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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



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



For the quarterly period ended September 30, 2005



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the Period from :
 to



Commission File Number: 1-14927



OPINION RESEARCH CORPORATION

(Exact
name of registrant as specified in its charter)



|                                                 |  |                                     
|------------------------------------------------ |  | ------------------------------------
|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)



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 an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).



Yes ̈No  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 practical date.



Common Stock, $0.01 Par Value  5,360,326 shares as of
November 11, 2005.



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OPINION RESEARCH CORPORATION AND SUBSIDIARIES



INDEX



|                              |  |                                                                                                             |  |   
|----------------------------- |  | ----------------------------------------------------------------------------------------------------------- |  | --
|Part I. Financial Information |  |                                                                                                            
|                              |  |                                                                                                            
|Item 1.                       |  | Financial Statements                                                                                        |  | 3 
|                              |  |                                                                                                            
|                              |  | Consolidated Balance Sheets  December 31, 2004 and September 30, 2005 (Unaudited)                          |  | 3 
|                              |  |                                                                                                            
|                              |  | Consolidated Statements of Operations (Unaudited) - Three and nine months ended September 30, 2004 and 2005 |  | 4 
|                              |  |                                                                                                            
|                              |  | Consolidated Statements of Cash Flows (Unaudited) - Nine months ended September 30, 2004 and 2005           |  | 5 
|                              |  |                                                                                                            
|                              |  | Notes to consolidated financial statements  September 30, 2005 (Unaudited)                                 |  | 6 
|                              |  |                                                                                                            
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                       |  | 14
|                              |  |                                                                                                            
|Item 3.                       |  | Quantitative and Qualitative Disclosure About Market Risk                                                   |  | 22
|                              |  |                                                                                                            
|Item 4.                       |  | Controls and Procedures                                                                                     |  | 22
|                              | 
|Part II. Other Information    |  |                                                                                                            
|                              |  |                                                                                                            
|Item 1.                       |  | Legal Proceedings                                                                                           |  | 23
|                              |  |                                                                                                            
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                 |  | 24
|                              |  |                                                                                                            
|Item 3.                       |  | Defaults upon Senior Securities                                                                             |  | 24
|                              |  |                                                                                                            
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                         |  | 24
|                              |  |                                                                                                            
|Item 5.                       |  | Other Information                                                                                           |  | 24
|                              |  |                                                                                                            
|Item 6.                       |  | Exhibits                                                                                                    |  | 24
|                              | 
|Signature                     |  | 25                                                                                                         



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##### Table of Contents

PART I: FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------



OPINION RESEARCH CORPORATION AND SUBSIDIARIES



Consolidated Balance Sheets

(in thousands, except share amounts)



|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------ | - | ----------------- | - | ------- | -
|                                                                                                                                                                      |  | December 31,2004 |        |   | September 30,2005 |  
|                                                                                                                                                                      |  |                  |        |   | (Unaudited)       |  
|Assets                                                                                                                                                                |  |                  |        |   |                   |   |         |  
|Current Assets:                                                                                                                                                       |  |                  |        |   |                   |   |         |  
|Cash and cash equivalents                                                                                                                                             |  | $                | 467    |   |                   | $ | 1,718   |  
|Accounts receivable:                                                                                                                                                  |  |                  |        |   |                   |   |         |  
|Billed                                                                                                                                                                |  |                  | 26,001 |   |                   |   | 24,583  |  
|Unbilled services                                                                                                                                                     |  |                  | 17,986 |   |                   |   | 17,927  |  
|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|                                                                                                                                                                      |  |                  | 43,987 |   |                   |   | 42,510  |  
|Less: allowance for doubtful accounts                                                                                                                                 |  |                  | 93     |   |                   |   | 53      |  
|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|                                                                                                                                                                      |  |                  | 43,894 |   |                   |   | 42,457  |  
|Prepaid and other current assets                                                                                                                                      |  |                  | 3,672  |   |                   |   | 2,898   |  
|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|Total current assets                                                                                                                                                  |  |                  | 48,033 |   |                   |   | 47,073  |  
|Property and equipment, net                                                                                                                                           |  |                  | 10,105 |   |                   |   | 10,015  |  
|Intangibles, net                                                                                                                                                      |  |                  | 421    |   |                   |   | 243     |  
|Goodwill                                                                                                                                                              |  |                  | 32,748 |   |                   |   | 26,970  |  
|Deferred income taxes                                                                                                                                                 |  |                  | 3,248  |   |                   |   | 3,285   |  
|Other assets                                                                                                                                                          |  |                  | 3,128  |   |                   |   | 3,974   |  
|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|                                                                                                                                                                      |  | $                | 97,683 |   |                   | $ | 91,560  |  
|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|                                                                                                                                                                      |  |                 
|Liabilities and Stockholders Equity                                                                                                                                  |  |                  |        |   |                   |   |         |  
|Current Liabilities:                                                                                                                                                  |  |                  |        |   |                   |   |         |  
|Accounts payable                                                                                                                                                      |  | $                | 6,254  |   |                   | $ | 5,207   |  
|Accrued expenses                                                                                                                                                      |  |                  | 9,191  |   |                   |   | 10,289  |  
|Deferred revenues                                                                                                                                                     |  |                  | 4,344  |   |                   |   | 3,950   |  
|Short-term borrowings                                                                                                                                                 |  |                  | 2,000  |   |                   |   | 3,000   |  
|Other current liabilities                                                                                                                                             |  |                  | 2,823  |   |                   |   | 3,181   |  
|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|Total current liabilities                                                                                                                                             |  |                  | 24,612 |   |                   |   | 25,627  |  
|Long-term debt                                                                                                                                                        |  |                  | 40,286 |   |                   |   | 56,927  |  
|Other liabilities                                                                                                                                                     |  |                  | 1,542  |   |                   |   | 1,584   |  
|Redeemable Equity:                                                                                                                                                    |  |                  |        |   |                   |   |         |  
|Preferred stock:                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|Series B - 10 shares designated, issued and outstanding, liquidation value of $10 per share for December 31 2004 and none issued or
outstanding at September 30, 2005 |  |                  |       |   |                   |   |        |  
|Series C - 588,229 shares designated, none issued or outstanding                                                                                                      |  |                  |       |   |                   |   |        |  
|Common stock, 1,176,458 shares issued and outstanding for December                                                                                                    |  |                  |        |   |                   |   |         |  
|31, 2004 and none issued or outstanding at September 30, 2005                                                                                                         |  |                  | 8,900  |   |                   |   |        |  
|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,                                                                                                           |  |                  |        |   |                   |   |         |  
|5,245,815 shares issued and 5,196,993 outstanding in 2004, and 5,333,435 shares issued and 5,284,613 outstanding in 2005                                              |  |                  | 52     |   |                   |   | 53      |  
|Additional paid-in capital                                                                                                                                            |  |                  | 21,426 |   |                   |   | 20,292  |  
|Retained earnings (deficit)                                                                                                                                           |  |                  | 422    |   |                   |   | (12,653 | )
|Treasury stock, at cost, 48,822 shares in 2004 and 2005                                                                                                               |  |                  | (261   | ) |                   |   | (261    | )
|Accumulated other comprehensive income (loss)                                                                                                                         |  |                  | 704    |   |                   |   | (9      | )
|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|Total stockholders equity                                                                                                                                            |  |                  | 22,343 |   |                   |   | 7,422   |  
|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  
|                                                                                                                                                                      |  | $                | 97,683 |   |                   | $ | 91,560  |  
|                                                                                                                                                                      |  |                  |        |   |                   |   |         |  



See notes to
consolidated financial statements



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OPINION RESEARCH CORPORATION AND SUBSIDIARIES



Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)



|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|-------------------------------------------------- |  | ------------------------------- | --------- | - | ------------------------------ | - | --------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                   |  | Three Months EndedSeptember 30, |           |   | Nine months EndedSeptember 30, |  
|                                                   |  | 2004                            |           |   | 2005                           |   |           | 2004 |  |   | 2005      |  
|Revenues                                           |  | $                               | 48,894    |   |                                | $ | 48,697    |      |  | $ | 146,255   |   |  | $ | 149,417   |  
|Cost of revenues                                   |  |                                 | 34,692    |   |                                |   | 35,505    |      |  |   | 103,455   |   |  |   | 107,210   |  
|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Gross profit                                       |  |                                 | 14,202    |   |                                |   | 13,192    |      |  |   | 42,800    |   |  |   | 42,207    |  
|Selling, general and administrative expenses       |  |                                 | 10,130    |   |                                |   | 9,912     |      |  |   | 30,398    |   |  |   | 31,153    |  
|Depreciation and amortization                      |  |                                 | 1,017     |   |                                |   | 1,068     |      |  |   | 2,914     |   |  |   | 3,060     |  
|Goodwill impairment charge                         |  |                                 |          |   |                                |   | 5,530     |      |  |   |          |   |  |   | 5,530     |  
|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Operating income (loss)                            |  |                                 | 3,055     |   |                                |   | (3,318    | )    |  |   | 9,488     |   |  |   | 2,464     |  
|Interest expense                                   |  |                                 | 1,167     |   |                                |   | 1,405     |      |  |   | 6,540     |   |  |   | 4,539     |  
|Other non-operating (income) expense, net          |  |                                 | (85       | ) |                                |   | 1,373     |      |  |   | (386      | ) |  |   | 1,324     |  
|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Income (loss) before income tax expense (benefit)  |  |                                 | 1,973     |   |                                |   | (6,096    | )    |  |   | 3,334     |   |  |   | (3,399    | )
|Income tax expense (benefit)                       |  |                                 | 972       |   |                                |   | (1,442    | )    |  |   | 1,632     |   |  |   | (228      | )
|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Net income (loss)                                  |  | $                               | 1,001     |   |                                | $ | (4,654    | )    |  | $ | 1,702     |   |  | $ | (3,171    | )
|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Repurchased LLR interests                          |  |                                 |          |   |                                |   | (9,904    | )    |  |   |          |   |  |   | (9,904    | )
|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Net income (loss) available to common shareholders |  | $                               | 1,001     |   |                                | $ | (14,558   | )    |  | $ | 1,702     |   |  | $ | (13,075   | )
|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Net income (loss) per common share:                |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Basic                                              |  | $                               | 0.16      |   |                                | $ | (2.58     | )    |  | $ | 0.27      |   |  | $ | (2.12     | )
|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Diluted                                            |  | $                               | 0.15      |   |                                | $ | (2.58     | )    |  | $ | 0.26      |   |  | $ | (2.12     | )
|                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Weighted average common shares outstanding:        |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Basic                                              |  |                                 | 6,288,649 |   |                                |   | 5,642,665 |      |  |   | 6,226,654 |   |  |   | 6,158,475 |  
|Diluted                                            |  |                                 | 6,483,720 |   |                                |   | 5,642,665 |      |  |   | 6,435,092 |   |  |   | 6,158,475 |  



See notes to
consolidated financial statements



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OPINION RESEARCH CORPORATION AND SUBSIDIARIES



Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)



|                                                                                         |  |                                |         |   |      |   |          |  
|---------------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | - | -------- | -
|                                                                                         |  | Nine months EndedSeptember 30, |        
|                                                                                         |  | 2004                           |         |   | 2005 |  
|Cash flows from operating activities:                                                    |  |                                |         |   |      |   |          |  
|Net income (loss)                                                                        |  | $                              | 1,702   |   |      | $ | (3,171   | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                                |         |   |      |   |          |  
|Depreciation and amortization                                                            |  |                                | 2,914   |   |      |   | 3,060    |  
|Goodwill impairment charge                                                               |  |                                |        |   |      |   | 5,530    |  
|Non-cash interest expense                                                                |  |                                | 3,186   |   |      |   | 1,207    |  
|Loss on disposal of fixed assets                                                         |  |                                |        |   |      |   | 1        |  
|Change in:                                                                               |  |                                |         |   |      |   |          |  
|Accounts receivable                                                                      |  |                                | (2,949  | ) |      |   | 988      |  
|Other assets                                                                             |  |                                | (319    | ) |      |   | (837     | )
|Accounts payable and accrued expenses                                                    |  |                                | (2,805  | ) |      |   | 121      |  
|Deferred revenues                                                                        |  |                                | 1,183   |   |      |   | (270     | )
|Other liabilities                                                                        |  |                                | 1,296   |   |      |   | 548      |  
|                                                                                         |  |                                |         |   |      |   |          |  
|Net cash provided by operating activities                                                |  |                                | 4,208   |   |      |   | 7,177    |  
|                                                                                         |  |                                |         |   |      |   |          |  
|Cash flows from investing activities:                                                    |  |                                |         |   |      |   |          |  
|Capital expenditures                                                                     |  |                                | (3,256  | ) |      |   | (2,963   | )
|                                                                                         |  |                                |         |   |      |   |          |  
|Net cash used in investing activities                                                    |  |                                | (3,256  | ) |      |   | (2,963   | )
|                                                                                         |  |                                |         |   |      |   |          |  
|Cash flows from financing activities:                                                    |  |                                |         |   |      |   |          |  
|Borrowings under line-of-credit agreements                                               |  |                                | 51,030  |   |      |   | 138,462  |  
|Repayments under line-of-credit agreements                                               |  |                                | (46,523 | ) |      |   | (134,306 | )
|Proceeds from issuance of notes payable                                                  |  |                                | 22,048  |   |      |   | 35,000   |  
|Repayments of notes payable                                                              |  |                                | (29,004 | ) |      |   | (22,077  | )
|Payment for repurchased LLR interests                                                    |  |                                |        |   |      |   | (20,414  | )
|Payments of loan origination and amendment fees                                          |  |                                | (1,850  | ) |      |   |         |  
|Repayments under capital lease arrangements                                              |  |                                | (79     | ) |      |   | (145     | )
|Proceeds from the issuance of capital stock and exercise of options                      |  |                                | 549     |   |      |   | 477      |  
|                                                                                         |  |                                |         |   |      |   |          |  
|Net cash used in financing activities                                                    |  |                                | (3,829  | ) |      |   | (3,003   | )
|                                                                                         |  |                                |         |   |      |   |          |  
|Effect of exchange rate changes on cash and cash equivalents                             |  |                                | 126     |   |      |   | 40       |  
|                                                                                         |  |                                |         |   |      |   |          |  
|(Decrease) increase in cash and cash equivalents                                         |  |                                | (2,751  | ) |      |   | 1,251    |  
|Cash and cash equivalents at beginning of period                                         |  |                                | 2,766   |   |      |   | 467      |  
|                                                                                         |  |                                |         |   |      |   |          |  
|Cash and cash equivalents at end of period                                               |  | $                              | 15      |   |      | $ | 1,718    |  
|                                                                                         |  |                                |         |   |      |   |          |  
|Supplemental Disclosures:                                                                |  |                                |         |   |      |   | `        |  
|Cash paid for:                                                                           |  |                                |         |   |      |   |          |  
|Interest                                                                                 |  | $                              | 4,101   |   |      | $ | 2,762    |  
|Income tax                                                                               |  |                                | 678     |   |      |   | 672      |  
|Non-cash investing and financing activities:                                             |  |                                |         |   |      |   |          |  
|Acquisition of equipment under capital lease                                             |  | $                              | 52      |   |      | $ | 20       |  



See notes to
consolidated financial statements



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OPINION RESEARCH CORPORATION AND SUBSIDIARIES



Notes to Consolidated Financial Statements

September 30, 2005

(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. Operating results for the three and nine months ended September 30, 2005 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, 2004. 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 the statement of cash flows for the period ended September 30, 2004, certain amounts in unbilled services have been reclassified to deferred revenues in the net cash provided by operating activities
section. In Note F, Goodwill and Other Intangible Assets, fully amortized intangible asset balances have been adjusted to reflect only unamortized intangible assets.



NOTE B - 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
banks designated base rate (6.75% at September 30, 2005) plus 100 basis points or LIBOR (3-month LIBOR was 4.07% at September 30, 2005) plus 300 basis points. As of September 30, 2005, there was approximately $8.6 million of
additional credit available under the Senior Revolving Facility.



In May 2004,
we also issued $10.0 million of secured subordinated notes (the Secured Subordinated Notes) and $12.0 million of unsecured subordinated notes (the Unsecured Subordinated Notes) to Allied Capital Corporation. The Secured
Subordinated Notes carried an interest rate of 10% and were to mature in November 2007. The Secured Subordinated Notes required principal payments of $500,000 per quarter commencing July 1, 2004, with an unamortized balance of $3.0 million due
at the end of the term. The Unsecured Subordinated Notes were to mature in May 2009 and carried a fixed interest rate of 15.5%; 13% payable quarterly in cash, and 2.5% payable in cash or deferred and included in the outstanding principal balance
until maturity. In exchange for consideration received in connection with this debt, we extended the term of existing warrants held by Allied Capital Corporation and Allied Investment Corporation (together, Allied) from May 2007 to the
later of May 2009 or the third anniversary of the repayment date. These warrants were issued in 1999 to Allied and are for the purchase of 437,029 shares of our common stock at an exercise price of $5.422 per share. The extension of these warrants
was valued at $616,000 and was accreted through interest expense over the life of the Unsecured Subordinated Notes.



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All debt outstanding as of May 4, 2004 was repaid with proceeds from the above borrowings. In conjunction with the
new credit facilities, we incurred additional costs of approximately $1.4 million which are included in other long term assets in our consolidated financial statements and are being amortized over the remaining terms of the facilities. Due to the
refinancing of the credit facilities, we also wrote off the unamortized loan fees of approximately $2.5 million as interest expense, which included payments of $345,000 made in 2004, related to the retired debt in the third quarter of 2004.



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 the Secured Subordinated Notes and the 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 percent 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 the repurchase of 1,176,458 common shares purchased by LLR on
September 1, 2000, 740,500 warrants to purchase common shares, rights to convert the common shares into preferred shares with an annual dividend obligation of $1.2 million, anti-dilution rights and warrants, as well as other rights. The
transaction resulted in a $9.9 million increase in net loss available to common shareholders.



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. For the measuring period ended
September 30, 2005, we were in compliance with all of our financial covenants. 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.



NOTE C - 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 with Citizens Bank to hedge our
interest rate risk exposure on the Term Loan due to fluctuations in interest rates. The interest rate cap qualified as an accounting hedge under the guidance in FASB Statement No. 133, Derivatives and Hedging Activities, and was
designated, on the date the contract was entered into as a hedge of the variability of cash flows to be paid related to a recognized liability (cash flow hedge). This interest rate cap is based on a notional amount of $13,500,000 and an
interest rate of LIBOR plus 350 basis points. It matures in 2010.



The interest
rate cap, set at 4.5%, was purchased at a premium of $106,000, which is being amortized using the effective yield method over the term of the contract. The difference between the interest rate on the debt instrument and the interest rate cap will be
recorded in earnings as a reduction in interest expense whenever the interest rate on the term loan rises above the cap. For the three months ended September 30, 2005, there was no impact on earnings.



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##### Table of Contents

NOTE D - EARNINGS (LOSS) PER SHARE



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



|                                                   |  |                                  |       |      |                                 |         |      |  |      |       |  |   |         |  
|-------------------------------------------------- |  | -------------------------------- | ----- | ---- | ------------------------------- | ------- | ---- |  | ---- | ----- |  | - | ------- | -
|                                                   |  | Three Months Ended September 30, |       |      | Nine months Ended September 30, |        
|(in thousands, except per share amounts)           |  | 2004                             |       | 2005 |                                 |         | 2004 |  | 2005 |      
|Numerator:                                         |  |                                  |       |      |                                 |         |      |  |      |       |  |   |         |  
|Net income (loss) available to common shareholders |  | $                                | 1,001 |      | $                               | (14,558 | )    |  | $    | 1,702 |  | $ | (13,075 | )
|Numerator for basic and diluted earnings per share |  | $                                | 1,001 |      | $                               | (14,558 | )    |  | $    | 1,702 |  | $ | (13,075 | )
|Denominator:                                       |  |                                  |       |      |                                 |         |      |  |      |       |  |   |         |  
|Denominator for basic earnings per share           |  |                                  |       |      |                                 |         |      |  |      |       |  |   |         |  
|Weighted-average shares                            |  |                                  | 6,289 |      |                                 | 5,643   |      |  |      | 6,227 |  |   | 6,158   |  
|Effect of dilutive stock options                   |  |                                  | 195   |      |                                 |        |      |  |      | 208   |  |   |        |  
|Denominator for diluted earnings per share         |  |                                  |       |      |                                 |         |      |  |      |       |  |   |         |  
|Adjusted weighted-average shares                   |  |                                  | 6,484 |      |                                 | 5,643   |      |  |      | 6,435 |  |   | 6,158   |  
|Net income (loss) per common share:                |  |                                  |       |      |                                 |         |      |  |      |       |  |   |         |  
|Basic                                              |  | $                                | 0.16  |      | $                               | (2.58   | )    |  | $    | 0.27  |  | $ | (2.12   | )
|Diluted                                            |  | $                                | 0.15  |      | $                               | (2.58   | )    |  | $    | 0.26  |  | $ | (2.12   | )



For the three and nine month periods
ended September 30, 2004, there were 276,902 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 because inclusion would have been
anti-dilutive.



For the three and nine month periods ended September 30,
2005, there were 256,900 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 E - STOCK-BASED COMPENSATION



Employee stock option plans are accounted for in accordance with Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to
Employees and related interpretations. We have adopted the disclosure-only provisions of Statement of Financial Accounting Standards No. 123, Stock-Based Compensation and Statement 148,Accounting for Stock-Based
Compensation  Transition and Disclosure, which was released in December 2002 as an amendment of Statement 123.



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##### Table of Contents

The following table illustrates the effect on net income and earnings per share if the fair value based method had been
applied to all stock option awards:



|                                                                                                                                      |  |                                 |       |   |                                 |   |         |      |  |   |       |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ----- | - | ------------------------------- | - | ------- | ---- |  | - | ----- | - |  | - | ------- | -
|                                                                                                                                      |  | Three Months EndedSeptember 30, |       |   | Nine months Ended September 30, |  
|(in thousands, except per share amounts)                                                                                              |  | 2004                            |       |   | 2005                            |   |         | 2004 |  |   | 2005  |  
|Net income (loss) available to common shareholders                                                                                    |  | $                               | 1,001 |   |                                 | $ | (14,558 | )    |  | $ | 1,702 |   |  | $ | (13,075 | )
|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 |  |                                 | (72   | ) |                                 |   | (57     | )    |  |   | (221  | ) |  |   | (179    | )
|                                                                                                                                      |  |                                 |       |   |                                 |   |         |      |  |   |       |   |  |   |         |  
|Net income (loss) available to common Shareholders  pro forma                                                                        |  | $                               | 929   |   |                                 | $ | (14,615 | )    |  | $ | 1,481 |   |  | $ | (13,254 | )
|                                                                                                                                      |  |                                 |       |   |                                 |   |         |      |  |   |       |   |  |   |         |  
|Basic earnings (loss) per share  as reported                                                                                         |  | $                               | 0.16  |   |                                 | $ | (2.58   | )    |  | $ | 0.27  |   |  | $ | (2.12   | )
|Basic earnings (loss) per share  pro forma                                                                                           |  | $                               | 0.15  |   |                                 | $ | (2.59   | )    |  | $ | 0.24  |   |  | $ | (2.15   | )
|Diluted earnings (loss) per share - as reported                                                                                       |  | $                               | 0.15  |   |                                 | $ | (2.58   | )    |  | $ | 0.26  |   |  | $ | (2.12   | )
|Diluted earnings (loss) per share - pro forma                                                                                         |  | $                               | 0.14  |   |                                 | $ | (2.59   | )    |  | $ | 0.23  |   |  | $ | (2.15   | )



The fair value of each option grant is
estimated on the date of grant using the Black-Scholes option-pricing model. The following weighted-average assumptions were used for options granted during the nine months ended September 30, 2004 and 2005:



|                                |  |         |   |  |         |  
|------------------------------- |  | ------- | - |  | ------- | -
|                                |  | 2004    |   |  | 2005    |  
|Expected dividend yield         |  | 0       | % |  | 0       | %
|Expected stock price volatility |  | 53.00   | % |  | 45.10   | %
|Risk-free interest rate         |  | 3.34    | % |  | 4.00    | %
|Expected life of options        |  | 7 years |   |  | 7 years |  



There were no options granted during
the three months ended September 30, 2004 and 2005. The number of options granted during the nine months ended September 30, 2004 and 2005 were 222,500 and 50,000, respectively. The weighted average fair value of options granted during the
nine months ended September 30, 2004 and 2005 was $3.57 and $3.44 per share, respectively.



In December 2004, the FASB issued Statement No. 123(R), Share-Based Payment(Statement No. 123(R)). Statement No. 123(R) requires that the costs of employee share-based payments be
measured at fair value on the awards grant date using an option-pricing model and recognized in the financial statements over the requisite service period. Statement No. 123(R) does not change the accounting for stock ownership plans,
which is subject to the American Institute of Certified Public Accountants Statement of Position (SOP) No. 93-6, Employers Accounting for Employee Stock Ownership Plans. Statement No. 123(R) supersedes APB
No. 25, and its related interpretations, and eliminates the alternative to use APB No. 25s intrinsic value method of accounting, which we currently use.



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Statement No. 123(R) requires public companies to adopt Statement 123(R) using the modified prospective application
for periods from the adoption date forward. For periods before the required effective date, companies may elect to apply the modified retrospective application method, although not required.



The modified prospective method requires compensation cost for the portion of awards for
which the requisite service has not yet been rendered that are outstanding as of the adoption date to be recognized over the remaining service period. The compensation cost for that portion of awards will be based on the grant-date fair value of
those awards as calculated for pro forma disclosures under Statement No. 123, as originally issued. All new awards and awards that are modified, repurchased, or cancelled after the adoption date will be accounted for under the provisions of
Statement No. 123(R).



The modified retrospective application method may
be applied to either all periods prior to adoption or only to prior interim periods in the year of adoption, thus allowing companies to recognize, in their prior period financial statements, the exact amount of compensation cost that was previously
disclosed in their proforma footnote disclosure. However, changes to the amounts originally disclosed in prior periods are precluded.



On April 14, 2005, the Securities and Exchange Commission issued Release 2005-57, which allows companies to implement Statement No. 123(R) at the beginning of
their next fiscal year, instead of the next reporting period that begins after September 15, 2005 as disclosed in the original Statement No. 123(R) release in December 2004. We currently plan to apply the required modified prospective
method upon adoption on January 1, 2006. We are evaluating the impact Statement No. 123(R) will have on our financial position, results of operations, earnings per share and cash flows when adopted.



NOTE F - GOODWILL AND OTHER INTANGIBLE ASSETS



In September 2005 we evaluated the goodwill in the Teleservices segment to determine if
there was any impairment. The evaluation resulted from deterioration in the performance of this segment.



The goodwill impairment test requires us to estimate the fair value of our overall business enterprise at the reporting unit level. We estimated fair value using market comparables, a discounted cash flow analysis, as
well as a liquidation valuation approach for the Teleservices segment. The results of these approaches are weighted to determine fair value. Under the market approach, fair value was determined by comparing our reporting units to similar businesses.
Under the discounted cash flows method, we utilized projected revenue and cash flow forecasts, as well as assumptions of terminal value, together with an applicable discount rate, to determine fair value. We then compared the carrying value of this
reporting unit to its fair value.



The results of the analysis performed
indicated that the recorded book value of the Teleservices segment exceeded its estimated fair value, thus resulting in the write-off of the remaining goodwill of $5.5 million in this segment. Management believes that the decline in the fair value
of the Teleservices segment is attributable to deterioration in the performance of this segment and client concentration.



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##### Table of Contents

The changes in the carrying value of goodwill by segment for the nine months ended September 30, 2005 are as
follows:



|                              |  |                     |       |                    |   |       |              |  |   |                |   |              |   |        |  |   |        |  
|----------------------------- |  | ------------------- | ----- | ------------------ | - | ----- | ------------ |  | - | -------------- | - | ------------ | - | ------ |  | - | ------ | -
|(in thousands)                |  | U.S. MarketResearch |       | U.K.MarketResearch |   |       | Teleservices |  |   | SocialResearch |   | Consolidated |  
|Balance at January 1, 2005    |  | $                   | 2,390 |                    | $ | 3,047 |              |  | $ | 5,530          |   |              | $ | 21,781 |  | $ | 32,748 |  
|Impairment charge             |  |                     |      |                    |   |      |              |  |   | (5,530         | ) |              |   |       |  |   | (5,530 | )
|Foreign currency translation  |  |                     |      |                    |   | (248  | )            |  |   |               |   |              |   |       |  |   | (248   | )
|                              |  |                     |       |                    |   |       |              |  |   |                |   |              |   |        |  |   |        |  
|Balance at September 30, 2005 |  | $                   | 2,390 |                    | $ | 2,799 |              |  | $ |               |   |              | $ | 21,781 |  | $ | 26,970 |  
|                              |  |                     |       |                    |   |       |              |  |   |                |   |              |   |        |  |   |        |  



The components of intangible assets
are as follows:



|                                           |  |                   |        |   |                    |   |       |  
|------------------------------------------ |  | ----------------- | ------ | - | ------------------ | - | ----- | -
|                                           |  | December 31, 2004 |        |   | September 30, 2005 |  
|(in thousands)                             |  |                  
|Intangible assets subject to amortization: |  |                   |        |   |                    |   |       |  
|Non-competition agreements                 |  | $                 | 995    |   |                    | $ | 594   |  
|Other                                      |  |                   | 485    |   |                    |   | 446   |  
|                                           |  |                   |        |   |                    |   |       |  
|                                           |  |                   | 1,480  |   |                    |   | 1,040 |  
|Accumulated amortization                   |  |                   | (1,059 | ) |                    |   | (797  | )
|                                           |  |                   |        |   |                    |   |       |  
|                                           |  | $                 | 421    |   |                    | $ | 243   |  
|                                           |  |                   |        |   |                    |   |       |  



Amortization of intangible assets for
the three and nine months ended September 30, 2004 was $55,000 and $258,000. Amortization of intangible assets for the three and nine months ended September 30, 2005 was $51,000 and $178,000, respectively. The estimated aggregate
amortization expense for the remainder of 2005 and each of the five succeeding years is as follows:



|     |  |                |   
|---- |  | -------------- | --
|     |  | (in thousands)
|2005 |  | $              | 15
|2006 |  |                | 19
|2007 |  |                | 19
|2008 |  |                | 19
|2009 |  |                | 19
|2010 |  |                | 19



NOTE
G - COMPREHENSIVE INCOME (LOSS)



The components of comprehensive income (loss)
for the three and nine months ended September 30, 2004 and 2005 were:



|                                        |  |                                 |       |   |                                |   |        |      |  |   |       |   |  |   |        |  
|--------------------------------------- |  | ------------------------------- | ----- | - | ------------------------------ | - | ------ | ---- |  | - | ----- | - |  | - | ------ | -
|                                        |  | Three Months EndedSeptember 30, |       |   | Nine months EndedSeptember 30, |  
|                                        |  | 2004                            |       |   | 2005                           |   |        | 2004 |  |   | 2005  |  
|(in thousands)                          |  |                                 |       |   |                                |  
|Net income (loss)                       |  | $                               | 1,001 |   |                                | $ | (4,654 | )    |  | $ | 1,702 |   |  | $ | (3,171 | )
|Other comprehensive loss:               |  |                                 |       |   |                                |   |        |      |  |   |       |   |  |   |        |  
|Foreign currency translation adjustment |  |                                 | (89   | ) |                                |   | (63    | )    |  |   | (355  | ) |  |   | (713   | )
|                                        |  |                                 |       |   |                                |   |        |      |  |   |       |   |  |   |        |  
|Comprehensive income (loss)             |  | $                               | 912   |   |                                | $ | (4,717 | )    |  | $ | 1,347 |   |  | $ | (3,884 | )
|                                        |  |                                 |       |   |                                |   |        |      |  |   |       |   |  |   |        |  



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##### Table of Contents

NOTE H - 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 four reportable segments: U.S. market research, U.K. market research, Teleservices, 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.MarketResearch |        |   | U.K.MarketResearch |   | Teleservices |  |   | SocialResearch |   | TotalSegments |   |         | Other |   |         | Consolidated | 
|Quarter ended September 30, 2004:              |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   |         |  
|Revenues from external customers               |  | $                  | 6,023  |   |                    | $ | 5,623        |  | $ | 3,213          |   |               | $ | 32,703  |       | $ | 47,562  |              |  | $ | 1,332 |   |  | $ | 48,894  |  
|Operating (loss) income                        |  |                    | (640   | ) |                    |   | 58           |  |   | 236            |   |               |   | 3,378   |       |   | 3,032   |              |  |   | 23    |   |  |   | 3,055   |  
|Interest and other non-operating expenses, net |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   | 1,082   |  
|Income before income tax expense               |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   | 1,973   |  
|                                               |  |                    |        |   |                    |   |             
|Quarter ended September 30, 2005:              |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   |         |  
|Revenues from external customers               |  | $                  | 6,072  |   |                    | $ | 6,097        |  | $ | 1,750          |   |               | $ | 34,064  |       | $ | 47,983  |              |  | $ | 714   |   |  | $ | 48,697  |  
|Goodwill impairment charge                     |  |                    |       |   |                    |   |             |  |   | (5,530         | ) |               |   |        |       |   | (5,530  | )            |  |   |      |   |  |   | (5,530  | )
|Operating (loss) income                        |  |                    | (685   | ) |                    |   | 210          |  |   | (5,865         | ) |               |   | 3,302   |       |   | (3,038  | )            |  |   | (280  | ) |  |   | (3,318  | )
|Interest and other non-operating expenses, net |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   | 2,778   |  
|Loss before income tax benefit                 |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   | (6,096  | )
|                                               |  |                    |        |   |                    |   |             
|Nine months ended September 30, 2004:          |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   |         |  
|Revenues from external customers               |  | $                  | 19,623 |   |                    | $ | 16,681       |  | $ | 10,163         |   |               | $ | 95,897  |       | $ | 142,364 |              |  | $ | 3,891 |   |  | $ | 146,255 |  
|Operating (loss) income                        |  |                    | (1,920 | ) |                    |   | 348          |  |   | 926            |   |               |   | 10,104  |       |   | 9,458   |              |  |   | 30    |   |  |   | 9,488   |  
|Interest and other non-operating expenses, net |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   | 6,154   |  
|Income before income tax expense               |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   | 3,334   |  
|                                               |  |                    |        |   |                    |   |             
|Nine months ended September 30, 2005:          |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   |         |  
|Revenues from external customers               |  | $                  | 19,266 |   |                    | $ | 17,236       |  | $ | 6,234          |   |               | $ | 104,118 |       | $ | 146,854 |              |  | $ | 2,563 |   |  | $ | 149,417 |  
|Goodwill impairment charge                     |  |                    |       |   |                    |   |             |  |   | (5,530         | ) |               |   |        |       |   | (5,530  | )            |  |   |      |   |  |   | (5,530  | )
|Operating (loss) income                        |  |                    | (1,390 | ) |                    |   | 284          |  |   | (6,254         | ) |               |   | 10,654  |       |   | 3,294   |              |  |   | (830  | ) |  |   | 2,464   |  
|Interest and other non-operating expenses, net |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   | 5,863   |  
|Loss before income tax benefit                 |  |                    |        |   |                    |   |              |  |   |                |   |               |   |         |       |   |         |              |  |   |       |   |  |   | (3,399  | )



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NOTE I  STOCKHOLDERS DERIVATIVE LAWSUIT



On December 2, 2004, several persons who purport to be stockholders of our company
filed a derivative complaint against us and our directors in the Chancery Court of the State of Delaware regarding an offering of common stock. We previously proposed to use a portion of the proceeds of a public offering of our common stock to
repurchase interests in our company held by the LLR Partnerships, other than limited registration rights and shares of our common stock with a value of $2.0 million, which the LLR Partnerships would retain. The plaintiffs alleged, among other
things, that an offering would be unfairly dilutive to their holdings of our common stock and that the purchase price we intended to pay for the LLR Interests would constitute a waste of corporate assets. The complaint further alleged that, in
approving the offering and the repurchase of the interests held by the LLR partnerships, our directors did not act on our behalf or on behalf of our stockholders but, rather, breached their fiduciary duties of good faith and loyalty to us and our
stockholders. Finally, the complaint alleged that Janney Montgomery Scott LLC, an independent valuation firm, materially overvalued the LLR Interests in its opinion to our board of directors that our repurchase of the interests held by the LLR
Partnerships is fair, from a financial point of view, to our stockholders other than the LLR Partnerships. Following our issuance of senior subordinated notes and the completion of the repurchase of the LLR Interests in July 2005, the plaintiffs
amended their complaint to challenge the repurchase as completed.



In
connection with their lawsuit, the plaintiffs seek the following:



| |  |  | a declaration that our directors have violated their fiduciary duties;
| | - |  | ----------------------------------------------------------------------



| |  |  | rescission of our repurchase of the LLR Interests, or an award of damages to us;
| | - |  | --------------------------------------------------------------------------------



| |  |  | an accounting from the defendants, jointly and severally, to us, the plaintiffs and our other stockholders for all monetary damages suffered by us by reason of the alleged
misconduct;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the award of costs and disbursements of their actions, including reasonable attorneys and experts fees; and
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | such other and further relief as the court may determine is just and proper.
| | - |  | ----------------------------------------------------------------------------



We believe this suit is without merit and intend to vigorously defend against it. We have moved to dismiss the plaintiffs complaint.



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##### Table of Contents

|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 federal or state tax laws or the administration of these laws;
| | - |  | -------------------------------------------------------------------------



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



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



| |  |  | certain other risk factors under the heading Risk Factors described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31,
2005.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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##### Table of Contents

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, products, or 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 Fortune 500 corporations in the automotive, consumer goods and services,
financial services, health care, information technology, retail and trade, and telecommunications industries. We have served the commercial research market since 1938. We also provide telemarketing services for clients in the membership services,
financial services, information technology, and entertainment industries.



We
currently have four segments for financial reporting purposes:



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



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



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



| |  |  | Teleservices.
| | - |  | -------------



Our consolidated revenues decreased and increased, respectively, in the three and nine months ended September 30, 2005 as compared to the comparable periods of 2004, reflecting strong performance in our largest
segment, Social Research, relatively stable market conditions in our U.S. and U.K. market research segments and poor conditions in our Teleservices segment.



Our operating income decreased to an operating loss in the three-month period ended September 30, 2005, as a result of reduced revenues in the relatively high margin
Teleservices segment, a goodwill impairment charge in the Teleservices segment, increases in costs of revenues in the Social Research and U.K. market research segments, offset by decreases in selling, general and administrative expenses in the
Social Research and Teleservices segments. For the nine-month period ended September 30, 2005, operating income decreased primarily as a result of the goodwill impairment charge in the Teleservices segment, increased costs of revenues and
selling, general and administrative expense, offset by increased revenues.



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. For the Teleservices segment we recognize revenues at the time the services are performed. The level of our revenues is affected by government spending patterns, general economic conditions,



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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 and audit, office space and support service expenses, travel and training costs, directors fees and other non-project related expenses.



Goodwill impairment: Our results in the three and nine months ended September 30,
2005 were impacted by a $5.5 million goodwill impairment charge in our Teleservices segment.



Interest expense: Our results in the three and nine months ended September 30, 2005 were impacted by the higher interest rate on the new subordinated debt, rising interest rate on our variable debt, lower
financing costs on the term loan in comparison to the Allied debt which was refinanced in March 2005 and the related non-cash write-off of an original issue discount, unamortized loan fees and prepayment penalties of approximately $547,000, $266,000
and $362,000 respectively.



Results of Operations



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



|                                             |  |                                 |   |  |                                |    |  |       |   |  |       |   
|-------------------------------------------- |  | ------------------------------- | - |  | ------------------------------ | -- |  | ----- | - |  | ----- | --
|                                             |  | Three Months EndedSeptember 30, |   |  | Nine months EndedSeptember 30, |   
|                                             |  | 2004                            |   |  | 2005                           |    |  | 2004  |   |  | 2005  |   
|Revenue                                      |  | 100.0                           | % |  | 100.0                          | %  |  | 100.0 | % |  | 100.0 | % 
|Gross profit                                 |  | 29.0                            | % |  | 27.1                           | %  |  | 29.3  | % |  | 28.2  | % 
|Selling, general and administrative expenses |  | 20.7                            | % |  | 20.4                           | %  |  | 20.8  | % |  | 20.8  | % 
|Operating income (loss)                      |  | 6.2                             | % |  | (6.8                           | )% |  | 6.5   | % |  | 1.6   | % 
|Net income (loss)                            |  | 2.0                             | % |  | (9.6                           | )% |  | 1.2   | % |  | (2.1  | )%



Comparison of the three-month
periods ended September 30, 2004 and 2005



Consolidated revenues
decreased $197,000, or 0.4%, from $48.9 million in the third quarter of 2004 to $48.7 million in the third quarter of 2005 due to a decrease in revenues in the Teleservices segment of $1.5 million, or 45.5%, reflecting continued weakness in this
market segment. The decreased revenues were offset by increased revenues of $1.4 million, or 4.2%, in the Social Research segment, $474,000, or 8.4%, in the U.K. market research segment, and $49,000, or 0.8%, in the U.S. market research segment. In
all cases, the increase or decrease in revenues in the various operating segments was primarily due to higher or lower demand for services.



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Consolidated cost of revenues increased $813,000, or 2.3%, from $34.7 million in the third quarter of 2004 to $35.5
million in the third quarter of 2005. Gross profit as a percentage of revenues declined from 29.0% in 2004 to 27.1% in 2005. In the Social Research segment, cost of revenues increased $2.0 million, or 8.5%, from $23.6 million in 2004 to $25.6
million in 2005, while gross profit as a percentage of revenues in the Social Research segment decreased from 27.9% in 2004 to 25.0% in 2005 due to increased lower margin cost reimbursable projects in 2005. In the U.K. market research segment, cost
of revenues increased $342,000, or 9.5%, from $3.6 million in 2004 to $4.0 million in 2005, while gross profit as a percentage of revenues in the U.K. market research segment decreased from 35.8% in 2004 to 35.1% in 2005. In the U.S. market research
segment, cost of revenues decreased $420,000, or 8.6%, from $4.9 million in 2004 to $4.4 million in 2005, and gross profit as a percentage of revenues increased from 19.2% in 2004 to 26.7% in 2005. In the Teleservices segment, cost of revenues
decreased $757,000, or 46.7%, from $1.6 million in 2004 to $864,000 in 2005, consistent with lower revenues, while gross profit as a percentage of revenues increased from 49.5% in 2004 to 50.6% in 2005.



Selling, general and administrative (SG&A) expenses decreased $218,000, or
2.2%, from $10.1 million in 2004 to $9.9 million in 2005. As a percentage of revenues, consolidated SG&A expenses decreased from 20.7% in 2004 to 20.4% in 2005. In the U.S. market research segment, SG&A expenses increased from $1.6 million
in 2004 to $2.1 million in 2005, or as a percentage of revenues, from 25.9% in 2004 to 34.6% in 2005. The increase in the U.S. market research segment SG&A expenses was offset by a decrease in the Social Research segment from $5.4 million in
2004 to $4.8 million in 2005, or as a percentage of revenues from 16.5% in 2004 to 14.0% in 2005, a decrease in the Teleservices segment from $1.1 million in 2004 to $1.0 million in 2005, which as a percentage of revenues, increased from 35.1% in
2004 to 59.3% in 2005, as a result of lower revenues, and a slight decrease of $56,000 in the U.K. market research segment, or as a percentage of revenues from 31.9% in 2004 to 28.5% in 2005.



Depreciation and amortization expense increased $51,000, or 5.0%, from $1.0 million in 2004
to $1.1 million in 2005 as a result of increases in the related asset base in 2005 in various business units offset by reductions in other business units. As a percentage of revenues, depreciation and amortization expense increased from 2.1% in 2004
to 2.2% in 2005.



In September 2005, the Company recorded a goodwill impairment
charge of $5.5 million based on the results of a goodwill impairment evaluation in the Teleservices business segment which indicated that the recorded book value exceeded its estimated fair value, as determined by a weighting of comparable company
analyses, discounted cash flow and liquidation value analyses. Management believes that the decline in the fair value of the Teleservices segment was due to deterioration in the performance of this segment and client concentration.



Interest expense increased $238,000, or 20.4%, from $1.2 million in the third quarter of 2004
to $1.4 million in the third quarter of 2005 primarily due to the third quarter issuance of the subordinated notes, to The Royal Bank of Scotland and rising interest rates on our variable rate debt offset by the absence of more costly fixed rate
debt instruments in 2004 that were refinanced in the first quarter of 2005.



Other non-operating (income) expense, net, decreased by $1.5 million from income of $85,000 in the third quarter of 2004 to expense of $1.4 million in the third quarter of 2005 primarily due to the write off of $1.3 million in costs
incurred in our previously postponed equity offering.



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The income tax expense (benefit) for the third quarter of 2004 and 2005 was $972,000 and $(1.4 million), respectively.
For the third quarter of 2005, we were in a tax benefit position due to net losses incurred in the related period as a result of the goodwill impairment in the Teleservices segment, the equity offering expense and a tax accrual adjustment which
reduced net income by $5.0 million. The income tax provision is higher and lower than statutory rates in 2004 and 2005 respectively due to the fact that we are not deriving tax benefits from non-U.S. segments and state losses.



As a result of the foregoing, net income decreased from income of $1.0 million in the third
quarter of 2004 to a net loss of $4.7 million in the third quarter of 2005.



During the quarter, we repurchased interests in the Company held by the LLR Partnerships. The transaction consisted of the repurchase of 1,176,458 common shares purchased by LLR on September 1, 2000, 740,500 warrants to purchase common
shares, rights to convert the common shares into preferred shares with an annual dividend obligation of $1.2 million, anti-dilution rights and warrants, as well as other rights. The transaction resulted in a $9.9 million increase in net loss
available to common shareholders from $4.7 million to $14.6 million.



Comparison of the nine-month periods ended September 30, 2004 and 2005



Consolidated revenues increased $3.2 million, or 2.2%, from $146.3 million in 2004 to $149.4 million in 2005, due to an increase in revenues in our Social Research segment of $8.2 million, or 8.6%, and an increase in
revenues in our U.K. market research segment of $555,000, or 3.3%. These increases were offset by a decrease in revenues in our Teleservices segment of $3.9 million, or 38.7%, reflecting continued weakness in this market segment; and a decrease in
revenues in our U.S. market research segment $357,000, or 1.8%. In all cases, the increase or decrease in revenues in the various operating segments is primarily due to higher or lower demand for services.



Consolidated cost of revenues increased $3.8 million, or 3.6%, from $103.5 million in 2004 to
$107.2 million in 2005. Gross profit as a percentage of revenues declined from 29.3% in 2004 to 28.2% in 2005. In the Social Research segment, cost of revenues increased $7.9 million, or 11.3%, from $69.5 million in 2004 to $77.4 million in 2005,
while gross profit as a percentage of revenues decreased from 27.5% in 2004 to 25.7% in 2005 due to increased lower margin cost reimbursable projects in 2005. In the U.K. market research segment, cost of revenues increased $424,000, or 4.0%, while
gross profit as a percentage of revenues decreased from 37.2% in 2004 to 36.8% in 2005. In the U.S. market research segment, cost of revenues decreased $2.0 million, or 12.8%, from $15.4 million in 2004 to $13.4 million in 2005, and gross profit as
a percentage of revenues increased from 21.4% in 2004 to 30.3% in 2005. In the Teleservices segment, cost of revenues decreased 38.9% from $5.0 million in 2004 to $3.1 million in 2005, and gross profit as a percentage of revenues increased from
50.3% in 2004 to 50.6% in 2005 as a result of decreased revenue.



SG&A
expenses increased $755,000, or 2.5%, from $30.4 million in 2004 to $31.2 million in 2005. As a percentage of revenues, consolidated SG&A expenses remained constant at 20.8% for both periods in 2004 and 2005. In the Social Research segment,
SG&A expenses decreased from $15.1 million in 2004 to $14.8 million in 2005, or as a percentage of revenues from 15.7% in 2004 to 14.2% in 2005. In the U.S. market research segment, SG&A expenses increased from $5.5 million in 2004 to $6.6
million in 2005, or as a percentage of revenues from 27.9% in 2004 to 34.4% in 2005. The U.K. market research segment remained relatively constant with a decrease in SG&A expenses as a percentage of revenues from 32.7% to 31.8%. SG&A
expenses declined in the Teleservices segment from $3.6 million in 2004 to $3.3 million in 2005, or as a percentage of revenues, increased from 35.3% in 2004 to 53.5% in 2005, primarily due to lower revenues in this segment.



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Depreciation and amortization expense on a consolidated basis increased by $146,000 from $2.9 million in 2004 to $3.1
million in 2005 as a result of increases in the related asset base in 2005 in various business units offset by reductions in other business units. As a percentage of revenues, depreciation and amortization expense remained constant at 2.0% for both
periods in 2004 and 2005.



In September 2005, a goodwill impairment charge of
$5.5 million was recorded based on the results of a goodwill impairment evaluation in the Teleservices business segment which indicated that the recorded book value exceeded its estimated fair value, as determined by a weighting of comparable
company analyses, discounted cash flow and liquidation value analysis. Management believes that the decline in the fair value of the Teleservices segment was due to deterioration in the performance of this segment and client concentration.



Interest expense decreased $2.0 million, or 30.6%, from $6.5 million in 2004
to $4.5 million in 2005 primarily due to refinancing charges in 2004 of approximately $2.5 million, as compared to refinancing charges in 2005 of approximately $1.2 million, and the lower cost of borrowing resulting from these refinancings, offset
by the issuance of the subordinated notes, to The Royal Bank of Scotland, and rising interest rates on our variable rate debt.



Other non-operating (income) expense, net, decreased $1.7 million from income of $386,000 in 2004 to expense of $1.3 million in 2005 primarily due to the $1.3 million
write off of the postponed equity offering costs. In the second quarter of 2004, the U.K. market research segment realized a foreign exchange gain of $335,000 from the settlement of a long-term intercompany payable.



The income tax expense (benefit) for the nine months ended September 30, 2004 and 2005
was $1.6 million and $(228,000) respectively. The tax benefit in 2005 is primarily due to the goodwill impairment charge in the Teleservices business segment, the write off of the postponed equity offering expense and the first quarter refinancing
charge, which in aggregate, reduced net income by $5.3 million. The income tax provision is higher and lower than statutory rates in 2004 and 2005 respectively due to the fact that we are not deriving tax benefits from non-U.S. segments and state
losses.



As a result of the foregoing, net income decreased from net income of
$1.7 million in 2004 to a net loss of $3.2 million in 2005.



We repurchased
interests in the Company held by the LLR Partnerships. The transaction consisted of the repurchase of 1,176,458 common shares purchased by LLR on September 1, 2000, 740,500 warrants to purchase common shares, rights to convert the common shares
into preferred shares with an annual dividend obligation of $1.2 million, anti-dilution rights and warrants, as well as other rights. The transaction resulted in a $9.9 million increase in net loss available to common shareholders from $3.2 million
to $13.1 million.



Liquidity and Capital Resources



Cash Flows



At September 30, 2005, working capital was $21.4 million. Net cash provided by operating activities for the nine-month period ended
September 30, 2005 was $7.2 million compared to $4.2 million for the same period in 2004. For the nine-month period ended September 30, 2005, the net cash provided by operating activities was primarily generated by net loss of $3.2
million, after adjusting for depreciation and amortization, and other non-cash items, totaling $9.8 million, and decreases in accounts receivable of $988,000, increases in accounts payable and accrued expenses of $121,000 and increases in other
liabilities of $548,000 offset by increases in other assets of $837,000 and decreases in deferred revenues of $270,000. For the same period in 2004, the net cash provided by operating activities was primarily generated by net income of $1.7 million,
after adjusting for depreciation and amortization, and other non-cash items, totaling $6.1 million, and increases in



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accounts receivable of $2.9 million, increases in other assets of $319,000, increases in deferred revenues and other liabilities of $1.2 million and $1.3
million respectively and decreases in accounts payable and accrued expenses of $2.8 million.



Investing activities for the nine-month period ended September 30, 2005 consisted of capital expenditures of $3.0 million as compared to $3.3 million for the same period in 2004. The majority of the spending on
capital items was for the ongoing maintenance and replacement of technology.



Financing activities for the nine-month period ended September 30, 2005 included a net increase in borrowings of $17.1 million; payment for the reacquisition of interests in the Company held by the LLR Partnerships for $20.0 million,
plus transaction costs; proceeds from the sale of our common stock under our various stock purchase plans and the exercises of stock options totaling $477,000 and repayments under our capital leases of $145,000. Financing activities
for the nine-month period ended September 30, 2004 included a net decrease in borrowings of $2.4 million, payment of loan amendment fees and capital leases of $1.9 million and $79,000 respectively, offset by proceeds from the sale of our
common stock under our various stock purchase plans and the exercises of stock options totaling $549,000.



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 banks designated base
rate (6.75% at September 30, 2005) plus 100 basis points or LIBOR (3-month LIBOR was 4.07% at September 30, 2005) plus 300 basis points. As of September 30, 2005, there was approximately $8.6 million of additional credit available
under the Senior Revolving Facility.



In May 2004, we also issued $10.0 million
of secured subordinated notes (the Secured Subordinated Notes) and $12.0 million of unsecured subordinated notes (the Unsecured Subordinated Notes) to Allied Capital Corporation. The Secured Subordinated Notes carried an
interest rate of 10% and were to mature in November 2007. The Secured Subordinated Notes required principal payments of $500,000 per quarter commencing July 1, 2004, with an unamortized balance of $3.0 million due at the end of the term. The
Unsecured Subordinated Notes were to mature in May 2009 and carried a fixed interest rate of 15.5%; 13% payable quarterly in cash, and 2.5% payable in cash or deferred and included in the outstanding principal balance until maturity. In exchange for
consideration received in connection with this debt, we extended the term of existing warrants held by Allied Capital Corporation and Allied Investment Corporation (together, Allied) from May 2007 to the later of May 2009 or the third
anniversary of the repayment date. These warrants were issued in 1999 to Allied and are for the purchase of 437,029 shares of our common stock at an exercise price of $5.422 per share. The extension of these warrants was valued at $616,000 and was
accreted through interest expense over the life of the Unsecured Subordinated Notes.



All debt outstanding as of May 4, 2004 was repaid with proceeds from the above borrowings. In conjunction with the new credit facilities, we incurred additional costs of approximately $1.4 million which are included in other long term
assets in our consolidated financial statements and are being amortized over the remaining terms of the facilities. Due to the refinancing of the credit facilities, we also wrote off the unamortized loan fees of approximately $2.5 million as
interest expense, which included payments of $345,000 made in 2004, related to the retired debt in the third quarter of 2004.



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



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proceeds from the Term Loan and a drawdown from the Senior Revolving Facility were used to prepay the Secured Subordinated Notes and the 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 percent 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 the LLR Partnerships. The transaction consisted of the repurchase of 1,176,458 common shares purchased by LLR on September 1, 2000, 740,500 warrants to purchase common shares, rights to convert the common
shares into preferred shares with an annual dividend obligation of $1.2 million, anti-dilution rights and warrants, as well as other rights. The transaction resulted in a $9.9 million increase in net loss available to common shareholders.



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. For the measuring period ended September 30, 2005, we were in compliance with all covenants.



In September 2005, the Company entered into an interest rate cap with Citizens Bank to hedge our interest rate risk exposure on the Term
Loan. The interest rate cap qualified as an accounting hedge under the guidance in FASB Statement No. 133, Derivatives and Hedging Activities, and was designated, on the date the contract was entered into as a hedge of the variability of
cash flows to be paid related to a recognized liability (cash flow hedge). This interest rate cap is based on a notional amount of $13,500,000 and an interest rate of LIBOR plus 350 basis points. It matures in 2010.



The interest rate cap, set at 4.5%, was purchased at a premium of $106,000, which is being
amortized using the effective yield method over the term of the contract. The difference between the interest rate on the debt instrument and the interest rate cap will be recorded in earnings whenever the interest rate on the term loan rises above
the cap. For the three and nine months ended September 30, 2005, there was no impact on earnings.



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
|------ | ---------------------------------------------------------



Except for the completion of the refinancing of the revolving credit facility, the subordinated debt financing and the interest rate hedging contract disclosed in the
Liquidity and Capital Resources section and in Notes B and C of this Form 10-Q, there have been no other significant changes in market risk since December 31, 2004 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, 2004.



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 September 30, 2005 by expected maturities.



Interest Rate Sensitivity

Principal (Notional) Amount by Expected Maturity

Average Interest (Cap) Rate

(in thousands)



|                                                              |  |      |     |      |   |       |  |      |        |      |   |             |  |       |       |                   |   |        |  |   |        |  |   |       
|------------------------------------------------------------- |  | ---- | --- | ---- | - | ----- |  | ---- | ------ | ---- | - | ----------- |  | ----- | ----- | ----------------- | - | ------ |  | - | ------ |  | - | ------
|                                                              |  | 2005 |     | 2006 |   | 2007  |  | 2008 |        | 2009 |   | There-After |  | Total |       | Fair Value9/30/05
|Liabilities                                                   |  |      |     |      |   |       |  |      |        |      |   |             |  |       |       |                   |   |        |  |   |        |  |   |       
|Long-term debt including current portion:                     |  |      |     |      |   |       |  |      |        |      |   |             |  |       |       |                   |   |        |  |   |        |  |   |       
|Variable rate debt:                                           |  |      |     |      |   |       |  |      |        |      |   |             |  |       |       |                   |   |        |  |   |        |  |   |       
|LIBOR + 3.0%, Prime + 1%                                      |  |      |    |      |   |      |  | $    | 26,427 |      |   |            |  |       |      |                   |   |       |  | $ | 26,427 |  | $ | 26,427
|LIBOR + 3.5%                                                  |  | $    | 750 |      | $ | 3,000 |  | $    | 3,000  |      | $ | 3,000       |  | $     | 3,000 |                   | $ | 750    |  | $ | 13,500 |  | $ | 13,500
|Fixed rate debt  14.0%                                       |  |      |    |      |   |      |  |      |       |      |   |            |  |       |      |                   | $ | 20,000 |  | $ | 20,000 |  | $ | 19,692
|Interest Rate Derivative Financial Instrument Related to Debt |  |      |     |      |   |       |  |      |        |      |   |             |  |       |       |                   |   |        |  |   |        |  |   |       
|Interest Rate Cap:                                            |  |      |     |      |   |       |  |      |        |      |   |             |  |       |       |                   |   |        |  |   |        |  |   |       
|Notional amount  Cap rate at 4.5%                            |  |      |    |      |   |      |  |      |       |      |   |            |  |       |      |                   | $ | 13,500 |  | $ | 13,500 |  | $ | 110   



|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.



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There has not been any change in our internal control over financial reporting during the three and nine month periods
ended September 30, 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



PART II: OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------



On December 2, 2004, several persons who purport to be stockholders of our company filed a derivative complaint against us and our directors in the Chancery Court of the State of Delaware regarding an offering of
common stock. We previously proposed to use a portion of the proceeds of a public offering of our common stock to repurchase interests in our company held by the LLR Partnerships, other than limited registration rights and shares of our
common stock with a value of $2.0 million, which the LLR Partnerships would retain. The plaintiffs alleged, among other things, that an offering would be unfairly dilutive to their holdings of our common stock and that the purchase price we intended
to pay for the LLR Interests would constitute a waste of corporate assets. The complaint further alleged that, in approving the offering and the repurchase of the interests held by the LLR partnerships, our directors did not act on our behalf or on
behalf of our stockholders but, rather, breached their fiduciary duties of good faith and loyalty to us and our stockholders. Finally, the complaint alleged that Janney Montgomery Scott LLC, an independent valuation firm, materially overvalued the
LLR Interests in its opinion to our board of directors that our repurchase of the interests held by the LLR Partnerships is fair, from a financial point of view, to our stockholders other than the LLR Partnerships. Following our issuance of senior
subordinated notes and the completion of the repurchase of the LLR Interests in July 2005, the plaintiffs amended their complaint to challenge the repurchase as completed.



In connection with their lawsuit, the plaintiffs seek the following:



| |  |  | a declaration that our directors have violated their fiduciary duties;
| | - |  | ----------------------------------------------------------------------



| |  |  | rescission of our repurchase of the LLR Interests, or an award of damages to us;
| | - |  | --------------------------------------------------------------------------------



| |  |  | an accounting from the defendants, jointly and severally, to us, the plaintiffs and our other stockholders for all monetary damages suffered by us by reason of the alleged
misconduct;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the award of costs and disbursements of their actions, including reasonable attorneys and experts fees; and
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | such other and further relief as the court may determine is just and proper.
| | - |  | ----------------------------------------------------------------------------



We believe this suit is without merit and intend to vigorously defend against it. We have moved to dismiss the plaintiffs complaint.



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##### Table of Contents

|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
|------- | -----------------



Opinion Research Corporations 2006 Annual Meeting of Stockholders will be held on May 16, 2006.



| |  |  | Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, the deadline for submitting stockholder proposals for inclusion in the Companys proxy statement and form of
proxy for the 2006 Annual Meeting is December 11, 2005.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Pursuant to the advance notice provision of the Companys by-laws, the date after which notice of a stockholder proposal submitted outside the processes of Rule 14a-8 is
considered untimely is November 24, 2005.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The foregoing deadlines are earlier than the deadlines disclosed in the Companys proxy statement dated September 15, 2005 because the date of the 2006 Annual Meeting had not yet been set when the proxy statement was printed and
distributed. As a result of setting the meeting date, the Company was able to establish the deadlines in accordance with its by-laws and SEC rules.



|        |  |          |  |                                                                                                                                                                                
|------- |  | -------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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.                             



24



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##### Table of Contents

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: November 14, 2005 |  |  |  | /s/    DOUGLAS L. COX                               
|                        |  |  |  | Douglas L. Cox                                      
|                        |  |  |  | Executive Vice President and Chief Financial Officer
|                        |  |  |  | (Principal Financial and Accounting Officer)        



25