8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

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

_________________

Date of Report
(Date of earliest
event reported):	November 4, 2008

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

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

1245 Q Street, Lincoln, Nebraska 68508

(Address of principal executive offices, including zip code)

(402) 475-2525

(Registrant’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

        On November 4, 2008, National Research Corporation (the “Company”) issued a press release announcing its earnings for the quarter ended September 30, 2008. A copy of such press release is furnished as Exhibit 99.1 and is incorporated by reference herein.

        On November 5, 2008, the Company held a conference call and online Web simulcast in connection with the Company’s announcement of its earnings for the quarter ended September 30, 2008. A copy of the script for such conference call and simulcast is furnished as Exhibit 99.2 and is incorporated by reference herein. An archive of such conference call and simulcast and the related question and answer session will be available online at www.earnings.com.

Item 9.01. Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

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

(99.1) Press Release of National Research Corporation, dated November 4, 2008.

(99.2) Script for conference call and online Web simulcast, held November 5, 2008.

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SIGNATURES

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

Date: November 5, 2008

NATIONAL RESEARCH CORPORATION

By:  /s/ Patrick E. Beans

        Patrick E. Beans

        Vice President, Treasurer, Secretary and Chief

        Financial Officer

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NATIONAL RESEARCH CORPORATION

Exhibit Index to Current Report on Form 8-K
Dated November 4, 2008

Exhibit
Number

(99.1) Press Release of National Research Corporation, dated November 4, 2008.

(99.2) Script for conference call and online Web simulcast, held November 5, 2008.

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EX-99.1

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

NATIONAL RESEARCH CORPORATION ANNOUNCES
THIRD QUARTER 2008 RESULTS AND
FOURTH QUARTER DIVIDEND
__________________________________________________
Revenue and Earnings Surpass Expectations

LINCOLN, Nebraska (November 4, 2008) — National Research Corporation (NASDAQ:NRCI) today announced results for the third quarter ended September 30, 2008.

• Quarterly revenue $13.5 million

• Quarterly diluted earnings per share of $0.29

• NRC quarterly net new contracts $2.7 million

• New contracts for subscription-based products continue rapid growth--up 67% for the quarter and 170% year-to-date

• Total recurring contract value $56.5 million, up 16% over third quarter 2007

        Commenting on the third quarter results, Michael D. Hays, president and chief executive officer of National Research Corporation, said, “We had a good quarter. Traditionally HealthCare Market Guide has driven our third quarter revenue and we knew, given the deferred nature of our new HCMG Ticker product, we had a hurdle to make up. The balance of the organization’s growth did just that and largely offsets HCMG revenue.”

        Revenue for the quarter ended September 30, 2008, was $13.5 million compared to $14.0 million for the same quarter 2007. Net income for the quarter ended September 30, 2008, was $2.0 million compared to $2.5 million for the third quarter 2007.

        Revenue for the first nine months of 2008 was $38.8 million, compared to $38.1 million for the same period in 2007. Net income for the first nine months of 2008 was $5.6 million resulting in $.83 per basic and $.81 per diluted earnings per share.

        The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.14 (fourteen cents) per share payable December 31, 2008, to shareholders of record as of the close of business on December 5, 2008.

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NRCI Announces Third Quarter Results
Page 2
November 4, 2008

        In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, “Happily, we are debt free today having paid off the $12.5 million loan in 30 months in conjunction with our acquisition of TGI in May 2006. This, along with having paid $8.2 million in dividends and $8.9 million in repurchasing stock during that same period, speaks to our constant profitability and a very strong cash flow.”

        A listen-only simulcast of National Research Corporation’s third quarter conference call will be available online at www.earnings.com on November 5, 2008, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately an hour later and continue for 30 days.

        National Research Corporation, headquartered in Lincoln, Nebraska, is a leading provider of performance measurement, improvement services, and governance education to the healthcare industry in the United States and Canada.

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

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NRCI Announces Third Quarter Results
Page 3
November 4, 2008

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Revenue	$	13,469		$	13,952		$	38,824		$	38,102
Operating expenses:
Direct expenses		6,598			5,930			17,845			16,744
Selling, general and administrative		3,053			3,240			9,960			9,890
Depreciation and amortization		661			672			2,003			1,922
Total operating expenses		10,312			9,842			29,808			28,556
Operating income		3,157			4,110			9,016			9,546
Other income (expense):
Interest income		6			32			33			101
Interest expense		(21	)		(110	)		(118	)		(413	)
Other, net		29			21			9			88
Total other income (expense)		14			(57	)		(76	)		(224	)
Income before income taxes		3,171			4,053			8,940			9,322
Provision for income taxes		1,205			1,558			3,390			3,592
Net income	$	1,966		$	2,495		$	5,550		$	5,730
Net income per share, basic	$	0.30		$	0.36		$	0.83		$	0.84
Net income per share, diluted	$	0.29		$	0.36		$	0.81		$	0.82
Weighted average shares outstanding:
Basic		6,644			6,851			6,699			6,846
Diluted		6,803			7,013			6,845			6,995

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NRCI Announces Third Quarter Results
Page 4
November 4, 2008

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

	Sept. 30, 2008			Dec. 31, 2007
ASSETS
Current Assets:
Cash and cash equivalents	$	677		$	3,355
Short-term investments		--			99
Accounts receivable, net		9,785			6,379
Income taxes recoverable		55			272
Other current assets		1,780			2,495
Total current assets		12,297			12,600
Net property and equipment		12,595			11,974
Other, net		36,215			37,295
Total Assets	$	61,107		$	61,869
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	2,152		$	2,492
Deferred revenue		15,313			9,922
Accrued compensation		1,457			1,477
Notes payable		239			1,093
Total current liabilities		19,161			14,984
Non-current liabilities		2,339			4,598
Total Liabilities		21,500			19,582
Shareholders’ Equity:
Common stock, $0.001 par value; 20,000,000 shares authorized;
issued 7,942,559 in 2008 and 7,883,289 in 2007;
outstanding 6,698,480 in 2008 and 6,926,442 in 2007		8			8
Additional paid-in capital		25,807			23,508
Retained earnings		32,712			30,004
Accumulated other comprehensive income		694			932
Treasury stock		(19,614	)		(12,165	)
Total shareholders’ equity		39,607			42,287
Total liabilities and shareholders’ equity	$	61,107		$	61,869

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EX-99.2

Mike:

Thank you ___________, and welcome everyone to National Research Corporation’s third quarter 2008 conference call. My name is Mike Hays, the Company’s CEO, and joining me on the call today is Pat Beans our CFO.

Before we commence our remarks, I would ask Pat to review conditions related to any forward-looking statements that may be made as part of today’s call. Pat.

Pat:

Thank you, Mike.

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

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Mike:

Thank you, Pat.

To kick off the call, let me say we had a good quarter. Both revenue and earnings came in ahead of where they may have been without the increased contribution year-over-year from NRC Picker and The Governance Institute. Moving from our annual Healthcare Market Guide product which is delivered in the third quarter, to an ever-increasing number of Market Guide clients upgrading to the Ticker product, has driven a large proportion of Market Guide revenue to become ratably recognized over a 12-month subscription period. I’m very happy to see that we can make such a positive change to Market Guide and still have a good third quarter.

Before I add color to this success and dive into additional topics, let me turn the call back to Pat to review the quarterly and year-to-date financials. Pat.

Pat:

Thanks, Mike.

For the three months ended September 30, 2008, the Company’s revenue was $13.5 million, compared to $14.0 million for the same period in 2007. For the nine months ended September 30, 2008, the Company achieved revenue of $38.8 million, compared to $38.1 million during the same period in 2007.

2

For the three-month period ended September 30, 2008, net income for the Company was $2 million or $0.29 per diluted share. Net income was 15% of revenue, which is our model.

For the nine months ended September 30, 2008, net income for the Company was $5.5 million, compared to $5.7 million in the prior year, both resulting in $0.81 per diluted share.

The Healthcare Market Guide’s new subscription-based Ticker product ended the quarter with a year-to-date increase of $2.1 million of new deferred revenue. Had these sales been for the traditional Market Guide product, it would have resulted in an additional $1.3 million of net income based on an effective tax rate of 38%, or an additional $0.18 per diluted share, putting diluted EPS at $0.99 for the nine months ended September 30, 2008.

During the third quarter 2008, direct expenses as a percentage of revenue were 49%, compared to 43% in 2007. As we stated on our last call in August, we divided our sales force into two groups; one focused only on bringing in new clients and the second focused exclusively on current clients. Starting in July 2008, the associated expenses for the sales group focusing exclusively on current clients are included in the direct expenses instead of SG&A. In addition, we had the cost of the Healthcare Market Guide’s annual non-Ticker deliverable for the last time this quarter.

3

During the third quarter 2008, the selling, general and administrative costs were down in total dollars to $3.1 million compared to $3.2 million during the same period in 2007. SG&A expenses for this quarter were 23% of revenue, the same as in 2007. For the nine-month period ended September 30, 2008, the SG&A were 26% of revenue, also the same as in 2007.

Depreciation and amortization were 5% of revenue during the third quarter in 2008 compared to 5% in the same quarter 2007.

Cash flow from operations for the third quarter was $4 million, compared to $2.9 million for the same period in 2007. Cash flow from operations for the nine months ending September 30, 2008, was $11 million, compared to $10.4 million for the same period in 2007. During the first nine months of 2008, the Company’s notes payable decreased by about $2.8 million. During the same time, the Company repurchased 293,686 shares of treasury stock for $7.4 million at an average cost of $25.36 per share. Cash and short-term investments as of September 30, 2008, were $677,000. During the month of October 2008, the Company completely paid off the term-loan from the May 2006 acquisition of TGI and currently has no outstanding bank debt.

4

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

Mike:

Thank you, Pat.

Net new sales for the third quarter were $2.7 million. Healthcare Market Guide contributed materially to this new sales number, yet both TGI and NRC Picker added to the overall performance with each bringing on new clients, as well as up-selling additional products to current clients. Our sales performance for subscription-based products increased 67% in the third quarter compared to a year ago. Year-to-date, subscription-based product sales have soared 170%. Given market demand for this portfolio of high-margin offerings, we have, and will continue, to increase the size of the sales teams for both HCMG and TGI.

5

Our patient experience measurement and improvement products are becoming even more important to the most senior management levels of healthcare organizations given the public spotlight. As we forecasted, publicly reporting of HCAHPS scores have increased resources focused against improving hospitals’ performance. As value-based purchasing becomes tied to improving the patient experience, we believe this trend will continue, if not accelerate.

On the economic front, we have seen no real changes on the number of days to decisions on new contracts, nor have we seen any material push-back to embedded price increases. As well, clients remain interested in broadening the relationship by purchasing more products and services from our Company. In addition, renewal rates and accounts receivables are tracking to historical trends. One economy-driven change we are seeing is that it seems easier to find great talent, at least in Lincoln.

On our last call, I reviewed our Payer Solutions division and the declining enrollment in Medicare Advantage. I’m happy to report Payer Solutions revenue has stabilized and the unit is profitable.

6

Our new product development efforts remain a top priority for the organization and we have moved forward in enlarging the group of associates dedicated to that effort. Several major new products across most all business units are in their final phase of market testing, and we are looking forward to launching those new offerings that test out best.

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

Closing statement

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

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