National Research (NRC) - 2024 Q3 - Quarterly Report

Revenue Performance - Revenue for the three months ended September 30, 2024, decreased by $2.1 million (6$35.8 million compared to $37.9 million in the same period of 2023, primarily due to decreased US recurring revenue from the existing client base[90] - For the nine months ended September 30, 2024, revenue decreased by$4.4 million (4%) to $106.2 million compared to$110.6 million in the same period of 2023, mainly from decreased US recurring revenue[96] - Recurring contract value declined by 9% to $131.6 million in 2024 compared to$144.3 million in 2023, primarily due to a lack of growth in new contracts[102] Expenses - Direct expenses increased by $1.1 million (5$15.3 million in the three months ended September 30, 2024, mainly from higher conference expenses[90] - Selling, general, and administrative expenses decreased by $814,000 (7$10.99 million in the three months ended September 30, 2024, primarily due to reduced marketing and consulting expenses[90] - Total other expense increased by $768,000, primarily due to lower interest income and higher interest expense, leading to a total other expense of$(684,000) in the three months ended September 30, 2024[94] Operating Income - Operating income for the three months ended September 30, 2024, decreased by $1.98 million (20$7.98 million compared to $9.96 million in the same period of 2023[90] Cash Flow and Dividends - Cash provided by operating activities increased by$1.84 million (7%) to $28.2 million for the nine months ended September 30, 2024, compared to$26.4 million in the same period of 2023[96] - The company paid cash dividends of $8.6 million in the nine months ended September 30, 2024, with$2.8 million declared in the three months ended September 30, 2024[110] Debt and Credit Facilities - As of September 30, 2024, the company had $3.5 million in cash and cash equivalents, with up to$25 million of unused borrowings under the Line of Credit[104] - As of September 30, 2024, the outstanding balance on the Term Loan was $14.5 million, with monthly principal payments of$92,800 due through May 2027[115] - The outstanding balance on the Delayed Draw Term Loan was $34.2 million, with monthly principal payments of$220,882 due through May 2027[116] - The Line of Credit had $5.0 million of borrowings outstanding as of September 30, 2024, with an availability to borrow an additional$25.0 million[117] - The weighted average interest rate on borrowings on the Line of Credit for the three-month period ended September 30, 2024 was 7.65%[117] - The company is required to maintain a minimum fixed charge coverage ratio of 1.10x and a cash flow leverage ratio of 3.00x or less throughout the term of the Credit Facilities[119] - The company amended its Credit Facilities on August 5, 2024, revising the interest rate on the Term Loan to a floating rate based on the 30-day SOFR plus 235 basis points[114] - The company is obligated to pay ongoing unused commitment fees at a rate of 0.20% per annum based on the actual daily unused portions of the Line of Credit and the Delayed Draw Term Loan facility[118] Stock Repurchase - During the three months ended September 30, 2024, the company repurchased 395,217 shares of common stock under the 2022 Stock Repurchase Program[125] - As of September 30, 2024, the remaining number of shares that could be purchased under the 2022 Program was 700,633 shares[125] Tax Liabilities - The company had a liability for gross unrecognized tax benefits related to uncertain tax positions amounting to $2.2 million as of September 30, 2024[122]