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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2003

or

For the transition period from              to             

Commission file number 0-22554

OPINION RESEARCH CORPORATION

(Exact name of registrant as specified in its charter)

609-452-5400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.01 par value

Preferred Stock Purchase Rights

(Title of Classes)

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the Registrant is an accelerated filer (as defined in 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the common stock held by non-affiliates of the Registrant, based on the closing sale price of its common stock on June 30, 2003, the last business day of the Company’s second fiscal quarter, as quoted on the Nasdaq National Market, was approximately $29,000,000.*

As of February 26, 2004, 6,150,310 shares of common stock, par value $.01 per share, were outstanding.

Documents incorporated by reference:

Portions of the Registrant’s definitive Proxy Statement, which will be filed with the Securities and Exchange Commission in connection with the Registrant’s 2004 Annual Meeting of Stockholders, are incorporated by reference into Part III of this report.

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OPINION RESEARCH CORPORATION

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Except where the context indicates otherwise, the term “Company” refers to Opinion Research Corporation and its subsidiaries. All dollar amounts presented in this Annual Report on Form 10-K are in thousands unless indicated otherwise. Readers of this report should review carefully the information contained under the headings “Risk Factors” and “Forward-looking Statements” in Part II.

PART I

General

Opinion Research Corporation (the “Company”) was established in 1938 to apply the principles of general public opinion polling to marketing issues facing America’s largest companies. The Company has evolved to provide social research, market research, information services, marketing services, and telemarketing. The Company identifies its segments based on its three primary service offerings – market research, social research and teleservices. The market research business is then further divided by geographic locations where the business operates. The Company currently has four reportable segments: U.S. market research, U.K. market research, teleservices and social research. In the social research segment, the Company performs public sector primary research and provides information technology, communications, and other consulting services, primarily to agencies of the United States federal government and state and local governments. The majority of the Company’s governmental projects are in the areas of health, education, and international aid. In the market research business, the Company assists its commercial clients in the evaluation, monitoring and optimization of their marketing and sales efforts, addressing issues such as customer loyalty and retention, market demand and forecasting, and corporate image and competitive positioning. In the teleservices business, the Company provides telemarketing services which principally consist of outbound customer acquisition services.

The Company completed its initial public offering in October 1993. Between 1993 and 1997, as part of its globalization strategy, the Company established its presence in the United Kingdom, Asia and Mexico through various acquisitions. In January 1998, the Company acquired ProTel Marketing, Inc. (“ORC ProTel”), a high quality telemarketing company based in Lansing, Illinois. In May 1999, the Company acquired Macro International Inc. (“ORC Macro”), a predominantly public sector research, consulting and technology company based in the Washington, D.C. area. The ORC Macro acquisition substantially increased the Company’s presence in the public sector. In September 2000, the Company acquired C/J Research, Inc. (“C/J”), and in November 2000, acquired Social & Health Services, Ltd. (“SHS”). The two acquisitions in 2000 provided expansion opportunities for the Company in the areas of consumer research, social research and information management.

The Company collects customer, market, and demographic information through computer-assisted telephone interviews, internet based data collection techniques, personal interviews, mail questionnaires and specialized techniques such as business panels. Management believes that the Company’s extensive expertise with regard to certain business and social issues enables it to provide reliable customer, market, and demographic information and advisory services to clients. The Company also believes that its recognized name and long-standing reputation enable it to obtain information from senior executives who are difficult to access.

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The Company’s strategy for market research focuses on client projects that require periodic updating and tracking of information, thereby creating the potential for higher-margin recurring revenues. The portion of the Company’s market research revenues from such projects was approximately 58% in 2003.

The Company’s Services and Products

The Company offers a variety of services and products to assist clients with their strategic and tactical decisions as well as their plans for marketing products and services.

Services

Advanced Analytics & Data Modeling. The Company’s diagnostic and statistical models are among the most sophisticated in market research. By focusing on its clients’ business issues and the application of the right analytic tools, the Company can effectively transform data and analyses into intelligence and insight. These services are offered by the social research, U.S. market research, and U.K. market research business segments.

Communications and Marketing Services. The Company provides full service communications and marketing services to private, not-for-profit, and government organizations. These services include strategic planning; communication and marketing campaign development; brochure design and production; print, radio and television advertising; web site development and management; brand development; public relations; video development and broadcasting; clearinghouse, warehousing and fulfillment services. These services are mainly concentrated in public health and education arenas where the Company has won awards for their success in areas such as the reduction of drug, tobacco and alcohol use among teens, and the prevention of school violence. These services are offered by the social research business segment.

Corporate Reputation & Branding. The Company works with clients worldwide to manage their corporate and brand images; identify and achieve optimal positioning in the marketplace; and strengthen equity with customers, employees and the financial community. The strength of a client’s image or reputation is identified through interviews with constituency groups with whom the client interacts and whose decisions influence the client’s success. These groups may include customers, potential customers, distributors, suppliers, the media and the investment community. These services are provided by the U.S. market research and U.K. market research business segments.

Customer Loyalty & Retention. The Company assists its clients in quantifying customer loyalty and increasing customer retention. By capturing and analyzing the perceptions and experiences of its clients’ prospects, clients, and employees, the Company provides analysis and feedback on customer loyalty which drives superior customer retention and business performance. The Company provides its clients with information on the elements of products or

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services which are most important to their customers; on how well these products and services compare to the competition; and on which customers will continue to purchase and recommend such products and services. These services are provided by the social research, U.S. market research, and U.K. market research business segments.

Data Collection & Processing. The Company’s telephone interviewing call centers in North America, Europe and Asia combine research expertise and advanced telecommunications technology. These facilities, staffed with multilingual interviewers, use the Computer Assisted Telephone Interviewing (CATI) system, which provides clients with highly efficient and cost effective data and information collection. The Company also utilizes internet based data collection techniques. These services are provided by the social research, U.S. market research, and U.K. market research business segments.

Demographic and Health Research. The Company manages international research programs in developing nations for organizations such as The United States Agency for International Development (“USAID”), the World Health Organization (“WHO”), and UNICEF. By providing information for informed decisions in population, health and nutrition, it supports a range of data collection options that can be tailored to fit specific monitoring and evaluation needs of government organizations. These include a variety of population and facility-based surveys, secondary data analyses and other specialized research such as qualitative, education and gender-based studies. Revenue generated from demographic and health research services was $21,103, $19,316, and $19,014 for the year ended 2003, 2002 and 2001, respectively. These services are provided by the social research business segment.

Employee Survey Programs. The Company provides comprehensive employee-related research services to measure satisfaction, increase staff retention, reduce hiring and training costs, and improve customer service. Using proprietary computer software, exclusive multi-industry benchmarking databases and a combination of quantitative and qualitative methodologies, the Company works with clients to identify strengths and weaknesses. The Company implements all stages of program management, from questionnaire design and processing through reporting, final analysis and recommendations for action. These services are provided by the social research, U.S. market research, and U.K. market research business segments.

Information Technologies. The Company offers a variety of technology-based services and products. These include computer security products, such as Internet firewalls; software testing and quality assurance, instructional product development for interactive multimedia, computer-based instruction, decision-support systems, computer-based textbooks, and products for individuals with special learning needs; and advanced Web services, including a number of proprietary Web applications, database development and management, and dynamic information retrieval. These services are principally provided by the social research business segment with certain services also provided by the U.S. market research and U.K. market research business segments.

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Management Consulting. The Company offers a full spectrum of services to address opportunities and problem areas, and to ensure that client organizations can meet future challenges effectively. The Company’s methods and expertise produce strategies, plans and interventions that fit the values, cultures and needs of the client organization and its managers. The Company’s focus is on sound analysis, with effective support in implementing recommended strategies and solutions and ensuring capacity within the client organization so that continuing outside assistance is not required. These services are principally provided by the social research business segment.

Market Assessment. The Company works with clients worldwide to analyze and forecast market demand for new products and services. The Company combines sophisticated analytic techniques with global reach to provide clients with insight regarding optimal product/services configuration and pricing, as well as market size information. This work supports clients’ business planning and capital generation for new ventures. These services are provided by the U.S. market research and U.K. market research business segments.

Public Sector Research. The Company provides research and evaluation services to local and national governments and to international organizations. Among the services provided are communication studies; cost, cost benefit & cost effectiveness analysis; customer satisfaction & loyalty studies; ethnography; experimental & quasi-experimental research; needs assessments; outcome & impact studies; performance measurement; policy research; process & implementation studies; secondary data analysis & data mining; and survey research. Revenue generated from public sector research was $120,501, $105,958, and $96,071 for the year ended 2003, 2002 and 2001, respectively. These services are provided by the social research and U.K. market research business segments.

Training & Educational Technologies. The Company offers a full spectrum of training services to help organizations adapt to and capitalize on changing circumstances. All courses and training services are supported by the Company’s research and management consulting services in the subject areas offered. The Company uses adult learning methodologies, instructional system design, electronic performance support systems and highly skilled facilitators who provide interactive, experiential-based training. The Company is also a leader in applying technology to educational and learning needs and in developing and producing distance learning programs, multimedia materials and expert systems. These services are provided by the social research business segment.

Telemarketing. The Company provides integrated multi-channel Customer Relationship Management solutions (CRM) nation-wide for high profile, large volume clients. Combining inbound, web-enabled technology with outbound predictive dialing, the Company offers resources for clients seeking a partner that effectively provides multiple CRM services for their programs. The Company’s services are designed to optimize the effectiveness of contact center activity as measured by response rates, sales yields, and net customer acquisition costs. A broad range of services, both outbound and inbound, are offered by the Company. Some of the services offered include account reactivations, continuity marketing, credit card programs, cross-selling, customer information corrections, customer relations/revenue preservation

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programs, new product/new service introductions. Program development, script development, training, clerical support, frequent monitoring of agents, digital audio recording, tracking, report development and 100% verification of sales/leads are services that are available to all clients. These services are provided by the teleservices business segment.

Industries

Automotive. Utilizing research methodologies developed for its automotive industry clients, the Company has extensive experience working with a wide range of companies around the world, including vehicle manufacturers, original-equipment-manufacturers suppliers, dealers, distributors, trucking companies and heavy equipment manufacturers. The Company provides sophisticated segmentation research and long-term studies on retail sales and service; brand image and equity; product development, design and performance; and dealer/manufacturer relations. The Company’s exclusive consumer market analysis evaluates and tracks customer needs as they relate to new vehicle purchases, financing and leasing, buying behavior, and brand loyalty. Industry expertise is offered by the U.S. market research and U.K. market research business segments.

Consumer Goods & Services. The areas of specialization of the Company include understanding markets and marketing programs from the consumer point-of-view. The Company’s capabilities include segmentation and product/brand positioning; advertising and communications effectiveness; brand equity and brand perceptions; product development; customer satisfaction and loyalty; behavior and usage and diversification into new markets, both international and local. The Company also works in partnership with manufacturers and suppliers of consumer goods to understand the needs, behavior and attitudes of customers at all stages in the product life cycle. The Company’s aim is to understand a client’s business from a consumer perspective to enhance business decisions. Industry expertise is offered by the U.S. market research and U.K. market research business segments. The teleservices business segment also has extensive experience in this industry.

Financial Services. The Company provides market and customer intelligence to banks, securities brokerage firms, insurance companies and other financial institutions across a number of business issues: customer loyalty and retention, image management, market segmentation and positioning, new product development, pricing strategy, corporate branding, and customer database management. By focusing its research efforts on key customer segments – such as high net worth individuals, corporate treasurers, active investors, policyholders, etc. – the Company can determine the specific factors that influence the target groups’ decisions, and design strategies to attract, retain and motivate them effectively. Industry expertise is offered by the U.S. market research and U.K. market research and social research business segments. The teleservices business segment also has extensive experience in this industry.

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Health Care. The Company’s services include surveys and evaluations to determine patient satisfaction, market segmentation, customer acquisition, competitive analysis, community needs assessment, and corporate positioning. For pharmaceutical companies, HMOs, hospitals, and health care providers, the Company also conducts loyalty and retention modeling research as part of its clients’ patient and employee satisfaction programs. Through its innovative methodologies, such as proprietary panels, the Company establishes ongoing dialogues with difficult-to-reach decision-makers such as physicians, plan and hospital administrators and benefits managers. Industry expertise is offered by the U.S. market research and social research business segments.

Retail and Trade. To shape marketing strategy, the Company’s areas of specialization include understanding the determinants of store choice; customer loyalty and satisfaction; mystery shopping; segmentation and positioning; store location, layout, design and product positioning; merchandise performance; development and appraisal of individual outlets and sites; and diversification into new markets, both domestic and international. The Company also works in partnership with manufacturers and suppliers of consumer goods to understand the needs, behavior and attitudes of customers at all stages in the distribution channel. The Company’s aim is to enhance the manufacturer/trade/consumer relationship. Industry expertise is offered by the U.S. market research and U.K. market research business segments. The teleservices business segment also has extensive experience in this industry.

Telecommunications and Information Technology. The Company provides market knowledge for a range of telecommunications and information technology companies, from wireless communications companies and telephone carriers to Internet service providers and computer hardware and software firms. Its services include market definition, segmentation, new product development, customer retention, corporate branding, usage analysis, and competitive profiling. Among its services, the Company helps clients determine pricing and distribution systems, track service performance, gauge the success of products and services, design and configure new products, predict customer needs and define competitive positions in new markets. Industry expertise is offered by the U.S. market research and U.K. market research business segments. The teleservices business segment also has extensive experience in this industry.

Products

The following products are used by the Company to deliver some of the services listed above and are also marketed as stand-alone products:

Shared-Cost Programs. For over 30 years, the Company has conducted shared-cost telephone survey programs, marketed under the name “CARAVAN,” in which questions from a number of clients are combined in a series of interview questionnaires. The CARAVAN programs provide multiple clients with high-quality, timely information at a relatively low cost. The general public CARAVAN is a twice-weekly shared-cost national survey combining questions of clients such as advertising agencies, public affairs departments of large corporations and product managers. Typically, the information collected from the CARAVAN survey provides measurement and evaluation of advertising and products. These programs are provided by the U.S. market research business segment.

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Customer Loyalty Plus (CL+) is the Company’s system for measuring and building customer loyalty. The three-phase approach includes Assessment, which is designed to provide clients with a customized CL+ score that can be used over time to evaluate change; Planning, which consists of an action plan aimed at closing the identified gaps; and Improvement, during which the Company’s professionals design and implement a specialized program tailored to the client’s specific needs. The plan includes training, organization development and total quality management programs. This product is provided by the social research business segment.

ORC Overnight (E-Overnight and E-Ad test). Capitalizing on its 30 years of experience with CARAVAN, the company offers its clients the ability to conduct up to 300, 10-minute interviews, with results delivered the following day. Conducted either by telephone (CATI) or via the Internet, the surveys are a combination of closed and open-end questions. Next-day deliverables include verbatim comments as well as cross-tabular data. In some cases, a brief summary analysis may be provided. The client has the choice of providing their own sample or relying on the Company to provide it. The client may choose from three programs, ORC Overnight (CATI), ORC E-Overnight (Internet), or ORC E-Ad test (Internet with audio/visual ad clips for on-line ad testing). Both Internet programs have the added value of real-time access to data, as soon as data collection begins. These programs are provided by the U.S. market research business segment.

Marketing

Marketing and Sales-Support Program. In 2003, the Company continued to support strong business development initiatives worldwide, as well as build upon already comprehensive internal and external communications programs. The Company’s business development efforts continued with the production of newsletters, position papers, direct marketing, seminars, advertising, media placements, web development, telemarketing and speaking platforms. These efforts have assisted in allowing the Company to access a large number of prospective clients worldwide and share its products, services, and capabilities.

Clients and Client Relationships

The Company’s largest clients in terms of revenues generated include prominent multinational corporations and agencies of the U.S. and U.K. governments. For many clients, the Company performed multiple projects, sometimes for different subsidiaries or business units of the same client. In general, the Company’s engagements are terminable by the Company’s clients at any time, with the expectation of cost recovery for work completed by the Company.

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The Company’s largest single client, USAID, accounted for 11% of the Company’s revenues for the last three fiscal years. All revenues generated by the USAID relationship were for demographic and health research studies. In addition, revenues generated by the Company’s teleservices business segment were from certain key clients. The loss of its larger clients would have a material adverse effect on the Company.

Competition

Many other firms provide some of the services and products provided by the Company, typically focusing on consumer markets. However, the Company believes that no single competitor offers a comparable combination of services and products.

For business to business market research, the Company believes that it competes for clients based on a variety of factors, including name recognition, reputation, expertise in a variety of industries, ability to access executives and other key constituencies, ability to collect accurate and representative data, ability to enhance the value of the data collected through analysis and consulting, technological competence, reliability, promptness and efficiency. In the Company’s experience, its typical clients are interested in the quality and utility of the service received as well as price.

For consumer market research services, the Company regularly experiences significant competition from a large number of competitors, including marketing and research departments of various companies, advertising agencies and business consulting firms. Price, reputation, and quality of service are the dominant considerations.

For social research services, the Company competes with a large number of firms that vary in size as well as with not-for-profit organizations. The competition varies depending upon the agency for which the work is being conducted and the services to be provided. Technical competence is the key differentiator.

For outbound telemarketing services, the Company competes with a large number of telemarketing companies. Quality and reliability of service are the key differentiators.

Segment Information

Information regarding financial data by operating and geographic segments is set forth in the Notes to Consolidated Financial Statements at Note 14, “Segments.”

Backlog

As of December 31, 2003, backlog in the market research business of the Company was $10,629 as compared to $13,825 as of December 31, 2002. All of the 2003 backlog in the market research business is expected to be recognized as revenues by December 31, 2004. Social research backlog at December 31, 2003 was $290,965, as compared to $215,632 at December 31, 2002. Revenue from this backlog is expected to be recognized over the next five years. The Company’s engagements generally are terminable by the Company’s clients at any time, with the expectation of cost recovery for work completed by the Company.

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Employees

As of December 31, 2003, the Company employed a total of approximately 1,650 full-time employees and 1,000 part-time hourly employees. The part-time employees work as telephone and field interviewers and data processors. Of the full-time employees, approximately 945 are professionals engaged in direct client service, 555 are telemarketing representatives, and 150 are engaged in support, administration and executive oversight.

None of the Company’s employees are subject to a collective bargaining agreement, nor has the Company experienced any work stoppages. The Company believes that its relationship with its employees is satisfactory.

Available Information

The Company files reports and other information with the Securities and Exchange Commission (“SEC”) pursuant to the information requirements of the Securities Exchange Act of 1934. Readers may read and copy any document that the Company files at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The Company’s filings are also available to the public from commercial document retrieval services and at the SEC’s web site at http://www.sec.gov.

The Company maintains a website at www.opinionresearch.com, which contains information about the Company, including links to the Company’s annual report on Form 10-K, quarterly report on Form 10-Q, current reports on Form 8-K, and related amendments, which are available as soon as reasonably practicable after such reports are filed or furnished electronically with the SEC. The Company’s website and the information contained in it shall not be deemed incorporated by reference to this Form 10-K.

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The Company’s executive offices are located in approximately 30,000 square feet of leased space in Princeton, New Jersey. The term of the lease continues through August 2013. The Company leases additional facilities throughout the world. The following table sets forth certain information relating to these properties:

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The Company presently has a combined total of 719 computer assisted telephone interviewing stations worldwide dedicated to market research and an additional 345 telemarketing stations. All of these facilities are equipped with state-of-the-art hardware and software.

The Company believes that its properties are sufficient for its current operational needs.

The Company is not a party to any material litigation.

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2003.

Executive Officers of the Registrant

The following table sets forth certain information concerning the principal executive officers of the Company as of February 26, 2004.

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Mr. Short joined the Company as its Chief Financial Officer in 1989 and was appointed Vice Chairman in 1992. In 1998, Mr. Short was appointed President of the Company. In February 1999, Mr. Short was appointed Chief Executive Officer and Chairman of the Board.

Mr. Quirk joined the Company in 1999 with the acquisition of ORC Macro, where he served, and continues to serve, as the Chief Executive Officer since 1980. In 2000, Mr. Quirk was elected as a member of the Board of Directors of the Company. In 2003, Mr. Quirk was appointed President of the Company. Mr. Quirk holds an MBA degree from Cornell University.

Dr. Fink joined the Company in 1982. Since 1990, Dr. Fink had held various managerial positions within the Company and was a member of the Board of Directors of the Company and Managing Director of the Company’s corporate brand equity practice when he resigned in February 1999. Between 1999 and 2001, Dr. Fink was President of the worldwide brand research division of Enterprise IG. In July 2001, Dr. Fink rejoined the Company as Vice Chairman. Dr. Fink holds a Ph.D. in Economics from the Pennsylvania State University.

Mr. Cox joined the Company as Executive Vice President and Chief Financial Officer in October 1998. Prior to joining the Company, Mr. Cox spent ten years as Senior Vice President and Chief Financial Officer of Elf Atochem North America, Inc. Mr. Cox holds an MBA, with honors, from the Wharton School of the University of Pennsylvania.

Mr. Croke joined the Company in 1991 as Controller. Throughout the years Mr. Croke has served in various capacities in the Company’s financial arena. In 1995, Mr. Croke was appointed Director of Finance. Mr. Croke holds an MBA from Case Western Reserve University.

Ms. Wolf joined the Company in 1998 with the acquisition of ORC ProTel, which she co-founded in 1988. Ms. Wolf was appointed Chief Executive Officer of ORC ProTel in 1998. Ms. Wolf has over 30 years of experience in telemarketing.

Dr. Holden joined the Company in 1999 with the acquisition of ORC Macro. Dr. Holden joined ORC Macro’s Atlanta office in 1998 as Technical Director. He was appointed Vice President in 2000. In 2002, Dr. Holden was appointed Senior Vice President, Managing Director of the Applied Research Division. In 2003, Dr. Holden was appointed President of ORC Macro. Dr. Holden holds a Ph.D. in Clinical/Community Psychology from the University of South Carolina.

Mr. Cornelius joined the Company in 1993 with the acquisition of a U.K. division. In 2003, Mr. Cornelius was appointed Managing Director of O.R.C. International Ltd. Mr. Cornelius holds a B.S. in Sociology with Honors from Kingston University.

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PART II

Market Information

The Company’s Common Stock is currently quoted on the Nasdaq National Market under the symbol “ORCI”. The table below sets forth the high and low prices for the Company’s Common Stock (the “Common Stock”) for each of the four quarters of 2003 and 2002:

The closing price of the Common Stock on February 26, 2004 was $5.93 per share. As of February 26, 2004, the Company had 88 holders of record of the Common Stock (approximately 702 beneficial stockholders).

Dividends

The Company has not paid any dividends on the Common Stock. The Company’s financing agreements currently prohibit dividend payments, and, it is the Company’s intent to retain its earnings, if any, to finance future growth and therefore does not anticipate paying dividends on the Common Stock in the foreseeable future.

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The following selected financial data should be read in conjunction with the Company's audited financial statements and notes which are listed herein under Item 15 and are included on pages F-1 through F-30.

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Results of Operations - 2003 compared to 2002

Revenues

Consolidated revenues for 2003 increased $4,297, or 2%, to $179,557 from $175,260 in 2002. Revenues increased $10,127, or 10%, in the Company’s social research business. Revenues decreased $728, or 5%, in the teleservices business. Revenues declined $7,220 or 22%, in U.S. market research, and increased $1,499, or 8%, in U.K. market research. For U.K. market research, the decline of the U.S. dollar relative to the U.K. pound increased revenues by $1,657. Except for U.K. market research where the revenue increase was due to exchange rate fluctuations, the increase or decrease in revenues in the various operating segments is primarily due to higher or lower demand for services, with approximately $4,200 of the decline in U.S. market research revenues arising from the reduced scope of three client contracts and $1,300 from the non-renewal of two client contracts.

The Company expects that social research revenues will continue to expand as evidenced by increased backlog. Any improvements in U.S. market research and teleservices revenues over 2003 are dependent upon continued recovery in the economic and business climate.

Cost of Revenues

Consolidated cost of revenues increased $5,185, or 4%, to $125,890 in 2003 from $120,705 in 2002. Gross profit as a percentage of revenues declined to 30% in 2003 from 31% in 2002. For the social research business, cost of revenues increased 10% from $77,394 in 2002 to $84,862 in 2003 and the gross profit percentage was stable at 27% in both 2003 and 2002. In U.S. market research, cost of revenues decreased 16% from $22,231 in 2002 to $18,758 in 2003 and the gross profit percentage decreased from 33% in 2002 to 27% in 2003 reflecting reduced efficiencies and lower pricing. For U.K. market research, cost of revenues increased 3% from $12,316 in 2002 to $12,660 in 2003 and the decline of the U.S. dollar relative to the U.K. pound increased cost of revenues by $1,024. The gross profit percentage increased from 35% in 2002 to 38% in 2003, reflecting improved efficiencies. In the teleservices business, cost of revenues decreased 3% from $7,761 in 2002 to $7,559 in 2003 and the gross profit percentage decreased from 50% in 2002 to 49% in 2003 reflecting reduced efficiencies.

Due to the headcount reduction efforts implemented in 2003, the Company expects to show improvements in the gross profit percentage for the U.S. market research in 2004.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) decreased $299, or 1%, to $39,437 in 2003 from $39,736 in 2002. As a percent of revenues, consolidated SG&A decreased from 23% in 2002 to 22% in 2003. The decrease in SG&A was principally due to the cost reduction efforts implemented in U.S. market research, which included headcount reductions and cutbacks in discretionary spending. For the social research business, while SG&A increased from $16,236 in 2002 to $16,965 in 2003, SG&A as a percentage of revenue was flat at 15% for both 2003 and 2002. For U.K. market research, the increase in SG&A was principally attributable to exchange rate fluctuations.

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Depreciation and Amortization Expense

Depreciation and amortization expense decreased by $572, or 12%, to $4,024 in 2003 from $4,596 in 2002. The decrease is principally due to certain fixed and identifiable intangible assets which were fully depreciated or amortized by the end of 2002.

Goodwill Impairment Charge

In October 2003, the Company performed its annual goodwill impairment test in accordance with Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets (“Statement 142”). Based upon the initial results of such test, the Company determined that there was a goodwill impairment charge in the Company’s Korean subsidiary of $317. In addition, the Company engaged an independent valuation firm to determine if there were goodwill impairment issues associated with the Company’s U.S. market research and teleservices business segments. The analysis performed by the independent valuation firm indicated that the recorded book values of U.S. market research and teleservices exceeded their fair values, as determined by a weighting of comparable company analyses and discounted cash flow models. Upon completion of such assessments, the Company recorded non-cash impairment charges of $10,000 to reduce the carrying value of the goodwill in teleservices and $6,000 in U.S. market research.

In October 2002, as part of its annual impairment test based on Statement 142, the Company engaged an independent valuation firm to determine if there had been an impairment of the goodwill associated with the Company’s U.S. market research business. The analysis performed by the independent valuation firm indicated that the recorded book value of U.S. market research exceeded its fair value, as determined by a weighting of comparable company analyses and discounted cash flow models. Upon completion of such assessment, the Company recorded a non-cash impairment charge of $5,938 to reduce the carrying value of goodwill in U.S. market research.

Management believes that the decline in the fair value of its U.S. market research business can be attributed to the following:

Management believes that the decline in the fair value of its teleservices business can be attributed to the following:

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Management cannot provide assurance that an additional impairment charge will not be required in the future if the U.S. market research and teleservices businesses do not recover as projected.

Interest and Other Non-Operating Expenses, net

Interest and other non-operating expenses increased $212, or 4%, to $4,996 in 2003 from $4,784 in 2002. The increase is due to an increase in interest expense of $258 attributable to higher borrowing costs partially offset by a decrease of $46 in other non-operating expense.

Provision (benefit) for Income Taxes

The (benefit) provision for income taxes for 2003 and 2002 was $(2,165) and $2,122, respectively. Excluding the effect of tax benefits of $4,810 resulting from the goodwill impairment charges in 2003, the provisions for these years are higher than the amounts that result from applying the federal statutory rate to income before income taxes, due to the Company not providing tax benefits for certain state and non-U.S. losses as well as increased state taxes from profitable business segments.

Cumulative Effect of Accounting Change

With the adoption of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (“Statement 142”) on January 1, 2002, the Company recorded as a cumulative effect of a change in accounting principle, goodwill impairment related to the Company’s Mexican subsidiary of $292, or $(0.05) per share.

Net Loss

As a result of the foregoing, net loss for 2003 and 2002 was $(8,942) and $(2,913), respectively. The 2003 results were negatively impacted by a goodwill impairment charge of $11,507, net of tax benefits. The 2002 results were negatively impacted by a goodwill impairment charge and the cumulative effect of an accounting change of $6,230, net of tax benefits.

Results of Operations - 2002 compared to 2001

Revenues

Consolidated revenues for 2002 decreased $1,649, or 1%, to $175,260 from $176,909 in 2001. Revenues increased $10,162, or 11%, in the Company’s social research business. Revenues decreased $2,870, or 16%, in the teleservices business. Revenues declined $8,263, or 20%, in U.S. market research, and increased $619, or 3%, in U.K. market research. In all cases, the increase or decrease in revenues in the various operating segments is primarily due to higher or lower demand for services, with approximately $4,300 of the decline in U.S. market research revenues arising from the non-renewal of two client contracts and $3,700 from the reduced scope of three client contracts.

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Cost of Revenues

Consolidated cost of revenues decreased $820, or 1%, to $120,705 in 2002 from $121,525 in 2001. Gross profit as a percentage of revenues was stable at 31% in both 2002 and 2001. For the social research business, cost of revenues increased 11% from $69,816 in 2001 to $77,394 in 2002 and the gross profit percentage was stable at 27% in both 2002 and 2001. Consistent with the decline in revenues, cost of revenues decreased 20% from $27,832 in 2001 to $22,231 in 2002 in U.S. market research and the gross profit percentage was stable at 33% in both 2002 and 2001. For U.K. market research, cost of revenues increased 6% from $11,644 in 2001 to $12,316 in 2002 and the gross profit percentage declined from 37% in 2001 to 35% in 2002, primarily as the result of higher subcontracting costs. In the teleservices business, cost of revenues decreased 17% from $9,379 in 2001 to $7,761 in 2002, reflecting the lower volume of client services. The gross profit percentage improved slightly from 49% in 2001 to 50% in 2002.

Selling, General and Administrative Expenses

SG&A increased $1,608, or 4%, to $39,736 in 2002 from $38,128 in 2001. The increase is mainly attributable to higher compensation and occupancy expenses. As a percent of revenues, SG&A increased to 23% from 22%.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased by $3,835 to $4,596, or 45%, in 2002 from $8,431 in 2001. The adoption of Statement 142 at the beginning of 2002 which eliminated the amortization of goodwill, accounted for $3,738 of this decrease.

Goodwill Impairment Charge

In October 2002, as part of its annual impairment test based on Statement 142, the Company engaged an independent valuation firm to determine if there had been an impairment of the goodwill associated with the Company’s U.S. market research business. The analysis performed by the independent valuation firm indicated that the recorded book value of the U.S. market research reporting unit exceeded its fair value, as determined by a weighting of comparable company analyses and discounted cash flow models. Upon completion of such assessment, the Company recorded a non-cash impairment charge of $5,938 to reduce the carrying value of goodwill in the U.S. market research reporting unit. See Note 3 to Consolidated Financial Statements “Goodwill and other intangibles” for additional information.

Interest and Other Non-Operating Expenses

Interest and other non-operating expenses decreased $629, or 12%, to $4,784 in 2002 from $5,413 in 2001. The decrease is due to a decrease in interest expense of $797, resulting from lower interest rates and reduced borrowings, partially offset by an increase of $168 in other non-operating expenses resulting from unfavorable foreign currency fluctuations.

Provision for Income Taxes

The provision for income taxes for 2002 and 2001 was $2,122 and $1,796, respectively. The provisions for these years are higher than the amounts that result from applying the federal statutory rate to income before income taxes, reflecting the absence of any tax benefits associated with the goodwill impairment charge in 2002, the non-deductibility of goodwill amortization in 2001, and for both years, the impact of state taxes.

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Cumulative Effect of Accounting Change

With the adoption of Statement 142 on January 1, 2002, the Company recorded as a cumulative effect of a change in accounting principle, goodwill impairment related to the Company’s Mexican subsidiary of $292, or $(0.05) per share.

Net (Loss) Income

Net (loss) income for 2002 and 2001 was $(2,913) and $1,616, respectively.

Liquidity and Capital Resources

As of December 31, 2003, working capital was $19,374. Net cash generated by operations for 2003 was $6,951 as compared to $10,726 in 2002. For 2003, the net cash provided by operating activities was primarily generated by a net loss, after adjusting for depreciation and amortization, goodwill impairment charge and other non-cash items, totaling $8,145, an increase of $2,065 in payables and accrued expenses and other liabilities of $146, offset by an increase in receivables of $3,182 and an increase in other assets of $181. For 2002, the net cash provided by operating activities was primarily generated by a net loss, after adjusting for depreciation and amortization, goodwill impairment charge and other non-cash items, totaling $8,798, a net decrease in receivables of $2,971, and an increase of $2,551 in payables and accrued expenses, offset by an increase in other assets of $239 and decreases in deferred revenues of $2,397 and other liabilities of $958.

Investing activities for 2003 included capital expenditures of $3,360. Investing activities for 2002 included capital expenditures of $2,334 and acquisition related payments of $46.

In 2003, financing activities included a net reduction in borrowings totaling $2,091 and proceeds from the sale of the Company’s common stock under the Company’s stock purchase plans and the exercises of stock options totaling $502. In 2002, financing activities included a net reduction in borrowings totaling $8,674 and proceeds from the sale of the Company’s common stock under the Company’s stock purchase plans and the exercises of stock options totaling $723.

On October 4, 2001, the Company amended its senior credit facility (“Senior Facility”) increasing the amount available under the revolving credit to up to $24,000 and shortening the maturity for both the revolving credit and the term notes to June 1, 2004 from May 31, 2005 (the “October 2001 Amendment”). Additionally, the October 2001 Amendment provided for an increase in the interest rate to LIBOR plus 325 basis points or the financial institution’s designated base rate plus 200 basis points. The Company incurred amendment fees of $427 for the October 2001 Amendment which were recorded in other long-term assets of the Company’s consolidated financial statements.

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On September 29, 2002, the Company further amended its credit facilities (the “September 2002 Amendment”), which, among other things, reduced the amount available under the revolving credit from $24,000 to $19,000 and amended certain near-term financial covenants to less restrictive amounts. In conjunction with the September 2002 Amendment, the Company wrote off $77 of unamortized loan fees and incurred additional costs of $55, which were recorded as other long-term assets in the Company’s consolidated financial statements and, together with the previously unamortized loan fees of $672, are being amortized over the remaining term of the facility.

In February 2003, the Company completed another amendment to its Senior Facility (the “February 2003 Amendment”) which further reduced the amount available under the revolving credit from $19,000 to $16,500 and amended certain future covenants to be less restrictive. Additionally, the February 2003 Amendment provides for an increase in the interest rate by 50 basis points to LIBOR plus 375 basis points or the financial institution’s designated base rate plus 250 basis points. The Company incurred an amendment fee of $180 for the February 2003 Amendment. In conjunction with the February 2003 Amendment, the Company also amended its subordinated debenture to increase the coupon rate from 12% to 12.5% and amended certain future covenants to be less restrictive. Total costs incurred for amending the subordinated debentures were $75.

The Company is required to maintain certain financial covenants under its Senior Facility, such as minimum earnings, debt-to-earnings, interest coverage and other financial ratios. For the measuring period ended June 30, 2003, the Company was not in compliance with two of the existing covenants; such non-compliance was waived by the lenders in July 2003. In conjunction with the waiver, the Company also amended certain covenants for the measuring period ended September 30, 2003 to be less restrictive (the “July 2003 Amendment”). The Company was in compliance with all covenant requirements for the measuring period ended September 30, 2003. Total costs incurred for the July 2003 Amendment of $495 are being amortized over the remaining term of the facility.

During the third quarter of 2003, it came to the attention of the Company and its lenders that the Company failed to make a payment under an excess cash flow provision of its senior credit facility in the amount of $1,681. The Company and its lenders entered into a Forbearance Agreement pursuant to which the lenders agreed to allow the Company to make such payment in four equal monthly installments beginning December 31, 2003, and the Company agreed to an increase of 2% in the interest rate applicable to its senior credit facility and a forbearance fee of $79. The Company also agreed to meet certain deadlines relating to the expected refinancing of its credit facilities which included the requirement to deliver a written commitment from a new senior credit facility lender no later than December 17, 2003. The Company was not able to deliver such written commitment on the specified date. In addition, the senior lenders must approve all payments under the loan agreement with its subordinated lenders. At the time of the non-delivery of the written commitment, the lenders did not approve such payments and, as a result, the Company failed to make an interest payment to its subordinated lenders in the amount of $474 which was originally due on December 1, 2003.

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On December 30, 2003, the Company completed another amendment to its Senior Facility (the “December 2003 Amendment”) in which Heller Financial Inc., a wholly owned subsidiary of General Electric Capital Corporation, purchased the remaining interests from other participating lenders and assumed the entire Senior Facility. The December 2003 Amendment provides for the increase in the amount available under the revolving credit from $16,500 to $19,500 and extends the maturity for both the revolving credit and the term notes to March 31, 2005. Additionally, the December 2003 Amendment provides for an increase in the interest rate to LIBOR plus 700 basis points or the financial institution’s designated base rate plus 500 basis points for the revolving credit and 9% for the term notes for which the outstanding balance as of December 31, 2003 was $13,500. The December 2003 Amendment also permitted the payment of interest in the amount of $474 due to the Company’s subordinated lenders and waived the existing defaults and the required excess cash flow payments discussed in the previous paragraphs. The Company made such interest payment to its subordinated lenders upon completion of the December 2003 Amendment. As of December 31, 2003, 3-month LIBOR was 1.15% and the Company had approximately $2,576 of additional credit available under its Senior Facility, as amended.

In conjunction with the December 2003 Amendment, the Company incurred an amendment fee of $1,000, which was recorded in other long-term assets of the Company’s consolidated financial statements and, together with the previously unamortized loan fees of $520, is being amortized over the remaining term of the facility.

The Company is required to maintain certain financial covenants under its credit facilities, such as minimum earnings, debt-to-earnings, interest coverage and other financial ratios. For the measuring period ended December 31, 2003, the Company was in compliance with all of the financial covenants. In March 2004, the Company further amended a future financial covenant under its Senior Facility and subordinated debentures to be less restrictive. The Company incurred an amendment fee of $75. The Company expects to be in compliance with all of the financial covenants, as amended, throughout 2004.

The Company entered into a joint venture agreement (the “Joint Venture”) during 2001 for the purpose of developing new research-based products. As of December 31, 2003, the Company has a 44.75% ownership interest in the Joint Venture. In 2003, the Company contributed $495 in services and cash and, since inception, has contributed an aggregate of $1,650. All amounts funded to date have been expensed. The Company is not obligated for any future funding of the Joint Venture.

There are no material capital expenditure commitments and no acquisition related commitments. The Company has no off-balance sheet financing arrangements. The Company intends to refinance its current Senior Facility with a new long-term senior credit facility in 2004. The Company believes that its current sources of liquidity and capital will be sufficient to fund its long-term obligations and working capital needs for the foreseeable future.

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The following table represents the Company’s contractual obligations as of December 31, 2003:

Contractual Obligations

Pursuant to the terms of a September 1, 2000 Purchase Agreement, the Company sold and LLR Equity Partners, L.P. and LLR Equity Partners Parallel, L.P. (collectively, “LLR”) purchased in a private placement (i) 1,176,458 shares of the Company’s Common Stock, (ii) 10 shares of the Series B Preferred Stock, and (iii) warrants to purchase 740,500 shares of the Company’s Common Stock at an exercise price of $12.00 per share, for aggregate gross proceeds of $10 million. At any time after September 2005, LLR may exchange each share of Common Stock for one-half of a share of the Company’s Series C Preferred Stock. After conversion, the holders of Series C Preferred Stock are entitled to receive cumulative quarterly cash dividends at an annual rate of $2.04 per share, or an aggregate of $1,200 per annum.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on assumptions that are believed to be reasonable under the circumstances.

The Company believes that the implementation of the following critical accounting policies, used in the preparation of its consolidated financial statements, introduce the most significant levels of judgments and estimates.

Revenue Recognition

The Company recognizes revenues on the percentage of completion method for its social research and market research segments, which relies on a periodic determination of the ratio of costs incurred to total estimated contract costs. The Company follows this method since reasonably dependable estimates of the revenue and costs applicable to various stages of a project can be made. Recognized revenue and profit are subject to revisions as the project

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progresses to completion. Revisions in profit estimates are reflected in income in the period in which the facts that give rise to the revision become known. Although such revisions have not been material, revisions in the future may be material to the Company’s results of operations. For the Company’s teleservices business, revenues are recognized at the time services are performed.

Goodwill and Other Intangible Assets

The Company has significant intangible assets related to goodwill and other identifiable intangible assets, such as non-competition agreements. The determination of the related estimated useful lives involves significant judgments. Changes in those useful lives could be material to the Company’s results of operations.

In assessing the recoverability of the Company’s goodwill and other identifiable intangibles, the Company must make assumptions regarding estimated future cash flows and other factors, such as trading and transaction multiples, and for other identifiable assets, valuation estimates for items such as backlog and outstanding proposals, to determine the fair value of the respective assets. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for these assets. On January 1, 2002, the Company adopted Statement No. 142, Goodwill and Other Intangible Assets, which requires the Company to analyze its goodwill for impairment on an annual basis. At the date of adoption, the Company reclassified assembled workforce intangible assets with an unamortized balance of $865 to goodwill and recorded as a cumulative effect of a change in accounting principle, goodwill impairment related to the Company’s Mexican subsidiary of $292, or $(0.05) per share. During 2002 the Company identified other intangible assets with useful life that could no longer be determined. As a result, the Company reclassified $480 from other intangible assets to goodwill in the fourth quarter of 2002. In the fourth quarter of 2002, the Company recorded a non-cash impairment charge of $5,938 to reduce the carrying value of goodwill in U.S. market research.

In the fourth quarter of 2003, the Company recorded non-cash impairment charges of $10,000, $6,000 and $317 to reduce the carrying values of goodwill in teleservices, U.S. market research, and the Company’s Korean subsidiary, respectively.

Deferred Tax and Valuation Allowance

The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between financial statement and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Recognition of deferred tax assets is limited to amounts considered to be more likely than not to be realized in future periods.

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At December 31, 2003 the Company has net deferred tax assets of $7,526 before the application of a valuation allowance. Of this amount, $2,178 is made up of state deferred tax assets of subsidiaries that have not been profitable. The Company recognizes that it is not more likely than not that the future tax benefits of these assets will be realized. Accordingly, the Company has recorded a $2,178 valuation allowance against these assets. The Company believes that all of the deferred tax assets for federal income tax purpose will be fully realized.

Recent Accounting Pronouncements

In August 2001, the FASB issued Statement No. 143, Accounting for Asset Retirement Obligations (“Statement 143”). Statement 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. The Company adopted Statement 143 on January 1, 2003 and the adoption of Statement 143 had an insignificant impact on the Company’s results of operations, financial position or cash flows.

Effective January 1, 2003, the Company adopted Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities, which requires liabilities for costs associated with exit or disposal activities to be recognized when the liabilities are incurred, rather than when an entity commits to an exit plan. Statement 146 also establishes that the liability should initially be measured and recorded at fair value. The new rule changes the timing of liability and expense recognition related to exit or disposal activities, but not the ultimate amount of such expenses.

In 2003, the Company reduced its workforce in its U.S. market research operating segment and, as a result, has incurred one-time termination benefits of approximately $705 for the terminations of certain employees. These termination benefits were recognized in accordance with Statement 146 and included in the Company’s results of operations for the year ended December 31, 2003.

In January 2003, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 46, Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51 (“Interpretation 46”). Interpretation 46 requires the consolidation of entities in which an enterprise absorbs a majority of the entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. Currently, entities are generally consolidated by an enterprise when it has a controlling financial interest through ownership of a majority voting interest in the entity.

During 2001, the Company formed the Joint Venture with a third party for the purpose of developing new research-based products. The Company has a 44.75% ownership interest and 50% voting interest in the Joint Venture. In 2003, the Company contributed $495 in services and cash and, since inception, has contributed an aggregate of $1,650. All amounts funded to date have been expensed. The Company is not obligated for future funding of the Joint Venture.

As the Joint Venture has sufficient amount of equity to absorb the entity’s expected loss and the equity owners as a group are able to make decisions about the entity’s activities, and the equity owners have the obligation to absorb expected losses and the rights to receive the expected

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residual returns, the Company believes that the Joint Venture is not a Variable Interest Entity under the principal criteria as set forth in Interpretation 46 and, accordingly, is not required to apply the consolidation provision under Interpretation 46. The adoption of Interpretation 46 at December 31, 2003 had no impact on the Company’s results of operations, financial position or cash flows.

In May 2003, the FASB issued Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. Statement 150 requires that certain financial instruments with characteristics of both liabilities and equity, including mandatorily redeemable financial instruments, be classified as a liability. Any amounts paid or to be paid to holders of these financial instruments in excess of the initial measurement amount shall be reflected in interest cost. Statement 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise shall be effective at the beginning of the first interim period beginning after June 15, 2003. The Company adopted Statement 150 on July 1, 2003. The adoption of this statement had no impact on the Company’s results of operations, financial position or cash flows.

Inflation and Foreign Currency Exchange

Inflation has not had a significant impact on the Company’s operating results to date, nor does the Company expect it to have a significant impact through 2004. The foreign currency exchange fluctuations did not have a material impact on the Company’s operating results in 2003 and 2002. In 2001, the appreciation of the U.S. dollar versus the British pound had negatively affected the Company’s operating results. As the Company continues to expand its international operations, exposures to gains and losses from foreign currency fluctuations will increase. It has not been the Company’s practice to enter into foreign exchange contracts, but such contracts may be used in the future if the Company deems them to be an appropriate resource to manage the Company’s exposure to movements in foreign currency exchange rates.

Risk Factors

Readers of this report should be aware that the following important factors, among others, in some cases have affected, and in the future could affect, the actual operating results of the Company and could cause the Company’s actual consolidated results for 2004 and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company:

The Company’s success depends on its ability to retain its existing clients and obtain new clients. The Company’s clients generally may terminate the services it provides to them at any time. The loss of one or more of the Company’s large clients or a significant reduction in business from such clients could have a material adverse effect on the Company. The existence of larger projects and long-term client relationships may increase the Company’s reliance on particular projects and clients. In 2003, approximately 62% of the Company’s revenue was generated by providing services to various U.S. governmental departments and agencies. In addition, revenues generated by the Company’s teleservices business segment were reliant upon certain key clients. The loss of its larger clients would have a material adverse effect on the Company.

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The Company’s business may suffer if demand for its services declines. A number of factors that are beyond the Company’s control can adversely affect the demand of the Company’s existing clients for its services and impair its ability to attract new clients. These include marketing budgets, general economic conditions, consolidations, government spending, and other industry-specific trends. Changes in management or ownership of an existing client are factors that can affect the client’s demand for the Company’s services. As a result, the Company may provide different levels of services to its clients from year to year, and these differences can contribute to fluctuations in the Company’s operating results.

The Company’s attempts to expand its operations into markets where the Company does not currently operate may not be successful and the Company’s efforts to expand its international operations will be subject to added risks which are inherent in doing business abroad. Part of the Company’s business strategy is to expand domestically and internationally, and to extend into related businesses through strategic acquisitions. There can be no assurance that the Company will be able to so expand or to identify targets for such acquisitions on terms attractive to the Company. Further, there can be no assurance that the Company’s services will be sufficiently accepted to sustain its efforts to expand in selected international markets. International expansion will also subject the Company to risks inherent in doing business abroad, including adverse fluctuations in currency exchange rates, limitations on asset transfers, changes in foreign regulations and political turmoil. Furthermore, there can be no assurance that the Company will be able to integrate successfully the operations of any subsequently acquired company with its current operations.

The Company’s business may suffer if the Company is unable to retain its key personnel. The Company is dependent upon the efforts and skills of certain key senior executives. The loss of the services of one or more of these individuals could have a material adverse effect on the Company. The Company does not currently maintain key man life insurance policies on any of the Company’s executives other than John F. Short, the Company’s chief executive officer, and the Company has employment agreements only with certain executive officers. Competition for senior management is intense, and the Company may not be successful in retaining key personnel or in attracting and retaining other personnel that the Company may require in the future.

The Company’s operating results may suffer if there were significant goodwill write-offs. Goodwill related to acquisitions represents a substantial portion of the Company’s total assets. If the fair value of the goodwill should drop below the recorded value, the Company would be required to write off the excess goodwill, which could adversely affect the Company’s operating results. At December 31, 2003, the net goodwill amount on the Company’s consolidated balance sheet represents approximately 34% of the Company’s total assets at such date. This goodwill is an intangible asset and represents the excess of the purchase price that the Company paid for acquired businesses over the estimated fair market value of the net assets of those businesses. If the fair value of the goodwill, determined in accordance with applicable accounting standards, were to fall below the recorded value shown on the balance sheet, the Company would be required to write off the excess goodwill. Any write-off would be treated as an expense and, although non-cash in nature, would adversely affect the Company’s operating results.

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Loan agreement covenants could adversely affect the Company’s business by limiting the Company’s flexibility. The Company is subject to customary financial and operating covenants under its current credit agreements. These covenants limit or prohibit, among other things, the Company’s ability to incur additional debt, make prepayment of certain indebtedness, make investments, sell assets or engage in mergers and acquisitions. These covenants could adversely affect the Company’s business by limiting the Company’s operational and financial flexibility.

The Company faces competition in its industry. The Company faces competition in connection with most of the individual services and products it provides. Although the Company believes that no single competitor offers a comparable combination of services and products, there can be no assurance that other companies, including some with greater financial resources than the Company, will not attempt to offer a range of services and products similar to those offered by the Company, or otherwise compete more effectively in the market research and information services industry. The Company regularly experiences significant competition for customers seeking market research services from a large number of competitors. These include market research companies, advertising agencies, and business consulting firms. The Company competes for public sector research services with a large number of firms that vary in size as well as with not-for-profit organizations. For outbound telemarketing services, the Company competes with a large number of telemarketing companies.

The Company’s business may suffer from the enactment of state and federal government “do not call lists.” Such lists limit the number of eligible recipients of telemarketing phone calls. Although such lists do not currently apply to market research phone calls, new legislation could change the current market research exemption.

The Company does not currently pay dividends on its common stock and the Company does not expect to do so for the foreseeable future. The Company expects to retain its future earnings, if any, for the operation and expansion of its business, and to pay no cash dividends for the foreseeable future. The terms of the Company’s current financing agreements prohibit the payment of dividends, and future agreements may also contain terms that limit the amount of dividends the Company may pay or prohibit any payment of dividends.

Anti-takeover provisions and the Company’s right to issue preferred stock could make a third-party acquisition of the Company difficult. The Company’s certificate of incorporation provides that the board of directors may issue preferred stock without stockholder approval. In addition, the Company’s by-laws provide for a classified board, with each board member serving a three-year term. The board of directors has also adopted a stockholder rights plan, commonly referred to as a “poison pill.” The issuance of preferred stock, the existence of a classified board, and the stockholder rights plan could make it more difficult for a third party to acquire the Company without board approval. These provisions could also limit the price that certain investors might be willing to pay in the future for the Company’s common stock.

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Trading Volume in the Company’s Common Stock has historically been limited. There is a limited market for the Company’s common stock. Selling the Company’s shares may be difficult because smaller quantities of shares are bought and sold and security analysts’ and the news media’s coverage about the Company is limited. These factors could result in lower prices and larger spreads in the bid and ask prices for the Company’s shares.

Forward-looking Statements

Certain statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Annual Report on Form 10-K, are forward-looking statements. The Company has based these forward-looking statements on its current expectations about future events. These forward-looking statements include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance and business, and include the following:

These forward-looking statements are subject to risks, uncertainties, and assumptions about the Company and its operations that are subject to change based on various important factors, some of which are beyond the Company’s control. The following factors, among others, could cause the Company’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in its forward-looking statements:

If one or more of the assumptions underlying these forward-looking statements proves incorrect, the Company’s actual results, performance or achievements in future periods could differ materially from those expressed in, or implied by, the forward-looking statements contained in this Annual Report on Form 10-K. Therefore, the Company cautions the readers not to place undue reliance on its forward-looking statements.

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The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether written or oral, whether as a result of new information, changed assumptions, the occurrence of unanticipated events, changes in future operating results over time or otherwise. All forward-looking statements attributable to the Company are expressly qualified by these cautionary statements.

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Market risks relating to the Company’s operations result primarily from changes in interest rates and changes in foreign exchange rates. The Company monitors its interest rate and foreign exchange rate exposures on an ongoing basis. Historically, the Company has entered into interest rate hedging contracts and will continue to evaluate their appropriateness. As of December 31, 2003, the Company was not a party to any interest rate hedging contracts.

It has not been the Company’s practice to enter into foreign exchange contracts, but such contracts may be used in the future if the Company deems them to be an appropriate resource to manage the Company’s exposure to movements in foreign currency exchange rates. The Company does not consider its 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 on the Company’s revenues, cost of revenues and operating expenses when considered individually, the net impact on the Company’s results of operations has not been significant.

The following table provides information about the financial instruments of the Company that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates as of February 26, 2004 by expected maturity dates.

Interest Rate Sensitivity

Principal Amount by Expected Maturity

Average Interest Rate

The Company’s financial statements, together with the report of the Company’s independent auditors, are set forth beginning at page F-1 at the end of this Report.

None.

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The Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report and, based on this evaluation, concluded that the Company’s disclosure controls and procedures, which have been designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, are effective.

No change in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) or 15d-15(f)) has occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART III

The Company has adopted a Code of Conduct that applies to the Company’s directors, officers and employees, including its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Company’s Code of Conduct is located on its website at www.opinionresearch.com. The Company intends to satisfy the disclosure requirements under Item 10 of Form 8-K regarding an amendment or waiver from a provision of the Code of Conduct that applies to its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and that relates to certain topics by posting such information on its website at www.opinionresearch.com. Any shareholder may request this information in print form from the Company’s Secretary.

Except as set forth under the caption “Executive Officers of the Registrant” in Part I of this Annual Report on Form 10-K, the information required by this item, including information with respect to directors, audit committee, and audit committee financial experts of the Company and Section 16(a) beneficial ownership reporting compliance, will be contained in the Company’s definitive Proxy Statement with respect to the Company’s Annual Meeting of Stockholders for 2004 (“2004 Proxy Statement”), to be filed with SEC within 120 days following the end of the Company’s fiscal year ended December 31, 2003, and is hereby incorporated by reference thereto.

This information will be contained in the Company’s 2004 Proxy Statement, to be filed with SEC within 120 days following the end of the Company’s fiscal year ended December 31, 2003, and is hereby incorporated by reference thereto.

The information required by Item 403 of Regulation S-K will be contained in the Company’s 2004 Proxy Statement, to be filed with SEC within 120 days following the end of the Company’s fiscal year ended December 31, 2003, and is hereby incorporated by reference thereto.

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The following table provides information as of December 31, 2003 with respect to compensation plans (including individual compensation arrangements) under which the Company’s equity securities are authorized for issuance.

This information will be contained in the Company’s 2004 Proxy Statement, to be filed with SEC within 120 days following the end of the Company’s fiscal year ended December 31, 2003, and is hereby incorporated by reference thereto.

The information required by Item 9(e) of Schedule 14A will be contained in the Company’s 2004 Proxy Statement, to be filed with SEC within 120 days following the end of the Company’s fiscal year ended December 31, 2003, and is hereby incorporated by reference thereto.

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PART IV

All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable or the required information is given in the Financial Statements or Notes thereto, and therefore have been omitted.

The Company furnished a current report on Form 8-K on October 29, 2003 pursuant to Item 12 relating to the announcement of earnings for the quarter ended September 30, 2003 (including unaudited financial information).

The Company filed a current report on Form 8-K on December 17, 2003 pursuant to Item 5 relating to a failure in meeting certain deadlines as set forth in the Forbearance Agreement the Company entered with its senior credit lenders on November 14, 2003 and an estimated goodwill impairment charge at December 31, 2003.

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The Company filed a current report on Form 8-K on December 30, 2003, as amended on January 9, 2004, pursuant to Item 5 relating to a refinancing of its existing senior credit facility.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 15, 2004 by the following persons on behalf of the Registrant and in the capacities indicated.

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Report of Independent Auditors

The Board of Directors and Stockholders

Opinion Research Corporation

We have audited the accompanying consolidated balance sheets of Opinion Research Corporation and Subsidiaries as of December 31, 2003 and 2002, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2003. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Opinion Research Corporation and Subsidiaries at December 31, 2003 and 2002, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Notes 1 and 3 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, effective January 1, 2002.

/s/ ERNST & YOUNG LLP

MetroPark, New Jersey

February 9, 2004

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OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share amounts)

See notes to consolidated financial statements.

F-2

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OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

See notes to consolidated financial statements.

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OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(in thousands)