NIC Restructures Business Units, Issues Earnings Warning
SEPT. 22-National Information Consortium Inc., an e-government solutions provider, is cutting staff at two major business units and reorganizing its top management team to better compete in the e-government marketplace.
By William Welsh, Staff Writer
SEPT. 22-In an effort to improve a sagging bottom line, National Information Consortium Inc. is cutting staff and restructuring the company's business units.
NIC of Overland Park, Kan., is taking a $1 million pre-tax charge in the third quarter for the restructuring, which includes staff reductions at NIC Commerce and NIC Technologies, company officials said. Both units were purchased within the past year by NIC, an e-government solutions provider.
NIC also warned investors that its earnings will fall short of third quarter expectations, with an anticipated net loss per share of between 24 cents and 25 cents before a one-time anticipated quarterly charge of about $0.01 per share.
"We are displeased with our short-term financial results, and in particular with the performance of our newly acquired companies," said NIC President and Chief Executive Jim Dodd, who said the acquisitions were a necessary part of the company's growth. "We are now in better position than ever to benefit from the imminent explosion of e-commerce in the pubic sector."
The two units, NIC Commerce and NIC Technologies, had been the main source of shortfalls versus expectations in company revenues and earnings. Third quarter revenues are expected to be between $19 million and $19.5 million, with losses between $7.5 million and $8.5 million, NIC officials said.
The stock, which reached a 52-week high of $78 per share in March, closed at $5.06 on Friday, Sept. 22.
NIC's new structure will have three sectors: public and private partnerships, strategic ventures and e-government solutions.
The public and private partnerships group will include all state and local projects. NIC currently has 15 states and local customers.
The strategic ventures group will include NIC's alliances with America Online Inc. of Dulles, Va., and Deloitte Consulting of New York, its international interests and its B2G industry portal venture.
The e-government solutions group will consist of NIC's three product solutions businesses: NIC Commerce, NIC Technologies and NIC Conquest.