Contact: Betty Feezor
Phone: 404-728-2363 For Immediate Release
---------------------
NDC ANNOUNCES SECOND QUARTER RESULTS
ATLANTA, December 20, 2000 --- National Data Corporation (NDC: NYSE) today
announced results for the second quarter of fiscal year 2001 ended November 30,
2000.
Earnings per share was $.50 basic and $.48 per fully diluted share, prior
to the effect of accounting for the spin-off of Global Payments and certain one
time items. This compares to earnings of $.45 basic and $.44 per fully diluted
share in the second quarter last year.
Revenue for the period, net of operations divested in the last year, was
$165.2 million. The comparable figure for last year's second quarter was $152.9
million. Revenue, including divested operations, was $166.3 million compared
with $169.2 million last year. Revenue, net of divested operations, for NDC
Health was $83.4 million compared to $71.2 million last year. Global Payments'
comparable revenue was $81.8 million versus $81.7 million last year.
Cash earnings, as reflected by EBITDA, was at an annualized rate of $178.0
million for the second quarter compared to $166.4 million annualized rate in
last year's second quarter. This amounts to $5.41 per basic share. EBITDA margin
in the quarter increased to 26.8% from 24.6% last year.
Operating income for the period was $30.9 million versus $28.5 million in
the previous year, with margins increasing to 18.6% from 16.8%.
These results are shown on page 1 of the attachment.
GAAP reporting for the quarter reflects accepted accounting practices that
call for showing Global Payments as a discontinued operation, as well as
including one time spin-off and restructuring costs at this time. The
restructuring charges were identified publicly 12 months ago and are $2.2
million. Including these transactions, GAAP fully diluted earnings totaled $.19
per share versus a loss of ($.46) in last year's second quarter. The resulting
figures are for the remaining Healthcare business. These are shown on page 2
for the second quarter and page 3 for year to date GAAP reporting.
For Global Payments, second quarter revenue including divested operations
was $82.6 million; operating income was $16.0 million; net income was $8.4
million and basic earnings per share was $.26.
The balance sheet is strong and reflects reductions in accounts receivable
days sales outstanding from 52 days on May 31, 2000 to 48 days currently. Bank
debt has been reduced by 17% over the same period. On a year-to-date basis, cash
flow from operations was $72.3 million.
The company made significant progress during the quarter on the planned
spin-off of its Global Payments subsidiary. A private letter ruling confirming
the tax free nature of the transaction has been received from the Internal
Revenue Service. All intercompany operating and service arrangements are
complete and in effect. All executive positions have been filled for both
companies. The remaining open
item is completion of the registration process with the Securities and Exchange
Commission for Global's securities. Global's Form 10 filing was recently
amended to reflect the planned acquisition of Canadian Imperial Bank of
Commerce's merchant acquiring business and the formation of a ten year marketing
alliance announced on November 9, 2000.
"The second quarter results were very good from several standpoints," said
Robert A. Yellowlees, National Data Corporation Chairman and Chief Executive
Officer. " First, revenue growth indicators in key business areas, cash earnings
levels and margin expansion show positive signs. Second, the major strategic
repositioning and consolidation was completed in the quarter. Finally, we
completed all of the planning and operational tasks necessary for the new two
company environment.
"In the last five fiscal years we have had compound annual growth rates of
20% in revenue, 25% in EBITDA, 31% in operating income and 19% in cash flow from
operations.
"Since 1995 we have created two businesses that are both significantly
larger than our original business was five years ago. Two businesses with
broader product lines and more diverse distribution channels. They have
stronger business models which generate greater cash earnings. And their
breadth of talented people and management has continued to expand.
"Now we are fully prepared for the pending spin off of Global Payments. It
will provide our shareholders with two excellent franchises in very attractive
markets. The businesses are well positioned to take advantage of the
opportunities that the markets afford - with strong management and excellent
leaders in Paul Garcia and Walter Hoff."
National Data Corporation is a leading provider of electronic commerce
solutions and health information services that add value to its customers'
operations.
When used in this report, press releases, and elsewhere by management of
National Data Corporation, from time to time, the words "believes,"
"anticipates," "expects," and similar expressions are intended to identify
forward-looking statements concerning the Company's operations, economic
performance and financial condition, including in particular, the Company's
ability to realize the benefits of the change in our business, the write-offs,
and the charges, including growth in revenue and earnings. These statements are
based on a number of assumptions and estimates which are inherently subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Company, and reflect future business decisions which are subject
to change. A variety of factors could cause actual results to differ materially
from those anticipated in the Company's forward-looking statements, some of
which include competition in the market for the Company's services, continued
expansion of the Company's product and service offerings, product demand, market
and customer acceptance, the effect of economic conditions, competition,
pricing, development difficulties, the ability to consummate and integrate
acquisitions, and other risk factors that are discussed from time to time in the
Company's Securities and Exchange Commission ("SEC") reports and other filings.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligations to publicly release the results of any revisions to these forward-
looking statements that may be made to reflect events or circumstances after the
date hereof, or thereof, as the case may be, or to reflect the occurrence of
unanticipated events.
###
Consolidated Results, net of one time charges
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (ADJUSTED)
NATIONAL DATA CORPORATION AND SUBSIDIARIES
(In thousands, except per share data)
- -----------------------------------------------------------------------------------------------------
Three Months Ended November 30,
-----------------------------------------------------
2000 1999
------------------------ ------------------------
Revenues (excluding divested businesses) $165,206 $152,866
Revenues (divested businesses) 1,090 16,335
------------------------ ------------------------
Revenues (total) 166,296 169,201
- -----------------------------------------------------------------------------------------------------
Operating expenses:
Cost of service 82,136 85,169
Sales, general and administrative 53,253 55,579
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135,389 140,748
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Operating income 30,907 28,453
- -----------------------------------------------------------------------------------------------------
EBITDA 44,505 41,595
Other income (expense):
Interest and other income 543 427
Interest and other expense (3,276) (3,402)
Minority interest in earnings (1,350) (923)
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(4,083) (3,898)
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Income before income taxes 26,824 24,555
Provision for income taxes 10,327 9,454
- -----------------------------------------------------------------------------------------------------
Net income $ 16,497 $ 15,101
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Basic earnings per share:
Basic earnings per share $0.50 $0.45
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Diluted earnings per share:
Diluted earnings per share $0.48 $0.44
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Press Release Page 1
GAAP Reporting: Includes divested businesses
and one time charges
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
NATIONAL DATA CORPORATION AND SUBSIDIARIES
(In thousands, except per share data)
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended November 30,
-------------------------------------------------------
2000 1999
------------------------- -------------------------
Revenues $83,666 $ 85,027
- ---------------------------------------------------------------------------------------------------------------------
Operating expenses:
Cost of service 49,349 53,950
Sales, general and administrative 19,381 29,014
Restructuring and impairment charges 2,156 34,393
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70,886 117,357
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Operating income (loss) 12,780 (32,330)
- ---------------------------------------------------------------------------------------------------------------------
Other income (expense):
Interest and other income 13 2,361
Interest and other expense (1,794) (1,745)
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(1,781) 616
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Income (loss) before income taxes and discontinued operations 10,999 (31,714)
Provision (benefit) for income taxes 4,310 (10,546)
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) before discontinued operations 6,689 (21,168)
Discontinued operations - PHSS, net of tax - (2,323)
Discontinued operations - Global Payments Inc., net of tax 8,407 8,023
Discontinued operations - Spin-off Special Charge, net of tax (8,733) -
- ---------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 6,363 $(15,468)
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Basic earnings per share:
Income (loss) before discontinued operations $ 0.20 $ (0.63)
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Discontinued operations - PHSS $ - $ (0.07)
Discontinued operations - Global Payments Inc. $ 0.26 $ 0.24
Discontinued operations - Spin-off Special Charge $ (0.27) $ -
-------------------------------------------------------
Basic earnings (loss) per share $ 0.19 $ (0.46)
------------------------------------------------------
Diluted earnings (loss) per share:
Income (loss) before discontinued operations $ 0.20 $ (0.63)
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Discontinued operations - PHSS $ - $ (0.07)
Discontinued operations - Global Payments Inc. $ 0.25 $ 0.24
Discontinued operations - Spin-off Special Charge $ (0.27) $ -
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Diluted earnings (loss) per share $ 0.19 $ (0.46)
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Press Release Page 2
GAAP Reporting: Includes divested businesses
and one time charges
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
NATIONAL DATA CORPORATION AND SUBSIDIARIES
(In thousands, except per share data)
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended November 30,
------------------------------------------------------
2000 1999
------------------------- ------------------------
Revenues $169,540 $170,747
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Operating expenses:
Cost of service 99,871 104,693
Sales, general and administrative 40,546 48,168
Restructuring and impairment charges 2,156 34,393
------------------------------------------------------
142,573 187,254
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Operating income (loss) 26,967 (16,507)
- -----------------------------------------------------------------------------------------------------------------------------------
Other income (expense):
Interest and other income 30 3,742
Interest and other expense (3,753) (3,299)
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(3,723) 443
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Income (loss) before income taxes and discontinued operations 23,244 (16,064)
Provision (benefit) for income taxes 9,024 (4,529)
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before discontinued operations 14,220 (11,535)
Discontinued operations - PHSS, net of tax - (18,223)
Discontinued operations - Global Payments Inc., net of tax 17,056 19,227
Discontinued operations - Spin-off Special Charge, net of tax (8,733) -
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 22,543 $(10,531)
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Basic earnings per share:
Income (loss) before discontinued operations $ 0.43 $ (0.35)
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Discontinued operations - PHSS $ - $ (0.55)
Discontinued operations - Global Payments Inc. $ 0.52 $ 0.58
Discontinued operations - Spin-off Special Charge $ (0.27) $ -
-----------------------------------------------------
Basic earnings (loss) per share $ 0.69 $ (0.32)
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Diluted earnings (loss) per share:
Income (loss) before discontinued operations $ 0.42 $ (0.35)
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Discontinued operations - PHSS $ - $ (0.55)
Discontinued operations - Global Payments Inc. $ 0.51 $ 0.55
Discontinued operations - Spin-off Special Charge $ (0.27) $ -
-----------------------------------------------------
Diluted earnings (loss) per share $ 0.67 $ (0.32)
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Press Release Page 3
UNAUDITED CONSOLIDATED BALANCE SHEETS
NATIONAL DATA CORPORATION AND SUBSIDIARIES
(In thousands, except share and per share data)
- ----------------------------------------------------------------------------------------------------------------------------------
November 30, May 31,
2000 2000
------------------ ------------------
ASSETS
Current assets:
Cash and cash equivalents $ 7,286 $ 1,789
Accounts receivable 61,648 73,025
Allowance for doubtful accounts (6,243) (7,316)
------------------ ------------------
Accounts receivable, net 55,405 65,709
------------------ ------------------
Income tax receivable 28,867 1,962
Deferred income taxes 298 20,097
Prepaid expenses and other current assets 17,275 13,857
------------------ ------------------
Total current assets 109,131 103,414
------------------ ------------------
Property and equipment, net 79,130 69,265
Intangible assets, net 217,275 214,800
Deferred income taxes 15,565 32,247
Investments 36,322 5,948
Other 9,539 4,346
Net assets of discontinued operations 205,702 220,312
------------------ ------------------
Total Assets $672,664 $650,332
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit $ 57,000 $ 68,500
Current portion of long-term debt 164 159
Obligations under capital leases 5,362 5,803
Accounts payable and accrued liabilities 57,183 55,082
Accrued spinoff related liabilities 10,819 -
Deferred income 23,899 23,319
------------------ ------------------
Total current liabilities 154,427 152,863
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Long-term debt 152,425 152,495
Obligations under capital leases 1,607 1,793
Other long-term liabilities 15,016 13,045
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Total liabilities 323,475 320,196
------------------ ------------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, par value $1.00 per share; 1,000,000 shares authorized,
none issued - -
Common stock, par value $.125 per share; 200,000,000 shares authorized;
33,953,008 shares issued 4,244 4,244
Capital in excess of par value 348,174 349,387
Treasury stock, at cost, 1,019,859 and 1,211,880 shares, respectively (26,897) (31,960)
Retained earnings 38,375 20,763
Deferred compensation (6,798) (7,332)
Unrealized holding loss (4,264) (1,727)
Cumulative translation adjustment (3,645) (3,239)
------------------ ------------------
Total shareholders' equity 349,189 330,136
------------------ ------------------
Total Liabilities and Shareholders' Equity $672,664 $650,332
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Press Release Page 4