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National Research Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 6, 2011 04:26PM
National Research Corp. (NRCI) filed Quarterly Report for the period ended 2011-03-31. National Research Corp. has a market cap of $234.4 million; its shares were traded at around $34.905 with a P/E ratio of 27.5 and P/S ratio of 3.7. The dividend yield of National Research Corp. stocks is 2.5%. National Research Corp. had an annual average earning growth of 15.2% over the past 10 years. GuruFocus rated National Research Corp. the business predictability rank of 5-star.
Highlight of Business Operations:
The Company had a working capital deficiency of $5.5 million as of March 31, 2011, compared to a working capital deficiency of $8.8 million as of December 31, 2010. The decrease in the working capital deficiency was primarily due to a $3.8 million increase in trade accounts receivable, $403,000 increase in prepaid expenses, a $1.3 million decrease in accrued expenses and accounts payable combined, and a $224,000 decrease in accrued wages, partially offset by a $1.1 million increase in deferred revenue, $973,000 decrease in recoverable income taxes, and a $203,000 decrease in cash and cash equivalents. The working capital deficiency balance was primarily due to a deferred revenue balance of $18.8 million as of March 31, 2011, and $17.7 million as of December 31, 2010.
Net cash provided by operating activities was $3.9 million for the quarter ended March 31, 2011, which included net income of $3.5 million, plus non-cash charges (benefits) for deferred tax expense, depreciation and amortization and non-cash stock compensation totaling $2.2 million. Changes in working capital reduced 2011 cash flows from operating activities by $1.7 million, primarily due to timing of initial billings on new or renewal contracts decreasing cash flows provided from trade accounts receivable and deferred revenue.
Net cash provided by operating activities was $6.3 million for the quarter ended March 31, 2010, which included net income of $3.1 million, plus non-cash charges (benefits) for deferred tax expense, depreciation and amortization, and non-cash stock compensation totaling $1.5 million. Changes in working capital benefitted 2010 cash flows from operating activities by $1.6 million.
Net cash used by financing activities was $1.9 million in the quarter ended March 31, 2011. Cash was generated from borrowings under the term note and revolving credit note totaling $2.0 million. Proceeds from the exercise of stock options provided cash of $132,000. Cash was used to pay dividends of $1.5 million, repay borrowings under the term note and revolving credit note totaling $2.5 million, and repurchases of the Company s common stock for $74,000.
The agreement under which the Company acquired MIV provides for contingent earn-out payments over three years based on growth in revenue and earnings. The 2010 and 2009 earn-out payments paid in February 2011 and 2010, were $1.6 million and $172,000 respectively, net of closing valuation adjustments, and were recorded as additions to goodwill. In April 2011, the Company reached an agreement which limits the final earn-out payment associated with the MIV acquisition at $2.6 million. Of this amount, $2.4 million was paid during April 2011, and if certain conditions are satisfied, a final payment, if any, up to $117,000 will be paid no later than February 2012. The payments will be recorded as additions to goodwill.
Shareholders equity increased $2.5 million to $51.1 million at March 31, 2011, from $48.6 million at December 31, 2010. The increase was primarily due to net income of $3.5 million, non-cash stock compensation expense of $220,000, increase in the cumulative translation adjustment of $225,000, and the exercise of stock options of $132,000, offset by dividends paid of $1.5 million.
Stocks Discussed: NRCI,