# EDGAR Filing Document

**Accession Number:** 0000070487
**File Stem:** 0001437749-23-003575
**Filing Date:** 2023-2
**Character Count:** 19953
**Document Hash:** 4cd7b39f9d3f0058600d63a267c453a0
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-003575.hdr.sgml**: 20230216

**ACCESSION NUMBER**: 0001437749-23-003575

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20230214

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230216

**DATE AS OF CHANGE**: 20230216

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NATIONAL RESEARCH CORP
- **CENTRAL INDEX KEY:** 0000070487
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731]
- **IRS NUMBER:** 470634000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-35929
- **FILM NUMBER:** 23637405

**BUSINESS ADDRESS:**
- **STREET 1:** 1245 Q STREET
- **CITY:** LINCOLN
- **STATE:** NE
- **ZIP:** 68508
- **BUSINESS PHONE:** 4024752525

**MAIL ADDRESS:**
- **STREET 1:** 1245 Q STREET
- **CITY:** LINCOLN
- **STATE:** NE
- **ZIP:** 68508

nrc20230215_8k.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

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**FORM **8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported):

February 14, 2023

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**National Research Corporation**

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| Delaware | 001-35929 | 47-0634000 |
| (State or other jurisdiction<br> of incorporation) | (Commission<br> File Number) | (IRS Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| 1245 Q Street, Lincoln, Nebraska | 68508 |
| (Address of principal executive offices) | (Zip Code) |

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(402) 475-2525

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 Common Stock | NRC | The NASDAQ Stock Market |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

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** | **Results of Operations and Financial Condition.** | **Results of Operations and Financial Condition.** |
|  | On February 14, 2023, National Research Corporation, a Delaware corporation (the "Company"), issued a press release announcing its financial and operating results for the fourth quarter and year ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.<br>On February 15, 2023, the Company held a conference call and online Web simulcast in connection with the Company's announcement of its earnings for the fourth quarter and year ended December 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/759565253. | On February 14, 2023, National Research Corporation, a Delaware corporation (the "Company"), issued a press release announcing its financial and operating results for the fourth quarter and year ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.<br>On February 15, 2023, the Company held a conference call and online Web simulcast in connection with the Company's announcement of its earnings for the fourth quarter and year ended December 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/759565253. |
| **Item 9.01** | **Financial Statements and Exhibits.** | **Financial Statements and Exhibits.** |
|  | **(d)** | **Exhibits.** |
|  | EXHIBIT<br> <u>NUMBER</u> | <u>EXHIBIT DESCRIPTION</u> |
|  | 99.1 | [National Research Corporation press release announcing its financial and operating results for the fourth quarter and year ended December 31, 2022.](ex_476440.htm) |
|  | 99.2 | [National Research Corporation script for the conference call and online Web simulcast held February 15, 2023.](ex_476441.htm) |
|  | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
|  | 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. | 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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**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **NATIONAL RESEARCH CORPORATION** | **NATIONAL RESEARCH CORPORATION** |
|  | *(Registrant)* |  |
| Date: February 16, 2023 | By: | /s/ Kevin R. Karas |
|  |  | Kevin R. Karas |
|  |  | Senior Vice President Finance, Chief Financial Officer, Treasurer and Secretary |

---

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**EXHIBIT INDEX**

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| | |
|:---|:---|
| **EXHIBIT**<br> **<u>NUMBER</u>** | **<u>EXHIBIT DESCRIPTION</u>** |
| 99.1 | National Research Corporation press release announcing its financial and operating results for the fourth quarter and year ended December 31, 2022. |
| 99.2 | National Research Corporation script for the conference call and online Web simulcast held February 15, 2023. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

## Exhibit 99.1

**Exhibit 99.1**

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| | |
|:---|:---|
| ![nrclogo.jpg](nrclogo.jpg) | <br> 1245 Q Street, Lincoln, NE 68508<br> P: 1 800 388 4264 \| F: 402 475 9061<br> nrchealth.com<br>|

---

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| | |
|:---|:---|
| **Contact:** | **Kevin R. Karas** |

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**Chief Financial Officer**

**402-475-2525**

**NATIONAL RESEARCH CORPORATION ANNOUNCES** 

**FOURTH QUARTER AND CALENDAR YEAR 2022 RESULTS**

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LINCOLN, Nebraska (February 14, 2023) — National Research Corporation, dba NRC Health, (NASDAQ:NRC) today announced results for the fourth quarter and calendar year 2022.

Regarding the Company's 2022 annual performance, Kevin Karas, Chief Financial Officer, said, "We continued to grow revenue from core offerings, including our Human Understanding Program, resulting in 7% year-over-year revenue growth, partially offset by the phase out of our Canadian operations and other non-core offerings. Adoption of the Human Understanding Program has continued to increase with recent new client additions including St. Bernards Healthcare, Longstreet Clinic, and Legacy Community Health. In addition, we are proud to have recently received the Best in KLAS 2023 Award for Patient Experience Improvement. This recognition affirms our leadership position and focus on transforming the healthcare industry with a human-first approach."

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 2022. For the full year, the Company funded $12.2 million for innovation and growth, $21.0 million for dividend payments, and $27.6 million for share repurchases.

Related to the fourth quarter ended December 31, 2022, other expense increased primarily due to a $2.6 million reclassification of the cumulative translation adjustment into earnings from the substantial liquidation of our investment in our Canadian subsidiary.

Diluted earnings per share decreased to $0.27 for the quarter ended December 31, 2022, from diluted earnings per share of $0.38 for the quarter ended December 31, 2021. Diluted earnings per share decreased to $1.27 for the year ended December 31, 2022, from diluted earnings per share of $1.46 for the year ended December 31, 2021.

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NRC Announces Fourth Quarter 2022 Results

February 14, 2023

A live simulcast of National Research Corporation's 2022 fourth quarter conference call will be available online at <u>https://events.q4inc.com/attendee/759565253</u> on February 15, 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 info@nrchealth.com, or visit www.nrchealth.com.

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NRC Announces Fourth Quarter 2022 Results

February 14, 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<br> December 31 | Three months ended<br> December 31 | Twelve months ended<br> December 31 | Twelve months ended<br> December 31 |
|  | 2022 | 2021 | 2022 | 2021 |
| Revenue | $38144 | $38298 | $151568 | $147954 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Direct | 13987 | 14167 | 57049 | 52350 |
| &nbsp;&nbsp;&nbsp; Selling, general and administrative | 10541 | 9901 | 42699 | 38960 |
| &nbsp;&nbsp;&nbsp; Depreciation, amortization and impairment | 1375 | 1357 | 5277 | 6374 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 25903 | 25425 | 105025 | 97684 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating income | 12241 | 12873 | 46543 | 50270 |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest income | 134 | 4 | 168 | 14 |
| &nbsp;&nbsp;&nbsp; Interest expense | (286) | (399) | (1209) | (1667) |
| &nbsp;&nbsp;&nbsp; Reclassification of cumulative translation into earnings | (2569) |  | (2569) |  |
| &nbsp;&nbsp;&nbsp; Other, net | (49) | 13 | (118) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other income (expense) | (2770) | (382) | (3728) | (1649) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income before income taxes | 9471 | 12491 | 42815 | 48621 |
| Provision for income taxes | 2830 | 2858 | 11015 | 11155 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income | $6641 | $9633 | $31800 | $37466 |
| Earnings Per Share of Common Stock: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Basic Earnings Per Share | $0.27 | $0.38 | $1.28 | $1.47 |
| &nbsp;&nbsp;&nbsp; Diluted Earnings Per Share | $0.27 | $0.38 | $1.27 | $1.46 |
| Weighted average shares and share equivalents outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Basic | 24648 | 25419 | 24922 | 25422 |
| &nbsp;&nbsp;&nbsp; Diluted | 24775 | 25597 | 25052 | 25640 |

---

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NRC Announces Fourth Quarter 2022 Results

February 14, 2023

**NATIONAL RESEARCH CORPORATION AND SUBSIDIARY**

**Unaudited Condensed Consolidated Balance Sheets**

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

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| | | |
|:---|:---|:---|
|  | **December 31,**<br> **2022** | **December 31,**<br> **2021** |
| <u>**Assets**</u> |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents | $25026 | $54361 |
| &nbsp;&nbsp;&nbsp; Accounts receivable, net | 14461 | 13728 |
| &nbsp;&nbsp;&nbsp; Other current assets | 4229 | 5618 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 43716 | 73707 |
| &nbsp;&nbsp;&nbsp; Property and equipment, net | 17248 | 12391 |
| &nbsp;&nbsp;&nbsp; Goodwill | 61614 | 61614 |
| &nbsp;&nbsp;&nbsp; Other, net | 7883 | 9828 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $130461 | $157540 |
| **<u>Liabilities and Shareholders</u>**<u>'</u> **<u>Equity</u>** |  |  |
| Current liabilities: |  |  |
| Current portion of notes payable, net unamortized debt issuance costs | $4491 | $4278 |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued expenses | 5136 | 7393 |
| &nbsp;&nbsp;&nbsp; Accrued compensation | 4551 | 7139 |
| &nbsp;&nbsp;&nbsp; Deferred revenue | 15198 | 17213 |
| &nbsp;&nbsp;&nbsp; Dividends payable | 2956 | 3044 |
| &nbsp;&nbsp;&nbsp; Other current liabilities | 1085 | 1321 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 33417 | 40388 |
| &nbsp;&nbsp;&nbsp; Notes payable, net of current portion and unamortized debt issuance costs | 17690 | 22269 |
| &nbsp;&nbsp;&nbsp; Other non-current liabilities | 7321 | 9546 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 58428 | 72203 |
| Shareholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp; Preferred stock, $0.01 par value, authorized 2,000,000 shares, none issued |  |  |
| &nbsp;&nbsp;&nbsp; Common stock, $0.001 par value; authorized 110,000,000 shares, issued 30,922,181 in 2022 and 30,898,600 in 2021, outstanding 24,628,173 in 2022 and 25,361,409 in 2021 | 31 | 31 |
| &nbsp;&nbsp;&nbsp; Additional paid-in capital | 175453 | 173942 |
| &nbsp;&nbsp;&nbsp; Retained earnings (accumulated deficit) | (25184) | (36112) |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss, foreign currency translation adjustment |  | (2375) |
| &nbsp;&nbsp;&nbsp; Treasury stock | (78267) | (50149) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total shareholders' equity | 72033 | 85337 |
| Total liabilities and shareholders' equity | $130461 | $157540 |

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## Exhibit 99.2

**Exhibit 99.2**

**<u>Kevin:</u>**

Thank you, ___________, and welcome everyone to National Research Corporation's 2022 fourth 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.

**<u>Linda:</u>**

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.

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**<u>Kevin:</u>**

Thanks, Linda, and again, welcome everyone.

For almost 42 years NRC Health has been committed 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 that builds trust and loyalty. Over time, NRC Health has consistently led the industry with innovative and transformative solutions, including patient centered care, Market Insights, Real time feedback and online ratings and reviews. Last week it was announced that NRC Health received the Best in KLAS 2023 Award for Patient Experience Improvement. This recognition affirms our leadership position and focus on transforming the healthcare industry with a human-first approach.

Let me turn the call back over to Linda to review our financial performance and then open the call to your questions.

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**<u>Linda</u>**

Thank you, Kevin.

Revenue for the fourth quarter 2022 decreased slightly compared to the fourth quarter of 2021 primarily due to the scheduled closure of our Canadian location. Revenue growth in core offerings year over year was 7% partially offset by the phase out of our Canadian operations and other non-core offerings, resulting in a net 2% increase in revenue for 2022 over prior year.

Our operating income was also impacted by expense increases in 2022 due to some inflationary pressure as well as intentional resource allocation towards retaining and developing talent, solution innovation, process automation and marketing programs. Operating income decreased by 5% and 7% respectively, for the fourth quarter and full year of 2022.

Fourth quarter other expense increased primarily due to a $2.6 million reclassification of the cumulative translation adjustment into earnings from substantial liquidation of our investment in our Canadian subsidiary.

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The effective tax rate in the fourth quarter of 2022 was 30% compared to 23% in 2021 primarily due to the non-deductible cumulative translation adjustment.

We ended the year with $146.8 million in 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.

The Company's Board of Directors has established priorities for capital allocation with funding of innovation and growth investments, including both M&A activity and internal projects, as the preferred use of capital. The Company funded $12.2 million for innovation and growth purposes for the year end December 31, 2022, in addition to quarterly dividend payments to shareholders totaling $21.0 million, and $27.6 million for share repurchases.

That concludes my comments for this morning. I'll now turn the call back to Kevin.

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**<u>Kevin</u>**

Thank you, Linda.

This completes our prepared remarks, so <u>operator</u> I will now ask you to open the call to any questions.

**<u>Closing Statement</u>** <u>–</u> **<u>Kevin</u>**

Thank you for your time today. We look forward to sharing our results again next quarter.