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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly
period ended March 31, 2006



| ̈ | 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: 1-14927



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OPINION RESEARCH CORPORATION

(Exact
name of registrant as specified in its charter)



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|                                                 |  |                                     
|------------------------------------------------ |  | ------------------------------------
|Delaware                                         |  | 22-3118960                          
|(State of incorporation)                         |  | (I.R.S. Employer Identification No.)
|                                                 | 
|600 College Road East, Suite #4100 Princeton, NJ |  | 08540                               
|(Address of principal executive offices)         |  | (Zip Code)                          

609-452-5400

(Registrants telephone number, including area code)



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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 periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes  x    No ̈

Indicate by check mark whether the Registrant is large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of
the Exchange Act. (Check one):

Large accelerated filer ̈Accelerated filer ̈Non-accelerated
filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes ̈No  x

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

Common Stock, $0.01 Par Value  5,421,087 shares as of May 5, 2006.



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##### Table of Contents

OPINION RESEARCH CORPORATION AND SUBSIDIARIES

INDEX



|          |  |                                                                                                |  |   
|--------- |  | ---------------------------------------------------------------------------------------------- |  | --
|Part I.   |  | Financial Information                                                                          |  |   
|          |  |                                                                                               
|Item 1.   |  | Financial Statements                                                                           |  | 1 
|          |  |                                                                                               
|          |  | Consolidated Balance Sheets  December 31, 2005 and March 31, 2006 (Unaudited)                 |  | 1 
|          |  |                                                                                               
|          |  | Consolidated Statements of Operations (Unaudited) - Three months ended March 31, 2005 and 2006 |  | 2 
|          |  |                                                                                               
|          |  | Consolidated Statements of Cash Flows (Unaudited) - Three months ended March 31, 2005 and 2006 |  | 3 
|          |  |                                                                                               
|          |  | Notes to consolidated financial statements  March 31, 2006 (Unaudited)                        |  | 4 
|          |  |                                                                                               
|Item 2.   |  | Managements Discussion and Analysis of Financial Condition and Results of Operations          |  | 12
|          |  |                                                                                               
|Item 3.   |  | Quantitative and Qualitative Disclosures About Market Risk                                     |  | 18
|          |  |                                                                                               
|Item 4.   |  | Controls and Procedures                                                                        |  | 18
|          |  |                                                                                               
|Part II.  |  | Other Information                                                                              |  |   
|          |  |                                                                                               
|Item 1.   |  | Legal Proceedings                                                                              |  | 19
|          |  |                                                                                               
|Item 1A.  |  | Risk Factors                                                                                   |  | 19
|          |  |                                                                                               
|Item 2.   |  | Unregistered Sales of Equity Securities and Use of Proceeds                                    |  | 19
|          |  |                                                                                               
|Item 3.   |  | Defaults upon Senior Securities                                                                |  | 19
|          |  |                                                                                               
|Item 4.   |  | Submission of Matters to a Vote of Security Holders                                            |  | 19
|          |  |                                                                                               
|Item 5.   |  | Other Information                                                                              |  | 19
|          |  |                                                                                               
|Item 6.   |  | Exhibits                                                                                       |  | 20
|          | 
|Signature |  | 21                                                                                            



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##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL INFORMATION

OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share amounts)



|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ------------- | - | ------- | -
|                                                                                                                                                                                                           |  | December 31,2005 |         |   | March 31,2006 |  
|                                                                                                                                                                                                           |  |                  |         |   | (Unaudited)   |  
|Assets                                                                                                                                                                                                     |  |                  |         |   |               |   |         |  
|Current Assets:                                                                                                                                                                                            |  |                  |         |   |               |   |         |  
|Cash and cash equivalents                                                                                                                                                                                  |  | $                |        |   |               | $ | 996     |  
|Accounts receivable:                                                                                                                                                                                       |  |                  |         |   |               |   |         |  
|Billed                                                                                                                                                                                                     |  |                  | 26,959  |   |               |   | 23,911  |  
|Unbilled services                                                                                                                                                                                          |  |                  | 17,600  |   |               |   | 20,308  |  
|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  
|                                                                                                                                                                                                           |  |                  | 44,559  |   |               |   | 44,219  |  
|Less: allowance for doubtful accounts                                                                                                                                                                      |  |                  | 58      |   |               |   | 4       |  
|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  
|                                                                                                                                                                                                           |  |                  | 44,501  |   |               |   | 44,215  |  
|Prepaid expense and other current assets                                                                                                                                                                   |  |                  | 2,291   |   |               |   | 4,479   |  
|Assets of discontinued operations                                                                                                                                                                          |  |                  | 505     |   |               |   | 316     |  
|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  
|Total current assets                                                                                                                                                                                       |  |                  | 47,297  |   |               |   | 50,006  |  
|                                                                                                                                                                                                           |  |                 
|Property and equipment, net                                                                                                                                                                                |  |                  | 8,833   |   |               |   | 9,052   |  
|Intangibles, net                                                                                                                                                                                           |  |                  | 224     |   |               |   | 221     |  
|Goodwill                                                                                                                                                                                                   |  |                  | 26,903  |   |               |   | 26,934  |  
|Deferred tax asset                                                                                                                                                                                         |  |                  | 4,893   |   |               |   | 2,738   |  
|Other assets                                                                                                                                                                                               |  |                  | 3,806   |   |               |   | 3,453   |  
|Assets of discontinued operations                                                                                                                                                                          |  |                  | 212     |   |               |   |        |  
|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  
|                                                                                                                                                                                                           |  | $                | 92,168  |   |               | $ | 92,404  |  
|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  
|Liabilities and Stockholders Equity                                                                                                                                                                       |  |                  |         |   |               |   |         |  
|Current Liabilities:                                                                                                                                                                                       |  |                  |         |   |               |   |         |  
|Accounts payable                                                                                                                                                                                           |  | $                | 6,269   |   |               | $ | 6,599   |  
|Accrued expenses                                                                                                                                                                                           |  |                  | 11,705  |   |               |   | 8,428   |  
|Deferred revenues                                                                                                                                                                                          |  |                  | 4,156   |   |               |   | 4,172   |  
|Short-term borrowings                                                                                                                                                                                      |  |                  | 3,000   |   |               |   | 3,000   |  
|Other current liabilities                                                                                                                                                                                  |  |                  | 3,199   |   |               |   | 2,499   |  
|Liabilities of discontinued operations                                                                                                                                                                     |  |                  | 586     |   |               |   | 152     |  
|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  
|Total current liabilities                                                                                                                                                                                  |  |                  | 28,915  |   |               |   | 24,850  |  
|                                                                                                                                                                                                           |  |                 
|Long-term debt                                                                                                                                                                                             |  |                  | 55,321  |   |               |   | 57,744  |  
|Other liabilities                                                                                                                                                                                          |  |                  | 1,517   |   |               |   | 2,607   |  
|Liabilities of discontinued operations                                                                                                                                                                     |  |                  | 154     |   |               |   |        |  
|                                                                                                                                                                                                           |  |                 
|Stockholders Equity:                                                                                                                                                                                      |  |                  |         |   |               |   |         |  
|Preferred stock, $.01 par value, 1,000,000 shares authorized: Series A - 10,000 shares designated, none issued or outstanding                                                                              |  |                  |        |   |               |   |        |  
|Common stock, $.01 par value, 20,000,000 shares authorized, 5,409,148 shares issued and 5,360,326 outstanding at December 31, 2005 and
5,437,354 shares issued and 5,388,532 outstanding at March 31, 2006 |  |                  | 54      |   |               |   | 54      |  
|Additional paid-in capital                                                                                                                                                                                 |  |                  | 20,631  |   |               |   | 20,886  |  
|Accumulated deficit                                                                                                                                                                                        |  |                  | (14,002 | ) |               |   | (13,395 | )
|Treasury stock, at cost, 48,822 shares                                                                                                                                                                     |  |                  | (261    | ) |               |   | (261    | )
|Accumulated other comprehensive loss                                                                                                                                                                       |  |                  | (161    | ) |               |   | (81     | )
|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  
|Total stockholders equity                                                                                                                                                                                 |  |                  | 6,261   |   |               |   | 7,203   |  
|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  
|                                                                                                                                                                                                           |  | $                | 92,168  |   |               | $ | 92,404  |  
|                                                                                                                                                                                                           |  |                  |         |   |               |   |         |  



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##### Table of Contents

OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income

(in thousands, except share and per share amounts)

(Unaudited)



|                                                                                                               |  |                             |           |   |      |   |           |  
|-------------------------------------------------------------------------------------------------------------- |  | --------------------------- | --------- | - | ---- | - | --------- | -
|                                                                                                               |  | Three Months endedMarch 31, |          
|                                                                                                               |  | 2005                        |           |   | 2006 |  
|Revenues                                                                                                       |  | $                           | 46,243    |   |      | $ | 47,354    |  
|Cost of revenues                                                                                               |  |                             | 33,324    |   |      |   | 34,122    |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Gross profit                                                                                                   |  |                             | 12,919    |   |      |   | 13,232    |  
|                                                                                                               |  |                            
|Selling, general and administrative expenses                                                                   |  |                             | 9,196     |   |      |   | 9,200     |  
|Depreciation and amortization                                                                                  |  |                             | 778       |   |      |   | 925       |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Operating income                                                                                               |  |                             | 2,945     |   |      |   | 3,107     |  
|                                                                                                               |  |                            
|Interest and other non-operating expense, net                                                                  |  |                             | 2,302     |   |      |   | 1,630     |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Income before provision for income tax expense                                                                 |  |                             | 643       |   |      |   | 1,477     |  
|                                                                                                               |  |                            
|Provision for income tax expense                                                                               |  |                             | 250       |   |      |   | 724       |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Income from continuing operations                                                                              |  | $                           | 393       |   |      | $ | 753       |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Discontinued Operations                                                                                        |  |                             |           |   |      |   |           |  
|Loss from discontinued operations, net of tax (benefit) expense of $(132) and $1 in 2005 and 2006 respectively |  | $                           | (251      | ) |      | $ | (146      | )
|                                                                                                               |  |                             |           |   |      |   |           |  
|Net income                                                                                                     |  | $                           | 142       |   |      | $ | 607       |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Basic Earnings per common share:                                                                               |  |                             |           |   |      |   |           |  
|Income from continuing operations                                                                              |  | $                           | 0.06      |   |      | $ | 0.14      |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Loss from discontinued operations                                                                              |  | $                           | (0.04     | ) |      | $ | (0.03     | )
|                                                                                                               |  |                             |           |   |      |   |           |  
|Net income per common share                                                                                    |  | $                           | 0.02      |   |      | $ | 0.11      |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Diluted Earnings per common share:                                                                             |  |                             |           |   |      |   |           |  
|Income from continuing operations                                                                              |  | $                           | 0.06      |   |      | $ | 0.14      |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Loss from discontinued operations                                                                              |  | $                           | (0.04     | ) |      | $ | (0.03     | )
|                                                                                                               |  |                             |           |   |      |   |           |  
|Net income per common share                                                                                    |  | $                           | 0.02      |   |      | $ | 0.11      |  
|                                                                                                               |  |                             |           |   |      |   |           |  
|Weighted average shares outstanding:                                                                           |  |                             |           |   |      |   |           |  
|Basic                                                                                                          |  |                             | 6,404,723 |   |      |   | 5,388,454 |  
|Diluted                                                                                                        |  |                             | 6,605,578 |   |      |   | 5,432,793 |  

See notes to consolidated financial statements.



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OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)



|                                                                                                         |  |                             |         |   |      |   |        |  
|-------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------ | -
|                                                                                                         |  | Three months endedMarch 31, |        
|                                                                                                         |  | 2005                        |         |   | 2006 |  
|Cash flows from operating activities:                                                                    |  |                             |         |   |      |   |        |  
|Net income                                                                                               |  | $                           | 142     |   |      | $ | 607    |  
|Less:                                                                                                    |  |                             |         |   |      |   |        |  
|Loss from discontinued operations                                                                        |  |                             | (251    | ) |      |   | (146   | )
|                                                                                                         |  |                             |         |   |      |   |        |  
|Income from continuing operations                                                                        |  |                             | 393     |   |      |   | 753    |  
|Adjustments to income from continuing operations to net cash provided by (used in) operating activities: |  |                             |         |   |      |   |        |  
|Depreciation and amortization                                                                            |  |                             | 778     |   |      |   | 925    |  
|Loss on disposal of fixed assets                                                                         |  |                             | 1       |   |      |   |       |  
|Amortization of original issue discount                                                                  |  |                             | 562     |   |      |   |       |  
|Amortization of loan fees                                                                                |  |                             | 369     |   |      |   | 50     |  
|Provision for doubtful accounts                                                                          |  |                             |        |   |      |   | 60     |  
|Deferred income tax                                                                                      |  |                             | 10      |   |      |   | (21    | )
|Equity based compensation                                                                                |  |                             |        |   |      |   | 127    |  
|Changes in operating assets and liabilities:                                                             |  |                             |         |   |      |   |        |  
|Billed accounts receivable                                                                               |  |                             | 31      |   |      |   | 2,974  |  
|Unbilled services                                                                                        |  |                             | (823    | ) |      |   | (2,679 | )
|Other assets                                                                                             |  |                             | (1,163  | ) |      |   | 192    |  
|Accounts payable                                                                                         |  |                             | 259     |   |      |   | 324    |  
|Accrued expenses and other liabilities                                                                   |  |                             | 1,473   |   |      |   | (3,269 | )
|Deferred revenues                                                                                        |  |                             | 542     |   |      |   | 15     |  
|                                                                                                         |  |                             |         |   |      |   |        |  
|Net cash provided by (used in) operating activities of continuing operations                             |  |                             | 2,432   |   |      |   | (549   | )
|                                                                                                         |  |                             |         |   |      |   |        |  
|Cash flows from investing activities:                                                                    |  |                             |         |   |      |   |        |  
|Capital expenditures                                                                                     |  |                             | (873    | ) |      |   | (1,109 | )
|                                                                                                         |  |                             |         |   |      |   |        |  
|Net cash used in investing activities of continuing operations                                           |  |                             | (873    | ) |      |   | (1,109 | )
|                                                                                                         |  |                             |         |   |      |   |        |  
|Cash flows from financing activities:                                                                    |  |                             |         |   |      |   |        |  
|Net borrowings under line-of-credit agreement                                                            |  |                             | 4,322   |   |      |   | 3,173  |  
|Proceeds from the issuance of notes payable                                                              |  |                             | 15,000  |   |      |   |       |  
|Repayments of notes payable                                                                              |  |                             | (20,577 | ) |      |   | (750   | )
|Payments of loan origination and amendment fees                                                          |  |                             | (75     | ) |      |   | (106   | )
|Repayments under capital lease arrangements                                                              |  |                             | (60     | ) |      |   | (37    | )
|Proceeds from the issuance of capital stock and exercise of options                                      |  |                             | 170     |   |      |   | 128    |  
|                                                                                                         |  |                             |         |   |      |   |        |  
|Net cash (used in) provided by financing activities of continuing operations                             |  |                             | (1,220  | ) |      |   | 2,408  |  
|                                                                                                         |  |                             |         |   |      |   |        |  
|Net cash provided by operating activities of discontinued operations                                     |  |                             | 415     |   |      |   | 235    |  
|Net cash used in investing activities of discontinued operations                                         |  |                             | (124    | ) |      |   |       |  
|Effect of exchange rate changes on cash and cash equivalents                                             |  |                             | (5      | ) |      |   | 11     |  
|                                                                                                         |  |                             |         |   |      |   |        |  
|Increase in cash and cash equivalents                                                                    |  |                             | 625     |   |      |   | 996    |  
|Cash and cash equivalents at beginning of period                                                         |  |                             | 419     |   |      |   |       |  
|                                                                                                         |  |                             |         |   |      |   |        |  
|Cash and cash equivalents at end of period                                                               |  | $                           | 1,044   |   |      | $ | 996    |  
|                                                                                                         |  |                             |         |   |      |   |        |  
|Supplemental disclosures:                                                                                |  |                             |         |   |      |   |        |  
|Cash paid for:                                                                                           |  |                             |         |   |      |   |        |  
|Interest                                                                                                 |  | $                           | 1,285   |   |      | $ | 1,492  |  
|Income tax                                                                                               |  |                             | 176     |   |      |   | 326    |  

See notes to consolidated financial statements



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OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2006

(Unaudited)

NOTE A - BASIS OF PRESENTATION

The accompanying
unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (herein referred to as GAAP) for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal
recurring deferrals and accruals) considered necessary for a fair presentation have been included.

The consolidated financial statements include the
accounts of our company and our wholly owned subsidiaries. All inter-company transactions are eliminated upon consolidation. Operating results for the three months ended March 31, 2006 are not necessarily indicative of the results that may be
expected for the full year. For further information, reference should be made to the consolidated financial statements and footnotes contained in our Annual Report on Form 10-K for the year ended December 31, 2005. For purposes of this report,
Opinion Research, the Company, we, our, us or similar references mean Opinion Research Corporation and its consolidated subsidiaries unless the context requires otherwise.

Certain reclassifications and format changes have been made to prior year amounts to conform to the current periods presentation. In Note G, Goodwill and Other
Intangible Assets, fully amortized intangible asset balances have been adjusted to reflect only unamortized intangible assets.

NOTE B 
DISCONTINUED OPERATIONS

In December 2005 we entered into an agreement to sell the Companys teleservices business, previously identified as a
reportable segment, for the assumption of all the liabilities of the teleservices business, other than bank debt, and the possibility of receiving payments during the next five years based on its revenues over a specified threshold determined
annually in accordance with a formula set forth in the sale agreement. As of March 31, 2006, we have not booked any receivable for payments under the sale agreement. Additionally, we announced the closure of our market research operations in
South Korea and Mexico due to inconsistent operating results and a determination that these operations were not strategic in providing the Companys services to its global clients.

In accordance with Statement of Financial Accounting Standards (SFAS) No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets, the above segment and operations are
classified as discontinued operations and the financial results are reported as discontinued operations for all periods presented.



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##### Table of Contents

The financial results of the former teleservices business and market research operations in South Korea and Mexico
included in discontinued operations are as follows:



|                                       |  |                              |      |   |      |   |    
|-------------------------------------- |  | ---------------------------- | ---- | - | ---- | - | ---
|                                       |  | Three months ended March 31,
|                                       |  | 2005                         |      |   | 2006
|                                       |  | (in thousands)              
|Loss before income tax                 |  | $                            | 383  |   |      | $ | 145
|Income tax (benefit) expense           |  |                              | (132 | ) |      |   | 1  
|                                       |  |                              |      |   |      |   |    
|Loss from discontinued operations, net |  | $                            | 251  |   |      | $ | 146
|                                       |  |                              |      |   |      |   |    

The assets and liabilities of the discontinued operations in South Korea and Mexico are also presented separately
as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets at December 31, 2005 and March 31, 2006.

NOTE C - CREDIT FACILITIES

In May 2004, we entered into a secured revolving credit facility of $35.0 million with Citizens Bank of
Pennsylvania and First Horizon Bank (the Senior Revolving Facility). The Senior Revolving Facility is for a three-year term and is secured by substantially all of our assets. The Senior Revolving Facility carries an interest rate at our
discretion of either the financial institutions designated base rate (7.75% at March 31, 2006,) plus 100 basis points or LIBOR (3-month LIBOR was 5.00% at March 31, 2006) plus 300 basis points. As of March 31, 2006, there was
approximately $6.3 million of additional credit available under the Senior Revolving Facility.

In March 2005, we entered into a new secured term loan of
$15.0 million with Citizens Bank of Pennsylvania and First Horizon Bank (the Term Loan). The Term Loan is for a five-year term and is secured by substantially all of our assets. The Term Loan carries an interest rate of LIBOR plus 350
basis points, requires principal payments of $750,000 per quarter and matures in 2010. The proceeds from the Term Loan and a drawdown from the Senior Revolving Facility were used to prepay secured and unsecured subordinated notes in the combined
amount of $20.5 million. We wrote-off unamortized fees in the amount of $813,000 and incurred prepayment penalties in the amount of $362,000 in connection with this transaction in the first quarter of 2005.

In July 2005, we issued $20.0 million of unsecured subordinated notes to The Royal Bank of Scotland. These notes mature in July 2011, carry cash interest of 14% per
year and have no interim principal amortization. The proceeds from the issuance of these unsecured subordinated notes were used to finance the repurchase of interests in the Company held by LLR Equity Partners, L.P. and LLR Equity Partners Parallel,
L.P. (the LLR Partnerships or LLR). The transaction consisted of (i) the repurchase of 1,176,458 common shares purchased by LLR on September 1, 2000; (ii) a warrant to purchase 740,500 common shares;
(iii) rights to convert the common shares into preferred shares with an annual dividend obligation of $1.2 million; (iv) anti-dilution rights and warrants; and (v) other rights.

We are required to maintain certain financial covenants under our credit facilities, such as minimum earnings, debt-to-earnings, interest coverage, and other financial
ratios. In addition, covenants under our credit facilities limit or prohibit our ability to incur additional debt, prepay specified types of indebtedness, pay dividends, make investments, sell assets, or engage in mergers and acquisitions.



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##### Table of Contents

NOTE D  DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY

We use derivative financial instruments to mitigate market risk from changes in interest rates. We do not use derivative financial instruments for speculative purposes.

In September 2005, we entered into an interest rate cap agreement with Citizens Bank to hedge our interest rate risk exposure on the Term Loan due to its
variable interest rate. The interest rate cap qualified as a cash flow hedge pursuant to SFAS No. 133, Accounting for Derivatives Instruments and Hedging Activities. The interest rate cap is set at a LIBOR rate of 4.5%, has a
remaining life matching the Term Loan, was based upon a notional amount of $13.5 million, and was purchased for a premium of $106,000. Changes in the fair value of the interest rate cap are reported as a component of Other Comprehensive Income and
reclassified into earnings in the period or periods during which the interest rate on the Term Loan exceeds 4.5%.

For the period ended March 31,
2006, the value of the interest rate cap increased by approximately $52,000 (before taxes) and $34,000 (after tax); such amount is reflected in Other Comprehensive Income. No amounts were reclassified into earnings for the period ended
March 31, 2006.

NOTE E - EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:



|                                           |  |                                        |       |   |      |   |       |  
|------------------------------------------ |  | -------------------------------------- | ----- | - | ---- | - | ----- | -
|                                           |  | Three months ended March 31,           |      
|                                           |  | 2005                                   |       |   | 2006 |  
|                                           |  | (in thousands,except per shareamounts) |      
|Numerator:                                 |  |                                        |       |   |      |   |       |  
|Income from continuing operations          |  | $                                      | 393   |   |      | $ | 753   |  
|Loss from discontinued operations          |  |                                        | (251  | ) |      |   | (146  | )
|                                           |  |                                        |       |   |      |   |       |  
|Net income                                 |  | $                                      | 142   |   |      | $ | 607   |  
|                                           |  |                                        |       |   |      |   |       |  
|Denominator:                               |  |                                        |       |   |      |   |       |  
|Denominator for basic earnings per share   |  |                                        |       |   |      |   |       |  
|Weighted average shares outstanding        |  |                                        | 6,405 |   |      |   | 5,388 |  
|Effect of dilutive potential common shares |  |                                        | 201   |   |      |   | 45    |  
|                                           |  |                                        |       |   |      |   |       |  
|Denominator for diluted earnings per share |  |                                        | 6,606 |   |      |   | 5,433 |  
|                                           |  |                                        |       |   |      |   |       |  
|Basic earnings per share                   |  |                                        |       |   |      |   |       |  
|Income from continuing operations          |  | $                                      | 0.06  |   |      | $ | 0.14  |  
|Loss from discontinued operations          |  | $                                      | (0.04 | ) |      | $ | (0.03 | )
|Net income                                 |  | $                                      | 0.02  |   |      | $ | 0.11  |  
|                                           |  |                                       
|Diluted earnings per share                 |  |                                        |       |   |      |   |       |  
|Income from continuing operations          |  | $                                      | 0.06  |   |      | $ | 0.14  |  
|Loss from discontinued operations          |  | $                                      | (0.04 | ) |      | $ | (0.03 | )
|Net income                                 |  | $                                      | 0.02  |   |      | $ | 0.11  |  



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For the three month period ended March 31, 2005, there were 266,900 options and 740,500 warrants outstanding to
purchase our common shares that were not included in the computation of diluted earnings per share because their inclusion would have been anti-dilutive.

For the three month period ended March 31, 2006, there were 640,078 options outstanding to purchase our common shares that were not included in the computation of diluted loss per share because their inclusion would have been
anti-dilutive. The 740,500 warrants previously held by the LLR Partnerships were repurchased by the Company during the quarter ended September 30, 2005.

NOTE F - STOCK-BASED COMPENSATION

As permitted by SFAS No. 123, Accounting for Stock-Based Compensation (Statement
No. 123), we had previously elected to follow Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees and related interpretations in accounting for our employee option plans.

We had also adopted the disclosure-only provisions of SFAS No. 123, Stock-Based Compensation and SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, which was released in December 2002 as an amendment to Statement 123.

Under APB No. 25, no
compensation expense was recognized at the time of the option grant if the exercise price of the employee stock option was fixed and was at least equal to or greater than the fair market value of the underlying common stock on the date of grant and
the number of shares to be issued pursuant to the exercise of such options were known and fixed at the grant date.

On January 1, 2006, the Company
adopted SFAS Statement No. 123(R), Share-Based Payment, using the modified prospective method, whereby we apply Statement 123(R) to new and modified awards beginning January 1, 2006 and recognize compensation expense for the
portion of outstanding unvested awards, based on the grant-date fair value of those awards. The adoption of Statement 123(R) resulted in approximately $127,000 of share-based compensation expense for the three months ended March 31, 2006.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model for options granted prior to
January 1, 2006 and a lattice based option model for option grants issued in 2006. We are applying a lattice based option pricing model for new options as it allows for the variation of assumption inputs overtime, thus, potentially resulting in
a better estimate of fair value.

The following weighted-average assumptions were used for options granted during the three months ended March 31,
2005 and 2006:



|                                |  |                              |   |  |         |  
|------------------------------- |  | ---------------------------- | - |  | ------- | -
|                                |  | Three months ended March 31, |  
|                                |  | 2005                         |   |  | 2006    |  
|Expected dividend yield         |  | 0                            | % |  | 0       | %
|Expected stock price volatility |  | 45.1                         | % |  | 53.8    | %
|Risk-free interest rate         |  | 4.0                          | % |  | 4.8     | %
|Expected life of options        |  | 7 years                      |   |  | 7 years |  



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If we had elected to recognize compensation expense based upon the fair value of the options granted at grant date as
prescribed by Statement No. 123, net income and related per share amounts would have been adjusted to the proforma amounts indicated in the table below:



|                                                                                                                                      |  |                                        |      |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------- | ---- | -
|                                                                                                                                      |  | Three months ended March 31, 2005      |     
|                                                                                                                                      |  | (in thousands,except per shareamounts) |     
|Net income - as reported                                                                                                              |  | $                                      | 142  |  
|Add: stock-based employee compensation expense included in reported net income, net of related tax effects                            |  |                                        |     |  
|Deduct: total stock based employee compensation expense determined under fair value method for all awards, net of related tax
effects |  |                                        | (64  | )
|                                                                                                                                      |  |                                        |      |  
|Net income - pro forma                                                                                                                |  | $                                      | 78   |  
|                                                                                                                                      |  |                                        |      |  
|Basic earnings per share                                                                                                              |  |                                        |      |  
|Net income - as reported                                                                                                              |  | $                                      | 0.02 |  
|Net income - pro forma                                                                                                                |  | $                                      | 0.01 |  
|Diluted earnings per share                                                                                                            |  |                                        |      |  
|Net income - as reported                                                                                                              |  | $                                      | 0.02 |  
|Net income - pro forma                                                                                                                |  | $                                      | 0.01 |  

The number of options granted during the three months ended March 31, 2005 and 2006 was 50,000 and 122,500,
respectively. The weighted average fair value of options granted during the three months ended March 31, 2005 and 2006 was $3.44 and $3.13 per share, respectively. We recognized compensation expense of $102,000 for the three months ended
March 31, 2006.

The number of shares purchased through our various Stock Purchase Plans at 85% of the lower of the fair market value at the beginning
or end of the quarter, was 27,042 and 27,855 for the three months ended March 31, 2005 and 2006, respectively. We recognized compensation expense of $25,000 for the three months ended March 31, 2006.



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NOTE G - GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying value of goodwill by segment for the three months ended March 31, 2006 are as follows:



|                             |  |                      |       |                      |   |                 |  |              |        |  |   |       
|---------------------------- |  | -------------------- | ----- | -------------------- | - | --------------- |  | ------------ | ------ |  | - | ------
|                             |  | U.S. Market Research |       | U.K. Market Research |   | Social Research |  | Consolidated
|                             |  | (in thousands)      
|Balance at January 1, 2006   |  | $                    | 2,390 |                      | $ | 2,732           |  | $            | 21,781 |  | $ | 26,903
|Foreign currency translation |  |                      |      |                      |   | 31              |  |              |       |  |   | 31    
|                             |  |                      |       |                      |   |                 |  |              |        |  |   |       
|Balance at March 31, 2006    |  | $                    | 2,390 |                      | $ | 2,763           |  | $            | 21,781 |  | $ | 26,934
|                             |  |                      |       |                      |   |                 |  |              |        |  |   |       

The components of intangible assets are as follows:



|                                          |  |                   |        |   |                |   |      |  
|----------------------------------------- |  | ----------------- | ------ | - | -------------- | - | ---- | -
|                                          |  | December 31, 2005 |        |   | March 31, 2006 |  
|                                          |  | (in thousands)    |       
|Intangible assets subject to amortization |  |                   |        |   |                |   |      |  
|Non-competition agreements                |  | $                 | 994    |   |                | $ |     |  
|Other                                     |  |                   | 435    |   |                |   | 440  |  
|                                          |  |                   |        |   |                |   |      |  
|                                          |  | $                 | 1,429  |   |                | $ | 440  |  
|Accumulated amortization                  |  |                   | (1,205 | ) |                |   | (219 | )
|                                          |  |                   |        |   |                |   |      |  
|                                          |  | $                 | 224    |   |                | $ | 221  |  
|                                          |  |                   |        |   |                |   |      |  

Amortization of intangible assets for the three months ended March 31, 2005 and 2006 was $55,000 and $4,000,
respectively. The estimated aggregate amortization expense for the remainder of 2006 and each of the five succeeding years is as follows:



|     |  |                |   
|---- |  | -------------- | --
|     |  | (in thousands)
|2006 |  | $              | 14
|2007 |  |                | 18
|2008 |  |                | 18
|2009 |  |                | 18
|2010 |  |                | 18
|2011 |  |                | 18

NOTE H - COMPREHENSIVE (LOSS) INCOME

The components of comprehensive (loss) income for the three months ended March 31, 2005 and 2006 were:



|                                                 |  |                             |      |   |      |   |    
|------------------------------------------------ |  | --------------------------- | ---- | - | ---- | - | ---
|                                                 |  | Three Months Ended March 31
|                                                 |  | 2005                        |      |   | 2006
|                                                 |  | (in thousands)             
|Net income                                       |  | $                           | 142  |   |      | $ | 607
|Other comprehensive (loss) income:               |  |                             |      |   |      |   |    
|Change in value of derivative, net of tax of $18 |  |                             |     |   |      |   | 34 
|Foreign currency translation adjustment          |  |                             | (149 | ) |      |   | 46 
|                                                 |  |                             |      |   |      |   |    
|Comprehensive (loss) income                      |  | $                           | (7   | ) |      | $ | 687
|                                                 |  |                             |      |   |      |   |    



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NOTE I - SEGMENTS

We
identify segments based on our internal reporting to management and our board of directors which reflects our geographic locations and industries in which we operate. We currently have three reportable segments: U.S. market research, U.K. market
research, and Social Research. We measure segment profits as operating profit, which is defined as income before interest and other non-operating expenses and income taxes. The U.S. market research segment includes unallocated corporate
headquarters expense. Information on segments and a reconciliation to the consolidated total, are as follows:



|                                                         |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   |        |  
|-------------------------------------------------------- |  | -------------------- | ----- | - | -------------------- | - | ----- | -------------- |  | ------------- | ------ | ----- | - | ------ | ---------------- | - | ---- | ------------ |  | ---- | - |  | - | ------ | -
|(in thousands)                                           |  | U.S. Market Research |       |   | U.K. Market Research |   |       | SocialResearch |  | TotalSegments |        | Other |   |        | DivestedEntities |   |      | Consolidated | 
|Three months ended March 31, 2005                        |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   |        |  
|Revenues from external customers                         |  | $                    | 6,403 |   |                      | $ | 5,437 |                |  | $             | 33,858 |       | $ | 45,698 |                  | $ | 545  |              |  |      |   |  | $ | 46,243 |  
|Operating (loss) income                                  |  |                      | (566  | ) |                      |   | (28   | )              |  |               | 3,641  |       |   | 3,047  |                  |   | (102 | )            |  |      |   |  |   | 2,945  |  
|Interest and other non- operating expenses, net          |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 2,302  |  
|Income before income tax expense                         |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 643    |  
|Provision for income tax expense - continuing operations |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 250    |  
|Income from continuing operations                        |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 393    |  
|Discontinued operations, net                             |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  | (251 | ) |  |   | (251   | )
|Net income                                               |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 142    |  
|                                                         |  |                      |       |   |                      |   |      
|Three months ended March 31, 2006                        |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   |        |  
|Revenues from external customers                         |  | $                    | 6,582 |   |                      | $ | 5,621 |                |  | $             | 34,664 |       | $ | 46,867 |                  | $ | 487  |              |  |      |   |  | $ | 47,354 |  
|Operating (loss) income                                  |  |                      | (541  | ) |                      |   | 124   |                |  |               | 3,690  |       |   | 3,273  |                  |   | (166 | )            |  |      |   |  |   | 3,107  |  
|Interest and other non- operating expenses, net          |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 1,630  |  
|Income before income tax expense                         |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 1,477  |  
|Provision for income tax expense - continuing operations |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 724    |  
|Income from continuing operations                        |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 753    |  
|Discontinued operations, net                             |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  | (146 | ) |  |   | (146   | )
|Net income                                               |  |                      |       |   |                      |   |       |                |  |               |        |       |   |        |                  |   |      |              |  |      |   |  |   | 607    |  



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NOTE J  STOCKHOLDERS DERIVATIVE LAWSUIT

On December 2, 2004, several persons who purported to be stockholders of the Company filed a derivative complaint against the Company and its directors in the Chancery Court of the State of Delaware challenging
the decision to repurchase certain interests in the Company held by LLR. The plaintiffs alleged, among other things, that the purchase price the Company intended to pay for certain of the interests held by LLR would constitute a waste of corporate
assets. The complaint further alleged that, in approving the offering and the repurchase of the interests held by LLR, the directors did not act on the Companys behalf or on behalf of its stockholders but, rather, breached their fiduciary
duties of good faith and loyalty to the Company and its stockholders. Finally, the complaint alleged that Janney Montgomery Scott LLC (JMS), an independent valuation firm, materially overvalued the LLR interests in its opinion to the
Companys board of directors that the Companys repurchase of the LLR interests was fair, from a financial point of view, to the stockholders other than LLR.

Thereafter, the Company and LLR modified the terms on which the repurchase would be completed, the Company issued senior subordinated notes to finance the repurchase and, in July of 2005, the Company repurchased all
of LLRs interests in the Company for $20 million. The plaintiffs then amended their complaint to challenge the repurchase as completed but again alleged that the Company paid too much for the LLR interests, that the directors breached their
duties of good faith and loyalty in approving the repurchase on the modified terms and that JMS overvalued the LLR interests when it opined that the repurchase of the LLR interests was fair from a financial point of view, to the stockholders other
than LLR.

We have not accrued any costs, beyond incurred legal costs, for expense relating to this matter as the Company and its directors believe
plaintiffs allegations have no merit and we intend to vigorously defend the actions challenged in the plaintiffs amended complaint. Any expense to be incurred in conjunction with this matter cannot reasonably be estimated at this time.



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following
Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A) includes forward-looking statements. In general, statements other than statements of historical facts contained in this report,
including statements regarding revenues, selling, general and administrative expenses, profitability, financial position, business strategy, and plans and objectives of management for future operations, are forward-looking statements. The words
believe, may, will, estimate, continue, anticipate, intend, expect and similar expressions, as they relate to us, are intended to identify
forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations,
business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including among other things:



| |  |  | fluctuations in demand for our services;
| | - |  | ----------------------------------------



| |  |  | competition;
| | - |  | ------------



| |  |  | our dependence on key personnel;
| | - |  | --------------------------------



| |  |  | government funding of social research projects;
| | - |  | -----------------------------------------------



| |  |  | leverage and debt service (including sensitivity to fluctuations in interest rates);
| | - |  | ------------------------------------------------------------------------------------



| |  |  | domestic and global economic, credit and capital market conditions;
| | - |  | -------------------------------------------------------------------



| |  |  | foreign exchange fluctuations;
| | - |  | ------------------------------



| |  |  | changes in tax laws or the administration of these laws;
| | - |  | --------------------------------------------------------



| |  |  | regulatory or judicial proceedings;
| | - |  | -----------------------------------



| |  |  | the outcome of the stockholders derivative litigation; and
| | - |  | -----------------------------------------------------------



| |  |  | certain other risks described under Item 1A, Risk Factors in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31,
2006.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

This list of risks is not exhaustive. We operate in a very competitive and rapidly changing environment. New risk factors emerge from
time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking
statements after the date of this report as a result of new information, future events or developments, except as required by federal securities laws.



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Overview

We provide
research services to governments and commercial clients in North America, Europe and Asia. We collect customer, market, employee and demographic data by utilizing computer-assisted telephone interviews, internet-based data collection techniques,
personal interviews, mail questionnaires, and other means. After collecting the data, we analyze, develop and present to our clients cohesive reports which provide insights regarding their programs, operations or, products and services. Our services
are designed to help our clients manage and evaluate public policy programs and funding decisions, sell products, and improve their corporate image and competitive position. Our government clients include some of the largest U.S. federal agencies
including the Substance Abuse and Mental Health Services Administration, the United States Agency for International Development, the Centers for Disease Control and Prevention, and the National Institutes of Health. We have served some of these
clients for over 20 years. Our commercial clients include a diverse base of major national and multi-national corporations in the automotive, consumer goods and services, energy, financial services, health care, information technology, retail and
trade, and telecommunications industries. We have served the commercial research market since 1938.

We currently have three segments for financial
reporting purposes:



| |  |  | Social Research;
| | - |  | ----------------



| |  |  | U.K. market research; and
| | - |  | -------------------------



| |  |  | U.S. market research.
| | - |  | ---------------------

Our consolidated revenues increased in the three
months ended March 31, 2006 as compared to the comparable period in 2005, reflecting improvement in each of our segments.

Our operating income
increased in the three-month period ended March 31, 2006, as a result of increased revenues partially offset by increased costs of revenues and increased depreciation and amortization expense.

The following are factors that affect our results from operations:

Revenues: We generate our revenues from the hourly billings of professional labor, including part-time labor, from call center services, and from charging our clients for the out-of-pocket costs and subcontracted services incurred
for projects. In our market research and social research segments, revenues under fixed-price contracts are recognized on a proportional performance basis. Revenues under time-and-materials contracts and cost-reimbursement contracts are recognized
as costs are incurred. The level of our revenues is affected by government spending patterns, general economic conditions, the competitiveness of our service offerings in the marketplace and general market conditions that influence the demand for
our specific services and pricing.

Cost of revenues: All costs directly attributable to a project are included in cost of revenues. These include
the salary, benefits and incentive compensation expense for our professional staff and the hourly wages and benefits of our part-time staff engaged in project work. The cost of our professional staff is relatively fixed over the short-term, and
fluctuations in our gross margin may occur due to changes in project margins, the mix of project work that we perform, the level of part-time labor and other variable costs, and the utilization rates of our staff. In addition we include project
related telephone expense and out of pocket expenses, including travel, and subcontracted services incurred for project work, in cost of revenues, and the level of these expenditures will impact gross margin.

Selling, general and administrative expenses: These include expenses that are not directly related to project performance, including salaries, benefits and
incentive compensation for executive management and support services including marketing, information technology, finance and human resources. Also included are external expenses including insurance, legal, marketing, audit, office space and support
service expenses, travel and training costs, directors fees and other non-project related expenses.



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On January 1, 2006, we adopted SFAS Statement No. 123(R), Share-Based Payment, using the modified
prospective method, whereby we apply Statement 123(R) to new and modified awards beginning January 1, 2006 and recognize compensation expense for the portion of outstanding unvested awards, based on the grant-date fair value of those awards.
The adoption of Statement 123(R) resulted in approximately $127,000 of share-based compensation expense for the three months ended March 31, 2006.

As
of March 31, 2006, we estimated $1.1 million of unrecognized stock-based compensation expense relating to unvested awards. We expect to be recognize this expense over a weighted average period of 2 years.

Interest expense: Our results in the three months ended March 31, 2006 were impacted by interest expense on the term loan refinancing and the unsecured
subordinated debt financing which occurred in March and July 2005 respectively, and rising interest rates on our variable debt.

Results of Operations

The following table sets forth, for the periods indicated, selected operating data as a percentage of revenue:



|                                  |  |                              |   |  |       |  
|--------------------------------- |  | ---------------------------- | - |  | ----- | -
|                                  |  | Three Months Ended March 31, |  
|                                  |  | 2005                         |   |  | 2006  |  
|Revenue                           |  | 100.0                        | % |  | 100.0 | %
|Gross Profit                      |  | 27.9                         | % |  | 27.9  | %
|SG&A                              |  | 19.9                         | % |  | 19.4  | %
|Operating income                  |  | 6.4                          | % |  | 6.6   | %
|Income from continuing operations |  | 0.8                          | % |  | 1.6   | %
|Loss from discontinued operations |  | -0.5                         | % |  | -0.3  | %
|Net income                        |  | 0.3                          | % |  | 1.3   | %

Comparison of the three-month periods ended March 31, 2005 and 2006

Consolidated revenues increased $1.1 million, or 2.4%, from $46.2 million in the first quarter of 2005 to $47.3 million in the first quarter of 2006. Revenues increased
by $806,000, or 2.4%, in the social research segment, $184,000, or 3.4%, in the U.K. market research segment, and $179,000, or 2.8%, in the U.S. market research segment. The increase in revenues in the various operating segments was primarily due to
higher demand for services, except for the U.K. market research, where the appreciation of the U.S. dollar relative to the U.K. pound reduced revenues by $445,000.

Consolidated cost of revenues increased $798,000, or 2.4%, from $33.3 million in the first quarter of 2005 to $34.1 million in the first quarter of 2006, consistent with increased revenues. Gross profit as a percentage of revenues remained
constant at 27.9% in the first quarter of 2005 and 2006. In the social research segment, cost of revenues increased $595,000, or 2.4%, from $25.0 million in 2005 to $25.5 million in 2006, while gross profit as a percentage of revenues remained
constant at 26.3% in 2005 and 2006. In the U.K. market research segment, cost of revenues increased $199,000, or 5.9%, from $3.4 million in 2005 to $3.6 million in 2006, while gross profit as a percentage of revenues in the U.K. market research
segment decreased from 37.9% in 2005 to 36.4% in 2006. Cost of revenues in the U.K. market research were reduced by $283,000 from currency fluctuations. In the U.S. market research segment, cost of revenues remained constant at $4.5 million in 2005
and 2006, while gross profit as a percentage of revenues increased from 30.0% in 2005 to 31.7% in 2006, reflecting increased efficiency and productivity.

Selling, general and administrative (SG&A) expenses was essentially unchanged at $9.2 million. As a percentage of revenues, consolidated SG&A expenses decreased from 19.9% in 2005 to 19.4% in 2006. In the U.S. market
research segment, SG&A expenses increased $201,000 from $2.3 million in 2005 to $2.5 million



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##### Table of Contents

in 2006, or as a percentage of revenues, from 36.0% in 2005 to 38.1% in 2006. The increase in the U.S. market research
segment SG&A expenses included stock-based compensation expense of $127,000 resulting from our adoption of SFAS No. 123(R). The increase was offset by a $178,000 decrease in the U.K. market research segment from $1.9 million in 2005 to $1.7
million in 2006, or as a percentage of revenues from 35.0% in 2005 to 30.6% in 2006. The decrease in SG&A expense in the U.K. market research segment was due to a $136,000 appreciation of the U.S. dollar relative to the U.K. pound. There was a
slight decrease of $25,000 in the social research segment, or as a percentage of revenues, a decrease from 14.3% in 2005 to 13.9% in 2006.

Depreciation
and amortization expense increased $147,000, or 18.9%, from $778,000 in 2005 to $925,000 in 2006 as a result of increases in the related asset base in 2006 in the social research and U.K. market research segments, due to our investment in
technology, offset by reductions in the U.S. market research business unit. As a percentage of revenues, depreciation and amortization expense increased from 1.7% in 2005 to 2.0% in 2006.

Interest expense decreased $663,000, or 29.1%, from $2.3 million in the first quarter of 2005 to $1.6 million in the first quarter of 2006 due to a refinancing charge of
$1.2 million, and the lower cost of debt incurred in the March 2005 refinancing. The decrease was partially offset by rising interest rates on our variable rate debt, and interest expense from the subordinated debt issued in July 2005.

Other non-operating expense, net, decreased by $9,000 from $23,000 in the first quarter of 2005 to $14,000 in the first quarter of 2006 primarily due to non-cash
foreign exchange income.

The provision for income tax expense for the first quarter of 2005 and 2006 was $250,000 and $724,000, respectively. The income
tax provision is higher than statutory rates in 2005 and 2006, respectively, due to the fact that we are not deriving tax benefits from certain state and non-U.S. losses.

In December 2005, we divested our former teleservices business. We also commenced the closure of non-strategic international market research operations due to inconsistent operating results and a determination that
these operations were not strategic in providing the Companys services to its global clients. These closures are expected to be completed in the second quarter of 2006. Loss from discontinued operations, net of tax, was $251,000 and $146,000
in the first quarter of 2005 and 2006 respectively.

As a result of the foregoing, net income increased from $142,000 in the first quarter of 2005 to
$607,000 in the first quarter of 2006.



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Liquidity and Capital Resources

Cash Flows

At March 31, 2006, working capital was $25.1 million. Net cash provided by operating
activities for the three- month period ended March 31, 2005 was $2.4 million compared to net cash used in operating activities of $549,000 for the same period in 2006. For the three-month period ended March 31, 2005, the net cash provided
by operating activities was primarily generated by income from continuing operations of $393,000, adjusted for depreciation and amortization, and other non-cash items, totaling $1.7 million, increase in accounts payable of $259,000, increase in
accrued expenses and other liabilities of $2.0 million, offset by increases in accounts receivable and other assets of $792,000 and $1.2 million, respectively. Net cash provided by operating activities of discontinued operations for the three month
period ended March 31, 2005 was $415,000. For the same period in 2006, the net cash used in operating activities was primarily generated by income from continuing operations of $753,000, adjusted for depreciation and amortization, and other
non-cash items, totaling $1.1 million, decreases in accrued expenses and other liabilities of $3.2 million, decreases in accounts receivable and other assets of $295,000 and $192,000, respectively, offset by an increase in accounts payable of
$324,000. Net cash provided by operating activities of discontinued operations for the three month period ended March 31, 2006 was $235,000.

Investing activities for the three-month period ended March 31, 2005 consisted of capital expenditures of $873,000 as compared to $1.1 million for the same period in 2006. The majority of the spending on capital items was for the
replacement of technology. Capital expenditures incurred in discontinued operations for the three month period ended March 31, 2005 totaled $124,000.

Financing activities for the three-month period ended March 31, 2005 included a net decrease in borrowings totaling $1.3 million, payments for loan amendment fees and capital leases of $75,000 and $60,000 respectively, offset in part
by proceeds from the sale of our common stock under our various stock purchase plans and the exercises of stock options totaling $170,000. Financing activities for the three-month period ended March 31, 2006, included a net increase in
borrowings of $2.4 million, payments for loan amendment fees and capital leases of $106,000 and $37,000, respectively, and proceeds of $128,000 from the sale of our common stock under our various stock purchase plans.

Credit Facilities

In May 2004, we entered into a secured
revolving credit facility of $35.0 million with Citizens Bank of Pennsylvania and First Horizon Bank (the Senior Revolving Facility). The Senior Revolving Facility is for a three-year term and is secured by substantially all of our
assets. The Senior Revolving Facility carries an interest rate at our discretion of either the financial institutions designated base rate (7.75% at March 31, 2006,) plus 100 basis points or LIBOR (3-month LIBOR was 5.00% at
March 31, 2006) plus 300 basis points. As of March 31, 2006, there was approximately $6.3 million of additional credit available under the Senior Revolving Facility.

In March 2005, we entered into a new secured term loan of $15.0 million with Citizens Bank of Pennsylvania and First Horizon Bank (the Term Loan). The Term Loan is for a five-year term and is secured by
substantially all of our assets. The Term Loan carries an interest rate of LIBOR plus 350 basis points, requires principal payments of $750,000 per quarter and matures in 2010. The proceeds from the Term Loan and a drawdown from the Senior Revolving
Facility were used to prepay secured and unsecured subordinated notes in the combined amount of $20.5 million. We wrote-off unamortized fees in the amount of $813,000 and incurred prepayment penalties in the amount of $362,000 in connection with
this transaction in the first quarter of 2005.

In July 2005, we issued $20.0 million of unsecured subordinated notes to The Royal Bank of Scotland. These
notes mature in July 2011, carry cash interest of 14% per year and have no interim principal amortization. The proceeds from the issuance of these unsecured subordinated notes were used to finance the repurchase of interests in the Company held
by LLR Equity Partners, L.P. and LLR Equity Partners Parallel, L.P. (the LLR



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##### Table of Contents

Partnerships or LLR). The transaction consisted of (i) the repurchase of 1,176,458 common shares purchased by LLR on September 1,
2000; (ii) a warrant to purchase 740,500 common shares; (iii) rights to convert the common shares into preferred shares with an annual dividend obligation of $1.2 million; (iv) anti-dilution rights and warrants; and (v) other
rights.

We are required to maintain certain financial covenants under our credit facilities, such as minimum earnings, debt-to-earnings, interest
coverage, and other financial ratios. In addition, covenants under our credit facilities limit or prohibit our ability to incur additional debt, prepay specified types of indebtedness, pay dividends, make investments, sell assets, or engage in
mergers and acquisitions.

In September 2005, we entered into an interest rate cap agreement with Citizens Bank to hedge our interest rate risk exposure on
the Term Loan due to its variable interest rate. The interest rate cap qualified as a cash flow hedge pursuant to SFAS No. 133. The interest rate cap is set at a LIBOR rate of 4.5%, has a remaining life matching the Term Loan, is based upon a
notional amount of $13.5 million, and was purchased for a premium of $106,000. Changes in the fair value of the interest rate cap are reported as a component of Other Comprehensive Income and reclassified into earnings in the period or periods
during which the interest rate on the Term Loan exceeds 4.5%.

For the period ended March 31, 2006, the value of the interest rate cap increased by
approximately $52,000 (before taxes) and $34,000 (after tax); such amount is reflected in Other Comprehensive Income. No amounts were reclassified into earnings for the period ended March 31, 2006.

Capital Expenditures

We currently have no material capital
expenditure commitments and no acquisition related commitments.

We believe that our current sources of liquidity and capital will be sufficient to fund
our long-term obligations and working capital needs until May 2007, at which time our Senior Revolving Facility matures.



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

There have been no significant changes in market risk
since December 31, 2005 that would have a material effect on the Companys risk exposure as previously disclosed in the Companys Annual Report on Form 10-K for the year ended December 31, 2005.

It has not been our practice to enter into foreign exchange contracts, but we may use such contracts in the future if we deem them to be an appropriate resource to
manage our exposure to movements in foreign currency exchange rates. We do not consider our current foreign exchange exposure, which is primarily related to changes between the U.S. dollar and the U.K. pound, to be material. Although the impact of
changes in foreign exchange rates may be significant to our revenues, cost of revenues and operating expenses when considered individually, the net impact on our results of operations has not been significant.

The following table provides information about the financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents the
expected principal cash flows and related weighted average interest rates as of March 31, 2006 by expected maturities.

Interest
Rate Sensitivity

Principal (Notional) Amount by Expected Maturity

Average Interest (Cap) Rate

(in thousands)



|                                          |  |      |       |      |   |        |  |      |       |      |   |       |  |             |     |       |   |                      |  |   |   |  |   |        |  |   |       
|----------------------------------------- |  | ---- | ----- | ---- | - | ------ |  | ---- | ----- | ---- | - | ----- |  | ----------- | --- | ----- | - | -------------------- |  | - | - |  | - | ------ |  | - | ------
|                                          |  | 2006 |       | 2007 |   | 2008   |  | 2009 |       | 2010 |   | 2011  |  | There after |     | Total |   | Fair Value 3/31/2006
|Liabilities                               |  |      |       |      |   |        |  |      |       |      |   |       |  |             |     |       |   |                      |  |   |   |  |   |        |  |   |       
|Long-term debt including current portion: |  |      |       |      |   |        |  |      |       |      |   |       |  |             |     |       |   |                      |  |   |   |  |   |        |  |   |       
|Variable rate debt:                       |  |      |       |      |   |        |  |      |       |      |   |       |  |             |     |       |   |                      |  |   |   |  |   |        |  |   |       
|LIBOR + 3.0%, Prime +1%                   |  | $    |      |      | $ | 28,744 |  | $    |      |      | $ |      |  | $           |    |       | $ |                     |  | $ |  |  | $ | 28,744 |  | $ | 28,744
|LIBOR + 3.5%                              |  |      | 2,250 |      |   | 3,000  |  |      | 3,000 |      |   | 3,000 |  |             | 750 |       |   |                     |  |   |  |  |   | 12,000 |  |   | 12,000
|Fixed rate debt - 14.0%                   |  |      |      |      |   |       |  |      |      |      |   |      |  |             |    |       |   | 20,000               |  |   |  |  |   | 20,000 |  |   | 18,541
|                                          |  |      |       |      |   |        |  |      |      
|Interest Rate Derivative Financial        |  |      |       |      |   |        |  |      |       |      |   |       |  |             |     |       |   |                      |  |   |   |  |   |        |  |   |       
|Instrument Related to Debt                |  |      |       |      |   |        |  |      |       |      |   |       |  |             |     |       |   |                      |  |   |   |  |   |        |  |   |       
|Interest Rate Cap:                        |  |      |       |      |   |        |  |      |       |      |   |       |  |             |     |       |   |                      |  |   |   |  |   |        |  |   |       
|Cap rate at 4.5%                          |  |      |      |      |   |       |  |      |      |      |   |      |  |             | 176 |       |   |                     |  |   |  |  |   | 176    |  |   | 176   

ITEM 4. CONTROLS AND PROCEDURES

Our chief executive officer and chief financial officer, with the assistance of
management, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act) as of the end of the period covered by
this report (the Evaluation Date). Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that
information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, and that such information
is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures.

There has not been any change in our internal control over financial reporting during the three-month period ended March 31, 2006 that has materially affected, or
is reasonably likely to materially affect, our internal control over financial reporting.



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##### Table of Contents

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

On December 2, 2004, several persons who purported to be stockholders of the Company filed a
derivative complaint against the Company and its directors in the Chancery Court of the State of Delaware challenging the decision to repurchase certain interests in the Company held by LLR. The plaintiffs alleged, among other things, that the
purchase price the Company intended to pay for certain of the interests held by LLR would constitute a waste of corporate assets. The complaint further alleged that, in approving the offering and the repurchase of the interests held by LLR, the
directors did not act on the Companys behalf or on behalf of its stockholders but, rather, breached their fiduciary duties of good faith and loyalty to the Company and its stockholders. Finally, the complaint alleged that Janney Montgomery
Scott LLC (JMS), an independent valuation firm, materially overvalued the LLR interests in its opinion to the Companys board of directors that the Companys repurchase of the LLR interests was fair, from a financial point of
view, to the stockholders other than LLR.

Thereafter, the Company and LLR modified the terms on which the repurchase would be completed, the Company
issued senior subordinated notes to finance the repurchase and, in July of 2005, the Company repurchased all of LLRs interests in the Company for $20 million. The plaintiffs then amended their complaint to challenge the repurchase as completed
but again alleged that the Company paid too much for the LLR interests, that the directors breached their duties of good faith and loyalty in approving the repurchase on the modified terms and that JMS overvalued the LLR interests when it opined
that the repurchase of the LLR interests was fair from a financial point of view, to the stockholders other than LLR.

We have not accrued any costs,
beyond incurred legal costs, for expense relating to this matter as the Company and its directors believe plaintiffs allegations have no merit and we intend to vigorously defend the actions challenged in the plaintiffs amended complaint.
Any expense to be incurred in conjunction with this matter cannot reasonably be estimated at this time.

Item 1A. Risk Factors

Not Applicable.

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

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.



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Item 6. Exhibits



| | 31.1 | Certification of Principal Executive Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 31.2 | Certification of Principal Financial Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | 32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------



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SIGNATURE

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.



|                   |  |  |  |                                                                                                                 
|------------------ |  |  |  | ----------------------------------------------------------------------------------------------------------------
|                   |  |  |  | Opinion Research Corporation                                                                                    
|                   |  |  |  | (Registrant)                                                                                                    
|                   |  | 
|Date: May 15, 2006 |  |  |  | /s/ Douglas L. Cox                                                                                              
|                   |  |  |  | Douglas L. Cox Executive Vice President and Chief
Financial Officer (Principal Financial and Accounting Officer)



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