National Research Corporation (NASDAQ:NRC) Q3 2019 Earnings Conference Call Transcript
Nov 06, 2019 • 11:00 am ET
Greetings and welcome to the National Research Corporation Third Quarter 2019 Conference Call. [Operator Instructions].
I would now like to turn the conference over to Michael Hays Chief Executive Officer. Please go ahead.
Michael D. Hays
Thank you Nelson and welcome everyone to National Research Corporation's 2019 Third Quarter Earnings Call. My name is Mike Hays the company's CEO and joining me on the call today is Kevin Karas our Chief Financial Officer.
Before we continue I'd ask Kevin to review conditions related to any forward-looking statements that may be made as part of today's call. Kevin?
Thank you, Mike. This conference call includes forward-looking statements related to the company that involve 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 facts that could affect the company's future results please see the company's filings with the Securities and Exchange Commission.
With that I'll turn it back to you Mike.
Michael D. Hays
Thanks Kevin and again welcome everyone. The highlight of the third quarter was clearly our accelerated sales momentum which actually set a new -- net new sales record of $10 million. This record was comprised of a number of new clients that were referenceable wins including one if not the largest client of PRC. And now in the early days of the fourth quarter this momentum continues with us winning over one if not the most prestigious clients of press gaining.
I will add some additional comments after Kevin shares with us details of the financial performance in the quarter. Kevin?
Thank you, Mike. Total contract value at the end of the third quarter of 2019 ended at $140.5 million representing 11% growth over the same period in the prior year. Health care system clients with agreements for multiple solutions represented 27% of our client base at the end of the third quarter of 2019 up from 24% at the same time last year. Total contract value for our digital Voice of the Customer platform solutions increased to $93 million compared to $69.8 million at the end of the third quarter of 2018. Third quarter 2019 revenue was $32.5 million an increase of 8% over the third quarter of 2018. Third quarter revenue for our digital Voice of the Customer platform solutions increased to 64% of our total revenue compared to 51% of total revenue in the third quarter of 2018. Our consolidated operating income for the third quarter of 2019 was $10.2 million or 31% of revenue compared to $9.2 million also 31% of revenue for the same period last year. Total operating expenses of $22.2 million for the quarter increased by 7% in comparison to prior year. Direct expenses increased by 3% to $12.1 million for the third quarter of 2019 compared to $11.8 million for the same period in 2018.
Direct expenses as a percent of revenue were 37%