Full Press Release Details
| Contact: | Kevin R. Karas |
| Chief Financial Officer | |
| 402-475-2525 |
NATIONAL RESEARCH CORPORATION ANNOUNCES
FOURTH QUARTER AND YEAR-END 2016 RESULTS
Board of Directors Declares Quarterly Dividend
LINCOLN, Nebraska (February 14, 2017) - National Research Corporation (NASDAQ: NRCIA and NRCIB) today announced results for the fourth quarter and year-end 2016.
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.
NRC Announces Fourth Quarter 2016 Results
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, 2016 | Dec. 31, 2015 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 33,021 | $ | 42,145 | ||||
| Accounts receivable, net | 10,864 | 9,808 | ||||||
| Income taxes receivable | 14 | 157 | ||||||
| Other current assets | 3,166 | 2,951 | ||||||
| Total Current Assets | 47,065 | 55,061 | ||||||
| Property and equipment, net | 11,806 | 11,125 | ||||||
| Goodwill | 57,861 | 57,792 | ||||||
| Other, net | 3,892 | 4,071 | ||||||
| Total Assets | $ | 120,624 | $ | 128,049 | ||||
| LIABILITIES AND SHAREHOLDERS ' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 3,916 | $ | 3,394 | ||||
| Deferred revenue | 15,497 | 14,843 | ||||||
| Accrued compensation | 4,543 | 4,391 | ||||||
| Dividends payable | 4,213 | 18,440 | ||||||
| Income taxes payable | 662 | 701 | ||||||
| Notes payable | 2,683 | 2,402 | ||||||
| Total Current Liabilities | 31,514 | 44,171 | ||||||
| Non-Current Liabilities | 6,304 | 9,656 | ||||||
| Total Liabilities | 37,818 | 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 2015 | 26 | 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 2015 | 4 | 4 | ||||||
| Additional paid-in capital | 46,725 | 44,103 | ||||||
| Retained earnings | 71,507 | 65,313 | ||||||
| Accumulated other comprehensive loss | (2,626 | ) | (2,995 | ) | ||||
| Treasury stock | (32,830 | ) | (32,229 | ) | ||||
| Total Shareholders ' Equity | 82,806 | 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 w eighted average shares and share equivalents outstanding | ||||||||||||||||
| Combined - Basic | 24,228 | 24,134 | 24,218 | 24,219 | ||||||||||||
| Combined - Diluted | 24,687 | 24,459 | 24,597 | 24,503 |