NRCI National Research Corp. (MM)

National Research Corporation (NASDAQ:NRCI) today announced results for the second quarter 2010.

• Quarterly net new contracts up 114% from prior year quarter adding $3.8 million to total contract value;
• Acquisition of Outcome Concept Systems, Inc (OCS) adds $7.4 million to total contract value;
• Illuminate™ launched to capture an estimated $200 million market for discharge planning.

Commenting on the second quarter results, Michael D. Hays, president and chief executive officer of National Research Corporation, said, “I’m delighted that net new contracts for the quarter more than doubled from a year ago, largely driven by an NRC Picker record-breaking sales performance--its second quarter in a row of double-digit growth in net new contracts. Exciting as well is the launch of Illuminate, a discharge planning product which minimizes avoidable hospital readmission for which CMS is broadening financial penalties. This first-to-market, full-scale programmatic solution is already implemented in hospitals covering more than 200,000 patient discharges annually. Today, we also completed the acquisition of OCS, a Seattle-based health analytics and informatics firm. In my view, this transaction brings a whole new opportunity to NRC given OCS’s expertise and systems to benchmark financial, clinical and operational performance of healthcare providers.”

Revenue for the quarter ended June 30, 2010, was $14.1 million, compared to $13.6 million for the same quarter in 2009. Net income for the quarter ended June 30, 2010, was $1.7 million, or $.25 per basic and diluted share, compared to $1.6 million for the second quarter 2009, or $.24 per basic and diluted share.

Revenue for the first half of 2010 increased 4% to $31.5 million, compared to $30.3 million for the same period in 2009. Net income for the first six months of 2010 increased 12% to $4.8 million, resulting in $0.72 basic and $0.71 diluted earnings per share, also up 13%, over the same period in 2009.

The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.19 (nineteen cents) per share payable September 30, 2010, to shareholders of record as of the close of business on September 3, 2010.

In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “Net income for the quarter was lower than we desire at 12% of revenue, but understandable given the Illuminate launch and transaction expenses related to OCS. For the third quarter 2010, we anticipate net income back in the 15% range which aligns with our model. In fact, OCS’s software as a service product portfolio, and Illuminate’s syndicated-based business model should provide for very attractive margins on that book of business.”

A listen-only simulcast of National Research Corporation’s 2010 first quarter conference call will be available online at www.earnings.com on August 4, 2010, 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   Six Months Ended June 30, June 30,

2010

 

2009

2010

 

2009

  Revenue $ 14,139 $ 13,594 $ 31,509 $ 30,334   Operating expenses: Direct expenses 5,877 6,114 12,333 13,242 Selling, general and administrative 4,545 3,887 9,014 8,016 Depreciation and amortization   1,059   891   2,157   2,001 Total operating expenses   11,481   10,892   23,504   23,259   Operating income 2,658 2,702 8,005 7,075   Other income (expense), net: Interest income 2 - 3 1 Interest expense (93 ) (85 ) (191 ) (223 ) Other, net   49   (98 ) 6   (57 )   Total other income (expense), net   (42 )   (183 )   (182 )   (279 )   Income before income taxes 2,616 2,519 7,823 6,796 Provision for income taxes   956   910   3,034   2,537   Net income $ 1,660 $ 1,609 $ 4,789 $ 4,259 Net income per share, basic $ 0.25 $ 0.24 $ 0.72 $ 0.64 Net income per share, diluted $ 0.25 $ 0.24 $ 0.71 $ 0.63   Weighted average shares outstanding: Basic 6,634 6,637 6,637 6,635 Diluted 6,732 6,734 6,724 6,720  

NATIONAL RESEARCH CORPORATION

Unaudited Consolidated Condensed Balance Sheets

(Dollars in thousands)     June 30,   Dec. 31, 2010 2009 ASSETS   Current Assets: Cash and cash equivalents $ 7,236 $ 2,512 Accounts receivable, net 7,902 5,214 Income taxes recoverable 1,325 803 Other current assets   3,050   3,135 Total current assets 19,513 11,664   Net property and equipment 13,031 13,975 Other, net   46,280   46,860   Total Assets $ 78,824 $ 72,499   LIABILITIES AND SHAREHOLDERS’ EQUITY   Current Liabilities: Accounts payable and accrued expenses $ 1,730 $ 1,446 Deferred revenue 15,909 11,907 Accrued compensation 2,281 1,926 Notes payable   819   816 Total current liabilities 20,739 16,095   Non-current liabilities   11,717   12,233   Total Liabilities   32,456   28,328   Shareholders’ Equity:

Common stock, $0.001 par value; 20,000,000 shares authorized;issued 8,029,282 in 2010 and 8,018,044 in 2009;outstanding 6,653,001 in 2010 and 6,662,111 in 2009

8 8 Additional paid-in capital 28,274 27,871 Retained earnings 40,165 37,905 Accumulated other comprehensive income 766 769 Treasury stock   (22,845 )   (22,382 ) Total shareholders’ equity   46,368   44,171 Total liabilities and shareholders’ equity $ 78,824 $ 72,499