UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 0-29466
National Research Corporation
(Exact name of Registrant as specified in its charter)
Wisconsin 47-0634000
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1033 "O" Street, Lincoln Nebraska 68508
(Address of principal executive offices) (Zip Code)
(402) 475-2525
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.001 par value, outstanding as of July 31, 1999: 7,050,000 shares
NATIONAL RESEARCH CORPORATION
FORM 10-Q INDEX
For the Quarter Ended June 30, 1999
Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets 3
Condensed Statements of Income (Loss) 4
Condensed Statements of Cash Flows 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of 7-11
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About 11
Market Risk
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 12
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index 15
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PART I - Financial Information
ITEM 1 Financial Statements
NATIONAL RESEARCH CORPORATION
CONDENSED BALANCE SHEETS
June 30, December 31,
1999 1998
------------------- --------------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 2,511,660 $ 4,887,712
Investments in marketable debt securities 7,313,953 8,009,343
Trade accounts receivable, less allowance for doubtful
accounts of $76,891 in 1999 and $61,891 in 1998 2,227,829 2,940,356
Unbilled revenues 806,606 1,030,351
Prepaid expenses and other 774,633 165,037
Deferred income taxes 232,557 222,500
------------------- --------------------
Total current assets 13,867,238 17,255,299
------------------- --------------------
Property and equipment, net of accumulated
depreciation and amortization 4,979,000 2,288,583
Deferred income taxes 505,626 548,506
Goodwill and other intangibles, net of accumulated amortization 5,978,923 6,160,209
Other 15,592 26,582
------------------- --------------------
Total assets $ 25,346,379 $ 26,279,179
=================== ====================
Liabilities and Shareholders' Equity
Current liabilities:
Purchase price payable $ - $ 2,650,000
Current portion - notes payable 30,754 30,754
Accounts payable and accrued expenses 2,020,506 1,429,728
Accrued wages, bonuses and profit sharing 718,035 907,743
Income taxes payable 127,752 -
Billings in excess of revenues earned 4,547,865 3,283,462
------------------- --------------------
Total current liabilities 7,444,912 8,301,687
Notes payable, net of current portion 59,656 74,694
Bonuses and profit sharing accruals 87,306 157,472
Other accrued expense 258,323 310,793
------------------- --------------------
Total long-term liabilities 405,285 542,959
------------------- --------------------
Total liabilities 7,850,197 8,844,646
------------------- --------------------
Shareholders' equity:
Preferred stock, $.01 par value; authorized 2,000,000
shares, no shares issued and outstanding - -
Common stock, $.001 par value; authorized 20,000,000
shares, issued 7,305,000 7,305 7,305
Additional paid-in capital 16,839,839 16,839,839
Retained earnings 1,958,632 1,734,983
Treasury stock, at cost; 255,000 shares in 1999, 213,000 shares in 1998 (1,309,594) (1,147,594)
------------------- --------------------
Total shareholders' equity 17,496,182 17,434,533
------------------- --------------------
Total liabilities and shareholders' equity $ 25,346,379 $ 26,279,179
=================== ====================
See accompanying notes to condensed financial statements.
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NATIONAL RESEARCH CORPORATION
CONDENSED STATEMENTS OF INCOME (LOSS)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------------------- ----------------------------------
1999 1998 1999 1998
-------------- ----------------- ---------------- ----------------
Revenues $ 4,305,341 $ 4,029,717 $ 7,968,264 $ 7,435,817
--------------- ----------------- ---------------- ----------------
Operating expenses:
Direct expenses 3,005,639 2,015,961 5,582,940 3,524,922
Selling, general and administrative 1,045,928 1,242,811 1,950,422 2,431,399
Depreciation and amortization 179,111 66,363 348,222 118,356
Acquired in-process research and
development cost - 2,737,542 - 2,737,542
Severance charge - 303,740 - 303,740
--------------- ----------------- ---------------- ----------------
Total operating expenses 4,230,678 6,366,417 7,881,584 9,115,959
--------------- ----------------- ---------------- ----------------
Operating income (loss) 74,663 (2,336,700) 86,680 (1,680,142)
Other income:
Interest income 133,322 255,330 284,016 517,530
Other, net 2,110 - 9,859 -
Interest expense (2,135) (1,303) (4,393) (1,303)
--------------- ----------------- ---------------- ----------------
Total other income 133,297 254,027 289,482 516,227
--------------- ----------------- ---------------- ----------------
Income (loss) before income taxes 207,960 (2,082,673) 376,162 (1,163,915)
Income tax provision (benefit) 85,233 (798,125) 152,513 (441,125)
--------------- ----------------- ---------------- ----------------
Net income (loss) 122,727 (1,284,548) 223,649 (722,790)
=============== ================= ================ ================
Net Income per share--basic and diluted $ .02 $ (0.18) $ .03 $ (0.10)
=============== ================= ================ ================
Weighted average shares and share equivalents
outstanding--basic 7,055,824 7,305,000 7,066,301 7,305,000
=============== ================= ================ ================
Weighted average shares and share equivalents
outstanding--diluted 7,056,585 7,305,000 7,067,062 7,305,000
=============== ================= ================ ================
See accompanying notes to condensed financial statements.
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NATIONAL RESEARCH CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
------------------------------
1999 1998
-------------- --------------
Cash flows from operating activities:
Net income (loss) $ 223,649 $ (722,790)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 359,698 118,356
Acquired in-process research and development cost, net of tax - 1,669,309
Loss (gain) on disposal of assets 1,110 -
Loss on sale of other investments 144 -
Changes in assets and liabilities, net of acquisition:
Current assets 370,490 (501,947)
Current liabilities 1,683,652 1,976,516
-------------- --------------
Net cash provided by operating activities 2,638,743 2,539,444
-------------- --------------
Cash flows from investing activities:
Purchases of property and equipment (2,883,003) (713,731)
Acquisition, net of cash required - (5,616,353)
Accounts receivable- other - (648,874)
Purchases of securities available-for-sale (5,807,754) (8,169,883)
Proceeds from the maturities of securities available-for-sale 6,503,000 9,348,881
-------------- --------------
Net cash used in investing activities (2,187,757) (5,799,960)
-------------- --------------
Cash flows from financing activities:
Payments on notes payable (15,038) (3,735)
Payment of purchase price payable (2,650,000) -
Purchase of treasury stock (162,000) -
-------------- --------------
Net cash used in financing activities (2,827,038) (3,735)
-------------- --------------
Net decrease in cash and cash equivalents (2,376,052) (3,264,251)
Cash and cash equivalents at beginning of period 4,887,712 4,688,352
-------------- --------------
Cash and cash equivalents at end of period $ 2,511,660 $ 1,424,101
============== ==============
Supplemental disclosure of cash paid for:
Interest $ 4,393 $ 1,303
============== ==============
Taxes $ (10,845) $ 577,650
============== ==============
See accompanying notes to condensed financial statements.
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NATIONAL RESEARCH CORPORATION
Notes to Condensed Financial Statements
1. INTERIM FINANCIAL REPORTING
The condensed balance sheet of National Research Corporation (the "Company") at
December 31, 1998 was derived from the Company's audited balance sheet as of
that date. All other financial statements contained herein are unaudited and, in
the opinion of management, include all adjustments (consisting only of normal
recurring adjustments) the Company considers necessary for a fair presentation
of financial position, results of operations and cash flows in accordance with
generally accepted accounting principles.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed financial statements should be
read in conjunction with the financial statements and notes thereto that are
included in the Company's Form 10-K for the fiscal year ended December 31, 1998,
filed with the Securities and Exchange Commission in March 1999.
Other than its net income, the Company's only other source of comprehensive
income is unrealized gains or losses on marketable debt securities. However,
other comprehensive income from marketable debt securities is not significant
for the three- or six-month periods ended June 30, 1999 and 1998, respectively.
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ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth, for the periods indicated, selected financial
information derived from the Company's condensed financial statements, expressed
as a percentage of total revenues. The trends illustrated in the following table
may not necessarily be indicative of future results. The discussion that follows
the table should be read in conjunction with the condensed financial statements.
Percentage of Total Revenues
-------------------------------------------------------------------------
Three months ended Six months Ended
June 30, June 30,
----------------------------------- ----------------------------------
1999 1998 1999 1998
----------------------------------- ----------------------------------
Revenues: 100.0% 100.0% 100.0% 100.0%
=================================== ==================================
Operating expenses:
Direct expenses 69.8 50.0 70.0 47.4
Selling, general and administrative 24.3 30.9 24.5 32.7
Depreciation and amortization 4.2 1.6 4.4 1.5
Acquired in-process research and development cost - 67.9 - 36.8
Severance charge - 7.5 - 4.1
----------------------------------- ----------------------------------
Total operating expenses: 98.3 157.9 98.9 122.5
----------------------------------- ----------------------------------
Operating income (loss) 1.7% (57.9%) 1.1% (22.5%)
=================================== ==================================
Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998
Total revenues. Total revenues increased 6.8% in the three month period ended
June 30, 1999 to $4.3 million from $4.0 million in the three month period ended
June 30, 1998. The increase was due primarily to an increase in revenue from
performance tracking services and custom research as a result of the addition of
new clients, and, to a lesser extent, an increase in the scope of existing
tracking projects. The increase in revenues was partially offset by a decrease
in revenues from the Company's syndicated services. Billings for syndicated
services during the period were slightly less compared to the same period in
1998, but a larger percentage of 1999 sales were for services to be delivered in
the third quarter of 1999.
Direct expenses. Direct expenses increased 49.1% to $3.0 million in the
three-month period ended June 30, 1999 from $2.0 million in the same period
during 1998. The increase in direct expenses in the 1999 period was due
primarily to increases in fieldwork expenses of $366,000 (which was due
partially to the outsourcing of call center work and fees paid to accreditation
organizations) and labor and payroll expenses of $243,000 (which was due
partially to increased costs associated with the addition of a telephone call
center, additional labor associated with internal software conversion, and with
increased revenues), and, to a lesser extent, increases in postage expenses of
$116,000, communication/telephone expenses of $31,000, rent and office expenses
of $29,000 and software conversion costs of $210,000. Direct expenses increased
as a percentage of total revenues to 69.8% in the three month period ended June
30, 1999 from 50.0% during the same period of 1998. The increase in direct
expenses as a percentage of total revenues was due primarily to expenses
associated with the Company's planned conversion of internal software(which has
not been completed) and also to an increase use of telephone methodology, which
increases labor costs. Direct expenses as a
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percentage of total revenues are expected to remain at levels similar to the
1999 period until the internal software conversion is completed, which the
Company anticipates will occur in the fourth quarter of 1999.
Selling, general and administrative expenses. Selling, general and
administrative expenses decreased 15.8% to $1.0 million for the three-month
period ended June 30, 1999 from $1.2 million for the same period in 1998. This
decrease was primarily due to a decrease in salaries and benefit expenses of
$93,000 and direct marketing and trade show expenses of $88,000. Selling,
general, and administrative expenses decreased as a percentage of total revenues
to 24.3% for the three month period ended June 30, 1999 from 30.9% for the same
period in 1998. The decrease was due partially to the additional expense in June
of 1998 associated with the acquisition of Healthcare Research Systems, Ltd.
("HRS") and to the increase in revenue in 1999 without a related increase in
selling, general and administrative expenses.
Depreciation and amortization. Depreciation and amortization expenses increased
170.0% to $179,000 in the three-month period ended June 30, 1999 from $66,000 in
the same period of 1998. The increase in amortization and depreciation is
primarily due to the acquisition of intangible assets of HRS and the purchase of
computer equipment and software. Depreciation and amortization expenses as a
percentage of total revenues increased to 4.2% in the three-month period ended
June 30, 1999, from 1.6% in the same period of 1998.
Acquired in-process research and development cost and severance charge. In
connection with the acquisition of HRS in June 1998, the Company incurred a
one-time, non-recurring charge of $2.7 million for costs assigned to in-process
research and development activities of the acquired company and severance costs
of $304,000 for duplicative employees of the Company as a result of the
acquisition. The aggregate charges to income net of taxes associated with the
acquisition were approximately $1.9 million, or $0.26 per share.
Provision for income taxes. The provision for income taxes totaled $85,000
(40.0% effective tax rate) for the three-month period ended June 30, 1999 as
compared to $798,000 tax benefit (38.9% effective tax benefit) for the same
period in 1998. The increase in expense is due to the profit for the 1999
period.
Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998
Total revenues. Total revenues increased 7.2% in the six month period ended June
30, 1999 to $8.0 million from $7.4 million in the six month period ended June
30, 1998. The increase was due primarily to an increase in revenue from
performance tracking services and custom research as a result of the addition of
new clients, the acquisition of HRS in June 1998 and, to a lesser extent, an
increase in the scope of existing tracking projects. The increase in revenues
was partially offset by a decrease in revenues from the Company's syndicated
services. Billings for syndicated services during the period were even compared
to the same period in 1998, but a larger percentage of 1999 sales were for
services to be delivered in the third quarter of 1999.
Direct expenses. Direct expenses increased 58.4% to $5.6 million in the
six-month period ended June 30, 1999 from $3.5 million in the same period during
1998. The increase in direct expenses in the 1999 period was due primarily to an
increase in labor and payroll expenses of $830,000 (which was due partially to
increased costs associated with the addition of a telephone call center,
additional labor associated with the internal software conversion and with
increased revenues) and, to a lesser extent, increases in postage expenses of
$244,000, fieldwork expenses of $371,000, printing expenses of $48,000,
communication/telephone expenses of $66,000, rent and office expenses of $37,000
and software conversion costs of $323,000. Direct expenses increased as a
percentage of total revenues to 70.1% in the six month period ended June 30,
1999 from 47.4% during the same period of 1998. The increase in direct expenses
as a percentage of total revenues was due primarily to expenses associated with
the Company's planned conversion of internal software(which has not been
completed) and also to an increase in telephone methodology, which increases
labor costs. Direct expenses as a percentage of total revenues are expected to
remain at levels similar to the 1999 period until the
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internal software conversion is completed, which the Company anticipates will
occur in the fourth quarter of 1999.
Selling, general and administrative expenses. Selling, general and
administrative expenses decreased 19.8% to $2.0 million for the six-month period
ended June 30, 1999 from $2.4 million for the same period in 1998. This decrease
was primarily due to a decrease in legal and accounting expenses of $49,000,
salaries and benefit expenses of $255,000, telephone expenses of $15,000,
research and development expenses of $48,000 and direct marketing and trade show
expenses of $114,000. These decreases were offset by an increase in rent and
office expenses of $51,000 associated with the Company's new office in Columbus,
Ohio. Selling, general, and administrative expenses decreased as a percentage of
total revenues to 24.5% for the six month period ended June 30, 1999 from 32.7%
for the same period in 1998. The decrease was due partially to the additional
expense in June of 1998 associated with the acquisition of HRS and to the
increase in revenue in 1999 without a related increase in selling, general and
administrative expenses.
Depreciation and amortization. Depreciation and amortization expenses increased
194.2% to $348,000 in the six-month period ended June 30, 1999 from $118,000 in
the same period of 1998. The increase in amortization and depreciation is
primarily due to the acquisition of intangible assets of HRS and the purchase of
computer equipment and software. Depreciation and amortization expenses as a
percentage of total revenues increased to 4.4% in the six-month period ended
June 30, 1999, from 1.5% in the same period of 1998.
Acquired in-process research and development cost and severance charge. In
connection with the acquisition of HRS in June 1998, the Company incurred a
one-time, non-recurring charge of $2.7 million for costs assigned to in-process
research and development activities of the acquired company and severance costs
of $304,000 for duplicative employees of the Company as a result of the
acquisition. The aggregate charges to income net of taxes associated with the
acquisition were approximately $1.9 million, or $0.26 per share.
Provision for income taxes. The provision for income taxes totaled $153,000
(40.0% effective tax rate) for the six-month period ended June 30, 1999 as
compared to $441,000 tax benefit (38.9% effective tax benefit) for the same
period in 1998. The increase in expense is due to the profit for the 1999
period.
Liquidity and Capital Resources
The Company's principal source of funds historically has been cash flow from its
operations. The Company's cash flow has been sufficient to provide funds for
working capital and capital expenditures.
As of June 30, 1999, the Company had cash and cash equivalents of $2.5 million
and working capital of $6.4 million.
During the six months ended June 30, 1999, the Company generated $2.6 million of
net cash from operating activities as compared to $2.5 million of net cash
generated during the same period in the prior year. The increase in cash flow
was mainly due to the timing of collections of accounts receivable and the
timing of costs incurred in advance of billings on certain projects.
For the six months ended June 30, 1999, net cash used in investing activities
was $2.2 million as compared to $5.8 million during the same period in the prior
year. The 1999 decrease in cash used was primarily due to the 1998 acquisition
of HRS and its related receivable of $6.3 million, which was partially offset by
the purchase and renovation of a new building for $1.7 million, and investment
of $1.2 in furniture, computer equipment, software and production equipment to
meet the expansion of the Company's business and by the proceeds of maturities
of securities available-for-sale. The Company plans to spend an additional $3.0
million
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during 1999 to renovate the new building. Following renovation, the Company
intends to move its headquarters to such building in December 1999. The Company
expects to secure long-term financing on the building for approximately $3.8
million. The 1998 net cash used was primarily due to the acquisition of HRS in
June 1998 for approximately $5.6 million, the accounts receivable-other related
to the acquisition of $649,000 and investment of $714,000 in furniture, computer
equipment and production equipment to meet the expansion of the Company's
business, which was partially offset by the maturing of investments in debt
securities available-for-sale.
Net cash used in financing activities was $2.8 million and $4,000 for the six
months ended June 30, 1999 and 1998, respectively. The most significant use of
cash for financing activities in 1999 was for the payments of notes payable,
acquisition purchase price payable and the purchase of treasury stock.
The Company typically bills clients for projects before they have been
completed. Billed amounts are recorded as billings in excess of costs or
deferred revenue on the Company's financial statements and are recognized as
income when earned. As of June 30, 1999 and as of December 31, 1998, the Company
had $4.5 million and $3.3 million of deferred revenues, respectively. In
addition, when work is performed in advance of billing, the Company records this
work as a cost in excess of billings or unbilled revenue. At June 30, 1999 and
December 31, 1998, the Company had $807,000 and $1.0 million of unbilled
revenues, respectively. Substantially all deferred and unbilled revenues will be
earned and billed, respectively, within 12 months of the respective period ends.
In October 1998, the Company announced plans to repurchase up to 245,000 shares
of common stock in the open market or in privately negotiated transactions. The
Company repurchased 245,000 shares between October 1998 and March 1999. In April
1999, the Board of Directors of the Company authorized the repurchase of an
additional 150,000 shares. As of July 31, 1999, 10,000 shares under the new
authorization had been repurchased.
Year 2000
The Year 2000 ("Y2K") issue is the result of computer systems using two digits,
as opposed to four digits, to indicate the year. Such computer systems will be
unable to interpret dates beyond the year 1999, which could cause a system
failure or other computer errors, leading to a disruption in operations. The
Company uses software and related technologies throughout its business that
could be affected by the date change in Y2K.
At the end of 1997, an independent third party conducted an assessment of the
Company's computer systems and, based on such assessment, the Company developed
plans to address issues related to the impact of Y2K on its information systems.
The Company has completed the assessment phase for all of its information
technology systems and developed a plan of repair or replacement for those
systems that were not Y2K compliant.
Many of the external software programs used by the Company were already Y2K
compliant. The remaining software is currently being upgraded to new vendor
versions, which, in addition to providing increased functionality, address the
Y2K issue.
The Company's internal software systems presented no Y2K compatibility issues.
Most of the Company's internal hardware systems presented no Y2K compatibility
issues. The Company has been upgrading its computer hardware that is not Y2K
compliant on an ongoing basis and all mission-critical hardware will be Y2K
compliant before the last quarter of 1999. The software used by the Company to
deliver information to its clients contains no date related data or code other
than that related to licensing issues, and therefore, is not affected by the Y2K
issue.
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Many of the services sold by the Company originate from data provided by the
Company's clients. The Company generally does not use live data provided by its
clients, instead the clients transmit member or patient information on a weekly
or monthly basis. As a result, the Company's ability to provide services to
these clients is dependent on whether such clients' systems for transmitting
data to the Company are Y2K compliant. If a client cannot transmit member or
patient information to the Company, then the Company cannot provide its services
to the client. Therefore, there can be no assurance that the failure of clients
of the Company to be Y2K compliant will not have a material adverse effect on
the Company. To be prepared to address unexpected occurrences, the Company will
develop contingency plans before the last quarter of 1999 to assess alternative
methods to obtain data from its clients.
The current estimate of total remaining Y2K compliance cost is $126,000. A
majority of these costs have been included in the ongoing upgrading and
standardization of the Company's systems. Approximately $56,000 of such costs
have been incurred to date. Based upon progress to date, the Company does not
believe that future costs of Y2K compliance will materially affect the Company's
operating results or financial condition. If problems with the Company's
conversion of internal software systems are not corrected by year end, then the
Company could incur additional costs to upgrade existing programs.
The estimated costs of, and timetable for, becoming Y2K compliant constitute
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Shareholders, potential investors and other readers are
cautioned that such estimates are based on numerous assumptions by management,
including assumptions regarding the accuracy of representations made by third
parties concerning their compliance with Y2K issues and other factors.
ITEM 3 Quantitative and Qualitative Disclosures About Market Risk
The Company has not experienced any material changes in its market risk
exposures since December 31, 1998.
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PART II - Other Information
ITEM 2 Changes in Securities and Use of Proceeds
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) The Company's Registration Statement on Form S-1 (Registration No.
333-33273) (the "Registration Statement") relating to the offer and sale (the
"Offering") of an aggregate of 2,415,000 shares of Common Stock was declared
effective by the Securities and Exchange Commission on October 9, 1997. Of the
2,415,000 shares of Common Stock registered under the Registration Statement,
1,250,000 shares were sold by the Company and 1,165,000 shares (including
315,000 shares sold pursuant to the exercise of an over-allotment option granted
to the underwriters) were sold by a certain shareholder of the Company, Michael
D. Hays (the "Selling Shareholder").
During the fourth quarter of 1997, all of the shares of Common Stock
registered were sold in the Offering at a price of $15.00 per share, for an
aggregate price of $18,750,000 and $17,475,000 for the shares of Common Stock
sold by the Company and the Selling Shareholder, respectively. After deducting
the underwriting discount of $1.05 per share, the Selling Shareholder received
net proceeds equal to $16,251,750 and the Company received net proceeds equal to
$17,437,500 less expenses of $596,411 incurred in connection with the Offering.
The net proceeds to the Company are reasonably estimated to be applied as
follows:
1. Temporary investments of United States government $5,280,313
securities with maturities of two years or less
2. Acquisition of HRS and related acquisition costs 8,549,588
3. The acquisition of a new headquarters building 1,701,594
4. The repurchase of treasury stock 1,309,594
-----------
Total proceeds to the Company $16,841,089
===========
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ITEM 4 Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of shareholders on April 14, 1999.
At such meeting, Paul C. Schorr, III was elected as director of the Company for
a term to expire at the 2002 annual meeting of shareholders and until his
successor is duly elected and qualified pursuant to the following vote: Paul C
Schorr, III - 6,949,074 shares voted for, 1,000 withholding authority, 0
abstentions and 0 broker non-votes. The other directors of the Company whose
terms of office continued after the 1999 annual of shareholders are as follows:
Terms expiring at the 2000 annual meeting - Michael D. Hays and John N Nunnelly;
and term expiring at the 2001 annual meeting - Patrick E. Beans.
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibit Number Description
(27) Financial Data Schedule (EDGAR version only)
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended June
30, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NATIONAL RESEARCH CORPORATION
Date: August 10, 1999 By: /s/ Michael D. Hays
---------------------------------------------
Michael D. Hays
President and Chief Executive Officer
Date: August 10, 1999 By: /s/ Patrick E. Beans
---------------------------------------------
Patrick E. Beans
Vice President, Treasurer, Secretary and
Chief Financial Officer (Principal
Financial and Accounting Officer)
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NATIONAL RESEARCH CORPORATION
EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q
For the Quarterly Period ended June 30, 1999
Exhibit
-------
(27) Financial Data Schedule (EDGAR version only)
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