UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended February 28, 2001
------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File No. 001-12392
---------
NATIONAL DATA CORPORATION
-------------------------
(Exact name of registrant as specified in charter)
DELAWARE 58-0977458
-------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
National Data Plaza, Atlanta, Georgia 30329-2010
------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 404-728-2000
------------
NONE
--------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last year)
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 period 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 [_].
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Common Stock, Par Value $.125 - 33,532,579 shares
------------------------------------------------
Outstanding as of April 6, 2001
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
NATIONAL DATA CORPORATION AND SUBSIDIARIES
(In thousands, except per share data)
================================================================================================================
Three Months Ended February 28/29,
-------------------------------------
2001 2000
-------------------------------------
Revenues:
Information management $ 37,195 $ 33,746
Network services and systems 51,037 37,957
Divested businesses - 14,165
--------------------------------------
88,232 85,868
- -----------------------------------------------------------------------------------------------------------------
Operating expenses:
Cost of service 45,718 44,893
Sales, general and administrative 18,653 19,654
Depreciation and amortization 8,686 6,990
--------------------------------------
73,057 71,537
--------------------------------------
Operating income 15,175 14,331
- -----------------------------------------------------------------------------------------------------------------
Other income (expense):
Interest and other income 101 88
Interest and other expense (2,054) (1,727)
Minority interest in losses 841 -
--------------------------------------
(1,112) (1,639)
--------------------------------------
Income before income taxes and discontinued operations 14,063 12,692
Provision for income taxes 5,414 4,882
- -----------------------------------------------------------------------------------------------------------------
Income before discontinued operations 8,649 7,810
Discontinued operations - net of tax (See Note 4) - (6,616)
- -----------------------------------------------------------------------------------------------------------------
Net income $ 8,649 $ 1,194
======================================
Basic earnings per share:
Income before discontinued operations $ 0.26 $ 0.24
--------------------------------------
Discontinued operations - net of tax (See Note 4) $ - $ (0.20)
--------------------------------------
Basic earnings per share $ 0.26 $ 0.04
--------------------------------------
Diluted earnings per share:
Income before discontinued operations $ 0.25 $ 0.23
--------------------------------------
Discontinued operations - net of tax (See Note 4) $ - $ (0.20)
--------------------------------------
Diluted earnings per share $ 0.25 $ 0.04
--------------------------------------
See Notes to Unaudited Consolidated Financial Statements.
2
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
NATIONAL DATA CORPORATION AND SUBSIDIARIES
(In thousands, except per share data)
=================================================================================================================
Nine Months Ended February 28/29,
-------------------------------------------
2001 2000
-------------------------------------------
Revenues:
Information management $ 105,188 $ 101,777
Network services and systems 146,722 112,296
Divested businesses 5,862 42,542
-------------------------------------------
257,772 256,615
- -----------------------------------------------------------------------------------------------------------------
Operating expenses:
Cost of service 130,720 136,103
Sales, general and administrative 57,172 65,153
Depreciation and amortization 25,582 23,142
Restructuring and impairment charges 2,156 34,393
-------------------------------------------
215,630 258,791
-------------------------------------------
Operating income (loss) 42,142 (2,176)
- -----------------------------------------------------------------------------------------------------------------
Other income (expense):
Interest and other income 131 3,830
Interest and other expense (5,690 ) (5,026)
Minority interest in losses 724 -
--------------------------------------------
(4,835 ) (1,196)
--------------------------------------------
Income (loss) before income taxes and discontinued operations 37,307 (3,372)
Provision for income taxes 14,438 353
- ------------------------------------------------------------------------------------------------------------------
Income (loss) before discontinued operations 22,869 (3,725)
Discontinued operations - net of tax (See Note 4) 8,323 (5,612)
- ------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 31,192 $ (9,337)
============================================
Basic earnings (loss) per share:
Income (loss) before discontinued operations $ 0.70 $ (0.11)
--------------------------------------------
Discontinued operations - net of tax (See Note 4) $ 0.25 $ (0.17)
--------------------------------------------
Basic earnings (loss) per share $ 0.95 $ (0.28)
--------------------------------------------
Diluted earnings (loss) per share:
Income (loss) before discontinued operations $ 0.67 $ (0.11)
--------------------------------------------
Discontinued operations - net of tax (See Note 4) $ 0.25 $ (0.17)
--------------------------------------------
Diluted earnings (loss) per share $ 0.92 $ (0.28)
--------------------------------------------
See Notes to Unaudited Consolidated Financial Statements.
3
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
NATIONAL DATA CORPORATION AND SUBSIDIARIES
(In thousands)
====================================================================================================================
Nine Months Ended February 28/29,
----------------------------------------
2001 2000
---- ----
Cash flows from operating activities:
Net income (loss) $ 31,192 $ (9,337)
Adjustments to reconcile net income (loss) to cash provided by
operating activities before changes in assets and liabilities:
Non-cash restructuring and impairment charges 930 23,880
(Income) loss from discontinued operations (8,323) 5,612
Depreciation and amortization 25,582 23,142
Deferred income taxes 36,017 (12,856)
Provision for bad debts 490 8,778
Other, net 718 (4,161)
Changes in assets and liabilities which provided (used) cash,
net of the effects of acquisitions:
Accounts receivable, net (481) 11,223
Prepaid expenses and other assets (8,929) 140
Accounts payable and accrued liabilities (6,643) 12,492
Deferred income 760 (3,787)
Income taxes (15,720) 5,164
--------------------------------------
Net cash provided by operating activities 55,593 60,290
--------------------------------------
Cash flows from investing activities:
Capital expenditures (25,177) (18,628)
Business acquisitions, net of acquired cash (23,224) -
Sale of marketable securities - 2,974
Business divestitures 20,000 3,500
Purchase of investment (18,092) (10,045)
--------------------------------------
Net cash used in investing activities (46,493) (22,199)
--------------------------------------
Cash flows from financing activities:
Net repayments under lines of credit (68,500) (15,000)
Net principal payments under capital lease arrangements
and other long-term debt (2,126) (14,478)
Net issuances (purchases) related to stock activities 5,292 (33,779)
Dividends paid (7,409) (7,481)
--------------------------------------
Net cash used in financing activities (72,743) (70,738)
--------------------------------------
Net cash provided by discontinued operations 10,305 26,682
Cash dividend from Global Payments Inc. 77,600 -
--------------------------------------
Increase in cash and cash equivalents 24,262 (5,965)
Cash and cash equivalents, beginning of period 1,789 2,058
--------------------------------------
Cash and cash equivalents, end of period $ 26,051 $ (3,907)
======================================
See Notes to Unaudited Consolidated Financial Statements.
4
UNAUDITED CONSOLIDATED BALANCE SHEETS
NATIONAL DATA CORPORATION AND SUBSIDIARIES
(In thousands, except share and per share data)
=========================================================================================================================
February 28, May 31,
2001 2000
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 26,051 $ 1,789
Accounts receivable 65,138 73,025
Allowance for doubtful accounts (6,908) (7,316)
----------- -----------
Accounts receivable, net 58,230 65,709
----------- -----------
Income tax receivable 21,744 1,962
Deferred income taxes - 20,097
Prepaid expenses and other current assets 19,895 13,857
----------- ----------
Total current assets 125,920 103,414
----------- -----------
Property and equipment, net 80,313 69,265
Intangible assets, net 226,480 214,800
Deferred income taxes 16,327 32,247
Investments 36,449 5,948
Other 7,740 4,346
Net assets of discontinued operations - 220,312
----------- -----------
Total Assets $ 493,229 $ 650,332
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit $ - $ 68,500
Current portion of long-term debt 168 159
Obligations under capital leases 4,118 5,803
Accounts payable and accrued liabilities 53,673 55,082
Accrued spinoff related liabilities 6,484 -
Deferred income taxes 464 -
----------- -----------
Deferred income 20,208 23,319
----------- -----------
Total current liabilities 85,115 152,863
----------- -----------
Long-term debt 152,384 152,495
Obligations under capital leases 1,450 1,793
Other long-term liabilities 15,395 13,045
----------- -----------
Total liabilities 254,344 320,196
----------- -----------
Commitments and contingencies
Minority interest in equity of subsidiaries 12,830 -
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; 33,827,690
and 33,953,008 shares issued, respectively 4,228 4,244
Capital in excess of par value 208,589 349,387
Treasury stock, at cost, 868,426 and 1,211,880 shares, respectively (22,903) (31,960)
Retained earnings 44,546 20,763
Deferred compensation (2,626) (7,332)
Unrealized holding loss (4,137) (1,727)
Cumulative translation adjustment (1,642) (3,239)
----------- -----------
Total shareholders' equity 226,055 330,136
----------- -----------
Total Liabilities and Shareholders' Equity $ 493,229 $ 650,332
=========== ===========
See Notes to Unaudited Consolidated Financial Statements.
5
NOTES TO UNAUDITED CONSOLIDATED
-------------------------------
FINANCIAL STATEMENTS
--------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
On January 31, 2001, National Data Corporation (the "Company") completed the
spin-off of its eCommerce business segment, encompassed in the newly formed
Global Payments Inc. subsidiary, into a separate publicly traded company with
its own management and Board of Directors to permit the Company to increase
focus on its core businesses. As a result of the spin-off, the Company's
financial statements have been prepared with Global Payments' net assets,
results of operations, and cash flows displayed separately as "discontinued
operations" with all historical financial statements restated to conform to this
presentation, in accordance with Accounting Principles Board Opinion No. 30,
"Reporting the Results of Operations".
National Data Corporation's healthcare information business segment is the
remaining stand-alone business after the spin-off. Accordingly, National Data
Corporation is now doing business as NDCHealth.
In the third quarter of fiscal 2000 the Company decided to pursue the
divestiture of its management services business and has placed this business
into a discontinued operations category in accordance with Accounting Principles
Board Opinion No. 30. All prior periods have been restated to reflect the
discontinued operations accounting treatment. During the first quarter of fiscal
2001, the Company completed the sale of the management services business.
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes the disclosures are adequate to make
the information presented not misleading. In addition, certain reclassifications
have been made to the fiscal 2000 consolidated financial statements to conform
to the fiscal 2001 presentation.
It is suggested that these financial statements be read in conjunction with the
audited financial statements and notes thereto included in the Company's latest
annual report on Form 10-K for the fiscal year ended May 31, 2000.
In the opinion of management, the information furnished reflects all adjustments
necessary to present fairly the financial position, results of operations, and
cash flows for the interim periods presented.
6
NOTE 2 - EARNINGS PER SHARE:
Basic earnings per share is computed by dividing reported net earnings available
to common shareholders by weighted average shares outstanding during the period.
Diluted earnings per share is computed by dividing reported net earnings
available to common shareholders by weighted average shares outstanding during
the period and the impact of securities that, if exercised, and convertible debt
that, if converted, would have a dilutive effect on earnings per share. All
options with an exercise price less than the average market share price for the
period have a dilutive effect on earnings per share.
The following table sets forth the computation of basic and diluted earnings (in
thousands, except per share data):
Three Months Ended (Before Discontinued Operations)
----------------------------------------------------------------------------------
February 28, 2001 February 29, 2000
----------------------------------------------------------------------------------
Income Shares Per Share Income Shares Per Share
------ ------ --------- ------ ------ ---------
Basic EPS:
Income $ 8,649 32,992 $ 0.26 $ 7,810 32,920 $ 0.24
========= =========
Effect of Dilutive Securities:
Stock Options --- 1,356 --- 890
---------------------- --------------------
8,649 34,348 7,810 33,810
Convertible debt --- --- --- ---
---------------------- --------------------
Diluted EPS:
Income plus assumed conversions $ 8,649 34,348 $ 0.25 $ 7,810 33,810 $ 0.23
================================================================================
Three Months Ended (After Discontinued Operations)
----------------------------------------------------------------------------------
February 28, 2001 February 29, 2000
----------------------------------------------------------------------------------
Income Shares Per Share Income Shares Per Share
------ ------ --------- ------ ------ ---------
Basic EPS:
Net income $ 8,649 32,992 $ 0.26 $1,194 32,920 $ 0.04
========= =========
Effect of Dilutive Securities:
Stock Options --- 1,356 --- 890
--------------------- --------------------
8,649 34,348 1,194 33,810
Convertible debt --- --- --- ---
--------------------- --------------------
Diluted EPS:
Net Income plus assumed conversions $ 8,649 34,348 $ 0.25 $1,194 33,810 $ 0.04
================================================================================
7
Nine Months Ended (Before Discontinued Operations)
----------------------------------------------------------------------------------
February 28, 2001 February 29, 2000
----------------------------------------------------------------------------------
Income Shares Per Share Income Shares Per Share
------ ------ --------- ------ ------ ---------
Basic EPS:
Income (loss) $22,869 32,879 $ 0.70 ($3,725) 33,392 ($ 0.11)
========= =========
Effect of Dilutive Securities:
Stock Options --- 1,057 --- ---
--------------------- --------------------
22,869 33,936 (3,725) 33,392
Convertible debt --- --- --- ---
--------------------- --------------------
Diluted EPS:
Income (loss) plus assumed
conversions $22,869 33,936 $ 0.67 ($3,725) 33,392 ($ 0.11)
================================================================================
Nine Months Ended (After Discontinued Operations)
----------------------------------------------------------------------------------
February 28, 2001 February 29, 2000
----------------------------------------------------------------------------------
Income Shares Per Share Income Shares Per Share
------ ------ ---------- ------ ------ ---------
Basic EPS:
Net income (loss) $31,192 32,879 $ 0.95 ($9,337) 33,392 ($ 0.28)
=========== =========
Effect of Dilutive Securities:
Stock Options --- 1,057 --- ---
---------------------- --------------------------
31,192 33,936 (9,337) 33,392
Convertible debt --- --- --- ---
---------------------- ----------- --------
Diluted EPS:
Net Income (loss) plus assumed
conversions $31,192 33,936 $ 0.92 ($9,337) 33,392 ($ 0.28)
==================================================================================
For the three and nine months ended February 28, 2001 and February 29, 2000,
convertible debt had an antidilutive effect on diluted earnings per share before
and after discontinued operations; accordingly, diluted earnings per share was
not adjusted for convertible debt.
8
NOTE 3 - RESTRUCTURING AND IMPAIRMENT CHARGES:
During the last 24 months, we completed a significant strategy review and
implemented a plan to focus on our core products and services. As a result, the
last two years have represented a major transition period for our Company. This
included management's evaluation, during the second quarter of fiscal year 2000,
of the Company's current product and service offerings in light of changing
market and technological environments. The decision was made to focus management
attention on the core information management and network services and systems as
well as related Internet initiatives. Accordingly, actions were initiated to
eliminate non-core as well as obsolete and redundant product and service
offerings. In addition, the Company accelerated clearing house integration,
consolidation of locations, and associated staff and expense reductions. Total
restructuring and asset impairment charges during the second quarter of fiscal
2000 were $34.4 million. Of this total, approximately $10.5 million were cash
items that were accrued at the time the charges were incurred. At the end of the
second quarter of fiscal 2000, we also disclosed that we would have additional
restructuring and other unusual charges of up to $10 million in the next twelve
months.
Of this projected $10 million in additional charges, the Company incurred $2.2
million of restructuring and impairment charges during the second quarter of
fiscal 2001 as these actions were finalized and implemented. Of this total,
approximately $1.2 million were cash items that were accrued at the time the
charges were incurred. These cash items include severance and related costs of
$1.1 million and facility exit costs of $0.1 million. The severance and related
costs arose from the Company's actions to reduce personnel staffing in areas of
redundant operations and activities. These charges reflect 58 specifically
identified executives and employees who were informed of their termination
during the second quarter of fiscal 2001. The facility costs relate to a
location that was closed during the quarter. The remaining $1.0 million
impairment charge was the result of the write down and divestiture of a non-core
operation.
As of February 28, 2001, $3.3 million of the cash portion of the restructuring
charges remains accrued as a current liability and $0.2 million is accrued as a
long-term liability in the respective liabilities sections of the balance sheet
as follows:
(in thousands)
Current
Original Year Payments Long-
Total Additions To Date Current Term
- --------------------------------------------------------------------------------------------------------------------------------
Closed or planned closings of facilities $ 6,100 $ 160 $ 5,320 $ 748 $192
Estimated costs for settlements on contracts
2,236 - 498 1,738 -
Severance and related costs 2,177 1,066 2,383 860 -
-----------------------------------------------------------------------
Total $10,513 $ 1,226 $ 8,201 $3,346 $ 192
=======================================================================
9
NOTE 4 - DISCONTINUED OPERATIONS
On December 20, 1999, the Company announced its intention to spin-off its
eCommerce business segment, encompassed in the newly formed Global Payments Inc.
subsidiary. This spin-off was contingent on receiving a favorable opinion from
outside counsel regarding the tax-free status of the dividend. On November 15,
2000 the Company received a favorable opinion from counsel based on an IRS
ruling and completed the spin-off on January 31, 2001. The spin-off was
accomplished by distributing all of the shares of common stock of Global
Payments to NDC stockholders. NDC stockholders received 0.8 share of Global
Payments Inc. common stock for each share of NDC common stock held as of the
January 19, 2001 record date.
As a result of the spin-off, the Company's February 28, 2001 financial
statements have been prepared with Global Payments' net assets, results of
operations, and cash flows displayed separately as "discontinued operations"
with all historical financial statements restated to conform to this
presentation, in accordance with Accounting Principles Board Opinion No. 30,
"Reporting the Results of Operations". During the second quarter of fiscal 2001,
the Company recorded an expense of $10.0 million to reflect the net costs
associated with effecting the spin-off ($8.7 million after tax, or $0.27 per
share). These costs include legal and investment banker fees, severance,
duplicate software licenses, and other related costs partially offset by the
projected income for Global Payments for the period from the measurement date
through January 31, 2001.
Additionally, in the third quarter of fiscal 2000, the Company made the decision
to divest its management services business and account for this business area as
discontinued operations in accordance with Accounting Principles Board Opinion
No. 30. The Company successfully completed the sale of this management services
business for total cash consideration of $20.0 million in the first quarter of
fiscal 2001.
The operating results of the discontinued operations for the three and nine
months ended February 28, 2001 and February 29, 2000 are summarized as follows:
Three months ended February 28, 2001
------------------------------------------------
Global Payments Management
(In thousands, except per share data): Inc. Services Total
- ----------------------------------------------------------------------------------------------------------------------
Revenue $ 53,770 $ - $ 53,770
Operating income 8,247 - 8,247
------------------------------------------------
Net income from discontinued operations $ - $ - $ -
================================================
Diluted earnings (loss) per share:
Total $ - $ - $ -
------------------------------------------------
10
Three months ended February 29, 2000
------------------------------------------------------
Global Management
(In thousands, except per share data): Payments Inc. Services Total
- ----------------------------------------------------------------------------------------------------------------------------
Revenue $ 81,827 $ 26,250 $108,077
Operating income (loss) 13,420 (5,053) 8,367
Income (loss) from operations, net of tax 6,930 (3,165) 3,765
Projected phase-out loss from operations, net of tax - (10,381) (10,381)
------------------------------------------------------
Net income (loss) from discontinued operations $ 6,930 $ (13,546) $ (6,616)
======================================================
Diluted earnings (loss) per share:
From operations $ 0.21 $ (0.10) $ 0.11
------------------------------------------------------
Projected phase-out loss from operations $ - $ (0.31) $ (0.31)
------------------------------------------------------
Total $ 0.21 $ (0.41) $ (0.20)
------------------------------------------------------
Nine months ended February 28, 2001
------------------------------------------------------
Global Management
(In thousands, except per share data): Payments Inc. Services Total
- ----------------------------------------------------------------------------------------------------------------------------
Revenue $ 223,592 $ 21,905 $ 191,727
Operating income 40,801 168 32,722
Income from operations, net of tax 17,056 - 17,056
Spin-off special charge, net of tax (8,733) - (8,733)
-------------------------------------------------------
Net income from discontinued operations $ 8,323 $ - $ 8,323
=======================================================
Diluted earnings (loss) per share:
From operations $ 0.50 $ - $ 0.50
-------------------------------------------------------
Spin-off special charge $ (0.26) $ - $ (0.26)
-------------------------------------------------------
Total $ 0.25 $ - $ 0.25
-------------------------------------------------------
Nine months ended February 29, 2000
------------------------------------------------------
Global Management
(In thousands, except per share data): Payments Inc. Services Total
- ----------------------------------------------------------------------------------------------------------------------------
Revenue $ 255,829 $ 81,270 $ 337,099
Operating income (loss) 49,234 (12,088) 37,146
Income (loss) from operations, net of tax 26,157 (7,628) 18,529
Projected phase-out loss from operations, net of tax - (10,381) (10,381)
-------------------------------------------------------
Income (loss) from discontinued operations before cumulative effect
of change in accounting principle 26,157 (18,009) 8,148
Cumulative effect of change in accounting principle, net of tax - (13,760) (13,760)
-------------------------------------------------------
Net income (loss) from discontinued operations $ 26,157 $ (31,769) $ (5,612)
=======================================================
Diluted earnings (loss) per share:
From operations $ 0.78 $ (0.23) $ 0.55
-------------------------------------------------------
Projected phase-out loss from operations $ - $ (0.31) $ (0.31)
-------------------------------------------------------
Cumulative effect of change in accounting principle $ - $ (0.41) $ (0.41)
-------------------------------------------------------
Total $ 0.78 $ (0.95) $ (0.17)
-------------------------------------------------------
11
The net assets of discontinued operations are summarized as follows:
February 28,
2001 May 31, 2000
------------- --------------------------------------------------
Global Management
(In thousands): Total Payments Inc. Services Total
- ------------------------------------------------------------------------------------------------------------------------------
Current assets $ - $ 67,935 $ 27,535 $ 95,470
Property and equipment, net - 28,665 5,756 34,421
Intangible assets, net - 173,726 - 173,726
Other assets (liabilities) - (73) 1,384 1,311
Current liabilities - (28,149) (7,788) (35,937)
Other long-term liabilities - (6,623) (2,370) (8,993)
Provision for estimated losses - - (21,214) (21,214)
Minority interest in equity of subsidiaries - (18,472) - (18,472)
------------- --------------------------------------------------
Net assets of discontinued operations $ - $ 217,009 $ 3,303 $ 220,312
============= ==================================================
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION:
Supplemental cash flow disclosures, including non-cash investing and financing
activities, for the nine months ended February 28, 2001 and February 29, 2000
are as follows:
(in thousands) 2001 2000
- ------------------------------------------------------------------------------------------------------
Net income taxes paid $ 905 $ 500
Interest paid 3,932 4,634
Capital leases entered into in exchange
for property and equipment - 776
Non-cash investment in MedicaLogic/Medscape, Inc. - 7,000
Non-cash investment in TechRx Incorporated 15,306 -
NOTE 6 - COMPREHENSIVE INCOME (LOSS):
The components of comprehensive income (loss) are as follows:
Three months ended February 28/29,
-----------------------------------------
(in thousands) 2001 2000
- --------------------------------------------------------------------------------------------------
Net income $ 8,649 $ 1,194
Foreign currency translation adjustment 875 (9)
Unrealized holding gain, net of tax 164 420
--------------- -------------
Total comprehensive income $ 9,688 $ 1,605
=============== =============
Nine months ended February 28/29,
-----------------------------------------
(in thousands) 2000 1999
- --------------------------------------------------------------------------------------------------
Net income (loss) $ 31,192 ($ 9,337)
Foreign currency translation adjustment 565 (15)
Unrealized holding gain (loss), net of tax (2,410) 5,176
--------------- -------------
Total comprehensive income (loss) $ 29,347 ($ 4,176)
=============== =============
12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For an understanding of the significant factors that influenced our
results, the following discussion should be read in conjunction with the
consolidated financial statements of NDCHealth and related notes appearing
elsewhere in this report.
NDCHealth provides high volume, network based information solutions and
point of service systems to the healthcare industry. Our Information Management
products and services provided to pharmaceutical manufacturers and pharmacy
chains include consulting services and database information reporting on
prescription drug sales and pharmacy operations. Our Network Services and
Systems products and services provided to pharmacies, physicians, hospitals,
integrated delivery systems, managed care organizations, payers, government
healthcare agencies, distributors, clinics, Internet portals, pharmaceutical
manufacturers and other healthcare providers and those who serve them include
electronic claims processing, eligibility, claims adjudication and payment
systems, provision of administrative and clinical services, and practice
management systems.
We serve a diverse customer base comprised of more than 180,000 physicians,
ninety percent of the pharmacies in North America and twenty-five percent of the
pharmacies in the United Kingdom, more than twenty percent of the nation's
hospitals, over 100 pharmaceutical manufacturers and over 1,000 health care
payers. In addition, we are in the early phases of entering the German and U.K.
information markets. We believe that our presence in the multiple pharmacy,
managed care organization, physician, hospital, pharmaceutical manufacturer, and
healthcare payer markets is broader than any other similar healthcare
information company and provides us with a strong competitive advantage.
Results of Operations
On December 20, 1999, we announced our intention to split into two
independent, publicly traded companies by spinning off our Global Payments
subsidiary. This spin-off was completed on January 31, 2001. As a result of the
spin-off, National Data Corporation's healthcare information business segment is
the remaining stand-alone business and is now doing business as NDCHealth. In
light of the spin-off, the NDCHealth February 28, 2001 financial statements have
been prepared with Global Payments' net assets, results of operations, and cash
flows displayed separately as "discontinued operations" with all historical
financial statements restated to conform to this presentation, in accordance
with Accounting Principles Board Opinion No. 30, "Reporting the Results of
Operations".
During the last 24 months, we completed a significant strategy review and
implemented a plan to focus on our core products and services. As a result, the
last two years have represented a major transition period for our company. As a
part of that plan, we determined to divest our management services business in
the third quarter of fiscal 2000. The sale of this management services business
was completed in the first quarter of fiscal 2001. This business is also
accounted for as discontinued operations in accordance with Accounting
Principles Board Opinion No. 30.
The remainder of the results of operations excludes these discontinued
operations.
During the last fifteen months, we have also eliminated non-core as well as
obsolete and redundant product and service offerings. In addition, we
accelerated clearing house integration, consolidation of locations and
associated staff and expense reductions. Total charges related to
13
restructuring and asset impairment were $34.4 million during the first nine
months of fiscal 2000.
During the second quarter of fiscal 2000, management also evaluated certain
significant business risks related to recent acquisitions and those locations
that were closed as part of the strategic review, including bankrupt accounts
and customer disputes. As a result of this review, unusual expenses were
recorded in the second quarter of fiscal 2000 as follows: accounts receivable
write-off of $8.0 million; bad debt allowance increases of $2.0 million;
litigation settlement expenses of $1.3 million; and write-off of $0.8 million of
prepaid expenses and recording of $1.2 million of accrued expenses.
Approximately $2.2 million of these unusual expenses were related to the
management services operation and are reflected in the results of the
discontinued operations. Accordingly, the results of the first nine months of
fiscal 2000 include approximately $45.5 million of charges related to
restructuring and asset impairment ($34.4 million) and other unusual expenses
($11.1 million). These unusual expenses are included in the Sales, General and
Administrative expenses ($9.2 million) and Cost of Service ($1.9 million).
At the end of the second quarter of fiscal 2000, we disclosed that we would
have additional restructuring and other unusual charges of up to $10 million in
the next twelve months. In the second quarter of fiscal 2001, both our Salt Lake
City operations and a portion of our Cleveland operations were closed. We also
wrote down and divested a software operation. Therefore, in the first nine
months of fiscal 2001, $2.2 million of restructuring and impairment charges are
reflected. These actions essentially complete all of the programs identified in
our strategic review.
Additionally, during the first quarter of fiscal 2001, we merged our
Pharmacy Systems business activity with TechRx Incorporated to leverage the
combined product development and distribution of both our systems to the
pharmacy market. In order to provide more meaningful comparisons, revenue from
these divested businesses is shown separately below.
Three Months Ended hNine Months Ended
February 28/29, February 28/29,
------------------------------------ ----------------------------------
(In millions) 2001 2000 Change 2001 2000 Change
------------------------------------ ----------------------------------
Revenue:
Information Management $37.2 $33.7 10% $105.2 $101.8 3%
Network Services and Systems 51.0 38.0 34% 146.7 112.3 31%
Divested Businesses - 14.2 (100%) 5.9 42.5 (86%)
---------------------------------------------------------------------------
Total $88.2 $85.9 3% $257.8 $256.6 0%
Depreciation and Amortization: $ 8.7 $ 7.0 24% $ 25.6 $ 23.1 11%
NDCHealth's earnings before interest, taxes, depreciation and amortization
(EBITDA) is defined as operating income plus depreciation and amortization and
restructuring and impairment charges. This statistic and its results as a
percentage of revenue may not be comparable to similarly titled measures
reported by other companies. However, management believes this statistic is a
relevant measurement and provides a comparable cash earnings measure by
excluding the impact of the amortization of acquired intangibles, potential
timing differences associated with capital expenditures and the related
depreciation charges, restructuring and impairment charges. EBITDA is detailed
below.
Three Months Ended Nine Months Ended
February 28/29, February 28/29,
------------------------------------ ----------------------------------
(In millions) 2001 2000 Change 2001 2000 Change
------------------------------------ ----------------------------------
EBITDA: $23.9 $21.3 12% $69.9 $55.4 26%
14
Three Months Ended Nine Months Ended
February 28/29, February 28/29,
------------------------------------ ----------------------------------
(In millions) 2001 2000 Change 2001 2000 Change
------------------------------------ ----------------------------------
Income before Income Taxes and
Discontinued Operations (IBIT):
NDCHealth $ 14.1 $ 12.7 11% $39.5 $31.0 27%
Restructuring and Impairment - - - (2.2) (34.4) 94%
--------------------------------------------------------------------------
Total IBIT $ 14.1 $ 12.7 11% $37.3 ($3.4) -
Revenue
Revenue, net of divested operations, increased to $88.2 million in the
third quarter of fiscal 2001, a 23% increase from the prior year's third quarter
revenue of $71.7 million and a 6% sequential increase from revenue of $83.5
million in the second quarter of fiscal 2001. Information Management revenue
grew to $37.2 million from $33.7 million, a 10% increase over the prior year's
third quarter. This growth resulted from providing new services to our existing
customers and new revenues from our expansion in Europe. Network Services and
Systems revenue grew to $51.0 million from $38.0 million, a 34% increase over
the prior year's third quarter. This increase was the result of growth of our
existing customers, additions to our customer base, and increased transaction
volumes from continued expansion of our product offerings as well as new revenue
from a recently acquired business that has been integrated with our existing
operations. Total GAAP reported revenue, including divested businesses, for the
third quarter of fiscal 2001 was $88.2 million, an increase of $2.3 million, or
3%, from the third quarter of fiscal 2000. This increase was the result of
increased revenues in our continuing operations and new revenues from our
acquisition offsetting the lost revenues from the Divested Businesses.
Revenue, net of divested operations, increased by 18% to $251.9 million in
the first nine months of fiscal 2001 from $214.1 million in the prior year's
first nine months. Information Management revenue grew to $105.2 million from
$101.8 million, or 3%. Network Services and Systems revenue grew to $146.7
million from $112.3 million, or 31%. These increases were due to the same
factors described above. Total GAAP revenue for the first nine months of fiscal
2001 increased to $257.8 million from $256.6 million in the prior year's first
nine months. This increase was the result of increased revenues in our
continuing operations and new revenues from acquisitions offsetting the lost
revenues from the Divested Businesses.
Operating Expenses
Cost of service as a percentage of revenue was 52% in both the third
quarter of fiscal 2001 and the third quarter of fiscal 2000. The absolute
dollars of Cost of service increased $0.8 million (2%) in the third quarter of
fiscal 2001 as compared to the third quarter of fiscal 2000. This 2% increase in
absolute dollars compares favorably to the revenue increase of 3% due to the
increased leverage of our infrastructure from increased transaction volumes and
divestiture of high expense margin businesses.
Cost of service as a percentage of revenue was 51% in the first nine months
of fiscal 2001 compared to 53% in the first nine months of fiscal 2000.
Excluding the $1.9 million of unusual expenses in fiscal 2000 described above in
Results of Operations, Cost of service expense as a percentage of revenue was
52% for the first nine months of fiscal 2000. Absolute dollar spending,
15
excluding these unusual charges, declined $3.5 million, or 3%, compared to the
prior year. These decreases as a percentage of revenue and in absolute dollars
were due to the increased leverage of our infrastructure from increased
transaction volumes and divestiture of high expense margin businesses.
Sales, general and administrative expense ("SG&A") decreased $1.0 million,
or 5%, in the third quarter of fiscal 2001 from the same period last year. As a
percentage of revenue, SG&A expense was 21% for the third quarter of fiscal 2001
compared to 23% for the prior year's third quarter. This decrease was the result
of the divestiture of high expense margin businesses.
SG&A expense decreased to $57.2 million for the first nine months of fiscal
2001 from $65.2 million for the first nine months of fiscal 2000. This was due
primarily to the unusual expenses ($9.2 million) in the prior year described in
Results of Operations above. Excluding these unusual expenses, SG&A expense as a
percentage of revenue was 22% for the first nine months of both fiscal 2001 and
fiscal 2000. SG&A expenses as a percentage of revenue remained flat due to
decreased expenses in the current year resulting from the divestiture of high
expense margin businesses being offset by expenses in preparation for the spin-
off of Global Payments.
Depreciation and amortization expense ("D&A") increased $1.7 million, or
24%, in the third quarter of fiscal 2001 from the same period last year. As a
percentage of revenue, D&A expense was 10% for the third quarter of fiscal 2001
compared to 8% for the prior year's third quarter. This increase was primarily
the result of the amortization of goodwill from newly acquired businesses.
D&A expense increased to $25.6 million for the first nine months of fiscal
2001 from $23.1 million for the first nine months of fiscal 2000. As a
percentage of revenue, D&A expense was 10% for the first nine months of fiscal
2001 compared to 9% for the first nine months of the prior year for the same
reason described above.
Operating Income
Operating income increased 6% to $15.2 million for the third quarter of
fiscal 2001 from $14.3 million for the third quarter of fiscal 2000. As a
percentage of revenue, the operating income margin was 17% in the third quarter
of both fiscal 2001 and fiscal 2000. Excluding the restructuring and impairment
charges in the second quarter of fiscal 2001, operating income increased 2%
sequentially to $15.2 million for the third quarter of fiscal 2001 from $14.9
million for the prior quarter.
Operating income increased to $42.1 million for the first nine months of
fiscal 2001 from an operating loss of $2.2 million for the first nine months of
fiscal 2000. Excluding the unusual expenses in fiscal 2000 and restructuring and
impairment charges in fiscal 2001 and 2000 described above, operating income
increased to $44.3 million for the first nine months of fiscal 2001 from $43.3
million for the first nine months of fiscal 2000. Excluding these charges, as a
percentage of revenue, the operating income margin was 17% in the first nine
months of both fiscal 2001 and fiscal 2000.
EBITDA
EBITDA for the third quarter of fiscal 2001 increased 12% to $23.9 million
from $21.3 million in the prior year. The EBITDA margin percentage was 27% in
the third quarter of fiscal 2001, compared to 25% in the third quarter of fiscal
2000. EBITDA for the third quarter of fiscal 2001 increased by $0.3 million
sequentially from the second quarter of fiscal 2001.
16
EBITDA for the first nine months of fiscal 2001 increased by $14.5 million,
or 26%, to $69.9 million from $55.4 million in the prior year's first nine
months due to the unusual expenses ($11.1 million) in fiscal 2000 described
above. Excluding the unusual charges, the EBITDA margin percentage was 27% in
the first nine months of fiscal 2001, compared to 26% in the first nine months
of fiscal 2000.
Other Expense
Total other expense decreased to $1.1 million for the third quarter of
fiscal 2001 compared to $1.6 million for the third quarter of fiscal 2000. This
decrease was primarily due to minority interest credit of $0.8 million which
represents the minority's share of losses attributable to subsidiaries
consolidated in our financial statements but not 100% owned by us.
Total other expense increased $3.6 million for the first nine months of
fiscal 2001 compared to the first nine months of fiscal 2000. This increase was
primarily the result of net gains recorded on the sale of marketable securities
and our dental systems business in the first nine months of fiscal 2000.
Liquidity and Capital Resources
Cash flow generated from operations provides us with a significant source
of liquidity to meet our needs. At February 28, 2001, we had cash and cash
equivalents totaling $26.1 million. Net cash provided by operating activities
decreased to $55.6 million for the first nine months of fiscal 2001 compared to
$60.3 million in the first nine months of fiscal 2000 primarily due to changes
in income taxes, decreases in accounts payable and accrued liabilities, and
increases in prepaids and other assets. The change in income taxes is due to the
loss on the disposal of the management services discontinued operations. These
losses were not deductible for tax purposes until the business was divested.
During fiscal 2001, we completed the sale of these discontinued operations;
therefore, the previously non-deductible reserves are deductible for tax
purposes and will decrease the amount of income taxes payable, favorably
impacting cash flow. The decrease in accounts payable and accrued liabilities
primarily relates to decreases in accruals relating to our recent divestitures.
The increase in prepaids and other assets primarily relates to increases in non-
trade receivables related to our recent investments and alliances.
Net cash used in investing activities was $46.5 million for the first nine
months of fiscal 2001 compared to $22.2 million for the first nine months of
fiscal 2000. This increase is primarily due to capital expenditures of $25.2
million, business acquisitions of $23.2 million and investments of $18.1
million, partially offset by $20.0 million in proceeds received from the
divestiture of the management services business. We continue to invest in
capital expenditures related to growth in our business and acceleration of
certain strategic initiatives. Additionally, during the first quarter of fiscal
2001, an agreement was reached to merge our pharmacy systems business activity
with TechRx Incorporated. As part of this agreement, we exchanged existing
assets, liabilities and cash for our investment interest in TechRx.
Net cash used in financing activities increased to $72.7 million for the
first nine months of fiscal 2001 from $70.7 million in the first nine months of
fiscal 2000. The net effect of the payments and borrowings against the lines of
credit is $68.5 million in payments for the first nine months of fiscal 2001
compared to $15.0 million for the first nine months of fiscal 2000. Principal
payments under capital lease arrangements and other long-term debt decreased
$12.4 million for the first nine months of fiscal 2001 from the first nine
months of fiscal 2000 due primarily to reduced capital lease
17
activity. Dividends of $7.4 million and $7.5 million were paid during the first
nine months of fiscal 2001 and fiscal 2000, respectively.
Based upon the relative financial conditions, results of operations and
prospects of NDCHealth and Global Payments, NDC determined that $96.1 million
would be an appropriate allocation to Global Payments of the existing NDC debt
at May 31, 2000. For the eight months ended January 31, 2001 Global Payments
made net repayments of $18.5 million, thereby reducing this $96.1 million due to
NDCHealth to $77.6 million as of January 31, 2001. At the date of the spin-off
and shortly thereafter, Global Payments Inc. made net cash payments to NDCHealth
equal to $77.6 million. We used a portion of the proceeds from this cash payment
to retire our existing lines of credit at the time of the spin-off.
Net cash provided by discontinued operations, including the cash dividend
from Global Payments, was $87.9 million in the first nine months of fiscal 2001
compared to $26.7 million in the first nine months of fiscal 2000.
We have a new credit facility providing a $50 million revolving line of
credit which became effective upon completion of the spin-off and is available
for working capital and general corporate purposes. The facility terminates
December 1, 2001, with the option for NDCHealth to extend the facility for one
year. At February 28, 2001, there was no amount outstanding under the facility.
We believe that our current level of cash and borrowing capacity, along with
future cash flows from operations, are sufficient to meet the needs of our
existing operations and our planned requirements for the foreseeable future. We
regularly evaluate cash requirements for current operations, commitments,
development activities and strategic acquisitions. We may elect to raise
additional funds for these purposes, either through the issuance of additional
debt or equity or otherwise, as appropriate.
Quantitative and Qualitative Disclosure About Market Risk.
There have been no significant changes in NDCHealth's market risk from that
disclosed in our annual report on Form 10-K for the year ended May 31, 2000.
Forward Looking Results of Operations
For the year ended May 31, 2000, NDCHealth reported revenue of $345
million. This revenue included $56 million associated with businesses divested
in the past 18 months. Excluding these revenues from the reported fiscal 2000
amounts, our revenue would have been $289 million. By implementing our revised
strategy previously discussed, and excluding these divested businesses from both
fiscal 2000 and fiscal 2001 results, we expect to generate annual revenue growth
from $289 million in fiscal 2000 to $335 - $340 million in fiscal 2001.
We expect that our basic earnings per share for the fiscal year ending May
31, 2001, excluding discontinued operations, restructuring and impairment
charges, and the results of the businesses divested in the past 18 months, will
be in the range of $1.00, plus or minus two percent, with dilution of $0.03, as
we continue to make investments in future growth.
Forward-Looking Information
When used in this Quarterly Report on Form 10-Q, in documents incorporated
herein and elsewhere by management of National Data Corporation ("NDCHealth" or
the "Company"), from time
18
to time, the words "believes," "anticipates," "expects," "intends," "plans" and
similar expressions and statements that are necessarily dependent on future
events are intended to identify forward-looking statements concerning the
Company's business operations, economic performance and financial condition,
including in particular, the Company's business strategy and means to implement
the strategy, the Company's objectives, the amount of future capital
expenditures, the likelihood of the Company's success in developing and
introducing new products and expanding its business, and the timing of the
introduction of new and modified products or services. For such statements, the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995 is applicable and invoked. Such
statements are based on a number of assumptions, estimates, projections or plans
that are inherently subject to significant risks, uncertainties and
contingencies that are subject to change. Actual revenues, revenue growth and
margins will be dependent upon all such factors and their results subject to
risks related to the implementation of changes by the Company, the failure to
implement changes, and customer acceptance of such changes or lack of change.
Actual results of events could differ materially from those anticipated in the
Company's forward-looking statements as a result of a variety of factors,
including: (a) those set forth in Exhibit 99.1 to the Registrant's Annual Report
on Form 10-K for the period ended May 31, 2000 which are incorporated herein by
this reference; (b) those set forth elsewhere herein; (c) those set forth from
time to time in the Company's press releases and reports and other filings made
with the Securities and Exchange Commission; and (d) those set forth from time
to time in the Company's analyst calls and discussions. The Company cautions
that such factors are not exclusive. Consequently, all of the forward-looking
statements made herein are qualified by these cautionary statements and 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 obligation to
update forward-looking or other statements or to publicly release the results of
any revisions of such 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.
19
Part II
ITEM 1 - PENDING LEGAL PROCEEDINGS
- ----------------------------------
The Company is party to a number of claims and lawsuits incidental to its
business. In the opinion of management, the ultimate outcome of such matters, in
the aggregate, will not have a material adverse impact on the Company's
financial position, liquidity or results of operations.
ITEM 2 - CHANGES IN SECURITIES
- ------------------------------
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
- ----------------------------------------
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
None
ITEM 5 - OTHER INFORMATION
- --------------------------
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits:
2.1 Distribution Agreement, Plan of Distribution and Reorganization, dated as
of January 31, 2001 by and between National Data Corporation and Global
Payments Inc. (filed as Exhibit 2.1 to the Registrant's Current Report on
Form 8-K filed on February 14, 2001, file No. 001-12392, and incorporated
herein by reference).
10.1 Tax Sharing and Indemnification Agreement, dated as of January 31, 2001 by
and between National Data Corporation and Global Payments Inc. (filed as
Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on
February 14, 2001, file No. 001-12392, and incorporated herein by
reference).
10.2 Employee Benefits Agreement, dated as of January 31, 2001 by and between
National Data Corporation and Global Payments Inc. (filed as Exhibit 10.2
to the Registrant's Current Report on Form 8-K filed on February 14, 2001,
file No. 001-12392, and incorporated herein by reference).
10.3 Transition Support Agreement, dated as of January 31, 2001 by and between
National Data Corporation and Global Payments Inc. (filed as Exhibit 10.3
to the Registrant's Current Report on Form 8-K filed on February 14, 2001,
file No. 001-12392, and incorporated herein by reference).
20
10.4 Intercompany Systems/Network Services Agreement, dated as of January 31,
2001 by and between National Data Corporation and Global Payments Inc.
(filed as Exhibit 10.4 to the Registrant's Current Report on Form 8-K
filed on February 14, 2001, file No. 001-12392, and incorporated herein by
reference).
10.5 Services Agreement (Batch Processing), dated as of January 31, 2001 by and
between National Data Corporation and Global Payments Inc. (filed as
Exhibit 10.5 to the Registrant's Current Report on Form 8-K filed on
February 14, 2001, file No. 001-12392, and incorporated herein by
reference).
10.6 Headquarters Lease Agreement, dated as of January 31, 2001 by and between
National Data Corporation and Global Payments Inc. (filed as Exhibit 10.6
to the Registrant's Current Report on Form 8-K filed on February 14, 2001,
file No. 001-12392, and incorporated herein by reference).
10.7 Sublease Agreement, dated as of January 31, 2001 by and between National
Data Corporation and Global Payments Systems LLC. (filed as Exhibit 10.7
to the Registrant's Current Report on Form 8-K filed on February 14, 2001,
file No. 001-12392, and incorporated herein by reference).
10.8 Sublease Agreement, dated as of January 31, 2001 by and between National
Data Corporation and National Data Payment Systems, Inc. (filed as Exhibit
10.8 to the Registrant's Current Report on Form 8-K filed on February 14,
2001, file No. 001-12392, and incorporated herein by reference).
(b) Reports Filed on Form 8-K:
National Data Corporation's Form 8-K dated December 20, 2000, was filed on
December 20, 2000, including as an exhibit under Item 7 the Company's
press release dated December 20, 2000.
National Data Corporation's Form 8-K dated December 20, 2000, was filed on
December 20, 2000, reporting under Item 9 the Company's release of
business and financial information giving effect to the spin-off of the
Global Payments Inc. subsidiary.
National Data Corporation's Form 8-K dated January 22, 2001, was filed on
January 23, 2001, reporting under Item 9 the Company's announcement of the
adjusted conversion rate of its 5% Convertible Subordinated Notes due
November 1, 2003.
National Data Corporation's Form 8-K dated February 1, 2001, was filed on
February 7, 2001, reporting under Item 9 the Company's release of guidance
regarding diluted earnings per share for the fiscal year ending May 31,
2001.
National Data Corporation's Form 8-K dated January 31, 2001, was filed on
February 14, 2001, reporting under Item 2 the Company's completion of the
spin-off of Global Payments Inc. and under Item 9 Proforma Financial
Information giving effect to the spin-off and the related transactions.
21
Signatures
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.
National Data Corporation
-------------------------
(Registrant)
Date: April 11, 2001 By: /s/ David H. Shenk
--------------- ------------------
David H. Shenk
Corporate Controller
(Chief Accounting Officer)
22