National Research Corporation Announces Third Quarter 2018 Results
November 06 2018 - 5:00PM
National Research Corporation (NASDAQ:NRC) today announced results
for the third quarter of 2018.
- Net New Sales of $6.2 million
- Revenue up 4% to $30 million
- Operating Income up 29% to $9.2 million
- Voice of Customer platform contract value increased to $37
million
- Third quarter platform revenue increased to 27% of total
revenue, up from 15% in the same period 2017
Remarking on Company performance, Michael D.
Hays, chief executive officer of National Research Corporation
said, “We welcome MD Anderson, Johns Hopkins and Cedars-Sinai to
our growing list of new and expanded NRC Health partners. In the
third quarter alone, we exceeded the total dollar value of new
client wins in all of 2017 and year-to-date, have more than doubled
last year.”
Kevin Karas, chief financial officer commented,
“Third quarter net new sales were 15% higher than the same period
last year. We also realized much better customer retention which
drove significant improvement in our revenue growth rate compared
to the first half of 2018. Operating income increased by over $2.0
million compared to the prior year as a result of revenue growth
leverage, operating efficiencies and the impact of $958,000 of
recapitalization costs incurred in the third quarter of 2017.”
Revenue for the quarter ended September 30,
2018, was $30.0 million, compared to $29.0 million for the same
quarter in 2017. Net income for the quarter ended September 30,
2018, was $7.0 million, compared to $4.2 million for the quarter
ended September 30, 2017. Diluted earnings per share increased to
$0.27 for the common shares (formerly Class A) for the quarter
ended September 30, 2018, from diluted earnings per share of $0.09
for Class A shares and $0.57 for Class B shares for the quarter
ended September 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 third quarter conference call will be available
online at http://edge.media-server.com/m6/p/v4h88sbd on
November 7, 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.
Contact: Kevin R. Karas
Chief Financial Officer
402-475-2525
NATIONAL RESEARCH
CORPORATION AND
SUBSIDIARYUnaudited Condensed
Consolidated Statements of Income(In thousands, except per
share data)
|
Three months ended September 30,
|
Nine months ended September 30,
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
Revenue |
$ |
30,013 |
|
|
$ |
28,951 |
|
|
$ |
89,047 |
|
|
$ |
87,661 |
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
Direct
expenses |
|
11,780 |
|
|
|
12,267 |
|
|
|
35,685 |
|
|
|
36,706 |
|
Selling,
general and administrative |
|
7,679 |
|
|
|
8,430 |
|
|
|
23,486 |
|
|
|
22,021 |
|
Depreciation and amortization |
|
1,388 |
|
|
|
1,132 |
|
|
|
3,996 |
|
|
|
3,376 |
|
Total operating expenses |
|
20,847 |
|
|
|
21,829 |
|
|
|
63,167 |
|
|
|
62,103 |
|
|
|
|
|
|
Operating income |
|
9,166 |
|
|
|
7,122 |
|
|
|
25,880 |
|
|
|
25,558 |
|
|
|
|
|
|
Other
income (expense): |
|
|
|
|
Interest income |
|
3 |
|
|
|
29 |
|
|
|
57 |
|
|
|
58 |
|
Interest expense |
|
(544 |
) |
|
|
(18 |
) |
|
|
(990 |
) |
|
|
(68 |
) |
Other, net |
|
(242 |
) |
|
|
40 |
|
|
|
222 |
|
|
|
76 |
|
|
|
|
|
|
Total other (expense) income |
|
(783 |
) |
|
|
51 |
|
|
|
(711 |
) |
|
|
66 |
|
|
|
|
|
|
Income before income taxes |
|
8,383 |
|
|
|
7,173 |
|
|
|
25,169 |
|
|
|
25,624 |
|
|
|
|
|
|
Provision
for income taxes |
|
1,391 |
|
|
|
3,020 |
|
|
|
2,923 |
|
|
|
9,198 |
|
|
|
|
|
|
Net income |
$ |
6,992 |
|
|
$ |
4,153 |
|
|
$ |
22,246 |
|
|
$ |
16,426 |
|
|
|
|
|
|
Earnings Per Share of Common Stock: |
|
|
|
|
Basic Earnings Per Share: |
|
|
|
|
Common (formerly Class A) |
$ |
0.28 |
|
|
$ |
0.10 |
|
|
$ |
0.76 |
|
|
$ |
0.39 |
|
Class B |
$ |
-- |
|
|
$ |
0.59 |
|
|
$ |
1.31 |
|
|
$ |
2.34 |
|
Diluted Earnings Per Share: |
|
|
|
|
Common (formerly Class A) |
$ |
0.27 |
|
|
$ |
0.09 |
|
|
$ |
0.73 |
|
|
$ |
0.38 |
|
Class B |
$ |
-- |
|
|
$ |
0.57 |
|
|
$ |
1.27 |
|
|
$ |
2.28 |
|
|
|
|
|
|
Weighted
average shares and share equivalents outstanding Common
(formerly Class A) - basic |
|
24,671 |
|
|
|
20,788 |
|
|
|
23,184 |
|
|
|
20,759 |
|
Class B - basic |
|
-- |
|
|
|
3,514 |
|
|
|
3,527 |
|
|
|
3,514 |
|
Common (formerly Class A) - diluted |
|
25,526 |
|
|
|
21,740 |
|
|
|
24,083 |
|
|
|
21,537 |
|
Class B - diluted |
|
-- |
|
|
|
3,620 |
|
|
|
3,628 |
|
|
|
3,595 |
|
NATIONAL RESEARCH
CORPORATION AND
SUBSIDIARYUnaudited Condensed
Consolidated Balance Sheets(Dollars in thousands, except
per share amounts and par value)
|
Sep.
30, 2018 |
|
Dec. 31, 2018 |
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
7,273 |
|
|
$ |
34,733 |
|
Accounts
receivable, net |
|
16,544 |
|
|
|
14,806 |
|
Income
taxes receivable |
|
1,001 |
|
|
|
375 |
|
Other
current assets |
|
3,952 |
|
|
|
2,345 |
|
Total
Current Assets |
|
28,770 |
|
|
|
52,259 |
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
14,269 |
|
|
|
12,359 |
|
Goodwill |
|
57,955 |
|
|
|
58,021 |
|
Deferred contract
costs |
|
3,371 |
|
|
|
-- |
|
Other, net |
|
4,352 |
|
|
|
4,677 |
|
Total Assets |
$ |
108,717 |
|
|
$ |
127,316 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Accounts
payable and accrued expenses |
$ |
4,307 |
|
|
$ |
3,546 |
|
Deferred
revenue |
|
18,642 |
|
|
|
16,878 |
|
Accrued
compensation |
|
4,586 |
|
|
|
6,597 |
|
Dividends
payable |
|
4,209 |
|
|
|
4,222 |
|
Income
taxes payable |
|
70 |
|
|
|
-- |
|
Notes
payable |
|
3,623 |
|
|
|
1,067 |
|
Total
Current Liabilities |
|
35,437 |
|
|
|
32,310 |
|
|
|
|
|
|
|
|
|
Non-Current
Liabilities |
|
43,141 |
|
|
|
4,965 |
|
|
|
|
|
|
|
|
|
Total
Liabilities |
|
78,578 |
|
|
|
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 29,830,307 in 2018 and 25,835,230 in
2017, outstanding 24,762,212 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 |
|
156,384 |
|
|
|
51,025 |
|
Retained
earnings |
|
(97,027 |
) |
|
|
77,574 |
|
Accumulated other comprehensive loss |
|
(2,053 |
) |
|
|
(1,635 |
) |
Treasury
stock |
|
(27,195 |
) |
|
|
(36,953 |
) |
Total
Shareholders’ Equity |
|
30,139 |
|
|
|
90,041 |
|
Total
Liabilities and Shareholders’ Equity |
$ |
108,717 |
|
|
$ |
127,316 |
|
|
|
|
|
|
|
|
|
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