8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

_________________

Date of Report
(Date of earliest
event reported):	February 8, 2005

National Research Corporation

(Exact name of registrant as specified in its charter)

Wisconsin	0-29466	47-0634000
(State or other	(Commission File	(IRS Employer
jurisdiction of	Number)	Identification No.)
incorporation)

1245 Q Street, Lincoln, Nebraska 68508

(Address of principal executive offices, including zip code)

(402) 475-2525

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.    Results of Operations and Financial Condition.

        On February 8, 2005, National Research Corporation (the “Company”) issued a press release announcing its earnings for the quarter and year ended December 31, 2004. A copy of such press release is furnished as Exhibit 99.1 and is incorporated by reference herein.

        On February 9, 2004, the Company held a conference call in connection with the Company’s announcement of its earnings for the quarter and year ended December 31, 2004. A copy of the script for such conference call is furnished as Exhibit 99.2 and is incorporated by reference herein. An archive of such conference call and the related question and answer session will be available online at www.fulldisclosure.com.

Item 9.01.    Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Exhibits. The following exhibits are being furnished herewith:

(99.1) Press Release of National Research Corporation, dated February 8, 2005.

(99.2) Script for conference call, held February 9, 2005.

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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 hereunto duly authorized.

Date: February 9, 2005

NATIONAL RESEARCH CORPORATION

By:  /s/ Patrick E. Beans

        Patrick E. Beans

        Vice President, Treasurer, Secretary and Chief Financial Officer

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NATIONAL RESEARCH CORPORATION

Exhibit Index to Current Report on Form 8-K
Dated February 8, 2005

Exhibit
Number

(99.1) Press Release of National Research Corporation, dated February 8, 2005.

(99.2) Script for conference call, held February 9, 2005.

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EX-99.1

1245 "Q" Street
Lincoln, NE 68508
Phone: 402-475-2525
Fax: 402-475-9061

Contact: Patrick E. Beans
Chief Financial Officer
402-475-2525

NATIONAL RESEARCH CORPORATION ANNOUNCES
RESULTS FOR THE YEAR AND FOURTH QUARTER

LINCOLN, Nebraska (February 8, 2005) — National Research Corporation (NASDAQ/NM:NRCI), a leader in healthcare performance measurement, today announced results for the fourth quarter and year ended December 31, 2004.

        Revenues for the year ended December 31, 2004, increased 10.3% to a record $29.7 million compared with revenues of $26.9 million for the same period in 2003. Net income for the year ended December 31, 2004, increased to $4.6 million compared with net income of $4.4 million in the prior year. Earnings per share increased 4.8% to $0.63 per basic and diluted share compared with $0.60 per basic and diluted share in the prior year.

        Revenues for the fourth quarter ended December 31, 2004, decreased 4.6% to $6.4 million compared with revenues of $6.7 million for the fourth quarter of 2003. Net income for the fourth quarter of 2004 decreased 26.6% to $921,000, or $0.13 per basic and diluted share, compared with net income of $1.3 million, or $0.17 per basic and diluted share, for the same period in 2003.

        Commenting on the results, Michael D. Hays, chief executive officer of National Research Corporation, said, “As previously announced, our fourth quarter 2004 results were affected by continued volatility in the federal government sector of our revenue base. This, along with the Company’s sales expansion expense, will disproportionately impact our first quarter 2005 results as well. As noted in our previous guidance, we now expect first quarter 2005 earnings per share of approximately $0.08.”

        Patrick E. Beans, chief financial officer of National Research Corporation, added, “Even with the $0.08 first quarter 2005 earnings per share guidance, we still expect year-over-year growth, primarily as a result of increasing our core business.”

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NRCI Announces Fourth Quarter and Year-End Results
Page 2
February 8, 2005

        A listen-only simulcast of National Research Corporation’s fourth quarter and year-end conference call will be available online at www.fulldisclosure.com on February 9, 2005, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately two hours later and continue for 30 days.

        National Research Corporation, headquartered in Lincoln, Nebraska, is a leading provider of ongoing survey-based performance measurement, analysis, tracking services and improvement services to the healthcare industry. The Company addresses the growing need of healthcare providers and payors to measure the care outcomes, specifically experience and health status, of their patients and/or members. The Company has been at the forefront of the industry in developing tools that enable healthcare organizations to obtain performance measurement information necessary to improve their business practices.

        This press release includes “forward-looking” statements related to the Company that can generally be identified as describing the Company’s future plans, objectives or goals. Such forward-looking statements are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the factors that could affect the Company’s future results, please see the Company’s filings with the Securities and Exchange Commission.

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NRCI Announces Fourth Quarter and Year-End Results
Page 3
February 8, 2005

NATIONAL RESEARCH CORPORATION
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)

	Three Months Ended December 31,						Year Ended December 31,
	2004			2003			2004			2003
Revenues	$	6,430		$	6,742		$	29,683		$	26,922
Operating expenses:
Direct expenses		2,680			2,749			12,869			12,029
Selling, general and administrative		1,817			1,606			7,394			5,987
Depreciation and amortization		526			477			2,018			1,941
Total operating expenses		5,023			4,832			22,281			19,957
Operating income		1,407			1,910			7,402			6,965
Other income (expense):
Interest income		96			79			345			293
Interest expense		(104	)		(106	)		(459	)		(428	)
Other, net		32			38			(5	)		85
Total other income (expense)		24			11			(119	)		(49	)
Income before income taxes		1,431			1,921			7,283			6,916
Provision for income taxes		510			666			2,732			2,532
Net income	$	921		$	1,255		$	4,551		$	4,384
Net income per share, basic	$	0.13		$	0.17		$	0.63		$	0.60
Net income per share, diluted	$	0.13		$	0.17		$	0.63		$	0.60
Weighted average shares outstanding:
Basic		7,142			7,271			7,181			7,259
Diluted		7,211			7,314			7,249			7,326

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NRCI Announces Fourth Quarter and Year-End Results
Page 4
February 8, 2005

NATIONAL RESEARCH CORPORATION
Unaudited Consolidated Condensed Balance Sheets
(Dollars in thousands)

	Dec. 31, 2004			Dec. 31, 2003
ASSETS
Current Assets:
Cash and cash equivalents	$	3,648		$	3,441
Short-term investments		15,348			12,767
Accounts receivable, net		3,392			5,479
Other current assets		3,066			1,834
Total current assets		25,454			23,521
Net property and equipment		12,355			12,189
Other, net		9,854			9,963
Total Assets	$	47,663		$	45,673
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	851		$	910
Deferred revenue		4,036			4,439
Accrued compensation		976			969
Notes payable		156			142
Income taxes payable		--			244
Total current liabilities		6,019			6,704
Noncurrent liabilities		6,917			6,545
Total Liabilities		12,936			13,249
Shareholders' Equity:
Common stock, $0.001 par value; 20,000,000 shares authorized;
7,684,006 and 7,639,819 shares issued, respectively;
7,174,706 and 7,305,819 outstanding, respectively		8			8
Additional paid-in capital		19,346			18,875
Retained earnings		20,382			15,832
Unearned compensation		(182	)		(394	)
Accumulated other comprehensive income		(71	)		(27	)
Treasury stock		(4,756	)		(1,870	)
Total shareholders' equity		34,727			32,424
Total Liabilities and Shareholders' Equity	$	47,663		$	45,673

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EX-99.2

Mike:

Thank You ___________. I’d like to welcome all participants to National Research Corporation’s fourth quarter and year-end 2004 conference call. My name is Mike Hays, the Company’s CEO, and joining me on the call today is Patrick Beans our CFO.

Before we commence our remarks, I would ask Pat to review conditions related to any forward-looking statements that may be made as part of today’s call. Pat.

Pat:

Thank you, Mike. This conference call includes forward-looking statements related to the company that involve risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the facts that could affect the company’s future results, please see the company’s filings with the Securities and Exchange Commission. With that, I’ll turn it back to you, Mike.

Mike:

Thank you, Pat.

Among the topics we will cover today will be highlights of our performance in the fourth quarter, as well as year-end 2004. I will also provide various key metrics and highlight activities planned for the year 2005, after which we will open the call to questions.

To begin, fourth quarter earnings per share was $0.13 or 14.3% of the $6.4 million in revenues for the quarter. Both revenue and earnings were below our expectations, driven largely by the volatility in federal sector projects. This volatility involved a combination of projects decreasing in scope or being canceled, while others were added or increased in scope. Year-end 2004 earnings were $4.5 million which was 15.3% of year-end revenues of $29.6 million.

I would now ask Pat to provide additional details on our financial performance for the quarter and year. Pat.

Pat:

During the year 2004, NRC achieved record revenues of $29.7 million, exceeding the record $26.9 million set in 2003. While this growth was below our goal, it did represent a 10% increased growth in revenues over 2003.

For the year ended 2004, the Company’s net income was $4.6 million or $0.63 EPS. This represented a 5% increased growth in earnings per share which again, was below our growth rate goal. The net income margin was 15.3% of revenue which was within model.

Looking at the current year 2005, we expect to operate within our model for the year. Direct expenses are expected to stay within the range of our model of 43 to 45% of revenue. Selling, general and administrative expenses are expected to stay within our model in the same range of 23 to 25% of revenue. Depreciation and amortization as a percentage of revenue should remain within the model at 5.5 to 6.5% for 2005. The income taxes should remain in the range of 9-10% of revenue which should give us a net income margin of about 15% of revenue.

Given we expect 2005 revenues to be greater than 2004, some may look at margin expansion. We, however, will continue to invest in the business and expect margins to follow our model and mirror year-end 2003 and 2004 margins.

Cash flow from operations for the year 2004 was $7.8 million. The company continues to improve its strong financial position. The balance sheet has improved again this quarter and should continue to improve even more during 2005. Cash and short-term investments as of December 31, 2004, were approximately $18.9 million, or $2.60 per share.

I will now turn it back over to Mike for additional discussion.

Mike:

Thank you, Pat.

During the first quarter of 2005, we expect volatility in the federal sector to continue, which will likely reduce first quarter revenue by about $1 million dollars compared to quarter one 2004. Independent of this revenue impact, we plan to maintain the increased expense structure of our sales expansion efforts due to the simple fact that the plan is working well by creating growth for our core business. As a result of the expected reduced revenues and increased expenses for the first quarter, EPS is likely to be $0.08 per share as was previously announced on January 25^th.

For the balance of 2005, we expect positive period-over-period comparisons in each of the second, third and fourth quarters. With this expected growth, we will more than make up for the first quarter decline and end the year 2005 with revenues and earnings higher than 2004.

We are not providing exact earnings guidance for the year 2005; however, many of you that work with models have asked us to point you in the right direction. As stated, we expect to have earnings greater than the 2004 EPS of $.63, which suggests at least an EPS of $0.64. When the first quarter’s estimated EPS of $0.08 is subtracted from $0.64, it shows we will need a minimum of $0.56 in earnings for the balance of 2005. This $0.56 would compare to EPS of $0.47 for the last three quarters of 2004, suggesting a 20% growth in the last three quarters of 2005. This is a very simple example but perhaps helpful.

The foundation for growth in 2005 is our base of recurring contract value which, with reductions in federal sector contract value, starts the year 2005 at $29.4 million, essentially equal to the company’s total 2004 revenues. To this base we expect continued growth in the company’s core business which showed 17% growth in recurring contract value 2004 over 2003 in the start-up year of our three-year sales expansion plan. The first year impact of this increased sales activity generated a 52% growth in net new sales for the year ending 2004 over 2003.

By staying focused and not altering our plans, we expect to reduce revenue concentration risk and take advantage of the market changes which are now inevitable. One driver of market change that we have discussed is HCAHPS. The national rollout of the program is set for the second quarter 2005. From the start, the program as now planned involves continuous measurement, meaning the estimated 3,700 participating hospitals will measure patient experiences among a sample of their patients each month, with systematic updates of the hospitals’ performance publicly reported.

As we have stated before, meeting the minimum requirements of HCAHPS is not where we see the opportunity. The growth in our category will be from the additional measurement necessary to pinpoint strengths and weakness and the incremental efforts to show improvement. Given HCAHPS is now continuous throughout the year, so will perhaps the focus on measurement and improvement.

________, I would now open the call to questions.