NRC 8-K
Nrc Health (NRC)
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| $.001 Par Value |
The |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 2.02
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Results of Operations and Financial Condition.
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On May 3, 2022, National Research Corporation, a Delaware corporation (the "Company"), issued a press release announcing its financial and operating results for the first quarter ended March 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.
On May 4, 2022, the Company held a conference call and online Web simulcast in connection with the Company’s announcement of its earnings for the first quarter ended March 31, 2022. A copy of the script for such conference call and simulcast is furnished as Exhibit 99.2 to this report. An archive of such conference call and simulcast and the related question and answer session will be available online at https://events.q4inc.com/attendee/864665437.
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Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits.
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EXHIBIT
NUMBER
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EXHIBIT DESCRIPTION
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99.1
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99.2
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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The information contained in Items 2.02 and 9.01 of this report and the exhibits hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
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The information in Items 2.02 and 9.01 of this report and the exhibits hereto may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act 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 are made based on the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. Actual results or events may differ from those anticipated by forward-looking statements. Please refer to the paragraph at the end of the attached press release and various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission for information concerning risks, uncertainties, and other factors that may affect future results.
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NATIONAL RESEARCH CORPORATION
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(Registrant)
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Date: May 5, 2022
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By:
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/s/ Kevin R. Karas
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Kevin R. Karas
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Senior Vice President Finance, Chief Financial Officer, Treasurer and Secretary
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EXHIBIT
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EXHIBIT DESCRIPTION
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99.1
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National Research Corporation press release announcing its financial and operating results for the first quarter ended March 31, 2022.
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99.2
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National Research Corporation script for the conference call and online Web simulcast held May 4, 2022.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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Exhibit 99.1
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1245 Q Street, Lincoln, NE 68508 P: 1 800 388 4264 | F: 402 475 9061 |
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Contact: |
Kevin R. Karas Chief Financial Officer 402-475-2525 |
NATIONAL RESEARCH CORPORATION ANNOUNCES
FIRST QUARTER 2022 RESULTS
LINCOLN, Nebraska (May 3, 2022) — National Research Corporation, dba NRC Health, (NASDAQ:NRC) today announced results for the first quarter 2022.
Q1 2022 financial results compared to Q1 2021:
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Revenue increased 8% to $38.4 million |
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Operating income decreased 3% to $11.7 million |
In commenting on recent events, Michael Hays, Chief Executive Officer, said “At year-end 2021, we announced the upcoming launch of NRC’s Health’s Human Understanding Program which enables health systems to deliver personalized care at scale. This past quarter, large numbers of current and prospective clients previewed and scrutinized the program. Never have I witnessed such absolute alignment with any product offering, confirming to me we are definitely on the right path. However, achieving personalized care at scale will not be instantaneous for any client organization; rather, accomplished by measured deployment of the Program over time and perhaps, similar to adoption trends we experienced with our digital Voice of the Customer offerings.
Regarding the Company’s first quarter financial performance, Kevin Karas, Chief Financial Officer, said, “Our growth strategy continues to focus on organic growth levers of increasing revenue from our core offerings, including our new Human Understanding Program, within our existing client base, as well as adding new clients to increase market share. As a result, revenue growth for the quarter was 8% over the prior year and we continued to see higher growth rates in our core offerings. Our operating expenses for the quarter increased at a higher rate as we allocated more resources towards innovation initiatives and associate empowerment benefits. We also utilized our strong cash flow to fund our quarterly dividend and additional share repurchases in the first quarter.”
NRC Announces First Quarter 2022 Results
Page 2
May 3, 2022
Revenue for the first quarter ended March 31, 2022, was $38.4 million, compared to $35.5 million for the same quarter in 2021. Net income for the quarter ended March 31, 2022, was $8.5 million, compared to $9.2 million for the quarter ended March 31, 2021.
Diluted earnings per share decreased to $0.34 for the quarter ended March 31, 2022, from diluted earnings per share of $0.36 for the quarter ended March 31, 2021.
Cash Flow from Operations was $8.3 million down from $14.4 million, leaving us with a Net Cash position (Cash minus Notes Payable) of $21.8 million, up from $13.8 million at March 31, 2021.
A live simulcast of National Research Corporation’s 2022 first quarter conference call will be available online at https://events.q4inc.com/attendee/864665437 on May 4, 2022, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately one hour later and continue for 30 days.
For more than 40 years, National Research Corporation has been a leading provider of analytics and insights that facilitate measurement and improvement to increase patient engagement and customer loyalty for healthcare providers, payers and other healthcare organizations in the United States and Canada. Our purpose is to enable human understanding by helping our clients to understand what matters most to each person that they serve.
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,” derivations thereof, and similar terms and phrases. 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, 2021 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.
NRC Announces First Quarter 2022 Results
Page 3
May 3, 2022
NATIONAL RESEARCH CORPORATION AND SUBSIDIARY
Unaudited Condensed Consolidated Statements of Income
(In thousands, except per share data)
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Three months ended |
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2022 |
2021 |
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Revenue |
$ | 38,441 | $ | 35,464 | ||||
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Operating expenses: |
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Direct |
14,779 | 11,940 | ||||||
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Selling, general and administrative |
10,649 | 9,520 | ||||||
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Depreciation, amortization and impairment |
1,316 | 1,984 | ||||||
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Total operating expenses |
26,744 | 23,444 | ||||||
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Operating income |
11,697 | 12,020 | ||||||
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Other income (expense): |
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Interest income |
5 | 3 | ||||||
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Interest expense |
(317 | ) | (432 | ) | ||||
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Other, net |
48 | 21 | ||||||
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Total other income (expense) |
(264 | ) | (408 | ) | ||||
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Income before income taxes |
11,433 | 11,612 | ||||||
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Income tax provision (benefit) |
2,894 | 2,380 | ||||||
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Net income |
$ | 8,539 | $ | 9,232 | ||||
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Earnings Per Share of Common Stock: |
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Basic Earnings Per Share |
$ | 0.34 | $ | 0.36 | ||||
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Diluted Earnings Per Share |
$ | 0.34 | $ | 0.36 | ||||
| Weighted average shares and share equivalents outstanding | ||||||||
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Basic |
25,251 | 25,414 | ||||||
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Diluted |
25,390 | 25,668 | ||||||
NRC Announces First Quarter 2022 Results
Page 4
May 3, 2022
NATIONAL RESEARCH CORPORATION AND SUBSIDIARY
Unaudited Condensed Consolidated Balance Sheets
(Dollars in thousands, except share amounts and par value)
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March 31, 2022 |
December 31, 2021 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | 47,290 | $ | 54,361 | ||||
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Accounts receivable, net |
15,910 | 13,728 | ||||||
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Other current assets |
5,721 | 5,618 | ||||||
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Total current assets |
68,921 | 73,707 | ||||||
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Property and equipment, net |
12,853 | 12,391 | ||||||
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Goodwill |
61,614 | 61,614 | ||||||
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Other, net |
9,766 | 9,828 | ||||||
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Total assets |
$ | 153,154 | $ | 157,540 | ||||
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Current portion of notes payable, net unamortized debt issuance costs |
$ | 4,333 | $ | 4,278 | ||||
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Accounts payable and accrued expenses |
4,675 | 7,393 | ||||||
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Accrued compensation |
5,935 | 7,139 | ||||||
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Deferred revenue |
16,693 | 17,213 | ||||||
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Dividends payable |
6,047 | 3,044 | ||||||
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Other current liabilities |
3,886 | 1,321 | ||||||
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Total current liabilities |
41,569 | 40,388 | ||||||
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Notes payable, net of current portion and unamortized debt issuance costs |
21,161 | 22,269 | ||||||
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Other non-current liabilities |
8,938 | 9,546 | ||||||
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Total liabilities |
71,668 | 72,203 | ||||||
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Shareholders’ equity: |
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Preferred stock, $0.01 par value, authorized 2,000,000 shares, none issued |
-- | -- | ||||||
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Common stock, $0.001 par value; authorized 110,000,000 shares, issued 30,898,600 in 2022 and 2021, outstanding 25,194,447 in 2022 and 25,361,409 in 2021 |
31 | 31 | ||||||
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Additional paid-in capital |
174,227 | 173,942 | ||||||
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Retained earnings (accumulated deficit) |
(33,620 |
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(36,112 |
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Accumulated other comprehensive loss, foreign currency translation adjustment |
(2,324 |
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(2,375 |
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Treasury stock |
(56,828 |
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(50,149 |
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Total shareholders’ equity |
81,486 | 85,337 | ||||||
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Total liabilities and shareholders’ equity |
$ | 153,154 | $ | 157,540 | ||||
Exhibit 99.2
Mike:
Thank you, ___________, and welcome everyone to National Research Corporation’s 2022 first 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 would ask Kevin to review conditions related to any forward-looking statements that may be made as part of today’s call.
Kevin.
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.
Mike:
Thanks, Kevin, and again, welcome everyone.
By way of sharing a few highlights at year-end 2021, we publicly announced the launch of NRC Health’s Human Understanding Program which enables health systems to deliver personalized care at scale. This past quarter, large numbers of current and prospective clients previewed and scrutinized the program. Never have I witnessed such absolute alignment with any product offering, confirming to me we are definitely on the right path. However, achieving personalized care at scale will not be instantaneous for any client organization; rather, accomplished by measured deployment of the program over time and perhaps mirroring the adoption trends we experienced with our digital Voice of the Customer offerings.
Our Human Understanding Program, as you know, is an integrated offering comprised of most of our historical point solutions with a much-elevated mission-driven aspiration; that being, to enable each partner organization to treat each patient as unique.
Knowing how to capture what matters most to patients and associates is our DNA. Delivering that insight to empower personalized interaction for care teams at each interaction draws upon expanded capabilities, including delivering data across workflows and processes for care teams to optimize personal interactions with patients based upon new-found insight about the person.
With that, I will now turn the call back over to Kevin to review our financial performance and will then open the call to your questions.
Kevin
Thank you, Mike.
Our growth strategy continues to focus on organic growth levers of increasing revenue from our core offerings, including our new Human Understanding Program, within our existing client base, as well as adding new clients to increase market share. Revenue growth for the first quarter 2022 was 8% over the first quarter of 2021. First quarter operating income declined by 3% compared to the same period in 2021 as we allocated more resources towards innovation initiatives and associate empowerment benefits. Our first quarter 2022 direct operating expenses also increased from costs related to hosting additional and in-person conferences this year.
We ended the quarter with $147.6 million in total recurring contract value or TRCV. Our TRCV metric represents the total revenue projected under all renewable contracts for their respective next annual renewal periods, assuming no upsells, downsells, price increases, or cancellations, measured as of the most recent quarter end. Our first quarter 2022 ending TRCV decreased by 1% over the prior year.
The decline in TRCV growth rate in 2022 was impacted by our strategy to continue to evolve our business mix as we focus on growing our digital core solutions, while at the same time eliminating certain legacy or non-core solutions. Our adjusted 2022 TRCV growth rate without those eliminations was 2% increase.
Net income for the first quarter 2022, was $8.5 million, compared to $9.2 million for same period in 2021. The lower net income was due to decrease in operating income, as well as increases in our effective tax rate.
The effective tax rate for the first quarter 2022 increased to 25%, compared to 21% for the same period in 2021, mainly due to decreased tax benefits from the exercise of share-based compensation awards and higher state income taxes.
The cash flow from operations was $8.3 million in 2022 down from $14.4 million in 2021. The Company ended the quarter with a cash balance of $47.3 million, up from $43.5 million in the first quarter of 2021.
The Company’s Board of Directors has established priorities for capital allocation with funding of innovation and growth investments, including both M&A activity, as well as internal projects as the preferred use of capital. The Company funded $3.1 million for innovation and growth purposes in the first quarter of 2022. Next in priority is capital allocation for quarterly dividends and share repurchases. In the first quarter of 2022, we paid $3.0 million in quarterly dividends to shareholders and $6.7 million for share repurchases.
That concludes my comments for this morning. I’ll now turn the call back to Mike.
Mike
Thank you, Kevin.
This completes our prepared remarks, so operator I will now ask you to open the call to questions.