National Research (US:NRC)2025-11-07 18:03Revenue and Income - Revenue for the three months ended September 30, 2025, decreased by $1.2 million (3%) to $34.6 million compared to $35.8 million in the same period of 2024[98] - Operating income for the nine months ended September 30, 2025, decreased by 30% to $17.9 million compared to $25.6 million in the same period of 2024[105] - Cash provided by operating activities decreased by 32% to $19.3 million for the nine months ended September 30, 2025, compared to $28.2 million in 2024[105] Expenses - Direct expenses decreased by $1.8 million (19%) to $12.4 million in Q3 2025, primarily due to lower conference costs[98] - Selling, general, and administrative expenses increased by $1.3 million (12%) to $12.3 million in Q3 2025, driven by higher salaries and benefits[100] Tax and Dividends - The effective tax rate increased to 34% in Q3 2025 from 22% in Q3 2024, primarily due to limitations on executive compensation deductions[98] - Cash dividends paid in the nine months ended September 30, 2025, totaled $8.3 million, with $2.7 million declared in Q3 2025[118] Capital and Debt - Capital expenditures for the nine months ended September 30, 2025, amounted to $9.6 million, mainly for building renovations and software development[119] - The company had a working capital deficit of $18.2 million as of September 30, 2025, compared to $16.3 million at the end of 2024[116] - The outstanding balance on the Delayed Draw Term Loan was $80.4 million as of September 30, 2025, with an additional borrowing capacity of $27.6 million available[123] - The company had no borrowings outstanding under the Revolving Loan as of September 30, 2025, with an availability to borrow $30.0 million[124] - The weighted average interest rate on short-term borrowings for the three-month period ended September 30, 2025, was 6.68%, down from 7.65% in the same period of 2024[124] - The company is required to maintain a minimum fixed charge coverage ratio of 1.10x and a cash flow leverage ratio of 3.50x or less, and was in compliance with these financial covenants as of September 30, 2025[126] Share Repurchase and Commitments - The company repurchased 618,264 shares of common stock for an aggregate of $9.3 million during the three months ended September 30, 2025, with no remaining shares authorized for repurchase under the 2025 Program[132] - The ongoing unused commitment fees for the Revolving Loan and Delayed Draw Term Loan range from 0.15% to 0.30% based on the cash flow leverage ratio[125] - Fixed lease payments amounted to $514,000 for operating leases and $10,000 for finance leases, payable within 12 months as of September 30, 2025[127] Tax Positions and Accounting Estimates - The liability for gross unrecognized tax benefits related to uncertain tax positions was $2.4 million as of September 30, 2025[129] - The company is evaluating the effects of the One Big Beautiful Bill Act on its estimated annual effective tax rate but does not expect a material impact on financial statements[130] - There have been no material changes to critical accounting estimates that impact the financial statements as of September 30, 2025[133]