-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K6zOtfTIGSlZSYAQWFmeu9dH/9/pdGU58kjyI4Y+Gv+hCWPRNT936MmMJQON+VDv kPobCIljuqaMjIdPYPwZRg== 0000897069-02-000593.txt : 20020814 0000897069-02-000593.hdr.sgml : 20020814 20020814134324 ACCESSION NUMBER: 0000897069-02-000593 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL RESEARCH CORP CENTRAL INDEX KEY: 0000070487 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 470634000 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-29466 FILM NUMBER: 02734080 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 10-Q 1 sdc178a.txt 10-Q QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 0-29466 National Research Corporation ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Wisconsin 47-0634000 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1245 "Q" Street, Lincoln Nebraska 68508 ------------------------------------------------------ (Address of principal executive offices) (Zip Code) (402) 475-2525 ------------------------------------------------------ (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.001 par value, outstanding as of August 2, 2002: 7,169,055 - --------------------------------------------------------------------------- shares - ------ NATIONAL RESEARCH CORPORATION FORM 10-Q INDEX For the Quarter Ended June 30, 2002 Page No. -------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets 3 Condensed Statements of Income 4 Condensed Statements of Cash Flows 5 Notes to Condensed Financial Statements 6-7 Item 2. Management's Discussion and Analysis of 8-11 Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures About 12 Market Risk PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 12 Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13 Exhibit Index 14 2 PART I - Financial Information ITEM 1 Financial Statements NATIONAL RESEARCH CORPORATION CONDENSED BALANCE SHEETS June 30, December 31, 2002 2001 ----------- ------------ (unaudited) Assets Current assets: Cash and cash equivalents $ 1,869,979 $ 1,080,053 Investments in marketable debt securities 7,434,919 6,636,543 Trade accounts receivable, less allowance for doubtful accounts of $101,631 and $101,674 in 2002 and 2001, respectively 2,337,663 2,141,104 Unbilled revenues 2,019,336 1,671,079 Prepaid expenses and other 913,470 286,653 Income taxes recoverable - 266,034 Deferred income taxes 198,031 210,452 ----------- ----------- Total current assets 14,773,398 12,291,918 ----------- ----------- Net property and equipment 12,627,796 12,907,197 ----------- ----------- Customer lists, net of accumulated amortization 569,886 631,135 Goodwill and other intangibles, net of accumulated amortization 7,908,043 7,908,043 Other 30,978 34,099 ----------- ----------- Total assets $35,910,101 $33,772,392 =========== =========== Liabilities and Shareholders' Equity Current liabilities: Current portion of notes payable $ 128,082 $ 132,312 Accounts payable 559,789 1,391,043 Accrued wages, bonuses and profit sharing 561,870 494,446 Accrued expenses 402,637 364,642 Income taxes payable 432,073 - Billings in excess of revenues earned 3,499,694 2,649,370 ----------- ----------- Total current liabilities 5,584,145 5,031,813 Notes payable, net of current portion 5,118,914 5,169,757 Deferred income taxes 346,603 217,424 ----------- ----------- Total liabilities 11,049,662 10,418,994 ----------- ----------- Shareholders' equity: Preferred stock, $.01 par value; authorized 2,000,000 shares, no shares issued and outstanding - - Common stock, $.001 par value; authorized 20,000,000 shares, issued 7,468,400 in 2002 and 7,395,593 in 2001 outstanding 7,166,700 in 2002 and 7,093,893 in 2001 7,468 7,395 Additional paid-in capital 17,556,720 17,255,917 Retained earnings 8,787,134 7,597,340 Accumulated other comprehensive income (loss), net of taxes 12,186 (4,185) Treasury stock, at cost; 301,700 shares in 2002 and 2001 (1,503,069) (1,503,069) ----------- ----------- Total shareholders' equity 24,860,439 23,353,398 ----------- ----------- Total liabilities and shareholders' equity $35,910,101 $33,772,392 =========== =========== See accompanying notes to condensed financial statements. 3 NATIONAL RESEARCH CORPORATION CONDENSED STATEMENTS OF INCOME (Unaudited)
Three months ended Six months ended June 30, June 30, -------------------------- -------------------------- 2002 2001 2002 2001 ----------- ----------- ----------- ----------- Revenues $ 4,799,653 $ 3,367,555 $ 8,848,280 $ 7,458,098 ----------- ----------- ----------- ----------- Operating expenses: Direct expenses 1,779,618 1,696,527 3,574,222 3,685,988 Selling, general and administrative 1,088,291 1,128,641 2,361,831 2,081,828 Depreciation and amortization 417,678 464,816 822,356 867,947 ----------- ----------- ----------- ----------- Total operating expenses 3,285,587 3,289,984 6,758,409 6,635,763 ----------- ----------- ----------- ----------- Operating income 1,514,066 77,571 2,089,871 822,335 Other income (expense): Interest income 61,095 104,910 124,885 243,889 Interest expense (125,867) (112,350) (231,376) (229,222) Other, net (5,111) (4,620) (71,554) (9,166) ----------- ----------- ----------- ----------- Total other income (expense) (69,883) (12,060) (178,045) 5,501 ----------- ----------- ----------- ----------- Income before income taxes 1,444,183 65,511 1,911,826 827,836 Provision for income taxes 548,789 22,273 722,031 281,464 ----------- ----------- ----------- ----------- Net income 895,394 43,238 1,189,795 546,372 =========== =========== =========== =========== Net income per share--basic $ .13 $ .01 $ .17 $ .08 =========== =========== =========== =========== Net income per share--diluted $ .12 $ .01 $ .17 $ .08 =========== =========== =========== =========== Weighted average shares and share equivalents outstanding-- basic 7,139,946 7,046,367 7,119,803 7,042,838 =========== =========== =========== =========== Weighted average shares and share equivalents outstanding--diluted 7,193,515 7,057,007 7,173,372 7,053,478 =========== =========== =========== ===========
See accompanying notes to condensed financial statements. 4 NATIONAL RESEARCH CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended June 30, -------------------------- 2002 2001 ----------- ----------- Cash flows from operating activities: Net income $ 1,189,795 $ 546,372 Adjustments to reconcile net income to net cash Provided by operating activities: Depreciation and amortization 822,356 867,947 Deferred income taxes 133,167 63,615 Gain on sale of property and equipment (1,420) (300) Gain on sale of other investments (18) --- Net changes in assets and liabilities: Trade accounts receivable (196,559) (284,835) Unbilled revenues (348,257) 346,605 Prepaid expenses and other (614,546) (566,658) Accounts payable (362,096) 78,147 Accrued expenses, wages, bonuses, and profit sharing 105,419 (182,145) Income taxes recoverable and payable 698,107 6,693 Billings in excess of revenues earned 850,324 1,049,746 ----------- ----------- Net cash provided by operating activities 2,276,272 1,925,187 ----------- ----------- Cash flows from investing activities: Purchases of property and equipment (960,014) (837,195) Proceeds from sale of property and equipment 1,420 300 Acquisition of healthcare survey business --- (3,772,229) Purchases of securities available-for-sale (3,816,042) (6,330,290) Proceeds from the maturities of securities available-for-sale 3,042,487 6,908,012 ----------- ----------- Net cash used in investing activities (1,732,149) (4,031,402) ----------- ----------- Cash flows from financing activities: Payments on notes payable (55,073) (64,581) Proceeds from exercise of stock options 300,876 88,946 ----------- ----------- Net cash provided by financing activities 245,803 24,365 ----------- ----------- Net increase (decrease) in cash and cash equivalents 789,926 (2,081,850) Cash and cash equivalents at beginning of period $ 1,080,053 $ 3,218,805 ----------- ----------- Cash and cash equivalents at end of period $ 1,869,979 $ 1,136,955 =========== =========== Supplemental disclosure of cash paid for: Interest $ 194,034 $ 229,211 =========== =========== Taxes $ 1,410 $ 211,267 =========== =========== Supplemental disclosures of noncash investing activities: Accounts payable included $184,254 in 2001 for purchases of property and equipment. In connection with the Company's acquisition of a business in 2001, the Company assumed unearned revenues of $0.3 million for uncompleted customer contracts. See accompanying notes to condensed financial statements. 5 NATIONAL RESEARCH CORPORATION Notes to Condensed Financial Statements 1. INTERIM FINANCIAL REPORTING The condensed balance sheet of National Research Corporation (the "Company") at December 31, 2001 was derived from the Company's audited balance sheet as of that date. All other financial statements contained herein are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) the Company considers necessary for a fair presentation of financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America. Information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed financial statements should be read in conjunction with the financial statements and notes thereto that are included in the Company's Form 10-K for the fiscal year ended December 31, 2001, filed with the Securities and Exchange Commission in March 2002. 2. COMPREHENSIVE INCOME Other than its net income, the Company's only other source of comprehensive income is unrealized gains or losses on marketable debt securities. Other comprehensive income from marketable debt securities was $12,186 and $18,962 for the six-month periods ended June 30, 2002 and 2001, respectively. 3. GOODWILL AND OTHER INTANGIBLE ASSETS In June 2001, the Financial Accounting Standards Board issued SFAS No. 142. Goodwill and Other Intangible Assets. This statement replaces the requirement to amortize goodwill and certain other intangible assets (with indefinite useful lives) with an annual impairment test. SFAS No. 142 also requires an evaluation of the estimated useful lives of intangible assets and an impairment test for goodwill and non-amortizable assets upon adoption. The Company adopted the provisions of SFAS No. 142 as of January 1, 2002. As a result of adopting this standard, the Company ceased amortizing goodwill and certain other non-amortizable intangible assets effective January 1, 2002. Total amortization expense was $30,624 and $135,230 during the three months ended June 30, 2002 and 2001, respectively, and $61,248 and $210,011 during the six months ended June 30, 2002 and 2001, respectively. Following is the June 30, 2002 and 2001 statement of income data, adjusted as if SFAS No. 142 had been effective as of January 1, 2001: 6 Three months ended Six months ended June 30, June 30, ---------------------- ------------------------ 2002 2001 2002 2001 --------- --------- ----------- --------- Reported net income 895,394 43,238 1,189,795 546,372 Amortization of goodwill, net of taxes -- 58,163 -- 103,569 ------- ------- --------- ------- Adjusted net income 895,394 101,401 1,189,795 649,941 ======= ======= ========= ======= Reported net income per share $0.13 $0.01 $0.17 $0.08 Amortization of goodwill, net of taxes -- $0.01 -- $0.01 ------- ------- --------- ------- Adjusted net income per share $0.13 $0.02 $0.17 $0.09 ======= ======= ========= ======= All of the Company's goodwill and non-amortizable intangible assets are allocated to one reporting unit-the healthcare survey business. The Company also completed it's transitional evaluation of the recoverability of goodwill and non-amortizable intangible assets as of January 1, 2002, using the fair value methodology of SFAS No. 142. The Company's analysis did not result in the recognition of an impairment loss on goodwill or other non-amortizable intangible assets. 4. EARNINGS PER SHARE Net income per share has been calculated and presented for "basic" and "diluted" data. "Basic" net income per share is computed by dividing net income by the weighted average number of common shares outstanding, whereas "diluted" net income per share is computed by dividing net income by the weighted average number of common shares outstanding adjusted for the dilutive effects of options and common equivalent shares outstanding. At June 30, 2002 and 2001, 42,053 and 72,537 options, respectively, have been excluded from the diluted net income per share computation because their exercise price exceeds the fair market value. 7 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following table sets forth, for the periods indicated, selected financial information derived from the Company's condensed financial statements, expressed as a percentage of total revenues. The trends illustrated in the following table may not necessarily be indicative of future results. The discussion that follows the table should be read in conjunction with the condensed financial statements. Percentage of Total Revenues ------------------------------------------ Three months ended Six months ended June 30, June 30, ------------------ ------------------ 2002 2001 2002 2001 ------- ------- ------- ------- Revenues: 100.0% 100.0% 100.0% 100.0% ======= ======= ======= ======= Operating expenses: Direct expenses 37.1 50.4 40.4 49.4 Selling, general and administrative 22.7 33.5 26.7 27.9 Depreciation and amortization 8.7 13.8 9.3 11.7 ------- ------- ------- ------- Total operating expenses: 68.5 97.7 76.4 89.0 ------- ------- ------- ------- Operating income 31.5% 2.3% 23.6% 11.0% ======= ======= ======= ======= Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001 Total revenues. Total revenues increased 42.5% in the three month period ended June 30, 2002 to $4.8 million from $3.4 million in the three month period ended June 30, 2001. The increase was primarily due to the addition of new clients, including the major new contract signed in January 2002. Direct expenses. Direct expenses were essentially flat, at $1.8 million and $1.7 million in the three-month period ended June 30, 2002 and 2001, respectfully. The slight increase in direct expenses in the 2002 period was primarily due to increases in fieldwork of $86,000, labor and payroll expenses of $47,000, and travel and maintenance $29,000. This increase was partially offset by decreases in telephone expense of $28,000, and printing and postage costs of $52,000. Direct expenses as a percentage of total revenues decreased to 37.1% in the three month period ended June 30, 2002 compared to 50.4% during the same period of 2001. Direct expenses as a percentage of total revenues were lower partially due to the mix of telephone versus mail methodology and some volume pricing received during the 2002 quarter. Direct expenses as a percentage of revenue are expected to be higher for the balance of the 2002, similar to the approximately 44% levels reported in the first quarter of 2002. 8 Selling, general and administrative expenses. Selling, general and administrative expenses were essentially flat, at $1.1 million for each of the three-month periods ended June 30, 2002 and 2001. The slight decrease in the 2002 period was primarily due to decreases in legal and consulting fees of $160,000, and office expenses of $17,000. This decrease was offset by increases in salaries and benefits expense of $80,000, contract services of $40,000, and travel and meals of $17,000. Selling, general, and administrative expenses decreased as a percentage of total revenues to 22.7% for the three month period ended June 30, 2002 from 33.5% for the same period in 2001 primarily due to higher revenue levels. Selling, general and administrative expenses as a percentage of revenue for the balance of 2002 are expected to decrease slightly. Depreciation and amortization. Depreciation and amortization expenses decreased 10.1% to $418,000 in the three-month period ended June 30, 2002 from $465,000 in the same period of 2001. The decrease is primarily due to the adoption of SFAS No. 142 on January 1, 2002. In connection with the adoption of SFAS No. 142, the Company ceased amortizing goodwill and certain other intangible assets. The three-month period ended June 30, 2001 included $88,126 for amortization of certain intangible assets no longer subject to amortization. This was partially offset by the additional depreciation of software, computer equipment and production equipment. Depreciation and amortization expenses as a percentage of total revenues decreased to 8.7% in the three-month period ended June 30, 2002 from 13.8% in the same period of 2001. Provision for income taxes. The provision for income taxes totaled $549,000 (38.0% effective tax rate) for the three-month period ended June 30, 2002 as compared to $22,000 (34.0% effective tax rate) for the same period in 2001. The effective tax rate was lower in 2001 due to differences in state income taxes. Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001 Total revenues. Total revenues increased 18.6% in the six month period ended June 30, 2002 to $8.8 million from $7.5 million in the six month period ended June 30, 2001. The increase was primarily due to the addition of new clients, including the major new contract signed in January 2002, and, to a lesser extent, by an increase in scope of work from existing clients. Direct expenses. Direct expenses decreased 3.2% to $3.6 million in the six-month period ended June 30, 2002 from $3.7 million in the same period during 2001. The slight decrease in direct expenses in the 2002 period was primarily due to decreases in labor and payroll expenses of $153,000, and telephone expense of $34,000. This decrease was partially offset by increases in fieldwork and fees of $28,000, travel and maintenance $38,000, and printing and postage costs of $4,000. Direct expenses decreased as a percentage of total revenues to 40.4% in the six-month period ended June 30, 2002 from 49.4% during the same period of 2001. Direct expenses as a percentage of total revenues for the balance of 2002 are expected to increase slightly. Selling, general and administrative expenses. Selling, general and administrative expenses increased 13.4% to $2.4 million for the six-month period ended June 30, 2002 from $2.1 million for the same period in 2001. This increase was primarily due to increases in salaries and benefits expense of $265,000, taxes and other fees of $35,000, marketing expenses of $34,000, and travel expenses of $23,000. These increases were partially offset by decreases in legal and consulting fees 9 of $37,000, rents and maintenance of $7,000, and recruiting expenses of $32,000. Selling, general, and administrative expenses as a percentage of total revenues decreased to 26.7% for the six month period ended June 30, 2002 from 27.9% for the same period in 2001. Depreciation and amortization. Depreciation and amortization expenses decreased 5.3% to $822,000 in the six-month period ended June 30, 2002 from $868,000 in the same period of 2001. The decrease is primarily due to the adoption of SFAS No. 142 on January 1, 2002. In connection with the adoption of SFAS No. 142, the Company ceased amortizing goodwill and certain other intangible assets. The six-month period ended June 30, 2001 included $156,923 for amortization of certain intangible assets no longer subject to amortization. This was partially offset by the additional depreciation of software, computer equipment and production equipment. Depreciation and amortization expenses as a percentage of total revenues decrease to 9.3% in the six-month period ended June 30, 2002 from 11.7% in the same period of 2001. Other income (expense). Other income and expense increased to $(72,000) in the six-month period ended June 30, 2002 from $(9,000) in the same period of 2001. The increase was due to the recording of $64,000 of prejudgment interest related to the lawsuit resolved in the first quarter of 2002. The other income and expense should trend to last year's amounts for the balance of the year. Provision for income taxes. The provision for income taxes totaled $722,000 (37.8% effective tax rate) for the six-month period ended June 30, 2002 as compared to $281,000 (34.0% effective tax rate) for the same period in 2001. The effective tax rate was lower in 2001 due to differences in state income taxes. Liquidity and Capital Resources The Company's principal source of funds historically has been cash flow from its operations. The Company's cash flow has been sufficient to provide funds for working capital and capital expenditures, other than expenditures related to the Company's building, which were paid, in part, from the proceeds of borrowings and the sales of securities available-for-sale. As of June 30, 2002, the Company had cash and cash equivalents of $1.9 million and working capital of $9.2 million. During the six months ended June 30, 2002, the Company generated $2.3 million of net cash from operating activities as compared to $1.9 million of net cash generated during the same period in the prior year. The increase in cash flow was mainly due to higher net income, as well as changes in accrued expenses and income taxes payable. This was offset by the timing of collections of accounts receivable, the timing of costs incurred in advance of billings on certain projects and a decrease in accounts payable. For the six months ended June 30, 2002, net cash used in investing activities was $1.7 million as compared to $4.0 million during the same period in the prior year. The 2002 net cash used in investing activities was primarily due to the investment of $960,000 in furniture, computer 10 equipment, software and production equipment to support the expansion of the Company's business, and an increase of the net of purchases of securities available-for-sale over the proceeds from the maturities of securities of $774,000. The 2001 net cash used in investing activities was primarily due to the purchase of The Picker Institute's healthcare survey business ($3.8 million) and an investment of $837,000 in furniture, computer equipment, software and production equipment to support the expansion of the Company's business, which was partially offset by the net proceeds of maturities of securities available-for-sale over the purchase of securities available for sale of $578,000. Net cash generated in financing activities was $246,000 for the six months ended June 30, 2002 compared to $24,000 during the same period in the prior year. The cash provided by financing activities during 2002 and 2001 was primarily due to proceeds from exercised stock options. The Company typically bills clients for projects before they have been completed. Billed amounts are recorded as billings in excess of revenues earned or deferred revenue on the Company's financial statements and are recognized as income when earned. As of June 30, 2002 and as of December 31, 2001, the Company had $3.5 million and $2.6 million of deferred revenues, respectively. The increase in deferred revenues at June 30, 2002 results primarily from pre-selling of the Company's annually published NRC Healthcare Market Guide(R). The revenues related to the sales of the product are expected to be recognized during the third quarter following completion of the product and delivery to the customers. In addition, when work is performed in advance of billing, the Company records this work as a cost in excess of billings or unbilled revenue. At June 30, 2002 and December 31, 2001, the Company had $2.0 million and $1.7 million of unbilled revenues, respectively. Substantially all deferred and unbilled revenues will be earned and billed, respectively, within 12 months of the respective period ends. In October 1998, the Company announced plans to repurchase up to 245,000 shares of common stock in the open market or in privately negotiated transactions. The Company repurchased 245,000 shares between October 1998 and March 1999. In April 1999, the Board of Directors of the Company authorized the repurchase of an additional 150,000 shares. As of July 31, 2002, 56,700 shares have been repurchased under the new authorization. Accounting Pronouncements In June 2002, the Financial Accounting Standards Board issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. Under SFAS No. 146, a liability for exit costs would not be recognizable based upon the date that an entity commits to an exit plan. Instead, liabilities and expenses associated with exit plan activities are required to be expensed as incurred under the new standard. This statement also establishes that fair value is the objective for initial measurement of the liability. This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and is effective for exit or disposal activities that are initiated after December 31, 2002. 11 ITEM 3 Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The Company has not experienced any material changes in its market risk exposures since December 31, 2001. PART II - Other Information ITEM 4 Submission of Matters to a Vote of Security Holders --------------------------------------------------- The Company held it annual meeting of shareholders on May 1, 2002. At such meeting, (a) JoAnn M. Martin and Paul C. Schorr, III were reelected as directors of the Company for terms to expire at the 2005 annual meeting of shareholders and until their successors are duly elected and qualified pursuant to the following votes: JoAnn M. Martin--6,630,374 shares voted for, 154,830 shares withholding authority, 0 abstentions and 0 broker non-votes, and Paul C. Schorr, III--6,630,374 shares voted for, 154,830 shares withholding authority, 0 abstentions and 0 broker non-votes; and (b) the National Research Corporation 2001 Equity Incentive Plan was approved pursuant to the following vote: 5,465,511 shares voted for, 194,230 shares voted against, 1,300 shares abstained from voting and 0 broker non-votes. The other directors of the Company whose terms of office continued after the 2002 annual meeting of shareholders are as follows: terms expiring at the 2003 meeting - Michael D. Hays and John N. Nunnelly; and terms expiring at the 2004 meeting - Patrick E. Beans. ITEM 6 Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits (99.1) Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (99.2) Certification of the Vice President, Treasurer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended June 30, 2002. 12 SIGNATURES 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 thereunto duly authorized. NATIONAL RESEARCH CORPORATION Date: August 14, 2002 By: /s/ Michael D. Hays ----------------------------------------- Michael D. Hays President and Chief Executive Officer Date: August 14, 2002 By: /s/ Patrick E. Beans ----------------------------------------- Patrick E. Beans Vice President, Treasurer, Secretary and Chief Financial Officer (Principal Financial and Accounting Officer) 13 NATIONAL RESEARCH CORPORATION EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q For the Quarterly Period ended June 30, 2002 Exhibit ------- (99.1) Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (99.2) Certification of the Vice President, Treasurer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 14 EX-99.1 3 sdc178b.txt CERTIFICATION OF PRESIDENT AND CEO Exhibit 99.1 Written Statement of the President and Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned President and Chief Executive Officer of National Research Corporation (the "Company"), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2002 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Michael D. Hays - ------------------------------------ Michael D. Hays August 14, 2002 EX-99.2 4 sdc178c.txt CERTIFICATION OF VP, TREASURER AND CFO Exhibit 99.2 Written Statement of the Vice President, Treasurer, and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Vice President, Treasurer, and Chief Financial Officer of National Research Corporation (the "Company"), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2002 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Patrick E. Beans - ------------------------------------ Patrick E. Beans August 14, 2002 -----END PRIVACY-ENHANCED MESSAGE-----