NRCI National Research Corp. (MM)

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

• Quarterly net new contracts of $5.4 million, up 80% from the prior year quarter, set a new company record;
• Quarterly revenue of $16 million, up 18% from prior year quarter;
• Quarterly net income of $2.1 million, up 7% from prior year quarter;
• NRC Picker registers positive top line growth, first in past seven quarters;
• Board of Directors declares fourth quarter dividend of $0.19 per share

Commenting on the third quarter results, Michael D. Hays, president and chief executive officer of National Research Corporation, said, “I’m delighted that net new contracts for the third quarter set a new company record. In fact, the $9.2 million of net new contracts signed in the past two quarters exceeds all of 2009. NRC Picker sales performance contributed materially to the Company’s overall sales record and also helped drive third quarter revenue growth for that business unit. In the quarter, we experienced additional traction from our continued heavy investment in Illuminate™, although the investment contributed to lower net income. As well, on the new product front, The Governance Institute finalized a new offering which will launch in the fourth quarter. Integration of OCS, which we acquired in the third quarter, is going well and is adding meaningful depth in leadership and technology.”

Revenue for the quarter ended September 30, 2010, was $16.0 million, compared to $13.5 million for the same quarter in 2009. Net income for the quarter ended September 30, 2010, was $2.1 million, or $.32 per basic and diluted share, compared to $2.0 million for the third quarter 2009, or $.30 per basic and diluted share.

Revenue for the first nine months of 2010 increased 8% to $47.5 million, compared to $43.9 million for the same period in 2009. Net income for the first nine months of 2010 increased 11% over the same period in 2009, to $6.9 million, resulting in $1.04 basic and $1.03 diluted earnings per share, also up 11% 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 December 30, 2010, to shareholders of record as of the close of business on December 3, 2010.

In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “Total contract value has increased $13.7 million in the past nine months to $75.1 million, up 22% from year-end 2009, driven by outstanding sales performance and the acquisition of OCS. Net income for the third quarter was 13% of revenue, up from 12% in second quarter. We anticipate net income back in the 15% plus range as we monetize investments being made in new products and finalize the transition of OCS.”

A listen-only simulcast of National Research Corporation’s 2010 third quarter conference call will be available online at www.earnings.com on November 3, 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 Nine Months Ended September 30, September 30,

2010

2009

2010

2009

 

Revenue

$

16,006 $ 13,517 $ 47,515 $ 43,850   Operating expenses: Direct expenses 6,038 5,521 18,370 18,762 Selling, general and administrative 5,250 3,797 14,265 11,813 Depreciation and amortization   1,225   901   3,382   2,902 Total operating expenses   12,513   10,219   36,017   33,477   Operating income 3,493 3,298 11,498 10,373   Other income (expense), net: Interest income 1

-

5 1 Interest expense   (137 )   (91 )   (328 )   (314 ) Other, net  

(24

)

 

(75

)

  (18 )   (132 )   Total other income (expense), net   (160 )   (166 )   (341 )   (445 )   Income before income taxes 3,333 3,132 11,157 9,928 Provision for income taxes   1,191   1,138   4,226   3,675   Net income $ 2,142 $ 1,994 $ 6,931 $ 6,253 Net income per share, basic $ 0.32 $ 0.30 $ 1.04 $ 0.94 Net income per share, diluted $ 0.32 $ 0.30 $ 1.03 $ 0.93   Weighted average shares outstanding: Basic 6,632 6,637 6,635 6,636 Diluted 6,727 6,735 6,725 6,723  

NATIONAL RESEARCH CORPORATION

Unaudited Consolidated Condensed Balance Sheets

(Dollars in thousands)

    Sep. 30, Dec. 31, 2010 2009 ASSETS   Current Assets: Cash and cash equivalents $ 3,195 $ 2,512 Accounts receivable, net 9,779 5,214 Income taxes recoverable 447 803 Other current assets   2,944   3,135 Total current assets 16,365 11,664   Net property and equipment 14,372 13,975 Other, net   62,663   46,860   Total Assets $ 93,400 $ 72,499   LIABILITIES AND SHAREHOLDERS’ EQUITY   Current Liabilities: Accounts payable and accrued expenses $ 2,322 $ 1,446 Deferred revenue 18,732 11,907 Accrued compensation 2,400 1,926 Notes payable   1,809   816 Total current liabilities 25,263 16,095   Non-current liabilities   20,455   12,233   Total Liabilities   45,718   28,328   Shareholders’ Equity: Common stock, $0.001 par value; 20,000,000 shares authorized; issued 8,035,428 in 2010 and 8,018,044 in 2009; outstanding 6,659,147 in 2010 and 6,662,111 in 2009 8 8 Additional paid-in capital 28,583 27,871 Retained earnings 41,042 37,905 Accumulated other comprehensive income 894 769 Treasury stock   (22,845 )   (22,382 ) Total shareholders’ equity   47,682   44,171 Total liabilities and shareholders’ equity $ 93,400 $ 72,499