10-Q

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 September 30, 2012

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   T   No  £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes   T   No  £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer £ Accelerated filer £ Non-accelerated filer T Smaller reporting company £

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.)

Yes  £    No  T

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 November 1, 2012: 6,853,770 shares

NATIONAL RESEARCH CORPORATION

FORM 10-Q INDEX

For the Quarter Ended September 30, 2012

			Page No.
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets	4
		Condensed Consolidated Statements of Income	5
		Condensed Consolidated Statements of Comprehensive Income	6
		Condensed Consolidated Statements of Cash Flows	7
		Condensed Notes to Consolidated Financial Statements	8-15
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15-20
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
	Item 4.	Controls and Procedures	21
PART II.	OTHER INFORMATION
	Item 1A.	Risk Factors	22
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
	Item 6.	Exhibits	22
	Signatures		23
	Exhibit Index		24

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Special Note Regarding Forward-Looking Statements

Certain matters discussed in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements can generally be identified as such because the context of the statement includes phrases such as National Research Corporation (the “Company”) “believes,” “expects,” or other words of similar import.  Similarly, statements that describe the Company’s future plans, objectives or goals are also forward-looking statements.  Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results or outcomes to differ materially from those currently anticipated.  Factors that could affect actual results or outcomes include, without limitation, the following factors:

· The possibility of non-renewal of the Company’s client service contracts;

· The Company’s ability to compete in its markets, which are highly competitive, and the possibility of increased price pressure and expenses;

· The effects of an economic downturn;

· The possibility of consolidation in the healthcare industry;

· The impact of federal healthcare reform legislation or other regulatory changes;

· The Company’s ability to retain its limited number of key clients;

· The Company’s ability to attract and retain key managers and other personnel;

· The possibility that the Company’s intellectual property and other proprietary information technology could be copied or independently developed by its competitors;

· Regulatory developments; and

· The factors set forth under the caption “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as such section may be updated by Part II, Item 1A of the Company’s subsequently filed Quarterly Reports on Form 10-Q (including this Report).

Shareholders, potential investors and other readers are urged to consider these and other factors in evaluating the forward-looking statements, and are cautioned not to place undue reliance on such forward-looking statements.  The forward-looking statements included are only made as of the date of this Quarterly Report on Form 10-Q and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

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PART I – Financial Information

ITEM 1.    Financial Statements

NATIONAL RESEARCH CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts and par value, unaudited)

	September 30, 2012			December 31, 2011
Assets
Current assets:
Cash and cash equivalents	$	15,026		$	8,082
Trade accounts receivable, less allowance for doubtful accounts of $215 and $289in 2012 and 2011, respectively		14,206			11,187
Unbilled revenue		886			913
Prepaid expenses and other		1,909			1,166
Income tax receivable		90			--
Deferred income taxes		334			789
Total current assets		32,451			22,137
Property and equipment, net		12,907			13,613
Intangible assets, net		6,063			7,073
Goodwill		57,839			57,730
Other		169			123
Total assets	$	109,429		$	100,676
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of notes payable	$	13,076		$	1,861
Accounts payable		503			783
Accrued wages, bonus and profit sharing		3,779			3,591
Accrued expenses		2,802			1,519
Income taxes payable		--			145
Deferred revenue		17,527			16,500
Total current liabilities		37,687			24,399
Notes payable, net of current portion		--			12,625
Deferred income taxes		7,094			7,588
Deferred revenue		326			185
Other long term liabilities		253			325
Total liabilities		45,360			45,122
Shareholders’ equity:
Common stock, $0.001 par value; authorized 20,000,000 shares, issued 8,278,491 in 2012 and 8,117,849 in 2011,outstanding 6,824,355 in 2012 and 6,724,280 in 2011		8			8
Additional paid-in capital		35,880			31,080
Retained earnings		53,061			46,995
Accumulated other comprehensive income, foreign currency translation		1,267			907
Treasury stock, at cost; 1,454,136 shares in 2012 and 1,393,569 shares in 2011		(26,147	)		(23,436	)
Total shareholders’ equity		64,069			55,554
Total liabilities and shareholders’ equity	$	109,429		$	100,676

See accompanying notes to condensed consolidated financial statements.

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NATIONAL RESEARCH CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except for per share amounts, unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Revenue	$	21,386		$	18,549		$	64,425		$	56,655
Operating expenses:
Direct		8,769			7,471			26,333			21,489
Selling, general and administrative		5,821			5,572			17,541			17,651
Depreciation and amortization		1,149			1,312			3,606			3,790
Total operating expenses		15,739			14,355			47,480			42,930
Operating income		5,647			4,194			16,945			13,725
Other income (expense):
Interest income		8			4			20			8
Interest expense		(134	)		(155	)		(416	)		(480	)
Other, net		(29	)		74			(16	)		55
Total other expense		(155	)		(77	)		(412	)		(417	)
Income before income taxes		5,492			4,117			16,533			13,308
Provision for income taxes		1,915			1,470			5,168			4,876
Net income	$	3,577		$	2,647		$	11,365		$	8,432
Net income per share – basic	$	.53		$	.40		$	1.68		$	1.26
Net income per share – diluted	$	.51		$	.39		$	1.64		$	1.23
Weighted average shares and share equivalents outstanding – basic		6,791			6,679			6,754			6,666
Weighted average shares and share equivalents outstanding – diluted		6,961			6,850			6,941			6,845

See accompanying notes to condensed consolidated financial statements.

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NATIONAL RESEARCH CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, unaudited)

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012		2011
Net income	$	3,577	$	2,647		$	11,365	$	8,432
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	419	$	(497	)	$	360	$	(311	)
Other comprehensive income (loss)	$	419	$	(497	)	$	360	$	(311	)
Comprehensive income	$	3,996	$	2,150		$	11,725	$	8,121

See accompanying notes to condensed consolidated financial statements.

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NATIONAL RESEARCH CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Nine months ended September 30,
	2012			2011
Cash flows from operating activities:
Net income	$	11,365		$	8,432
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,606			3,790
Deferred income taxes		(413	)		1,139
Non-cash share-based compensation expense		179			538
Tax benefit from exercise of stock options		373			55
Loss on disposal of property and equipment		2			(1	)
Net changes in assets and liabilities:
Trade accounts receivable		(2,884	)		(3,208	)
Unbilled revenue		33			129
Prepaid expenses and other		(693	)		147
Accounts payable		(297	)		518
Accrued expenses, wages, bonuses and profit sharing		1,427			1,149
Income taxes receivable and payable		(235	)		906
Deferred revenue		1,131			769
Net cash provided by operating activities		13,594			14,363
Cash flows from investing activities:
Purchases of property and equipment		(1,890	)		(2,276	)
Earn out payments related to business acquisitions		--			(4,114	)
Net cash used in investing activities		(1,890	)		(6,390	)
Cash flows from financing activities:
Proceeds from notes payable		--			4,545
Payments on notes payable		(1,410	)		(5,910	)
Payments on capital lease obligations		(89	)		(104	)
Proceeds from exercise of stock options		1,058			567
Common stock withheld from vested restricted shares for payroll tax withholdings		(527	)		(146	)
Excess tax benefit from share-based compensation		1,353			354
Payment of dividends on common stock		(5,299	)		(4,435	)
Net cash used in financing activities		(4,914	)		(5,129	)
Effect of exchange rate changes on cash		154			(140	)
Increase in cash and cash equivalents		6,944			2,704
Cash and cash equivalents at beginning of period		8,082			3,519
Cash and cash equivalents at end of period	$	15,026		$	6,223
Supplemental disclosure of cash paid for:
Interest expense	$	394		$	449
Income taxes	$	3,897		$	2,375

See accompanying notes to condensed consolidated financial statements.

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NATIONAL RESEARCH CORPORATION AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.         BASIS OF CONSOLIDATION AND PRESENTATION

National Research Corporation (the “Company”) is a provider of performance measurement and improvement services, healthcare analytics and governance education to the healthcare industry in the United States and Canada.  The Company’s services, which are comprehensive, include data collection, healthcare analytics, best practice identification and effective delivery of value-added business intelligence that enables its clients to improve performance across key business metrics.  Through its extensive array of service capabilities and industry relationships, the Company is positioned to provide healthcare information services to organizations across a wide continuum of service delivery segments.

The Company has eight operating segments that are aggregated into one reporting segment because they have similar economic characteristics and meet the other aggregation criteria from the Financial Accounting Standards Board (“FASB”) guidance on segment disclosure.  The eight operating segments are: NRC Picker U.S. and NRC Picker Canada, which each offer renewable performance tracking and improvement services, custom research, subscription-based educational services and a renewable syndicated service; Ticker, which offers stand-alone market information, as well as a comparative performance database to allow the Company’s clients to assess their performance relative to the industry, to access best practice examples, and to utilize competitive information for marketing purposes; Payer Solutions, which offers functional disease-specific and health status measurement tools; The Governance Institute (“TGI”), which offers subscription-based governance information and educational conferences designed to improve the effectiveness of hospital and healthcare systems by continually strengthening their healthcare boards, medical leadership and management performance in the United States; My InnerView (“MIV”), which provides quality and performance improvement solutions to the senior care industry; Outcome Concept Systems, Inc. (“OCS”), which provides financial and operational benchmarks and analytics to home care and hospice providers; and Illuminate, a patient outreach and discharge program designed to facilitate service and clinical recovery within the critical hours after a patient is discharged from a healthcare setting within the acute care, skilled nursing, physician and home health environments.

The condensed consolidated balance sheet of the Company at December 31, 2011, was derived from the Company’s audited consolidated 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.

Information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted.  These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto that are included in the Company’s Form 10-K for the fiscal year ended December 31, 2011, filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2012.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

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The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, National Research Corporation Canada.  All significant intercompany transactions and balances have been eliminated.

The functional currency of the Company’s foreign subsidiary, National Research Corporation Canada, is the subsidiary’s local currency.  The Company translates the assets and liabilities of its foreign subsidiary at the period-end rate of exchange and its foreign subsidiary’s income statement balances at the average rate prevailing during the period.  The Company records the resulting translation adjustment in accumulated other comprehensive income, a component of shareholders’ equity.  Gains and losses related to transactions denominated in a currency other than the subsidiary’s local currency and short-term intercompany accounts are included in other income (expense) in the consolidated statements of income.

Fair Value Measurements

The Company’s 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 the Company’s market assumptions.  The inputs are then classified into the following hierarchy: (1) Level 1 Inputs—quoted prices in active markets for identical assets and liabilities; (2) Level 2 Inputs—observable market-based inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets, quoted prices for similar or identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and (3) Level 3 Inputs—unobservable inputs.

The following details the Company’s financial assets and liabilities within the fair value hierarchy at

September 30, 2012, and December 31, 2011:

Fair Values Measured on a Recurring Basis

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of September 30, 2012
Money Market Funds	$	4,085	$	--	$	--	$	4,085
Commercial Paper		10,624		--		--		10,624
Total	$	14,709	$	--	$	--	$	14,709
As of December 31, 2011
Money Market Funds	$	3,243	$	--	$	--	$	3,243
Commercial Paper		4,659		--		--		4,659
Total	$	7,902	$	--	$	--	$	7,902

The Company’s long-term debt is recorded at historical cost.  The following are the carrying amounts and estimated fair values, based primarily on estimated current rates available for debt of the same remaining duration and adjusted for nonperformance and credit risk:

	September 30, 2012		December 31, 2011
	(In thousands)
Total carrying amounts of long-term debt	$	13,076	$	14,486
Estimated fair value of long-term debt	$	13,186	$	14,498

The Company estimated the fair value of its long-term, fixed-rate debt using a Level 2 discounted cash flow analysis based on current borrowing rates for debt with similar maturities.

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The Company believes that the carrying amounts of trade accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short maturity of those instruments.  All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which includes goodwill and non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment).  As of September 30, 2012, and December 31, 2011, there was no indication of impairment related to the Company’s non-financial assets.

2.         INCOME TAXES

The Company’s effective tax rate decreased to 31.3% for the nine-month period ended September 30, 2012, compared to 36.6% for the same period in 2011.  The effective tax rate decreased to 34.9% for the three-month period ended September 30, 2012, compared to 35.7% for the same period in 2011.  This decrease was primarily the result of the recognition of an additional $79,000 in tax benefits due to the expiration of the U.S. Federal statute of limitations associated with certain tax positions.

The effective tax rate for the nine-month period ended September 30, 2012, is lower than the rate in the same period of 2011 primarily due to a reduction of current state income taxes by $45,000, as well as an adjustment to income taxes of $575,000 for decreases in deferred state tax rates resulting from legislative changes.  The Company also recorded federal tax credits of $87,000 and $198,000, and recognized an additional $79,000 in tax benefits when compared to 2011 due to the expiration of the U.S. Federal statute of limitations associated with certain tax positions.

The unrecognized tax benefit as of September 30, 2012, was $225,000, excluding interest of $11,000 and no penalties.  The full unrecognized tax benefits, if recognized, would favorably impact the effective income tax rate.  The Company believes it is reasonably possible that the total amount of unrecognized tax benefits could decrease during the next 12 months due to the expiration of the U.S. federal statute of limitations associated with certain other tax positions.  The Company accrues interest and penalties related to uncertain tax position in the statements of income as income tax expense.

3.         NOTES PAYABLE

On December 19, 2008, the Company borrowed $9.0 million under a term note to partially finance the acquisition of MIV.  In July 2010, the Company refinanced the existing term loan with a $6.9 million term loan.  The new term loan is payable in 35 monthly installments of $80,104, with a balloon payment of $4.8 million for the remaining principal balance and interest due on July 31, 2013.  Borrowings under the term note bear interest at an annual rate of 3.79%.  The outstanding balance of the term note at September 30, 2012, was $5.4 million.

On July 31, 2010, the Company borrowed $10.0 million under a term note to partially finance the acquisition of OCS.  The term loan is payable in 35 monthly installments of $121,190 with a balloon payment of $6.7 million for the remaining principal balance and interest due on July 31, 2013.  Borrowings under the term note bear interest at an annual rate of 3.79%.  The outstanding balance of the term note at September 30, 2012, was $7.7 million.

The Company expects to refinance the term notes prior to July 31, 2013.  If, however, the notes cannot be extended, the Company believes it has adequate cash flows from operations to meet its debt and capital needs.

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The term notes are secured by certain of the Company’s assets, including the Company’s land, building, trade accounts receivable and intangible assets.  The term notes contain various restrictions and covenants applicable to the Company, including requirements that the Company maintain certain financial ratios at prescribed levels and restrictions on the ability of the Company to consolidate or merge, create liens, incur additional indebtedness or dispose of assets.  As of September 30, 2012, the Company was in compliance with these restrictions and covenants.

The Company also has a revolving credit note that was renewed in June 2012 to extend the term to June 30, 2013.The maximum aggregate amount available under the revolving credit note is $6.5 million, subject to a borrowing base equal to 75% of the Company’s eligible accounts receivable.  Borrowings under the revolving credit note bear interest at a variable annual rate, with three rate options at the discretion of management as follows:  (1) 2.5% plus the daily reset one-month London Interbank Offered Rate (“LIBOR”) or (2) 2.2% plus the one-, two-, three-, six- or twelve-month LIBOR rate, or (3) the bank’s Money Market Loan Rate.  As of September 30, 2012, the revolving credit note did not have a balance.  According to the borrowing base requirements, the Company had the capacity to borrow $6.5 million as of September 30, 2012.

4.         SHARE-BASED COMPENSATION

The Company measures and recognizes compensation expense for all share-based payments.  The compensation expense is recognized based on the grant-date fair value of those awards.  All of the Company’s existing stock option awards and non-vested stock awards have been determined to be equity-classified awards.

The Company’s 2001 Equity Incentive Plan provides for the granting of stock options, stock appreciation rights, restricted stock, performance shares and other share-based awards and benefits up to an aggregate of 600,000 shares of the Company’s common stock.  Options granted may be either nonqualified or incentive stock options.  Options vest over one to five years following the date of grant and option terms are generally five to ten years following the date of grant.

The Company’s 2004 Non-Employee Director Stock Plan (the “2004 Director Plan”) is a nonqualified plan that provides for the granting of options with respect to 550,000 shares of the Company’s common stock.  The 2004 Director Plan provides for grants of nonqualified options to each director of the Company who is not employed by the Company.  On the date of each annual meeting of shareholders of the Company, options to purchase 12,000 shares of the Company’s common stock are granted to directors that are re-elected or retained as a director at such meeting.  Options vest one year following the date of grant and option terms are generally ten years following the date of grant, or three years in the case of termination of the outside director’s service.

The Company’s 2006 Equity Incentive Plan provides for the granting of options, stock appreciation rights, restricted stock, performance shares and other share-based awards and benefits up to an aggregate of 600,000 shares of the Company’s common stock.  Options granted may be either incentive stock options or nonqualified stock options.  Vesting terms vary with each grant and option terms are generally five to ten years.  Options vest over five years following the date of grant and option terms are generally five to ten years following the date of grant.

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The Company granted options to purchase 79,630 and 166,008 shares of the Company’s common stock during the nine-month periods ended September 30, 2012, and 2011 respectively.  Options to purchase shares of common stock were granted with exercise prices equal to the fair value of the common stock on the date of grant.  The fair value of stock options granted was estimated using a Black-Scholes valuation model with the following assumptions:

	2012			2011
Expected dividend yield at date of grant	2.63	to	3.98%	2.00	to	2.55%
Expected stock price volatility	29.10	to	31.70%	26.70	to	32.00%
Risk-free interest rate	0.56	to	1.15%	1.70	to	2.14%
Expected life of options (in years)	4	to	6	4	to	6

The risk-free interest rate assumptions were based on the U.S. Treasury yield curve in effect at the time of the grant.  The expected volatility was based on historical monthly price changes of the Company’s stock based on the expected life of the options at the date of grant.  The expected life of options is the average number of years the Company estimates that options will be outstanding.  The Company considers groups of associates that have similar historical exercise behavior separately for valuation purposes.

The following table summarizes stock option activity under the Company’s 2001 and 2006 Equity Incentive Plans and the 2004 Director Plan for the nine months ended September 30, 2012:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2011		769,401		$	25.73
Granted		79,630		$	45.28
Exercised		(164,000	)	$	19.93
Cancelled		(131,012	)	$	27.47
Outstanding at September 30, 2012		554,019		$	29.84		6.59	$	11,317
Exercisable at September 30, 2012		306,524		$	25.26		5.44	$	7,666

The following table summarizes information regarding non-vested stock granted to associates under the 2001 Equity Incentive Plan for the nine months ended September 30, 2012:

	Shares Outstanding			Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2011		30,002		$	30.57
Granted		7,823		$	38.35
Vested		(6,441	)	$	24.22
Forfeited		(11,181	)	$	32.31
Outstanding at September 30, 2012		20,203		$	34.65

As of September 30, 2012, the total unrecognized compensation cost related to non-vested stock awards was approximately $515,000 and is expected to be recognized over a weighted average period of 4.00 years.

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5.         GOODWILL AND OTHER INTANGIBLE ASSETS

The following represents a summary of changes in the Company’s carrying amount of goodwill for the nine months ended September 30, 2012.

	(In thousands)
Balance as of December 31, 2011	$	57,730
Foreign currency translation		109
Balance as of September 30, 2012	$	57,839

Intangible assets consisted of the following:

	September 30, 2012		December 31, 2011
	(In thousands)
Non-amortizing other intangible assets:
Trade name	$	1,191	$	1,191
Amortizing other intangible assets:
Customer related intangibles		10,525		10,513
Non-compete agreements		430		430
Trade name		1,902		1,902
Total other intangible assets		14,048		14,036
Less accumulated amortization		7,985		6,963
Other intangible assets, net	$	6,063	$	7,073

6.         PROPERTY AND EQUIPMENT

	September 30, 2012			December 31, 2011
	(In thousands)
Property and equipment	$	31,112		$	29,229
Accumulated depreciation		(18,205	)		(15,616	)
Property and equipment, net	$	12,907		$	13,613

7.         EARNINGS PER SHARE

Net income per share has been calculated and presented for “basic” and “diluted” per share data.  “Basic” net income per share was computed by dividing net income by the weighted average number of common shares outstanding, whereas “diluted” net income per share was computed by dividing net income by the weighted average number of common shares outstanding adjusted for the dilutive effects of options and restricted stock.  The Company excluded 48,702 and 178,965 options for the three-month periods ended September 30, 2012, and 2011, respectively, and 75,051 and 107,048 options from the nine-month periods ended September 30, 2012, and 2011 respectively, from the diluted net income per share computation because the exercise or grant price exceeded the fair market value of the common stock on such date.  Also excluded were 530 and 2,583 restricted shares from the calculation during the three-month periods ended September 30, 2012, and 2011, respectively.

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The following table shows the amounts used in computing earnings per share and the effect on the weighted average number of shares of dilutive potential common stock:

	Three months ended September 30,				Nine months ended September 30,
	(In thousands)				(In thousands)
	2012		­ 2011		­ 2012		­ 2011­
Weighted average shares and share equivalents – basic		6,791		6,679		6,754		6,666
Weighted average dilutive effect of options		160		160		173		165
Weighted average dilutive effect of restricted stock		10		11		14		14
Weighted average shares and share equivalents - dilutive		6,961		6,850		6,941		6,845

8.           ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS

In June 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-05, Presentation of Comprehensive Income, which amends ASC 220, Comprehensive Income, by requiring all non-owner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance was effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2011.  In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, which defers certain portions of ASU No. 2011-05 indefinitely and will be further deliberated by the FASB at a future date.  The Company adopted the requirements of ASU 2011-05 and ASU 2011-12 by presenting a Condensed Consolidated Statement of Comprehensive Income immediately following the Condensed Consolidated Statement of Income.  There was no other impact on the Company’s condensed consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Intangibles — Goodwill and Other. ASU No. 2011-08 allows entities to first assess qualitatively whether it is necessary to perform the two-step goodwill impairment test.  If an entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting period is less than its carrying amount, the quantitative two-step goodwill impairment test is required.  An entity has the unconditional option to bypass the qualitative assessment and proceed directly to performing the quantitative goodwill impairment test.  The Company adopted the requirements of ASU 2011-08 and will perform a qualitative assessment first when performing the annual goodwill assessment in the fourth quarter of 2012.  The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements.

In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment.  Similar to the guidance in ASU 2011-08 for goodwill, ASU No. 2012-02 allows entities to first perform a qualitative assessment of its indefinite-lived intangible assets.  The Company is not required to perform further analysis, unless, based on the qualitative assessment, the Company concludes that it is more likely than not that the indefinite-lived intangible assets are impaired.  The Company has the option to bypass the qualitative assessment and perform the quantitative assessment.  The Company adopted the requirements of ASU No. 2012-02 and will perform a qualitative assessment first when performing its annual assessment of indefinite-lived intangible assets in the fourth quarter of 2012.  The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements.

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9.           RELATED PARTY TRANSACTIONS

A Board member of the Company also serves as an officer of Ameritas Life Insurance Corp. (“Ameritas”).  In connection with the Company’s regular assessment of its insurance-based associate benefits and the costs associated therewith, which is conducted by an independent insurance broker, in 2007 the Company began purchasing dental insurance for certain of its associates from Ameritas and in 2009, the Company also began purchasing vision insurance for certain of its associates from Ameritas.  The total value of these purchases was $50,000 and $41,000 for the three-month periods ended September 30, 2012, and 2011, respectively.  The total value of these purchases was $143,000 for the nine-month period ended September 30, 2012, and $124,000 for the nine-month period ended September 30, 2011.

The Company leased office space for OCS from EPIC Property Management LLC from August 2010 through June 2011.  A former owner of OCS and an associate of the Company during the lease-term was a co-owner of EPIC Property Management LLC.  The total of the rental and utility payments under the lease was $101,000 in the nine-month period ended September 30, 2011.

ITEM 2.         Management’s Discussion and Analysis of Financial Condition and Results ofOperations

Overview

The Company believes it is a leading provider of performance measurement and improvement services, healthcare analytics and governance education to the healthcare industry in the United States and Canada.  The Company believes it has achieved this leadership position based on 31 years of industry experience and its relationships with many of the industry’s largest organizations.  The Company’s portfolio of services addresses the growing needs of healthcare organizations to measure and improve satisfaction, quality and cost outcomes relative to the services that they provide.  Since its founding in 1981 in Lincoln, Nebraska, the Company has focused on meeting the information needs of the healthcare industry.  The Company’s services, which are comprehensive, include data collection, healthcare analytics, best practice identification and effective delivery of value-added business intelligence that enables its clients to improve performance across key business metrics.  Through its extensive array of service capabilities and industry relationships, the Company is positioned to provide healthcare information services to organizations across a wide continuum of service delivery segments.

Results of Operations

The following table sets forth for the periods indicated, select financial information derived from the Company’s consolidated financial statements expressed as a percentage of total revenue.  The trends illustrated may not necessarily be indicative of future results.  The discussion that follows the table should be read in conjunction with the condensed consolidated financial statements.

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	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Revenue:		100.0	%		100.0	%		100.0	%		100.0	%
Operating expenses:
Direct		41.0			40.3			40.9			37.9
Selling, general and administrative		27.2			30.0			27.2			31.2
Depreciation and amortization		5.4			7.1			5.6			6.7
Total operating expenses		73.6			77.4			73.7			75.8
Operating income		26.4	%		22.6	%		26.3	%		24.2	%

Three Months Ended September 30, 2012, Compared to Three Months Ended September 30, 2011

Revenue.  Revenue for the three-month period ended September 30, 2012, increased 15.3% to $21.4 million, compared to $18.5 million in the three-month period ended September 30, 2011.  The increase was due to market share growth and vertical growth in the existing client base.

Direct expenses.  Direct expenses increased 17.4% to $8.8 million for the three-month period ended September 30, 2012, compared to $7.5 million in the same period during 2011.  This was due to increases in variable expenses of $859,000, including postage, labor costs, contracted survey-related costs to service the higher volume of business and conference-related expenses, and an increase in fixed expenses of $440,000 from additional investments in technology, research and service resources that support our strategy of empowering customer-centric healthcare across the continuum.  Direct expenses increased as a percentage of revenue to 41.0% in the three-month period ended September 30, 2012, from 40.3% during the same period of 2011.  Variable expenses as a percentage of revenue were 1.0% of the change due to higher survey volumes for the subscription-based products, offset by a decrease in fixed expenses of 0.3% due to the leveraging of the investments in technology, research and service resources against increased revenue.

Selling, general and administrative expenses.  Selling, general and administrative expenses increased 4.5% to $5.8 million for the three-month period ended September 30, 2012, compared to $5.6 million for the same period in 2011.  Selling, general, and administrative expenses decreased as a percentage of revenue to 27.2% for the three-month period ended September 30, 2012, from 30.0% for the same period in 2011 due to the leveraging of selling, general and administrative expenses against increased revenue in the three-month period ended September 30, 2012.

Depreciation and amortization.  Depreciation and amortization expenses were $1.1 million and $1.3 million for the three-month periods ended September 30, 2012, and 2011, respectively.  Depreciation and amortization expenses as a percentage of revenue decreased to 5.4% for the three-month period ended September 30, 2012, from 7.1% during the same period of 2011.

Provision for income taxes. Provision for income taxes was $1.9 million (34.9% effective tax rate) for the three-month period ended September 30, 2012, compared to $1.5 million (35.7% effective tax rate) for the same period in 2011.  The effective tax rate for the three-month period ended September 30, 2012, is lower than the rate in the same period of 2011 primarily due to the recognition of an additional $79,000 in tax benefits when compared to 2011 due to the expiration of the U.S. federal statute of limitations associated with certain tax positions.

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Nine Months Ended September 30, 2012, Compared to Nine Months Ended September 30, 2011

Revenue.  Revenue for the nine-month period ended September 30, 2012, increased 13.7% to $64.4 million compared to $56.7 million in the nine-month period ended September 30, 2011.  The increase was due to market share growth and vertical growth in the existing client base.  Revenue from subscription-based agreements comprised 74.0% of the total revenue for the nine-month period ended September 30, 2012, compared to 60.0% of total revenue for the nine-month period ended September 30, 2011.  Subscription-based agreements, which represent 78.0% of the contract value as of September 30, 2012, are recurring annual service agreements where revenue is spread evenly over the period of service provided.

Direct expenses.  Direct expenses increased 22.5% to $26.3 million in the nine-month period ended September 30, 2012, compared to $21.5 million in the same period during 2011 due to an increase in variable expenses of $2.9 million, including postage, labor costs, contracted survey-related costs to service the higher volume of business and conference-related expenses, and an increase in fixed expenses of $1.9 million from additional staffing and related expenses in information technology development and client service functions.  Direct expenses increased as a percentage of revenue to 40.9% in the nine-month period ended September 30, 2012, from 37.9% during the same period of 2011.  Variable expenses as percentage of revenue were 2.0% of the change due to higher survey volumes for the subscription-based products, and fixed expenses were 1.0% of the change due to investments in technology, research and service resources.  This percentage is projected to be at an average of 41.0% for the full year in 2012.

Selling, general and administrative expenses.  Selling, general and administrative expenses decreased 0.6% to $17.5 million for the nine-month period ended September 30, 2012, compared to $17.7 million for the same period in 2011.  Selling, general, and administrative expenses decreased as a percentage of revenue to 27.2% for the nine-month period ended September 30, 2012, from 31.2% for the same period in 2011 due to the leveraging of selling, general and administrative expenses against increased revenue.  This percentage is projected to be at an average of 27.0% for the full year in 2012.

Depreciation and amortization.  Depreciation and amortization expenses for the nine-month periods ended September 30, 2012, and 2011 was $3.6 million and $3.8 million, respectively.  Depreciation and amortization expenses as a percentage of revenue decreased to 5.6% in the nine-month period ended September 30, 2012, compared to 6.7% in the same period of 2011.  Depreciation and amortization is projected to remain fairly constant in dollar amounts through 2012 and at an average of 6.0% of revenue for the full year.

Provision for income taxes. The provision for income taxes totaled $5.2 million (31.3% effective tax rate) for the nine-month period ended September 30, 2012, compared to $4.9 million (36.6% effective tax rate) for the same period in 2011.  The effective tax rate for the nine-month period ended September 30, 2012, is lower than the rate in the same period of 2011, primarily due to a reduction of current state income taxes by $45,000, as well as an adjustment to income taxes of $575,000 for decreases in deferred state tax rates resulting from legislative changes.  The Company also recorded federal tax credits of $198,000, and recognized an additional $79,000 in tax benefits over the same period in 2011 due to the expiration of the U.S. Federal statute of limitations associated with certain tax positions.

Liquidity and Capital Resources

The Company believes that its existing sources of liquidity, including cash and cash equivalents, borrowing availability, and operating cash flows will be sufficient to meet its projected capital and debt maturity needs and dividend policy for the foreseeable future.  The Company expects to refinance its term notes prior to their July 31, 2013 maturity.  If, however, the notes cannot be extended, the Company believes it has adequate cash flows from operations to meet its debt and capital needs.

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During November 2012, the Company declared a regular quarterly dividend of $0.26 per share and a special one-time dividend of $1.50 per share both payable Tuesday, December 18, 2012.

The Company had cash and cash equivalents of $15.0 million at September 30, 2012, of which $4.2 million was held in Canada.  All of the amounts held in Canada are intended to be indefinitely reinvested in foreign operations.  The amounts held outside of the U.S. are eligible for repatriation, but under current law, would be subject to U.S. federal income taxes, less applicable foreign tax credits.  It is impractical to determine the additional income tax liability, if any, associated with such repatriation.

Working Capital

The Company had a working capital deficiency of $5.2 million as of September 30, 2012, compared to a working capital deficiency of $2.3 million as of December 31, 2011.  The change in the working capital balance was primarily due to an increase in the current portion of notes payable of $11.2 million, offset by an increase in cash and cash equivalents of $6.9 million.  The increase in the current portion of notes payable is due to the balloon payments on the term notes due in July 2013.  The Company’s working capital is significantly impacted by its large deferred revenue balances.  The deferred revenue balances as of September 30, 2012, and December 31, 2011, were $17.5 million and $16.5 million, respectively.

The deferred revenue balance is primarily due to timing of initial billings on new and renewal contracts.  The Company typically invoices clients for performance tracking services and custom research projects before they have been completed.  Billed amounts are recorded as billings in excess of revenue earned, or deferred revenue, on the Company’s consolidated financial statements, and are recognized as income when earned.  In addition, when work is performed in advance of billing, the Company records this work as revenue earned in excess of billings, or unbilled revenue.  Substantially all deferred revenue and all unbilled revenue will be earned and billed respectively, within 12 months of when the respective period ends.

Cash Flow Analysis

A summary of operating, investing, and financing activities is shown in the following table:

	Nine Months Ended September 30,
	2012			2011
	(In thousands)
Provided by operating activities	$	13,594		$	14,363
Used in investing activities		(1,890	)		(6,390	)
Used in financing activities		(4,914	)		(5,129	)
Effect of exchange rate change on cash		154			(140	)
Net increase in cash and cash equivalents		6,944			2,704
Cash and cash equivalents at end of period	$	15,026		$	6,223

Cash Flows from Operating Activities

Cash flows from operating activities consist of net income adjusted for non-cash items including depreciation and amortization, deferred taxes, and the effect of working capital changes.

Net cash provided by operating activities was $13.6 million for the nine months ended September 30, 2012, which included net income of $11.4 million, plus non-cash charges (benefits) for deferred tax expense, depreciation and amortization, and non-cash stock compensation totaling $3.7 million.  Changes in working capital reduced 2012 cash flows from operating activities by $1.5 million, primarily due to the timing of initial billings on new or renewal contracts decreasing cash flows provided from trade accounts receivable and an increase in prepaid expenses.  These reductions were offset by an increase in deferred revenue and accrued expenses, wages, bonuses and profit sharing.

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Net cash provided by operating activities was $14.4 million for the nine months ended September 30, 2011, which included net income of $8.4 million, plus non-cash charges (benefits) for deferred tax expense, depreciation and amortization and non-cash stock compensation totaling $5.5 million.  Changes in working capital benefitted 2011 cash flows from operating activities by $411,000, primarily due to the timing of initial billings on new or renewal contracts decreasing cash flows provided from trade accounts receivable, partially offset by timing of payments on accrued expenses.

Cash Flows from Investing Activities

Net cash of $1.9 million was used for investing activities in the nine months ended September 30, 2012, for purchases of property and equipment.

Net cash of $6.4 million was used for investing activities in the nine months ended September 30, 2011.  Earn-out payments related to the MIV acquisition approximated $4.1 million, and purchases of property and equipment totaled $2.3 million.

Cash Flows from Financing Activities

Net cash used by financing activities was $4.9 million in the nine months ended September 30, 2012.  Proceeds from the exercise of and the excess tax benefit of share-based compensation provided cash of $1.1 million and $1.4 million, respectively.  Cash was used to pay dividends of $5.3 million, payroll taxes on vested restricted shares of $527,000, capital lease obligations of $89,000 and to repay borrowings under the term notes totaling $1.4 million.

Net cash used by financing activities was $5.1 million in the nine months ended September 30, 2011.  Cash was generated from borrowings under the term note and revolving credit note totaling $4.5 million.  Proceeds from the exercise of and the excess tax benefit of share-based compensation provided cash of $567,000 and $354,000, respectively.  Cash was used to pay dividends of $4.4 million, repay capital lease obligations of $104,000, repay borrowings under the term and revolving credit notes totaling $5.9 million, and payroll taxes on vested restricted shares of $146,000.

The effect of changes in foreign exchange rates increased (decreased) cash and cash equivalents by $154,000 and ($140,000) in the quarters ended September 30, 2012, and 2011, respectively.

Capital Expenditures

Cash paid for capital expenditures was $1.9 million for the nine-month period ended September 30, 2012.  These expenditures consisted mainly of computer software, computer hardware, furniture and other equipment.  The Company expects similar capital expenditure purchases for the remainder of 2012 consisting primarily of computer software and hardware and other equipment to be funded through cash generated from operations.

Debt and Equity

On December 19, 2008, the Company borrowed $9.0 million under a term note to partially finance the acquisition of MIV.  In July 2010, the Company refinanced the existing term loan with a $6.9 million term loan.  The new term loan is payable in 35 monthly installments of $80,104, with a balloon payment of $4.8 million for the remaining principal balance and interest due on July 31, 2013.  Borrowings under the term note bear interest at an annual rate of 3.79%.  The outstanding balance of the term note at September 30, 2012, was $5.4 million.

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On July 31, 2010, the Company borrowed $10.0 million under a term note to partially finance the acquisition of OCS.  The term loan is payable in 35 monthly installments of $121,190, with a balloon payment of $6.7 million for the remaining principal balance and interest due on July 31, 2013.  Borrowings under the term note bear interest at an annual rate of 3.79%.  The outstanding balance of the term note at September 30, 2012, was $7.7 million.

The Company expects to refinance the term notes prior to July 31, 2013.  If, however, the notes cannot be extended, the Company believes it has adequate cash flows from operations to meet its debt and capital needs.

The term notes are secured by certain of the Company’s assets, including the Company’s land, building, trade accounts receivable and intangible assets.  The term notes contain various restrictions and covenants applicable to the Company, including requirements that the Company maintain certain financial ratios at prescribed levels and restrictions on the ability of the Company to consolidate or merge, create liens, incur additional indebtedness or dispose of assets.  As of September 30, 2012, the Company was in compliance with these restrictions and covenants.

The Company also has a revolving credit note that was renewed in June 2012 to extend the term to June 30, 2013.  The maximum aggregate amount available under the revolving credit note is $6.5 million, subject to a borrowing base equal to 75.0% of the Company’s eligible accounts receivable.  Borrowings under the revolving credit note bear interest at a variable annual rate, with three rate options at the discretion of management as follows:  (1) 2.5% plus the daily reset one-month LIBOR rate, or (2) 2.2% plus the one-, two-, three-, six- or twelve-month LIBOR rate, or (3) the bank’s Money Market Loan Rate.  As of September 30, 2012, the revolving credit note did not have a balance.  According to the borrowing base requirements, the Company had the capacity to borrow $6.5 million as of September 30, 2012.

The Company has capital leases for computer equipment, office equipment, and inserting equipment.  The balance of the capital leases as of September 30, 2012, was $346,000.

Shareholders’ equity increased $8.5 million to $64.1 million at September 30, 2012, from $55.6 million at December 31, 2011.  The increase was primarily due to net income of $11.4 million and $4.6 million related to share-based compensation, partially offset by dividends paid of $5.3 million and share repurchases of $2.7 million.

Stock Repurchase Program

In February 2006, the Board of Directors of the Company authorized the repurchase of 750,000 shares of common stock in the open market or in privately negotiated transactions.  As of September 30, 2012, the remaining number of shares that could be purchased under this authorization was 190,862.

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ITEM 3.         Quantitative and Qualitative Disclosures about Market Risk

There are no material changes to the disclosures regarding the Company’s market risk exposures made in its Annual Report on Form 10-K for the year ended December 31, 2011.

ITEM 4.         Controls and Procedures

The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report, and has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – Other Information

ITEM 1A.      Risk Factors

There have been no material changes to the risk factors relating to the Company set forth in Part I, Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2011.

ITEM 2.         Unregistered Sales of Equity Securities and Use of Proceeds

In February 2006, the Board of Directors of the Company authorized the repurchase of an additional 750,000 shares of Common Stock in the open market or in privately negotiated transactions.  Unless terminated earlier by resolution of the Company’s Board of Directors, the repurchase program will expire when the Company has repurchased all shares authorized for repurchase thereunder.  As of November 1, 2012, 587,332 shares have been repurchased under that authorization.

The table below summarizes stock repurchases for the three-month period ended September 30, 2012.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 – July 31, 2012		5,803	$	51.80		5,803		200,794
August 1 – August 31, 2012		9,932	$	51.89		9,932		190,862
September 1 – September 30, 2012		--		--		--		190,862

ITEM 6.         Exhibits

The exhibits listed in the accompanying index of exhibits are filed as part of this Quarterly Report on Form 10-Q.

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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 thereunto duly authorized.

	NATIONAL RESEARCH CORPORATION
Date: November 7, 2012	By:	/s/ Michael D. Hays
		Michael D. Hays
		Chief Executive Officer (Principal Executive Officer)
Date: November 7, 2012	By:	/s/ Kevin R. Karas
		Kevin R. Karas
		Senior Vice President Finance, Treasurer, Secretary and
		Chief Financial Officer (Principal Financial and Accounting Officer)

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NATIONAL RESEARCH CORPORATION

EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the Quarterly Period ended September 30, 2012

Exhibit

(31.1) Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.

(31.2) Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.

(32) Written Statement of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

(101)* Financial statements from the Quarterly Report on Form 10-Q of National Research Corporation for the quarter ended September 30, 2012, formatted in eXtensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, (v)  the Notes to Condensed Consolidated Financial Statements, and (vi) document and entity information

* In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

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EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934

I, Michael D. Hays, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of National Research Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2012	/s/ Michael D. Hays
	Michael D. Hays
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934

I, Kevin R. Karas, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of National Research Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2012	/s/ Kevin R. Karas
	Kevin R. Karas
	Chief Financial Officer

EX-32

Exhibit 32

Written Statement of the Chief Executive Officer 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, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of National Research Corporation (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the three-month period ended September 30, 2012, (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

Chief Executive Officer

/s/ Kevin R. Karas

Kevin R. Karas

Chief Financial Officer

Date: November 7, 2012

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Note 6 - Property and Equipment (Detail) - Property and Equipment (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Property and equipment	$ 31,112	$ 29,229
Accumulated depreciation	(18,205)	(15,616)
Property and equipment, net	$ 12,907	$ 13,613

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Note 2 - Income Taxes (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Effective Income Tax Rate, Continuing Operations	34.90%	35.70%	31.30%	36.60%
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations		$ 79,000
Income Tax Reconciliation, Tax Credits	87,000		198,000
Unrecognized Tax Benefits	225,000		225,000
Unrecognized Tax Benefits, Interest on Income Taxes Expense			11,000
State [Member]
Reduction of State Income Taxes			45,000
Decrease in Deferred State Tax Rates			$ 575,000

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Note 3 - Notes Payable

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Text Block]

3.         NOTES PAYABLE

On December 19, 2008, the Company borrowed $9.0 million under a term note to partially finance the acquisition of MIV.  In July 2010, the Company refinanced the existing term loan with a $6.9 million term loan.  The new term loan is payable in 35 monthly installments of $80,104, with a balloon payment of $4.8 million for the remaining principal balance and interest due on July 31, 2013.  Borrowings under the term note bear interest at an annual rate of 3.79%.  The outstanding balance of the term note at September 30, 2012, was $5.4 million.

On July 31, 2010, the Company borrowed $10.0 million under a term note to partially finance the acquisition of OCS.  The term loan is payable in 35 monthly installments of $121,190 with a balloon payment of $6.7 million for the remaining principal balance and interest due on July 31, 2013.  Borrowings under the term note bear interest at an annual rate of 3.79%.  The outstanding balance of the term note at September 30, 2012, was $7.7 million.

The Company expects to refinance the term notes prior to July 31, 2013.  If, however, the notes cannot be extended, the Company believes it has adequate cash flows from operations to meet its debt and capital needs.

The term notes are secured by certain of the Company’s assets, including the Company’s land, building, trade accounts receivable and intangible assets.  The term notes contain various restrictions and covenants applicable to the Company, including requirements that the Company maintain certain financial ratios at prescribed levels and restrictions on the ability of the Company to consolidate or merge, create liens, incur additional indebtedness or dispose of assets.  As of September 30, 2012, the Company was in compliance with these restrictions and covenants.

The Company also has a revolving credit note that was renewed in June 2012 to extend the term to June 30, 2013.The maximum aggregate amount available under the revolving credit note is $6.5 million, subject to a borrowing base equal to 75% of the Company’s eligible accounts receivable.  Borrowings under the revolving credit note bear interest at a variable annual rate, with three rate options at the discretion of management as follows:  (1) 2.5% plus the daily reset one-month London Interbank Offered Rate (“LIBOR”) or (2) 2.2% plus the one-, two-, three-, six- or twelve-month LIBOR rate, or (3) the bank’s Money Market Loan Rate.  As of September 30, 2012, the revolving credit note did not have a balance.  According to the borrowing base requirements, the Company had the capacity to borrow $6.5 million as of September 30, 2012.

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Note 4 - Share-Based Compensation (Detail) - Stock option activity (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Outstanding at December 31, 2011	769,401
Outstanding at December 31, 2011 (in Dollars per share)	$ 25.73
Granted	79,630	166,008
Granted (in Dollars per share)	$ 45.28
Exercised	(164,000)
Exercised (in Dollars per share)	$ 19.93
Cancelled	(131,012)
Cancelled (in Dollars per share)	$ 27.47
Outstanding at September 30, 2012	554,019
Outstanding at September 30, 2012 (in Dollars per share)	$ 29.84
Outstanding at September 30, 2012	6 years 215 days
Outstanding at September 30, 2012 (in Dollars)	$ 11,317
Exercisable at September 30, 2012	306,524
Exercisable at September 30, 2012 (in Dollars per share)	$ 25.26
Exercisable at September 30, 2012	5 years 160 days
Exercisable at September 30, 2012 (in Dollars)	$ 7,666

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Note 4 - Share-Based Compensation (Detail) - Stock Options Valuation Assumptions	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Minimum [Member]
Expected dividend yield at date of grant	2.63%	2.00%
Expected stock price volatility	29.10%	26.70%
Risk-free interest rate	0.56%	1.70%
Expected life of options (in years)	4 years	4 years
Maximum [Member]
Expected dividend yield at date of grant	3.98%	2.55%
Expected stock price volatility	31.70%	32.00%
Risk-free interest rate	1.15%	2.14%
Expected life of options (in years)	6 years	6 years

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Note 4 - Share-Based Compensation (Detail) - Non-vested stock (USD $)	9 Months Ended
	Sep. 30, 2012
Outstanding at December 31, 2011	30,002
Outstanding at December 31, 2011 (in Dollars per share)	$ 30.57
Granted	7,823
Granted (in Dollars per share)	$ 38.35
Vested	(6,441)
Vested (in Dollars per share)	$ 24.22
Forfeited	(11,181)
Forfeited (in Dollars per share)	$ 32.31
Outstanding at September 30, 2012	20,203
Outstanding at September 30, 2012 (in Dollars per share)	$ 34.65

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Note 5 - Goodwill and Other Intangible Assets (Detail) - Summary of changes in the carrying amount of goodwill (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Balance as of December 31, 2011	$ 57,730
Foreign currency translation	109
Balance as of September 30, 2012	$ 57,839

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Note 2 - Income Taxes

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Text Block]

2.         INCOME TAXES

The Company’s effective tax rate decreased to 31.3% for the nine-month period ended September 30, 2012, compared to 36.6% for the same period in 2011.  The effective tax rate decreased to 34.9% for the three-month period ended September 30, 2012, compared to 35.7% for the same period in 2011.  This decrease was primarily the result of the recognition of an additional $79,000 in tax benefits due to the expiration of the U.S. Federal statute of limitations associated with certain tax positions.

The effective tax rate for the nine-month period ended September 30, 2012, is lower than the rate in the same period of 2011 primarily due to a reduction of current state income taxes by $45,000, as well as an adjustment to income taxes of $575,000 for decreases in deferred state tax rates resulting from legislative changes.  The Company also recorded federal tax credits of $87,000 and $198,000, and recognized an additional $79,000 in tax benefits when compared to 2011 due to the expiration of the U.S. Federal statute of limitations associated with certain tax positions.

The unrecognized tax benefit as of September 30, 2012, was $225,000, excluding interest of $11,000 and no penalties.  The full unrecognized tax benefits, if recognized, would favorably impact the effective income tax rate.  The Company believes it is reasonably possible that the total amount of unrecognized tax benefits could decrease during the next 12 months due to the expiration of the U.S. federal statute of limitations associated with certain other tax positions.  The Company accrues interest and penalties related to uncertain tax position in the statements of income as income tax expense.

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Note 5 - Goodwill and Other Intangible Assets (Detail) - Intangible assets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Non-amortizing other intangible assets:
Trade name	$ 1,191	$ 1,191
Amortizing other intangible assets:
Customer related intangibles	10,525	10,513
Non-compete agreements	430	430
Trade name	1,902	1,902
Total other intangible assets	14,048	14,036
Less accumulated amortization	7,985	6,963
Other intangible assets, net	$ 6,063	$ 7,073

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 15,026	$ 8,082
Trade accounts receivable, less allowance for doubtful accounts of $215 and $289 in 2012 and 2011, respectively	14,206	11,187
Unbilled revenue	886	913
Prepaid expenses and other	1,909	1,166
Income tax receivable	90
Deferred income taxes	334	789
Total current assets	32,451	22,137
Property and equipment, net	12,907	13,613
Intangible assets, net	6,063	7,073
Goodwill	57,839	57,730
Other	169	123
Total assets	109,429	100,676
Current liabilities:
Current portion of notes payable	13,076	1,861
Accounts payable	503	783
Accrued wages, bonus and profit sharing	3,779	3,591
Accrued expenses	2,802	1,519
Income taxes payable		145
Deferred revenue	17,527	16,500
Total current liabilities	37,687	24,399
Notes payable, net of current portion		12,625
Deferred income taxes	7,094	7,588
Deferred revenue	326	185
Other long term liabilities	253	325
Total liabilities	45,360	45,122
Shareholders’ equity:
Common stock, $0.001 par value; authorized 20,000,000 shares, issued 8,278,491 in 2012 and 8,117,849 in 2011, outstanding 6,824,355 in 2012 and 6,724,280 in 2011	8	8
Additional paid-in capital	35,880	31,080
Retained earnings	53,061	46,995
Accumulated other comprehensive income, foreign currency translation	1,267	907
Treasury stock, at cost; 1,454,136 shares in 2012 and 1,393,569 shares in 2011	(26,147)	(23,436)
Total shareholders’ equity	64,069	55,554
Total liabilities and shareholders’ equity	$ 109,429	$ 100,676

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income	$ 11,365	$ 8,432
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,606	3,790
Deferred income taxes	(413)	1,139
Non-cash share-based compensation expense	179	538
Tax benefit from exercise of stock options	373	55
Loss on disposal of property and equipment	2	(1)
Net changes in assets and liabilities:
Trade accounts receivable	(2,884)	(3,208)
Unbilled revenue	33	129
Prepaid expenses and other	(693)	147
Accounts payable	(297)	518
Accrued expenses, wages, bonuses and profit sharing	1,427	1,149
Income taxes receivable and payable	(235)	906
Deferred revenue	1,131	769
Net cash provided by operating activities	13,594	14,363
Cash flows from investing activities:
Purchases of property and equipment	(1,890)	(2,276)
Earn out payments related to business acquisitions		(4,114)
Net cash used in investing activities	(1,890)	(6,390)
Cash flows from financing activities:
Proceeds from notes payable		4,545
Payments on notes payable	(1,410)	(5,910)
Payments on capital lease obligations	(89)	(104)
Proceeds from exercise of stock options	1,058	567
Common stock withheld from vested restricted shares for payroll tax withholdings	(527)	(146)
Excess tax benefit from share-based compensation	1,353	354
Payment of dividends on common stock	(5,299)	(4,435)
Net cash used in financing activities	(4,914)	(5,129)
Effect of exchange rate changes on cash	154	(140)
Increase in cash and cash equivalents	6,944	2,704
Cash and cash equivalents at beginning of period	8,082	3,519
Cash and cash equivalents at end of period	15,026	6,223
Supplemental disclosure of cash paid for:
Interest expense	394	449
Income taxes	$ 3,897	$ 2,375

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Note 7 - Earnings Per Share (Detail) - Weighted average number of shares In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Weighted average shares and share equivalents – basic	6,791	6,679	6,754	6,666
Weighted average shares and share equivalents - dilutive	6,961	6,850	6,941	6,845
Stock Options [Member]
Incremental common shares	160	160	173	165
Restricted Stock [Member]
Incremental common shares	10	11	14	14

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Note 1 - Basis of Consolidation and Presentation (Detail)	9 Months Ended
	Sep. 30, 2012
Number of Operating Segments	8
Number of Reportable Segments	1

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Note 9 - Related Party Transactions (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Ameritas Life Insurance Corp [Member]
Related Party Transaction, Amounts of Transaction	$ 50,000	$ 41,000	$ 143,000	$ 124,000
EPIC Property Management [Member]
Related Party Transaction, Amounts of Transaction				$ 101,000

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Note 1 - Basis of Consolidation and Presentation (Detail) - Long-term Debt (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Total carrying amounts of long-term debt	$ 13,076	$ 14,486
Estimated fair value of long-term debt	$ 13,186	$ 14,498

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Note 1 - Basis of Consolidation and Presentation

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.         BASIS OF CONSOLIDATION AND PRESENTATION

National Research Corporation (the “Company”) is a provider of performance measurement and improvement services, healthcare analytics and governance education to the healthcare industry in the United States and Canada.  The Company’s services, which are comprehensive, include data collection, healthcare analytics, best practice identification and effective delivery of value-added business intelligence that enables its clients to improve performance across key business metrics.  Through its extensive array of service capabilities and industry relationships, the Company is positioned to provide healthcare information services to organizations across a wide continuum of service delivery segments.

The Company has eight operating segments that are aggregated into one reporting segment because they have similar economic characteristics and meet the other aggregation criteria from the Financial Accounting Standards Board (“FASB”) guidance on segment disclosure.  The eight operating segments are: NRC Picker U.S. and NRC Picker Canada, which each offer renewable performance tracking and improvement services, custom research, subscription-based educational services and a renewable syndicated service; Ticker, which offers stand-alone market information, as well as a comparative performance database to allow the Company’s clients to assess their performance relative to the industry, to access best practice examples, and to utilize competitive information for marketing purposes; Payer Solutions, which offers functional disease-specific and health status measurement tools; The Governance Institute (“TGI”), which offers subscription-based governance information and educational conferences designed to improve the effectiveness of hospital and healthcare systems by continually strengthening their healthcare boards, medical leadership and management performance in the United States; My InnerView (“MIV”), which provides quality and performance improvement solutions to the senior care industry; Outcome Concept Systems, Inc. (“OCS”), which provides financial and operational benchmarks and analytics to home care and hospice providers; and Illuminate, a patient outreach and discharge program designed to facilitate service and clinical recovery within the critical hours after a patient is discharged from a healthcare setting within the acute care, skilled nursing, physician and home health environments.

The condensed consolidated balance sheet of the Company at December 31, 2011, was derived from the Company’s audited consolidated 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.

Information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted.  These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto that are included in the Company’s Form 10-K for the fiscal year ended December 31, 2011, filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2012.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, National Research Corporation Canada.  All significant intercompany transactions and balances have been eliminated.

The functional currency of the Company’s foreign subsidiary, National Research Corporation Canada, is the subsidiary’s local currency.  The Company translates the assets and liabilities of its foreign subsidiary at the period-end rate of exchange and its foreign subsidiary’s income statement balances at the average rate prevailing during the period.  The Company records the resulting translation adjustment in accumulated other comprehensive income, a component of shareholders’ equity.  Gains and losses related to transactions denominated in a currency other than the subsidiary’s local currency and short-term intercompany accounts are included in other income (expense) in the consolidated statements of income.

Fair Value Measurements

The Company’s 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 the Company’s market assumptions.  The inputs are then classified into the following hierarchy: (1) Level 1 Inputs—quoted prices in active markets for identical assets and liabilities; (2) Level 2 Inputs—observable market-based inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets, quoted prices for similar or identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and (3) Level 3 Inputs—unobservable inputs.

The following details the Company’s financial assets and liabilities within the fair value hierarchy at

September 30, 2012, and December 31, 2011:

Fair Values Measured on a Recurring Basis

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of September 30, 2012
Money Market Funds	$	4,085	$	--	$	--	$	4,085
Commercial Paper		10,624		--		--		10,624
Total	$	14,709	$	--	$	--	$	14,709
As of December 31, 2011
Money Market Funds	$	3,243	$	--	$	--	$	3,243
Commercial Paper		4,659		--		--		4,659
Total	$	7,902	$	--	$	--	$	7,902

The Company’s long-term debt is recorded at historical cost.  The following are the carrying amounts and estimated fair values, based primarily on estimated current rates available for debt of the same remaining duration and adjusted for nonperformance and credit risk:

	September 30, 2012		December 31, 2011
	(In thousands)
Total carrying amounts of long-term debt	$	13,076	$	14,486
Estimated fair value of long-term debt	$	13,186	$	14,498

The Company estimated the fair value of its long-term, fixed-rate debt using a Level 2 discounted cash flow analysis based on current borrowing rates for debt with similar maturities.

The Company believes that the carrying amounts of trade accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short maturity of those instruments.  All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which includes goodwill and non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment).  As of September 30, 2012, and December 31, 2011, there was no indication of impairment related to the Company’s non-financial assets.

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Condensed Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Allowance for doubtful accounts (in Dollars)	$ 215	$ 289
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	8,278,491	8,117,849
Common stock, shares outstanding	6,824,355	6,724,280
Treasury stock, shares	1,454,136	1,393,569

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Note 1 - Basis of Consolidation and Presentation (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of September 30, 2012
Money Market Funds	$	4,085	$	--	$	--	$	4,085
Commercial Paper		10,624		--		--		10,624
Total	$	14,709	$	--	$	--	$	14,709
As of December 31, 2011
Money Market Funds	$	3,243	$	--	$	--	$	3,243
Commercial Paper		4,659		--		--		4,659
Total	$	7,902	$	--	$	--	$	7,902

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

	September 30, 2012		December 31, 2011
	(In thousands)
Total carrying amounts of long-term debt	$	13,076	$	14,486
Estimated fair value of long-term debt	$	13,186	$	14,498

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 01, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	NATIONAL RESEARCH CORP
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		6,853,770
Amendment Flag	false
Entity Central Index Key	0000070487
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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Note 4 - Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	2012			2011
Expected dividend yield at date of grant	2.63	to	3.98%	2.00	to	2.55%
Expected stock price volatility	29.10	to	31.70%	26.70	to	32.00%
Risk-free interest rate	0.56	to	1.15%	1.70	to	2.14%
Expected life of options (in years)	4	to	6	4	to	6

Schedule of Share-based Compensation, Activity [Table Text Block]

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2011		769,401		$	25.73
Granted		79,630		$	45.28
Exercised		(164,000	)	$	19.93
Cancelled		(131,012	)	$	27.47
Outstanding at September 30, 2012		554,019		$	29.84		6.59	$	11,317
Exercisable at September 30, 2012		306,524		$	25.26		5.44	$	7,666

Schedule of Nonvested Share Activity [Table Text Block]

	Shares Outstanding			Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2011		30,002		$	30.57
Granted		7,823		$	38.35
Vested		(6,441	)	$	24.22
Forfeited		(11,181	)	$	32.31
Outstanding at September 30, 2012		20,203		$	34.65

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Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue	$ 21,386	$ 18,549	$ 64,425	$ 56,655
Operating expenses:
Direct	8,769	7,471	26,333	21,489
Selling, general and administrative	5,821	5,572	17,541	17,651
Depreciation and amortization	1,149	1,312	3,606	3,790
Total operating expenses	15,739	14,355	47,480	42,930
Operating income	5,647	4,194	16,945	13,725
Other income (expense):
Interest income	8	4	20	8
Interest expense	(134)	(155)	(416)	(480)
Other, net	(29)	74	(16)	55
Total other expense	(155)	(77)	(412)	(417)
Income before income taxes	5,492	4,117	16,533	13,308
Provision for income taxes	1,915	1,470	5,168	4,876
Net income	$ 3,577	$ 2,647	$ 11,365	$ 8,432
Net income per share – basic (in Dollars per share)	$ 0.53	$ 0.40	$ 1.68	$ 1.26
Net income per share – diluted (in Dollars per share)	$ 0.51	$ 0.39	$ 1.64	$ 1.23
Weighted average shares and share equivalents outstanding – basic (in Shares)	6,791	6,679	6,754	6,666
Weighted average shares and share equivalents outstanding – diluted (in Shares)	6,961	6,850	6,941	6,845

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Note 6 - Property and Equipment

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment Disclosure [Text Block]

6.         PROPERTY AND EQUIPMENT

	September 30, 2012			December 31, 2011
	(In thousands)
Property and equipment	$	31,112		$	29,229
Accumulated depreciation		(18,205	)		(15,616	)
Property and equipment, net	$	12,907		$	13,613

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Note 5 - Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Text Block]

5.         GOODWILL AND OTHER INTANGIBLE ASSETS

The following represents a summary of changes in the Company’s carrying amount of goodwill for the nine months ended September 30, 2012.

	(In thousands)
Balance as of December 31, 2011	$	57,730
Foreign currency translation		109
Balance as of September 30, 2012	$	57,839

Intangible assets consisted of the following:

	September 30, 2012		December 31, 2011
	(In thousands)
Non-amortizing other intangible assets:
Trade name	$	1,191	$	1,191
Amortizing other intangible assets:
Customer related intangibles		10,525		10,513
Non-compete agreements		430		430
Trade name		1,902		1,902
Total other intangible assets		14,048		14,036
Less accumulated amortization		7,985		6,963
Other intangible assets, net	$	6,063	$	7,073

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Note 1 - Basis of Consolidation and Presentation (Detail) - Fair Values Measured on a Recurring Basis (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair value of financial asset	$ 14,709	$ 7,902
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of financial asset	4,085	3,243
Money Market Funds [Member]
Fair value of financial asset	4,085	3,243
Commercial Paper [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of financial asset	10,624	4,659
Commercial Paper [Member]
Fair value of financial asset	10,624	4,659
Fair Value, Inputs, Level 1 [Member]
Fair value of financial asset	$ 14,709	$ 7,902

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Note 5 - Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Goodwill [Table Text Block]

	(In thousands)
Balance as of December 31, 2011	$	57,730
Foreign currency translation		109
Balance as of September 30, 2012	$	57,839

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	September 30, 2012		December 31, 2011
	(In thousands)
Non-amortizing other intangible assets:
Trade name	$	1,191	$	1,191
Amortizing other intangible assets:
Customer related intangibles		10,525		10,513
Non-compete agreements		430		430
Trade name		1,902		1,902
Total other intangible assets		14,048		14,036
Less accumulated amortization		7,985		6,963
Other intangible assets, net	$	6,063	$	7,073

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Note 9 - Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions Disclosure [Text Block]

9.           RELATED PARTY TRANSACTIONS

A Board member of the Company also serves as an officer of Ameritas Life Insurance Corp. (“Ameritas”).  In connection with the Company’s regular assessment of its insurance-based associate benefits and the costs associated therewith, which is conducted by an independent insurance broker, in 2007 the Company began purchasing dental insurance for certain of its associates from Ameritas and in 2009, the Company also began purchasing vision insurance for certain of its associates from Ameritas.  The total value of these purchases was $50,000 and $41,000 for the three-month periods ended September 30, 2012, and 2011, respectively.  The total value of these purchases was $143,000 for the nine-month period ended September 30, 2012, and $124,000 for the nine-month period ended September 30, 2011.

The Company leased office space for OCS from EPIC Property Management LLC from August 2010 through June 2011.  A former owner of OCS and an associate of the Company during the lease-term was a co-owner of EPIC Property Management LLC.  The total of the rental and utility payments under the lease was $101,000 in the nine-month period ended September 30, 2011.

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Note 7 - Earnings Per Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Text Block]

7.         EARNINGS PER SHARE

Net income per share has been calculated and presented for “basic” and “diluted” per share data.  “Basic” net income per share was computed by dividing net income by the weighted average number of common shares outstanding, whereas “diluted” net income per share was computed by dividing net income by the weighted average number of common shares outstanding adjusted for the dilutive effects of options and restricted stock.  The Company excluded 48,702 and 178,965 options for the three-month periods ended September 30, 2012, and 2011, respectively, and 75,051 and 107,048 options from the nine-month periods ended September 30, 2012, and 2011 respectively, from the diluted net income per share computation because the exercise or grant price exceeded the fair market value of the common stock on such date.  Also excluded were 530 and 2,583 restricted shares from the calculation during the three-month periods ended September 30, 2012, and 2011, respectively.

The following table shows the amounts used in computing earnings per share and the effect on the weighted average number of shares of dilutive potential common stock:

	Three months ended September 30,				Nine months ended September 30,
	(In thousands)				(In thousands)
	2012		­ 2011		­ 2012		­ 2011­
Weighted average shares and share equivalents – basic		6,791		6,679		6,754		6,666
Weighted average dilutive effect of options		160		160		173		165
Weighted average dilutive effect of restricted stock		10		11		14		14
Weighted average shares and share equivalents - dilutive		6,961		6,850		6,941		6,845

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Note 8 - Adoption of New Accounting Pronouncements

9 Months Ended

Sep. 30, 2012

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

8.           ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS

In June 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-05, Presentation of Comprehensive Income, which amends ASC 220, Comprehensive Income, by requiring all non-owner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance was effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2011.  In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, which defers certain portions of ASU No. 2011-05 indefinitely and will be further deliberated by the FASB at a future date.  The Company adopted the requirements of ASU 2011-05 and ASU 2011-12 by presenting a Condensed Consolidated Statement of Comprehensive Income immediately following the Condensed Consolidated Statement of Income.  There was no other impact on the Company’s condensed consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Intangibles — Goodwill and Other. ASU No. 2011-08 allows entities to first assess qualitatively whether it is necessary to perform the two-step goodwill impairment test.  If an entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting period is less than its carrying amount, the quantitative two-step goodwill impairment test is required.  An entity has the unconditional option to bypass the qualitative assessment and proceed directly to performing the quantitative goodwill impairment test.  The Company adopted the requirements of ASU 2011-08 and will perform a qualitative assessment first when performing the annual goodwill assessment in the fourth quarter of 2012.  The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements.

In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment.  Similar to the guidance in ASU 2011-08 for goodwill, ASU No. 2012-02 allows entities to first perform a qualitative assessment of its indefinite-lived intangible assets.  The Company is not required to perform further analysis, unless, based on the qualitative assessment, the Company concludes that it is more likely than not that the indefinite-lived intangible assets are impaired.  The Company has the option to bypass the qualitative assessment and perform the quantitative assessment.  The Company adopted the requirements of ASU No. 2012-02 and will perform a qualitative assessment first when performing its annual assessment of indefinite-lived intangible assets in the fourth quarter of 2012.  The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements.

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2012

Nature of Operations [Text Block]

National Research Corporation (the “Company”) is a provider of performance measurement and improvement services, healthcare analytics and governance education to the healthcare industry in the United States and Canada.  The Company’s services, which are comprehensive, include data collection, healthcare analytics, best practice identification and effective delivery of value-added business intelligence that enables its clients to improve performance across key business metrics.  Through its extensive array of service capabilities and industry relationships, the Company is positioned to provide healthcare information services to organizations across a wide continuum of service delivery segments.

Segment Reporting, Policy [Policy Text Block]

The Company has eight operating segments that are aggregated into one reporting segment because they have similar economic characteristics and meet the other aggregation criteria from the Financial Accounting Standards Board (“FASB”) guidance on segment disclosure.  The eight operating segments are: NRC Picker U.S. and NRC Picker Canada, which each offer renewable performance tracking and improvement services, custom research, subscription-based educational services and a renewable syndicated service; Ticker, which offers stand-alone market information, as well as a comparative performance database to allow the Company’s clients to assess their performance relative to the industry, to access best practice examples, and to utilize competitive information for marketing purposes; Payer Solutions, which offers functional disease-specific and health status measurement tools; The Governance Institute (“TGI”), which offers subscription-based governance information and educational conferences designed to improve the effectiveness of hospital and healthcare systems by continually strengthening their healthcare boards, medical leadership and management performance in the United States; My InnerView (“MIV”), which provides quality and performance improvement solutions to the senior care industry; Outcome Concept Systems, Inc. (“OCS”), which provides financial and operational benchmarks and analytics to home care and hospice providers; and Illuminate, a patient outreach and discharge program designed to facilitate service and clinical recovery within the critical hours after a patient is discharged from a healthcare setting within the acute care, skilled nursing, physician and home health environments.

Basis of Accounting, Policy [Policy Text Block]

The condensed consolidated balance sheet of the Company at December 31, 2011, was derived from the Company’s audited consolidated 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.

Information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted.  These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto that are included in the Company’s Form 10-K for the fiscal year ended December 31, 2011, filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2012.

Use of Estimates, Policy [Policy Text Block]

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

Consolidation, Policy [Policy Text Block]

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, National Research Corporation Canada.  All significant intercompany transactions and balances have been eliminated.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

The functional currency of the Company’s foreign subsidiary, National Research Corporation Canada, is the subsidiary’s local currency.  The Company translates the assets and liabilities of its foreign subsidiary at the period-end rate of exchange and its foreign subsidiary’s income statement balances at the average rate prevailing during the period.  The Company records the resulting translation adjustment in accumulated other comprehensive income, a component of shareholders’ equity.  Gains and losses related to transactions denominated in a currency other than the subsidiary’s local currency and short-term intercompany accounts are included in other income (expense) in the consolidated statements of income.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

The Company’s 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 the Company’s market assumptions.  The inputs are then classified into the following hierarchy: (1) Level 1 Inputs—quoted prices in active markets for identical assets and liabilities; (2) Level 2 Inputs—observable market-based inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets, quoted prices for similar or identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and (3) Level 3 Inputs—unobservable inputs.

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Note 7 - Earnings Per Share (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	48,702	178,965	75,051	107,048
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	530	2,583

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Note 7 - Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Weighted Average Number of Shares [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	(In thousands)				(In thousands)
	2012		­ 2011		­ 2012		­ 2011­
Weighted average shares and share equivalents – basic		6,791		6,679		6,754		6,666
Weighted average dilutive effect of options		160		160		173		165
Weighted average dilutive effect of restricted stock		10		11		14		14
Weighted average shares and share equivalents - dilutive		6,961		6,850		6,941		6,845

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Note 3 - Notes Payable (Detail) (USD $)	9 Months Ended		9 Months Ended		9 Months Ended
	Sep. 30, 2012	Dec. 19, 2008	Sep. 30, 2012 Term Loan MIV Acquisition [Member]	Jul. 31, 2010 Term Loan MIV Acquisition [Member]	Sep. 30, 2012 Term Loan OCS Acquisition [Member]
Debt Instrument, Face Amount		$ 9,000,000		$ 6,900,000	$ 10,000,000
Debt Instrument, Periodic Payment			80,104		121,190
Debt Instrument Balloon Payment Amount			4,800,000		6,700,000
Debt Instrument, Interest Rate, Stated Percentage			3.79%		3.79%
Notes Payable			5,400,000		7,700,000
Line of Credit Facility, Maximum Borrowing Capacity	6,500,000
Line of Credit Facility, Borrowing Capacity, Description	75%
Line of Credit Facility, Interest Rate Description	Borrowings under the revolving credit note bear interest at a variable annual rate, with three rate options at the discretion of management as follows:(1) 2.5% plus the daily reset one-month London Interbank Offered Rate ("LIBOR") or (2) 2.2% plus the one-, two-, three-, six- or twelve-month LIBOR rate, or (3) the bank's Money Market Loan Rate.
Line of Credit Facility, Remaining Borrowing Capacity	$ 6,500,000

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net income	$ 3,577	$ 2,647	$ 11,365	$ 8,432
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	419	(497)	360	(311)
Other comprehensive income (loss)	419	(497)	360	(311)
Comprehensive income	$ 3,996	$ 2,150	$ 11,725	$ 8,121

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Note 4 - Share-Based Compensation

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

4.         SHARE-BASED COMPENSATION

The Company measures and recognizes compensation expense for all share-based payments.  The compensation expense is recognized based on the grant-date fair value of those awards.  All of the Company’s existing stock option awards and non-vested stock awards have been determined to be equity-classified awards.

The Company’s 2001 Equity Incentive Plan provides for the granting of stock options, stock appreciation rights, restricted stock, performance shares and other share-based awards and benefits up to an aggregate of 600,000 shares of the Company’s common stock.  Options granted may be either nonqualified or incentive stock options.  Options vest over one to five years following the date of grant and option terms are generally five to ten years following the date of grant.

The Company’s 2004 Non-Employee Director Stock Plan (the “2004 Director Plan”) is a nonqualified plan that provides for the granting of options with respect to 550,000 shares of the Company’s common stock.  The 2004 Director Plan provides for grants of nonqualified options to each director of the Company who is not employed by the Company.  On the date of each annual meeting of shareholders of the Company, options to purchase 12,000 shares of the Company’s common stock are granted to directors that are re-elected or retained as a director at such meeting.  Options vest one year following the date of grant and option terms are generally ten years following the date of grant, or three years in the case of termination of the outside director’s service.

The Company’s 2006 Equity Incentive Plan provides for the granting of options, stock appreciation rights, restricted stock, performance shares and other share-based awards and benefits up to an aggregate of 600,000 shares of the Company’s common stock.  Options granted may be either incentive stock options or nonqualified stock options.  Vesting terms vary with each grant and option terms are generally five to ten years.  Options vest over five years following the date of grant and option terms are generally five to ten years following the date of grant.

The Company granted options to purchase 79,630 and 166,008 shares of the Company’s common stock during the nine-month periods ended September 30, 2012, and 2011 respectively.  Options to purchase shares of common stock were granted with exercise prices equal to the fair value of the common stock on the date of grant.  The fair value of stock options granted was estimated using a Black-Scholes valuation model with the following assumptions:

	2012			2011
Expected dividend yield at date of grant	2.63	to	3.98%	2.00	to	2.55%
Expected stock price volatility	29.10	to	31.70%	26.70	to	32.00%
Risk-free interest rate	0.56	to	1.15%	1.70	to	2.14%
Expected life of options (in years)	4	to	6	4	to	6

The risk-free interest rate assumptions were based on the U.S. Treasury yield curve in effect at the time of the grant.  The expected volatility was based on historical monthly price changes of the Company’s stock based on the expected life of the options at the date of grant.  The expected life of options is the average number of years the Company estimates that options will be outstanding.  The Company considers groups of associates that have similar historical exercise behavior separately for valuation purposes.

The following table summarizes stock option activity under the Company’s 2001 and 2006 Equity Incentive Plans and the 2004 Director Plan for the nine months ended September 30, 2012:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2011		769,401		$	25.73
Granted		79,630		$	45.28
Exercised		(164,000	)	$	19.93
Cancelled		(131,012	)	$	27.47
Outstanding at September 30, 2012		554,019		$	29.84		6.59	$	11,317
Exercisable at September 30, 2012		306,524		$	25.26		5.44	$	7,666

The following table summarizes information regarding non-vested stock granted to associates under the 2001 Equity Incentive Plan for the nine months ended September 30, 2012:

	Shares Outstanding			Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2011		30,002		$	30.57
Granted		7,823		$	38.35
Vested		(6,441	)	$	24.22
Forfeited		(11,181	)	$	32.31
Outstanding at September 30, 2012		20,203		$	34.65

As of September 30, 2012, the total unrecognized compensation cost related to non-vested stock awards was approximately $515,000 and is expected to be recognized over a weighted average period of 4.00 years.

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Note 4 - Share-Based Compensation (Detail) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Share-based Compensation Arrangement By Share-based Payment Award Option Term	5 years
Share-based Goods and Nonemployee Services Transaction, Shares Approved for Issuance (in Shares)	550,000
Common Stock Options Granted To Directors (in Shares)	12,000
Share-based Goods and Nonemployee Services Transaction Vesting Period	1 year
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)	79,630	166,008
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized (in Dollars)	$ 515,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	4 years
Normal Term [Member]
Share-based Goods and Nonemployee Services Transaction Option Terms	10 years
Termination of Service [Member]
Share-based Goods and Nonemployee Services Transaction Option Terms	3 years
The 2001 Equity Incentive Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement By Share-based Payment Award Option Term	5 years
The 2001 Equity Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement By Share-based Payment Award Option Term	10 years
The 2001 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)	600,000
The 2006 Equity Incentive Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Share-based Compensation Arrangement By Share-based Payment Award Option Term	5 years
The 2006 Equity Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	10 years
Share-based Compensation Arrangement By Share-based Payment Award Option Term	10 years
The 2006 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)	600,000

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Note 6 - Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Table Text Block]

	September 30, 2012			December 31, 2011
	(In thousands)
Property and equipment	$	31,112		$	29,229
Accumulated depreciation		(18,205	)		(15,616	)
Property and equipment, net	$	12,907		$	13,613