Contact: | Patrick E. Beans Chief Financial Officer 402-475-2525 |
NATIONAL RESEARCH CORPORATION ANNOUNCES
FOURTH QUARTER AND YEAR-END 2006 RESULTS
2006 Revenues Jump 35% — Quarterly Dividend Increase Approved
LINCOLN, Nebraska (February 13, 2007) — National Research Corporation (NASDAQ/NM:NRCI), a leader in healthcare performance measurement, today announced results for the fourth quarter and year ended December 31, 2006.
• | 2006 revenues increased by 35% |
• | 2006 net new contracts reached $11.9 million, up 81% over 2005 |
• | 2006 earnings per share up 15%; up 23% without the impact of share-based expenses |
• | Quarterly dividend increase of 20% to $0.12 per share |
Revenues for the quarter ended December 31, 2006, were $10.3 million, compared with revenues of $8.6 million for the same period in 2005, an increase of 21%. Net income for the quarter ended December 31, 2006, was $1.0 million, or $0.15 per basic and $0.14 per diluted share, compared with net income of $1.5 million, or $0.22 per basic and diluted share, in the prior year period. Earnings per share for the quarter ended December 31, 2006, were negatively impacted by $0.02 per share as a result of the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123R in the first quarter 2006.
Revenues for the year ending December 31, 2006, were $43.8 million, compared with revenues of $32.4 million for the year ended 2005. Net income for 2006 was $5.9 million, or $0.86 per basic and $0.85 per diluted share, compared with $5.2 million, or $0.74 per basic and diluted share, in the prior year 2005. Earnings per share for the twelve months ended December 31, 2006, were negatively impacted by $0.08 per share as a result of the Company’s adoption of SFAS No. 123R. Had it been adopted in 2005, the earnings per share would have been $0.70 per basic and $0.69 per diluted share for the year 2005, compared to $0.86 per basic and $0.85 per diluted share in 2006. Excluding the impact of SFAS 123R results in an increase in diluted earnings per share on a comparable basis of 23% for 2006 over 2005. The company believes that this non-GAAP measure provides a better comparison for the current year on earnings per share.
-MORE-
NRCI Announces Fourth Quarter and Year-End 2006 Results
Page 2
February 13, 2007
Commenting on the results, Michael D. Hays, chief executive officer of National Research Corporation, remarked, “We started the year focused on achieving strong revenue growth in 2006, and I’m very pleased to report that we achieved our targeted rate in the core business and exceeded our growth target when including TGI.”
Mr. Hays continued, “Sales growth throughout the entire year has been strong and with fourth quarter sales up 174% alone, proves our strategies for top-line growth remain highly effective into 2007. This, along with a full year of TGI’s revenue which is growing in its own right will, I believe, result in 2007 being another robust growth year.”
The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.12 (twelve cents) per share, an increase of 20% over the prior quarter, payable March 30, 2007, to shareholders of record as of the close of business on March 9, 2007.
In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “Even with some added expenses in the fourth quarter which lowered our overall margins, we had a record year in 2006. For 2007, we anticipate continued top-line growth will drive expanded margins by leveraging our expense structure and should result in strong growth of our net income and earnings per share.”
A listen-only simulcast of National Research Corporation’s year-end conference call will be available online atwww.earnings.com on February 14, 2007, 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, 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.
-MORE-
NRCI Announces Fourth Quarter and Year-End 2006 Results
Page 3
February 13, 2007
NATIONAL RESEARCH CORPORATION
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 | 2005 | 2006 | 2005 | |||||||||||
Revenues | $ | 10,318 | $ | 8,558 | $ | 43,771 | $ | 32,436 | ||||||
Operating expenses: | ||||||||||||||
Direct expenses | 4,605 | 3,801 | 19,445 | 13,642 | ||||||||||
Selling, general and administrative | 3,150 | 2,012 | 12,158 | 8,617 | ||||||||||
Depreciation and amortization | 689 | 428 | 2,260 | 1,762 | ||||||||||
Total operating expenses | 8,444 | 6,241 | 33,863 | 24,021 | ||||||||||
Operating income | 1,874 | 2,317 | 9,908 | 8,415 | ||||||||||
Other income (expense): | ||||||||||||||
Interest income | 15 | 120 | 171 | 488 | ||||||||||
Interest expense | (201 | ) | (76 | ) | (517 | ) | (379 | ) | ||||||
Other, net | (38 | ) | 0 | (56 | ) | (10 | ) | |||||||
Total other income (expense) | (224 | ) | 44 | (402 | ) | 99 | ||||||||
Income before income taxes | 1,650 | 2,361 | 9,506 | 8,514 | ||||||||||
Provision for income taxes | 644 | 827 | 3,622 | 3,278 | ||||||||||
Net income | $ | 1,006 | $ | 1,534 | $ | 5,884 | $ | 5,236 | ||||||
Net income per share, basic | $ | 0.15 | $ | 0.22 | $ | 0.86 | $ | 0.74 | ||||||
Net income per share, diluted | $ | 0.14 | $ | 0.22 | $ | 0.85 | $ | 0.74 | ||||||
Weighted average shares outstanding: | ||||||||||||||
Basic | 6,838 | 6,921 | 6,836 | 7,038 | ||||||||||
Diluted | 6,976 | 7,012 | 6,954 | 7,118 |
-MORE-
NRCI Announces Fourth Quarter and Year-End 2006 Results
Page 3
February 13, 2007
NATIONAL RESEARCH CORPORATION
Consolidated Condensed Balance Sheets
(Dollars in thousands)
Dec. 31, 2006 | Dec. 31, 2005 | |||||||
---|---|---|---|---|---|---|---|---|
ASSETS | (Unaudited) | (Audited) | ||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 876 | $ | 844 | ||||
Short-term investments | 1,110 | 9,452 | ||||||
Accounts receivable, net | 6,734 | 5,495 | ||||||
Income taxes recoverable | 898 | 184 | ||||||
Other current assets | 3,379 | 2,243 | ||||||
Total current assets | 12,997 | 18,218 | ||||||
Net property and equipment | 11,716 | 11,891 | ||||||
Other, net | 36,819 | 14,566 | ||||||
Total Assets | $ | 61,532 | $ | 44,675 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 1,511 | $ | 2,007 | ||||
Deferred revenue | 8,264 | 5,434 | ||||||
Accrued compensation | 1,594 | 1,248 | ||||||
Notes payable | 3,110 | 1,471 | ||||||
Total current liabilities | 14,479 | 10,160 | ||||||
Non-current liabilities | 10,303 | 1,922 | ||||||
Total Liabilities | 24,782 | 12,082 | ||||||
Shareholders’ Equity: | ||||||||
Common stock, $0.001 par value; 20,000,000 shares authorized; | ||||||||
issued 7,837,848 in 2006 and 7,740,571 in 2005; | ||||||||
outstanding 6,890,631 in 2006 and 6,845,571 in 2005 | 8 | 8 | ||||||
Additional paid-in capital | 21,820 | 20,046 | ||||||
Retained earnings | 26,488 | 23,360 | ||||||
Unearned compensation | -- | (433 | ) | |||||
Accumulated other comprehensive income | 358 | 300 | ||||||
Treasury stock | (11,924 | ) | (10,688 | ) | ||||
Total shareholders’ equity | 36,750 | 32,593 | ||||||
Total liabilities and shareholders’ equity | $ | 61,532 | $ | 44,675 | ||||
-END-