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United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

For the Quarterly Period Ended June 30, 2004

For the 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)

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 Exchange Act Rule 12b-2).     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.

INDEX

Opinion Research Corporation and Subsidiaries

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share amounts)

(Unaudited)

See notes to financial statements

OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)

See notes to financial statements

OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

See notes to financial statements

OPINION RESEARCH CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2004

(Unaudited)

(in thousands, except shares and per share data)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles 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 generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. For further information, refer to the consolidated financial statements and footnotes thereto included in the Registrant Company and Subsidiaries’ Annual Report on Form 10-K for the year ended December 31, 2003.

In the statement of cash flows for the period ended June 30, 2003, $255 of the change in other assets previously included in net cash provided by operating activities has been reclassified to payments of loan amendment fees in the cash flows from financing activities to conform to the current period presentation.

NOTE B - CREDIT FACILITIES

In May 2004, the Company entered into a new secured revolving credit facility of $35,000 with two financial institutions (the “Senior Revolving Facility”). The Senior Revolving Facility is for a three-year term and is secured by substantially all of the assets of the Company. The Senior Revolving Facility carries an interest rate at the discretion of the Company of either the financial institution’s designated base rate (4.25% at June 30, 2004) plus 100 basis points or LIBOR (3-month LIBOR was 1.63% at June 30, 2004) plus 300 basis points. As of June 30, 2004, the Company had approximately $8,687 of additional credit available under the Senior Revolving Facility.

In May 2004, the Company also issued $10,000 of secured subordinated notes (the “Secured Subordinated Notes”) and $12,000 of unsecured subordinated notes (the “Unsecured Subordinated Notes”) to a financial institution. The Secured Subordinated Notes carry an interest rate of 10% and will mature in November 2007. The Secured Subordinated Notes require principal payments of $500 per quarter commencing July 1, 2004, with an unamortized balance of $3,000 due at the end of the term. The Unsecured Subordinated Notes expire in May 2009 and carry a fixed interest rate of 15.5%; 13% is payable quarterly in cash, and 2.5%, at the discretion of the Company, may be paid in cash or deferred and included in the outstanding principal balance until maturity. In exchange for consideration received in connection with this debt, the Company extended the term of existing warrants held by the financial institution from

May 2007 to the later of May 2009 or the third anniversary of the repayment date. These warrants were issued in 1999 to the financial institution and are for the purchase of 437,029 shares of the Company’s common stock at an exercise price of $5.422 per share. The extension of these warrants is valued at $616 and will be accreted through interest expense over the life of the Unsecured Subordinated Notes.

The Company is required to maintain certain financial covenants under its credit facilities. For the measuring period ended June 30, 2004, the Company was in compliance with all of the financial covenants.

All debt outstanding as of May 4, 2004 was repaid with proceeds from the above borrowings. In conjunction with its new credit facilities, the Company incurred additional costs of approximately $1,430 which are included in other long term assets in the Company’s consolidated financial statements and amortized over the remaining terms of the facilities, commencing in the second quarter of 2004. Due to the refinancing described herein, the Company also wrote off the unamortized loan fees of approximately $2,506 as interest expense, which included payments of $420 made in 2004, related to the retired debt in the second quarter of 2004.

NOTE C - EARNINGS PER SHARE

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

NOTE D - STOCK-BASED COMPENSATION

The Company accounts for its employee stock option plans under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”) and related interpretations. The Company has adopted the disclosure-only provisions of Statement 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.

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

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

No options were granted during the three months ended June 30, 2004 and 2003. The weighted average fair value of options granted during the six months ended June 30, 2004 and 2003 was $3.59 and $3.09 per share, respectively.

NOTE E - GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying value of goodwill as of June 30, 2004 are as follows:

The Company’s intangible assets consist of the following:

Amortization of intangible assets was $203 for the six months ended June 30, 2004 and $277 for the six months ended June 30, 2003, respectively. The estimated aggregate amortization expense for the remainder of 2004 and each of the five succeeding years is as follows:

NOTE F - COMPREHENSIVE INCOME (LOSS)

The Company’s comprehensive income for the three and six months ended June 30, 2004 and 2003, are set forth in the following table:

NOTE G - SEGMENTS

The Company’s operations by business segments for the three and six months ended June 30, 2004 and 2003, are presented in the table below. For both periods presented, the U.S. market research segment included unallocated corporate headquarters related expenses.

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

(dollars in thousands)

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the Company’s interim financial statements and notes thereto, which appear elsewhere in this Quarterly Report on Form 10-Q, and the Company’s audited financial statements and the MD&A contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 23, 2004 (the “Form 10-K”). The following discussion contains forward-looking statements that involve risks and uncertainties. The words “may,” “could,” “believe,” “expect,” “anticipate,” or “intend” and similar expressions and phrases are intended to identify forward-looking statements. As a result of many factors, including the factors set forth under the caption “Forward-Looking Statements” in the Form 10-K, the Company’s actual results may differ materially from those anticipated in these forward-looking statements.

Results of Operations - Second Quarter 2004 as Compared to Second Quarter 2003

Revenues for the second quarter of 2004 increased $3,919, or 9%, to $49,400 from $45,481 in 2003. Revenues increased $2,071, or 7%, in the Company’s social research business, $194, or 3%, in U.S. market research, $653, or 15%, in U.K. market research and $47, or 1%, in the teleservices business. In all cases, the increase in revenues in the various operating segments is due to higher demand for services. For U.K. market research, the decline of the U.S. dollar relative to the U.K. pound increased revenues by $594.

Cost of revenues increased $3,099, or 10%, from $31,946 in 2003 to $35,045 in 2004. Gross profit as a percentage of revenues decreased slightly from 30% in 2003 to 29% in 2004. The increase in cost of revenues is principally attributable to higher part-time labor expenses for the U.S. market research business, which are not expected to continue.

Selling, general and administrative expenses (“SG&A”) increased $694, or 7%, to $10,370 in the second quarter of 2004 from $9,676 in the second quarter of 2003. As a percentage of revenues, consolidated SG&A remained constant at 21% for both 2004 and 2003.

Depreciation and amortization expense decreased by $53, or 5%, to $955 in the second quarter of 2004 from $1,008 in the second quarter of 2003. The decrease is principally due to certain intangible assets which were fully amortized by the end of 2003.

Interest expense increased $2,623 to $3,766 in the second quarter of 2004 from $1,143 in the second quarter of 2003. The increase is principally due to the write-off of the unamortized loan fees of $2,506 related to debt that was refinanced during the quarter. With the completed refinancing (as discussed below in the “Liquidity and Capital Resources” section) and based on current interest rate and debt levels, the Company anticipates that interest expense in subsequent quarters will be approximately $1,200 per quarter.

Other non-operating (income) expenses, net, increased to $(293) in the second quarter of 2004 from $(5) in the second quarter of 2003. The increase is principally due to a foreign exchange

gain of $335 realized in U.K. market research due to the settlement of a long-term intercompany payable, partially offset by increases in other non-operating expenses in other business units.

The provision (benefit) for income taxes for the second quarter of 2004 and the second quarter of 2003 was $(206) and $793, respectively. The write-off of the unamortized loan fees discussed previously in interest expense provided a tax benefit of approximately $852 in the second quarter of 2004. The Company anticipates that the underlying effective tax rate on operations for the full year 2004 will be approximately 48.5%. The increase in the effective rate compared to the same period in the prior year is due to the absence of offsetting tax benefits for certain state and non-U.S. losses as well as increased state taxes from profitable business segments in the current period.

As a result of all of the above, net income decreased to $(237) in the second quarter of 2004 from $920 in the second quarter of 2003.

Results of Operations - Six Months Year-to-Date 2004 as Compared to Six Months Year-to-Date 2003

Revenues for the first six months of 2004 increased $8,716, or 10%, to $97,361 from $88,645 in 2003. Revenues increased $5,199, or 9%, in the Company’s social research business, $266, or 4%, in the teleservices business and $1,961, or 22%, in U.K. market research. Revenues declined $75, or 1%, in U.S. market research. Higher demand for services is the main contributor to the overall revenue increase among various operating segments. For U.K. market research, the decline of the U.S. dollar relative to the U.K. pound increased revenues by $1,267.

Cost of revenues increased $7,011, or 11%, from $61,752 in 2003 to $68,763 in 2004. Gross profit as a percentage of revenues decreased from 30% in 2003 to 29% in 2004. The increase in cost of revenues is principally attributable to higher part-time labor expenses for the U.S. market research business, which are not expected to continue.

Selling, general and administrative expenses (“SG&A”) increased $618, or 3%, to $20,268 in the first six months of 2004 from $19,650 in the first six months of 2003. As a percentage of revenues, consolidated SG&A decreased from 22% in 2003 to 21% in 2004, reflecting improved efficiencies from cost reductions in U.S. market research, partially offset by increases in the other segments.

Depreciation and amortization expense decreased by $57, or 3%, to $1,897 in the first six months of 2004 from $1,954 in the first six months of 2003. The decrease is principally due to certain intangible assets which were fully amortized by the end of 2003.

Interest expense increased $3,079 to $5,373 in the first six months of 2004 from $2,294 in the first six months of 2003. The increase is principally due to the write-off of the unamortized loan fees of $2,506 related to debt that was refinanced during the quarter. With the completed refinancing (as discussed below in the “Liquidity and Capital Resources” section) and based on current interest rate and debt levels, the Company anticipates that interest expense in subsequent quarters will be approximately $1,200 per quarter.

Other non-operating (income) expenses, net, increased to $(301) in the first six months of 2004 from $17 in the first six months of 2003. The increase is principally due to a foreign exchange gain of $335 realized in U.K. market research in the second quarter of 2004 due to the settlement of a long-term intercompany payable, partially offset by increases in other non-operating expenses in other business units.

The provision for income taxes was $660 in the first six months of 2004 as compared to $1,325 in the same period of 2003. The write-off of the unamortized loan fees discussed previously in interest expense provided a tax benefit of approximately $852 in the second quarter of 2004. The Company anticipates that the underlying effective tax rate on operations for the full year 2004 will be approximately 48.5%. The increase in the effective rate compared to the same period in the prior year is due to the absence of offsetting tax benefits for certain state and non-U.S. losses as well as increased state taxes from profitable business segments in the current period.

As a result of all of the above, net income decreased to $701 in the first six months of 2004 from $1,653 in the first six months of 2003.

Liquidity and Capital Resources

Net cash (used in) provided by operating activities for the first six months of 2004 was $(269) as compared to $1,956 for the same period in 2003. The decrease of $2,225 in the operating cash flows is principally attributable to the timing of payments on operational disbursements, such as payroll, income taxes, and interest, and an increase in unbilled receivables as a result of the revenue increase in the first six months of 2004.

Investing activities for the first six months of 2004 consisted of capital expenditures totaling $1,587 as compared to $1,478 for the same period in 2003. In both periods, the majority of the spending on capital items was for the ongoing maintenance and replacement of technology.

Financing activities included a net increase in borrowings during the first six months of 2004 totaling $1,445, payment of loan amendment fees of $1,850 and proceeds from the sale of the Company’s common stock under the Company’s various stock purchase plans of $395. This compares to a net reduction in borrowings of $1,815 and proceeds from the sale of the Company’s common stock under the Company’s various stock purchase plans of $239 during the first six months of 2003.

In May 2004, the Company entered into a new secured revolving credit facility of $35,000 with two financial institutions (the “Senior Revolving Facility”). The Senior Revolving Facility is for a three-year term and is secured by substantially all of the assets of the Company. The Senior Revolving Facility carries an interest rate at the discretion of the Company of either the financial institution’s designated base rate (4.25% at June 30, 2004) plus 100 basis points or LIBOR (3-month LIBOR was 1.63% at June 30, 2004) plus 300 basis points. As of June 30, 2004, the Company had approximately $8,687 of additional credit available under the Senior Revolving Facility.

In May 2004, the Company also issued $10,000 of secured subordinated notes (the “Secured Subordinated Notes”) and $12,000 of unsecured subordinated notes (the “Unsecured Subordinated Notes”) to a financial institution. The Secured Subordinated Notes carry an interest rate of 10% and will mature in November 2007. The Secured Subordinated Notes require principal payments of $500 per quarter commencing July 1, 2004, with an unamortized balance of $3,000 due at the end of the term. The Unsecured Subordinated Notes expire in May 2009 and carry a fixed interest rate of 15.5%; 13% is payable quarterly in cash, and 2.5%, at the discretion of the Company, may be paid in cash or deferred and included in the outstanding principal balance until maturity. In exchange for consideration received in connection with this debt, the Company extended the term of existing warrants held by the financial institution from May 2007 to the later of May 2009 or the third anniversary of the repayment date. These warrants were issued in 1999 to the financial institution and are for the purchase of 437,029 shares of the Company’s common stock at an exercise price of $5.422 per share. The extension of these warrants is valued at $616 and will be accreted through interest expense over the life of the Unsecured Subordinated Notes.

The Company is required to maintain certain financial covenants under its credit facilities. For the measuring period ended June 30, 2004, the Company was in compliance with all of the financial covenants.

All debt outstanding as of May 4, 2004 was repaid with proceeds from the above borrowings. In conjunction with its new credit facilities, the Company incurred additional costs of approximately $1,430 which are included in other long term assets in the Company’s consolidated financial statements and amortized over the remaining terms of the facilities, commencing in the second quarter of 2004. Due to the refinancing described herein, the Company also wrote off the unamortized loan fees of approximately $2,506 as interest expense, which included payments of $420 made in 2004, related to the retired debt in the second quarter of 2004.

There are no material capital expenditure commitments and no acquisition related commitments. The Company has no off-balance sheet financing arrangements. 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Except for the completion of refinancing as disclosed in the “Liquidity and Capital Resources” section, there have been no significant changes in market risk since December 31, 2003 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, 2003. The following table provides information about the financial instruments of the Company that are sensitive to changes in interest rates and takes into account the refinancing of the Company’s credit facilities as of May 4, 2004. For debt obligations, the table presents principal cash flows and related weighted average interest rates as of June 30, 2004 by expected maturity dates.

ITEM 4. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2004. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported as specified in the Securities and Exchange Commission’s rules and forms. There has been no change in the Company’s internal control over financial reporting 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.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

None.

Item 3. Defaults upon Senior Securities

None.

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

The Annual Meeting of Stockholders of the Company was held on May 11, 2004 at the Company’s headquarters for the following purposes:

Dale J. Florio

Steven F. Ladin

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K

The Company filed a current report on Form 8-K on May 6, 2004 pursuant to Item 5 and Item 7 relating to the announcement of the Company’s debt refinancing.

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.