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):	May 1, 2007

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)

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 May 1, 2007, National Research Corporation (the "Company") issued a press release announcing its earnings for the quarter ended March 31, 2007. A copy of such press release is furnished as Exhibit 99.1 and is incorporated by reference herein.

        On May 2, 2007, the Company held a conference call and online Web simulcast in connection with the Company's announcement of its earnings for the quarter ended March 31, 2007. A copy of the script for such conference call and simulcast is furnished as Exhibit 99.2 and is incorporated by reference herein. An archive of such conference call and simulcast and the related question and answer session will be available online at www.earnings.com.

Item 9.01. Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

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

(99.1) Press Release of National Research Corporation, dated May 1, 2007.

(99.2) Script for conference call and online Web simulcast, held May 2, 2007.

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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:    May 2, 2007

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 May 1, 2007

Exhibit
Number

(99.1)     Press Release of National Research Corporation, dated May 1, 2007.

(99.2)     Script for conference call and online Web simulcast, held May 2, 2007.

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EX-99.1

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

NATIONAL RESEARCH CORPORATION ANNOUNCES
FIRST QUARTER 2007 RESULTS
_______________________________________________

Net New Contracts Signed Sets Another Record

LINCOLN, Nebraska (May 1, 2007) — National Research Corporation (NASDAQ:NRCI) today announced results for the first quarter ended March 31, 2007.

o Quarterly revenues increased by 29%

o Quarterly net income increased by 31%

o Quarterly earnings per share of $0.23, up 28%

o Quarterly net new contracts reached a record $4.1 million

        Commenting on the first quarter results, Michael D. Hays, chief executive officer of National Research Corporation, said, “I’m pleased with our first quarter performance with revenue, net income and EPS all registering strong growth. We’re also thrilled with our continued sales growth. In fact, the $4.1 million of net new contracts signed in the first quarter is the highest since we started reporting this metric in June 2004, and is 21% greater than the fourth quarter 2006.”

        Revenues for the quarter ended March 31, 2007, were $12.2 million, compared to $9.5 million for the same period in 2006, an increase of 29%. Net income for the quarter ended March 31, 2007, was $1.6 million, or $0.23 per basic and diluted share, compared with net income of $1.2 million, or $0.18 per basic and diluted share, in the prior year period.

        In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “The quarter showed good growth in most core businesses and, as anticipated, with the added revenue from TGI, our growth rates surpassed what we would normally expect. Given TGI’s top-line contribution and revenue growth in the other business units, we are seeing greater leverage of certain expense categories, which is expanding our operating income margin.”

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NRCI Announces First Quarter Results
Page 2
May 1, 2007

        A listen-only simulcast of National Research Corporation’s 2007 first quarter conference call will be available online at www.earnings.com on May 2, 2007, beginning at 11:00 a.m. Eastern Time. The online replay will follow approximately an hour later and continue for 30 days.

        National Research Corporation, headquartered in Lincoln, Nebraska, is a leading provider of performance measurement, improvement services, and governance education to the healthcare industry in the United States and Canada.

        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 First Quarter Results
Page 3
May 1, 2007

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

	Three Months Ended March 31,
	2007			2006
Revenues	$	12,205		$	9,476
Operating expenses:
Direct expenses		5,448			4,100
Selling, general and administrative		3,400			3,006
Depreciation and amortization		627			470
Total operating expenses		9,475			7,576
Operating income		2,730			1,900
Other income (expense):
Interest income		14			82
Interest expense		(167	)		(10	)
Other, net		16			(14	)
Total other income (expense)		(137	)		58
Income before income taxes		2,593			1,958
Provision for income taxes		999			741
Net income	$	1,594		$	1,217
Net income per share, basic	$	0.23		$	0.18
Net income per share, diluted	$	0.23		$	0.18
Weighted average shares outstanding:
Basic		6,842			6,819
Diluted		6,964			6,918

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NRCI Announces First Quarter Results
Page 4
May 1, 2007

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

	Mar. 31, 2007		Dec. 31, 2006
ASSETS	(Unaudited)
Current Assets:
Cash and cash equivalents	$	1,358	$	876
Short-term investments		1,028		1,110
Accounts receivable, net		8,926		6,734
Income taxes recoverable		--		898
Other current assets		2,620		3,379
Total current assets		13,932		12,997
Net property and equipment		11,686		11,716
Other, net		36,906		36,819
Total Assets	$	62,524	$	61,532

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	1,564		$	1,511
Deferred revenue		10,465			8,264
Accrued compensation		1,595			1,594
Notes payable		726			3,110
Income taxes payable		29			--
Total current liabilities		14,379			14,479
Non-current liabilities		10,144			10,303
Total Liabilities		24,523			24,782
Shareholders' Equity:
Common stock, $0.001 par value; 20,000,000 shares authorized;
issued 7,869,778 in 2007 and 7,827,848 in 2006;
outstanding 6,920,261 in 2007 and 6,890,631 in 2006		8			8
Additional paid-in capital		22,326			21,820
Retained earnings		27,252			26,488
Accumulated other comprehensive income		391			358
Treasury stock		(11,976	)		(11,924	)
Total shareholders' equity		38,001			36,750
Total liabilities and shareholders' equity	$	62,524		$	61,532

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EX-99.2

Mike:

Thank you, ___________, and welcome everyone to National Research Corporation’s first quarter 2007 conference call. My name is Mike Hays, the Company’s CEO, and joining me on the call today is Pat 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.

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Mike:

Thank you, Pat, and again, welcome everyone to our first quarter call.

The Company had a good first quarter with revenue and net income growth in the 30% range over the first quarter 2006. This is especially positive given that first quarter 2006 revenue was up 44% over the first quarter 2005, which established a very strong comparable.

During the first quarter, we saw growth in all business units except Healthcare Market Guide, which fell far short of its fourth quarter 2006 performance. Net new sales continue to set records suggesting the market remains positively inclined to our portfolio of products.

Let me now turn the call back to Pat for a detailed review of our quarterly financial performance.

Pat:

Thanks, Mike.

Company revenue for the three months ended March 31, 2007, was $12.2 million, compared to $9.5 million during the same period in 2006, a 29% increase.

2

For the three months ended March 31, 2007, net income for the Company was $1.6 million or $0.23 per basic and diluted share, compared to $1.2 million or $0.18 per basic and diluted share for the same period in 2006. The net income margin for the first quarter 2007 was 13%.

Operating income for the quarter ending March 31^st was $2.7 million or 22.4% of revenues, compared to 20% in the first quarter 2006.

During the first quarter 2007, direct expenses as a percentage of revenue were 45%, which is at the highest end of our model of 43 to 45%. For the year 2007, we believe that we’ll reduce direct expenses down slightly to end the year in the middle of our range at 44% of revenue.

During the first quarter 2007, selling, general and administrative costs represented 28% of revenue, compared to 32% in the first quarter 2006. Looking at 2007, we should see SG&A expenses being leveraged against higher revenue. For the year 2007, we may be outside our model of 23 to 25% with SG&A expense, but should be able to reduce it below what it is currently after the first couple of quarters of 2007.

The dollar expense of depreciation and amortization increased from $470,000 in 2006 to $627,000 in 2007 due to the acquisition of The Governance Institute, however, the expense as a percent of revenue remained constant at 5%. For 2007, we expect the annualized depreciation and amortization expense as a percentage of total revenue to be at the lower end of our model of 4.5 to 6% given continued revenue growth.

3

In 2007, we also expect continued lower interest income and higher interest expense than historical benchmarks due to the TGI acquisition. The increase in interest expense should be offset by TGI’s earnings.

Cash flow from operations for the first three months of 2007 was $4.4 million, compared to $1.2 million for the first three months of 2006. Cash flow was higher quarter-over-quarter due to the timing of billings, collections, and estimated tax payments. Cash and short-term investments as of March 31, 2007, were $2.4 million.

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

Mike:

Thank you, Pat.

From Pat’s comments, I’d like to point out that our increased revenue is beginning to provide for leverage of certain expenses, most notably SG&A, which we anticipate will continue. If so, it will bring us back in line with our historical performance of 25% operating income from which we fell short of in 2006.

4

Total Recurring Contract Value as of March 31, 2007, was $48.9 million. This increase in recurring contract value was again driven by net new sales. As mentioned, the marketplace is continuing to gravitate towards our unique product portfolio. This positive response is being seen not only among current clients increasing their scope of current projects and purchasing new products, but more and more new clients selecting NRC as well.

First quarter net new sales of $4.1 million were up 21% from the fourth quarter 2006 sales of $3.4 million, and have set another record for NRC. This record is particularly impressive given Healthcare Market Guide sales in the first quarter were only $271,000 compared to $679,000 in the fourth quarter 2006. In other words, net new sales for non-Healthcare Market Guide products grew from $2.7 million in the fourth quarter 2006 to $3.9 million this quarter.

While we are clearly pleased with this new sales record, I should remind you we do not expect, nor should you expect, the company to set new sales records quarter after quarter.

That said, in terms of sales associate head count, we currently stand at 41 and will be adding nine additional associates bringing the total for the company to 50.

5

Other material developments in the quarter have centered on expanding The Governance Institute’s offerings and applying their membership model to other NRC business units. TGI has expanded its number of member conferences in 2007, bringing the number from six major conferences in 2006, to nine this year. In addition, as suggested in our last earnings call, TGI, as well as our other business units, are moving forward with testing additional subscription-based membership programs. The membership model used by TGI, as well as The Corporate Executive Board Company and, closer to home in the healthcare space, The Advisory Board Company, is highly attractive to us and we are actively testing a number of programs that match this model. We are hopeful that several of these programs will pass the market acceptance testing and, if so, will be rolled out in 2007.

I would now like to open the call for your questions.

Operator:

Closing Statement.

Thank you for your time today. Pat and I looking forward to talking to you again next quarter.

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