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 March 31, 2013

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 T	Non-accelerated filer £	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 April 30, 2013: 6,910,928 shares

NATIONAL RESEARCH CORPORATION

FORM 10-Q INDEX

For the Quarter Ended March 31, 2013

			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	8-13
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14-18
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
	Item 4.	Controls and Procedures	18
PART II.	OTHER INFORMATION
	Item 1A.	Risk Factors	19
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
	Item 6.	Exhibits	19
	Signatures		20
	Exhibit Index		21

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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 (“NRC” or 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 year ended December 31, 2012, 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)

	March 31, 2013			December 31, 2012
Assets
Current assets:
Cash and cash equivalents	$	9,234		$	8,286
Trade accounts receivable, less allowance for doubtful accounts of $227 and $244in 2013 and 2012, respectively		14,378			12,119
Unbilled revenue		1,552			932
Prepaid expenses		2,171			1,269
Income tax receivable		--			158
Deferred income taxes		155			547
Other current assets		379			504
Total current assets		27,869			23,815
Property and equipment, net		12,192			12,493
Intangible assets, net		5,528			5,794
Goodwill		57,736			57,799
Other		177			145
Total assets	$	103,502		$	100,046
Liabilities and Shareholders’ Equity
Current liabilities:
Notes payable	$	12,110		$	12,436
Accounts payable		1,298			291
Accrued wages, bonus and profit sharing		2,803			4,392
Accrued expenses		2,550			2,265
Current portion of capital lease obligations		105			102
Income taxes payable		1,341			--
Deferred revenue		15,541			15,812
Total current liabilities		35,748			35,298
Deferred income taxes		7,204			7,527
Deferred revenue		405			254
Other long term liabilities		198			225
Total liabilities		43,555			43,304
Shareholders’ equity:
Common stock, $0.001 par value; authorized 20,000,000 shares, issued 8,416,343 in 2013 and 8,376,592 in 2012,outstanding 6,910,928 in 2013 and 6,874,992 in 2012		8			8
Additional paid-in capital		40,832			39,514
Retained earnings		47,028			44,700
Accumulated other comprehensive income, foreign currency translation		889			1,124
Treasury stock, at cost; 1,505,415 shares in 2013 and 1,501,600 shares in 2012		(28,810	)		(28,604	)
Total shareholders’ equity		59,947			56,742
Total liabilities and shareholders’ equity	$	103,502		$	100,046

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 March 31,
	2013			2012
Revenue	$	24,906		$	22,407
Operating expenses:
Direct		10,246			8,931
Selling, general and administrative		6,493			6,151
Depreciation and amortization		950			1,243
Total operating expenses		17,689			16,325
Operating income		7,217			6,082
Other income (expense):
Interest income		19			5
Interest expense		(117	)		(142	)
Other, net		14			(15	)
Total other expense		(84	)		(152	)
Income before income taxes		7,133			5,930
Provision for income taxes		2,663			2,081
Net income	$	4,470		$	3,849
Net income per share – basic	$	0.65		$	0.57
Net income per share – diluted	$	0.64		$	0.56
Weighted average shares and share equivalents outstanding – basic		6,890			6,719
Weighted average shares and share equivalents outstanding – diluted		7,021			6,907

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 March 31,
	2013			2012
Net income	$	4,470		$	3,849
Other comprehensive income (loss):
Foreign currency translation adjustment	$	(235	)	$	210
Other comprehensive income (loss)	$	(235	)	$	210
Comprehensive income	$	4,235		$	4,059

See accompanying notes to condensed consolidated financial statements.

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NATIONAL RESEARCH CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Three months ended March 31,
	2013			2012
Cash flows from operating activities:
Net income	$	4,470		$	3,849
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		950			1,243
Deferred income taxes		13			275
Non-cash share-based compensation expense		218			52
Tax benefit from exercise of stock options		56			213
Loss on disposal of property and equipment		1			--
Net changes in assets and liabilities:
Trade accounts receivable		(2,297	)		(2,340	)
Unbilled revenue		(633	)		(75	)
Prepaid expenses and other		(633	)		(933	)
Accounts payable		799			87
Accrued expenses, wages, bonuses and profit sharing		(1,237	)		(335	)
Income taxes receivable and payable		1,502			11
Deferred revenue		(108	)		34
Net cash provided by operating activities		3,101			2,081
Cash flows from investing activities:
Purchases of property and equipment		(416	)		(633	)
Net cash used in investing activities		(416	)		(633	)
Cash flows from financing activities:
Payments on notes payable		(326	)		(467	)
Payments on capital lease obligations		(27	)		(31	)
Proceeds from exercise of stock options		375			372
Common stock withheld from vested restricted shares for payroll tax withholdings		(55	)		(466	)
Excess tax benefit from share-based compensation		575			599
Payment of dividends on common stock		(2,142	)		(1,762	)
Net cash used in financing activities		(1,600	)		(1,755	)
Effect of exchange rate changes on cash		(137	)		97
Increase (decrease) in cash and cash equivalents		948			(210	)
Cash and cash equivalents at beginning of period		8,286			8,082
Cash and cash equivalents at end of period	$	9,234		$	7,872
Supplemental disclosure of cash paid for:
Interest expense	$	77		$	135
Income taxes	$	257		$	708

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

The Company is a leading provider of analytics and insights that facilitate revenue growth, patient, employee and customer retention and patient engagement for healthcare providers, payers and other healthcare organizations.  The Company’s solutions support the improvement of business and clinical outcomes, while facilitating regulatory compliance and the shift to population-based health management for its clients.  The Company’s ability to systematically capture, analyze and deliver to its clients self-reported information from patients, families and consumers is critical in today’s healthcare market.  NRC believes that access to and analysis of its extensive consumer-driven information will become even more valuable in the future as healthcare providers increasingly need to more deeply understand and engage patients and consumers in an effort towards effective population-based health management.

During the first quarter of 2013, the Company condensed their eight operating segments into two 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 two operating segments, organized by geographic area, are National Research Corporation (United States) and National Research Corporation Canada, which each offer a portfolio of solutions to address specific market needs around growth, retention, engagement and thought leadership for healthcare organizations. 

The condensed consolidated balance sheet of the Company at December 31, 2012, 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 year ended December 31, 2012, filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2013.

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.  Since the undistributed earnings of the Company’s foreign subsidiary are considered to be indefinitely reinvested, the components of other comprehensive income (loss) have not been tax effected.  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 condensed consolidated statements of income.

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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 March 31, 2013, and December 31, 2012:

Fair Values Measured on a Recurring Basis

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of March 31, 2013
Money Market Funds	$	5,835	$	--	$	--	$	5,835
Commercial Paper		3,052		--		--		3,052
Total	$	8,887	$	--	$	--	$	8,887
As of December 31, 2012
Money Market Funds	$	5,245	$	--	$	--	$	5,245
Commercial Paper		2,242		--		--		2,242
Total	$	7,487	$	--	$	--	$	7,487

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:

	March 31, 2013		December 31, 2012
	(In thousands)
Total carrying amounts of long-term debt	$	12,110	$	12,436
Estimated fair value of long-term debt	$	12,053	$	12,490

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 March 31, 2013, and December 31, 2012, there was no indication of impairment related to the Company’s non-financial assets.

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2.           INCOME TAXES

The Company’s effective tax rate increased to 37.3% for the three-month period ended March 31, 2013, compared to 35.1% for the same period in 2012.  This increase was primarily due to nondeductible fees associated with the recapitalization transaction that were incurred during the three-month period ended March 31, 2013, and an increase in unrecognized tax benefits during the three-month period ended March 31, 2013, compared to a decrease in unrecognized tax benefits for the same period in 2012.

The unrecognized tax benefit as of March 31, 2013, was $252,000, excluding interest of $12,000 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 My InnerView.  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 March 31, 2013, was $5.0 million.

On July 31, 2010, the Company borrowed $10.0 million under a term note to partially finance the acquisition of Outcome Concept Systems, Inc.  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 March 31, 2013, was $7.1 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 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 March 31, 2013 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 March 31, 2013.

The term notes and revolving credit note 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 March 31, 2013, the Company was in compliance with these restrictions and covenants.

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.

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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.  Stock options granted may be either nonqualified or incentive stock options.  Stock 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 stock 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.  Stock 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 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.  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.  Stock 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 29,448 and 31,630 shares of the Company’s common stock during the three-month periods ended March 31, 2013, and 2012 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:

	2013			2012
Expected dividend yield at date of grant		3.46	%		3.98	%
Expected stock price volatility		30.51	%		29.10	%
Risk-free interest rate		1.07	%		1.15	%
Expected life of options (in years)		6			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.

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The following table summarizes stock option activity under the Company’s 2001 and 2006 Equity Incentive Plans and the 2004 Director Plan for the three months ended March 31, 2013:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2012		455,918		$	30.34
Granted		29,448		$	52.42
Exercised		(39,751	)	$	13.21
Cancelled		--			--
Outstanding at March 31, 2013		445,615		$	33.33		6.85	$	10,909
Exercisable at March 31, 2013		195,325		$	26.74		5.28	$	6,068

The following table summarizes information regarding non-vested stock granted to associates under the 2006 Equity Incentive Plan for the three months ended March 31, 2013:

	Shares Outstanding		Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2012		20,203	$	34.65
Granted		--		--
Vested		--		--
Forfeited		--		--
Outstanding at March 31, 2013		20,203	$	34.65

As of March 31, 2013, the total unrecognized compensation cost related to non-vested stock awards was approximately $445,000 and is expected to be recognized over a weighted average period of 3.26 years.

5.           GOODWILL AND OTHER INTANGIBLE ASSETS

The following represents a summary of changes in the Company’s carrying amount of goodwill for the three months ended March 31, 2013:

	(In thousands)
Balance as of December 31, 2012	$	57,799
Foreign currency translation		(63	)
Balance as of March 31, 2013	$	57,736

Intangible assets consisted of the following:

	March 31, 2013			December 31, 2012
	(In thousands)
Non-amortizing other intangible assets:
Trade name	$	1,191		$	1,191
Amortizing other intangible assets:
Customer related intangibles		10,514			10,521
Non-compete agreements		430			430
Trade name		1,902			1,902
Total other intangible assets		14,037			14,044
Accumulated amortization		(8,509	)		(8,250	)
Other intangible assets, net	$	5,528		$	5,794

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6.           PROPERTY AND EQUIPMENT

	March 31, 2013			December 31, 2012
	(In thousands)
Property and equipment	$	31,564		$	31,191
Accumulated depreciation		(19,372	)		(18,698	)
Property and equipment, net	$	12,192		$	12,493

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 granted stock options and restricted stock.  The Company excluded 27,485 and 80,240 stock options for the three-month periods ended March 31, 2013, and 2012, 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.  No restricted stock awards were excluded from the calculation during the three-month periods ended March 31, 2013, and 2012.

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 March 31,
	(In thousands)
	2013		­ 2012
Weighted average shares and share equivalents – basic		6,890		6,719
Weighted average dilutive effect of options		120		174
Weighted average dilutive effect of restricted stock		11		14
Weighted average shares and share equivalents - diluted		7,021		6,907

8.           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, which is conducted by an independent insurance broker, and the costs associated therewith, 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 $55,000 and $48,000 for the three-month periods ended March 31, 2013, and 2012, respectively.  

Michael Hays, our Chief Executive Officer, is a director and owner of 14% of the equity interests of Nebraska Global Investment Company LLC.  The Company purchased certain technology consulting and software development services from Nebraska Global Investment Company LLC.  The total value of these purchases was $57,000 for the three-month period ended March 31, 2013.  No purchases were made during the same period in 2012.

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

Overview

The Company is a leading provider of analytics and insights that facilitate revenue growth, patient, employee and customer retention and patient engagement for healthcare providers, payers and other healthcare organizations.  The Company’s solutions support the improvement of business and clinical outcomes, while facilitating regulatory compliance and the shift to population-based health management for its clients.  The Company’s ability to systematically capture, analyze and deliver to its clients self-reported information from patients, families and consumers is critical in today’s healthcare market.  NRC believes that access to and analysis of its extensive consumer-driven information will become even more valuable in the future as healthcare providers increasingly need to more deeply understand and engage patients and consumers in an effort towards effective population-based health management.

NRC has achieved a market leadership position through its more than 32 years of industry innovation and experience, as well as its long-term, recurring revenue relationships (solutions that are used or required by a client each year) with many of the healthcare industry’s largest organizations.  Since its founding in 1981 in Lincoln, Nebraska, the Company has focused on meeting the evolving information needs of the healthcare industry through internal product development, as well as select acquisitions.

Results of Operations

The following table sets forth for the periods indicated, select financial information derived from the Company’s condensed 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.

	Three months ended March 31,
	2013			2012
Revenue:		100.0	%		100.0	%
Operating expenses:
Direct		41.1			39.9
Selling, general and administrative		26.1			27.5
Depreciation and amortization		3.8			5.5
Total operating expenses		71.0			72.9
Operating income		29.0	%		27.1	%

Three Months Ended March 31, 2013, Compared to Three Months Ended March 31, 2012

Revenue.  Revenue for the three-month period ended March 31, 2013, increased 11.2% to $24.9 million, compared to $22.4 million in the three-month period ended March 31, 2012.  The increase was due to market share growth and vertical growth in the existing client base.  Revenue from subscription-based agreements comprised 74% of the total revenue for the three-month period ended March 31, 2013, compared to 68% of the total revenue for the three-month period ended March 31, 2012.  Subscription-based agreements, which grew to represent 80% of contract value as of March 31, 2013, are recurring annual service agreements where revenue is spread evenly over the period of service provided.

-14-

Direct expenses.  Direct expenses increased 14.7% to $10.2 million for the three-month period ended March 31, 2013, compared to $8.9 million in the same period during 2012.  This was due to increases in variable expenses of $1.1 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 $210,000 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 41.1% in the three-month period ended March 31, 2013, from 39.9% during the same period of 2012.  Variable expenses as a percentage of revenue were 2.2% of the change due to higher survey volumes for the subscription-based products, partially offset by a decrease in fixed expenses as a percentage of revenue of 0.9% 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 5.6% to $6.5 million for the three-month period ended March 31, 2013, compared to $6.2 million for the same period in 2012.  Selling, general, and administrative expenses decreased as a percentage of revenue to 26.1% for the three-month period ended March 31, 2013, from 27.5% for the same period in 2012 due to the leveraging of selling, general and administrative expenses against increased revenue in the three-month period ended March 31, 2013.

Depreciation and amortization.  Depreciation and amortization expenses were $950,000 and $1.2 million for the three-month periods ended March 31, 2013, and 2012, respectively.  Depreciation and amortization expenses as a percentage of revenue decreased to 3.8% for the three-month period ended March 31, 2013, from 5.5% during the same period of 2012.

Provision for income taxes. Provision for income taxes was $2.7 million (37.3% effective tax rate) for the three-month period ended March 31, 2013, compared to $2.1 million (35.1% effective tax rate) for the same period in 2012.  The effective tax rate for the three-month period ended March 31, 2013, is higher than the rate in the same period of 2012 primarily due to nondeductible fees associated with the recapitalization transaction that were incurred during the three-month period ended March 31, 2013, and an increase in unrecognized tax benefits during the three-month period ended March 31, 2013, compared to a decrease in unrecognized tax benefits for the same period in 2012.

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.

The Company had cash and cash equivalents of $9.2 million at March 31, 2013, of which $6.2 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 $7.9 million as of March 31, 2013, compared to a working capital deficiency of $11.5 million as of December 31, 2012.  The change in the working capital balance was primarily due to an increase in accounts receivable of $2.3 million, cash and cash equivalents of $948,000, prepaid and other expenses of $777,000, and unbilled revenue of $620,000, partially offset by an increase in income taxes payable of $1.5 million mainly due to timing of billings and payment of income taxes.  The current portion of notes payable balance at March 31, 2013, and December 31, 2012, were $12.1 million and $12.4 million, respectively, for 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 and current portion of notes payable.  The deferred revenue balances as of March 31, 2013, and December 31, 2012, were $15.5 million and $15.8 million, respectively.

-15-

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 condensed 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:

	Three Months Ended March 31,
	2013			2012
	(In thousands)
Provided by operating activities	$	3,101		$	2,081
Used in investing activities		(416	)		(633	)
Used in financing activities		(1,600	)		(1,755	)
Effect of exchange rate change on cash		(137	)		97
Net increase (decrease) in cash and cash equivalents		948			(210	)
Cash and cash equivalents at end of period	$	9,234		$	7,872

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 $3.1 million for the three months ended March 31, 2013, which included net income of $4.5 million, plus non-cash charges (benefits) for deferred tax expense, depreciation and amortization, and non-cash stock compensation totaling $1.2 million.  Changes in working capital reduced 2013 cash flows from operating activities by $2.6 million, primarily due to the timing of initial billings on new or renewal contracts, annual prepaid commitments, and payments of annual bonuses.  These changes were partially offset by increasing cash flows from the timing of estimated tax payments.

Net cash provided by operating activities was $2.1 million for the three months ended March 31, 2012, which included net income of $3.8 million, plus non-cash charges (benefits) for deferred tax expense, depreciation and amortization, and non-cash stock compensation totaling $1.8 million.  Changes in working capital reduced 2012 cash flows from operating activities by $3.6 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.

-16-

Cash Flows from Investing Activities

Net cash of $416,000 and  $633,000 was used for investing activities in the three months ended March 31, 2013, and 2012, respectively, for purchases of property and equipment.

Cash Flows from Financing Activities

Net cash used in financing activities was $1.6 million in the three months ended March 31, 2013.  Proceeds from the exercise of stock options and the excess tax benefit of share-based compensation provided cash of $375,000 and $575,000, respectively.  Cash was used to pay dividends of $2.1 million, payroll taxes on vested restricted shares of $55,000, capital lease obligations of $27,000 and to repay borrowings under the term notes totaling $326,000.

Net cash used in financing activities was $1.8 million in the three months ended March 31, 2012.  Proceeds from the exercise of stock options and the excess tax benefit of share-based compensation provided cash of $372,000 and $599,000, respectively.  Cash was used to pay dividends of $1.8 million, payroll taxes on vested restricted shares of $466,000, and repay borrowings under the term notes totaling $467,000.

The effect of changes in foreign exchange rates increased (decreased) cash and cash equivalents by ($137,000) and $97,000 in the quarters ended March 31, 2013, and 2012, respectively.

Capital Expenditures

Cash paid for capital expenditures was $416,000 for the three-month period ended March 31, 2013.  These expenditures consisted mainly of computer software, computer hardware, furniture and other equipment.  The Company expects similar capital expenditure purchases for the remainder of 2013 consisting primarily of computer software and hardware and other equipment to be funded through cash generated from operations.

Debt and Equity

The Company has two term notes, which were used to partially finance acquisitions in 2008 and 2010, and mature on July 31, 2013.  Borrowings under the term notes bear interest at an annual rate of 3.79%.  The outstanding balance of the term notes at March 31, 2013, was $12.1 million.

The Company has a commitment letter and 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 Company also has a revolving credit note which provides for the maximum aggregate borrowings of $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 March 31, 2013, 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 March 31, 2013.  The Company expects to obtain a new revolving credit facility in conjunction with the term note refinancing during the second quarter of 2013.

The term notes and revolving credit note 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 March 31, 2013, the Company was in compliance with these restrictions and covenants.

-17-

The Company has capital leases for computer equipment, office equipment, and inserting equipment.  The balance of the capital leases as of March 31, 2013, was $303,000.

Shareholders’ equity increased $3.2 million to $59.9 million at March 31, 2013, from $56.7 million at December 31, 2012.  The increase was primarily due to net income of $4.5 million and $1.3 million related to share-based compensation, partially offset by dividends paid of $2.1 million, share repurchases of $205,000 and foreign currency translation adjustment of $235,000.

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 March 31, 2013, the remaining number of shares that could be purchased under this authorization was 139,583.

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, 2012.

ITEM 4.  Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief 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 quarter ended March 31, 2013, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

-18-

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, 2012.

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 April 30, 2013, 610,417 shares have been repurchased under that authorization.

The table below summarizes stock repurchases for the three-month period ended March 31, 2013.

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
January 1 – January 31, 2013		3,815	$	53.81		3,815		139,583
February 1 – February 28, 2013		--		--		--		139,583
March 1 – March 31, 2013		--		--		--		139,583

ITEM 6.  Exhibits

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

-19-

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: May 8, 2013	By:	/s/ Michael D. Hays
		Michael D. Hays
		Chief Executive Officer (Principal Executive Officer)
Date: May 8, 2013	By:	/s/ Kevin R. Karas
		Kevin R. Karas
		Senior Vice President Finance, Treasurer, Secretary and
		Chief Financial Officer (Principal Financial and Accounting Officer)

-20-

NATIONAL RESEARCH CORPORATION

EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the Quarterly Period ended March 31, 2013

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 March 31, 2013, 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.

-21-

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: May 8, 2013	/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: May 8, 2013	/s/ Kevin R. Karas
	Kevin R. Karas
	Chief Financial Officer

EX-32

Exhibit 32

Certification Pursuant to 18 U.S.C. Section 1350

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the accompanying Quarterly Report on Form 10-Q of National Research Corporation (the “Company”) for the three-month period ended March 31, 2013 (the “Report”), I, Michael D. Hays, Chief Executive Officer of the Company, and I, Kevin Karas, Chief Financial Officer, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, based on my knowledge, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The 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:  May 8, 2013

A signed original of this written statement required by Section 906 has been provided to National Research Corporation and will be retained by National Research Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Note 7 - Earnings Per Share (Detail) - Weighted Average Number of Shares In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Weighted average shares and share equivalents – basic	6,890	6,719
Weighted average shares and share equivalents - diluted	7,021	6,907
Stock Options [Member]
Weighted average dilutive effect of	120	174
Restricted Stock [Member]
Weighted average dilutive effect of	11	14

XML

Note 4 - Share-Based Compensation (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)	29,448	31,630
Options Vesting One To Five Years [Member] | The 2001 Equity Incentive Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year
Options Vesting One To Five Years [Member] | The 2001 Equity Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Options Vesting Five Years [Member] | The 2006 Equity Incentive Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement By Share-based Payment Award Option Term	5 years
Options Vesting Five Years [Member] | The 2006 Equity Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement By Share-based Payment Award Option Term	10 years
Nonvested [Member]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized (in Dollars)	445,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	3 years 94 days
Normal Term [Member] | 2004 Director Plan [Member]
Share-based Goods and Nonemployee Services Transaction Option Terms	10 years
Termination of Service [Member] | 2004 Director Plan [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
2004 Director Plan [Member]
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
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 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 3 - Notes Payable

3 Months Ended

Mar. 31, 2013

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 My InnerView.  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 March 31, 2013, was $5.0 million.

On July 31, 2010, the Company borrowed $10.0 million under a term note to partially finance the acquisition of Outcome Concept Systems, Inc.  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 March 31, 2013, was $7.1 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 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 March 31, 2013 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 March 31, 2013.

The term notes and revolving credit note 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 March 31, 2013, the Company was in compliance with these restrictions and covenants.

XML

Note 5 - Goodwill and Other Intangible Assets (Detail) - Summary of Changes in Goodwill (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Balance as of December 31, 2012	$ 57,799
Foreign currency translation	(63)
Balance as of March 31, 2013	$ 57,736

XML

Note 4 - Share-Based Compensation (Detail) - Non-vested stock (USD $)	Mar. 31, 2013	Dec. 31, 2012
Outstanding at December 31, 2012	20,203	20,203
Outstanding at December 31, 2012 (in Dollars per share)	$ 34.65	$ 34.65
Outstanding at March 31, 2013	20,203	20,203
Outstanding at March 31, 2013 (in Dollars per share)	$ 34.65	$ 34.65

XML

Note 5 - Goodwill and Other Intangible Assets (Detail) - Intangible Assets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Non-amortizing other intangible assets:
Trade name	$ 1,191	$ 1,191
Amortizing other intangible assets:
Customer related intangibles	10,514	10,521
Non-compete agreements	430	430
Trade name	1,902	1,902
Total other intangible assets	14,037	14,044
Accumulated amortization	(8,509)	(8,250)
Other intangible assets, net	$ 5,528	$ 5,794

XML

Note 6 - Property and Equipment (Detail) - Summary of Property and Equipment (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Property and equipment	$ 31,564	$ 31,191
Accumulated depreciation	(19,372)	(18,698)
Property and equipment, net	$ 12,192	$ 12,493

XML

Note 2 - Income Taxes

3 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Text Block]

2.           INCOME TAXES

The Company’s effective tax rate increased to 37.3% for the three-month period ended March 31, 2013, compared to 35.1% for the same period in 2012.  This increase was primarily due to nondeductible fees associated with the recapitalization transaction that were incurred during the three-month period ended March 31, 2013, and an increase in unrecognized tax benefits during the three-month period ended March 31, 2013, compared to a decrease in unrecognized tax benefits for the same period in 2012.

The unrecognized tax benefit as of March 31, 2013, was $252,000, excluding interest of $12,000 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 7 - Earnings Per Share (Detail)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	27,485	80,240

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Condensed Consolidated Balance Sheets (unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 9,234	$ 8,286
Trade accounts receivable, less allowance for doubtful accounts of $227 and $244 in 2013 and 2012, respectively	14,378	12,119
Unbilled revenue	1,552	932
Prepaid expenses	2,171	1,269
Income tax receivable		158
Deferred income taxes	155	547
Other current assets	379	504
Total current assets	27,869	23,815
Property and equipment, net	12,192	12,493
Intangible assets, net	5,528	5,794
Goodwill	57,736	57,799
Other	177	145
Total assets	103,502	100,046
Current liabilities:
Notes payable	12,110	12,436
Accounts payable	1,298	291
Accrued wages, bonus and profit sharing	2,803	4,392
Accrued expenses	2,550	2,265
Current portion of capital lease obligations	105	102
Income taxes payable	1,341
Deferred revenue	15,541	15,812
Total current liabilities	35,748	35,298
Deferred income taxes	7,204	7,527
Deferred revenue	405	254
Other long term liabilities	198	225
Total liabilities	43,555	43,304
Shareholders’ equity:
Common stock, $0.001 par value; authorized 20,000,000 shares, issued 8,416,343 in 2013 and 8,376,592 in 2012, outstanding 6,910,928 in 2013 and 6,874,992 in 2012	8	8
Additional paid-in capital	40,832	39,514
Retained earnings	47,028	44,700
Accumulated other comprehensive income, foreign currency translation	889	1,124
Treasury stock, at cost; 1,505,415 shares in 2013 and 1,501,600 shares in 2012	(28,810)	(28,604)
Total shareholders’ equity	59,947	56,742
Total liabilities and shareholders’ equity	$ 103,502	$ 100,046

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Condensed Consolidated Statements of Cash Flows (unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 4,470	$ 3,849
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	950	1,243
Deferred income taxes	13	275
Non-cash share-based compensation expense	218	52
Tax benefit from exercise of stock options	56	213
Loss on disposal of property and equipment	1
Net changes in assets and liabilities:
Trade accounts receivable	(2,297)	(2,340)
Unbilled revenue	(633)	(75)
Prepaid expenses and other	(633)	(933)
Accounts payable	799	87
Accrued expenses, wages, bonuses and profit sharing	(1,237)	(335)
Income taxes receivable and payable	1,502	11
Deferred revenue	(108)	34
Net cash provided by operating activities	3,101	2,081
Cash flows from investing activities:
Purchases of property and equipment	(416)	(633)
Net cash used in investing activities	(416)	(633)
Cash flows from financing activities:
Payments on notes payable	(326)	(467)
Payments on capital lease obligations	(27)	(31)
Proceeds from exercise of stock options	375	372
Common stock withheld from vested restricted shares for payroll tax withholdings	(55)	(466)
Excess tax benefit from share-based compensation	575	599
Payment of dividends on common stock	(2,142)	(1,762)
Net cash used in financing activities	(1,600)	(1,755)
Effect of exchange rate changes on cash	(137)	97
Increase (decrease) in cash and cash equivalents	948	(210)
Cash and cash equivalents at beginning of period	8,286	8,082
Cash and cash equivalents at end of period	9,234	7,872
Supplemental disclosure of cash paid for:
Interest expense	77	135
Income taxes	$ 257	$ 708

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Note 1 - Basis of Consolidation and Presentation (Detail) - Long-term Debt (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Total carrying amounts of long-term debt	$ 12,110	$ 12,436
Estimated fair value of long-term debt	$ 12,053	$ 12,490

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Note 3 - Notes Payable (Detail) (USD $)	3 Months Ended		3 Months Ended		3 Months Ended		3 Months Ended
	Mar. 31, 2013	Dec. 19, 2008	Mar. 31, 2013 Term Loan MIV Acquisition [Member]	Jul. 31, 2010 Term Loan MIV Acquisition [Member]	Mar. 31, 2013 Term Loan OCS Acquisition [Member]	Jul. 31, 2010 Term Loan OCS Acquisition [Member]	Mar. 31, 2013 Revolving Credit Facility [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			5,000,000		7,100,000
Line of Credit Facility, Maximum Borrowing Capacity							6,500,000
Line of Credit Facility, Borrowing Capacity, 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.						75%
Line of Credit Facility, Remaining Borrowing Capacity							$ 6,500,000

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Note 1 - Basis of Consolidation and Presentation

3 Months Ended

Mar. 31, 2013

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

1.           BASIS OF CONSOLIDATION AND PRESENTATION

The Company is a leading provider of analytics and insights that facilitate revenue growth, patient, employee and customer retention and patient engagement for healthcare providers, payers and other healthcare organizations.  The Company’s solutions support the improvement of business and clinical outcomes, while facilitating regulatory compliance and the shift to population-based health management for its clients.  The Company’s ability to systematically capture, analyze and deliver to its clients self-reported information from patients, families and consumers is critical in today’s healthcare market.  NRC believes that access to and analysis of its extensive consumer-driven information will become even more valuable in the future as healthcare providers increasingly need to more deeply understand and engage patients and consumers in an effort towards effective population-based health management.

During the first quarter of 2013, the Company condensed their eight operating segments into two 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 two operating segments, organized by geographic area, are National Research Corporation (United States) and National Research Corporation Canada, which each offer a portfolio of solutions to address specific market needs around growth, retention, engagement and thought leadership for healthcare organizations. 

The condensed consolidated balance sheet of the Company at December 31, 2012, 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 year ended December 31, 2012, filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2013.

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.  Since the undistributed earnings of the Company’s foreign subsidiary are considered to be indefinitely reinvested, the components of other comprehensive income (loss) have not been tax effected.  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 condensed 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 March 31, 2013, and December 31, 2012:

Fair Values Measured on a Recurring Basis

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of March 31, 2013
Money Market Funds	$	5,835	$	--	$	--	$	5,835
Commercial Paper		3,052		--		--		3,052
Total	$	8,887	$	--	$	--	$	8,887
As of December 31, 2012
Money Market Funds	$	5,245	$	--	$	--	$	5,245
Commercial Paper		2,242		--		--		2,242
Total	$	7,487	$	--	$	--	$	7,487

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:

	March 31, 2013		December 31, 2012
	(In thousands)
Total carrying amounts of long-term debt	$	12,110	$	12,436
Estimated fair value of long-term debt	$	12,053	$	12,490

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 March 31, 2013, and December 31, 2012, there was no indication of impairment related to the Company’s non-financial assets.

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Condensed Consolidated Balance Sheets (unaudited) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Allowance for doubtful accounts (in Dollars) (in Dollars)	$ 227	$ 244
Common stock, par value (in Dollars per share) (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in Shares)	20,000,000	20,000,000
Common stock, shares issued (in Shares)	8,416,343	8,376,592
Common stock, shares outstanding (in Shares)	6,910,928	6,874,992
Treasury stock, shares (in Shares)	1,505,415	1,501,600

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Note 5 - Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Schedule of Goodwill [Table Text Block]

	(In thousands)
Balance as of December 31, 2012	$	57,799
Foreign currency translation		(63	)
Balance as of March 31, 2013	$	57,736

Schedule of Intangible Assets and Goodwill [Table Text Block]

	March 31, 2013			December 31, 2012
	(In thousands)
Non-amortizing other intangible assets:
Trade name	$	1,191		$	1,191
Amortizing other intangible assets:
Customer related intangibles		10,514			10,521
Non-compete agreements		430			430
Trade name		1,902			1,902
Total other intangible assets		14,037			14,044
Accumulated amortization		(8,509	)		(8,250	)
Other intangible assets, net	$	5,528		$	5,794

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Document And Entity Information	3 Months Ended
	Mar. 31, 2013	Apr. 30, 2013
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		6,910,928
Amendment Flag	false
Entity Central Index Key	0000070487
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

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Note 6 - Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2013

Property, Plant and Equipment [Table Text Block]

	March 31, 2013			December 31, 2012
	(In thousands)
Property and equipment	$	31,564		$	31,191
Accumulated depreciation		(19,372	)		(18,698	)
Property and equipment, net	$	12,192		$	12,493

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenue	$ 24,906	$ 22,407
Operating expenses:
Direct	10,246	8,931
Selling, general and administrative	6,493	6,151
Depreciation and amortization	950	1,243
Total operating expenses	17,689	16,325
Operating income	7,217	6,082
Interest income	19	5
Interest expense	(117)	(142)
Other, net	14	(15)
Total other expense	(84)	(152)
Income before income taxes	7,133	5,930
Provision for income taxes	2,663	2,081
Net income	$ 4,470	$ 3,849
Net income per share – basic (in Dollars per share)	$ 0.65	$ 0.57
Net income per share – diluted (in Dollars per share)	$ 0.64	$ 0.56
Weighted average shares and share equivalents outstanding – basic (in Shares)	6,890	6,719
Weighted average shares and share equivalents outstanding – diluted (in Shares)	7,021	6,907

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Note 6 - Property and Equipment

3 Months Ended

Mar. 31, 2013

Property, Plant and Equipment Disclosure [Text Block]

6.           PROPERTY AND EQUIPMENT

	March 31, 2013			December 31, 2012
	(In thousands)
Property and equipment	$	31,564		$	31,191
Accumulated depreciation		(19,372	)		(18,698	)
Property and equipment, net	$	12,192		$	12,493

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Note 5 - Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2013

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 three months ended March 31, 2013:

	(In thousands)
Balance as of December 31, 2012	$	57,799
Foreign currency translation		(63	)
Balance as of March 31, 2013	$	57,736

Intangible assets consisted of the following:

	March 31, 2013			December 31, 2012
	(In thousands)
Non-amortizing other intangible assets:
Trade name	$	1,191		$	1,191
Amortizing other intangible assets:
Customer related intangibles		10,514			10,521
Non-compete agreements		430			430
Trade name		1,902			1,902
Total other intangible assets		14,037			14,044
Accumulated amortization		(8,509	)		(8,250	)
Other intangible assets, net	$	5,528		$	5,794

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Note 2 - Income Taxes (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	37.30%	35.10%
Unrecognized Tax Benefits (in Dollars)	$ 252,000
Unrecognized Tax Benefits, Interest on Income Taxes Accrued (in Dollars)	$ 12,000

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Note 7 - Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2013

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended March 31,
	(In thousands)
	2013		­ 2012
Weighted average shares and share equivalents – basic		6,890		6,719
Weighted average dilutive effect of options		120		174
Weighted average dilutive effect of restricted stock		11		14
Weighted average shares and share equivalents - diluted		7,021		6,907

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Note 1 - Basis of Consolidation and Presentation (Tables)

3 Months Ended

Mar. 31, 2013

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 March 31, 2013
Money Market Funds	$	5,835	$	--	$	--	$	5,835
Commercial Paper		3,052		--		--		3,052
Total	$	8,887	$	--	$	--	$	8,887
As of December 31, 2012
Money Market Funds	$	5,245	$	--	$	--	$	5,245
Commercial Paper		2,242		--		--		2,242
Total	$	7,487	$	--	$	--	$	7,487

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

	March 31, 2013		December 31, 2012
	(In thousands)
Total carrying amounts of long-term debt	$	12,110	$	12,436
Estimated fair value of long-term debt	$	12,053	$	12,490

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Note 7 - Earnings Per Share

3 Months Ended

Mar. 31, 2013

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 granted stock options and restricted stock.  The Company excluded 27,485 and 80,240 stock options for the three-month periods ended March 31, 2013, and 2012, 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.  No restricted stock awards were excluded from the calculation during the three-month periods ended March 31, 2013, and 2012.

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 March 31,
	(In thousands)
	2013		­ 2012
Weighted average shares and share equivalents – basic		6,890		6,719
Weighted average dilutive effect of options		120		174
Weighted average dilutive effect of restricted stock		11		14
Weighted average shares and share equivalents - diluted		7,021		6,907

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Note 8 - Related Party

3 Months Ended

Mar. 31, 2013

Related Party Transactions Disclosure [Text Block]

8.           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, which is conducted by an independent insurance broker, and the costs associated therewith, 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 $55,000 and $48,000 for the three-month periods ended March 31, 2013, and 2012, respectively.  

Michael Hays, our Chief Executive Officer, is a director and owner of 14% of the equity interests of Nebraska Global Investment Company LLC.  The Company purchased certain technology consulting and software development services from Nebraska Global Investment Company LLC.  The total value of these purchases was $57,000 for the three-month period ended March 31, 2013.  No purchases were made during the same period in 2012.

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Note 4 - Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2013

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

	2013			2012
Expected dividend yield at date of grant		3.46	%		3.98	%
Expected stock price volatility		30.51	%		29.10	%
Risk-free interest rate		1.07	%		1.15	%
Expected life of options (in years)		6			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, 2012		455,918		$	30.34
Granted		29,448		$	52.42
Exercised		(39,751	)	$	13.21
Cancelled		--			--
Outstanding at March 31, 2013		445,615		$	33.33		6.85	$	10,909
Exercisable at March 31, 2013		195,325		$	26.74		5.28	$	6,068

Schedule of Nonvested Share Activity [Table Text Block]

	Shares Outstanding		Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2012		20,203	$	34.65
Granted		--		--
Vested		--		--
Forfeited		--		--
Outstanding at March 31, 2013		20,203	$	34.65

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Note 8 - Related Party (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Ameritas Life Insurance Corp [Member]
Related Party Transaction, Amounts of Transaction	$ 55,000	$ 48,000
Nebraska Global Investment Company LLC [Member]
Related Party Transaction, Amounts of Transaction	$ 57,000

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Note 1 - Basis of Consolidation and Presentation (Detail) - Fair Value of Financial Assets and Liabilities (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair value of financial asset	$ 8,887	$ 7,487
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of financial asset	5,835	5,245
Money Market Funds [Member]
Fair value of financial asset	5,835	5,245
Commercial Paper [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of financial asset	3,052	2,242
Commercial Paper [Member]
Fair value of financial asset	3,052	2,242
Fair Value, Inputs, Level 1 [Member]
Fair value of financial asset	$ 8,887	$ 7,487

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Note 4 - Share-Based Compensation (Detail) - Stock Options Valuation Assumptions	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Expected dividend yield at date of grant	3.46%	3.98%
Expected stock price volatility	30.51%	29.10%
Risk-free interest rate	1.07%	1.15%
Expected life of options (in years)	6 years	6 years

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Condensed Consolidated Statements of Comprehensive Income (unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net income	$ 4,470	$ 3,849
Foreign currency translation adjustment	(235)	210
Other comprehensive income (loss)	(235)	210
Comprehensive income	$ 4,235	$ 4,059

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Note 4 - Share-Based Compensation

3 Months Ended

Mar. 31, 2013

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.  Stock options granted may be either nonqualified or incentive stock options.  Stock 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 stock 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.  Stock 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 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.  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.  Stock 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 29,448 and 31,630 shares of the Company’s common stock during the three-month periods ended March 31, 2013, and 2012 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:

	2013			2012
Expected dividend yield at date of grant		3.46	%		3.98	%
Expected stock price volatility		30.51	%		29.10	%
Risk-free interest rate		1.07	%		1.15	%
Expected life of options (in years)		6			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 three months ended March 31, 2013:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2012		455,918		$	30.34
Granted		29,448		$	52.42
Exercised		(39,751	)	$	13.21
Cancelled		--			--
Outstanding at March 31, 2013		445,615		$	33.33		6.85	$	10,909
Exercisable at March 31, 2013		195,325		$	26.74		5.28	$	6,068

The following table summarizes information regarding non-vested stock granted to associates under the 2006 Equity Incentive Plan for the three months ended March 31, 2013:

	Shares Outstanding		Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2012		20,203	$	34.65
Granted		--		--
Vested		--		--
Forfeited		--		--
Outstanding at March 31, 2013		20,203	$	34.65

As of March 31, 2013, the total unrecognized compensation cost related to non-vested stock awards was approximately $445,000 and is expected to be recognized over a weighted average period of 3.26 years.

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Note 4 - Share-Based Compensation (Detail) - Stock Option Activity (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Outstanding at December 31, 2012		455,918
Outstanding at December 31, 2012 (in Dollars per share)		$ 30.34
Granted	29,448	31,630
Granted (in Dollars per share)	$ 52.42
Exercised	(39,751)
Exercised (in Dollars per share)	$ 13.21
Outstanding at March 31, 2013	445,615
Outstanding at March 31, 2013 (in Dollars per share)	$ 33.33
Outstanding at March 31, 2013	6 years 310 days
Outstanding at March 31, 2013 (in Dollars)	$ 10,909
Exercisable at March 31, 2013	195,325
Exercisable at March 31, 2013 (in Dollars per share)	$ 26.74
Exercisable at March 31, 2013	5 years 102 days
Exercisable at March 31, 2013 (in Dollars)	$ 6,068

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Note 1 - Basis of Consolidation and Presentation (Detail)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Number of Operating Segments	2	8
Number of Reportable Segments	1