-----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, R8L74qyjniS332F37oluN8mhdjqD/CgUHxr7VTB5VqatZaFvu9i1UcQ99rYCUApJ BiW9EUTSpw+YvyNw2CV0cA== 0000931763-01-000815.txt : 20010412 0000931763-01-000815.hdr.sgml : 20010412 ACCESSION NUMBER: 0000931763-01-000815 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010228 FILED AS OF DATE: 20010411 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: 10-Q SEC ACT: SEC FILE NUMBER: 001-12392 FILM NUMBER: 1600637 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 10-Q 1 0001.txt FORM 10-Q 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 ================================================================================
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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 $ - $ - $ - ------------------------------------------------
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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%
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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 -----END PRIVACY-ENHANCED MESSAGE-----