
Proceeds from employee common stock purchases | $ 1,400,000 | $ 1,400,000 | $ 1,300,000 |
STOCK-BASED COMPENSATION AND _8
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Assumptions Used to Estimate Grant Date Fair Value Using the Black-Scholes Model (Details) - $ / shares | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 |
Share-based Payment Arrangement [Abstract] | |||
Risk-free interest rate | 2.41% | 2.08% | 1.02% |
Expected dividend yield | 1.93% | 2.06% | 2.69% |
Expected life | 1 year | 1 year | 1 year |
Expected stock price volatility | 29.94% | 35.51% | 23.07% |
Weighted average fair value of ESPP rights (usd per share) | $ 4.49 | $ 3.75 | $ 4.58 |
STOCK-BASED COMPENSATION AND _9
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Defined Contribution 401(k) Profit Sharing Plan (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)hour | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Defined contribution plan, eligibility, hours of service (in hours) | hour | 1,000 | ||
Defined Contribution 401(k) Profit Sharing Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 5.00% | ||
Defined contribution plan, cost | $ | $ 2.9 | $ 2.7 | $ 2.7 |
REPORTABLE SEGMENTS AND RELAT_3
REPORTABLE SEGMENTS AND RELATED INFORMATION - Summary of Financial Information for Reportable and Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues: | $ 87,074 | $ 90,385 | $ 91,566 | $ 85,180 | $ 78,649 | $ 87,028 | $ 92,498 | $ 86,725 | $ 354,205 | $ 344,900 | $ 336,508 |
Costs & expenses | 279,176 | 260,723 | 251,242 | ||||||||
Depreciation & amortization | 3,535 | 3,524 | 3,130 | 2,421 | 2,466 | 2,441 | 2,145 | 2,065 | 12,610 | 9,117 | 6,929 |
Operating income (loss) | $ 11,744 | $ 17,971 | $ 17,729 | $ 14,975 | $ 12,569 | $ 19,447 | $ 22,404 | $ 20,640 | 62,419 | 75,060 | 78,337 |
State Enterprise | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues: | 320,700 | 320,584 | 311,351 | ||||||||
Operating Segments | State Enterprise | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues: | 320,700 | 320,584 | 311,351 | ||||||||
Costs & expenses | 203,694 | 194,989 | 191,572 | ||||||||
Depreciation & amortization | 2,724 | 2,985 | 2,698 | ||||||||
Operating income (loss) | 114,282 | 122,610 | 117,081 | ||||||||
Operating Segments | Software & Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues: | 33,505 | 24,316 | 25,157 | ||||||||
Costs & expenses | 13,432 | 9,043 | 8,890 | ||||||||
Depreciation & amortization | 1,619 | 100 | 97 | ||||||||
Operating income (loss) | 18,454 | 15,173 | 16,170 | ||||||||
Other Reconciling Items | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues: | 0 | 0 | 0 | ||||||||
Costs & expenses | 62,050 | 56,691 | 50,780 | ||||||||
Depreciation & amortization | 8,267 | 6,032 | 4,134 | ||||||||
Operating income (loss) | $ (70,317) | $ (62,723) | $ (54,914) |
REPORTABLE SEGMENTS AND RELAT_4
REPORTABLE SEGMENTS AND RELATED INFORMATION - Summary of Concentration of Risk by Total Consolidated Revenues (Details) - Consolidated revenues | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Product concentration risk | Motor Vehicle Driver History Record Retrieval | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 26.00% | 29.00% | 31.00% |
Product concentration risk | Motor Vehicle Registrations | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 11.00% | 14.00% | 14.00% |
Customer concentration risk | Colorado State Partner | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Customer concentration risk | Texas NICUSA, LLC | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 17.00% | 20.00% | |
Customer concentration risk | LexisNexis Risk Solutions | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% | 19.00% | 19.00% |
UNAUDITED QUARTERLY OPERATING_3
UNAUDITED QUARTERLY OPERATING RESULTS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | $ 87,074 | $ 90,385 | $ 91,566 | $ 85,180 | $ 78,649 | $ 87,028 | $ 92,498 | $ 86,725 | $ 354,205 | $ 344,900 | $ 336,508 |
Operating expenses | |||||||||||
Selling & administrative and product support | 8,727 | 8,153 | 8,356 | 9,964 | 8,462 | 8,514 | 8,268 | 7,503 | |||
Enterprise technology & product support | 6,917 | 6,743 | 6,745 | 6,445 | 6,386 | 6,176 | 5,735 | 5,647 | |||
Depreciation & amortization | 3,535 | 3,524 | 3,130 | 2,421 | 2,466 | 2,441 | 2,145 | 2,065 | 12,610 | 9,117 | 6,929 |
Total operating expenses | 75,330 | 72,414 | 73,837 | 70,205 | 66,080 | 67,581 | 70,094 | 66,085 | 291,786 | 269,840 | 258,171 |
Operating income (loss) | 11,744 | 17,971 | 17,729 | 14,975 | 12,569 | 19,447 | 22,404 | 20,640 | 62,419 | 75,060 | 78,337 |
Interest income | 604 | 729 | 577 | 604 | 406 | 153 | 57 | 0 | 2,514 | 616 | 0 |
Income before income taxes | 12,348 | 18,700 | 18,306 | 15,579 | 12,975 | 19,600 | 22,461 | 20,640 | 64,933 | 75,676 | 78,337 |
Income tax provision | 2,390 | 4,190 | 3,846 | 4,077 | 3,127 | 3,698 | 5,450 | 5,132 | 14,503 | 17,407 | 26,723 |
Net income | $ 9,958 | $ 14,510 | $ 14,460 | $ 11,502 | $ 9,848 | $ 15,902 | $ 17,011 | $ 15,508 | $ 50,430 | $ 58,269 | $ 51,614 |
Basic net income per share (in usd per share) | $ 0.15 | $ 0.21 | $ 0.21 | $ 0.17 | $ 0.15 | $ 0.24 | $ 0.25 | $ 0.23 | $ 0.75 | $ 0.87 | $ 0.77 |
Diluted net income per share (in usd per share) | $ 0.15 | $ 0.21 | $ 0.21 | $ 0.17 | $ 0.15 | $ 0.24 | $ 0.25 | $ 0.23 | $ 0.75 | $ 0.87 | $ 0.77 |
Weighted average shares outstanding | |||||||||||
Basic (in shares) | 66,967 | 66,960 | 66,940 | 66,670 | 66,569 | 66,562 | 66,541 | 66,323 | 66,884 | 66,499 | 66,209 |
Diluted (in shares) | 66,967 | 66,960 | 66,940 | 66,670 | 66,641 | 66,598 | 66,561 | 66,323 | 66,884 | 66,560 | 66,266 |
Software & services | |||||||||||
Revenues: | $ 7,542 | $ 9,301 | $ 8,737 | $ 7,925 | $ 6,295 | $ 6,144 | $ 5,943 | $ 5,934 | $ 33,505 | $ 24,316 | $ 25,157 |
Operating expenses | |||||||||||
State enterprise cost of revenues, exclusive of depreciation & amortization | 3,797 | 3,586 | 3,329 | 2,720 | 2,354 | 2,226 | 2,235 | 2,228 | 13,432 | 9,043 | 8,890 |
State Enterprise Revenues | |||||||||||
Revenues: | 79,532 | 81,084 | 82,829 | 77,255 | 72,354 | 80,884 | 86,555 | 80,791 | 320,700 | 320,584 | 311,351 |
Operating expenses | |||||||||||
State enterprise cost of revenues, exclusive of depreciation & amortization | $ 52,354 | $ 50,408 | $ 52,277 | $ 48,655 | $ 46,412 | $ 48,224 | $ 51,711 | $ 48,642 | $ 203,694 | $ 194,989 | $ 191,572 |
Uncategorized Items - egov-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 208,000 |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 409,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 208,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (409,000) |