NRC National Research Corporation

National Research Corporation, dba NRC Health, (NASDAQ:NRC) today announced results for the second quarter 2024 and several other corporate developments.

Financial Results

Revenue for the quarter was approximately $35 million compared with approximately $36 million in the 2023 quarter. Earnings per diluted share were $0.26 compared with $0.29 for the 2023 quarter. At June 30, 2024, the Company’s net indebtedness (total borrowing minus cash and cash equivalents) was approximately $42 million. Total recurring contract value (TRCV) was approximately $138 million at June 30, 2024.

Credit Agreement Amendment

Effective August 5, 2024, the Company and its lender entered into a Third Amendment to Amended and Restated Credit Agreement, with material amendments including the following: (i) extended the maturity of the revolving loan facility to May 28, 2027, (ii) provided that all term loans will amortize over a ten-year amortization schedule (rather than the prior seven-year schedule) and bear interest at floating annual rate of SOFR + 235 basis points, with the maturity date for all term loans remaining May 28, 2027, (iii) extended the commitment period for making delayed draw-down term loans to May 28, 2026, (iv) expanded the permitted uses of delayed draw-down term loans to include dividends, stock repurchases, acquisitions, and capital expenditures as permitted by the agreement, and (v) increased the amount of capital expenditures to be excluded from fixed charge coverage ratio by $2.5 million.

Stock Repurchase Plan

The Company has approximately 1.1 million shares remaining under its existing stock repurchase plan. The Company did not repurchase any shares in the second quarter of 2024 pending the credit agreement amendments discussed above. Management is authorized to complete the plan in its discretion, credit agreement limitations, and future capital allocation decisions.

Dividend

The Company’s Board of Directors has declared a quarterly cash dividend of $0.12 (twelve cents) per share payable Friday, October 11, 2024, to stockholders of record as of the close of business on Friday, September 27, 2024.

Portfolio and Strategy Update

On July 15, 2024, the Company acquired NOBL Health, a leading provider of patient rounding insights and workflow applications. The enterprise value of the acquisition was approximately $6 million paid in cash at closing plus a potential earnout of up to $1 million based on future performance of the acquired products. NOBL had approximately $2 million of TRCV at the acquisition date.

The Company’s has and will, over the next 30 days, release acquired and internally developed products and features including:

• Consumer experience (CX) capabilities designed to build loyalty and growth for health systems.
• Employee experience (EX) capabilities powered by one of the leading consumer experience technology platforms.
• NOBL Health’s rounding tool, which provides real time feedback from patients and healthcare employees.
• A proprietary AI engine powering new products and features.

In Lieu of Conference Call

The Company has elected to include strategic updates normally discussed in earning calls to a broader group of current and potential stockholders via its quarterly earnings releases.

About NRC Health

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 statements related to releasing new products and features, future quarterly conference calls and other communications, and stock repurchases 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, 2023, 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 June 30

 

 

Six months ended June 30

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

35,021

 

 

$

36,161

 

 

$

70,334

 

 

$

72,634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

13,422

 

 

 

13,309

 

 

 

27,278

 

 

 

27,589

 

Selling, general and administrative

 

 

11,221

 

 

 

11,966

 

 

 

22,471

 

 

 

23,750

 

Depreciation and amortization

 

 

1,513

 

 

 

1,521

 

 

 

2,960

 

 

 

2,915

 

Total operating expenses

 

 

26,156

 

 

 

26,796

 

 

 

52,709

 

 

 

54,254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

8,865

 

 

 

9,365

 

 

 

17,625

 

 

 

18,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

25

 

 

 

273

 

 

 

69

 

 

 

523

 

Interest expense

 

 

(555

)

 

 

(192

)

 

 

(1,160

)

 

 

(433

)

Other, net

 

 

(11

)

 

 

(2

)

 

 

(16

)

 

 

(15

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(541

)

 

 

79

 

 

(1,107

)

 

 

75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

8,324

 

 

 

9,444

 

 

 

16,518

 

 

 

18,455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

2,149

 

 

 

2,171

 

 

 

3,984

 

 

 

4,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

6,175

 

 

$

7,273

 

 

$

12,534

 

 

$

14,236

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share of Common Stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.26

 

 

$

0.30

 

 

$

0.53

 

 

$

0.58

 

Diluted Earnings Per Share

 

$

0.26

 

 

$

0.29

 

 

$

0.52

 

 

$

0.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares and share equivalents outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

23,871

 

 

 

24,578

 

 

 

23,870

 

 

 

24,582

 

Diluted

23,915

24,716

23,934

24,727

 

NATIONAL RESEARCH CORPORATION AND SUBSIDIARY

Unaudited Condensed Consolidated Balance Sheets

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

 

 

 

June 30,

2024

 

 

December 31,

2023

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

485

 

 

$

6,653

 

Accounts receivable, net

 

 

10,057

 

 

 

12,378

 

Other current assets

 

 

6,408

 

 

 

5,329

 

Total current assets

 

 

16,950

 

 

 

24,360

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

33,741

 

 

 

28,205

 

Goodwill

 

 

61,614

 

 

 

61,614

 

Other, net

 

 

6,794

 

 

 

8,258

 

Total assets

 

$

119,099

 

 

$

122,437

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of notes payable, net of unamortized debt issuance costs

 

$

7,566

 

 

$

7,214

 

Line of credit

 

 

9,000

 

 

 

--

 

Accounts payable and accrued expenses

 

 

6,675

 

 

 

6,194

 

Accrued compensation

 

 

4,370

 

 

 

3,953

 

Deferred revenue

 

 

14,514

 

 

 

14,834

 

Dividends payable

 

 

2,865

 

 

 

2,906

 

Other current liabilities

 

 

738

 

 

 

1,102

 

Total current liabilities

 

 

45,728

 

 

 

36,203

 

 

 

 

 

 

 

 

 

 

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

 

 

25,655

 

 

 

29,470

 

Other non-current liabilities

 

 

7,518

 

 

 

7,809

 

Total liabilities

 

 

78,901

 

 

 

73,482

 

 

 

 

 

 

 

 

 

 

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 31,072,144 in 2024 and 31,002,919 in 2023, outstanding 23,871,257 in 2024 and 24,219,887 in 2023

 

 

31

 

 

 

31

 

Additional paid-in capital

 

 

179,872

 

 

 

178,213

 

Retained earnings (accumulated deficit)

 

 

(23,726

)

 

 

(30,530

)

Treasury stock

 

 

(115,979

)

 

 

(98,759

)

Total shareholders’ equity

 

 

40,198

 

 

 

48,955

 

Total liabilities and shareholders’ equity

 

$

119,099

 

 

$

122,437

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240806354663/en/

Linda A. Stacy Principal Financial Officer 402-475-2525