NRC 8-K
Nrc Health (NRC)
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(State or other jurisdiction
of incorporation)
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(Commission
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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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Securities registered pursuant to Section 12(b) of the Act:
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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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Emerging growth company
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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 2, 2023, 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, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.
On May 3, 2023, 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, 2023. 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/253347934.
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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 4, 2023
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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
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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Exhibit 99.1
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1245 Q Street, Lincoln, NE 68508 P: 1 800 388 4264 | F: 402 475 9061
nrchealth.com
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Contact: |
Kevin R. Karas |
Chief Financial Officer
402-475-2525
NATIONAL RESEARCH CORPORATION ANNOUNCES
FIRST QUARTER 2023 RESULTS
LINCOLN, Nebraska (May 2, 2023) — National Research Corporation, dba NRC Health, (NASDAQ:NRC) today announced results for the first quarter 2023.
Regarding the Company’s 2023 first quarter, Kevin Karas, Chief Financial Officer, said, “We remain focused on enabling healthcare organizations to deliver personalized care, including the recent announcement of MyView to integrate patient insights directly into the EHR to support care teams in understanding the unique and individual needs of the patients they serve. We are further expanding our sales and marketing resources in support of increased awareness and adoption of the Human Understanding Program to benefit both the patients being served and front-line caregivers.”
The Company’s Board of Directors maintained its capital allocation priorities of funding innovation and growth investments, including merger and acquisition activity, as well as internal projects, shareholder dividends and share repurchases during 2023. In the first quarter of 2023, the Company funded $2.9 million for innovation and growth, $3.0 million for dividend payments, and $2.0 million for share repurchases.
Diluted earnings per share decreased to $0.28 for the quarter ended March 31, 2023, from diluted earnings per share of $0.34 for the quarter ended March 31, 2022.
Page 2
May 2, 2023
A live simulcast of National Research Corporation’s 2023 first quarter conference call will be available online at https://events.q4inc.com/attendee/253347934 May 3, 2023, 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, 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 [email protected], 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,” 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, 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.
Page 3
May 2, 2023
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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2023 |
2022 |
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Revenue |
$ | 36,473 | $ | 38,441 | ||||
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Operating expenses: |
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Direct |
14,280 | 14,779 | ||||||
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Selling, general and administrative |
11,783 | 10,649 | ||||||
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Depreciation and amortization |
1,394 | 1,316 | ||||||
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Total operating expenses |
27,457 | 26,744 | ||||||
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Operating income |
9,016 | 11,697 | ||||||
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Other income (expense): |
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Interest income |
250 | 5 | ||||||
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Interest expense |
(241 | ) | (317 | ) | ||||
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Other, net |
(14 | ) | 48 | |||||
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Total other income (expense) |
(5 | ) | (264 | ) | ||||
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Income before income taxes |
9,011 | 11,433 | ||||||
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Income tax provision |
2,047 | 2,894 | ||||||
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Net income |
$ | 6,964 | $ | 8,539 | ||||
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Earnings Per Share of Common Stock: |
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Basic Earnings Per Share |
$ | 0.28 | $ | 0.34 | ||||
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Diluted Earnings Per Share |
$ | 0.28 | $ | 0.34 | ||||
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Weighted average shares and share equivalents outstanding Basic |
24,585 | 25,251 | ||||||
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Diluted |
24,738 | 25,390 | ||||||
Page 4
May 2, 2023
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, 2023 |
December 31, 2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | 23,724 | $ | 25,026 | ||||
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Accounts receivable, net |
14,220 | 14,461 | ||||||
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Other current assets |
7,228 | 4,229 | ||||||
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Total current assets |
45,172 | 43,716 | ||||||
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Property and equipment, net |
19,486 | 17,248 | ||||||
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Goodwill |
61,614 | 61,614 | ||||||
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Other, net |
8,034 | 7,883 | ||||||
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Total assets |
$ | 134,306 | $ | 130,461 | ||||
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Current portion of notes payable |
$ | 4,546 | $ | 4,491 | ||||
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Accounts payable and accrued expenses |
5,193 | 5,136 | ||||||
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Accrued compensation |
4,977 | 4,551 | ||||||
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Deferred revenue |
15,896 | 15,198 | ||||||
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Dividends payable |
2,953 | 2,956 | ||||||
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Other current liabilities |
2,547 | 1,085 | ||||||
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Total current liabilities |
36,112 | 33,417 | ||||||
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Notes payable, net of current portion and unamortized debt issuance costs |
16,530 | 17,690 | ||||||
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Other non-current liabilities |
6,999 | 7,321 | ||||||
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Total liabilities |
59,641 | 58,428 | ||||||
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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 30,943,119 in 2023 and 30,922,181 in 2022, outstanding 24,599,815 in 2023 and 24,628,173 in 2022 |
31 | 31 | ||||||
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Additional paid-in capital |
176,057 | 175,453 | ||||||
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Retained earnings (accumulated deficit) |
(21,173 |
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(25,184 |
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Treasury stock |
(80,250 |
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(78,267 |
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Total shareholders’ equity |
74,665 | 72,033 | ||||||
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Total liabilities and shareholders’ equity |
$ | 134,306 | $ | 130,461 | ||||
Exhibit 99.2
Kevin:
Thank you, ___________, and welcome everyone to National Research Corporation’s 2023 first quarter earnings call. My name is Kevin Karas, the company’s CFO, and joining me on the call today is Linda Stacy, our Vice President of Finance.
Before we continue, I would ask Linda to review conditions related to any forward-looking statements that may be made as part of today’s call. Linda.
Linda:
Thank you, Kevin.
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, Kevin.
Kevin:
Thanks, Linda, and again, welcome everyone.
For 42 years, NRC Health has been committed to humanizing healthcare and supporting organizations in their understanding of each unique individual. We are furthering that commitment with our recent announcement of being the first in the industry to seamlessly integrate patient insights directly into the EHR to support care teams in understanding the unique and individual needs of the patients that they serve. NRC Health was also recently named in Becker’s Top 150 Places to Work in Healthcare for creating a work culture and benefit structure supporting each associate as a unique individual. This represents the outcome made possible by adopting Human Understanding within our organization to benefit our associates.
Let me turn the call back over to Linda to review our financial performance and then open the call to your questions.
Linda
Thank you, Kevin.
Revenue for the first quarter 2023 decreased compared to the first quarter of 2022 by 5%, primarily due to the scheduled closure of our Canadian location in 2022 and focus on our core offerings.
We ended the quarter with $146.7 million in TRCV including a 1% increase in TRCV for our core solutions. 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.
Operating income decreased by 23% for the first quarter of 2023 compared to the first quarter of 2022 due to the decline in revenue and growth in marketing expenses of $1.3 million to expand brand recognition and support sales development. Beyond marketing expenses, operating expenses have remained consistent between periods through cost containment and workforce automation efforts.
The effective tax rate in the first quarter of 2023 was 23% compared to 25% in 2022 primarily due to increased tax benefits from the exercise of share-based compensation awards and lower state income taxes.
The Company’s Board of Directors maintained its capital allocation priorities of funding innovation and growth investments, including merger and acquisition activity, as well as internal projects, shareholder dividends and share repurchases during 2023. In the first quarter of 2023, the Company funded $2.9 million for innovation and growth, $3.0 million for dividend payments, and $2.0 million for share repurchases.
That concludes my comments for this morning. I’ll now turn the call back to Kevin.
Kevin
Thank you, Linda.
This completes our prepared remarks, so operator I will now ask you to open the call to any questions.
Closing Statement – Kevin
Thank you for your time today. We look forward to sharing our results again next quarter.