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NATIONAL COMPUTER SYSTEMS ANNOUNCES THIRD QUARTER RESULTS

 MINNEAPOLIS, Nov. 18 /PRNewswire/ -- National Computer Systems Inc. (NASDAQ: NLCS) announced today that third quarter net income declined to $1,505,000 or $0.10 per share from $3,753,000 or $0.23 per share in the same quarter a year ago. Revenues rose 5.3 percent to $77,645,000 from $73,719,000, although the growth in revenues was below the Company's expectations. For the first nine months of fiscal 1993, net income declined to $7,470,000 or $0.48 per share compared with $10,130,000 or $0.63 per share in the same period a year ago. Revenues rose 3.6 percent to $221,828,000 from $214,054,000.
 Revenue growth in the third quarter was affected by delays in shipping new products and by lower than expected sales of certain other current products. Gross margins were impacted by the lower than expected revenues and a less favorable sales mix, while operating margins were hurt by higher operating expenses built to support the higher revenue plan.
 "Obviously we are disappointed in our third quarter performance, but we are taking steps to strengthen our product line, improve our product development capability and sales productivity, and, at the same time, reduce costs and increase operating efficiencies" commented Chairman and CEO Charles W. Oswald. "Our markets are healthy and we believe we offer cost effective solutions for our customers. We look forward to improved results in our fourth quarter and in fiscal 1994."
 National Computer Systems is an information services company serving the education, business, financial, and assessment markets. The Company's common stock is traded on the NASDAQ National Market System under the symbol NLCS.
 NATIONAL COMPUTER SYSTEMS, INC.
 CONSOLIDATED BALANCE SHEETS
 (In thousands)
 October 31, 1993 January 31, 1993
 Cash $639 $10,767
 Accounts receivable 66,911 65,370
 Inventories 18,018 14,006
 Other current assets 9,507 8,644
 Total current assets 95,075 98,787
 Property, plant & equipment, net 65,121 62,133
 Software products 36,025 30,166
 Non-current receivables,
 investments and other 17,364 17,452
 Goodwill 5,340 6,201
 Total Other Assets 58,729 53,819
 Total Assets $218,925 $214,739
 Current maturities 1,022 1,481
 Accounts payable 12,979 18,006
 Accrued expenses 19,848 21,403
 Deferred income 18,821 16,808
 Income taxes 176 2,297
 Total Current Liabilities 52,846 59,995
 Deferred income taxes 9,838 9,558
 Long-term debt 44,561 23,869
 Stockholders' equity 111,680 121,317
 Total Liabilities and
 Stockholder's Equity $218,925 $214,739
 Income Statement
 For the three month period ended October 31, 1993
 (in thousands, except per share amounts)
 Three Months
 1993 1992
 Net Sales $60,777 $56,775
 Maintenance & Support 16,868 16,944
 Total Revenues 77,645 73,719
 Cost of Net Sales 37,471 33,468
 Cost of Maint & Support 12,304 12,920
 Gross Profit 27,870 27,331
 Operating Expenses
 Sales & Marketing 11,899 9,848
 Research & Development 2,501 2,348
 General & Administrative 10,029 8,886
 Income from Operations 3,441 6,249
 Interest and other expense 561 271
 Income before taxes 2,880 5,978
 Income taxes 1,375 2,225
 Net Income 1,505 3,753
 Primary Earnings per share $0.10 $0.23
 Average Shares Outstanding 15,403 16,033
 Income Statement
 For the nine month period ended October 31, 1993
 (in thousands, except per share amounts)
 Nine Months
 1993 1992
 Net Sales $169,918 $162,017
 Maintenance & Support 51,910 52,037
 Total Revenues 221,828 214,054
 Cost of Net Sales 97,569 92,123
 Cost of Maintenance & Support 38,604 39,794
 Gross Profit 85,655 82,137
 Operating Expenses
 Sales & Marketing 35,275 29,003
 Research & Development 6,911 6,629
 General & Administrative 29,646 28,709
 Income from Operations 13,823 17,796
 Interest and other expense 1,328 1,566
 Income before taxes 12,495 16,230
 Income Taxes 5,025 6,100
 Net Income 7,470 10,130
 Primary Earnings per share $0.48 $0.63
 Average Shares Outstanding 15,712 16,071
 -0- 11/18/93
 /CONTACT: Robert Kleiber of National Computer Systems, 612-829-3116/
 (NLCS)


CO: National Computer Systems ST: Minnesota IN: CPR SU: ERN

DS -- MN004 -- 5872 11/18/93 08:55 EST
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Date:Nov 18, 1993
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