NRCI National Research Corp. (MM)

National Research Corporation (NASDAQ:NRCI), a leader in healthcare performance measurement, today announced results for the third quarter and nine months ended September 30, 2006. Quarterly revenues increased by 31% over the third quarter 2005 Quarterly net new sales were $2.5 million Quarterly net income was up 15% Quarterly earnings per share growth equaled 17% Revenues for the quarter ended September 30, 2006, were $13.3 million, compared with revenues of $10.1 million for the same period in 2005, an increase of 31%. Net income for the quarter ended September 30, 2006, was $2.3 million, or $0.34 per basic and diluted share, compared with net income of $2.0 million, or $0.29 per basic and diluted share, in the prior year period. Earnings per share for the quarter ended September 30, 2006, were negatively impacted by $0.02 per share as a result of the effect of Statement of Financial Accounting Standards (�SFAS�) No. 123R adopted in the first quarter 2006. Revenues for the nine months ended September 30, 2006, were $33.5 million compared with revenues of $23.9 million for the same nine-month period of 2005. Net income for the nine months ended September 30, 2006, was $4.9 million, or $0.71 per basic and $0.70 per diluted share, compared with $3.7 million, or $0.52 per basic and diluted share, in the prior-year period. Earnings per share for the nine months ended September 30, 2006, were negatively impacted by $0.06 per share as a result of the effect of the Company�s adoption of SFAS No. 123R. Commenting on the results Patrick E. Beans, chief financial officer of National Research Corporation, remarked, �Achieving record revenues and earnings in the quarter builds upon our solid performance throughout the year and points toward a record 2006 with strong momentum going into 2007.� The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.10 (ten cents) per share, payable December 29, 2006, to shareholders of record as of the close of business on December 8, 2006. In closing, Michael D. Hays, chief executive officer of National Research Corporation, said, �Our performance in the third quarter represented a balanced contribution from all of our business units, including our recent acquisition, The Governance Institute. This suggests we have an effective, producing platform in place for the coming years.� A listen-only simulcast of National Research Corporation�s third quarter conference call will be available online at www.earnings.com on November 8, 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. NATIONAL RESEARCH CORPORATION Unaudited Consolidated Statements of Operations (In thousands, except per share data) � Three Months Ended Nine Months Ended September 30, September 30, 2006 2005 2006 2005 � Revenues $13,313� $10,132� $33,453� $23,878� � Operating expenses: Direct expenses 5,761� 4,018� 14,841� 9,840� Selling, general and administrative 2,960� 2,331� 9,009� 6,606� Depreciation and amortization 600� 456� 1,570� 1,334� � Total operating expenses 9,321� 6,805� 25,420� 17,780� � Operating income 3,992� 3,327� 8,033� 6,098� � Other income (expense): Interest income 18� 129� 156� 369� Interest expense (225) (101) (317) (303) Other, net 7� 18� (17) (10) � Total other income (expense) (200) 46� (178) 56� � Income before income taxes 3,792� 3,373� 7,855� 6,154� Provision for income taxes 1,450� 1,344� 2,977� 2,452� � Net income $2,342� $2,029� $4,878� $3,702� � Net income per share, basic $0.34� $0.29� $0.71� $0.52� Net income per share, diluted $0.34� $0.29� $0.70� $0.52� � Weighted average shares outstanding: Basic 6,845� 6,961� 6,836� 7,077� Diluted 6,986� 7,056� 6,951� 7,152� NATIONAL RESEARCH CORPORATION Consolidated Condensed Balance Sheets (Dollars in thousands) � Sept. 30, Dec. 31, 2006 2005 ASSETS (Unaudited) (Audited) � Current Assets: Cash and cash equivalents $1,387� $844� Short-term investments 1,243� 9,452� Accounts receivable, net 5,906� 5,495� Other current assets 3,135� 2,427� Total current assets 11,671� 18,218� � Net property and equipment 11,807� 11,891� Other, net 36,787� 14,566� � Total Assets $60,265� $44,675� � LIABILITIES AND SHAREHOLDERS' EQUITY � Current Liabilities: Accounts payable and accrued expenses $1,287� $2,007� Deferred revenue 7,513� 5,434� Accrued compensation 1,626� 1,248� Notes payable 3,001� 1,471� Income taxes payable 1,000� -� Total current liabilities 14,427� 10,160� � Non-current liabilities 9,514� 1,922� � Total Liabilities 23,941� 12,082� � Shareholders' Equity: Common stock, $0.001 par value; 20,000,000 shares authorized; issued 7,827,370 in 2006 and 7,740,571 in 2005; outstanding 6,889,458 in 2006 and 6,845,571 in 2005 8� 8� Additional paid-in capital 21,370� 20,046� Retained earnings 26,172� 23,360� Unearned compensation --� (433) Accumulated other comprehensive income 472� 300� Treasury stock (11,698) (10,688) Total shareholders' equity 36,324� 32,593� Total liabilities and shareholders' equity $60,265� $44,675� National Research Corporation (NASDAQ:NRCI), a leader in healthcare performance measurement, today announced results for the third quarter and nine months ended September 30, 2006. -- Quarterly revenues increased by 31% over the third quarter 2005 -- Quarterly net new sales were $2.5 million -- Quarterly net income was up 15% -- Quarterly earnings per share growth equaled 17% Revenues for the quarter ended September 30, 2006, were $13.3 million, compared with revenues of $10.1 million for the same period in 2005, an increase of 31%. Net income for the quarter ended September 30, 2006, was $2.3 million, or $0.34 per basic and diluted share, compared with net income of $2.0 million, or $0.29 per basic and diluted share, in the prior year period. Earnings per share for the quarter ended September 30, 2006, were negatively impacted by $0.02 per share as a result of the effect of Statement of Financial Accounting Standards ("SFAS") No. 123R adopted in the first quarter 2006. Revenues for the nine months ended September 30, 2006, were $33.5 million compared with revenues of $23.9 million for the same nine-month period of 2005. Net income for the nine months ended September 30, 2006, was $4.9 million, or $0.71 per basic and $0.70 per diluted share, compared with $3.7 million, or $0.52 per basic and diluted share, in the prior-year period. Earnings per share for the nine months ended September 30, 2006, were negatively impacted by $0.06 per share as a result of the effect of the Company's adoption of SFAS No. 123R. Commenting on the results Patrick E. Beans, chief financial officer of National Research Corporation, remarked, "Achieving record revenues and earnings in the quarter builds upon our solid performance throughout the year and points toward a record 2006 with strong momentum going into 2007." The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.10 (ten cents) per share, payable December 29, 2006, to shareholders of record as of the close of business on December 8, 2006. In closing, Michael D. Hays, chief executive officer of National Research Corporation, said, "Our performance in the third quarter represented a balanced contribution from all of our business units, including our recent acquisition, The Governance Institute. This suggests we have an effective, producing platform in place for the coming years." A listen-only simulcast of National Research Corporation's third quarter conference call will be available online at www.earnings.com on November 8, 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 Nine Months Ended September 30, September 30, ------------------ ----------------- 2006 2005 2006 2005 --------- -------- -------- -------- Revenues $13,313 $10,132 $33,453 $23,878 Operating expenses: Direct expenses 5,761 4,018 14,841 9,840 Selling, general and administrative 2,960 2,331 9,009 6,606 Depreciation and amortization 600 456 1,570 1,334 --------- -------- -------- -------- Total operating expenses 9,321 6,805 25,420 17,780 --------- -------- -------- -------- Operating income 3,992 3,327 8,033 6,098 Other income (expense): Interest income 18 129 156 369 Interest expense (225) (101) (317) (303) Other, net 7 18 (17) (10) --------- -------- -------- -------- Total other income (expense) (200) 46 (178) 56 Income before income taxes 3,792 3,373 7,855 6,154 Provision for income taxes 1,450 1,344 2,977 2,452 --------- -------- -------- -------- Net income $2,342 $2,029 $4,878 $3,702 ========= ======== ======== ======== Net income per share, basic $0.34 $0.29 $0.71 $0.52 ========= ======== ======== ======== Net income per share, diluted $0.34 $0.29 $0.70 $0.52 ========= ======== ======== ======== Weighted average shares outstanding: Basic 6,845 6,961 6,836 7,077 Diluted 6,986 7,056 6,951 7,152 *T -0- *T NATIONAL RESEARCH CORPORATION Consolidated Condensed Balance Sheets (Dollars in thousands) Sept. 30, Dec. 31, 2006 2005 ----------- --------- ASSETS (Unaudited) (Audited) Current Assets: Cash and cash equivalents $1,387 $844 Short-term investments 1,243 9,452 Accounts receivable, net 5,906 5,495 Other current assets 3,135 2,427 ----------- --------- Total current assets 11,671 18,218 Net property and equipment 11,807 11,891 Other, net 36,787 14,566 ----------- --------- Total Assets $60,265 $44,675 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses $1,287 $2,007 Deferred revenue 7,513 5,434 Accrued compensation 1,626 1,248 Notes payable 3,001 1,471 Income taxes payable 1,000 - ----------- --------- Total current liabilities 14,427 10,160 Non-current liabilities 9,514 1,922 ----------- --------- Total Liabilities 23,941 12,082 ----------- --------- Shareholders' Equity: Common stock, $0.001 par value; 20,000,000 shares authorized; issued 7,827,370 in 2006 and 7,740,571 in 2005; outstanding 6,889,458 in 2006 and 6,845,571 in 2005 8 8 Additional paid-in capital 21,370 20,046 Retained earnings 26,172 23,360 Unearned compensation -- (433) Accumulated other comprehensive income 472 300 Treasury stock (11,698) (10,688) ----------- --------- Total shareholders' equity 36,324 32,593 ----------- --------- Total liabilities and shareholders' equity $60,265 $44,675 =========== ========= *T