National Research Corporation Announces Fourth Quarter and Calendar Year 2023 Results
- Positive financial results for Q4 2023 with consecutive growth in new sales and operating margin.
- Record Net Promoter Score of 75 and plans to introduce new products focusing on AI solutions.
- Increase in diluted earnings per share to $0.36 and stable revenue at $38 million.
- Successful capital allocation strategies, including returning $55 million to stockholders in dividends and repurchases.
- Improved return on average equity to 51% in 2023 from 40% in 2022.
- CFO retirement announced with Kevin Karas stepping down effective March 31, 2024.
Insights
The reported increase in diluted earnings per share (EPS) for National Research Corporation is a positive indicator for investors, as it suggests improved profitability. The sequential growth in EPS, from $0.27 to $0.36, is particularly noteworthy given the context of a static revenue base of $38 million. This implies that the company's strategy to trim non-core service lines and focus on core sales is beginning to yield financial benefits. Moreover, the Net Promoter Score of 75 is an excellent achievement, reflecting high customer satisfaction and loyalty, which can lead to sustainable revenue streams and organic growth through positive word-of-mouth and repeat business.
The strategic capital allocation highlighted by the CFO, including dividends and stock repurchases, is indicative of strong cash flow management and shareholder value orientation. The return of $55 million to stockholders through these means, coupled with a robust return on average equity of 51%, showcases the company's financial strength and commitment to delivering stockholder returns. Investors should note the company's solid balance sheet with $30 million of net debt and available credit lines, which provides flexibility for future growth and innovation investments. The planned retirement of CFO Kevin Karas is a significant transition, but the promotion of Linda Stacy to Principal Accounting Officer suggests a smooth succession plan is in place.
The focus on AI-enabled solutions for the patient, customer and employee experience continuum represents a forward-looking approach to healthcare analytics and service delivery. NRC Health's investment in innovative product development, particularly in the areas of Market Experience (MX), Patient Experience (PX), Customer Experience (CX) and Employee Experience (EX), indicates a commitment to integrating advanced technologies to enhance the quality and efficiency of healthcare services. The company's expansion in these areas may have significant implications for healthcare providers, potentially leading to better patient outcomes and more personalized care, which could, in turn, influence market share and long-term revenue growth.
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 $0.27 $0.10 -
Revenue was
$38 million
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
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
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
Dividend
The Company’s Board of Directors has declared a quarterly cash dividend of
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
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Three months ended December 31 |
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Twelve months ended December 31 |
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2023 |
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2022 |
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2023 |
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2022 |
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|
|
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|
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|
|
|
|
|
|
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Revenue |
|
$ |
38,001 |
|
|
$ |
38,144 |
|
|
$ |
148,580 |
|
|
$ |
151,568 |
|
|
|
|
|
|
|
|
|
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|
|
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Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
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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 |
) |
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|
|
|
|
|
|
|
|
|
|
|
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Income before income taxes |
|
|
11,468 |
|
|
|
9,471 |
|
|
|
39,962 |
|
|
|
42,815 |
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|
|
|
|
|
|
|
|
|
|
|
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Provision for income taxes |
|
|
2,610 |
|
|
|
2,830 |
|
|
|
8,991 |
|
|
|
11,015 |
|
|
|
|
|
|
|
|
|
|
|
|
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Net income |
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$ |
8,858 |
|
|
$ |
6,641 |
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$ |
30,971 |
|
|
$ |
31,800 |
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Earnings Per Share of Common Stock: |
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Basic Earnings Per Share |
|
$ |
0.36 |
|
|
$ |
0.27 |
|
|
$ |
1.26 |
|
|
$ |
1.28 |
|
Diluted Earnings Per Share |
|
$ |
0.36 |
|
|
$ |
0.27 |
|
|
$ |
1.25 |
|
|
$ |
1.27 |
|
|
|
|
|
|
|
|
|
|
|
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Weighted average shares and share equivalents outstanding: |
|
|
|
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|
|
|
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Basic |
|
|
24,437 |
|
|
|
24,648 |
|
|
|
24,540 |
|
|
|
24,922 |
|
Diluted |
|
|
24,548 |
|
|
|
24,775 |
|
|
|
24,673 |
|
|
|
25,052 |
|
NATIONAL RESEARCH CORPORATION AND SUBSIDIARY
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December 31, 2023 |
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December 31, 2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
6,653 |
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$ |
25,026 |
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Accounts receivable, net |
|
|
12,378 |
|
|
|
14,461 |
|
Other current assets |
|
|
5,329 |
|
|
|
4,229 |
|
Total current assets |
|
|
24,360 |
|
|
|
43,716 |
|
|
|
|
|
|
|
|
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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 |
|
|
|
|
|
|
|
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Liabilities and Shareholders’ Equity |
|
|
|
|
|
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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 |
|
|
|
|
|
|
|
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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 |
|
|
|
|
|
|
|
|
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Shareholders’ equity: |
|
|
|
|
|
|
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Preferred stock, |
|
|
-- |
|
|
|
-- |
|
Common stock, |
|
|
31 |
|
|
|
31 |
|
Additional paid-in capital |
|
|
178,213 |
|
|
|
175,453 |
|
Retained earnings (accumulated deficit) |
|
|
(30,530 |
) |
|
|
(25,184 |
) |
|
|
|
|
|
|
|
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Treasury stock |
|
|
(98,759 |
) |
|
|
(78,267 |
) |
Total shareholders’ equity |
|
|
48,955 |
|
|
|
72,033 |
|
Total liabilities and shareholders’ equity |
|
$ |
122,437 |
|
|
$ |
130,461 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240213249406/en/
Kevin R. Karas
Chief Financial Officer
402-475-2525
Source: National Research Corporation
FAQ
What was the diluted earnings per share for Q4 2023?
What was the revenue for the quarter ended December 31, 2023?
What was the Net Promoter Score mentioned in the PR?
Who announced their retirement in the PR?
When is the quarterly cash dividend payable?
Where can the online simulcast of the conference call be accessed?
