National Research Corporation Announces Third Quarter 2017 Results

 National Research Corporation (NASDAQ:NRCIA) (NASDAQ:NRCIB) today announced results for the third quarter of 2017.

• Net New Sales $5.4 million
• Total Contract Value $123.6 million
• Revenue up 7% to $29.0 million
• Net Income of $4.2 million

Revenue for the third quarter ended September 30, 2017, was $29.0 million, compared to $27.0 million for the same quarter in 2016. Net income for the quarter ended September 30, 2017, was $4.2 million, compared to $4.7 million for the quarter ended September 30, 2016. Diluted earnings per share decreased to $0.09 for Class A shares and $0.57 for Class B shares for the quarter ended September 30 2017, from $0.11 for Class A shares and $0.66 for Class B shares for the quarter ended September 30, 2016.

Regarding third quarter performance, Kevin Karas, chief financial officer of National Research Corporation, said, “Third quarter net new sales increased by 5% over the same period last year as we continued to add new clients and increase contract value with existing clients during the quarter.  Our increase in operating income from revenue growth was offset by approximately $975,000 in expenses for our proposed recapitalization.”

A listen-only simulcast of National Research Corporation’s 2017 third quarter conference call will be available online at https://edge.media-server.com/m6/p/jfk3domr on November 8, 2017, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately one hour later and continue for 30 days.            

For more than 36 years, National Research Corporation has been a leading provider of analytics and insights that facilitate measurement and improvement of the patient and employee experience while also increasing patient engagement and customer loyalty for healthcare providers, payers and other healthcare organizations in the United States and Canada.  The Company’s solutions enable its clients to understand the voice of the customer with greater clarity, immediacy and depth.             

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.

NATIONAL RESEARCH CORPORATION AND SUBSIDIARYUnaudited Condensed Consolidated Statements of Income(In thousands, except per share data)
	Three months endedSeptember 30,								Nine months endedSeptember 30,
	2017			2016					2017			2016
Revenue	$	28,951		$			27,032		$	87,661		$	81,016
Operating expenses:
Direct expenses		12,267			11,468					36,706			33,741
Selling, general and administrative		8,430			7,139					22,021			21,766
Depreciation and amortization		1,132			1,086					3,376			3,146
Total operating expenses		21,829			19,693					62,103			58,653
Operating income		7,122			7,339					25,558			22,363
Other income (expense):
Interest income		29			12					58			34
Interest expense		(18	)		(38			)		(68	)		(158			)
Other, net		40			(4			)		76			112
Total other income (expense)		51			(30			)		66			(12			)
Income before income taxes		7,173			7,309					25,624			22,351
Provision for income taxes		3,020			2,580					9,198			7,558
Net income	$	4,153		$	4,729				$	16,426		$	14,793
Earnings Per Share of Common Stock:
Basic Earnings Per Share:
Class A	$	0.10		$	0.11				$	0.39		$	0.35
Class B	$	0.59		$	0.67				$	2.34		$	2.11
Diluted Earnings Per Share:
Class A	$	0.09		$	0.11				$	0.38		$	0.35
Class B	$	0.57		$	0.66				$	2.28		$	2.08
Weighted average shares and shareequivalents outstanding      Class A - basic		20,788			20,716					20,759			20,712
Class B - basic		3,514			3,511					3,514			3,503
Class A - diluted		21,740			21,068					21,537			21,017
Class B - diluted		3,620			3,556					3,595			3,557

 

NATIONAL RESEARCH CORPORATION AND SUBSIDIARY
Unaudited Condensed Consolidated Balance Sheets
(Dollars in thousands, except per share amounts and par value)
			Sep. 30,				Dec. 31,
			2017				2016
ASSETS
Current Assets:
	Cash and cash equivalents		$	35,750			$	33,021
	Accounts receivable, net			13,588				10,864
	Income taxes receivable			61				14
	Other current assets			4,423				3,166
		Total Current Assets		53,822				47,065
Property and equipment, net				12,089				11,806
Goodwill				58,036				57,861
Other, net				4,793				3,892
		Total Assets	$	128,740			$	120,624
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
	Accounts payable and accrued expenses		$	3,757			$	3,916
	Deferred revenue			18,486				15,497
	Accrued compensation			4,151				4,543
	Dividends payable			4,218				4,213
	Income taxes payable			1,862				662
	Notes payable			1,693				2,683
		Total Current Liabilities		34,167				31,514
Non-Current Liabilities				5,729				6,304
		Total Liabilities		39,896				37,818
Shareholders' Equity:
	Preferred stock, $0.01 par value, authorized 2,000,000 shares,   none issued			--				--
	Class A Common stock, $0.001 par value; authorized 60,000,000   shares, issued 25,799,230 in 2017 and 25,656,760 in 2016,   outstanding 20,942,785 in 2017 and 20,891,069 in 2016			26				26
	Class B Common stock, $0.001 par value; authorized 80,000,000   shares, issued 4,317,656 in 2017 and 4,308,875 in 2016,   outstanding 3,540,244 in 2017 and 3,539,931 in 2016			4				4
	Additional paid-in capital			50,121				46,725
	Retained earnings			75,278				71,507
	Accumulated other comprehensive loss			(1,528	)			(2,626	)
	Treasury stock			(35,057	)			(32,830	)
		Total Shareholders' Equity		88,844				82,806
		Total Liabilities and Shareholders' Equity	$	128,740			$	120,624

Contact:
Kevin R. Karas   
Chief Financial Officer
402-475-2525