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| Contact: | Patrick E. Beans Chief Financial Officer 402-475-2525 |
NATIONAL RESEARCH CORPORATION ANNOUNCES
SECOND QUARTER 2007 RESULTS AND THIRD QUARTER DIVIDEND
Net Income up 24% in the Second Quarter
LINCOLN, Nebraska (August 7, 2007) — National Research Corporation (NASDAQ:NRCI) today announced results for the second quarter ended June 30, 2007.
| • | Quarterly revenue increased by 12% |
| • | Quarterly net income increased by 24% |
| • | Quarterly diluted earnings per share of $0.23, up 21% |
| • | Quarterly net new contracts of $2.5 million, up 18% |
Commenting on the second quarter results, Michael D. Hays, chief executive officer of National Research Corporation, said, “Our quarterly financial results were mixed. Revenue was below our desired growth range, while net income and EPS growth was within the range. Our sales engine continues to perform well and going forward, will be focused on the commercial versus federal sector where we continue to experience volatility.”
Revenue for the quarter ended June 30, 2007, was $11.9 million, compared to $10.7 million for the same period in 2006. Net income for the quarter ended June 30, 2007, was $1.6 million, or $0.24 per basic and $0.23 per diluted earnings per share, compared with net income of $1.3 million, or $0.19 per basic and diluted share, in the prior year period.
Revenue for the first half of 2007 increased 20% to $24.1 million, compared to $20.1 million for the same period in 2006. Net income for the first six months of 2007 increased 28% to $3.2 million resulting in $0.47 per basic and $0.46 per diluted earnings per share, up 27% and 24% respectively, over the same period in 2006.
In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “Again this quarter, we realized margin expansion driven by revenue growth and a larger proportion of higher margin improvement products in our revenue mix as was our stated goal at the beginning of the year.”
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NRCI Announces Second Quarter Results
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August 7, 2007
The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.12 (twelve cents) per share payable September 28, 2007, to shareholders of record as of the close of business on September 7, 2007.
A listen-only simulcast of National Research Corporation’s year-end conference call will be available online atwww.earnings.com on August 8, 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.
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NRCI Announces Second Quarter Results
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August 7, 2007
NATIONAL RESEARCH CORPORATION
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |||||||||||
Revenue | $ | 11,945 | $ | 10,663 | $ | 24,150 | $ | 20,140 | ||||||
Operating expenses: | ||||||||||||||
| Direct expenses | 5,366 | 4,980 | 10,815 | 9,080 | ||||||||||
| Selling, general and administrative | 3,250 | 3,042 | 6,650 | 6,047 | ||||||||||
| Depreciation and amortization | 623 | 500 | 1,250 | 971 | ||||||||||
| Total operating expenses | 9,239 | 8,522 | 18,715 | 16,098 | ||||||||||
Operating income | 2,706 | 2,141 | 5,435 | 4,042 | ||||||||||
Other income (expense): | ||||||||||||||
| Interest income | 55 | 56 | 69 | 138 | ||||||||||
| Interest expense | (136 | ) | (82 | ) | (303 | ) | (92 | ) | ||||||
| Other, net | 51 | (10 | ) | 68 | (24 | ) | ||||||||
Total other income (expense) | (30 | ) | (36 | ) | (166 | ) | 22 | |||||||
Income before income taxes | 2,676 | 2,105 | 5,269 | 4,064 | ||||||||||
| Provision for income taxes | 1,035 | 786 | 2,034 | 1,528 | ||||||||||
Net income | $ | 1,641 | $ | 1,319 | $ | 3,235 | $ | 2,536 | ||||||
Net income per share, basic | $ | 0.24 | $ | 0.19 | $ | 0.47 | $ | 0.37 | ||||||
| Net income per share, diluted | $ | 0.23 | $ | 0.19 | $ | 0.46 | $ | 0.37 | ||||||
Weighted average shares outstanding: | ||||||||||||||
| Basic | 6,845 | 6,845 | 6,844 | 6,832 | ||||||||||
| Diluted | 7,002 | 6,970 | 6,979 | 6,938 | ||||||||||
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NRCI Announces Second Quarter Results
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August 7, 2007
NATIONAL RESEARCH CORPORATION
Consolidated Condensed Balance Sheets
(Dollars in thousands)
| June 30, 2007 | Dec. 31, 2006 | |||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | (Unaudited) | |||||||
Current Assets: | ||||||||
| Cash and cash equivalents | $ | 2,122 | $ | 876 | ||||
| Short-term investments | 753 | 1,110 | ||||||
| Accounts receivable, net | 7,725 | 6,734 | ||||||
| Income taxes recoverable | 56 | 898 | ||||||
| Other current assets | 3,729 | 3,379 | ||||||
| Total current assets | 14,385 | 12,997 | ||||||
Net property and equipment | 11,634 | 11,716 | ||||||
| Other, net | 37,273 | 36,819 | ||||||
Total Assets | $ | 63,292 | $ | 61,532 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 1,632 | $ | 1,511 | ||||
| Deferred revenue | 11,045 | 8,264 | ||||||
| Accrued compensation | 1,438 | 1,594 | ||||||
| Notes payable | 686 | 3,110 | ||||||
| Total current liabilities | 14,801 | 14,479 | ||||||
Non-current liabilities | 9,041 | 10,303 | ||||||
Total Liabilities | 23,842 | 24,782 | ||||||
Shareholders’ Equity: | ||||||||
| Common stock, $0.001 par value; 20,000,000 shares authorized; | ||||||||
| issued 7,876,957 in 2007 and 7,837,848 in 2006; | ||||||||
| outstanding 6,925,042 in 2007 and 6,890,631 in 2006 | 8 | 8 | ||||||
| Additional paid-in capital | 22,747 | 21,820 | ||||||
| Retained earnings | 28,061 | 26,488 | ||||||
| Accumulated other comprehensive income | 674 | 358 | ||||||
| Treasury stock | (12,040 | ) | (11,924 | ) | ||||
| Total shareholders’ equity | 39,450 | 36,750 | ||||||
| Total liabilities and shareholders’ equity | $ | 63,292 | $ | 61,532 | ||||
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