-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JBl4Tkh6KEvdtYyKu6xj9YMslkfEgsuOgef7H76L5xAORSlhvsyqjefl/BzO5kNg qZYvKsdnQmv1tmgqjA/nGw== 0000931763-00-000807.txt : 20000403 0000931763-00-000807.hdr.sgml : 20000403 ACCESSION NUMBER: 0000931763-00-000807 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20000322 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL DATA CORP CENTRAL INDEX KEY: 0000070033 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 580977458 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12392 FILM NUMBER: 591854 BUSINESS ADDRESS: STREET 1: NATIONAL DATA COPRORATION STREET 2: NATIONAL DATA PLAZA CITY: ATLANTA STATE: GA ZIP: 30329 BUSINESS PHONE: 4047282000 MAIL ADDRESS: STREET 1: NATIONAL DATA PLZ CITY: ATLANTA STATE: GA ZIP: 30329-2010 8-K 1 NATIONAL DATA CORP FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 22, 2000 -------------- Commission File No. 001-12392 --------- NATIONAL DATA CORPORATION ------------------------- (Exact name of registrant as specified in charter) DELAWARE 58-0977458 -------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 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) Item 5. Other Events ------------ On March 22, 2000, National Data Corporation announced earnings for the fiscal third quarter ending February 29, 2000, as well as a decision to divest its Physician and Hospital Support Services ("PHSS") business. A copy of the press release, with related attachments, is filed herewith as Exhibit 99.1 and is incorporated herein by reference. The decision to divest PHSS follows board decisions made last quarter. These decisions were to create separate eHealth and eCommerce companies and to increase focus on its core business areas. Related to that decision, the board also decided to evaluate strategic alternatives for the Health Management Services business. Accordingly, the board has decided to pursue the divestiture of PHSS and to place the business into a discontinued operations category. Additionally, the Company has prepared restated statements of income for the fiscal year ended May 31, 1999 and the nine months ended February 29, 2000, excluding the discontinued operations, with a note explaining the discontinued operations. These restated financial statements and note are filed herewith as Exhibit 99.2 and are incorporated herein by this reference. Item 7. Financial Statements and Exhibits - ------------------------------------------ (c) 99.1 Press Release, with related attachments, dated March 22, 2000, announcing earnings for the fiscal third quarter ending February 29, 2000, as well as a decision to divest its PHSS business. 99.2 Discontinued operations note, Unaudited Restated Consolidated Statements of Income for the fiscal year ended May 31, 1999 and the nine months ended February 29, 2000 (by quarter) including and excluding Restructuring Charges, share assumptions used in calculating earnings per share, and Segment Information (Unaudited) for the nine month periods ended February 29, 2000 and February 28, 1999. 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 that 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. 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 hereunto duly authorized. NATIONAL DATA CORPORATION ------------------------- (Registrant) By: /s/ David H. Shenk ---------------------- David H. Shenk Interim Chief Financial Officer (Principal Financial Officer and Chief Accounting Officer) Date: March 30, 2000 -------------- EX-99.1(1) 2 PRESS RELEASE Exhibit 99.1.1 Contact: Betty Feezor 404-728-2363 For Immediate Release --------------------- NDC ANNOUNCES THIRD QUARTER EARNINGS Atlanta, March 22, 2000 - National Data Corporation (NYSE:NDC) announced earnings for the fiscal third quarter ending February 29, 2000, as well as a decision to divest its PHSS business. The decision to divest PHSS follows board decisions made last quarter. These decisions were to create separate eHealth and eCommerce companies as part of a strategy to increase focus in its core business areas, as well as to evaluate strategic alternatives for the health management services business. Accordingly, the board has decided to pursue the divestiture of PHSS and to place the business into a discontinued operations category. Revenue for the quarter, net of discontinued operations, was $167.7 million. Operating income was $27.8 million with 16.5% operating margin. Income before discontinued operations was $14.7 million. Basic earnings per share was $.45 per share. Fully diluted EPS was $.44 per share. The impact of discontinued operations was a loss of $13.5 million, or loss of $.41 per share. Diluted EPS for the company was $.04. The charge taken in the quarter includes current period and projected future operating losses from PHSS. The results compare to the same period last year with revenue of $165.4 million, operating income of $33.4 million and income before discontinued operations of $17.9 million. For the nine month period, net of discontinued operations, revenue was $512.4 million compared to $492.2 million in fiscal 1999. Income before discontinued operations, which -more-- NDC Announces Third Quarter Earnings Page Two includes restructuring and impairment charges taken in the second fiscal quarter of 2000, was $22.4 million compared with $52.3 million in 1999. Basic EPS before discontinued operations was $.67.per share. Fully diluted EPS was $.65 per share. Additional charges for the cumulative effect of change in accounting principle related to PHSS are reported in the nine month results, for a net loss from discontinued operations of $31.8 million, or a loss of $.95 per share on a year-to-date basis. Diluted EPS for the company for the nine-month period was a loss of $.28 per share. The balance sheet remains strong. Accounts receivable management resulted in continued improvement in DSO. Net of discontinued operations, DSO decreased from 63 to 51 days compared to the position at the end of last fiscal year. Cash flow continues to be strong. Cash earnings per share, as reflected by EBITDA, were $4.83 per share on an annualized basis. Robert A. Yellowlees, chairman and chief executive officer said, "Our major emphasis is to re-establish our revenue growth model. To that end, we are making excellent progress in repositioning the business for sustained long term growth from our core operations. During this quarter, a number of actions have been taken to further rationalize non-strategic business activities. While these steps result in short-term revenue declines, when netted against core business revenue and earnings, they should improve results next year. "We have concentrated on three parallel priorities for the second half of this year. The first and the highest is revenue growth from the continued broadening of our product offerings and their acceptance for our core network- based information business. The second is the program to separate into two businesses so as to gain additional focus and speed in responding to -more- NDC Announces Third Quarter Earnings Page Three new market opportunities in the new economy. Finally, we are rationalizing those business and product areas that do not fit with our core network-based information strategy so that the two new entities will be leaner and more focused. "We are making excellent progress in all three areas. "Acceptance has grown for new offerings and others have been announced during the quarter. We have already completed a great deal of implementation planning since the decision in the last quarter to form the eHealth and eCommerce businesses. Our internal planning has advanced to the point that we will have next year's operating plan built around these new formats. And substantially all of our operations are expected to be conducting business in a pro forma version of that new structure by the start of the new fiscal year on June 1. "Management and the board have also completed the evaluation of strategic alternatives relating to PHSS. While we continue to see substantial opportunity in the market for high quality health management services, we feel that the development of it requires a more singular focus than we can provide at the moment. The size and diversity of opportunities in our core network-based information businesses demand the full measure of our management time and resources. Therefore, we concluded that we should divest this business and are actively pursuing that course. "I want to thank our employees in this area for their continued efforts. Even as we are pursuing divestiture, we are continuing to make investments in systems and facilities, as well as new marketing initiatives. These are centered around the key locations that now make up this business. We feel that these steps will even further enhance the ability of this unit and its employees to deliver expanded services to its client base. They should also add to its value, as -more- NDC Announces Third Quarter Earnings Page Four should the numerous initiatives undertaken by NDC over the last two years to strengthen operations. "The long-term opportunity in our markets is excellent. We are taking action now to concentrate our strategy and management priorities around these opportunities." #### 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. EX-99.1(2) 3 UNAUDITED CONSOLIDATED STATEMENT OF INCOME Exhibit 99.1.2 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME NATIONAL DATA CORPORATION (In thousands, except per share data)
- ----------------------------------------------------------------------------------------------- Three Months Ended February 29/28, ------------------------------------ 2000 1999 ------------ -------------- Revenues $ 167,695 $ 165,437 - ----------------------------------------------------------------------------------------------- Operating expenses: Cost of service 83,101 78,513 Sales, general and administrative 56,843 53,491 -------------------------------- 139,944 132,004 ================================ Operating income 27,751 33,433 - -------------------------------------------------------------------------------------------- Other income (expense): Interest and other income 600 336 Interest and other expense (3,352) (3,601) Minority interest in earnings (1,031) (834) -------------------------------- (3,783) (4,099) -------------------------------- Income before income taxes and discontinued operations 23,968 29,334 Provision for income taxes 9,228 11,440 - -------------------------------------------------------------------------------------------- Income before discontinued operations 14,740 17,894 Discontinued operations (13,546) 792 - -------------------------------------------------------------------------------------------- Net income $ 1,194 $ 18,686 ================================ Basic earnings per share: Income before discontinued operations $ 0.45 $ 0.53 -------------------------------- Discontinued operations $ (0.41) 0.02 -------------------------------- Basic earnings per share $ 0.04 $ 0.55 ================================ Diluted earnings per share: Income before discontinued operations $ 0.44 $ 0.50 -------------------------------- Discontinued operations $ (0.41) $ 0.02 -------------------------------- Diluted earnings per share $ 0.04 $ 0.52 --------------------------------
EX-99.1(3) 4 UNAUDITED CONSOLIDATED STATEMENT OF INCOME Exhibit 99.1.3 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME NATIONAL DATA CORPORATION (In thousands, except per share data) - --------------------------------------------------------------------------------
Nine Months Ended February 29/28, --------------------------------------- 2000 1999 --------------- -------------- Revenues $ 512,444 $ 492,164 - -------------------------------------------------------------------------------------------------------- Operating expenses: Cost of service 253,877 238,802 Sales, general and administrative 177,116 155,711 Restructuring and impairment charges 34,393 - --------------------------------------- 465,386 394,513 --------------------------------------- Operating income 47,058 97,651 - -------------------------------------------------------------------------------------------------------- Other income (expense): Interest and other income 4,991 1,710 Interest and other expense (9,835) (11,001) Minority interest in earnings (3,025) (2,646) --------------------------------------- (7,869) (11,937) --------------------------------------- Income before income taxes and discontinued operations 39,189 85,714 Provision for income taxes 16,757 33,429 - -------------------------------------------------------------------------------------------------------- Income before discontinued operations 22,432 52,285 Discontinued operations (31,769) (1,540) - -------------------------------------------------------------------------------------------------------- Net income (loss) $ (9,337) $ 50,745 ======================================= Basic earnings (loss) per share: Income before discontinued operations $ 0.67 $ 1.55 --------------------------------------- Discontinued operations $ (0.95) (0.05) --------------------------------------- Basic earnings (loss) per share $ (0.28) $ 1.51 ======================================= Diluted earnings (loss) per share: Income before discontinued operations $ 0.65 $ 1.48 --------------------------------------- Discontinued operations $ (0.95) $ (0.05) --------------------------------------- Diluted earnings (loss) per share $ (0.28) $ 1.44 ---------------------------------------
EX-99.1(4) 5 CONSOLIDATED BALANCE SHEETS Exhibit 99.1.4
CONSOLIDATED BALANCE SHEETS NATIONAL DATA CORPORATION (In thousands, except share and per share data) - ----------------------------------------------------------------------------------------------------------------------------- February 29, May 31, 2000 1999 ------------- -------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 949 $ 3,414 Billed accounts receivable 101,200 124,072 Unbilled accounts receivable 3,098 3,048 Allowance for doubtful accounts (6,960) (5,184) -------- -------- Accounts receivable, net 97,338 121,936 -------- -------- Income tax receivable - 8,348 Inventory 9,396 7,927 Net merchant processing receivable 8,218 - Deferred income taxes 4,610 1,191 Prepaid expenses and other current assets 16,843 13,023 -------- -------- Total current assets 137,354 155,839 -------- -------- Property and equipment, net 95,929 94,368 Intangible assets, net 352,114 369,076 Deferred income taxes 24,098 13,963 Investment 25,768 - Other 5,325 5,397 Net assets of discontinued operations 49,183 104,454 -------- -------- Total Assets $689,771 $743,097 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Line of credit $ 20,000 $ 35,000 Current portion of long-term debt 94 6,148 Obligations under capital leases 9,202 11,980 Accounts payable and accrued liabilities 70,641 58,562 Net merchant processing payable - 1,794 Income tax payable 5,134 - Deferred income 27,928 29,945 -------- -------- Total current liabilities 132,999 143,429 -------- -------- Long-term debt 147,070 147,190 Obligations under capital leases 8,252 15,469 Other long-term liabilities 15,758 9,183 -------- -------- Total liabilities 304,079 315,271 -------- -------- Commitments and contingencies Minority interest in equity of subsidiaries 19,539 18,732 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 and 100,000,000 shares authorized at February 29, 2000 and May 31, 1999, respectively, 33,953,008 and 33,953,031 shares issued, respectively. 4,244 4,244 Capital in excess of par value 341,542 345,639 Treasury stock, at cost, 1,095,320 and 175,442 shares, respectively (28,867) (5,857) Unrealized holding gain 5,176 - Retained earnings 54,047 70,865 Deferred compensation (7,380) (3,215) Cumulative translation adjustment (2,609) (2,582) -------- -------- Total shareholders' equity 366,153 409,094 -------- -------- Total Liabilities and Shareholders' Equity $689,771 $743,097 ======== ========
EX-99.1(5) 6 NDC SEGMENT INFORMATION (UNAUDITED) Exhibit 99.1.5 National Data Corporation Segment Information (Unaudited) (In Thousands)
Health Restructuring Information and Impairment ll Other and Third Quarter ended February 29, 2000 Services eCommerce Charge Corporate Totals - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $ 85,869 $ 81,826 $ - $ - $167,695 Depreciation and Amortization 6,450 4,843 - 673 11,966 EBITDA 24,271 19,859 - (4,413) 39,717 Income before income tax and discontinued operations 17,617 13,810 - (7,459) 23,968 Third Quarter ended February 28, 1999 - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $ 83,655 $ 81,782 $ - $ - $165,437 Depreciation and Amortization 7,352 5,176 - 499 13,027 EBITDA 26,046 24,114 - (3,700) 46,460 Income before income tax and discontinued operations 18,438 17,757 - (6,861) 29,334 Year to Date ended February 29, 2000 - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $256,615 $255,829 $ - $ - $512,444 Depreciation and Amortization 21,093 15,479 - 1,803 38,375 EBITDA 60,057 68,455 - (8,686) 119,826 Income before income tax and discontinued operations 38,088 49,315 (34,393) (13,821) 39,189 Year to Date ended February 28, 1999 - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $248,666 $243,498 $ - $ - $492,164 Depreciation and Amortization 19,972 15,419 - 1,364 36,755 EBITDA 70,831 72,815 - (9,240) 134,406 Income before income tax and discontinued operations 50,125 53,708 - (18,119) 85,714
EX-99.2(1) 7 DISCONTINUED OPERATIONS Exhibit 99.2.1 Discontinued Operations In the third quarter fiscal 2000, Management took action on a formal plan to divest non-core units that were acquired through the PHSS acquisition in December 1997. Over the last year, the Company has made significant progress in implementing programs to improve the underlying efficiency of these business activities. The result has been expected short term losses from the closed operations offsetting gains from those that would be the nucleus for longer term growth. The Company has made management changes. It has closed locations that did not have the critical mass for long-term profitable growth. It has implemented a number of new systems initiatives that will improve productivity and offer the infrastructure to process greater volume in the future. NDC believes that there is a significant demand for these services in the market and that these changes represent steps that can improve profitability from new revenue streams. In spite of these investments and actions taken to strengthen the business for future growth, the Company has concluded that these operations no longer logically integrate with NDC's core Health Information Services business. The core business includes Internet oriented network, information management and strategic provider point of use platforms. Management and the Board believe that the magnitude of opportunity in its core business requires singular focus of management time and resources. Thus, the decision was made to move to divest the line of business and account for it as discontinued operations in accordance with Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations". Accordingly, results of these operations have been classified as discontinued and prior periods have been restated. The operating results of the discontinued operations are summarized as follows (In thousands, except per share data):
Three Months Ended Nine Months Ended February 29/28, February 29/28, ------------------------------------------------------------------ 2000 1999 2000 1999 ---- ---- ---- ---- Revenue $ 26,250 $30,298 $ 81,270 $86,775 Operating income (loss) (5,053) 1,397 (12,088) (2,215) Income (loss) from operations (3,165) 792 (7,628) (1,540) Projected phase-out loss from operations, net of tax (10,381) -- (10,381) -- --------------------------------------------------------------- Income (loss) on discontinued operations before cumulative effect of change in accounting principle (13,546) 792 (18,009) (1,540) Cumulative effect of change in accounting principle -- -- (13,760) -- --------------------------------------------------------------- Net income (loss) on discontinued operations $(13,546) $ 792 $(31,769) $(1,540) =============================================================== Earnings (loss) per share: From operations $ (0.10) $ 0.02 $ (0.23) $ (0.05) Projected phase-out loss from operations (0.31) -- (0.31) -- Cumulative effect of change in accounting principle -- -- (0.41) -- --------------------------------------------------------------- Total $ (0.41) $ 0.02 $ (0.95) $ (0.05) ===============================================================
For the Physician Management Services component of the discontinued operation, the Company continued the accounting policy followed by this business prior to its acquisition by the Company. The Company maintained this generally accepted policy after the acquisition for Physician Management Services offerings for which the Company invoices and collects amounts on its customer's behalf. Previously, for customers where the amount and timing of collection of their accounts receivable could be reasonably estimated, the Company estimated the fees that it expected to invoice those customers upon collection of their accounts receivable. It recognized such revenues when substantially all services to be performed by the Company had been completed. Estimated costs to complete were accrued separately. Effective June 1, 1999, the Company elected to change its revenue recognition policy. Effective with the change in policy, the Company will recognize revenue when the services are billed to the customer, at which point all services to be performed by the Company have been completed. The impact of this change results in the elimination of estimated, or unbilled receivables and related accrued collection costs. Management believes that this change is appropriate and is consistent with recent authoritative literature, specifically SEC Staff Accounting Bulletin No. 101, issued December 3, 1999. The cumulative after tax effect of this change in accounting principle was $13.8 million, net of income taxes of $8.6 million, at June 1, 1999. The cumulative after tax effect on both the basic and diluted earnings per share was $(0.41). The net assets of discontinued operations are summarized as follows (In thousands): February 29, 2000 May 31, 1999 ----------------- ------------ Current assets $ 34,506 $ 56,989 Property and equipment, net 6,040 11,536 Intangible assets, net 36,453 55,248 Other assets 1,421 2,512 Current liabilities (10,885) (13,008) Long-term debt (5,500) (5,500) Other long-term liabilities (2,471) (3,323) Provision for estimated losses (10,381) -- ----------- ----------- Net assets of discontinued operations $ 49,183 $104,454 =========== =========== Management considers the carrying value of the net assets of the discontinued operations to be less than or equal to the approximate fair value to be received on disposal. EX-99.2(2) 8 UNAUDITED CONSOLIDATED STATEMENT OF INCOME Exhibit 99.2.2 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME NATIONAL DATA CORPORATION Restatement of Income for Discontinued Operations
(In thousands, except per share data) - ----------------------------------------------------------------------------------------------------------------------------------- FY 1999 FY 2000 ------------------------------------------------------ -------------------------------- Qtr1 Qtr 2 Qtr 3 Qtr 4 Total Qtr1 Qtr 2 Qtr 3 ------------------------------------------------------ -------------------------------- Revenue $163,738 $162,989 $165,437 $176,883 $669,047 $175,548 $169,201 $167,695 ------------------------------------------------------ -------------------------------- Operating expenses: Cost of service 79,593 80,696 78,513 82,455 321,259 83,719 87,057 83,101 Sales, general and administrative 50,835 51,385 53,491 53,300 209,009 55,467 64,806 56,843 Non-recurring charge 0 0 0 0 0 0 34,393 0 ------------------------------------------------------ -------------------------------- 130,428 132,081 132,004 135,755 530,268 139,186 186,256 139,944 ------------------------------------------------------ -------------------------------- Operating income 33,310 30,908 33,433 41,128 138,779 36,362 (17,055) 27,751 - ---------------- ------------------------------------------------------ -------------------------------- Other income (expense): Interest and other income 530 844 336 535 2,284 1,669 2,722 600 Interest and other expense (3,597) (3,803) (3,601) (3,892) (14,932) (3,081) (3,402) (3,352) Minority interest (995) (817) (834) (1,163) (3,809) (1,071) (923) (1,031) ------------------------------------------------------ -------------------------------- (4,062) (3,776) (4,099) (4,520) (16,457) (2,483) (1,603) (3,783) ------------------------------------------------------ -------------------------------- Income before income taxes and discontinued operations 29,248 27,132 29,334 36,608 122,322 33,879 (18,658) 23,968 Provision for income taxes 11,408 10,581 11,440 13,697 47,124 13,042 (5,513) 9,228 - -------------------------- ------------------------------------------------------ -------------------------------- Income before discontinued operations $ 17,840 $ 16,551 $ 17,894 $ 22,911 $ 75,198 $ 20,837 $(13,145) $ 14,740 ====================================================== ================================ Discontinued operations (1,517) (814) 792 (2,220) (3,761) (15,900) (2,323) (13,546) ------------------------------------------------------ -------------------------------- Net income $ 16,323 $ 15,737 $ 18,686 $ 20,691 $ 71,437 $ 4,937 $(15,468) $ 1,194 ====================================================== ================================ Basic earnings before discontinued operations (1) $ 0.53 $ 0.49 $ 0.53 $ 0.68 $ 2.23 $ 0.62 $ (0.39) $ 0.45 ====================================================== ================================ Discontinued operations (1) $ (0.04) $ (0.02) $ 0.02 $ (0.07) $ (0.11) $ (0.47) $ (0.07) $ (0.41) ------------------------------------------------------ -------------------------------- Basic earnings per share (1) $ 0.48 $ 0.47 $ 0.55 $ 0.61 $ 2.12 $ 0.15 $ (0.46) $ 0.04 ====================================================== ================================ Diluted earnings before discontinued operations (1) $ 0.51 $ 0.48 $ 0.50 $ 0.64 $ 2.11 $ 0.58 $ (0.39) $ 0.44 ====================================================== ================================ Discontinued operations (1) $ (0.04) $ (0.02) $ 0.02 $ (0.07) $ (0.11) $ (0.47) $ (0.07) $ (0.41) ------------------------------------------------------ -------------------------------- Diluted earnings per share (1) $ 0.47 $ 0.45 $ 0.52 $ 0.58 $ 2.02 $ 0.14 $ (0.46) $ 0.04 ====================================================== ================================
(1) Note: See the specific share counts utilized in earnings per share on Exhibit 99.2.4 EX-99.2(3) 9 PROFORMA UNAUDITED STATEMENT OF INCOME Exhibit 99.2.3 PROFORMA UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (Excludes Restructuring Charges) NATIONAL DATA CORPORATION Restatement of Income for Discontinued Operations
(In thousands, except per share data) ---------------------------------------------------------------------------------------------------------------------------------- FY 1999 FY 2000 ------------------------------------------------------- ---------------------------------- Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total Qtr 1 Qtr 2 Qtr 3 ------------------------------------------------------- ---------------------------------- Revenue $163,738 $162,989 $165,437 $176,883 $669,047 $175,548 $169,201 $167,695 - ------- ------------------------------------------------------- ---------------------------------- Operating expenses: Cost of service 79,593 80,696 78,513 82,455 321,259 83,719 87,057 (1) 83,101 Sales, general and administrative 50,835 51,385 53,491 53,300 209,009 55,467 64,806 (1) 56,843 ------------------------------------------------------- ---------------------------------- 130,428 132,081 132,004 135,755 530,268 139,186 151,863 139,944 ------------------------------------------------------- ---------------------------------- Operating income 33,310 30,908 33,433 41,128 138,779 36,362 17,338 27,751 - ---------------- ------------------------------------------------------- ---------------------------------- Other income (expense): Interest and other income 530 844 336 535 2,284 1,669 2,722 600 Interest and other expense (3,597) (3,803) (3,601) (3,892) (14,932) (3,081) (3,402) (3,352) Minority interest (995) (817) (834) (1,163) (3,809) (1,071) (923) (1,031) ------------------------------------------------------- ---------------------------------- (4,062) (3,776) (4,099) (4,520) (16,457) (2,483) (1,603) (3,783) ------------------------------------------------------- ---------------------------------- Income before income taxes and discontinued operations 29,248 27,132 29,334 36,608 122,322 33,879 15,735 23,968 ======================================================= ================================== Provision for income taxes 11,408 10,581 11,440 13,697 47,124 13,042 6,524 9,228 - -------------------------- ------------------------------------------------------- ---------------------------------- Income before discontinued operations $ 17,840 $ 16,551 $ 17,894 $ 22,911 $ 75,198 $ 20,837 $ 9,211 $ 14,740 ======================================================= ================================== Discontinued operations (1,517) (814) 792 (2,220) (3,761) (15,900) (2,323) (13,546) ------------------------------------------------------- ---------------------------------- Net income $ 16,323 $ 15,737 $ 18,686 $ 20,691 $ 71,437 $ 4,937 $ 6,888 $ 1,194 ======================================================= ================================== Basic earnings before discontinued operations (2) $ 0.53 $ 0.49 $ 0.53 $ 0.68 $ 2.23 $ 0.62 $ 0.28 $ 0.45 ======================================================= ================================== Discontinued operations (2) $ (0.04) $ (0.02) $ 0.02 $ (0.07) $ (0.11) $ (0.47) $ (0.07) $ (0.41) ------------------------------------------------------- ---------------------------------- Basic earnings per share (2) $ 0.48 $ 0.47 $ 0.55 $ 0.61 $ 2.12 $ 0.15 $ 0.21 $ 0.04 ======================================================= ================================== Diluted earnings before discontinued operations (2) $ 0.51 $ 0.48 $ 0.50 $ 0.64 $ 2.11 $ 0.58 $ 0.27 $ 0.44 ======================================================= ================================== Discontinued operations (2) $ (0.04) $ (0.02) $ 0.02 $ (0.07) $ (0.11) $ (0.47) $ (0.07) $ (0.41) ------------------------------------------------------- ---------------------------------- Diluted earnings per share (2) $ 0.47 $ 0.45 $ 0.52 $ 0.58 $ 2.02 $ 0.14 $ 0.20 $ 0.04 ======================================================= ==================================
(1) As discussed in the 10-Q for the quarter ended November 30, 1999, the Company incurred unusual expenses in addition to the $34,393 restructuring charge. Excluding the amounts recorded in the discontinued operations, these unusual expenses were $1,888 of Cost of Service Provided and $9,227 of Sales, General and Administrative expenses. (2) Note: See the specific share counts utilized in earnings per share on Exhibit 99.2.4 EX-99.2(4) 10 SHARE ASSUMPTIONS EXHIBIT 99.2.4 SHARE ASSUMPTIONS USED IN CALCULATING EARNINGS PER SHARE NATIONAL DATA CORPORATION Restatement of Income for Discontinued Operations (In thousands) - ------------------------------------------------------------------------------------------------------------------------------------ Results Including Restructuring Charges FY 1999 FY 2000 ---------------------------------------- ------------------------------- Qtr1 Qtr 2 Qtr 3 Qtr 4 Total Qtr1 Qtr 2 Qtr 3 YTD ---------------------------------------- ------------------------------- Basic earnings before discontinued operations 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920 33,392 ======================================== =============================== Discontinued operations 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920 33,392 ---------------------------------------- ------------------------------- Basic earnings per share 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920 33,392 ======================================== =============================== Diluted earnings before discontinued operations 35,039 34,808 38,038 37,900 37,823 38,017 33,376 36,562 34,402 ======================================== =============================== Discontinued operations 33,723 33,681 35,286 33,766 33,725 33,876 33,376 32,920 33,392 ---------------------------------------- ------------------------------- Diluted earnings per share 35,039 34,808 38,038 37,900 37,823 35,265 33,376 33,810 33,392 ======================================== =============================== Results Excluding Restructuring Charges FY 1999 FY 2000 ---------------------------------------- ----------------------- Qtr1 Qtr 2 Qtr 3 Qtr 4 Total Qtr1 Qtr 2 Qtr 3 ---------------------------------------- ----------------------- Basic earnings before discontinued operations 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920 ======================================== ======================= Discontinued operations 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920 ---------------------------------------- ----------------------- Basic earnings per share 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920 ======================================== ======================= Diluted earnings before discontinued operations 35,039 34,808 38,038 37,900 37,823 38,017 34,128 36,562 ======================================== ======================= Discontinued operations 33,723 33,681 35,286 33,766 33,725 33,876 33,376 32,920 ---------------------------------------- ----------------------- Diluted earnings per share 35,039 34,808 38,038 37,900 37,823 35,265 34,128 33,810 ======================================== =======================
EX-99.2(5) 11 NDC SEGMENT INFORMATION (UNAUDITED) Exhibit 99.2.5 National Data Corporation Segment Information (Unaudited) (In Thousands)
Restated Health Restructuring Information and Impairment All Other and First Quarter ended August 31, 1999 Services eCommerce Charge Corporate Totals - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $ 85,719 $ 89,829 $ - $ - $175,548 Depreciation and Amortization 7,323 5,346 - 598 13,267 EBITDA 24,616 27,007 - (1,993) 49,630 Income before income tax and discontinued operations 16,948 20,330 - (3,399) 33,879 Net income (loss) on discontinued operations (15,900) (15,900) First Quarter ended August 31, 1998 - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $ 81,341 $ 82,397 $ - $ - $163,738 Depreciation and Amortization 6,058 4,979 - 427 11,464 EBITDA 20,646 26,184 - (2,057) 44,773 Income before income tax and discontinued operations 14,480 19,826 - (5,058) 29,248 Net income (loss) on discontinued operations (1,517) (1,517) Second Quarter ended November 30, 1999 - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $ 85,027 $ 84,174 $ - $ - $169,201 Depreciation and Amortization 7,320 5,291 - 531 13,142 EBITDA 11,170 21,591 - (2,281) 30,480 Income before income tax and discontinued operations 3,525 15,175 (34,393) (2,965) (18,658) Net income (loss) on discontinued operations (2,323) (2,323) Second Quarter ended November 30, 1998 - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $ 83,670 $ 79,319 $ - $ - $162,989 Depreciation and Amortization 6,561 5,264 - 438 12,263 EBITDA 24,138 22,517 - (3,483) 43,172 Income before income tax and discontinued operations 17,207 16,125 - (6,200) 27,132 Net income (loss) on discontinued operations (814) (814)
National Data Corporation Segment Information (Unaudited) (In Thousands) Third Quarter ended February 29, 2000 - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $ 85,869 $ 81,826 $ - $ - $167,695 Depreciation and Amortization 6,450 4,843 - 673 11,966 EBITDA 24,271 19,859 - (4,413) 39,717 Income before income tax and discontinued operations 17,617 13,810 (7,459) 23,968 Net income (loss) on discontinued operations (13,546) (13,546) Third Quarter ended February 28, 1999 - ---------------------------------------------------------------------------------------------------------------------------------- Revenues $ 83,655 $ 81,782 $ - $ - $165,437 Depreciation and Amortization 7,352 5,176 - 499 13,027 EBITDA 26,046 24,114 - (3,700) 46,460 Income before income tax and discontinued operations 18,438 17,757 - (6,861) 29,334 Net income (loss) on discontinued operations 792 792
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