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| Contact: | Patrick E. Beans Chief Financial Officer 402-475-2525 |
NATIONAL RESEARCH CORPORATION ANNOUNCES
FOURTH QUARTER AND YEAR-END 2007 RESULTS
_________________
Quarterly New Contracts Reach a Record $5.5 million – Quarterly Dividend Increase Approved
LINCOLN, Nebraska (February 12, 2008) — National Research Corporation (NASDAQ:NRCI) today announced results for the fourth quarter and year ended December 31, 2007.
| • | Annual revenue increased by 12% |
| • | Annual net income increased by 16% |
| • | 2007 commercial contract value up 18% |
| • | 2007 net new contracts up 23% |
| • | Quarterly dividend increase to $0.14 per share |
Revenue for the quarter ended December 31, 2007, was $10.8 million, compared to $10.3 million for the same period in 2006. Net income for the quarter ended December 31, 2007, was $1.1 million, or $0.16 per diluted share, compared with net income of $1.0 million, or $0.14 per diluted share, in the prior year period.
Revenue for the year ending December 31, 2007, increased 12% to $48.9 million, compared to $43.8 million for the same period in 2006. Net income for 2007 increased 16% to $6.8 million, resulting in $1.00 per basic and $0.98 per diluted share, compared with $5.9 million, or $0.86 per basic and $0.85 per diluted share, in 2006.
Commenting on the results, Michael D. Hays, chief executive officer of National Research Corporation, said, “Our annual revenue growth of 12% in 2007 was poor, being noticeably impacted by new sales first going towards replacing reductions in contract value, which we knew would be the case. That said, we grew commercial contract value by 18%. Net new contracts were up 23% to $14.7 million for the year 2007 with $5.5 million coming in the last quarter. All this suggests a strong wind at our back going into 2008 which, to date, has been the case. I’m encouraged, as well, by a strong new product pipeline and the recent doubling of the size of our Healthcare Market Guide sales team from six to twelve associates.”
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NRCI Announces Fourth Quarter and Year-End 2007 Results
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February 12, 2008
The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.14 (fourteen cents) per share payable March 31, 2008, to shareholders of record as of the close of business on March 7, 2008.
In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “Going forward, with reductions in contract value replaced and our outstanding sales performance, we should return to top-line growth well within our model starting in quarter one of 2008 and benefit from material leverage of our expense structure throughout the year.”
A listen-only simulcast of National Research Corporation’s year-end conference call will be available online atwww.earnings.com on February 13, 2008, 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 Fourth Quarter and Year-End 2007 Results
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February 12, 2008
NATIONAL RESEARCH CORPORATION
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |||||||||||
Revenue | $ | 10,821 | $ | 10,318 | $ | 48,923 | $ | 43,771 | ||||||
Operating expenses: | ||||||||||||||
| Direct expenses | 5,057 | 4,605 | 21,801 | 19,446 | ||||||||||
| Selling, general and administrative | 3,283 | 3,150 | 13,173 | 12,158 | ||||||||||
| Depreciation and amortization | 661 | 689 | 2,583 | 2,259 | ||||||||||
| Total operating expenses | 9,001 | 8,444 | 37,557 | 33,863 | ||||||||||
Operating income | 1,820 | 1,874 | 11,366 | 9,908 | ||||||||||
Other income (expense): | ||||||||||||||
| Interest income | 37 | 15 | 139 | 171 | ||||||||||
| Interest expense | (70 | ) | (201 | ) | (483 | ) | (517 | ) | ||||||
| Other, net | 8 | (38 | ) | 96 | (56 | ) | ||||||||
Total other income (expense) | (25 | ) | (224 | ) | (248 | ) | (402 | ) | ||||||
Income before income taxes | 1,795 | 1,650 | 11,118 | 9,506 | ||||||||||
| Provision for income taxes | 686 | 644 | 4,278 | 3,622 | ||||||||||
Net income | $ | 1,109 | $ | 1,006 | $ | 6,840 | $ | 5,884 | ||||||
Net income per share, basic | $ | 0.16 | $ | 0.15 | $ | 1.00 | $ | 0.86 | ||||||
| Net income per share, diluted | $ | 0.16 | $ | 0.14 | $ | 0.98 | $ | 0.85 | ||||||
Weighted average shares outstanding: | ||||||||||||||
| Basic | 6,861 | 6,838 | 6,850 | 6,836 | ||||||||||
| Diluted | 7,034 | 6,976 | 7,011 | 6,954 | ||||||||||
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NRCI Announces Fourth Quarter and Year-End 2007 Results
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February 12, 2008
NATIONAL RESEARCH CORPORATION
Consolidated Condensed Balance Sheets
(Dollars in thousands)
| Dec. 31, 2007 | Dec. 31, 2006 | |||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | (Unaudited) | |||||||
Current Assets: | ||||||||
| Cash and cash equivalents | $ | 3,355 | $ | 876 | ||||
| Short-term investments | 99 | 1,110 | ||||||
| Accounts receivable, net | 6,379 | 6,734 | ||||||
| Income taxes recoverable | 249 | 898 | ||||||
| Other current assets | 2,518 | 3,379 | ||||||
| Total current assets | 12,600 | 12,997 | ||||||
Net property and equipment | 11,974 | 11,716 | ||||||
| Other, net | 37,295 | 36,819 | ||||||
Total Assets | $ | 61,869 | $ | 61,532 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 2,492 | $ | 1,511 | ||||
| Deferred revenue | 9,922 | 8,264 | ||||||
| Accrued compensation | 1,477 | 1,594 | ||||||
| Notes payable | 1,093 | 3,110 | ||||||
| Total current liabilities | 14,984 | 14,479 | ||||||
Non-current liabilities | 4,598 | 10,303 | ||||||
Total Liabilities | 19,582 | 24,782 | ||||||
Shareholders’ Equity: | ||||||||
| Common stock, $0.001 par value; 20,000,000 shares authorized; | ||||||||
| issued 7,883,289 in 2007 and 7,837,848 in 2006; | ||||||||
| outstanding 6,860,259 in 2007 and 6,890,631 in 2006 | 8 | 8 | ||||||
| Additional paid-in capital | 23,508 | 21,820 | ||||||
| Retained earnings | 30,004 | 26,488 | ||||||
| Accumulated other comprehensive income | 932 | 358 | ||||||
| Treasury stock | (12,165 | ) | (11,924 | ) | ||||
| Total shareholders’ equity | 42,287 | 36,750 | ||||||
| Total liabilities and shareholders’ equity | $ | 61,869 | $ | 61,532 | ||||
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