-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LFHqnJBIO+8r5RleRYh9pNplb0qc0KvcHpEDL+SNoeldbD1MvtF5FdWxYiTYQzsd ELUyNq7rHQK6Qp0bH3leoQ== 0000897069-99-000548.txt : 19991115 0000897069-99-000548.hdr.sgml : 19991115 ACCESSION NUMBER: 0000897069-99-000548 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL RESEARCH CORP CENTRAL INDEX KEY: 0000070487 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 470634000 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-29466 FILM NUMBER: 99747657 BUSINESS ADDRESS: STREET 1: 1033 O ST CITY: LINCOLN STATE: NE ZIP: 68508 BUSINESS PHONE: 4024752525 MAIL ADDRESS: STREET 1: 1033 O ST CITY: LINCOLN STATE: NE ZIP: 68508 10-Q 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 0-29466 National Research Corporation (Exact name of Registrant as specified in its charter) Wisconsin 47-063400 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1033 "O" Street, Lincoln Nebraska 68508 (Address of principal executive offices) (Zip Code) (402) 475-2525 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.001 par value, outstanding as of October 31, 1999: 7,050,000 shares NATIONAL RESEARCH CORPORATION FORM 10-Q INDEX For the Quarter Ended September 30, 1999 Page No. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets 3 Condensed Statements of Income (Loss) 4 Condensed Statements of Cash Flows 5 Notes to Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of 7-10 Financial Condition and Results of Operations PART II. OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds 11 Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 Exhibit Index 13 -2- PART I - Financial Information ITEM 1 Financial Statements NATIONAL RESEARCH CORPORATION CONDENSED BALANCE SHEETS September 30, December 31, 1999 1998 -------------- -------------- (unaudited) Assets Current assets: Cash and cash equivalents $ 1,116,228 $ 4,887,712 Investments in marketable debt securities 10,667,195 8,009,343 Trade accounts receivable less allowance for doubtful accounts of $91,891 in 1999 and $77,808 in 1998 2,110,995 2,940,356 Unbilled revenues 501,226 1,030,351 Prepaid expenses and other 71,257 165,037 Deferred income taxes 238,407 222,500 ------------ ------------ Total current assets 14,705,308 17,255,299 ------------ ------------ Property and equipment, net of accumulated depreciation and amortization 6,061,043 2,288,583 Deferred income taxes 498,162 548,506 Other 15,592 26,582 Goodwill and other intangibles, net of accumulated amortization 5,894,812 6,160,209 ------------ ------------ Total assets $ 27,174,917 $ 26,279,179 ============ ============ Liabilities and Shareholders' Equity Current liabilities: Notes payable, construction line of credit $ 1,940,000 $ -- Purchase price payable -- 2,650,000 Current portion - notes payable 30,754 30,754 Accounts payable and accrued expenses 2,585,476 1,429,728 Accrued wages, bonuses and profit sharing 622,583 907,743 Income taxes payable 459,431 -- Billings in excess of revenues earned 3,069,838 3,283,462 ------------ ------------ Total current liabilities 8,708,082 8,301,687 Notes payable, net of current portion 51,865 74,694 Bonuses and profit sharing accruals 66,260 157,472 Other accrued expense 226,124 310,793 ------------ ------------ Total long-term liabilities 344,249 542,959 ------------ ------------ Total liabilities 9,052,331 8,844,646 ------------ ------------ Shareholders' equity: Common stock, $.001 par value; authorized 20,000,000 shares, issued and outstanding 7,305,000 7,305 7,305 Preferred stock, $.01 par value; authorized 2,000,000 shares, no shares issued and outstanding -- -- Additional paid-in capital 16,839,839 16,839,839 Retained earnings 2,585,036 1,734,983 Treasury Stock, at cost; 255,000 shares in 1999; and 213,000 in 1998 (1,309,594) (1,147,594) ------------ ------------ Total shareholders' equity 18,122,586 17,434,533 ------------ ------------ Total liabilities and shareholders' equity $ 27,174,917 $ 26,279,179 ============ ============ See accompanying notes to condensed financial statements. -3- NATIONAL RESEARCH CORPORATION CONDENSED STATEMENTS OF INCOME (LOSS) (Unaudited)
Three months ended Nine months ended September 30, September 30, --------------------------------- --------------------------------- 1999 1998 1999 1998 --------------- --------------- ---------------- --------------- Revenues $ 5,597,544 $ 5,614,524 $ 13,565,808 $ 13,050,341 --------------- --------------- ---------------- ---------------- Operating expenses: Direct expenses 3,468,505 3,390,400 9,051,445 6,915,322 Selling, general and administrative 1,061,063 1,238,991 3,011,485 3,670,390 Depreciation and amortization 202,611 126,417 550,833 244,773 Acquired in-process research and development cost - - - 2,737,542 Severance charge - - - 303,740 --------------- --------------- ---------------- --------------- Total operating expenses 4,732,179 4,755,808 12,613,763 13,871,767 --------------- --------------- ---------------- --------------- Operating income (loss) 865,365 858,716 952,045 (821,426) Other income (expense) Interest income 129,072 174,594 413,087 692,124 Interest expense (1,924) (3,635) (6,317) (4,938) Loss on sale of equipment (20,996) - (22,106) - Other, net (10,884) - 86 - --------------- --------------- ---------------- --------------- Total other income 95,268 170,959 384,750 687,186 --------------- --------------- ---------------- --------------- Income (loss) before income taxes 960,633 1,029,675 1,336,795 (134,240) Income tax provision (benefit) 334,226 403,454 486,739 (37,671) --------------- --------------- ---------------- --------------- Net income (loss) 626,407 626,221 850,056 (96,569) --------------- --------------- ---------------- --------------- Net income (loss) per share--basic and diluted $ 0.09 $ 0.09 $ 0.12 $ (0.01) =============== ================ ================ =============== Weighted average shares and share equivalents outstanding--basic 7,050,000 7,305,000 7,060,861 7,305,000 =============== =============== ================ ================ Weighted average shares and share equivalents outstanding--basic and diluted 7,051,389 7,305,000 7,062,250 7,305,000 =============== =============== ================ ================
See accompanying notes to condensed financial statements. -4- NATIONAL RESEARCH CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Nine months ended September 30, ------------------------------ 1999 1998 -------------- -------------- Cash flows from operating activities: Net income (loss) $ 850,056 $ (96,569) Adjustments to reconcile net income to net cash Provided by operating activities: Depreciation and amortization 568,565 244,773 Acquired in-process research and development cost, net of tax - 1,669,309 Loss on disposal of assets 22,106 - Loss on sale of other investments 144 - Changes in assets and liabilities, net of acquisition: Current assets 1,498,694 1,135,840 Current liabilities 940,514 (465,591) -------------- -------------- Net cash provided by operating activities 3,880,079 2,487,762 -------------- -------------- Cash flows from investing activities: Purchases of property and equipment (4,111,801) (1,251,469) Acquisition, net of cash acquired (2,636,936) (5,616,353) Accounts receivable - other - (402,878) Purchases of securities available- for-sale (12,604,996) (8,332,133) Proceeds from the maturities of securities available-for-sale 9,947,000 9,348,921 -------------- -------------- Net cash used in investing activities (9,406,734) (6,253,912) -------------- -------------- Cash flows from financing activities: Proceeds from notes payable - construction line of credit 1,940,000 - Payments on notes payable (22,829) (10,926) Purchase of treasury stock (162,000) - -------------- -------------- Net cash provided by (used in) financing activities 1,755,171 (10,926) -------------- -------------- Net decrease in cash and cash equivalents (3,771,484) (3,777,076) Cash and cash equivalents at beginning of period 4,887,712 4,688,352 -------------- -------------- Cash and cash equivalents at end of period $ 1,116,228 $ 911,276 ============== ============== Supplemental disclosure of cash paid (received) for: Interest $ 6,317 $ 4,938 ============== ============== Taxes $ (10,019) $ 931,447 ============== ==============
See accompanying notes to condensed financial statements. -5- NATIONAL RESEARCH CORPORATION Notes to Condensed Financial Statements 1. INTERIM FINANCIAL REPORTING The condensed balance sheet of National Research Corporation (the "Company") at December 31, 1998 was derived from the Company's audited balance sheet as of that date. All other financial statements contained herein are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) the Company considers necessary for a fair presentation of financial position, results of operations and cash flows in accordance with generally accepted accounting principles. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed financial statements should be read in conjunction with the financial statements and notes thereto that are included in the Company's Form 10-K for the fiscal year ended December 31, 1998, filed with the Securities and Exchange Commission in March 1999. Other than its net income, the Company's only other source of comprehensive income is unrealized gains or losses on marketable debt securities. However, other comprehensive income from marketable debt securities is not significant for the nine-month periods ended September 30, 1999 and 1998, respectively. 2. LINE OF CREDIT In connection with the construction and renovation of the new headquarters, the Company entered into a line of credit arrangement with a local financial institution that provides for maximum borrowings of up to $5,700,000. At September 30, 1999, the Company had drawn $1,940,000 under the line of credit and had unused credit available of $3,760,000. The line of credit bears interest at prime less one percent, which was 7.25% at September 30, 1999, and matures on March 1, 2000. Borrowings under the line of credit are secured by marketable securities. -6- ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following table sets forth, for the periods indicated, selected financial information derived from the Company's condensed financial statements, expressed as a percentage of total revenues. The trends illustrated in the following table may not necessarily be indicative of future results. The discussion that follows the table should be read in conjunction with the condensed financial statements.
Percentage of Total Revenues ------------------------------------------------------ Three months ended Nine months ended September 30, September 30, ------------------------- ------------------------- 1999 1998 1999 1998 ------------------------- ------------------------- Revenues: 100.0% 100.0% 100.0% 100.0% ------------------------- ------------------------- Operating expenses: Direct expenses 62.0 60.4 66.7 53.0 Selling, general and administrative 19.0 22.1 22.2 28.1 Depreciation and amortization 3.6 2.3 4.1 1.9 Acquired in-process research and development cost -- -- -- 21.0 Severance charge -- -- -- 2.3 ------------------------- ------------------------- Total operating expenses: 84.6 84.8 93.0 106.3 ------------------------- ------------------------- Operating income (loss) 15.4% 15.2% 7.0% (6.3)% ========================= =========================
Three Months Ended September 30, 1999 Compared to Three Months Ended September 30, 1998 Total revenues. Total revenues were flat in the three-month period ended September 30, 1999 compared to the three-month period ended September 30, 1998, both at $5.6 million. Direct expenses. Direct expenses increased 2.3% to $3.5 million in the three-month period ended September 30, 1999 from $3.4 million in the same period during 1998. The increase in direct expenses in the 1999 period was due primarily to direct software conversion costs of $360,000. The decrease in fieldwork expense of $153,000 and the decrease in printing and postage of $143,000 offset part of the increase in direct software conversion costs. Direct expenses increased as a percentage of total revenues to 62.0% in the three-month period ended September 30, 1999, from 60.4% during the same period of 1998. The increase in direct expenses as a percentage of total revenues were due primarily to expenses associated with the Company's planned conversion of internal software (which has not been completed). Direct expenses as a percentage of total revenue are expected to remain at levels similar to the 1999 period until the internal software conversion is completed, which the Company anticipates will occur in the fourth quarter of 1999. Selling, general and administrative expenses. Selling, general and administrative expenses decreased 14.4% to $1.1 million for the three-month period ended September 30, 1999 from $1.2 million for the same period in 1998. This decrease was primarily due to a decrease in marketing costs of $82,000, office supplies and postage of $50,000, occupancy costs of $12,000, and payroll expenses of $8,000. These decreases were partially offset by an increase in legal and accounting expenses of $38,000. Sales, general and administrative expenses decreased as a percentage of total revenues to 19.0% for the three-month period ended September 30, 1999, from 22.1% for the same period in 1998. -7- Depreciation and amortization. Depreciation and amortization expenses increased 60.3% to $203,000 in the three-month period ended September 30, 1999 from $126,000 in the same period of 1998. The increase was primarily due to the acquisition of intangible assets of Healthcare Research Systems Ltd. ("HRS") in June 1998 and the internal development of software. Depreciation and amortization expenses as a percentage of total revenues increased to 3.6% in the three-month period ended September 30, 1999, from 2.3% in the same period of 1998. Provision for income taxes. The provision for income taxes totaled $334,000 (34.8% effective tax rate) for the three-month period ended September 30, 1999, as compared to $403,000 (39.2% effective tax benefit) for the same period in 1998 due to lower expected state tax expense. Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30, 1998 Total revenues. Total revenues increased 4.0% in the first nine months of 1999 to $13.6 million from $13.1 million in the first nine months of 1998. The increase was due primarily to an increase in revenue from performance tracking services and custom research, as well as syndicated services as a result of the addition of new clients and, to a lesser extent, an increase in the scope of existing tracking projects. Direct expenses. Direct expenses increased 30.9% to $9.1 million in the first nine months of 1999 from $6.9 million in the first nine months of 1998. The increase in direct expenses in the 1999 period was due to increases in labor and payroll expenses of $1,007,000, direct software conversion costs of $606,000, fieldwork expenses of $387,000, printing, postage and office supplies of $138,000, and rent expense of $50,000. Direct expenses increased as a percentage of total revenues to 66.7% in the first nine months of 1999, from 53.0% during the first nine months of 1998. The increase in direct expenses as a percentage of total revenues were due primarily to expenses associated with the Company's planned conversion of internal software (which has not been completed) and, to a lesser extent, an increase use of telephone methodology, which increases labor costs. Direct expenses as a percentage of total revenue are expected to remain at levels similar to the 1999 period until the internal software conversion is completed, which the Company anticipates will occur in the fourth quarter of 1999. Selling, general and administrative expenses. Selling, general and administrative expenses decreased 18.0% to $3.0 million for the first nine months of 1999 from $3.7 million for the first nine months of 1998. This decrease was primarily due to decreases of $290,000 related to payroll expenses, marketing costs of $236,000, office supplies and postage of $60,000. These decreases were partially offset by an increase in occupancy costs of $37,000. Selling, general and administrative expenses decreased as a percentage of total revenues to 22.2% for the first nine months of 1999, from 28.1% for the first nine months of 1998. Depreciation and amortization. Depreciation and amortization expenses increased 125.0% to $551,000 in the first nine months of 1999 from $245,000 in the first nine months of 1998. This increase was primarily due to the acquisition of intangible assets of HRS in June 1998 and the internal development of software. Depreciation and amortization expenses increased as a percentage of total revenues to 4.1% in the first nine months of 1999, from 1.9% in the first nine months of 1998. Acquired in-process research and development cost and severance charge. In connection with the acquisition of HRS in June 1998, the Company incurred a one-time, non-recurring charge of $2.7 million for costs assigned to in-process research and development activities of the acquired company and severance costs of $304,000 for duplicative employees of the Company as a result of the acquisition. The aggregate charges to income net of taxes associated with the acquisition were approximately $1.9 million, or $0.26 per share. Provision for income taxes. The provision for income taxes totaled $487,000 (36.4% effective tax rate) for the nine-month period ended September 30, 1999, as compared to a $38,000 tax benefit (27.8% effective tax benefit) for the same period in 1998. The increase in expense is due to the profit for the 1999 period. -8- Liquidity and Capital Resources The Company's principal source of funds historically has been cash flow from its operations. The Company's cash flow has been sufficient to provide funds for working capital and capital expenditures. As of September 30, 1999, the Company had cash and cash equivalents of $1.1 million and working capital of $6.0 million. During the nine months ended September 30, 1999, the Company generated $3.9 million of net cash from operating activities, as compared to $2.5 million of net cash generated during the same period in the prior year. The increase in cash flow was mainly due to the timing of collections of accounts receivable and the timing of costs incurred in advance of billings on certain projects. For the nine months ended September 30, 1999, net cash used in investing activities was $9.4 million, as compared to net cash used of $6.3 million during the same period in the prior year. The 1999 increase in cash used was primarily due to the purchase of an additional $3.7 million of securities available for sale. The 1999 investment in furniture, computer equipment, software and the new headquarters increased $2.9 million compared to 1998, while cash used for acquisition related items decreased $3.4 million. The Company's investments available-for-sale consist principally of United States government securities with maturities of twelve months or less. The 1998 net cash used was primarily due to the acquisition of HRS in June 1998 for approximately $5.6 million, the accounts receivable-other related to the acquisition of $403,000 and investment of $1.3 million in furniture, computer equipment, software and production equipment to meet the expansion of the Company's business, which was partially offset by the maturing of investments in debt securities available-for-sale. Net cash provided by financing activities was $1.8 million for the nine months ended September 30, 1999, as compared to net cash used in financing activities of $11,000 for the same period in 1998. Net cash provided by financing activities for 1999 was a result of the receipt of $1.9 million from the construction line of credit for the renovation of the new headquarters, which is expected to be refinanced with long-term debt once the remodeling of the building is complete. In connection with the construction and renovation of the new headquarters, the Company entered into a line of credit arrangement with a local financial institution that provides for maximum borrowings of up to $5,700,000. Borrowings under the line of credit are secured by marketable securities. The Company typically bills clients for projects before they have been completed. Billed amounts are recorded as billings in excess of costs or deferred revenue on the Company's financial statements and are recognized as income when earned. As of September 30, 1999 and as of December 31, 1998, the Company had $3.1 million and $3.3 million of deferred revenues, respectively. In addition, when work is performed in advance of billing, the Company records this work as a cost in excess of billings or unbilled revenue. At September 30, 1999 and December 31, 1998, the Company had $501,000 and $1.0 million of unbilled revenues, respectively. Substantially all deferred and unbilled revenues will be earned and billed, respectively, within 12 months of the respective period ends. In October 1998, the Company announced plans to repurchase up to 245,000 shares of common stock in the open market or in privately negotiated transitions. The Company repurchased 245,000 shares between October 1998 and March 1999. In April 1999, the Board of Directors of the Company authorized the repurchase of an additional 150,000 shares. As of October 31, 1999, 10,000 shares under the new authorization have been repurchased. Year 2000 The Year 2000 ("Y2K") issue is the result of computer systems using two digits, as opposed to four digits, to indicate the year. Such computer systems will be unable to interpret dates beyond the year 1999, which could cause a system failure or other computer errors, leading to a disruption in operations. The Company uses software and related technologies throughout its business that could be affected by the date change in Y2K. -9- At the end of 1997, an independent third party conducted an assessment of the Company's computer systems and, based on such assessment, the Company developed plans to address issues related to the impact of Y2K on its information systems. The Company believes that it has completed the assessment phase for all of its information technology systems and has made repairs or replacements for those systems that were not Y2K compliant. Many of the external software programs used by the Company were already Y2K compliant. The remaining software is currently being upgraded to new vendor versions, which, in addition to providing increased functionality, address the Y2K issue. The Company's internal software systems presented no Y2K compatibility issues. Most of the Company's internal hardware systems presented no Y2K compatibility issues. The Company believes that it has upgraded its computer hardware that was not Y2K compliant on an ongoing basis and all mission-critical hardware will be Y2K compliant before the end of 1999. The software used by the Company to deliver information to its clients contains no date related data or code other than that related to licensing issues, and therefore, is not affected by the Y2K issue. Many of the services sold by the Company originate from data provided by the Company's clients. The Company generally does not use live data provided by its clients, instead the clients transmit member or patient information on a weekly or monthly basis. As a result, the Company's ability to provide services to these clients is dependent on whether such clients' systems for transmitting data to the Company are Y2K compliant. If a client cannot transmit member or patient information to the Company, then the Company cannot provide its services to the client. The Company has been working with its clients during 1999 to resolve Y2K issues that affect the transmission of data to the Company. However, there can be no assurance that the failure of clients of the Company to be Y2K compliant will not have a material adverse effect on the Company. Contingency planning to maintain various data collection services in the event of systems related problems is a routine part of the Company's operations. As discussed above, the Company will continue to work with its clients to resolve Y2K issues that affect the transmission of data to the Company. To be prepared to address unexpected occurrences, the Company will finalize during November 1999 its contingency plans to assess alternative methods to obtain data from its clients. The Company is also identifying and considering various Y2K specific contingency plans, including identification of alternate vendors and service providers. There can be no assurance the alternative vendors and service providers will be available. The current estimate of total Y2K compliance cost is under $100,000. A majority of these costs have been included in the ongoing upgrading and standardization of the Company's systems. Approximately $57,000 of such costs has been incurred to date. Based upon progress to date, the Company does not believe that future costs of Y2K compliance will materially affect the Company's operating results or financial condition. The estimated costs of, and timetable for, becoming Y2K compliant constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Shareholders, potential investors and other readers are cautioned that such estimates are based on numerous assumptions by management, including assumptions regarding the accuracy of representations made by third parties concerning their compliance with Y2K issues and other factors. ITEM 3 Quantitative and Qualitative Disclosures About Market Risk The Company has not experienced any material changes in its market risk exposures since December 31, 1998. -10- PART II - Other Information ITEM 2 Changes in Securities and Use of Proceeds (a) Not applicable. (b) Not applicable. (c) Not applicable. (d) The Company's Registration Statement on Form S-1 (Registration No. 333-33273) (the "Registration Statement") relating to the offer and sale (the "Offering") of an aggregate of 2,415,000 shares of Common Stock was declared effective by the Securities and Exchange Commission on October 9, 1997. Of the 2,415,000 shares of Common Stock registered under the Registration Statement, 1,250,000 shares were sold by the Company and 1,165,000 shares (including 315,000 shares sold pursuant to the exercise of an over-allotment option granted to the underwriters) were sold by a certain shareholder of the Company, Michael D. Hays (the "Selling Shareholder"). During the fourth quarter of 1997, all of the shares of Common Stock registered were sold in the Offering at a price of $15.00 per share, for an aggregate price of $18,750,000 and $17,475,000 for the shares of Common Stock sold by the Company and the Selling Shareholder, respectively. After deducting the underwriting discount of $1.05 per share, the Selling Shareholder received net proceeds equal to $16,251,750 and the Company received net proceeds equal to $17,437,500 less expenses of $596,411 incurred in connection with the Offering. The net proceeds to the Company were reasonably estimated to be applied as follows: 1. Temporary investments of United States government securities with maturities of two years or less $4,530,002 2. Acquisition of HRS and related acquisition costs 8,549,588 3. The acquisition of a new headquarters building 2,451,905 4. The repurchase of treasury stock 1,309,594 ---------- Total proceeds to the Company $16,841,089 ========== ITEM 6 Exhibits and Reports on Form 8-K (a) Exhibit Number Description (27) Financial Data Schedule (EDGAR version only) (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended September 30, 1999. -11- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NATIONAL RESEARCH CORPORATION Date: November 12, 1999 By:/s/ Michael D. Hays ----------------------------------- Michael D. Hays President and Chief Executive Officer Date: November 12, 1999 By:/s/ Patrick E. Beans ----------------------------------- Patrick E. Beans Vice President, Treasurer, Secretary and Chief Financial Officer (Principal Financial and Accounting Officer) -12- NATIONAL RESEARCH CORPORATION EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q For the Quarterly Period ended September 30, 1999 Exhibit (27) Financial Data Schedule (EDGAR version only) -13- EX-27 2 FDS -- NATIONAL RESEARCH CORPORATION
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF NATIONAL RESEARCH CORPORATION AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 1,116 10,667 2,203 92 0 14,705 7,118 1,057 27,175 8,708 2,023 0 0 7 18,116 27,175 0 13,566 0 9,051 3,562 30 6 1,337 487 850 0 0 0 850 .12 .12
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