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National Research Corporation Announces Fourth Quarter and Year-End 2016 Results

LINCOLN, Neb., Feb. 14, 2017 (GLOBE NEWSWIRE) -- National Research Corporation (NASDAQ:NRCIA) (NASDAQ:NRCIB) today announced results for the fourth quarter and year-end 2016.

Fourth Quarter

  • Net New Sales $7.1 million
  • Revenue up 8% to $28.4 million
  • Net Income declined 3% to $5.7 million

Year-End 2016

  • Net New Sales $24.0 million
  • Revenue up 7% to $109.4 million
  • Net Income increased 17% to $20.5 million

Remarking on Company performance, Michael D. Hays, chief executive officer of National Research Corporation said, “An increasing proportion of our revenue is being derived from more contemporary and innovative products which support our rebranding focused on 'Human understanding'--an aspiration to keep us at the forefront of a dynamic healthcare environment.”

Revenue for the quarter ended December 31, 2016, was $28.4 million, compared to $26.4 million for the same quarter in 2015. Net income for the quarter ended December 31, 2016, was $5.7 million, compared to $5.9 million for the quarter ended December 31, 2015. Diluted earnings per share decreased to $0.13 for Class A shares and $0.80 for Class B shares for the quarter ended December 31, 2016, from $0.14 for Class A shares and $0.84 for Class B shares for the quarter ended December 31, 2015. Combined diluted earnings per share (a non-GAAP measure) decreased to $0.23 for the quarter ended December 31, 2016, from $0.24 for the fourth quarter 2015.

Revenue for the year ended December 31, 2016, was $109.4 million, compared to $102.3 million for the same quarter in 2015. Net income for the year ended December 31, 2016, was $20.5 million, compared to $17.6 million for the year ended 2015. Diluted earnings per share increased to $0.48 for Class A shares and $2.88 for Class B shares for the year ended December 31, 2016, from diluted earnings per share of $0.41 for Class A shares and $2.49 for Class B shares for the year ended December 31, 2015. Combined diluted earnings per share (a non-GAAP measure) increased to $0.83 for the year ended December 31, 2016, from $0.71 for the year ended 2015.

Regarding the Company’s financial performance, Kevin Karas, chief financial officer of National Research Corporation, said, “We continue to see positive results from our focus on revenue growth and expanding our operating income margin. Revenue and total contract value growth rates on a year-to-date basis more than doubled over the prior year and operating income increased by 18%. Net income for the fourth quarter of 2016 was lower than the prior year’s fourth quarter due to the $1.1 million pre-tax gain on the sale of our clinical workflow product in 2015.”

The Company also announced that its Board of Directors has declared a quarterly cash dividend of $.10 (ten cents) per Class A share and $.60 (sixty cents) per Class B share payable April 14, 2017, to shareholders of record as of the close of business on March 31, 2017.

A listen-only simulcast of National Research Corporation’s 2016 fourth quarter conference call will be available online at http://edge.media-server.com/m/p/7gyz3aqq on February 15, 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 35 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
December 31,
Twelve months ended
December 31,
2016 2015 2016 2015
Revenue$28,368 $26,365 $109,384 $102,343
Operating expenses:
Direct expenses 11,836 11,365 45,577 44,610
Selling, general and administrative 6,619 6,294 28,385 27,177
Depreciation and amortization 1,079 1,000 4,225 4,109
Total operating expenses 19,534 18,659 78,187 75,896
Operating income 8,834 7,706 31,197 26,447
Other income (expense):
Interest income 13 14 47 60
Interest expense (31) (48) (190) (220)
Other, net 189 1,096 302 1,073
Total other income (expense) 171 1,062 159 913
Income before income taxes 9,005 8,768 31,356 27,360
Provision for income taxes 3,280 2,841 10,838 9,750
Net income$5,725 $5,927 $20,518 $17,610
Earnings Per Share of Common Stock:
Basic Earnings Per Share:
Class A$0.14 $0.14 $0.49 $0.42
Class B$0.82 $0.85 $2.93 $2.52
Diluted Earnings Per Share:
Class A$0.13 $0.14 $0.48 $0.41
Class B$0.80 $0.84 $2.88 $2.49
Weighted average shares and share equivalents outstanding
Class A - basic 20,717 20,656 20,713 20,741
Class B - basic 3,511 3,478 3,505 3,478
Class A - diluted 21,118 20,936 21,037 20,981
Class B - diluted 3,569 3,523 3,560 3,522

NATIONAL RESEARCH CORPORATION AND SUBSIDIARY
Unaudited Condensed Consolidated Balance Sheets
(Dollars in thousands, except per share amounts and par value)
Dec. 31, Dec. 31,
2016 2015
ASSETS
Current Assets:
Cash and cash equivalents$33,021 $42,145
Accounts receivable, net10,864 9,808
Income taxes receivable14 157
Other current assets3,166 2,951
Total Current Assets47,065 55,061
Property and equipment, net11,806 11,125
Goodwill57,861 57,792
Other, net3,892 4,071
Total Assets$120,624 $128,049
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses$3,916 $3,394
Deferred revenue15,497 14,843
Accrued compensation4,543 4,391
Dividends payable4,213 18,440
Income taxes payable662 701
Notes payable2,683 2,402
Total Current Liabilities31,514 44,171
Non-Current Liabilities6,304 9,656
Total Liabilities37,818 53,827
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 25,656,760 in 2016 and 25,592,812 in 2015, outstanding 20,891,069 in 2016 and 20,848,168 in 201526 26
Class B Common stock, $0.001 par value; authorized 80,000,000 shares, issued 4,308,875 in 2016 and 4,271,413 in 2015, outstanding 3,539,931 in 2016 and 3,510,150 in 20154 4
Additional paid-in capital46,725 44,103
Retained earnings71,507 65,313
Accumulated other comprehensive loss(2,626)
(2,995)
Treasury stock(32,830) (32,229)
Total Shareholders’ Equity82,806 74,222
Total Liabilities and Shareholders’ Equity$120,624 $128,049


NATIONAL RESEARCH CORPORATION AND SUBSIDIARY
Unaudited Non-GAAP Combined Earnings Per Share Schedule
(In thousands, except per share data)
Three months ended
December 31,
Twelve months ended
December 31,
2016 2015 2016 2015
Combined Earnings Per Share
Basic Earnings Per Share$0.23 $0.24 $0.84 $0.72
Diluted Earnings Per Share$0.23 $0.24 $0.83 $0.71
Combined weighted average shares and share equivalents outstanding
Combined - Basic24,228 24,134 24,218 24,219
Combined - Diluted24,687 24,459 24,597 24,503


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

Source:National Research Corporation