| Contact: | Patrick E. Beans Chief Financial Officer 402-475-2525 |
NATIONAL RESEARCH CORPORATION ANNOUNCES SECOND
QUARTER 2006 RESULTS
Company Reports Continuing Growth
LINCOLN, Nebraska (August 1, 2006) — 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.”
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NRCI Announces Second Quarter Results
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August 1, 2006
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 atwww.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.
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NRCI Announces Second Quarter Results
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August 1, 2006
NATIONAL RESEARCH CORPORATION
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended 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 | ||||||||||
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NRCI Announces Second Quarter Results
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August 1, 2006
NATIONAL RESEARCH CORPORATION
Consolidated Condensed Balance Sheets
(Dollars in thousands)
| June 30, 2006 | Dec. 31, 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 | ||||
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