NRCI National Research Corp. (MM)

National Research Corporation (NASDAQ:NRCI) today announced results for the third quarter 2009.

• Quarterly revenue $13.5 million
• Quarterly operating income $3.3 million
• Quarterly earnings per share $0.30
• Quarterly net new contracts $3.0 million
• Year-to-date growth: revenue up 13%, operating income up 15%, diluted earnings per share up 15%, EBITDA up 20%

Commenting on the third quarter results, Michael D. Hays, president and chief executive officer of National Research Corporation, said, “Even though we are not yet hitting on all cylinders, net new contracts for the third quarter almost equaled the entire first half of 2009. With this renewed wind at our back, several new products, and added leadership depth, we should be set up for a strong fourth quarter and finish for the year.”

Revenue for the quarter ended September 30, 2009, was $13.5 million, virtually even with the same period in 2008. Net income for the third quarter was $2.0 million, or $0.30 basic and diluted earnings per share, compared with net income of $2.0 million, or $0.30 basic and $0.29 diluted earnings per share, in the prior year period. Operating income increased 4% to $3.3 million for the quarter ended September 30, 2009, compared to $3.2 million for the same period in 2008.

Revenue for the first nine months of 2009 increased 13% to $43.9 million, compared to $38.8 million for the same period in 2008. Net income for the first nine months of 2009 increased 13% to $6.3 million, resulting in $0.94 basic and $0.93 diluted earnings per share, up 13% and 15%, respectively, over the same period in 2008.

In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “Achieving our stated goal of 15% net income for the quarter on flat revenue shows a real commitment to the margins. Margin expansion is also evident when comparing our 20% EBITDA growth year-over-year to revenue growth of 13%.”

NATIONAL RESEARCH CORPORATION

Reconciliation of Consolidated Net Earnings to Consolidated EBITDA (Unaudited)

(In thousands)    

Nine Months Ended

September 30,

2009

 

2008

  Net income $ 6,253 $ 5,550 Provision for income taxes 3,675 3,390 Total other (income) expense 445 76 Depreciation and amortization   2,902   2,003 EBITDA $ 13,275 $ 11,019  

We define EBITDA as net income excluding provision for income taxes, total other (income) expenses (which is primarily interest expense, interest income and changes in foreign currency exchange rates), depreciation and amortization. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States. EBITDA, as we calculate it, may not be comparable to EBITDA reported by other companies.

A listen-only simulcast of National Research Corporation’s 2009 third quarter conference call will be available online at www.earnings.com on November 4, 2009, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately one hour later and continue for 30 days.

National Research Corporation, headquartered in Lincoln, Nebraska, is a leading provider of performance measurement, improvement services, and governance education 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,

2009

 

2008

2009

 

2008

  Revenue $ 13,517 $ 13,469 $ 43,850 $ 38,824   Operating expenses: Direct expenses 5,446 6,598 19,027 17,845 Selling, general and administrative 3,872 3,053 11,548 9,960 Depreciation and amortization   901     661     2,902     2,003   Total operating expenses   10,219     10,312     33,477     29,808     Operating income 3,298 3,157 10,373 9,016   Other income (expense): Interest income -- 6 1 33 Interest expense (91 ) (21 ) (314 ) (118 ) Other, net   (75 )   29     (132 ) 9     Total other income (expense) (166 ) 14 (445 ) (76 )   Income before income taxes 3,132 3,171 9,928 8,940 Provision for income taxes   1,138     1,205     3,675     3,390     Net income $ 1,994   $ 1,966   $ 6,253   $ 5,550     Net income per share, basic $ 0.30   $ 0.30   $ 0.94   $ 0.83   Net income per share, diluted $ 0.30   $ 0.29   $ 0.93   $ 0.81     Weighted average shares outstanding: Basic 6,637 6,644 6,636 6,699 Diluted 6,735 6,803 6,723 6,845  

NATIONAL RESEARCH CORPORATION

Unaudited Consolidated Condensed Balance Sheets

(Dollars in thousands)     Sep. 30,   Dec. 31, 2009 2008

ASSETS

  Current Assets: Cash and cash equivalents $ 1,460 $ 1,109 Accounts receivable, net 8,385 6,531 Income taxes recoverable 1,109 574 Other current assets   2,370   2,225 Total current assets 13,324 10,439   Net property and equipment 14,233 13,747 Other, net   46,849   47,959   Total Assets $ 74,406 $ 72,145   LIABILITIES AND SHAREHOLDERS’ EQUITY   Current Liabilities: Accounts payable and accrued expenses $ 1,851 $ 2,208 Deferred revenue 14,538 12,926 Accrued compensation 2,086 1,375 Notes payable   765   4,581 Total current liabilities 19,240 21,090   Non-current liabilities   12,595   12,457   Total Liabilities   31,835   33,547   Shareholders’ Equity: Common stock, $0.001 par value; 20,000,000 shares authorized; issued 8,016,021 in 2009 and 8,019,922 in 2008; outstanding 6,660,298 in 2009 and 6,667,517 in 2008 8 8 Additional paid-in capital 27,635 27,217 Retained earnings 36,734 33,677 Accumulated other comprehensive income (loss) 571 (6 ) Treasury stock   (22,377 )   (22,298 ) Total shareholders’ equity   42,571   38,598 Total liabilities and shareholders’ equity $ 74,406 $ 72,145