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National Research Corporation Announces Fourth Quarter and Calendar Year 2023 Results

National Research Corporation, dba NRC Health, (NASDAQ:NRC) today announced results for the fourth quarter 2023.

CEO Commentary

Michael Hays, Chief Executive Officer, commented: “We’re pleased to start 2024 with momentum from another consecutive quarter of growth in new sales and operating margin. We have trimmed non-core service lines, and developed our capability across the patient, customer, and employee experience continuum to focus on our clients’ most important needs. With industry-leading solutions – from C-Suite strategy through The Governance Institute, to customized data benchmarking and analysis, to actionable front-line solutions – NRC is better positioned than ever, and our highest ever Net Promoter Score of 75, a level rarely achieved by any brand, is a testament to delivering value to our partners.”

Mr. Hays continued, “I’m particularly excited by our expanded executive team and growth plan. We expect to roll out new Market Experience, PX, CX, and EX products regularly over the coming year and beyond. Meanwhile, we are ramping up our sales, IT, and innovative product development resources, with a focus on AI enabled solutions, to deliver more to our customers while improving our efficiency. We believe we are strongly positioned to expand Human Understanding across the experience lifecycle to recognize and respond to individuals as consumers, patients, and caregivers. In fulfilling our mission, we believe we are positioned to increase share across historical and expanded markets while creating more opportunity for our associates and value for our stockholders.”

Financial Summary

Kevin Karas, Chief Financial Officer, commented on the financial results, “Diluted earnings per share increased for the fourth straight quarter through a combination of sequentially improving new sales, focused cost control, and lower share count attributable to share repurchases. We continue to focus on returning to revenue growth, expanding our margins, and stockholder returns.”

For the quarter ended December 31, 2023, compared to the quarter ended December 31, 2022:

  • Diluted earnings per share increased to $0.36 from $0.27. The 2022 period included a $0.10 per share cumulative foreign currency translation expense associated with exiting the Canadian market.
  • Revenue was $38 million in each period, as increased new core sales were offset by reductions in non-core revenue.

From a capital standpoint, the Company remains well-positioned to execute the entire range of capital allocation alternatives, including funding innovation and growth investments, dividends, and share repurchases. During 2023, the Company returned $55 million to stockholders in the form of dividends and stock repurchases, and another $15 million in stock was repurchased in January of 2024. Return on average equity improved to 51% in 2023 from 40% in 2022, primarily resulting from returning capital to stockholders through dividends and stock repurchases.

For the remainder of 2024, capital allocation is expected to focus primarily on growth and innovation initiatives (including facilities renovation) and the regular quarterly dividend. At December 31, 2023, the Company had approximately $30 million of net debt, $30 million available on its revolving line of credit, and $56 million available on its delayed draw term facility.

CFO Retirement

Kevin Karas, Chief Financial Officer, has informed the Company of his intent to retire effective March 31, 2024. Chief Executive Officer, Michael Hays, commented: “We appreciate Kevin’s leadership and contributions over a remarkable 13-years of service. Under Kevin’s watch, the Company’s revenue has more than doubled, the market capitalization of our common stock has quadrupled, and we have returned over $255 million to our stockholders in the form of dividends and stock repurchases. Additionally, his integrity, insistence on quality, and unfailing good nature have reinforced our culture and helped develop a deep and talented team that is ready to assume his responsibilities. Our Vice President of Finance, Linda Stacy, has been promoted to Principal Accounting Officer effective March 31. We are grateful for Kevin’s service and wish him a productive and happy retirement.”

Dividend

The Company’s Board of Directors has declared a quarterly cash dividend of $0.12 (twelve cents) per share payable Monday, April 15, 2024, to shareholders of record as of the close of business on Friday, March 29, 2024.

Conference Call

A live simulcast of National Research Corporation’s 2023 fourth quarter conference call will be available online at https://events.q4inc.com/attendee/823574505 February 14, 2024, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately one hour later and continue for 30 days.

About NRC

For more than 40 years, NRC Health (NASDAQ: NRC) has led the charge to humanize healthcare and support organizations in their understanding of each unique individual. NRC Health’s commitment to Human Understanding® helps leading healthcare systems get to know each person they serve not as point-in-time insights, but as an ongoing relationship. Guided by its uniquely empathic heritage, NRC Health’s patient-focused approach, unmatched market research, and emphasis on consumer preferences are transforming the healthcare experience, creating strong outcomes for patients and entire healthcare systems. For more information, email info@nrchealth.com, or visit www.nrchealth.com.

This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as “believes,” “expect,” “focus,” “potential,” “will,” derivations thereof, and similar terms and phrases. In this press release, the statement related to the roll out of new products, future use of AI, our ability to improve efficiency, the potential to expand Human Understanding and increase market share, and future revenue growth, margins, stockholder returns, and capital allocation are forward-looking statements. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements, including those risks and uncertainties as set forth in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2022 and various disclosures in our press releases, stockholder reports, and other filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

 
 
 

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

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

38,001

 

 

$

38,144

 

 

$

148,580

 

 

$

151,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

13,793

 

 

 

13,987

 

 

 

56,015

 

 

 

57,049

 

Selling, general and administrative

 

 

11,070

 

 

 

10,541

 

 

 

46,621

 

 

 

42,699

 

Depreciation and amortization

 

 

1,429

 

 

 

1,375

 

 

 

5,899

 

 

 

5,277

 

Total operating expenses

 

 

26,292

 

 

 

25,903

 

 

 

108,535

 

 

 

105,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

11,709

 

 

 

12,241

 

 

 

40,045

 

 

 

46,543

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

41

 

 

 

134

 

 

 

820

 

 

 

168

 

Interest expense

 

 

(269

)

 

 

(286

)

 

 

(862

)

 

 

(1,209

)

Reclassification of cumulative translation into earnings

 

 

--

 

 

 

(2,569

)

 

 

--

 

 

 

(2,569

)

Other, net

 

 

(13

)

 

 

(49

)

 

 

(41

)

 

 

(118

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(241

)

 

 

(2,770

)

 

 

(83

)

 

 

(3,728

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

11,468

 

 

 

9,471

 

 

 

39,962

 

 

 

42,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

2,610

 

 

 

2,830

 

 

 

8,991

 

 

 

11,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

8,858

 

 

$

6,641

 

 

$

30,971

 

 

$

31,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share of Common Stock:

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.36

 

 

$

0.27

 

 

$

1.26

 

 

$

1.28

 

Diluted Earnings Per Share

 

$

0.36

 

 

$

0.27

 

 

$

1.25

 

 

$

1.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares and share equivalents outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

24,437

 

 

 

24,648

 

 

 

24,540

 

 

 

24,922

 

Diluted

 

 

24,548

 

 

 

24,775

 

 

 

24,673

 

 

 

25,052

 

 
 
 
 

NATIONAL RESEARCH CORPORATION AND SUBSIDIARY

Unaudited Condensed Consolidated Balance Sheets

(Dollars in thousands, except share amounts and par value) 

 

 

 

December 31,

2023

 

December 31,

2022

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,653

 

 

$

25,026

 

Accounts receivable, net

 

 

12,378

 

 

 

14,461

 

Other current assets

 

 

5,329

 

 

 

4,229

 

Total current assets

 

 

24,360

 

 

 

43,716

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

28,205

 

 

 

17,248

 

Goodwill

 

 

61,614

 

 

 

61,614

 

Other, net

 

 

8,258

 

 

 

7,883

 

Total assets

 

$

122,437

 

 

$

130,461

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of notes payable

 

$

7,214

 

 

$

4,491

 

Accounts payable and accrued expenses

 

 

6,194

 

 

 

5,136

 

Accrued compensation

 

 

3,953

 

 

 

4,551

 

Deferred revenue

 

 

14,834

 

 

 

15,198

 

Dividends payable

 

 

2,906

 

 

 

2,956

 

Other current liabilities

 

 

1,102

 

 

 

1,085

 

Total current liabilities

 

 

36,203

 

 

 

33,417

 

 

 

 

 

 

 

 

Notes payable, net of current portion and unamortized debt issuance costs

 

 

29,470

 

 

 

17,690

 

Other non-current liabilities

 

 

7,809

 

 

 

7,321

 

Total liabilities

 

 

73,482

 

 

 

58,428

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.01 par value, authorized 2,000,000 shares, none issued

 

 

--

 

 

 

--

 

Common stock, $0.001 par value; authorized 110,000,000 shares, issued 31,002,919 in 2023 and 30,922,181 in 2022, outstanding 24,219,887 in 2023 and 24,628,173 in 2022

 

 

31

 

 

 

31

 

Additional paid-in capital

 

 

178,213

 

 

 

175,453

 

Retained earnings (accumulated deficit)

 

 

(30,530

)

 

 

(25,184

)

 

 

 

 

 

 

 

Treasury stock

 

 

(98,759

)

 

 

(78,267

)

Total shareholders’ equity

 

 

48,955

 

 

 

72,033

 

Total liabilities and shareholders’ equity

 

$

122,437

 

 

$

130,461

 

 
 

 

Contacts

Kevin R. Karas

Chief Financial Officer

402-475-2525

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