National Research Corporation Announces First Quarter Results

Rhea-AI Summary

National Research , dba NRC Health, (NASDAQ:NRC) announced first quarter 2024 results showing strong growth potential. The CEO highlighted the company's competitive edge in healthcare insights and innovative products. Financially, significant investments were made in technology and teams to support new product launches. The company returned $18 million to stockholders and focused on product innovation and growth investments.

Positive

• NRC Health is positioned for growth in expanding markets with unmatched client service.

• The company's mission to enhance outcomes and experiences in healthcare aligns with client needs.

• Significant investments in technology, sales, and service teams were made to support new product launches.

• The company returned $18 million to stockholders through dividends and stock repurchases.

• Focus on product innovation and growth investments to drive expansion and operating efficiencies.

Negative

• The company faces unprecedented competition and financial pressure in healthcare systems.

• Increased investments in technology and teams may impact short-term profitability.

• The company's net debt stood at approximately $40 million as of March 31, 2024.

Insights

Financial Analyst

National Research Corporation's release detailing their first quarter financial results indicates a strategic commitment to innovation and technology, particularly in AI. Their investment of $4 million into human understanding solutions is modest relative to the industry but suggests a cautious approach to balancing growth with financial prudence. As they prepare for new product launches, the company has maintained a return to shareholders through dividends and repurchases totaling $18 million. This dual focus on shareholder return and innovation investment draws a picture of a company that's aiming to grow while also rewarding its investors' loyalty. Looking ahead, the mention of an expected increase in funding for growth investments could signal a bullish stance on their future capabilities, particularly in AI, which is increasingly becoming a central aspect of healthcare analytics. This financial strategy shows a balanced use of capital for immediate shareholder satisfaction and long-term growth, which is generally perceived positively by the market.

Healthcare Industry Analyst

NRC Health's assertion that they're poised for growth in the healthcare analytics market is underscored by their planned expansion of product suites and the bringing in of a Chief Experience Officer. By focusing on enhancing healthcare outcomes and experiences, they are tapping into a critical need within the healthcare sector: the demand for actionable insights. In a landscape marked by financial pressures and competition, NRC's offerings could meet the rising demand for sophisticated analytics that provide strategic alignment and real-time insights. The integration of generative AI into their solutions is particularly noteworthy, as it could position the company at the forefront of a transformative technology wave within healthcare analytics. The future product launches, if successful, could potentially elevate NRC's market standing and validate their current investments.

AI Technology Expert

The emphasis on generative AI by NRC Health is significant, as this technology is becoming a game-changer in many industries, including healthcare. Generative AI can analyze large datasets to identify patterns and insights that might elude human analysts, providing a level of predictive analytics that could revolutionize patient care and operational efficiency. However, the successful deployment of these technologies depends on their sophistication, accuracy and integration with existing systems. It's worth monitoring how NRC incorporates AI into their product suite and the market's reception to these innovations. Given the company's historical focus on healthcare insights and analytics, this move could considerably strengthen their value proposition to clients.

LINCOLN, Neb.--(BUSINESS WIRE)-- National Research Corporation, dba NRC Health, (NASDAQ:NRC) today announced results for the first quarter 2024.

CEO Commentary

Michael Hays, Chief Executive Officer, commented: “NRC continues to be strongly positioned for growth in our expanding markets. Our decades of benchmarks and trusted thought leadership afford healthcare insights unavailable to most competitors, while our client service remains unmatched, and we continue to roll out innovative new products and technologies. Our mission to enhance outcomes and experiences for everyone in the healthcare journey, while improving our clients’ bottom lines, provides true alignment with our clients.

“Healthcare systems are facing unprecedented competition and financial pressure, magnifying the importance of every experience across their enterprise – consumer, patient, employee. Our clients want a broader experience perspective, greater strategic alignment, innovation, and actionable insights that deliver more value. Next quarter, we will launch an expanded product suite that extends across the experience spectrum, recognizing and responding to consumers, patients, and caregivers as unique individuals. Our thought leadership assets, used by hundreds of health care systems, will be coordinated under our new Chief Experience Officer, who will use her decades of health system leadership roles to deliver them in increasingly targeted ways. And our expanded sales and product technology teams are working intensely with clients to develop a new generation of solutions, many powered by generative AI, that push analytics to managers and real-time, actionable insights to front line associates. We expect to offer new AI features and solutions this year and to integrate them across our products and business over time.”

Financial Summary

Linda Stacy, Principal Financial Officer, commented on the financial results, “During the first quarter, we made significant investments in our technology, sales and service teams as we prepared to launch new products and solutions later this year. For the balance of the year, we expect to continue building our AI and other technology capabilities, as well as our sales and thought leadership resources while seeking operating efficiencies.”

The Company continued to execute the entire range of capital allocation alternatives, including funding innovation and growth investments, dividends, and share repurchases. During the first quarter of 2024, the Company returned $18 million to stockholders in the form of dividends and stock repurchases. Funding for organic innovation and growth investments was $4 million consisting of facilities improvements and investments in our Human Understanding solutions. The Company is highly focused on product innovation and expects to see expansion in funding for innovation and growth investments for the remainder of the year.

The Company had strong cash flow from operations during the first quarter of 2024 and, at March 31, 2024, had other sources of liquidity including borrowing availability of $23 million on its line of credit and $56 million on its delayed draw term facility. At March 31, 2024, the Company had approximately $40 million of net debt.

Dividend

The Company’s Board of Directors has declared a quarterly cash dividend of $0.12 (twelve cents) per share payable Monday, July 15, 2024, to shareholders of record as of the close of business on Friday, June 28, 2024.

Conference Call

A live simulcast of National Research Corporation’s 2024 first quarter conference call will be available online at https://events.q4inc.com/attendee/554254445 May 8, 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 statements related to the roll out of new products, thought leadership assets, future use of AI, investment in product innovation, sales, technology, and thought leadership resources, operating efficiency, client profitability, the potential to expand Human Understanding and increase market share, and future revenue growth, 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, 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 March 31,
			2024				2023
Revenue		$	35,313			$	36,473
Operating expenses:
Direct			13,856				14,280
Selling, general and administrative			11,250				11,783
Depreciation and amortization			1,447				1,394
Total operating expenses			26,553				27,457
Operating income			8,760				9,016
Other income (expense):
Interest income			44				250
Interest expense			(605	)			(241	)
Other, net			(5	)			(14	)
Total other income (expense)			(566	)			(5	)
Income before income taxes			8,194				9,011
Provision for income taxes			1,835				2,047
Net income		$	6,359			$	6,964
Earnings Per Share of Common Stock:
Basic Earnings Per Share		$	0.27			$	0.28
Diluted Earnings Per Share		$	0.27			$	0.28
Weighted average shares and share equivalents outstanding
Basic			23,868				24,585
Diluted			23,963				24,738

NATIONAL RESEARCH CORPORATION AND SUBSIDIARY Unaudited Condensed Consolidated Balance Sheets (Dollars in thousands, except share amounts and par value)
		March 31, 2024				December 31, 2023
Assets
Current assets:
Cash and cash equivalents		$	1,699			$	6,653
Accounts receivable, net			11,127				12,378
Other current assets			7,188				5,329
Total current assets			20,014				24,360
Property and equipment, net			31,530				28,205
Goodwill			61,614				61,614
Other, net			7,753				8,258
Total assets		$	120,911			$	122,437
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of notes payable		$	7,504			$	7,214
Line of credit			7,000				--
Accounts payable and accrued expenses			8,129				6,194
Accrued compensation			5,385				3,953
Deferred revenue			15,194				14,834
Dividends payable			2,865				2,906
Other current liabilities			2,773				1,102
Total current liabilities			48,850				36,203
Notes payable, net of current portion and unamortized debt issuance costs			27,569				29,470
Other non-current liabilities			7,547				7,809
Total liabilities			83,966				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 31,078,202 in 2024 and 31,002,919 in 2023, outstanding 23,877,315 in 2024 and 24,219,887 in 2023			31				31
Additional paid-in capital			179,929				178,213
Retained earnings (accumulated deficit)			(27,036	)			(30,530	)
Treasury stock			(115,979	)			(98,759	)
Total shareholders’ equity			36,945				48,955
Total liabilities and shareholders’ equity		$	120,911			$	122,437

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240507960874/en/

Linda A. Stacy

Principal Financial Officer

402-475-2525

Source: National Research Corporation

FAQ

What is the dividend declared by National Research ?

National Research declared a quarterly cash dividend of $0.12 per share payable on July 15, 2024.

Where can I access the live simulcast of NRC's 2024 first quarter conference call?

The live simulcast will be available online at https://events.q4inc.com/attendee/554254445 on May 8, 2024, at 11:00 a.m. Eastern time.

What financial investments did NRC Health focus on during the first quarter of 2024?

NRC Health made significant investments in technology, sales, and service teams to support new product launches.