National Research Corporation Announces Third Quarter and Year-to-Date 2009 Results

LINCOLN, Neb. - (BUSINESS WIRE) - National Research Corporation (NASDAQ:NRCI) today announced results for the third quarter 2009.

• Quarterly revenue $13.5 million
• Quarterly operating income $3.3 million
• Quarterly earnings per share $0.30
• Quarterly net new contracts $3.0 million
• Year-to-date growth: revenue up 13%, operating income up 15%, diluted earnings per share up 15%, EBITDA up 20%

Commenting on the third quarter results, Michael D. Hays, president and chief executive officer of National Research Corporation, said, "Even though we are not yet hitting on all cylinders, net new contracts for the third quarter almost equaled the entire first half of 2009. With this renewed wind at our back, several new products, and added leadership depth, we should be set up for a strong fourth quarter and finish for the year."

Revenue for the quarter ended September 30, 2009, was $13.5 million, virtually even with the same period in 2008. Net income for the third quarter was $2.0 million, or $0.30 basic and diluted earnings per share, compared with net income of $2.0 million, or $0.30 basic and $0.29 diluted earnings per share, in the prior year period. Operating income increased 4% to $3.3 million for the quarter ended September 30, 2009, compared to $3.2 million for the same period in 2008.

Revenue for the first nine months of 2009 increased 13% to $43.9 million, compared to $38.8 million for the same period in 2008. Net income for the first nine months of 2009 increased 13% to $6.3 million, resulting in $0.94 basic and $0.93 diluted earnings per share, up 13% and 15%, respectively, over the same period in 2008.

In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, "Achieving our stated goal of 15% net income for the quarter on flat revenue shows a real commitment to the margins. Margin expansion is also evident when comparing our 20% EBITDA growth year-over-year to revenue growth of 13%."

NATIONAL RESEARCH CORPORATION
Reconciliation of Consolidated Net Earnings to Consolidated EBITDA (Unaudited)
(In thousands)
		Nine Months Ended
		September 30,
		2009			2008
Net income		$	6,253		$	5,550
Provision for income taxes			3,675			3,390
Total other (income) expense			445			76
Depreciation and amortization			2,902			2,003
EBITDA		$	13,275		$	11,019

We define EBITDA as net income excluding provision for income taxes, total other (income) expenses (which is primarily interest expense, interest income and changes in foreign currency exchange rates), depreciation and amortization. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States. EBITDA, as we calculate it, may not be comparable to EBITDA reported by other companies.

A listen-only simulcast of National Research Corporation's 2009 third quarter conference call will be available online at www.earnings.com on November 4, 2009, beginning at 11:00 a.m. Eastern time. The online replay will follow approximately one hour later and continue for 30 days.

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

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

NATIONAL RESEARCH CORPORATION
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Revenue		$	13,517			$	13,469			$	43,850			$	38,824
Operating expenses:
Direct expenses			5,446				6,598				19,027				17,845
Selling, general and administrative			3,872				3,053				11,548				9,960
Depreciation and amortization			901				661				2,902				2,003
Total operating expenses			10,219				10,312				33,477				29,808
Operating income			3,298				3,157				10,373				9,016
Other income (expense):
Interest income			--			6				1					33
Interest expense			(91	)			(21	)			(314	)			(118	)
Other, net			(75	)			29				(132	)		9
Total other income (expense)			(166	)			14				(445	)			(76	)
Income before income taxes			3,132				3,171				9,928				8,940
Provision for income taxes			1,138				1,205				3,675				3,390
Net income		$	1,994			$	1,966			$	6,253			$	5,550
Net income per share, basic		$	0.30			$	0.30			$	0.94			$	0.83
Net income per share, diluted		$	0.30			$	0.29			$	0.93			$	0.81
Weighted average shares outstanding:
Basic			6,637				6,644				6,636				6,699
Diluted			6,735				6,803				6,723				6,845

NATIONAL RESEARCH CORPORATION
Unaudited Consolidated Condensed Balance Sheets
(Dollars in thousands)
		Sep. 30,				Dec. 31,
		2009				2008
ASSETS
Current Assets:
Cash and cash equivalents		$	1,460			$	1,109
Accounts receivable, net			8,385				6,531
Income taxes recoverable			1,109				574
Other current assets			2,370				2,225
Total current assets			13,324				10,439
Net property and equipment			14,233				13,747
Other, net			46,849				47,959
Total Assets		$	74,406			$	72,145
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses		$	1,851			$	2,208
Deferred revenue			14,538				12,926
Accrued compensation			2,086				1,375
Notes payable			765				4,581
Total current liabilities			19,240				21,090
Non-current liabilities			12,595				12,457
Total Liabilities			31,835				33,547
Shareholders' Equity:
Common stock, $0.001 par value; 20,000,000 shares authorized;
issued 8,016,021 in 2009 and 8,019,922 in 2008;
outstanding 6,660,298 in 2009 and 6,667,517 in 2008		8				8
Additional paid-in capital			27,635				27,217
Retained earnings			36,734				33,677
Accumulated other comprehensive income (loss)			571				(6	)
Treasury stock			(22,377	)			(22,298	)
Total shareholders' equity			42,571				38,598
Total liabilities and shareholders' equity		$	74,406			$	72,145

National Research Corporation
Patrick E. Beans, Chief Financial Officer, 402-475-2525