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, 2016

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  ☒  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  ☒  No ☐

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

Large accelerated filer ☐     Accelerated filer ☒     Non-accelerated filer ☐   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  ☒ 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Class A Common Stock, $.001 par value, outstanding as April 30, 2016: 20,894,893 shares

Class B Common Stock, $.001 par value, outstanding as of April 30, 2016: 3,536,496 shares

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NATIONAL RESEARCH CORPORATION

FORM 10-Q INDEX

For the Quarter Ended March 31, 2016

			Page No.
PART I.	FINANCIAL INFORMATION		4
	Item 1.	Financial Statements	4
		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
		Notes to Condensed Consolidated Financial Statements	8-15
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16-20
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
	Item 4.	Controls and Procedures	20
PART II.	OTHER INFORMATION		21
	Item 1A.	Risk Factors	21
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
	Item 6.	Exhibits	21
	Signatures		22
	Exhibit Index		23

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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,” the “Company,” “we,” “our,” “us,” or similar terms) “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 and retention of key clients;

● 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 impact of consolidation in the healthcare industry;

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

● 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;

● The possibility that the Company could be subject to security breaches or computer viruses; 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, 2015, 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 SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	March 31, 2016			December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	25,366		$	42,145
Trade accounts receivable, less allowance for doubtful accounts of $167 and $173 in 2016 and 2015, respectively		14,101			9,808
Unbilled revenue		1,418			1,435
Prepaid expenses		1,965			1,482
Income tax receivable		1,919			157
Other current assets		45			34
Total current assets		44,814			55,061
Property and equipment, net		11,631			11,125
Intangible assets, net		3,592			3,778
Goodwill		57,944			57,792
Other		389			293
Total assets	$	118,370		$	128,049
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of notes payable	$	2,422		$	2,402
Accounts payable		1,572			614
Accrued wages, bonus and profit sharing		4,496			4,391
Accrued expenses		2,716			2,706
Current portion of capital lease obligations		66			74
Income taxes payable		-			701
Dividends payable		3,369			18,440
Deferred revenue		17,877			14,843
Total current liabilities		32,518			44,171
Notes payable, net of current portion		2,724			3,337
Deferred income taxes		6,520			5,744
Other long term liabilities		438			575
Total liabilities		42,200			53,827
Shareholders’ equity:
Preferred stock, $0.01 par value; authorized 2,000,000 shares, none issued		--			--
Class A Common stock, $0.001 par value; authorized 60,000,000 shares, issued 25,646,624 in 2016 and 25,592,812 in 2015, outstanding 20,894,893 in 2016 and 20,848,168 in 2015		26			26
Class B Common stock, $0.001 par value; authorized 80,000,000 shares, issued 4,298,886 in 2016 and 4,271,413 in 2015, outstanding 3,536,496 in 2016 and 3,510,150 in 2015		4			4
Additional paid-in capital		43,519			44,103
Retained earnings		67,118			65,313
Accumulated other comprehensive loss		(2,121	)		(2,995	)
Treasury stock, at cost; 4,751,731 Class A shares, 762,390 Class B shares in 2016 and 4,744,644 Class A shares, 761,263 Class B shares in 2015		(32,376	)		(32,229	)
Total shareholders’ equity		76,170			74,222
Total liabilities and shareholders’ equity	$	118,370		$	128,049

See accompanying notes to condensed consolidated financial statements

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NATIONAL RESEARCH CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

	Three months ended March 31,
	2016			2015
Revenue	$	27,870		$	26,270
Operating expenses:
Direct		11,539			11,799
Selling, general and administrative		7,357			7,627
Depreciation and amortization		968			1,015
Total operating expenses		19,864			20,441
Operating income		8,006			5,829
Other income (expense):
Interest income		11			17
Interest expense		(85	)		(63	)
Other, net		74			(1	)
Total other expense		--			(47	)
Income before income taxes		8,006			5,782
Provision for income taxes		2,833			2,302
Net income	$	5,173		$	3,480
Earnings Per Share of Common Stock:
Basic Earnings Per Share:
Class A	$	0.12		$	0.08
Class B	$	0.74		$	0.50
Diluted Earnings Per Share:
Class A	$	0.12		$	0.08
Class B	$	0.73		$	0.49
Dividends Per Share of Common Stock:
Class A	$	0.08		$	0.06
Class B	$	0.48		$	0.36
Weighted average shares and share equivalents outstanding:
Class A - basic		20,710			20,792
Class B - basic		3,489			3,478
Class A - diluted		20,948			21,033
Class B - diluted		3,531			3,524

See accompanying notes to condensed consolidated financial statements

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NATIONAL RESEARCH CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, unaudited)

	Three months ended  March 31,
	2016		2015
Net income	$	5,173	$	3,480
Other comprehensive income (loss):
Foreign currency translation adjustment	$	874	$	(1,054	)
Other comprehensive income (loss)	$	874	$	(1,054	)
Comprehensive Income	$	6,047	$	2,426

See accompanying notes to condensed consolidated financial statements.

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NATIONAL RESEARCH CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Three months ended
	March 31,
	2016			2015
Cash flows from operating activities:
Net income	$	5,173		$	3,480
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		968			1,015
Deferred income taxes		737			(63	)
Non-cash share-based compensation expense		536			184
Tax benefit from exercise of stock options		38			14
Non-cash change in uncertain tax positions		(119	)		13
Write off of purchase option		--			657
Net changes in assets and liabilities:
Trade accounts receivable		(4,167	)		(3,838	)
Unbilled revenue		33			(177	)
Prepaid expenses		(254	)		(374	)
Accounts payable		469			(141	)
Accrued expenses, wages, bonuses and profit sharing		58			67
Income taxes receivable and payable		(2,451	)		378
Deferred revenue		3,013			363
Net cash provided by operating activities		4,034			1,578
Cash flows from investing activities:
Purchases of property and equipment		(1,084	)		(757	)
Net cash used in investing activities		(1,084	)		(757	)
Cash flows from financing activities:
Payments on notes payable		(594	)		(576	)
Payments on capital lease obligations		(25	)		(50	)
Proceeds from exercise of stock options		547			--
Common stock withheld for payroll tax on share based compensation		(147	)		(92	)
Cash paid for non-controlling interest		(2,000	)		-
Excess tax benefit from share-based compensation		333			94
Payment of dividends on common stock		(18,440	)		(2,511	)
Net cash used in financing activities		(20,326	)		(3,135	)
Effect of exchange rate changes on cash		597			(718	)
Decrease in cash and cash equivalents		(16,779	)		(3,032	)
Cash and cash equivalents at beginning of period		42,145			40,042
Cash and cash equivalents at end of period	$	25,366		$	37,010
Supplemental disclosure of cash paid for:
Interest, net of capitalized amounts	$	83		$	59
Income taxes	$	4,361		$	1,893

See accompanying notes to condensed consolidated financial statements.

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NATIONAL RESEARCH CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF CONSOLIDATION AND PRESENTATION

The Company is a leading provider of analytics and insights that facilitate measurement and improvement of the patient and employee experience while also increasing patient engagement and loyalty for healthcare providers, payers and other healthcare organizations in the United States and Canada.

The Company’s six operating segments 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 six operating segments are Experience, The Governance Institute, Market Insights, Reputation, National Research Corporation Canada and Customer-Connect LLC (“Connect”), each of which 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, 2015, 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 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, 2015, filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2016.

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, its wholly-owned subsidiaries, National Research Corporation Canada and Connect. Prior to becoming a wholly-owned subsidiary in March 2016, the accounts of Connect, then a variable interest entity for which NRC was deemed the primary beneficiary, were included in the condensed consolidated financial statements of the Company. 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 loss, a component of shareholders’ equity. Since the undistributed earnings of the Company’s foreign subsidiary are considered to be indefinitely reinvested, no taxes were provided for on currency translation adjustments arising from converting the investment denominated in a foreign currency to U.S. dollars. 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.

Commercial paper included in cash equivalents is valued at amortized cost, which approximates fair value due to its short-term nature. These are included as a Level 2 measurement in the table below.

The following details the Company’s financial assets and liabilities within the fair value hierarchy at
March 31, 2016, and December 31, 2015:

Fair Values Measured on a Recurring Basis

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of March 31, 2016
Money Market Funds	$	9,353	$	--	$	--	$	9,353
Commercial Paper		--		14,412		--		14,412
Total	$	9,353	$	14,412	$	--	$	23,765
As of December 31, 2015
Money Market Funds	$	8,954	$	--	$	--	$	8,954
Commercial Paper		--		30,872		--		30,872
Total	$	8,954	$	30,872	$	--	$	39,826

The Company’s long-term debt is recorded at historical cost. The following are the carrying amounts and estimated fair values, using a Level 2 discounted cash flow analysis based primarily on estimated current rates available for debt of the same remaining duration and adjusted for nonperformance and credit risk:

	March 31, 2016		December 31, 2015
	(In thousands)
Total carrying amounts of long-term debt	$	5,146	$	5,739
Estimated fair value of long-term debt	$	5,142	$	5,708

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, 2016, and December 31, 2015, there was no indication of impairment related to the Company’s non-financial assets.

2. CONNECT

Connect was formed in June 2013 to develop and commercialize the Connect programs. Connect programs provide healthcare organizations the technology to engage patients through real-time identification and management of individual patient needs, preferences, risks, and experiences.  The platform ensures that organizations have access to a longitudinal view of the patient to more effectively manage patient engagement across the continuum of care.

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As of December 31, 2015, the Company owned approximately 89% of Connect and Illuminate Health, LLC owned 11% of Connect. Under the amended Connect operating agreement, NRC had the option to acquire additional equity units from Illuminate Health when new annual recurring contract value reached targeted levels. On March 7, 2016, NRC elected to exercise its first option to acquire one-third of the outstanding non-controlling interest for $1.0 million. Subsequently, on March 28, 2016, NRC and Illuminate Health reached an agreement whereby NRC acquired the remaining interest held by Illuminate Health for $1,000,000. Following these transactions, Connect is a wholly owned subsidiary of NRC. Since the Company previously consolidated Connect, the transaction was accounted for as an equity transaction, resulting in a reduction to additional paid in capital.

3. INCOME TAXES

The effective tax rate for the three-month period ended March 31, 2016 decreased to 35.4% compared to 39.8% for the same period in 2015. The decrease in the effective tax rate was mainly due to a $300,000 capital loss valuation allowance due to the write-off of a purchase option in 2015 and United States federal tax examination related adjustments decreasing tax expense by $48,000 in 2016. The United States federal tax examination for the tax year ended December 31, 2013 was completed in the three-month period ended March 31, 2016.

The unrecognized tax benefit as of March 31, 2016 was $338,000, excluding interest of $3,000 and penalties of $7,000. Of this amount, $82,000 represents the net unrecognized tax benefits that, if recognized, would favorably impact the effective income tax rate. The remaining $257,000 at March 31, 2016 would have no impact on the effective tax rate, if recognized.   The Company accrues interest and penalties related to uncertain tax position in the statements of income as income tax expense.

4. NOTES PAYABLE

The Company’s term note is payable in 60 monthly installments of $212,468. Borrowings under the term note bears interest at an annual rate of 3.12%. The outstanding balance of the term note at March 31, 2016 was $5.1 million.

The Company also has a revolving credit note that was renewed in June 2015 to extend the term to June 30, 2016.The maximum aggregate amount available under the revolving credit note is $6.5 million, subject to a borrowing base equal to 75.0% of the Company’s eligible accounts receivable. Borrowings under the revolving credit note bear interest at a variable annual rate, with three rate options at the discretion of management as follows: (1) 2.5% plus the daily reset one-month London Interbank Offered Rate (“LIBOR”) or (2) 2.2% plus the one-, two- or three- month LIBOR rate, or (3) the bank’s one-, two, three, six, or twelve month Money Market Loan Rate. As of March 31, 2016 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, 2016.

The term note 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 note and revolving credit note 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, 2016, the Company was in compliance with its financial covenants.

5. SHARE-BASED COMPENSATION

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

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The Company’s 2001 Equity Incentive Plan provided 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 1,800,000 class A and 300,000 class B shares of the Company’s common stock. Stock options granted could have been 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, as amended (the “2004 Director Plan”), is a nonqualified plan that provides for the granting of options with respect to 3,000,000 class A and 500,000 class B 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 36,000 class A shares and 6,000 class B 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 1,800,000 class A and 300,000 class B 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 following the date of grant.

The Company granted options to purchase 135,620 shares of the Company’s class A common stock and 22,603 shares of the class B common stock during the three-month period ended March 31, 2016. 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 the stock options granted was estimated using a Black-Scholes valuation model with the following assumptions:

	2016						2015
	Class A			Class B			Class A			Class B
Expected dividend yield at date of grant		3.02	%		8.12	%		2.57	%		5.72	%
Expected stock price volatility		34.61	%		31.77	%		34.87	%		33.94	%
Risk-free interest rate		2.12	%		2.12	%		1.78	%		1.78	%
Expected life of options (in years)		8			8			7			7

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 common 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, 2016:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (In thousands)
Class A
Outstanding at December 31, 2015		1,485,738		$	11.65
Granted		135,620		$	15.23
Exercised		(33,234	)	$	5.12			$	336
Forfeited		--			--
Outstanding at March 31, 2016		1,588,124		$	12.09		6.22	$	5,731
Exercisable at March 31, 2016		1,089,942		$	11.14		5.12	$	4,997
Class B
Outstanding at December 31, 2015		240,673		$	26.31
Granted		22,603		$	34.00
Exercised		(24,043	)	$	15.70			$	435
Forfeited		--			--
Outstanding at March 31, 2016		239,233		$	28.10		6.57	$	1,923
Exercisable at March 31, 2016		157,150		$	26.02		5.48	$	1,679

The following table summarizes information regarding unvested stock granted to associates under the 2006 Equity Incentive Plan for the three months ended March 31, 2016:

	Class A Shares Outstanding			Class A Weighted Average Grant Date Fair Value Per Share		Class B Shares Outstanding			Class B Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2015		183,814		$	12.78		30,635		$	36.93
Granted		20,578		$	15.23		3,430		$	34.00
Vested		(20,892	)	$	5.38		(3,482	)	$	32.31
Forfeited		--			--		--			--
Outstanding at March 31, 2016		183,500		$	13.89		30,583		$	37.13

As of March 31, 2016, the total unrecognized compensation cost related to unvested stock awards was approximately $2.7 million and is expected to be recognized over a weighted average period of 3.72 years.

6. 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, 2016:

	(In thousands)
Balance as of December 31, 2015	$	57,792
Foreign currency translation		152
Balance as of March 31, 2016	$	57,944

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Intangible assets consisted of the following:

	March 31, 2016			December 31, 2015
	(In thousands)
Non-amortizing other intangible assets:
Trade name	$	1,191		$	1,191
Amortizing other intangible assets:
Customer related		9,339			9,323
Technology		1,110			1,110
Trade name		1,572			1,572
Total other intangible assets		13,212			13,196
Accumulated amortization		(9,620	)		(9,418	)
Other intangible assets, net	$	3,592		$	3,778

7. PROPERTY AND EQUIPMENT

	March 31, 2016			December 31, 2015
	(In thousands)
Property and equipment	$	35,928		$	34,591
Accumulated depreciation		(24,297	)		(23,466	)
Property and equipment, net	$	11,631		$	11,125

8. EARNINGS PER SHARE

Net income per share of class A common stock and class B common stock is computed using the two-class method. Basic net income per share is computed by allocating undistributed earnings to common shares and using the weighted-average number of common shares outstanding during the period.

Diluted net income per share is computed using the weighted-average number of common shares and, if dilutive, the potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock. The dilutive effect of outstanding stock options is reflected in diluted earnings per share by application of the treasury stock method.

The liquidation rights and the rights upon the consummation of an extraordinary transaction are the same for the holders of class A common stock and class B common stock. Other than share distributions and liquidation rights, the amount of any dividend or other distribution payable on each share of class A common stock will be equal to one-sixth (1/6^th) of the amount of any such dividend or other distribution payable on each share of class B common stock. As a result, the undistributed earnings for each period are allocated based on the contractual participation rights of the class A and class B common stock as if the earnings for the period had been distributed.

At March 31, 2016 and 2015, the Company had 568,697 and 477,427 options of class A shares and 87,836 and 44,202 options of class B shares, respectively, which have been excluded from the diluted net income per share computation because the exercise price exceeds the fair market value.

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	For the Three Months Ended March 31, 2016						For the Three Months Ended March 31, 2015
	Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock
	(In thousands, except per share data)
Numerator for net income per share - basic:
Net income	$	2,568		$	2,605		$	1,738		$	1,742
Allocation of distributed and undistributed income to unvested restricted stock shareholders		(21	)		(23	)		(12	)		(10	)
Net income attributable to common shareholders	$	2,547		$	2,582		$	1,726		$	1,732
Denominator for net income per share - basic:
Weighted average common shares outstanding - basic		20,710			3,489			20,792			3,478
Net income per share – basic	$	0.12		$	0.74		$	0.08		$	0.50
Numerator for net income per share - diluted:
Net income attributable to common shareholders for basic computation	$	2,547		$	2,582		$	1,726		$	1,732
Denominator for net income per share - diluted:
Weighted average common shares outstanding - basic		20,710			3,489			20,792			3,478
Weighted average effect of dilutive securities – stock options		238			42			241			46
Denominator for diluted earnings per share – adjusted weighted average shares		20,948			3,531			21,033			3,524
Net income per share – diluted	$	0.12		$	0.73		$	0.08		$	0.49

9. RELATED PARTY TRANSACTIONS     

A board member of the Company 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, the Company purchases dental and vision insurance for certain of its associates from Ameritas. The total value of these purchases was $58,000 and $57,000 for the three-month periods ended March 31, 2016 and 2015, respectively.

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10. RECENT ACCOUNTING PRONOUNCEMENTS

In February 2015, the FASB issued Accounting Standards Update (“ASU”) ASU 2015-02, “Consolidation—Amendments to the Consolidation Analysis (Topic 810)” (“ASU 2015-02”), which requires reporting entities to reevaluate whether certain legal entities should be consolidated under the revised consolidation model. This ASU modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs), eliminates the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with VIEs, especially those that have fee arrangements and related party relationships. The Company’s adoption of the standard effective January 1, 2016 did not significantly impact its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement” ("ASU 2015-05"). The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. The update further specifies that the customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. The Company prospectively adopted ASU 2015-05 effective January 1, 2016. Based on the ability and feasibility for the Company to download software in its cloud computing arrangements it entered in 2016, all are accounted for as service contracts, which are expensed to direct expenses or selling, general and administrative expenses during the service period.

In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). ASU 2015-17 amends the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The Company adopted ASU 2015-17 retrospectively effective January 1, 2016 and reclassified $1.1 million of current deferred tax assets to noncurrent, which was netted with deferred tax liabilities on the December 31, 2015 consolidated balance sheet.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”).  ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in accounting principles generally accepted in the United States when it becomes effective. The standard is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2017, with early adoption allowed for years beginning after December 15, 2016. An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard.  The Company is currently in the process of evaluating the impact that this new guidance will have on its consolidated financial statements and expects to adopt the guidance through the retrospective transition method. We are in the process of developing and testing changes to our processes and systems. The Company currently expects the most significant changes to result from deferring commissions and recognizing the expense over the estimated life of the client relationship rather than expensing as incurred, which is the Company’s current practice, and estimating variable consideration at the outset of the contract. 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months on its balance sheet. This ASU is effective in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method. The Company is currently in the process of evaluating the impact that this new guidance will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718) (“ASU 2016-09”). This ASU simplifies accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective in fiscal years beginning after December 15, 2016.  Early adoption is permitted in any interim or annual period.  If the Company elects early adoption, all adjustments should be reflected as of the beginning of the fiscal year of adoption.The Company is currently assessing the impact that this new guidance will have on its consolidated financial statements.

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

The Company is a leading provider of analytics and insights that facilitate measurement and improvement of the patient and employee experience while also increasing patient engagement and loyalty for healthcare providers, payers and other healthcare organizations. The Company’s solutions enable its clients to provide customer-centric healthcare through understanding the voice of the customer to improve patient experience, engagement and loyalty, while also facilitating regulatory compliance and the shift to population-based health management for its clients. The Company’s ability to measure what matters most and 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 is becoming more valuable as healthcare providers increasingly need to more deeply understand and engage patients and consumers in an effort towards effective population-based health management.

The Company’s portfolio of subscription-based solutions provide actionable information and analysis to healthcare organizations and payers across a range of mission-critical, constituent-related elements, including patient experience and satisfaction, community population health risks, workforce engagement, community perceptions, and physician engagement. NRC partners with clients across the continuum of healthcare services. The Company’s clients range from acute care hospitals and post-acute providers, such as home health, long-term care and hospice, to numerous payer organizations. The Company believes this cross-continuum positioning is a unique and an increasingly important capability as evolving payment models drive healthcare providers and payers towards a more collaborative and interactive healthcare system.

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,
	2016			2015
Revenue:		100.0	%		100.0	%
Operating expenses:
Direct		41.4			44.9
Selling, general and administrative		26.4			29.0
Depreciation and amortization		3.5			3.9
Total operating expenses		71.3			77.8
Operating income		28.7	%		22.2	%

Three Months Ended March 31, 2016, Compared to Three Months Ended March 31, 2015

Revenue. Revenue for the three-month period ended March 31, 2016, increased 6.1% to $27.9 million, compared to $26.3 million in the three-month period ended March 31, 2015. The increase was due to new customer sales, as well as increases in sales to the existing client base.

Direct expenses. Direct expenses decreased 2.2% to $11.5 million for the three-month period ended March 31, 2016, compared to $11.8 million in the same period during 2015. This was due to decreased variable costs of $85,000, primarily from decreased conference expense of $247,000 due to less conferences held compared to the same period in 2015, partially offset by higher survey related costs of postage, printing, and contracted services due to the higher volumes. Fixed expenses decreased by $175,000 as a result of less incentive expense associated with the acquisition in 2014 and more information technology resources’ time being capitalized in software development. Direct expenses decreased as a percentage of revenue to 41.4% in the three-month period ended March 31, 2016, compared to 44.9% during the same period of 2015 as expenses decreased by 2.2% while revenue for the same period increased by 6.1%.

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Selling, general and administrative expenses. Selling, general and administrative expenses decreased 3.5% to $7.4 million for the three-month period ended March 31, 2016, compared to $7.6 million for the same period in 2015, as a result of less legal and accounting costs of $345,000, less repairs and maintenance on the Company’s headquarters building of $185,000, and less contracted services of $96,000, partially offset by an increase in salaries and benefits of $339,000 mainly from increased commissions and share based compensation expense. Legal and accounting costs decreased primarily due to a purchase option write off of $657,000 in 2015, partially offset by SEC registration fees expensed in 2016 of $177,000. Selling, general, and administrative expenses decreased as a percentage of revenue to 26.4% for the three-month period ended March 31, 2016, from 29.0% for the same period in 2015 as expenses decreased 3.5% while revenue for the same period increased by 6.1%.

Depreciation and amortization. Depreciation and amortization expenses decreased 4.6% to $968,000 for the three-month period ended March 31, 2016, compared to $1.0 million for the same period in 2015 primarily due to decreased amortization as a result of the sale of Predictive Analytics in 2015 and other intangibles becoming fully amortized. These decreases were partially offset by increased depreciation and amortization due to computer software license expense being included in depreciation and amortization in 2016, resulting from the adoption of ASU 2015-05. Previously, software license expense was included in direct expenses and selling, general and administrative expenses. Depreciation and amortization expenses as a percentage of revenue decreased to 3.5% for the three-month period ended March 31, 2016, from 3.9% during the same period in 2015.

Provision for income taxes. Provision for income taxes was $2.8 million (35.4% effective tax rate) for the three-month period ended March 31, 2016, compared to $2.3 million (39.8% effective tax rate) for the same period in 2015. The effective tax rate for the three-month period ended March 31, 2016, was lower than the rate in the same period of 2015 mainly due to a $300,000 capital loss valuation allowance recorded in 2015 from the write-off of a purchase option in 2015 and United States federal tax examination related adjustments decreasing tax expense by $48,000 in 2016.

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.

On March 7, 2016, the Company elected to exercise its first option to acquire one-third of the outstanding non-controlling interest of Connect for $1.0 million. Subsequently, on March 28, 2016, an agreement was reached with Illuminate Health whereby the Company acquired the remaining interest held by Illuminate Health for $1,000,000. As of March 31, 2016, the Company owns 100% of Connect.

The Company had cash and cash equivalents of $25.4 million at March 31, 2016, of which
$9.7 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. The Company estimated at December 31, 2015, that an additional tax liability of $534,000 would become due if repatriation of undistributed earnings would occur.

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Working Capital

The Company had a working capital balance of $12.3 million as of March 31, 2016, compared to a working capital balance of $10.9 million as of December 31, 2015. The change was primarily due to decreases in dividends payable of $15.1 million and income taxes payable of $701,000, increases in trade accounts receivable of $4.3 million, increases in income tax receivable of $1.8 million and increases in prepaid expenses of $483,000. This was partially offset by decreases in cash and cash equivalents of $16.8 million, increases in deferred revenue of $3.0 million and accounts payable of $958,000. Dividends payable and cash and cash equivalents changed mainly due to the payment of $18.4 million in dividends in 2016 that were declared in 2015. Trade accounts receivable increased due to timing of billings and collections on new and renewal contracts. Accounts payable and income tax receivables and payables changed due to the timing of vendor and income tax payments, respectively. The Company’s working capital is significantly impacted by its large deferred revenue balances which will vary based on the timing and frequency of billings on annual agreements. The current deferred revenue balances as of March 31, 2016 and December 31, 2015 were $17.9 million and $14.8 million, respectively.

The deferred revenue balance is primarily due to timing of initial billings on new and renewal contracts. The Company typically invoices clients for services 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,
	2016			2015
	(In thousands)
Provided by operating activities	$	4,034		$	1,578
Used in investing activities		(1,084	)		(757	)
Used in financing activities		(20,326	)		(3,135	)
Effect of exchange rate change on cash		597			(718	)
Net increase (decrease) in cash and cash equivalents		(16,779	)		(3,032	)
Cash and cash equivalents at end of period	$	25,366		$	37,010

Cash Flows from Operating Activities

Cash flows from operating activities consist of net income adjusted for non-cash items such as depreciation and amortization, deferred taxes, share-based compensation and related taxes, and the effect of working capital changes.

Net cash provided by operating activities was $4.0 million for the three months ended March 31, 2016, which included net income of $5.2 million, plus non-cash charges (benefits) for deferred tax expense, depreciation and amortization, provision for uncertain tax positions and non-cash stock compensation totaling $2.2 million. Changes in working capital decreased 2016 cash flows from operating activities by $3.3 million, primarily due to increases in trade accounts receivable and income taxes, net of increases in deferred revenue due to the timing of billing, collections and revenue recognition on new or renewal contracts.

Net cash provided by operating activities was $1.6 million for the three months ended March 31, 2015, which included net income of $3.5 million, plus non-cash charges (benefits) for deferred tax expense, depreciation and amortization, write off of purchase option, and non-cash stock compensation totaling $1.8 million. Changes in working capital decreased 2015 cash flows from operating activities by $3.7 million, primarily due to increases in trade accounts receivable due to the timing of billing and collections on new or renewal contracts.

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Net cash provided by operating activities increased $2.5 million for the three months ended March 31, 2016 compared to the three months ended March 31, 2015. The increase was mainly due to an increase in net income of $1.7 million and a $2.7 million increase in deferred revenue, partially offset by decreases in accounts receivable and income taxes.

Cash Flows from Investing Activities

Net cash of $1.1 million and $757,000 was used for investing activities in the three months ended March 31, 2016 and 2015, respectively, for purchases of property and equipment.

Cash Flows from Financing Activities

Net cash used in financing activities was $20.3 million in the three months ended March 31, 2016. The excess tax benefit of share-based compensation provided cash of $333,000 and proceeds from the exercise of stock options provided cash of $547,000. Cash was used to pay payroll taxes on vested restricted shares of $147,000, to pay capital lease obligations of $25,000, to repay borrowings under the term note totaling $594,000, to pay dividends on common stock of $18.4 million, and to pay $2.0 million for Connect non-controlling interests.

Net cash used in financing activities was $3.1 million in the three months ended March 31, 2015. The excess tax benefit of share-based compensation provided cash of $94,000. Cash was used to pay payroll taxes on vested restricted shares of $92,000, to pay capital lease obligations of $50,000, to repay borrowings under the term note totaling $576,000 and for the payment of dividends on common stock of $2.5 million.

The effect of changes in foreign exchange rates increased cash and cash equivalents by $597,000 in the three months ended March 31, 2016 and decreased cash and cash equivalents by $718,000 for the three months ended March 31, 2015.

Capital Expenditures

Cash paid for capital expenditures was $1.1 million for the three-month period ended March 31, 2016. These expenditures consisted mainly of computer software classified in property and equipment. The Company expects similar capital expenditure purchases for the remainder of 2016 consisting primarily of computer software and hardware and other equipment to be funded through cash generated from operations.

Debt and Equity

The Company’s term note is payable in 60 monthly installments of $212,468. Borrowings under the term note bears interest at an annual rate of 3.12%. The outstanding balance of the term note at March 31, 2016 was $5.1 million.

The Company also has a revolving credit note that was renewed in June 2015 to extend the term to June 30, 2016. This revolving credit note 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-, or three-month LIBOR rate, or (3) the bank’s one-, two-, three-, six- or twelve-month Money Market Loan Rate. As of March 31, 2016, and throughout the first quarter of 2016, 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, 2016. The Company expects to renew the revolving credit note prior to June 30, 2016. If however, the revolving credit note cannot be renewed, the Company believes it has adequate cash from operations to meet its debt and capital needs.

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The term note 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 note and revolving credit note 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, 2016, the Company was in compliance with these restrictions and covenants.

The Company has capital leases for computer equipment, office equipment, and inserting equipment. The balance of the capital leases as of March 31, 2016 was $152,000.

Shareholders’ equity increased $1.9 million to $76.2 million at March 31, 2016, from $74.2 million at December 31, 2015. The increase was due mainly due to net income of $5.2 million, changes in the cumulative translation adjustment of $874,000, share-based compensation of $536,000, $333,000 from the tax benefit from the exercise of the stock options and restricted stock, and $547,000 from the exercise of stock options. This was partially offset by dividends declared of $3.4 million, the acquisition of Connect non-controlling interests of $2.0 million, and share repurchases of $147,000.

Contractual Obligations

The Company had contractual obligations to make payments in the following amounts in the future as of March 31, 2016:

Contractual Obligations(1)	Total Payments		Remainder of 2016		One to Three Years		Three to Five Years		After Five Years
(In thousands)
Operating leases	$	1,126	$	346	$	678	$	102	$	--
Capital leases		157		52		105		--		--
Purchase obligations		--		--		--		--		--
Uncertain tax positions(2)		--		--		--		--		--
Long-term debt		5,325		1,912		3,413		--		--
Total	$	6,608	$	2,310	$	4,196	$	102	$	--

⁽¹⁾ Amounts are inclusive of interest payments, where applicable.

⁽²⁾ We have $341,000 in liabilities associated with uncertain tax positions. We are unable to reasonably estimate the expected cash settlement dates of these uncertain tax positions with certain taxing authorities.

Stock Repurchase Program

The Board of Directors of the Company authorized the repurchase of 2,250,000 class A and 375,000 class B shares of common stock in the open market or in privately negotiated transactions under a stock repurchase program that was originally approved in February 2006 and subsequently amended in May 2013. As of March 31, 2016 the remaining number of common stock shares that could be purchased under this authorization was 280,491 class A shares and 69,491 class B shares.

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, 2015.

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, 2016, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – Other Information

ITEM 1A. Risk Factors

There have been no material changes to the risk factors relating to the Company set forth in Part I, Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2015.

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

The Board of Directors of the Company authorized the repurchase of an additional 2,250,000 class A and 375,000 class B shares of common stock in the open market or in privately negotiated transactions under a stock repurchase program that was originally approved in February 2006 and subsequently amended in May 2013. 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, 2016, 1,969,509 shares of class A common stock and 305,509 shares of class B common stock have been repurchased under that authorization. No stock was repurchased under the program during the three-month period ended March 31, 2016.

ITEM 6. Exhibits

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

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NATIONAL RESEARCH CORPORATION
Date: May 6, 2016	By:	/s/ Michael D. Hays
		Michael D. Hays
		Chief Executive Officer (Principal Executive Officer)

Date: May 6, 2016	By:	/s/ Kevin R. Karas
		Kevin R. Karas
		Senior Vice President Finance, Treasurer, Secretary and Chief Financial Officer (Principal Financial and Accounting Officer)

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NATIONAL RESEARCH CORPORATION

EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the Quarterly Period ended March 31, 2016

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, 2016, formatted in eXtensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Notes to Condensed Consolidated Financial Statements, and (vi) document and entity information.

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

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EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

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

I, Michael D. Hays, certify that:

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

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

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

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

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, 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 6, 2016	/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 subsidiaries, 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 6, 2016	/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, 2016 (the “Report”), I, Michael D. Hays, Chief Executive Officer of the Company, and I, Kevin R. 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 6, 2016

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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Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 30, 2016
Common Class B [Member]
Entity Common Stock, Shares Outstanding (in shares)		3,536,496
Common Class A [Member]
Entity Common Stock, Shares Outstanding (in shares)		20,894,893
Entity Registrant Name	National Research Corporation
Entity Central Index Key	0000070487
Trading Symbol	nrci
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false

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Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Common Class A [Member]
Shareholders’ equity:
Common stock, value	$ 26,000	$ 26,000
Common Class B [Member]
Shareholders’ equity:
Common stock, value	4,000	4,000
Cash and cash equivalents	25,366,000	42,145,000
Trade accounts receivable, less allowance for doubtful accounts of $167 and $173 in 2016 and 2015, respectively	14,101,000	9,808,000
Unbilled revenue	1,418,000	1,435,000
Prepaid expenses	1,965,000	1,482,000
Income tax receivable	1,919,000	157,000
Other current assets	45,000	34,000
Total current assets	44,814,000	55,061,000
Property and equipment, net	11,631,000	11,125,000
Intangible assets, net	3,592,000	3,778,000
Goodwill	57,944,000	57,792,000
Other	389,000	293,000
Total assets	118,370,000	128,049,000
Current portion of notes payable	2,422,000	2,402,000
Accounts payable	1,572,000	614,000
Accrued wages, bonus and profit sharing	4,496,000	4,391,000
Accrued expenses	2,716,000	2,706,000
Current portion of capital lease obligations	$ 66,000	74,000
Income taxes payable		701,000
Dividends payable	$ 3,369,000	18,440,000
Deferred revenue	17,877,000	14,843,000
Total current liabilities	32,518,000	44,171,000
Notes payable, net of current portion	2,724,000	3,337,000
Deferred income taxes	6,520,000	5,744,000
Other long term liabilities	438,000	575,000
Total liabilities	42,200,000	53,827,000
Preferred stock, $0.01 par value; authorized 2,000,000 shares, none issued	0	0
Additional paid-in capital	43,519,000	44,103,000
Retained earnings	67,118,000	65,313,000
Accumulated other comprehensive loss	(2,121,000)	(2,995,000)
Treasury stock, at cost; 4,751,731 Class A shares, 762,390 Class B shares in 2016 and 4,744,644 Class A shares, 761,263 Class B shares in 2015	(32,376,000)	(32,229,000)
Total shareholders’ equity	76,170,000	74,222,000
Total liabilities and shareholders’ equity	$ 118,370,000	$ 128,049,000

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	60,000,000	60,000,000
Common stock, shares issued (in shares)	25,646,624	25,592,812
Common stock, shares outstanding (in shares)	20,894,893	20,848,168
Treasury stock, shares (in shares)	4,751,731	4,744,644
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	80,000,000	80,000,000
Common stock, shares issued (in shares)	4,298,886	4,271,413
Common stock, shares outstanding (in shares)	3,536,496	3,510,150
Treasury stock, shares (in shares)	762,390	761,263
Allowance for doubtful accounts	$ 167	$ 173
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	0	0

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Common Class A [Member]
Other income (expense):
Net income	$ 2,568	$ 1,738
Denominator for net income per share - basic:
Basic earnings per share (in dollars per share)	$ 0.12	$ 0.08
Diluted Earnings Per Share:
Diluted earnings per share (in dollars per share)	0.12	0.08
Dividends Per Share of Common Stock:
Dividends per share (in dollars per share)	$ 0.08	$ 0.06
Weighted average shares and share equivalents outstanding:
Weighted average shares and share equivalents outstanding, basic (in shares)	20,710	20,792
Weighted average shares and share equivalents outstanding, diluted (in shares)	20,948	21,033
Common Class B [Member]
Other income (expense):
Net income	$ 2,605	$ 1,742
Denominator for net income per share - basic:
Basic earnings per share (in dollars per share)	$ 0.74	$ 0.50
Diluted Earnings Per Share:
Diluted earnings per share (in dollars per share)	0.73	0.49
Dividends Per Share of Common Stock:
Dividends per share (in dollars per share)	$ 0.48	$ 0.36
Weighted average shares and share equivalents outstanding:
Weighted average shares and share equivalents outstanding, basic (in shares)	3,489	3,478
Weighted average shares and share equivalents outstanding, diluted (in shares)	3,531	3,524
Revenue	$ 27,870	$ 26,270
Direct	11,539	11,799
Selling, general and administrative	7,357	7,627
Depreciation and amortization	968	1,015
Total operating expenses	19,864	20,441
Operating income	8,006	5,829
Interest income	11	17
Interest expense	(85)	(63)
Other, net	$ 74	(1)
Total other expense		(47)
Income before income taxes	$ 8,006	5,782
Provision for income taxes	2,833	2,302
Net income	$ 5,173	$ 3,480

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net income	$ 5,173	$ 3,480
Other comprehensive income (loss):
Foreign currency translation adjustment	874	(1,054)
Other comprehensive income (loss)	874	(1,054)
Comprehensive Income	$ 6,047	$ 2,426

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 5,173,000	$ 3,480,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	968,000	1,015,000
Deferred income taxes	737,000	(63,000)
Non-cash share-based compensation expense	536,000	184,000
Tax benefit from exercise of stock options	38,000	14,000
Non-cash change in uncertain tax positions	$ (119,000)	13,000
Write off of purchase option		657,000
Net changes in assets and liabilities:
Trade accounts receivable	$ (4,167,000)	(3,838,000)
Unbilled revenue	33,000	(177,000)
Prepaid expenses	(254,000)	(374,000)
Accounts payable	469,000	(141,000)
Accrued expenses, wages, bonuses and profit sharing	58,000	67,000
Income taxes receivable and payable	(2,451,000)	378,000
Deferred revenue	3,013,000	363,000
Net cash provided by operating activities	4,034,000	1,578,000
Cash flows from investing activities:
Purchases of property and equipment	(1,084,000)	(757,000)
Net cash used in investing activities	(1,084,000)	(757,000)
Cash flows from financing activities:
Payments on notes payable	(594,000)	(576,000)
Payments on capital lease obligations	(25,000)	$ (50,000)
Proceeds from exercise of stock options	547,000
Common stock withheld for payroll tax on share based compensation	(147,000)	$ (92,000)
Cash paid for non-controlling interest	(2,000,000)
Excess tax benefit from share-based compensation	333,000	$ 94,000
Payment of dividends on common stock	(18,440,000)	(2,511,000)
Net cash used in financing activities	(20,326,000)	(3,135,000)
Effect of exchange rate changes on cash	597,000	(718,000)
Decrease in cash and cash equivalents	(16,779,000)	(3,032,000)
Cash and cash equivalents at beginning of period	42,145,000	40,042,000
Cash and cash equivalents at end of period	25,366,000	37,010,000
Supplemental disclosure of cash paid for:
Interest, net of capitalized amounts	83,000	59,000
Income taxes	$ 4,361,000	$ 1,893,000

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Note 1 - Basis of Consolidation and Presentation

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

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

1. BASIS OF CONSOLIDATION AND PRESENTATION

The Company is a leading provider of analytics and insights that facilitate measurement and improvement of the patient and employee experience while also increasing patient engagement and loyalty for healthcare providers, payers and other healthcare organizations in the United States and Canada.

The Company’s six operating segments 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 six operating segments are Experience, The Governance Institute, Market Insights, Reputation, National Research Corporation Canada and Customer-Connect LLC (“Connect”), each of which 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, 2015, 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 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, 2015, filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2016.

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, its wholly-owned subsidiaries, National Research Corporation Canada and Connect. Prior to becoming a wholly-owned subsidiary in March 2016, the accounts of Connect, then a variable interest entity for which NRC was deemed the primary beneficiary, were included in the condensed consolidated financial statements of the Company. 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 loss, a component of shareholders’ equity. Since the undistributed earnings of the Company’s foreign subsidiary are considered to be indefinitely reinvested, no taxes were provided for on currency translation adjustments arising from converting the investment denominated in a foreign currency to U.S. dollars. 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.

Commercial paper included in cash equivalents is valued at amortized cost, which approximates fair value due to its short-term nature. These are included as a Level 2 measurement in the table below.

The following details the Company’s financial assets and liabilities within the fair value hierarchy at
March 31, 2016, and December 31, 2015:

Fair Values Measured on a Recurring Basis

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of March 31, 2016
Money Market Funds	$	9,353	$	--	$	--	$	9,353
Commercial Paper		--		14,412		--		14,412
Total	$	9,353	$	14,412	$	--	$	23,765
As of December 31, 2015
Money Market Funds	$	8,954	$	--	$	--	$	8,954
Commercial Paper		--		30,872		--		30,872
Total	$	8,954	$	30,872	$	--	$	39,826

The Company’s long-term debt is recorded at historical cost. The following are the carrying amounts and estimated fair values, using a Level 2 discounted cash flow analysis based primarily on estimated current rates available for debt of the same remaining duration and adjusted for nonperformance and credit risk:

	March 31, 2016		December 31, 2015
	(In thousands)
Total carrying amounts of long-term debt	$	5,146	$	5,739
Estimated fair value of long-term debt	$	5,142	$	5,708

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, 2016, and December 31, 2015, there was no indication of impairment related to the Company’s non-financial assets.

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Note 2 - Connect

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Noncontrolling Interest Disclosure [Text Block]

2. CONNECT

Connect was formed in June 2013 to develop and commercialize the Connect programs. Connect programs provide healthcare organizations the technology to engage patients through real-time identification and management of individual patient needs, preferences, risks, and experiences.  The platform ensures that organizations have access to a longitudinal view of the patient to more effectively manage patient engagement across the continuum of care.

As of December 31, 2015, the Company owned approximately 89% of Connect and Illuminate Health, LLC owned 11% of Connect. Under the amended Connect operating agreement, NRC had the option to acquire additional equity units from Illuminate Health when new annual recurring contract value reached targeted levels. On March 7, 2016, NRC elected to exercise its first option to acquire one-third of the outstanding non-controlling interest for $1.0 million. Subsequently, on March 28, 2016, NRC and Illuminate Health reached an agreement whereby NRC acquired the remaining interest held by Illuminate Health for $1,000,000. Following these transactions, Connect is a wholly owned subsidiary of NRC. Since the Company previously consolidated Connect, the transaction was accounted for as an equity transaction, resulting in a reduction to additional paid in capital.

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Note 3 - Income Taxes

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

3. INCOME TAXES

The effective tax rate for the three-month period ended March 31, 2016 decreased to 35.4% compared to 39.8% for the same period in 2015. The decrease in the effective tax rate was mainly due to a $300,000 capital loss valuation allowance due to the write-off of a purchase option in 2015 and United States federal tax examination related adjustments decreasing tax expense by $48,000 in 2016. The United States federal tax examination for the tax year ended December 31, 2013 was completed in the three-month period ended March 31, 2016.

The unrecognized tax benefit as of March 31, 2016 was $338,000, excluding interest of $3,000 and penalties of $7,000. Of this amount, $82,000 represents the net unrecognized tax benefits that, if recognized, would favorably impact the effective income tax rate. The remaining $257,000 at March 31, 2016 would have no impact on the effective tax rate, if recognized.   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 4 - Notes Payable

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

4. NOTES PAYABLE

The Company’s term note is payable in 60 monthly installments of $212,468. Borrowings under the term note bears interest at an annual rate of 3.12%. The outstanding balance of the term note at March 31, 2016 was $5.1 million.

The Company also has a revolving credit note that was renewed in June 2015 to extend the term to June 30, 2016.

The maximum aggregate amount available under the revolving credit note is $6.5 million, subject to a borrowing base equal to 75.0% of the Company’s eligible accounts receivable. Borrowings under the revolving credit note bear interest at a variable annual rate, with three rate options at the discretion of management as follows: (1) 2.5% plus the daily reset one-month London Interbank Offered Rate (“LIBOR”) or (2) 2.2% plus the one-, two- or three- month LIBOR rate, or (3) the bank’s one-, two, three, six, or twelve month Money Market Loan Rate. As of March 31, 2016 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, 2016.

The term note 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 note and revolving credit note 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, 2016, the Company was in compliance with its financial covenants.

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Note 5 - Share-based Compensation

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

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

5. SHARE-BASED COMPENSATION

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

The Company’s 2001 Equity Incentive Plan provided 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 1,800,000 class A and 300,000 class B shares of the Company’s common stock. Stock options granted could have been 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, as amended (the “2004 Director Plan”), is a nonqualified plan that provides for the granting of options with respect to 3,000,000 class A and 500,000 class B 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 36,000 class A shares and 6,000 class B 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 1,800,000 class A and 300,000 class B 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 following the date of grant.

The Company granted options to purchase 135,620 shares of the Company’s class A common stock and 22,603 shares of the class B common stock during the three-month period ended March 31, 2016. 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 the stock options granted was estimated using a Black-Scholes valuation model with the following assumptions:

	2016						2015
	Class A			Class B			Class A			Class B
Expected dividend yield at date of grant		3.02	%		8.12	%		2.57	%		5.72	%
Expected stock price volatility		34.61	%		31.77	%		34.87	%		33.94	%
Risk-free interest rate		2.12	%		2.12	%		1.78	%		1.78	%
Expected life of options (in years)		8			8			7			7

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 common 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, 2016:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (In thousands)
Class A
Outstanding at December 31, 2015		1,485,738		$	11.65
Granted		135,620		$	15.23
Exercised		(33,234	)	$	5.12			$	336
Forfeited		--			--
Outstanding at March 31, 2016		1,588,124		$	12.09		6.22	$	5,731
Exercisable at March 31, 2016		1,089,942		$	11.14		5.12	$	4,997
Class B
Outstanding at December 31, 2015		240,673		$	26.31
Granted		22,603		$	34.00
Exercised		(24,043	)	$	15.70			$	435
Forfeited		--			--
Outstanding at March 31, 2016		239,233		$	28.10		6.57	$	1,923
Exercisable at March 31, 2016		157,150		$	26.02		5.48	$	1,679

The following table summarizes information regarding unvested stock granted to associates under the 2006 Equity Incentive Plan for the three months ended March 31, 2016:

	Class A Shares Outstanding			Class A Weighted Average Grant Date Fair Value Per Share		Class B Shares Outstanding			Class B Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2015		183,814		$	12.78		30,635		$	36.93
Granted		20,578		$	15.23		3,430		$	34.00
Vested		(20,892	)	$	5.38		(3,482	)	$	32.31
Forfeited		--			--		--			--
Outstanding at March 31, 2016		183,500		$	13.89		30,583		$	37.13

As of March 31, 2016, the total unrecognized compensation cost related to unvested stock awards was approximately $2.7 million and is expected to be recognized over a weighted average period of 3.72 years.

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Note 6 - Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

6. 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, 2016:

	(In thousands)
Balance as of December 31, 2015	$	57,792
Foreign currency translation		152
Balance as of March 31, 2016	$	57,944

Intangible assets consisted of the following:

	March 31, 2016			December 31, 2015
	(In thousands)
Non-amortizing other intangible assets:
Trade name	$	1,191		$	1,191
Amortizing other intangible assets:
Customer related		9,339			9,323
Technology		1,110			1,110
Trade name		1,572			1,572
Total other intangible assets		13,212			13,196
Accumulated amortization		(9,620	)		(9,418	)
Other intangible assets, net	$	3,592		$	3,778

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Note 7 - Property and Equipment

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

7. PROPERTY AND EQUIPMENT

	March 31, 2016			December 31, 2015
	(In thousands)
Property and equipment	$	35,928		$	34,591
Accumulated depreciation		(24,297	)		(23,466	)
Property and equipment, net	$	11,631		$	11,125

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Note 8 - Earnings Per Share

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

8. EARNINGS PER SHARE

Net income per share of class A common stock and class B common stock is computed using the two-class method. Basic net income per share is computed by allocating undistributed earnings to common shares and using the weighted-average number of common shares outstanding during the period.

Diluted net income per share is computed using the weighted-average number of common shares and, if dilutive, the potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock. The dilutive effect of outstanding stock options is reflected in diluted earnings per share by application of the treasury stock method.

The liquidation rights and the rights upon the consummation of an extraordinary transaction are the same for the holders of class A common stock and class B common stock. Other than share distributions and liquidation rights, the amount of any dividend or other distribution payable on each share of class A common stock will be equal to one-sixth (1/6

th

) of the amount of any such dividend or other distribution payable on each share of class B common stock. As a result, the undistributed earnings for each period are allocated based on the contractual participation rights of the class A and class B common stock as if the earnings for the period had been distributed.

At March 31, 2016 and 2015, the Company had 568,697 and 477,427 options of class A shares and 87,836 and 44,202 options of class B shares, respectively, which have been excluded from the diluted net income per share computation because the exercise price exceeds the fair market value

.

	For the Three Months Ended March 31, 2016						For the Three Months Ended March 31, 2015
	Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock
	(In thousands, except per share data)
Numerator for net income per share - basic:
Net income	$	2,568		$	2,605		$	1,738		$	1,742
Allocation of distributed and undistributed income to unvested restricted stock shareholders		(21	)		(23	)		(12	)		(10	)
Net income attributable to common shareholders	$	2,547		$	2,582		$	1,726		$	1,732
Denominator for net income per share - basic:
Weighted average common shares outstanding - basic		20,710			3,489			20,792			3,478
Net income per share – basic	$	0.12		$	0.74		$	0.08		$	0.50
Numerator for net income per share - diluted:
Net income attributable to common shareholders for basic computation	$	2,547		$	2,582		$	1,726		$	1,732
Denominator for net income per share - diluted:
Weighted average common shares outstanding - basic		20,710			3,489			20,792			3,478
Weighted average effect of dilutive securities – stock options		238			42			241			46
Denominator for diluted earnings per share – adjusted weighted average shares		20,948			3,531			21,033			3,524
Net income per share – diluted	$	0.12		$	0.73		$	0.08		$	0.49

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Note 9 - Related Party Transactions

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

9. RELATED PARTY TRANSACTIONS     

A board member of the Company 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, the Company purchases dental and vision insurance for certain of its associates from Ameritas. The total value of these purchases was $58,000 and $57,000 for the three-month periods ended March 31, 2016 and 2015, respectively.

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Note 10 - Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

10. RECENT ACCOUNTING PRONOUNCEMENTS

In February 2015, the FASB issued Accounting Standards Update (“ASU”) ASU 2015-02,

“Consolidation—Amendments to the Consolidation Analysis (Topic 810)”

(“ASU 2015-02”), which requires reporting entities to reevaluate whether certain legal entities should be consolidated under the revised consolidation model. This ASU modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs), eliminates the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with VIEs, especially those that have fee arrangements and related party relationships. The Company’s adoption of the standard effective January 1, 2016 did not significantly impact its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-05, “

Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement”

("ASU 2015-05"). The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. The update further specifies that the customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. The Company prospectively adopted ASU 2015-05 effective January 1, 2016. Based on the ability and feasibility for the Company to download software in its cloud computing arrangements it entered in 2016, all are accounted for as service contracts, which are expensed to direct expenses or selling, general and administrative expenses during the service period.

In November 2015, the FASB issued ASU 2015-17,

“Balance Sheet Classification of Deferred Taxes

” (“ASU 2015-17”). ASU 2015-17 amends the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The Company adopted ASU 2015-17 retrospectively effective January 1, 2016 and reclassified $1.1 million of current deferred tax assets to noncurrent, which was netted with deferred tax liabilities on the December 31, 2015 consolidated balance sheet.

In May 2014, the FASB issued ASU 2014-09,

“Revenue from Contracts with Customers (Topic 606)”

(“ASU 2014-09”).  ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in accounting principles generally accepted in the United States when it becomes effective. The standard is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2017, with early adoption allowed for years beginning after December 15, 2016. An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard.  The Company is currently in the process of evaluating the impact that this new guidance will have on its consolidated financial statements and expects to adopt the guidance through the retrospective transition method. We are in the process of developing and testing changes to our processes and systems. The Company currently expects the most significant changes to result from deferring commissions and recognizing the expense over the estimated life of the client relationship rather than expensing as incurred, which is the Company’s current practice, and estimating variable consideration at the outset of the contract. 

In February 2016, the FASB issued ASU 2016-02,

Leases

(Topic 842). This ASU requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months on its balance sheet. This ASU is effective in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method. The Company is currently in the process of evaluating the impact that this new guidance will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09,

Compensation – Stock Compensation (Topic 718)

(“ASU 2016-09”). This ASU simplifies accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective in fiscal years beginning after December 15, 2016.  Early adoption is permitted in any interim or annual period.  If the Company elects early adoption, all adjustments should be reflected as of the beginning of the fiscal year of adoption.

The Company is currently assessing the impact that this new guidance will have on its consolidated financial statements.

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Note 1 - Basis of Consolidation and Presentation (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value, Measurements, Recurring [Member]

Notes Tables

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, 2016
Money Market Funds	$	9,353	$	--	$	--	$	9,353
Commercial Paper		--		14,412		--		14,412
Total	$	9,353	$	14,412	$	--	$	23,765
As of December 31, 2015
Money Market Funds	$	8,954	$	--	$	--	$	8,954
Commercial Paper		--		30,872		--		30,872
Total	$	8,954	$	30,872	$	--	$	39,826

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

	March 31, 2016		December 31, 2015
	(In thousands)
Total carrying amounts of long-term debt	$	5,146	$	5,739
Estimated fair value of long-term debt	$	5,142	$	5,708

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Note 5 - Share-based Compensation (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

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

	2016						2015
	Class A			Class B			Class A			Class B
Expected dividend yield at date of grant		3.02	%		8.12	%		2.57	%		5.72	%
Expected stock price volatility		34.61	%		31.77	%		34.87	%		33.94	%
Risk-free interest rate		2.12	%		2.12	%		1.78	%		1.78	%
Expected life of options (in years)		8			8			7			7

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)
Class A
Outstanding at December 31, 2015		1,485,738		$	11.65
Granted		135,620		$	15.23
Exercised		(33,234	)	$	5.12			$	336
Forfeited		--			--
Outstanding at March 31, 2016		1,588,124		$	12.09		6.22	$	5,731
Exercisable at March 31, 2016		1,089,942		$	11.14		5.12	$	4,997
Class B
Outstanding at December 31, 2015		240,673		$	26.31
Granted		22,603		$	34.00
Exercised		(24,043	)	$	15.70			$	435
Forfeited		--			--
Outstanding at March 31, 2016		239,233		$	28.10		6.57	$	1,923
Exercisable at March 31, 2016		157,150		$	26.02		5.48	$	1,679

Schedule of Nonvested Share Activity [Table Text Block]

	Class A Shares Outstanding			Class A Weighted Average Grant Date Fair Value Per Share		Class B Shares Outstanding			Class B Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2015		183,814		$	12.78		30,635		$	36.93
Granted		20,578		$	15.23		3,430		$	34.00
Vested		(20,892	)	$	5.38		(3,482	)	$	32.31
Forfeited		--			--		--			--
Outstanding at March 31, 2016		183,500		$	13.89		30,583		$	37.13

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Note 6 - Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Goodwill [Table Text Block]

	(In thousands)
Balance as of December 31, 2015	$	57,792
Foreign currency translation		152
Balance as of March 31, 2016	$	57,944

Schedule of Intangible Assets [Table Text Block]

	March 31, 2016			December 31, 2015
	(In thousands)
Non-amortizing other intangible assets:
Trade name	$	1,191		$	1,191
Amortizing other intangible assets:
Customer related		9,339			9,323
Technology		1,110			1,110
Trade name		1,572			1,572
Total other intangible assets		13,212			13,196
Accumulated amortization		(9,620	)		(9,418	)
Other intangible assets, net	$	3,592		$	3,778

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Note 7 - Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Property, Plant and Equipment [Table Text Block]

	March 31, 2016			December 31, 2015
	(In thousands)
Property and equipment	$	35,928		$	34,591
Accumulated depreciation		(24,297	)		(23,466	)
Property and equipment, net	$	11,631		$	11,125

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Note 8 - Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

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

	For the Three Months Ended March 31, 2016						For the Three Months Ended March 31, 2015
	Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock
	(In thousands, except per share data)
Numerator for net income per share - basic:
Net income	$	2,568		$	2,605		$	1,738		$	1,742
Allocation of distributed and undistributed income to unvested restricted stock shareholders		(21	)		(23	)		(12	)		(10	)
Net income attributable to common shareholders	$	2,547		$	2,582		$	1,726		$	1,732
Denominator for net income per share - basic:
Weighted average common shares outstanding - basic		20,710			3,489			20,792			3,478
Net income per share – basic	$	0.12		$	0.74		$	0.08		$	0.50
Numerator for net income per share - diluted:
Net income attributable to common shareholders for basic computation	$	2,547		$	2,582		$	1,726		$	1,732
Denominator for net income per share - diluted:
Weighted average common shares outstanding - basic		20,710			3,489			20,792			3,478
Weighted average effect of dilutive securities – stock options		238			42			241			46
Denominator for diluted earnings per share – adjusted weighted average shares		20,948			3,531			21,033			3,524
Net income per share – diluted	$	0.12		$	0.73		$	0.08		$	0.49

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Note 1 - Basis of Consolidation and Presentation (Details Textual)	3 Months Ended	12 Months Ended
	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Goodwill and Intangible Asset Impairment	$ 0	$ 0
Number of Operating Segments	6
Number of Reportable Segments	1

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Note 1 - Fair Value of Financial Assets and Liabilities (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]
Assets, fair value	$ 9,353	$ 8,954
Fair Value, Inputs, Level 1 [Member] | Commercial Paper [Member]
Assets, fair value
Fair Value, Inputs, Level 1 [Member]
Assets, fair value	$ 9,353	$ 8,954
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member]
Assets, fair value
Fair Value, Inputs, Level 2 [Member] | Commercial Paper [Member]
Assets, fair value	$ 14,412	$ 30,872
Fair Value, Inputs, Level 2 [Member]
Assets, fair value	14,412	30,872
Money Market Funds [Member]
Assets, fair value	9,353	8,954
Commercial Paper [Member]
Assets, fair value	14,412	30,872
Assets, fair value	$ 23,765	$ 39,826

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Note 1 - Fair Values of Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Long-term Debt	$ 5,146	$ 5,739
Estimated fair value of long-term debt	$ 5,142	$ 5,708

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Note 2 - Connect (Details Textual) - USD ($)			3 Months Ended		12 Months Ended
	Mar. 28, 2016	Mar. 07, 2016	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Connect [Member] | Illuminate Health, LLC [Member]
Ownership Percentage Available to Acquire at Each Recurring Contract Value Target Level		33.33%
Payments to Noncontrolling Interests	$ 1,000,000	$ 1,000,000
Connect [Member]
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions					89.00%
Illuminate Health, LLC [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners					11.00%
Payments to Noncontrolling Interests			$ 2,000,000

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Note 3 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Effective Income Tax Rate Reconciliation, Percent	35.40%	39.80%
Increase (Decrease) in Effective Tax Rate from Capital Loss Valuation Allowance Write Off			$ (300,000)
Increase (Decrease) in Effective Tax Rate from Adjustments Related to Federal Tax Examinations	$ (48,000)
Unrecognized Tax Benefits	338,000
Unrecognized Tax Benefits, Interest on Income Taxes Accrued	3,000
Unrecognized Tax Benefits, Income Tax Penalties Accrued	7,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	82,000
Unrecognized Tax Benefits that Would Not Impact Effective Tax Rate	$ 257,000

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Note 4 - Notes Payable (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Revolving Credit Facility [Member] | One Month LIBOR [Member]
Debt Instrument, Basis Spread on Variable Rate	2.50%
Revolving Credit Facility [Member] | One, Two, or Three Month LIBOR [Member]
Debt Instrument, Basis Spread on Variable Rate	2.20%
Revolving Credit Facility [Member]
Long-term Line of Credit	$ 0
Line of Credit Facility, Maximum Borrowing Capacity	$ 6,500,000
Borrowing Capacity Percentage of Accounts Receivable	75.00%
Line of Credit Facility, Remaining Borrowing Capacity	$ 6,500,000
New Combined Term Note [Member]
Number of Monthly Installments	60
Debt Instrument, Periodic Payment	$ 212,468
Debt Instrument, Interest Rate, Stated Percentage	3.12%
Long-term Debt	$ 5,100,000
Long-term Debt	$ 5,146,000	$ 5,739,000

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Note 5 - Share-based Compensation (Details Textual) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($) shares
Common Class A [Member] | The 2001 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,800,000
Common Class A [Member] | Director Plan 2004 [Member] | Nonqualified Stock Options [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options Granted at Annual Meeting	36,000
Common Class A [Member] | Director Plan 2004 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	3,000,000
Common Class A [Member] | The 2006 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,800,000
Common Class A [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	135,620
Common Class B [Member] | The 2001 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	300,000
Common Class B [Member] | Director Plan 2004 [Member] | Nonqualified Stock Options [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options Granted at Annual Meeting	6,000
Common Class B [Member] | Director Plan 2004 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	500,000
Common Class B [Member] | The 2006 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	300,000
Common Class B [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	22,603
The 2001 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	5 years
The 2001 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Director Plan 2004 [Member] | Nonqualified Stock Options [Member] | Minimum [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	3 years
Director Plan 2004 [Member] | Nonqualified Stock Options [Member] | Maximum [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Director Plan 2004 [Member] | Nonqualified Stock Options [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year
The 2006 Equity Incentive Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	5 years
The 2006 Equity Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 2.7
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	3 years 262 days

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Note 5 - Stock Options Valuation Assumptions (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Common Class A [Member]
Expected dividend yield at date of grant	3.02%	2.57%
Expected stock price volatility	34.61%	34.87%
Risk-free interest rate	2.12%	1.78%
Expected life of options (in years)	8 years	7 years
Common Class B [Member]
Expected dividend yield at date of grant	8.12%	5.72%
Expected stock price volatility	31.77%	33.94%
Risk-free interest rate	2.12%	1.78%
Expected life of options (in years)	8 years	7 years

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Note 5 - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares
Common Class A [Member]
Outstanding, number of options (in shares) | shares	1,485,738
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 11.65
Granted, number of options (in shares) | shares	135,620
Granted, weighted average exercise price (in dollars per share) | $ / shares	$ 15.23
Exercised, number of options (in shares) | shares	(33,234)
Exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 5.12
Exercised, aggregate intrinsic value | $	$ 336
Forfeited, number of options (in shares) | shares
Forfeited, weighted average exercise price (in dollars per share) | $ / shares
Outstanding, number of options (in shares) | shares	1,588,124
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 12.09
Outstanding, weighted average remaining contractual term	6 years 80 days
Outstanding, aggregate intrinsic value | $	$ 5,731
Exercisable, number of options (in shares) | shares	1,089,942
Weighted average exercise price (in dollars per share) | $ / shares	$ 11.14
Exercisable, weighted average remaining contractual term	5 years 43 days
Exercisable, aggregate intrinsic value | $	$ 4,997
Common Class B [Member]
Outstanding, number of options (in shares) | shares	240,673
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 26.31
Granted, number of options (in shares) | shares	22,603
Granted, weighted average exercise price (in dollars per share) | $ / shares	$ 34
Exercised, number of options (in shares) | shares	(24,043)
Exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 15.70
Exercised, aggregate intrinsic value | $	$ 435
Forfeited, number of options (in shares) | shares
Forfeited, weighted average exercise price (in dollars per share) | $ / shares
Outstanding, number of options (in shares) | shares	239,233
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 28.10
Outstanding, weighted average remaining contractual term	6 years 208 days
Outstanding, aggregate intrinsic value | $	$ 1,923
Exercisable, number of options (in shares) | shares	157,150
Weighted average exercise price (in dollars per share) | $ / shares	$ 26.02
Exercisable, weighted average remaining contractual term	5 years 175 days
Exercisable, aggregate intrinsic value | $	$ 1,679

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Note 5 - Non-vested Stock (Details)	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Common Class A [Member]
Outstanding (in shares) | shares	183,814
Outstanding (in dollars per share) | $ / shares	$ 12.78
Granted (in shares) | shares	20,578
Granted (in dollars per share) | $ / shares	$ 15.23
Vested (in shares) | shares	(20,892)
Vested (in dollars per share) | $ / shares	$ 5.38
Forfeited (in shares) | shares
Forfeited (in dollars per share) | $ / shares
Outstanding (in shares) | shares	183,500
Outstanding (in dollars per share) | $ / shares	$ 13.89
Common Class B [Member]
Outstanding (in shares) | shares	30,635
Outstanding (in dollars per share) | $ / shares	$ 36.93
Granted (in shares) | shares	3,430
Granted (in dollars per share) | $ / shares	$ 34
Vested (in shares) | shares	(3,482)
Vested (in dollars per share) | $ / shares	$ 32.31
Forfeited (in shares) | shares
Forfeited (in dollars per share) | $ / shares
Outstanding (in shares) | shares	30,583
Outstanding (in dollars per share) | $ / shares	$ 37.13

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Note 6 - Summary of Changes in the Carrying Amount of Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Balance	$ 57,792
Foreign currency translation	152
Balance	$ 57,944

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Note 6 - Summary of Goodwill and Intangible Assets (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Trade Names 1 [Member]
Trade name	$ 1,191,000	$ 1,191,000
Customer Relationships [Member]
Customer related	9,339,000	9,323,000
Technology-Based Intangible Assets [Member]
Customer related	1,110,000	1,110,000
Trade Names [Member]
Customer related	1,572,000	1,572,000
Total other intangible assets	13,212,000	13,196,000
Accumulated amortization	(9,620,000)	(9,418,000)
Other intangible assets, net	$ 3,592,000	$ 3,778,000

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Note 7 - Summary of Property and Equipment (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Property and equipment	$ 35,928,000	$ 34,591,000
Accumulated depreciation	(24,297,000)	(23,466,000)
Property and equipment, net	$ 11,631,000	$ 11,125,000

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Note 8 - Earnings Per Share (Details Textual)	3 Months Ended		15 Months Ended
	Mar. 31, 2016 shares	Mar. 31, 2015 shares	Mar. 31, 2016
Common Class A [Member]
Common Stock to Dividend or Distribution Payable			0.167
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	568,697	477,427
Common Class B [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	87,836	44,202

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Note 8 - Net Income Per Share Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Common Class A [Member]
Numerator for net income per share - basic:
Net income	$ 2,568	$ 1,738
Allocation of distributed and undistributed income to unvested restricted stock shareholders	(21)	(12)
Net income attributable to common shareholders	$ 2,547	$ 1,726
Denominator for net income per share - basic:
Weighted average common shares outstanding - basic (in shares)	20,710	20,792
Net income per share – basic (in dollars per share)	$ 0.12	$ 0.08
Net income attributable to common shareholders	$ 2,547	$ 1,726
Weighted average effect of dilutive securities – stock options (in shares)	238	241
Denominator for diluted earnings per share – adjusted weighted average shares (in shares)	20,948	21,033
Net income per share – diluted (in dollars per share)	$ 0.12	$ 0.08
Common Class B [Member]
Numerator for net income per share - basic:
Net income	$ 2,605	$ 1,742
Allocation of distributed and undistributed income to unvested restricted stock shareholders	(23)	(10)
Net income attributable to common shareholders	$ 2,582	$ 1,732
Denominator for net income per share - basic:
Weighted average common shares outstanding - basic (in shares)	3,489	3,478
Net income per share – basic (in dollars per share)	$ 0.74	$ 0.50
Net income attributable to common shareholders	$ 2,582	$ 1,732
Weighted average effect of dilutive securities – stock options (in shares)	42	46
Denominator for diluted earnings per share – adjusted weighted average shares (in shares)	3,531	3,524
Net income per share – diluted (in dollars per share)	$ 0.73	$ 0.49
Net income	$ 5,173	$ 3,480

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Note 9 - Related Party Transactions (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Ameritas Life Insurance Corp [Member]
Related Party Transaction, Amounts of Transaction	$ 58,000	$ 57,000

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Note 10 - Recent Accounting Pronouncements (Details Textual) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Reclassification from Current Deferred Tax Assets to Noncurrent Deferred Tax Assets [Member] | December 31, 2015 [Member]
Prior Period Reclassification Adjustment	$ 1.1