EX-99.1 2 cmw3356a.htm PRESS RELEASE

Contact: Patrick E. Beans
Chief Financial Officer
402-475-2525

NATIONAL RESEARCH CORPORATION ANNOUNCES
FOURTH QUARTER AND YEAR-END 2007 RESULTS

_________________

Quarterly New Contracts Reach a Record $5.5 million – Quarterly Dividend Increase Approved

LINCOLN, Nebraska (February 12, 2008) — National Research Corporation (NASDAQ:NRCI) today announced results for the fourth quarter and year ended December 31, 2007.

  • Annual revenue increased by 12%
  • Annual net income increased by 16%
  • 2007 commercial contract value up 18%
  • 2007 net new contracts up 23%
  • Quarterly dividend increase to $0.14 per share

        Revenue for the quarter ended December 31, 2007, was $10.8 million, compared to $10.3 million for the same period in 2006. Net income for the quarter ended December 31, 2007, was $1.1 million, or $0.16 per diluted share, compared with net income of $1.0 million, or $0.14 per diluted share, in the prior year period.

        Revenue for the year ending December 31, 2007, increased 12% to $48.9 million, compared to $43.8 million for the same period in 2006. Net income for 2007 increased 16% to $6.8 million, resulting in $1.00 per basic and $0.98 per diluted share, compared with $5.9 million, or $0.86 per basic and $0.85 per diluted share, in 2006.

        Commenting on the results, Michael D. Hays, chief executive officer of National Research Corporation, said, “Our annual revenue growth of 12% in 2007 was poor, being noticeably impacted by new sales first going towards replacing reductions in contract value, which we knew would be the case. That said, we grew commercial contract value by 18%. Net new contracts were up 23% to $14.7 million for the year 2007 with $5.5 million coming in the last quarter. All this suggests a strong wind at our back going into 2008 which, to date, has been the case. I’m encouraged, as well, by a strong new product pipeline and the recent doubling of the size of our Healthcare Market Guide sales team from six to twelve associates.”

-MORE-

NRCI Announces Fourth Quarter and Year-End 2007 Results
Page 2
February 12, 2008

        The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.14 (fourteen cents) per share payable March 31, 2008, to shareholders of record as of the close of business on March 7, 2008.

        In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “Going forward, with reductions in contract value replaced and our outstanding sales performance, we should return to top-line growth well within our model starting in quarter one of 2008 and benefit from material leverage of our expense structure throughout the year.”

        A listen-only simulcast of National Research Corporation’s year-end conference call will be available online at www.earnings.com on February 13, 2008, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately an hour later and continue for 30 days.

        National Research Corporation, headquartered in Lincoln, Nebraska, is a leading provider of performance measurement, improvement services, and governance education to the healthcare industry in the United States and Canada.

        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.





-MORE-

NRCI Announces Fourth Quarter and Year-End 2007 Results
Page 3
February 12, 2008

NATIONAL RESEARCH CORPORATION
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)

Three Months Ended
December 31,
 Twelve Months Ended
December 31,
2007
 2006
 2007
 2006

Revenue		     $ 10,821   $ 10,318   $ 48,923   $ 43,771  

Operating expenses:		  
    Direct expenses    5,057    4,605    21,801    19,446  
    Selling, general and administrative    3,283    3,150    13,173    12,158  
    Depreciation and amortization    661    689    2,583    2,259  
        Total operating expenses    9,001    8,444    37,557    33,863  

        Operating income		    1,820    1,874    11,366    9,908  

Other income (expense):		  
    Interest income    37    15    139    171  
    Interest expense    (70 )  (201 )  (483 )  (517 )
    Other, net    8    (38 )  96    (56 )

        Total other income (expense)		    (25 )  (224 )  (248 )  (402 )

        Income before income taxes		    1,795    1,650    11,118    9,506  
        Provision for income taxes    686    644    4,278    3,622  

Net income		   $ 1,109   $ 1,006   $ 6,840   $ 5,884  

Net income per share, basic		   $ 0.16   $ 0.15   $ 1.00   $ 0.86  
Net income per share, diluted   $ 0.16   $ 0.14   $ 0.98   $ 0.85  

Weighted average shares outstanding:		  
    Basic    6,861    6,838    6,850    6,836  
    Diluted    7,034    6,976    7,011    6,954  


-MORE-

NRCI Announces Fourth Quarter and Year-End 2007 Results
Page 4
February 12, 2008

NATIONAL RESEARCH CORPORATION
Consolidated Condensed Balance Sheets
(Dollars in thousands)

Dec. 31,
2007
 Dec. 31,
2006
ASSETS (Unaudited)

Current Assets:		            
    Cash and cash equivalents   $ 3,355   $ 876  
    Short-term investments    99    1,110  
    Accounts receivable, net    6,379    6,734  
    Income taxes recoverable    249    898  
    Other current assets    2,518    3,379  
           Total current assets    12,600    12,997  

Net property and equipment		    11,974    11,716  
Other, net    37,295    36,819  

           Total Assets		   $ 61,869   $ 61,532  
LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:		  
    Accounts payable and accrued expenses   $ 2,492   $ 1,511  
    Deferred revenue    9,922    8,264  
    Accrued compensation    1,477    1,594  
    Notes payable    1,093    3,110  
           Total current liabilities    14,984    14,479  

Non-current liabilities		    4,598    10,303  

           Total Liabilities		    19,582    24,782  

Shareholders’ Equity:		  
    Common stock, $0.001 par value; 20,000,000 shares authorized;  
      issued 7,883,289 in 2007 and 7,837,848 in 2006;  
      outstanding 6,860,259 in 2007 and 6,890,631 in 2006    8    8  
    Additional paid-in capital    23,508    21,820  
    Retained earnings    30,004    26,488  
    Accumulated other comprehensive income    932    358  
    Treasury stock    (12,165 )  (11,924 )
           Total shareholders’ equity    42,287    36,750  
           Total liabilities and shareholders’ equity   $ 61,869   $ 61,532  

-END-