National Research Corporation (NRC Health) reported its financial results for the third quarter and the nine months ended September 30, 2024, reflecting a decline in revenue and profitability compared to the same periods in 2023.

For the three months ended September 30, 2024, NRC Health generated revenue of $35.8 million, a decrease of 6% from $37.9 million in the prior year. For the nine-month period, revenue totaled $106.2 million, down 4% from $110.6 million in 2023. The decline in revenue was attributed to a lack of growth in new contracts, despite a consistent retention rate.

Operating income for the third quarter was $8.0 million, down 20% from $10.0 million in 2023. For the nine months, operating income decreased by 10% to $25.6 million from $28.3 million. Net income for the third quarter was $5.7 million, compared to $7.9 million in the same quarter of 2023, while net income for the nine months fell to $18.2 million from $22.1 million. Basic earnings per share for the third quarter were $0.24, down from $0.32 in the previous year.

Total operating expenses for the third quarter were $27.8 million, slightly lower than $28.0 million in 2023. The decrease in selling, general, and administrative expenses by $890,000 was offset by increases in salary and benefit costs. Variable expenses increased as a percentage of revenue, rising to 18% in 2024 from 16% in 2023.

NRC Health's balance sheet showed total assets of $131.8 million as of September 30, 2024, an increase from $122.4 million at the end of 2023. However, total liabilities rose significantly to $97.2 million from $73.5 million, leading to a decrease in total shareholders' equity to $34.6 million from $49.0 million. The company reported a working capital deficit of $23.6 million, compared to $11.8 million at the end of 2023.

In terms of strategic developments, NRC Health completed the acquisition of Nobl Health on July 15, 2024, for $6.0 million, with potential contingent payments of up to $1.0 million based on future performance. The company also repurchased 395,217 shares of common stock during the third quarter under its stock repurchase program, with 700,633 shares remaining available for purchase.

Cash provided by operating activities increased to $28.2 million for the nine months ended September 30, 2024, up from $26.4 million in 2023, despite the decline in net income. The company reported cash and cash equivalents of $3.5 million at the end of the period, down from $6.7 million at the end of 2023.