NRCI National Research Corp. (MM)

National Research Corporation (NASDAQ/NM:NRCI), a leader in healthcare performance measurement, today announced results for the second quarter and six months ended June 30, 2005. Commenting on second quarter results, Michael D. Hays, chief executive officer of National Research Corporation, said, "This was an excellent quarter for us with significant improvement in virtually all operating and financial metrics. We are particularly pleased with the rapid pace at which we are adding new contracts as well as our net income growth of 26%, which outpaced a strong 12% increase in revenues. The increasing demand for our services is becoming a material driver for the Company." Revenues for the quarter ended June 30, 2005, were $7.1 million compared with revenues of $6.4 million for the same period in 2004. Net income for the quarter ended June 30, 2005, was $925,000 compared with net income of $738,000 in the prior year period. Earnings per share were $0.13 per basic and diluted share compared with $0.10 per basic and diluted share in the prior-year period. Revenues for the first half of 2005 were $13.7 million compared with revenues of $14.0 million for the first half of 2004. Net income for the six months ended June 30, 2005, was $1.7 million, or $0.23 per basic and diluted share, compared with $1.9 million, or $0.26 per basic and diluted share, in the prior-year period. Patrick E. Beans, chief financial officer of National Research Corporation, added, "Our strong second quarter performance was also driven by lower depreciation and lower interest expense, which are trends we expect to continue. Also, the volatility in our government business appears to have subsided; in fact, the value of government contracts increased slightly this past quarter." In closing, Mr. Hays added, "I am also very pleased with the future prospects of our company. Total recurring contract value (TRCV), always a good predictor of future success, was up almost 14% over the same quarter last year and up more than 5% compared with the first quarter of 2005. On the commercial side of our business, TRCV was up 21% period over period." A listen-only simulcast of National Research Corporation's second quarter conference call will be available online at www.earnings.com on August 3, 2005, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately an hour later and continue for 30 days. National Research Corporation, headquartered in Lincoln, Nebraska, is a leading provider of ongoing survey-based performance measurement, analysis, tracking and improvement services to the healthcare industry in the United States and Canada. The Company addresses the growing need of healthcare providers and payors to measure the care outcomes, specifically satisfaction and health status, of their patients and/or members. The Company develops tools that enable healthcare organizations to obtain performance measurement information necessary to improve their business practices. This press release includes "forward-looking" statements related to the Company that can generally be identified as describing the Company's future plans, objectives or goals. Such forward-looking statements are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the factors that could affect the Company's future results, please see the Company's filings with the Securities and Exchange Commission. -0- *T NATIONAL RESEARCH CORPORATION Unaudited Consolidated Statements of Operations (In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------ 2005 2004 2005 2004 -------- -------- -------- -------- Revenues $7,150 $6,371 $13,746 $13,933 Operating expenses: Direct expenses 3,073 2,717 5,822 6,015 Selling, general and administrative 2,089 1,850 4,274 3,754 Depreciation and amortization 454 489 878 953 -------- -------- -------- -------- Total operating expenses 5,616 5,056 10,974 10,722 -------- -------- -------- -------- Operating income 1,534 1,315 2,772 3,211 Other income (expense): Interest income 130 80 239 162 Interest expense (101) (137) (202) (250) Other, net (23) (56) (28) (66) -------- -------- -------- -------- Total other income (expense) 6 (113) 9 (154) Income before income taxes 1,540 1,202 2,781 3,057 Provision for income taxes 615 464 1,108 1,143 -------- -------- -------- -------- Net income $925 $738 $1,673 $1,914 ======== ======== ======== ======== Net income per share, basic $0.13 $0.10 $0.23 $0.26 ======== ======== ======== ======== Net income per share, diluted $0.13 $0.10 $0.23 $0.26 ======== ======== ======== ======== Weighted average shares outstanding: Basic 7,122 7,191 7,136 7,224 Diluted 7,179 7,284 7,191 7,316 NATIONAL RESEARCH CORPORATION Unaudited Consolidated Condensed Balance Sheets (Dollars in thousands) June 30, Dec. 31, 2005 2004 -------- -------- ASSETS Current Assets: Cash and cash equivalents $3,125 $3,648 Short-term investments 15,563 15,348 Accounts receivable, net 4,553 3,392 Other current assets 3,049 3,066 -------- -------- Total current assets 26,290 25,454 Net property and equipment 11,992 12,355 Other, net 10,083 10,145 -------- -------- Total Assets $48,365 $47,954 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses $1,320 $851 Deferred revenue 6,282 4,036 Accrued compensation 1,267 976 Notes payable 162 156 -------- -------- Total current liabilities 9,031 6,019 Current liabilities 6,820 6,917 -------- -------- Total Liabilities 15,851 12,936 -------- -------- Shareholders' Equity: Common stock, $0.001 par value; 20,000,000 shares authorized; issued 7,727,362 in 2005 and 7,684,006 in 2004; outstanding 7,004,151 in 2005 and 7,174,706 in 2004 8 8 Additional paid-in capital 19,897 19,346 Retained earnings 20,905 20,382 Unearned compensation (468) (182) Accumulated other comprehensive income 189 220 Treasury stock (8,017) (4,756) -------- -------- Total shareholders' equity 32,514 35,018 -------- -------- Total Liabilities and Shareholders' Equity $48,365 $47,954 ======== ======== *T