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
<PAGE>
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
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<PAGE>
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.
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<PAGE>
<TABLE>
NATIONAL RESEARCH CORPORATION
CONDENSED STATEMENTS OF INCOME (LOSS)
(Unaudited)
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
--------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
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
=============== =============== ================ ================
</TABLE>
See accompanying notes to condensed financial statements.
-4-
<PAGE>
<TABLE>
NATIONAL RESEARCH CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine months ended
September 30,
------------------------------
1999 1998
-------------- --------------
<S> <C> <C>
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
============== ==============
</TABLE>
See accompanying notes to condensed financial statements.
-5-
<PAGE>
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-
<PAGE>
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.
<TABLE>
<CAPTION>
Percentage of Total Revenues
------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
------------------------- -------------------------
1999 1998 1999 1998
------------------------- -------------------------
<S> <C> <C> <C> <C>
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)%
========================= =========================
</TABLE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,116
<SECURITIES> 10,667
<RECEIVABLES> 2,203
<ALLOWANCES> 92
<INVENTORY> 0
<CURRENT-ASSETS> 14,705
<PP&E> 7,118
<DEPRECIATION> 1,057
<TOTAL-ASSETS> 27,175
<CURRENT-LIABILITIES> 8,708
<BONDS> 2,023
0
0
<COMMON> 7
<OTHER-SE> 18,116
<TOTAL-LIABILITY-AND-EQUITY> 27,175
<SALES> 0
<TOTAL-REVENUES> 13,566
<CGS> 0
<TOTAL-COSTS> 9,051
<OTHER-EXPENSES> 3,562
<LOSS-PROVISION> 30
<INTEREST-EXPENSE> 6
<INCOME-PRETAX> 1,337
<INCOME-TAX> 487
<INCOME-CONTINUING> 850
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 850
<EPS-BASIC> .12
<EPS-DILUTED> .12
</TABLE>
