NRCI National Research Corp. (MM)

Company Reports Continuing Growth National Research Corporation (NASDAQ:NRCI), a leader in healthcare performance measurement, today announced results for the second quarter ended June 30, 2006. -- Quarterly revenues increased by 49% -- Quarterly net new contracts: $2.1 million -- Quarterly net income up 43% -- Quarterly earnings per share growth equals 47% Revenues for the quarter ended June 30, 2006, were $10.7 million compared with revenues of $7.2 million for the same period in 2005. Net income for the quarter ended June 30, 2006, was $1.3 million, or $0.19 per basic and diluted share, compared with net income of $925,000, or $0.13 per basic and diluted share, in the prior-year period. Earnings per share for the quarter ended June 30, 2006, were negatively impacted $.02 as a result of the effect of Statement of Financial Accounting Standards ("SFAS") No. 123R adopted in the first quarter and would have been $0.21 per share without that effect. Revenues for the first half of 2006 were $20.1 million compared with revenues of $14.0 million for the same period in 2005. Net income for the six months ended June 30, 2006, was $2.5 million, or $0.37 per basic and diluted share, compared with $1.6 million, or $0.23 per basic and diluted share, in the prior-year period. Earnings per share for the six months ended June 30, 2006, were negatively impacted $.04 as a result of the effect of the Company's adoption of SFAS No. 123R and would have been $0.41 per share without that effect. Commenting on the results, Michael D. Hays, chief executive officer of National Research Corporation, said, "Our second quarter performance continues the Company's growth momentum for which I'm very pleased. The matrix I focus on most is our Total Recurring Contract Value which has now risen to $46.1 million, up 42% compared to this time one year ago." In closing, Patrick E. Beans, chief financial officer of National Research Corporation, remarked, "The success of our sales expansion efforts continues to produce growth in both revenue and earnings per share while increasing our recurring revenue base. In addition, the acquisition of The Governance Institute on May 30, 2006, will add to the Company's revenue and earnings going forward." A listen-only simulcast of National Research Corporation's second quarter 2006 conference call will be available online at www.earnings.com on August 2, 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 performance measurement and improvement services to the healthcare industry in the United States and Canada. 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, ------------------ ----------------- 2006 2005 2006 2005 --------- -------- -------- -------- Revenues $10,663 $7,150 $20,140 $13,746 Operating expenses: Direct expenses 4,980 3,073 9,080 5,822 Selling, general and administrative 3,042 2,089 6,047 4,274 Depreciation and amortization 500 454 971 878 --------- -------- -------- -------- Total operating expenses 8,522 5,616 16,098 10,974 --------- -------- -------- -------- Operating income 2,141 1,534 4,042 2,772 Other income (expense): Interest income 56 130 138 239 Interest expense (82) (101) (92) (202) Other, net (10) (23) (24) (28) --------- -------- -------- -------- Total other income (expense) (36) 6 22 9 Income before income taxes 2,105 1,540 4,064 2,781 Provision for income taxes 786 615 1,528 1,108 --------- -------- -------- -------- Net income $1,319 $925 $2,536 $1,673 ========= ======== ======== ======== Net income per share, basic $0.19 $0.13 $0.37 $0.23 ========= ======== ======== ======== Net income per share, diluted $0.19 $0.13 $0.37 $0.23 ========= ======== ======== ======== Weighted average shares outstanding: Basic 6,845 7,122 6,832 7,136 Diluted 6,970 7,179 6,938 7,191 NATIONAL RESEARCH CORPORATION Consolidated Condensed Balance Sheets (Dollars in thousands) June 30, Dec. 31, 2006 2005 ----------- ----------- ASSETS (Unaudited) (Audited) Current Assets: Cash and cash equivalents $575 $844 Short-term investments 1,677 9,452 Accounts receivable, net 6,348 5,495 Other current assets 4,214 2,427 ----------- ----------- Total current assets 12,814 18,218 Net property and equipment 11,949 11,891 Other, net 37,112 14,566 ----------- ----------- Total Assets $61,875 $44,675 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses $1,556 $2,007 Deferred revenue 9,366 5,434 Accrued compensation 1,470 1,248 Notes payable 4,339 1,471 ----------- ----------- Total current liabilities 16,731 10,160 Non-current liabilities 10,072 1,922 ----------- ----------- Total Liabilities 26,803 12,082 ----------- ----------- Shareholders' Equity: Common stock, $0.001 par value; 20,000,000 shares authorized; issued 7,810,068 in 2006 and 7,740,571 in 2005; outstanding 6,912,034 in 2006 and 6,845,571 in 2005 8 8 Additional paid-in capital 21,359 20,046 Retained earnings 24,518 23,360 Unearned compensation (508) (433) Accumulated other comprehensive income 447 300 Treasury stock (10,752) (10,688) ----------- ----------- Total shareholders' equity 35,072 32,593 ----------- ----------- Total Liabilities and Shareholders' Equity $61,875 $44,675 =========== =========== *T