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National Research Corporation Announces Third Quarter 2014 Results

LINCOLN, Neb., Nov. 4, 2014 (GLOBE NEWSWIRE) -- National Research Corporation (Nasdaq:NRCIA) (Nasdaq:NRCIB) today announced results for the third quarter of 2014.

  • Net New Sales $8.1 million, up 30%
  • Total Contract Value $103.2 million
  • Revenue up 6% to $23.7 million
  • Net Income of $4.6 million, up 19%

Remarking on Company performance, Michael D. Hays, chief executive officer of National Research said, "Net new sales continue to register impressive gains across the product portfolio. Of particular note is our Market Insights product, which achieved a 48% year-to-date sales growth driven by the growing importance of branding."

Revenue for the quarter ended September 30, 2014, was $23.7 million, compared to $22.4 million for the same quarter in 2013. Net income for the quarter ended September 30, 2014, was $4.6 million, compared to $3.8 million for the quarter ended September 30, 2013. Diluted earnings per share increased to $0.11 for Class A shares and $0.64 for Class B shares for the quarter ended September 30, 2014, from diluted earnings per share of $0.09 for Class A shares and $0.54 for Class B shares for the quarter ended September 30, 2013. Combined diluted earnings per share (a non-GAAP measure) increased to $0.19 for the quarter ended September 30, 2014, from $0.15 for the third quarter of 2013.

Regarding third quarter performance, Kevin Karas, chief financial officer of National Research said, "The record net new sales performance positions the company to generate increased organic revenue growth rates into the fourth quarter of this year and the year 2015. From an earnings standpoint, we continue to enjoy leverage on incremental revenue which resulted in net income growth of 19% for the quarter."

In October, National Research made investments in two strategic technologies to advance the company's commitment to empowering consumer-centric healthcare across the continuum. The first, an asset purchase, creates a Center of Excellence in Atlanta, Georgia, responsible for developing novel solutions to enhance consumer decision-making in the selection of healthcare providers. The second, a seed investment, creates an option for a later acquisition of a partner company that has developed a talent-matching solution to accelerate the formation of high-performing teams. Both solutions will be launched to market in 2015.

A listen-only simulcast of the National Research 2014 third quarter conference call will be available online at http://www.media-server.com/m/p/boqud8ua on November 5, 2014, 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 33 years, National Research Corporation has been at the forefront of patient-centered care, helping healthcare providers measure and improve quality and services through analytics that offer a rich understanding of customers' experiences, preferences, risks and behaviors across the healthcare continuum.

The information discussed within this release includes financial results and projections that are in accordance with accounting principles generally accepted in the United States (GAAP). In addition, certain non-GAAP financial measures have been provided that calculate combined earnings per share based on combined Class A and Class B shares and share equivalents outstanding, respectively. The non-GAAP measures should be read in conjunction with the corresponding GAAP measures and should be considered in addition to, and not as an alternative or substitute for, the measures prepared in accordance with GAAP. Please note that the Company's non-GAAP measures may be different than those used by other companies. The additional non-GAAP financial information the Company presents should be considered in conjunction with, and not as a substitute for, the Company's financial information presented in accordance with GAAP. The non-GAAP financial measures are provided in an effort to provide information that investors may deem relevant to evaluate results from the company's core business operations and to compare the company's performance with prior periods. The company uses both GAAP and these non-GAAP financial measures for evaluating comparable financial performance against prior periods.

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 SUBSIDIARY
Unaudited Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three months ended
September 30,
Nine months ended
September 30,
2014 2013 2014 2013
Revenue $ 23,682 $ 22,407 $ 73,713 $ 69,667
Operating expenses:
Direct 9,769 9,452 30,871 29,196
Selling, general and administrative 5,805 6,019 18,154 18,903
Depreciation and amortization 949 907 2,810 2,788
Total operating expenses 16,523 16,378 51,835 50,887
Operating income 7,159 6,029 21,878 18,780
Other income (expense):
Interest income 22 14 58 45
Interest expense (76) (91) (236) (309)
Other, net 2 (4) 16 28
Total other expense (52) (81) (162) (236)
Income before income taxes 7,107 5,948 21,716 18,544
Provision for income taxes 2,555 2,135 7,659 6,827
Net income $ 4,552 $ 3,813 $ 14,057 $ 11,717
Earnings Per Share of Common Stock:
Basic Earnings Per Share:
Class A $ 0.11 $ 0.09 $ 0.34 $ 0.28
Class B $ 0.66 $ 0.55 $ 2.03 $ 1.70
Diluted Earnings Per Share:
Class A $ 0.11 $ 0.09 $ 0.33 $ 0.28
Class B $ 0.64 $ 0.54 $ 1.99 $ 1.67
Weighted average shares and share equivalents outstanding
Class A - basic 20,771 20,672 20,761 20,671
Class B - basic 3,474 3,445 3,472 3,445
Class A - diluted 21,035 21,111 21,078 21,087
Class B - diluted 3,536 3,514 3,538 3,513
NATIONAL RESEARCH CORPORATION AND SUBSIDIARY
Unaudited Condensed Consolidated Balance Sheets
(Dollars in thousands, except per share amounts and par value)
Sep. 30,
2014
Dec. 31,
2013
ASSETS
Current Assets:
Cash and cash equivalents $ 39,063 $ 22,092
Accounts receivable, net 10,924 11,043
Income taxes receivable 156 357
Other current assets 3,059 3,074
Total current assets 53,202 36,566
Property and equipment, net 11,943 11,898
Goodwill 57,475 57,593
Other, net 4,443 5,031
Total Assets $ 127,063 $ 111,088
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 3,498 $ 3,230
Deferred revenue 16,983 13,885
Accrued compensation 4,084 4,319
Income taxes payable 112 92
Notes payable 2,310 2,256
Total Current Liabilities 26,987 23,782
Non-current liabilities 13,768 15,551
Total Liabilities 40,755 39,333
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 25,372,186 in 2014 and 25,285,029 in 2013, outstanding 20,808,304 in 2014 and 20,768,784 in 2013 25 25
Class B Common stock, $0.001 par value; authorized 80,000,000 shares, issued 4,234,643 in 2014 and 4,220,117 in 2013, outstanding 3,480,217 in 2014 and 3,467,410 in 2013 4 4
Additional paid-in capital 44,127 42,192
Retained earnings 72,099 58,042
Accumulated other comprehensive income (loss) (231) 302
Treasury stock (29,716) (28,810)
Total shareholder's equity 86,308 71,755
Total liabilities and shareholders' equity $ 127,063 $ 111,088
NATIONAL RESEARCH CORPORATION AND SUBSIDIARY
Unaudited Non-GAAP Combined Earnings Per Share Schedule
(In thousands, except per share data)
Three months ended
September 30,
Nine months ended
September 30,
2014 2013 2014 2013
Combined Earnings Per Share
Basic Earnings Per Share $ 0.19 $ 0.16 $ 0.58 $ 0.49
Diluted Earnings Per Share $ 0.19 $ 0.15 $ 0.57 $ 0.48
Combined weighted average shares and share equivalents outstanding
Combined - Basic 24,245 24,117 24,234 24,116
Combined - Diluted 24,571 24,625 24,617 24,600

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

Source:National Research Corporation