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):	August 4, 2009

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 August 4, 2009, National Research Corporation (the “Company”) issued a press release announcing its earnings for the quarter ended June 30, 2009. A copy of such press release is furnished as Exhibit 99.1 and is incorporated by reference herein.

        On August 5, 2009, the Company held a conference call and online Web simulcast in connection with the Company’s announcement of its earnings for the quarter ended June 30, 2009. 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 August 4, 2009.

(99.2) Script for conference call and online Web simulcast, held August 5, 2009.

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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: August 5, 2009

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 August 4, 2009

Exhibit
Number

(99.1) Press Release of National Research Corporation, dated August 4, 2009.

(99.2) Script for conference call and online Web simulcast, held August 5, 2009.

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EX-99.1

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

NATIONAL RESEARCH CORPORATION ANNOUNCES
SECOND QUARTER AND YEAR-TO-DATE 2009 RESULTS

Board of Directors Declares Third Quarter Dividend

LINCOLN, Nebraska (August 4, 2009) — National Research Corporation (NASDAQ:NRCI) today announced results for the second quarter 2009.

• Quarterly revenue up 14% to $13.6 million

• Quarterly operating income up 6%

• Quarterly earnings per share $0.24

• Year-to-date growth: revenue up 20%; operating income and basic earnings per share up 21%

        Commenting on the second quarter results, Michael D. Hays, president and chief executive officer of National Research Corporation, said, “Our second quarter revenue growth was respectable, while growth in net income was not. That said, year-to-date performance is tracking close to plan. Second quarter net new sales were 15% ahead of first quarter which is a positive indication for the second half of 2009.”

        Revenue for the quarter ended June 30, 2009, was $13.6 million, compared to $11.9 million for the same period in 2008. Net income for the second quarter was $1.6 million, or $0.24 basic and diluted earnings per share, compared with net income of $1.6 million, or $0.24 basic and $0.23 diluted earnings per share, in the prior year period. Operating income increased 6% to $2.7 million for the quarter ended June 30, 2009, compared to $2.6 million for the same period in 2008.

        Revenue for the first half of 2009 increased 20% to $30.3 million, compared to $25.4 million for the same period in 2008. Net income for the first six months of 2009 increased 19% to $4.3 million, resulting in $0.64 basic and $0.63 diluted earnings per share, up 21% and 22% respectively, over the same period in 2008.

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NRCI Announces Second Quarter 2009 Results
Page 2
August 4, 2009

        The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.16 (sixteen cents) per share payable September 30, 2009, to shareholders of record as of the close of business on September 4, 2009.

        In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “Net income for the quarter was lower than we desire at 12% of revenue. For the third quarter 2009, we anticipate net income back in the 15% range which aligns with our model.”

        A listen-only simulcast of National Research Corporation’s 2009 second quarter conference call will be available online at www.earnings.com on August 5, 2009, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately one 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 Second Quarter 2009 Results
Page 3
August 4, 2009

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Revenue	$	13,594		$	11,901		$	30,334		$	25,355
Operating expenses:
Direct expenses		6,304			5,320			13,581			11,247
Selling, general and administrative		3,697			3,348			7,677			6,907
Depreciation and amortization		891			676			2,001			1,342
Total operating expenses		10,892			9,344			23,259			19,496
Operating income		2,702			2,557			7,075			5,859
Other income (expense):
Interest income		--			8			1			27
Interest expense		(85	)		(53	)		(223	)		(97	)
Other, net		(98	)		(13	)		(57	)		(20	)
Total other income (expense)		(183	)		(58	)		(279	)		(90	)
Income before income taxes		2,519			2,499			6,796			5,769
Provision for income taxes		910			918			2,537			2,185
Net income	$	1,609		$	1,581		$	4,259		$	3,584
Net income per share, basic	$	0.24		$	0.24		$	0.64		$	0.53
Net income per share, diluted	$	0.24		$	0.23		$	0.63		$	0.52
Weighted average shares outstanding:
Basic		6,637			6,637			6,635			6,728
Diluted		6,734			6,793			6,720			6,892

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NRCI Announces Second Quarter 2009 Results
Page 4
August 4, 2009

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

	June 30, 2009			Dec. 31, 2008
ASSETS
Current Assets:
Cash and cash equivalents	$	404		$	1,109
Accounts receivable, net		7,395			6,531
Income taxes recoverable		687			574
Other current assets		2,533			2,225
Total current assets		11,019			10,439
Net property and equipment		14,403			13,747
Other, net		46,842			47,959
Total Assets	$	72,264		$	72,145
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	2,122		$	2,208
Deferred revenue		14,203			12,926
Accrued compensation		1,895			1,375
Notes payable		820			4,581
Total current liabilities		19,040			21,090
Non-current liabilities		11,924			12,457
Total Liabilities		30,964			33,547
Shareholders’ Equity:
Common stock, $0.001 par value; 20,000,000 shares authorized;
issued 8,016,021 in 2009 and 8,019,922 in 2008;
outstanding 6,660,517 in 2009 and 6,667,517 in 2008		8			8
Additional paid-in capital		27,605			27,217
Retained earnings		35,805			33,677
Accumulated other comprehensive income (loss)		253			(6	)
Treasury stock		(22,371	)		(22,298	)
Total shareholders’ equity		41,300			38,598
Total liabilities and shareholders’ equity	$	72,264		$	72,145

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EX-99.2

Mike:

Thank you, ___________, and welcome everyone to National Research Corporation’s second quarter 2009 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.

1

Mike:

Thank you, Pat.

As mentioned in the earnings release, second quarter financial performance was mixed. Revenue growth in the 14% range, while below our aspirations, is better than many firms. On the other hand, producing incremental revenue with no added contribution to the bottom line is extremely poor performance. Year-to-date 2009 growth rates in the 20% range for both top and bottom line is positive, yet should provide us no place to hide regarding the need to consistently achieve our stated net income goal of 15%

Before I review plans now in place to achieve our net income goals, let me first turn the call back to Pat for his review of our second quarter and year-to-date financials. Pat.

Pat:

Thanks, Mike.

For the three-months ended June 30, 2009, the Company’s revenue was $13.6 million, up 14.2%, compared to $11.9 million during the same period in 2008. For the six-months ended June 30, 2009, the Company achieved revenue of $30.3 million, compared to $25.4 million during the same period in 2008, a 19.6% increase.

2

For the three-months ended June 30, 2009, net income for the Company was $1.6 million or $0.24 per dilutive share, compared to $0.23 per dilutive share in the same quarter last year. As Mike suggested, our net income was far below our targets. Several changes have already been made which will move net income back to 15% of revenue. Mike will review those plans with you during this call.

For the six-months ended June 30, 2009, net income for the Company was $4.3 million, or $0.63 per share, compared to $3.6 million, or $0.52 per share, for the same period in 2008, a 19% increase in net income and a 21% increase in earnings per share.

During the second quarter 2009, direct expenses as a percentage of revenue were 46%, compared to 45% in 2008. Forty-six percent is higher than our model for the quarter, but within the range at 45% for the six months ended June 30, 2009.

During the second quarter 2009, the selling, general and administrative costs were $3.7 million, compared to $3.3 million during the second quarter 2008. SG&A expenses for this quarter were 27% of revenue, compared to 28% in the same quarter 2008. For the six-month period ended June 30, 2009, the SG&A was 25% of revenue, again down when compared to 27% in the same period in 2008.

3

Depreciation and amortization were 7% of revenue during the second quarter in 2009, compared to 6% in the same quarter 2008. We expect this expense to be in this range or lower for the balance of 2009 due, in part, to the acquisition of My InnerView at the end of 2008.

Cash flow from operations for the six months ending June 30, 2009, was $7.6 million, compared to $7.1 million for the same period in 2008. During the first six months of 2009, the Company paid down notes payable by $4.1 million. Cash and short-term investments as of June 30, 2009, were $404,000.

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

Mike:

Thank you, Pat.

4

Focusing first on the expense side of our second quarter performance, two issues account for our poor performance. One, we did not watch expenses as well as we’ve always done. With each business unit showing various growth patterns, we did not always allocate resources correctly. We have now doubled up our attention and are now pouring gasoline where we are making the greatest returns, adjusting the cost structures of business units that should be producing more leverage, and holding back where today is not the right day.

The second and primary driver of low margins is our newly acquired business unit, My InnerView, whose cost structure is too great in general and became magnified in the second quarter during which revenue is seasonally lower than other quarters. I have assigned Joe Carmichael the task of working with My InnerView management to right size the cost structure with the appropriate degree of flexibility to achieve superior profitability every quarter. In July, $600,000 of costs were extracted with additional changes yet to take place.

In summary, between the right cost structure in place at My InnerView and with mindful allocations of monetary resources, I’m comfortable we can more consistently achieve our profit margins. And, of equal importance, optimize our top line growth.

5

Focusing on top-line performance for the second quarter, NRC Picker showed the same trends for the second quarter as were registered in the first quarter, that being flat to down. Payer Solutions, which showed a massive jump in revenue in the first quarter, ended the second quarter down slightly year-over-year. The Governance Institute, however, reversed its negative first-quarter performance to positive top-line growth in the second quarter. TGI, which serves 600 CEOs and 11,000 trustees of the nation’s hospitals, seems to be a good gauge of how the economy must be playing out for hospitals. The CEOs and board’s are the first to pull back, as they did in the second half of 2008, and may be the first to loosen up as we have seen the last month or so of the second quarter. If this is an accurate indicator, the industry is beginning to behave in a more optimistic manner. Despite the headwind circling within the healthcare sector, My InnerView showed revenue growth again in second quarter as did our Healthcare Market Guide business unit. HealthCare Market Guide’s success in upgrading its annual subscribers to the new monthly subscription product continues. Since product launch, HCMG has converted half or more of its members to Ticker, which provides monthly refreshes of “the voice of consumer” in 150 or so markets across the country. While Ticker upgrades are positive, and we continue to push for 100%, it does represent deferred revenue over the follow-on 12-month period; revenue that would otherwise have been recognized at point of purchase.

6

With Ticker as its platform, HealthCare Market Guide is in the process of testing additional add-on options which capitalize on Ticker being a system of on-going tracking of consumer behaviors.

Another trend showing improvement in the second quarter was net new sales up 15% over the first quarter 2009. The actual dollar amount, $1.8 million, is still only half our historical average of net new sales, yet trending in a positive direction. Total Contract Value at $59 plus million, has not changed much in the past 90 days.

On the new product front, TGI tested a board portal which failed its market test due to cutbacks in software expenditures. We will likely re-test that product idea at a later time. Several other products will move through market tests in August. In addition, we have brought on two additional associates to round out our product development team.

Before I open the call to questions, let me mention that on the sales front we added to the newly created My InnerView sales team, as well as additional sales associates to the NRC Picker outside sales group during the second quarter.

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_____, I would now like to open the question and answer portion of the call.

Closing statement

First, let me thank you for your time today. As you can tell, we are moving forward on several fronts at an ever-increasing pace. As always, Pat and I look forward to keeping you abreast of our progress.

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