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<SEC-DOCUMENT>0000897069-03-000862.txt : 20030807
<SEC-HEADER>0000897069-03-000862.hdr.sgml : 20030807
<ACCEPTANCE-DATETIME>20030807165300
ACCESSION NUMBER:		0000897069-03-000862
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20030805
ITEM INFORMATION:		
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20030807

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATIONAL RESEARCH CORP
		CENTRAL INDEX KEY:			0000070487
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-TESTING LABORATORIES [8734]
		IRS NUMBER:				470634000
		STATE OF INCORPORATION:			WI
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-29466
		FILM NUMBER:		03829233

	BUSINESS ADDRESS:	
		STREET 1:		1245 Q STREET
		CITY:			LINCOLN
		STATE:			NE
		ZIP:			68508
		BUSINESS PHONE:		4024752525

	MAIL ADDRESS:	
		STREET 1:		1245 Q STREET
		CITY:			LINCOLN
		STATE:			NE
		ZIP:			68508
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>sdc497.txt
<DESCRIPTION>8-K  CURRENT REPORT
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                             _______________________

                                    FORM 8-K

                                 CURRENT REPORT


                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                             _______________________


                        Date of Report
                        (Date of earliest
                        event reported):     August 5, 2003


                          National Research Corporation
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


   Wisconsin                         0-29466                      47-0634000
- ---------------                 ----------------             -------------------
(State or other                 (Commission File                (IRS Employer
jurisdiction of                      Number)                 Identification No.)
incorporation)


                    1245 "Q" Street, Lincoln, Nebraska 68508
          ------------------------------------------------------------
          (Address of principal executive offices, including zip code)


                                 (402) 475-2525
                         -------------------------------
                         (Registrant's telephone number)

<PAGE>


Item 7.  Financial Statements and Exhibits.

         (a)  Not applicable.

         (b)  Not Applicable.

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

              (99.1)  Press Release of National Research Corporation, dated
                      August 5, 2003.

              (99.2)  Script for conference call, held August 6, 2003.

Item 12.  Results of Operations and Financial Condition

     On August 5, 2003, National Research Corporation (the "Company") issued a
press release announcing its earnings for the second quarter and six months
ended June 30, 2003 and confirming its earnings guidance for 2003. A copy of
such press release is furnished as Exhibit 99.1 and is incorporated by reference
herein.

     On August 6, 2003, the Company held a conference call in connection with
the Company's announcement of its earnings for the second quarter and six months
ended June 30, 2003 and its confirmation of its earnings guidance for 2003. A
copy of the script for such conference call is furnished as Exhibit 99.2 and is
incorporated by reference herein. An archive of such conference call and the
related question and answer session will be available on the Company's web site
at www.nationalresearch.com.



                                       2
<PAGE>


                                   SIGNATURES

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


                                 NATIONAL RESEARCH CORPORATION


Date:  August 7, 2003             By: /s/ Patrick E. Beans
                                      ----------------------------------------
                                      Patrick E. Beans
                                      Vice President, Treasurer, Secretary and
                                        Chief Financial Officer



                                       3

<PAGE>



                          NATIONAL RESEARCH CORPORATION

                   Exhibit Index to Current Report on Form 8-K
                              Dated August 5, 2003


Exhibit
Number
- -------

 (99.1)    Press Release of National Research Corporation, dated August 5, 2003.

 (99.2)    Script for conference call, held August 6, 2003.



                                       4

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>sdc497a.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
[NATIONAL RESEARCH LOGO]                                         1245 "Q" Street
                                                              Lincoln, NE  68508
                                                            Phone:  402-475-2525
                                                              Fax:  402-475-9061


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


                     NATIONAL RESEARCH CORPORATION ANNOUNCES
                             SECOND QUARTER RESULTS


LINCOLN, Nebraska (August 5, 2003) -- National Research Corporation
(NASDAQ/NM:NRCI), a leader in healthcare performance measurement, today
announced results for the second quarter and six months ended June 30, 2003.

     In commenting on the second quarter results, Michael D. Hays, president and
chief executive officer of National Research Corporation, said, "We are pleased
with our financial results for the first half of the year. Our second quarter
performance was on target with our expectations, confirming the continuing
strength of our core business. We also are confirming that we expect to meet our
expectations for the full year ended December 31, 2003."

     Revenues for the second quarter ended June 30, 2003, increased 27.7% to
$6.1 million compared with revenues of $4.8 million for the second quarter of
2002. Net income for the second quarter of 2003 was $908,000, or $0.13 per basic
and $0.12 per diluted share, compared with net income of $895,000, or $0.13 per
basic and $0.12 per diluted share, in the prior-year quarter.

     Revenues for the six-month period ended June 30, 2003, increased 37.7% to
$12.2 million compared with revenues of $8.8 million for the first half of 2002.
Net income for the six months ended June 30, 2003, was $1.8 million, or $0.25
per basic and diluted share, compared with net income of $1.2 million, or $0.17
per basic and diluted share, in the prior-year period.

     In closing, Mr. Hays added, "The climate for our services currently is very
advantageous. A variety of factors, including informed healthcare consumers,
cost conscious payors, physicians and many more, are challenging the status quo
and creating a huge opportunity for our company."

     A listen-only simulcast of National Research Corporation's second quarter
conference call will be available online at www.companyboardroom.com on August
6, 2003, beginning at 11:00 a.m. Eastern time. The online replay will follow
approximately two hours later and continue for 30 days.


                                     -MORE-

<PAGE>


NRCI Announces Second Quarter Results
Page 2
August 5, 2003


     National Research Corporation, headquartered in Lincoln, Nebraska, is a
leading provider of ongoing survey-based performance measurement, analysis and
tracking services to the healthcare industry. The Company addresses the growing
need of healthcare providers and payors to measure the care outcomes,
specifically satisfaction and health status, of their patients and/or members.

     This press release includes "forward-looking" statements related to the
Company that can generally be identified as describing the Company's future
plans, objectives or goals. Such forward-looking statements are subject to risks
and uncertainties that could cause actual results or outcomes to differ
materially from those currently anticipated. These forward-looking statements
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. For further information about the factors that
could affect the Company's future results, please see the Company's filings with
the Securities and Exchange Commission.



                                     -MORE-

<PAGE>

NRCI Announces Second Quarter Results
Page 3
August 5, 2003

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

                                    Three Months Ended       Six Months Ended
                                         June 30,                June 30,
                                   --------------------    --------------------
                                     2003        2002        2003        2002
                                   --------    --------    --------    --------

Revenues                           $  6,129    $  4,799    $ 12,187    $  8,848

Operating expenses:
  Direct expenses                     2,667       1,780       5,483       3,574
  Selling, general and
   administrative                     1,533       1,088       2,817       2,362
  Depreciation and amortization         482         417         928         822
                                   --------    --------    --------    --------

    Total operating expenses          4,682       3,285       9,228       6,758
                                   --------    --------    --------    --------

    Operating income                  1,447       1,514       2,959       2,090

Other income (expense):
  Interest income                        68          61         137         125
  Interest expense                     (108)       (126)       (214)       (232)
  Other, net                             39          (5)         43         (72)
                                   --------    --------    --------    --------
    Total other income (expense)         (1)        (70)        (34)       (179)

    Income before income taxes        1,446       1,444       2,925       1,911
    Provision for income taxes          538         549       1,096         722
                                   --------    --------    --------    --------

Net income                         $    908    $    895    $  1,829    $  1,189
                                   ========    ========    ========    ========

Net income per share, basic        $   0.13    $   0.13    $   0.25    $   0.17
                                   ========    ========    ========    ========
Net income per share, diluted      $   0.12    $   0.12    $   0.25    $   0.17
                                   ========    ========    ========    ========
Weighted average shares
 outstanding:
  Basic                               7,256       7,140       7,252       7,120
  Diluted                             7,303       7,194       7,298       7,173

                                     -MORE-
<PAGE>

NRCI Announces Second Quarter Results
Page 4
August 5, 2003

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

                                                          June 30,    Dec. 31,
                                                            2003        2002
                      ASSETS                              --------    --------

Current Assets:
   Cash and cash equivalents                              $  2,698    $    991
   Short-term investments                                   11,089       9,987
   Accounts receivable, net                                  4,127       4,579
   Other current assets                                      2,894       2,391
                                                          --------    --------
          Total current assets                              20,808      17,948

Net property and equipment                                  12,398      12,346
Other, net                                                   9,953       8,538
                                                          --------    --------

           Total Assets                                   $ 43,159    $ 38,832
                                                          ========    ========

        LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses                  $  1,037    $    933
   Deferred revenue                                          4,834       3,277
   Accrued compensation                                        820         633
   Notes payable                                               136         132
   Income taxes payable                                        126          55
                                                          --------    --------
          Total current liabilities                          6,953       5,030

Noncurrent Liabilities                                       6,302       5,784
                                                          --------    --------

           Total Liabilities                                13,255      10,814
                                                          --------    --------

Shareholders' Equity:
   Common stock, $0.001 par value; 20,000,000 shares
    authorized; 7,572,568 and 7,560,610 shares issued,
    respectively; 7,257,068 and 7,245,110 outstanding,
    respectively                                                 8           8
   Additional paid-in capital                               18,182      18,124
   Retained earnings                                        13,276      11,447
   Accumulated other comprehensive income                       34          35
   Treasury stock                                           (1,596)     (1,596)
                                                          --------    --------
          Total shareholders' equity                        29,904      28,018
                                                          --------    --------

          Total Liabilities and Shareholders' Equity      $ 43,159    $ 38,832
                                                          ========    ========


                                      -END-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>4
<FILENAME>sdc497b.txt
<DESCRIPTION>SCRIPT FOR CONFERENCE CALL
<TEXT>
Mike
- ----

Thank you, _______________. I would like to welcome all of you to National
Research Corporation's second quarter conference call. My name is Mike Hays, CEO
of National Research. Joining me on the call today is our CFO, Pat Beans.

Before we commence the call, I would ask Pat to review with us conditions that
relate to forward looking statements we may make during today's call. Pat.

Pat
- ---

Thank you, Mike. This conference call includes "forward-looking" statements
related to the company that involve risks and uncertainties that could cause
actual results or outcomes to differ materially from those currently
anticipated. These forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. For
further information about the facts that could affect the company's future
results, please see the company's filings with the Securities and Exchange
Commission. With that, I'll turn it back to you Mike.

Mike
- ----

Thank you, Pat.

Our second quarter financial performance resulted in top line growth of 28% over
the second quarter 2002, driving fully diluted earnings per share of $0.12 in
line with previous guidance.

Looking back over the last four quarters, we have achieved revenue growth in our
core business of 35%--well ahead of our 25% targeted growth rate. Our core
business continues to show robust growth, and our earnings continue to expand,
as a percentage, ahead of this top line growth rate.

At this time, I'd like to turn the call back over to Pat so he may provide us
additional details regarding our second quarter results. Pat.

<PAGE>

Pat
- ---

Thank you Mike.

During the 2nd quarter of 2003, NRC produced a very solid revenue and EPS, even
with the affects of HEALTHSOUTH. During the 2nd quarter of 2003, the revenue
increased 28% over the 2nd quarter of 2002, with revenues growing from $4.8
million last year to $6.1 million this year. This revenue growth is the outcome
of an increase in demand for our core products which resulted in the addition of
new clients, each of which will help our recurring revenue during the balance of
2003 and into 2004.

For the first six months of 2003, NRC's revenue increased 38% compared to the
first six months of 2002. The company's revenue reached $12.2 million in 2003
compared to $8.8 million during the same period in 2002. This exceeds our
long-term growth benchmark of 25%.

In June we reported that we had reached agreement with HEALTHSOUTH on some
modifications to their contract. To update you, we have eliminated our payment
risk by only doing work once we have collected payment. HEALTHSOUTH is current
and we are providing services on the reduced contract.

The EPS for the 2nd quarter of 2003 was a solid $0.12 cents per share fully
diluted and $0.13 cents per share basic. The net income for the 2nd quarter was
$908,000 compared to $895,000 during the same period in 2002. During the 2nd
quarter of 2003, the net income moved closer to our long term model. Last year
we were outside our model showing the 19% margin for net income. Without the
events of HEALTHSOUTH, our margin for net income would have been closer to
16.5%, instead of 14.8%.

The EPS for the first six months of 2003 was $0.25 cents per share, a 47%
increase over the $0.17 cents per share in 2002. Our net income for the first
six months of 2003 was $1.8 million compared to $1.2 million in 2002. As a
percentage of revenue, our net

<PAGE>

income increased to 15%, up from 13%.The 2003 margin percentage is more in line
with our goals.

Our direct expenses as a percentage of revenue were 44% for the quarter. This is
in line with our goals. We expect direct expenses will increase a point or two
during the 3rd quarter due to the Healthcare Market Guide, but will reduce a
couple of points during the 4th quarter and be in line with the expected annual
margin.

The Selling, General and Administrative expenses, were higher during the quarter
partially due to the $100,000 bad debt recorded during the quarter relating to
HEALTHSOUTH. The S,G and A will be lower as a percent of revenue during the 3rd
quarter and back in line during the 4th quarter to end the year around 22 to 23%
of revenue.

Higher revenue will result in growth of net earnings for the next two quarters.
The 2003 edition of the HealthCare Market Guide will be release during the 3rd
quarter. We reaffirm our goal of earnings per share for 3rd quarter 2003 of
$0.18, and our annual EPS for the year 2003 to $0.62 cents per share.

The company continues to improve its strong financial position. The balance
sheet is in excellent shape and should improve even more during this quarter.
Cash flow from operations for the first six months of 2003 was $4.7 million.
Cash and short-term investments as of June 30, 2003, was approximately $14
million or $1.90 per share. The net cash and short-term investments improved by
$2.8 million during the first six months of 2003. The strong revenue and
earnings growth has the momentum to continue improving our strong financial
position.

I will now turn it back over to Mike for additional discussions.

<PAGE>

Mike
- ----

Thank You Pat

Before I open the call for Questions and Answers, let me provide you an update
on various topics and make a few important announcements

First, regarding Canada. Our Canadian expansion is on track with the integration
of Smaller World Communications, which we acquired in March of this year, being
essentially completed and without surprises.

I am also happy to announce we have a verbal agreement to add 100 hospitals
across the province of British Columbia to our client base. These BC hospitals
join 140 hospitals across Ontario in a program that standardizes measurement of
the patient experience using our Picker family of surveys.

Healthcare Market Guide, our syndicated product, will be delivered in third
quarter as planned. We anticipate showing an increase in revenue from HCMG when
we report third quarter performance. While HCMG represents approximately 10% of
revenue, the product's contribution to net profit is well ahead of its top line
contribution. We have created a sales group of five new associates to focus
exclusively on HCMG sales. As a direct result, we expect to maintain Healthcare
Market Guide as an important percentage of revenue, even given the growth we are
recording in our core business.

The 2003 Picker Institute International Symposium held in Boston, July 16
through 18, showed a 46% increase in attendance. This year's annual event
attracted clients and prospects from the U.S. and nine other countries.

During the Picker Symposium, we rolled out a new branding strategy to capitalize
on the strengths of National Research Corporation and the Picker Institute. The
NRC+Picker Group going forward, will be the brand that provides our company's
core measurement and improvement products and services.

<PAGE>

We also announced at the 2003 Symposium the re-establishment of the not for
profit Picker Institute, dedicated to educational activities which advance
patient-centered care as the fundamental foundation to healthcare delivery. With
the Picker Institute revitalized, we will also benefit from much expanded R&D
activities, as well as access to grants to offset Symposium expenses which NRC
currently underwrites.

Regarding the National Standard, momentum supporting the launch of
Hospital-CAHPS, the standardized measurement and public reporting of patient
experience, accelerated recently. Three of the largest trade associations
including The American Hospital Association, The Association of American Medical
Colleges and the Federation of American Hospitals called for hospitals across
the country to voluntarily sign up for public reporting of the results from the
standardized patient experience survey. In the first 60 days, the AHA has
received signed letters from 1,350 hospitals committing to participate in the
standard survey and public release of the results for consumer use. Whether or
not this recruiting effort eliminates a need for mandating participation is
unknown. This recruiting effort will, however, keep on track, if not accelerate,
the rollout which may have been delayed if pushed back to a federal mandate.
Were it to exist, the timeline from industry experts is that in the spring of
2004, hospital performance based upon results of the national surveys will be
publicly reported. The final survey and rollout timetable is expected to be
released in September or shortly thereafter.

On the new product front, we announced in a previous call our planned efforts to
roll out several new products, each having a clear recurring revenue stream. I
am happy to report those new offerings are now part of The NRC+Picker Group's
robust portfolio of products. Each of our new product offerings is being sold to
current clients with the intent of helping clients drive improvement. We believe
the improvement of one's patient experience ratings will become the key focus,
given the spotlight that is now on public reporting. The new products have
already been met with client acceptance and have proven to be an effective point
of difference at point of sale for prospects. We

<PAGE>

anticipate adding to our average client contract value, while establishing even
greater switching costs, thus protecting our base recurring revenues.

In closing I would like to announce we will be implementing a stock buyback
program of up to 500,000 shares to cover options and or restrictive stock that
we issued or may issue in future years. The sole intent of this program is to
minimize any possible dilution.

I would like now to open the call for Q&A.


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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