NRCI National Research Corp. (MM)

National Research Corporation (NASDAQ:NRCI) today announced results for the fourth quarter and year-end 2008.

• Quarterly revenue up 13% to $12.2 million
• Quarterly diluted earnings per share of $0.28, up 78%
• Quarterly net new contracts $3.0 million
• Year-end revenue $51.0 million; net income $7.4 million
• Year-end new contracts up 19%; subscription-based new contracts up 93%

Commenting on the 2008 fourth quarter and year-end results, Michael D. Hays, president and chief executive officer of National Research Corporation, said, �A good fourth quarter topped off a positive year which included our focus on new product development�the Healthcare Market Guide Ticker was launched, we added new revenue runways, and populated a robust pipeline of additional new products yet to be launched. As well, The Governance Institute completed its board support membership upgrade which contributed to their strong 2008 financial performance.�

Mr. Hays added, �Turning to 2009, I�m delighted that we are entering the year with booked contracts of more than $60 million which, if completed, suggests a 20% revenue growth in 2009 over 2008.�

Revenue for the quarter ended December 31, 2008, was $12.2 million, compared to $10.8 million for the same quarter in 2007. Net income for the quarter ended December 31, 2008, was $1.9 million compared to $1.1 million for the fourth quarter 2007.

Revenue for the year ended December 31, 2008, was $51.0 million, compared to $48.9 million for the same period in 2007. Net income for 2008 was $7.4 million, compared to $6.8 million for 2007. Year-end 2008 performance resulted in $1.11 per basic and $1.09 per diluted earnings per share, compared to 2007 performance of $1.00 per basic and $.98 per diluted earnings per share.

In closing, Patrick E. Beans, chief financial officer of National Research Corporation, said, �It�s a positive achievement to have rolled out the HealthCare Market Guide Ticker product, which required deferring some high margin revenue into 2009, and still maintain our net income target of 15% of Company revenue in 2008.�

A listen-only simulcast of National Research Corporation�s 2008 fourth quarter and year-end conference call will be available online at www.earnings.com on February 11, 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

Twelve Months Ended

December 31,

December 31,

2008

�

2007

2008

�

2007

� Revenue $ 12,190 $ 10,821$ 51,013 $ 48,923 � Operating expenses: Direct expenses 5,766 5,057 23,611 21,801 Selling, general and administrative 2,768 3,283 12,728 13,173 Depreciation and amortization � 683 � � 661 � � 2,685 � � 2,583 � Total operating expenses � 9,217 � � 9,001 � � 39,024 � � 37,557 � � Operating income 2,973 1,820 11,989 11,366 � Other income (expense): Interest income 9 37 42 139 Interest expense (21 ) (70 ) (139 ) (483 ) Other, net � 81 � 8 � � 91 � � 96 � � Total other income (expense) 69 (25 ) (6 ) (248 ) � Income before income taxes 3,042 1,795 11,983 11,118 Provision for income taxes � 1,148 � � 686 � � 4,538 � � 4,278 � � Net income $ 1,894 � $ 1,109 � $ 7,445 � $ 6,840 � � Net income per share, basic $ 0.29 � $ 0.16 � $ 1.11 � $ 1.00 � Net income per share, diluted $ 0.28 � $ 0.16 � $ 1.09 � $ 0.98 � � Weighted average shares outstanding: Basic 6,642 6,861 6,685 6,850 Diluted 6,782 7,034 6,832 7,011

NATIONAL RESEARCH CORPORATION

Unaudited Consolidated Condensed Balance Sheets

(Dollars in thousands)

� � Dec. 31, Dec. 31, 2008 2007 ASSETS � Current Assets: Cash and cash equivalents $ 1,109 $ 3,355 Short-term investments -- 99 Accounts receivable, net 6,531 6,379 Income taxes recoverable 590 272 Other current assets � 2,191 � � 2,495 � Total current assets 10,421 12,600 � Net property and equipment 13,652 11,974 Other, net � 46,575 � � 37,295 � � Total Assets $ 70,648 � $ 61,869 � � LIABILITIES AND SHAREHOLDERS� EQUITY � Current Liabilities: Accounts payable and accrued expenses $ 2,207 $ 2,492 Deferred revenue 12,926 9,922 Accrued compensation 1,375 1,477 Notes payable � 4,581 � � 1,093 � Total current liabilities 21,089 14,984 � Non-current liabilities � 10,961 � � 4,598 � � Total Liabilities � 32,050 � � 19,582 � � Shareholders� Equity:

Common stock, $0.001 par value; 20,000,000 shares authorized;�issued 8,019,922 in 2008 and 7,883,289 in 2007;�outstanding 6,667,517 in 2008 and 6,926,442 in 2007

8 8 Additional paid-in capital 27,217 23,508 Retained earnings 33,677 30,004 Accumulated other comprehensive income (6 ) 932 Treasury stock � (22,298 ) � (12,165 ) Total shareholders� equity � 38,598 � � 42,287 � Total liabilities and shareholders� equity $ 70,648 � $ 61,869 �