| Significant Accounting Policies [Text Block] | ( 1 Summary of Significant Accounting Policies Description of Business and Basis of Presentation National Research Corporation, doing business as NRC Health (“NRC Health,” the “Company,” “we,” “our,” “us” or similar terms), is a leading provider of analytics and insights that facilitate measurement and improvement of the patient and employee experience while also increasing patient engagement and customer loyalty for healthcare organizations in the United States and Canada. Our portfolio of solutions represent a unique set of capabilities that individually and collectively provide value to our clients. The solutions are offered at an enterprise level through the Voice of the Customer ("VoC") platform, The Governance Institute, and legacy Experience solutions Principles of Consolidation The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiary, National Research Corporation Canada. All significant intercompany transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Translation of Foreign Currencies Our Canadian subsidiary uses as its functional currency the local currency of the country in which it operates. It translates its assets and liabilities into U.S. dollars at the exchange rate in effect at the balance sheet date. It translates its revenue and expenses at the average exchange rate during the period. We include translation gains and losses in accumulated other comprehensive income (loss), a component of shareholders’ equity. Gains and losses related to transactions denominated in a currency other than the functional currency of the country in which we operate and short-term intercompany accounts are included in other income (expense) in the consolidated statements of income. Revenue Recognition On January 1, 2018, 2014 09, Revenue from Contracts with Customers 606” January 1, 2018 January 1, 2018 606, not $2.7 $814,000 We derive a majority of our revenues from our annually renewable subscription-based service agreements with our customers, which include performance measurement and improvement services, healthcare analytics and governance education services. Such agreements are generally cancelable on short or no 3 ● Identify the contract, or contracts, with a customer ● Identify the performance obligations in the contract ● Determine the transaction price ● Allocate the transaction price to the identified performance obligations; and ● Recognize revenue when, or as, we satisfy the performance obligations. Our revenue arrangements with a client may one may one one not not Our arrangements with customers consist principally of four 1 2 one 3 4 Subscription-based services - twelve may One-time services – one Fixed, non-subscription services – Unit-price services – not Deferred Contract Costs Deferred contract costs, net is stated at gross deferred costs less accumulated amortization. Beginning January 1, 2018, three five one 2018, January 1, 2018 $2.6 $776,000 $3.4 2018, $3.6 $2.6 December 31, 2019 2018, $4.2 $3.5 December 31, 2019 2018, December 31, 2019 2018 2019 2018 (In thousands) Direct expenses $ 34 $ 83 Selling, general and administrative expenses $ 2,874 $ 2,400 Total amortization $ 2,908 $ 2,483 Additional expense included in selling, general and administrative expenses for impairment of costs capitalized due to lost clients was $22,000 $51,000 December 31, 2019 2018, Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. We determine the allowance based on our historical write-off experience and current economic conditions. We review the allowance for doubtful accounts monthly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The following table provides the activity in the allowance for doubtful accounts for the years ended December 31, 2019, 2018 2017: Balance at Beginning of Year Bad Debt Expense Write-offs, net of Recoveries Balance at End of Year Year Ended December 31, 2017 $ 169 $ 249 $ 218 $ 200 Year Ended December 31, 2018 $ 200 $ 80 $ 105 $ 175 Year Ended December 31, 2019 $ 175 $ 75 $ 106 $ 144 Property and Equipment Property and equipment is stated at cost. Major expenditures to purchase property or to substantially increase useful lives of property are capitalized. Maintenance, repairs and minor renewals are expensed as incurred. When assets are retired or otherwise disposed of, their costs and related accumulated depreciation are removed from the accounts and resulting gains or losses are included in income. We capitalize certain costs incurred in connection with obtaining or developing internal-use software, including payroll and payroll-related costs for employees who are directly associated with the internal-use software projects and external direct costs of materials and services. Capitalization of such costs ceases when the project is substantially complete and ready for its intended purpose. Costs incurred during the preliminary project and post-implementation stages, as well as software maintenance and training costs are expensed as incurred. We capitalized approximately $4.1 $4.0 December 31, 2019 2018, We provide for depreciation and amortization of property and equipment using annual rates which are sufficient to amortize the cost of depreciable assets over their estimated useful lives. We use the straight-line method of depreciation and amortization over estimated useful lives of three ten three five one five seven forty Impairment of Long-Lived Assets and Amortizing Intangible Assets Long-lived assets, such as property and equipment and purchased intangible assets subject to depreciation or amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not first not third No December 31, 2019, 2018, 2017. Among others, management believes the following circumstances are important indicators of potential impairment of such assets and as a result may ● Significant underperformance in comparison to historical or projected operating results; ● Significant changes in the manner or use of acquired assets or our overall strategy; ● Significant negative trends in our industry or the overall economy; ● A significant decline in the market price for our common stock for a sustained period; and ● Our market capitalization falling below the book value of our net assets. Goodwill and Intangible Assets Intangible assets include customer relationships, trade names, technology, and goodwill. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not October 1 may not When performing the impairment assessment, we will first not not 2019, 2018 2017. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not October 1, may not We review for goodwill impairment by first may not October 1, 2019 No December 31, 2019, 2018 2017. December 31, 2019 $2.3 one March 2021, Income Taxes We use the asset and liability method of accounting for income taxes. Under that method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis using enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances, if any, are established when necessary to reduce deferred tax assets to the amount that is more likely than not December 31, 2019, 2018 2017, $24,000, $0, $4,000, We recognize the effect of income tax positions only if those positions are more likely than not 50% Share-Based Compensation All of our existing stock option awards and non-vested stock awards have been determined to be equity-classified awards. The compensation expense on share-based payments is recognized based on the grant-date fair value of those awards. We recognize the excess tax benefits and tax deficiencies in the income statement when options are exercised. Amounts recognized in the financial statements with respect to these plans: 2019 2018 2017 (In thousands) Amounts charged against income, before income tax benefit $ 1,224 $ 1,514 $ 1,845 Amount of related income tax benefit (2,081 ) (3,566 ) (2,310 ) Net (benefit) expense to net income $ (857 ) $ (2,052 ) $ (465 ) Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three $3.7 $1.8 December 31, 2019, 2018, may Leases We adopted Accounting Standards Update (“ASU”) 2016 02, 842 842” January 1, 2019 not not not not 12 Topic 842 $2.3 $2.3 $43,000 no We determine whether a lease is included in an agreement at inception. Operating lease ROU assets are included in operating lease right-of-use assets in our consolidated balance sheet. Finance lease assets are included in property and equipment. Operating and finance lease liabilities are included in other current liabilities and other long term liabilities. Certain lease arrangements may not ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments during the lease term. ROU assets and lease liabilities are recorded at lease commencement based on the estimated present value of lease payments. Because the rate of interest implicit in each lease is not Fair Value Measurements Our valuation techniques are based on maximizing observable inputs and minimizing the use of unobservable inputs when measuring fair value. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. The inputs are then classified into the following hierarchy: ( 1 1 2 2 1 not 3 3 The following details our financial assets within the fair value hierarchy at December 31, 2019 2018: Level 1 Level 2 Level 3 Total (In thousands) As of December 31, 2019 Money Market Funds $ 3,662 $ -- $ -- $ 3,662 Total Cash Equivalents $ 3,662 $ -- $ -- $ 3,662 As of December 31, 201 8 Money Market Funds $ 1,848 -- -- 1,848 Total Cash Equivalents $ 1,848 $ -- $ -- $ 1,848 There were no December 31, 2019 2018. Our long-term debt described in Note 8 2 The following are the carrying amount and estimated fair values of long-term debt: December 31, 2019 December 31, 2018 (In thousands) Total carrying amount of long-term debt $ 34,281 $ 37,966 Estimated fair value of long-term debt $ 35,205 $ 38,257 The carrying amounts of accounts receivable, accounts payable, and accrued expenses approximate their fair value. All non-financial assets that are not December 31, 2019 2018, no Commitments and Contingencies no December 31, 2019. A sales tax accrual was recorded in 2019 December 31, 2019, 2019 $775,000 second 2020. may first 2020, not second 2020. We became self-insured for group medical and dental insurance on January 1, 2019. $150,000 not not not third December 31, 2019, $270,000. Earnings Per Share Prior to the Recapitalization, net income per share of our former class A common stock and former class B common stock was computed using the two Diluted net income per share was computed using the weighted-average number of common shares and, if dilutive, the potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock. The dilutive effect of outstanding stock options is reflected in diluted earnings per share by application of the treasury stock method. The liquidation rights and the rights upon the consummation of an extraordinary transaction were the same for the holders of our former class A common stock and former class B common stock. Other than share distributions and liquidation rights, the amount of any dividend or other distribution payable on each share of former class A common stock was equal to one sixth 1/6 th As described in Note 2, April 2018, April 17, 2018. two April 16, 2018, We had 16,221, 93,346 104,647 December 31, 2019, 2018 2017, 1,858 December 31, 2017, 2019 2018 2017 Common Stock Common Stock (formerly Class A) Class B Common Stock Common Stock (formerly Class A) Class B Common Stock (In thousands, except per share data) Numerator for net income per share - basic: Net income $ 32,406 $ 25,423 $ 4,624 $ 11,388 $ 11,555 Allocation of distributed and undistributed income to unvested restricted stock shareholders (109 ) (82 ) (18 ) (88 ) (87 ) Net income attributable to common shareholders $ 32,297 $ 25,341 $ 4,606 $ 11,300 $ 11,468 Denominator for net income per share - basic: Weighted average common shares outstanding - basic 24,809 23,562 3,527 20,770 3,514 Net income per share - basic $ 1.30 $ 1.08 $ 1.31 $ 0.54 $ 3.26 Numerator for net income per share - diluted: Net income attributable to common shareholders for basic computation $ 32,297 $ 25,341 $ 4,606 $ 11,300 $ 11,468 Denominator for net income per share - diluted: Weighted average common s 24,809 23,562 3,527 20,770 3,514 Weighted average effect of dilutive securities – stock options: 844 886 101 857 89 Denominator for diluted earnings per share – adjusted weighted average shares 25,653 24,448 3,628 21,627 3,603 Net income per share - diluted $ 1.26 $ 1.04 $ 1.27 $ 0.52 $ 3.18 Recent Accounting Pronouncements Not In June 2016, 2016 13, 326 December 15, 2019 January 1, 2020 not In August 2018, 2018 15, 350 40 December 15, 2019 January 1, 2020 not In December 2019, 2019 12, 740 December 15, 2020 |
