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
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version on businesswire.com: https://www.businesswire.com/news/home/20240213249406/en/
Kevin R. Karas Chief Financial Officer
402-475-2525
National Research (NASDAQ:NRC)
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