NRCI National Research Corp. (MM)

Sales Set New Record Under Sales Expansion Plan National Research Corporation (NASDAQ/NM:NRCI), a leader in healthcare performance measurement, today announced results for the first quarter ended March 31, 2006. -- Quarterly net new contracts reached $3.8 million -- Quarterly revenues increased by 44% -- Quarterly net income up 63% -- Quarterly earnings per share growth equals 80% Commenting on the results, Michael D. Hays, chief executive officer of National Research Corporation, said, "Our first quarter performance was excellent and provides for a very strong start to 2006." Revenues for the quarter ended March 31, 2006, were $9.5 million compared with revenues of $6.6 million for the same period in 2005. Net income for the quarter ended March 31, 2006, was $1.2 million, or $0.18 per basic and diluted share, compared with net income of $748,100, or $0.10 per basic and diluted share, in the prior-year period. Excluding the $0.02 impact per basic and diluted share related to the Company's adoption of Statement of Financial Accounting Standards ("SFAS") No. 123R on January 1, 2006, for its share-based compensation plans, earnings per basic and diluted share for the quarter ended March 31, 2006, was $0.20. In closing, Patrick E. Beans, chief financial officer of National Research Corporation, added, "The first quarter's revenue growth, generated across the Company's various business units, speaks to the viability of the multiple growth runways we have established over the last few years." A listen-only simulcast of National Research Corporation's first quarter 2006 conference call will be available online at www.earnings.com on May 3, 2006, 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 March 31, ------------------ 2006 2005 -------- -------- Revenues $9,476 $6,597 Operating expenses: Direct expenses 4,100 2,750 Selling, general and administrative 3,006 2,185 Depreciation and amortization 470 424 -------- -------- Total operating expenses 7,576 5,359 -------- -------- Operating income 1,900 1,238 Other income (expense): Interest income 82 109 Interest expense (10) (101) Other, net (14) (5) ------- ------- Total other income 58 3 -------- -------- Income before income taxes 1,958 1,241 Provision for income taxes 741 493 -------- -------- Net income $1,217 $748 ======== ======== Net income per share, basic $0.18 $0.10 ======== ======== Net income per share, diluted $0.18 $0.10 ======== ======== Weighted average shares outstanding: Basic 6,819 7,150 Diluted 6,918 7,202 NATIONAL RESEARCH CORPORATION Consolidated Condensed Balance Sheets (Dollars in thousands) March 31, Dec. 31, 2006 2005 ------------------ ASSETS (Unaudited) (Audited) Current Assets: Cash and cash equivalents $1,031 $844 Short-term investments 8,692 9,452 Accounts receivable, net 5,730 5,495 Other current assets 2,417 2,427 -------- -------- Total current assets 17,870 18,218 Net property and equipment 11,860 11,891 Other, net 14,559 14,566 -------- -------- Total Assets $44,289 $44,675 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses $1,246 $2,007 Deferred revenue 5,630 5,434 Accrued compensation 1,230 1,248 Notes payable 200 1,471 Income taxes payable 208 -- -------- -------- Total current liabilities 8,514 10,160 Non-current liabilities 1,925 1,922 -------- -------- Total Liabilities 10,439 12,082 -------- -------- Shareholders' Equity: Common stock, $0.001 par value; 20,000,000 shares authorized; issued 7,786,576 in 2006 and 7,740,571 in 2005; outstanding 6,891,576 in 2006 and 6,845,571 in 2005 8 8 Additional paid-in capital 20,837 20,046 Retained earnings 23,889 23,360 Unearned compensation (509) (433) Accumulated other comprehensive income 313 300 Treasury stock (10,688) (10,688) -------- -------- Total shareholders' equity 33,850 32,593 -------- -------- Total Liabilities and Shareholders' Equity $44,289 $44,675 ======== ======== *T