National Research Corporation

National Research Corporation (NASDAQ:NRC) today announced results for the second quarter of 2018.

Digital VOC Platform highlights:

  • VOC contract value increased to $33 million
  • Year-to-date platform revenue increased to 23%, up from 11% year-over-year
  • Platform differentiation continues to drive new client sales activity

Remarking on Company performance, Michael D. Hays, chief executive officer of National Research Corporation said, “We ended the first half of the year exceeding the total dollar value of new client wins in all of 2017. Our VOC platform, combined with unmatched product extensions, is capturing the spend of legacy patient satisfaction vendors.”

Kevin Karas, chief financial officer commented, “Second quarter revenue decreased 1.5% from prior year in line with earlier visibility. We are expecting third quarter revenue growth in the 4% to 5% range compared to the third quarter of 2017 based on the trend in contract value growth.  It is important to note that second quarter results reflect the financial impact of the recapitalization that was approved by shareholders on April 16, 2018. The recapitalization impact included additional bank financing, legal fees, accelerated share-based compensation expense, income tax benefits, adjustments to shareholder’s equity and adjustments to the earnings-per-share calculation.”

Revenue for the quarter ended June 30, 2018, was $28.0 million, compared to $28.4 million for the same quarter in 2017. Net income for the quarter ended June 30, 2018, was $7.9 million, compared to $5.8 million for the quarter ended June 30, 2017. Diluted earnings per share increased to $0.28 for the common shares (formerly Class A) and decreased to $0.26 for Class B shares for the quarter ended June 30, 2018, from diluted earnings per share of $0.13 for Class A shares and $0.80 for Class B shares for the quarter ended June 30, 2017. Due to the recapitalization transaction on April 17, 2018, income has been allocated to both classes of shares through April 16, and allocated only to common stock (formerly Class A) after April 16. 

A listen-only simulcast of National Research Corporation’s 2018 second quarter conference call will be available online at http://edge.media-server.com/m6/p/2sqp4p7k on August 8, 2018, 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 37 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 ended    June 30,       Six months ended    June 30,    
     2018      2017       2018     2017 
                           
Revenue $   28,017     $   28,435     $   59,034     $   58,710  
         
Operating expenses:        
Direct expenses   10,996       11,939         23,904         24,439  
Selling, general and administrative   7,940       6,905       15,808         13,591  
Depreciation and amortization     1,325         1,139         2,608          2,244  
Total operating expenses     20,261         19,983         42,320         40,274  
                                   
Operating income   7,756       8,452       16,714       18,436  
         
Other income (expense):        
Interest income   9       15       54       29  
Interest expense   (439 )     (23 )     (447 )     (50 )
Other, net     493       27         464         35  
                                       
Total other income (expense)     63         19         71         14  
                                       
Income before income taxes   7,819       8,471       16,785       18,450  
         
Provision (benefit) for income taxes     (129 )       2,719         1,531         6,178  
                                       
Net income $   7,948     $   5,752     $   15,254     $   12,272  
                                       
Earnings Per Share of Common Stock:        
Basic Earnings Per Share:        
Common (formerly Class A) $     0.29     $     0.14     $   0.47     $   0.29  
Class B $     0.27     $     0.82     $   1.31     $   1.75  
Diluted Earnings Per Share:                                      
Common (formerly Class A) $   0.28     $   0.13     $   0.45     $   0.28  
Class B $   0.26     $   0.80     $   1.27     $   1.71  
                                       
Weighted average shares and share equivalents outstanding                                      
Common (formerly Class A) - basic     23,957         20,752         22,429         20,745  
Class B - basic     3,527          3,514         3,527         3,514  
Common (formerly Class A) - diluted     24,846         21,525         23,350         21,404  
Class B - diluted     3,620         3,591         3,628         3,584  
                               

 

  

NATIONAL RESEARCH CORPORATION AND SUBSIDIARYUnaudited Condensed Consolidated Balance Sheets(Dollars in thousands, except per share amounts and par value)

     Jun. 30,      Dec. 31, 
  2018    2017 
ASSETS              
Current Assets:  
Cash and cash equivalents $ 6,698     $ 34,733  
Accounts receivable, net   10,689       14,806  
Income taxes receivable   1,713       375  
Other current assets   4,533       2,345  
Total Current Assets   23,633       52,259  
               
Property and equipment, net   13,320       12,359  
Goodwill   57,913       58,021  
Deferred contract costs    3,369       --  
Other, net   4,650       4,677  
Total Assets $ 102,885     $  127,316  
               
LIABILITIES AND SHAREHOLDERS’ EQUITY  
   
Current Liabilities:  
Accounts payable and accrued expenses $ 3,710      $ 3,546  
Deferred revenue   16,660       16,878  
Accrued compensation   4,669       6,597  
Dividends payable   4,206       4,222  
Income taxes payable   97       --  
Notes payable   3,575       1,067  
Total Current Liabilities   32,917       32,310  
               
Non-Current Liabilities   43,151       4,965  
               
Total Liabilities   76,068       37,275  
   
Shareholders’ Equity:  
Preferred stock, $0.01 par value, authorized 2,000,000 shares, none issued   --       --   
Common stock (formerly Class A Common stock) $0.001 par value; authorized 60,000,000 shares,   issued 29,794,307 in 2018 and 25,835,230 in 2017, outstanding 24,783,983 in 2018 and 20,936,703 in 2017   30       26  
Class B Common stock, $0.001 par value; 4,319,256 issued and 3,535,238 outstanding in 2017   --       4  
Additional paid-in capital   155,614       51,025  
Retained earnings   (99,810 )      77,574  
Accumulated other comprehensive loss   (2,333 )      (1,635 )
Treasury stock   (26,684 )      (36,953 )
Total Shareholders’ Equity   26,817       90,041  
Total Liabilities and Shareholders’ Equity $ 102,885     $  127,316  
               

 

Contact:   Kevin R. Karas   Chief Financial Officer402-475-2525

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