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): November 19, 2002

NDCHealth Corporation
(Exact name of registrant as specified in its charter)

DELAWARE	001-12392	58-0977458
(State or other jurisdiction of	(Commission File No.)	(IRS Employer
incorporation)		Identification Number)

NDC Plaza, Atlanta, Georgia 30329-2010
(Address of principal executive offices) (Zip Code)

(404) 728-2000
(Registrant’s telephone number, including area code)

None
(Former name or former address, if changed since last report.)

Item 5. Other

     1.     On November 19, 2002, we reported pricing and an increase in size for our refinancing plan announced in October 2002. We priced a private offering of $200 million aggregate principal amount of our 10 1/2% senior subordinated notes due 2012 and increased the size of the offering to $200 million from $175 million. We also increased the size of our senior credit facility to $225 million from $200 million, which will consist of a $125 million six-year term loan and a five-year $100 million revolving credit facility. We expect to close the offering and the credit facility prior to November 30, 2002.

          The senior subordinated notes are being offered in an unregistered offering pursuant to Rule 144A and Regulation S under the Securities Act of 1933. We intend to offer to exchange the unregistered notes for substantially identical registered senior subordinated notes following the completion of the offering.

          We intend to use the net proceeds from the offering, together with borrowings under the new credit facility, to: (i) redeem all of our outstanding 5% convertible subordinated notes due November 2003 for an aggregate redemption price of $144.8 million plus accrued and unpaid interest to the redemption date; (ii) repay all outstanding indebtedness under our existing revolving credit facility; and (iii) pay fees and expenses. Any remaining net proceeds will be used for general corporate purposes.

          The senior subordinated notes will not be registered under the Securities Act of 1933 or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and any applicable state securities laws.

          The press release contained forward-looking statements concerning our future financing plans. The closing of the financing transactions discussed in the press release is subject to the satisfaction of customary conditions.

          A copy of the press release is attached hereto as Exhibit 99.1.

     2.     Exhibit 99.2 sets forth our pro forma statement of operations for the year ended May 31, 2002, (which update our pro forma statement of operations filed under our Form 8-K dated November 1, 2002, to reflect the actual terms of the refinancing plan described in paragraph 1) which is hereby incorporated into this Item 5 as if fully set forth herein. In accordance with Securities and Exchange Commission Regulation S-X section 210.11.01, the pro forma statement of operations gives effect to our proposed refinancing plan described in paragraph 1 and the acquisition of a controlling interest in TechRx Incorporated as if they had occurred on June 1, 2001.

     3.      With regard to the financial impact of the refinancing, we expect to incur additional interest expenses related to the new indebtedness and non-recurring charges related to redemption of our outstanding 5% convertible subordinated notes due 2003 and the repayment of our existing credit facility. For the full fiscal year 2003, we expect that diluted earnings per share will be in the range of $1.35 to $1.38, including the impact of the refinancing and charges related to early extinguishment of debt of $0.04 per share. Excluding the non-recurring charges, for the full fiscal year 2003, we expect diluted earnings per share to be in the range of $1.39 to $1.42.

     This paragraph 3 contains forward-looking statements regarding the expected financial impact of our proposed refinancing plan within the meaning of the federal securities laws. These statements are based on our beliefs and assumptions, which in turn are based on currently available information. Important assumptions regarding these statements include, among others, the expected terms and timing of any refinancing transactions. Our assumptions could prove to be inaccurate. These forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those projected. Many of these factors are beyond our ability to control or predict and include, among others, prevailing market conditions, changes in our industry, our ability to expand into new markets and introduce new, profitable products, our ability to successfully integrate acquisitions and general economic conditions. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on these statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

Item 7. Financial Statements and Exhibits

Exhibit 99.1	Text of press release dated November 19, 2002
Exhibit 99.2	(a) Introduction to Pro Forma Information
	(b) Pro forma Combined Statement of Operations for the year ended May 31, 2002
	(c) Notes to Pro Forma Combined Statement of Operations

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SIGNATURE

     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.

NDCHealth Corporation
(Registrant)
By:	/s/ David H. Shenk
	David H. Shenk
	Vice President & Corporate Controller
	(Chief Accounting Officer)

Date: November 19, 2002

-4- EX-99.1 3 g79481exv99w1.htm TEXT OF PRESS RELEASE

EXHIBIT 99.1

NDCHEALTH ANNOUNCES PRICING AND INCREASE IN SIZE FOR REFINANCING PLAN

Atlanta, Georgia, November 19, 2002 — NDCHealth Corporation (NYSE: NDC) today reported pricing and an increase in size for its refinancing plan announced in October 2002. The company priced a private offering of $200 million aggregate principal amount of its 10 1/2% senior subordinated notes due 2012 and increased the size of the offering to $200 million from $175 million. NDCHealth also increased the size of its senior credit facility to $225 million from $200 million, which will consist of a $125 million six-year term loan and a five-year $100 million revolving credit facility. The company expects to close the offering and the credit facility prior to November 30, 2002.

     The senior subordinated notes are being offered in an unregistered offering pursuant to Rule 144A and Regulation S under the Securities Act of 1933. NDCHealth intends to offer to exchange the unregistered notes for substantially identical registered senior subordinated notes following the completion of the offering.

     NDCHealth intends to use the net proceeds from the offering, together with borrowings under the new credit facility, to: (i) redeem all of its outstanding 5% convertible subordinated notes due November 2003 for an aggregate redemption price of $144.8 million plus accrued and unpaid interest to the redemption date; (ii) repay all indebtedness outstanding under its existing revolving credit facility; and (iii) pay fees and expenses. Any remaining net proceeds will be used for general corporate purposes.

     The senior subordinated notes will not be registered under the Securities Act of 1933 or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and any applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the notes or any other securities.

This press release contains forward-looking statements concerning NDCHealth’s future financing plans. The closing of the financing transactions discussed herein is subject to the satisfaction of customary conditions.

###

EX-99.2.(A) 4 g79481exv99w2wxay.htm INTRODUCTION TO PRO FORMA INFORMATION

EXHIBIT 99.2 (a)

INTRODUCTION TO PRO FORMA FINANCIAL INFORMATION

     The following pro forma combined statement of operations has been prepared to give effect to the acquisition of a controlling interest in TechRx Incorporated and the proposed refinancing plan as if they had occurred on June 1, 2001. This proposed refinancing includes (1) the issuance of $200 million aggregate principal amount of ten-year senior subordinated notes due 2012 and a new $225 million credit facility and (2) our use of the net proceeds from the issuance of the notes and borrowings under our proposed new credit facility to repay in full all indebtedness under our existing credit agreement and to redeem all of our outstanding 5% convertible subordinated notes due 2003.

     For the period presented, NDCHealth had a fiscal year end of May 31. TechRx previously had a fiscal year end of June 30, 2001. Because of our acquisition of a controlling interest, TechRx has changed their fiscal year to coincide with ours. As a result, TechRx’s most recent results are for the eleven months ended May 31, 2002. For the purposes of the pro forma combined statement of operations for the year ended May 31, 2002, TechRx’s results for the month of June 2001 have been combined with their results for the eleven months ended May 31, 2002 to provide an equivalent period to NDCHealth financial information for the year ended May 31, 2002. During the month of June 2001, TechRx recorded significant restructuring and impairment charges. Thus, these unusual items are included in the pro forma combined statement of operations for the year ended May 31, 2002.

     The pro forma combined statement of operations is not necessarily indicative of the results of operations that would have occurred if the acquisition or proposed refinancing plan had occurred on the date indicated or expected financial results of operations in the future. The pro forma combined statement of operations should be read in conjunction with the related notes to the pro forma combined statement of operations.

EX-99.2.(B) 5 g79481exv99w2wxby.htm PRO FORMA COMBINED STATEMENT OF OPERATIONS

EXHIBIT 99.2 (b)

PRO FORMA COMBINED STATEMENT OF OPERATIONS

For the Year Ended May 31, 2002
Unaudited
(in thousands, except per share data)

								PRO FORMA						PRO FORMA
								ADJUSTMENTS			PRO FORMA			ADJUSTMENTS			PRO FORMA
		NDCHEALTH			TECHRX			(A)			NDCHEALTH			(B)			NDCHEALTH
Revenues:
	Information management	$	150,399		$	—		$	—		$	150,399		$	—		$	150,399
	Network services and systems		198,622			45,637			(8,876	)(1)		235,383			—			235,383
	Divested businesses		4,360			—			—			4,360			—			4,360
			353,381			45,637			(8,876	)		390,142			—			390,142
Operating expenses:
	Cost of service		174,944			38,154			(6,840	)(1)		206,258			—			206,258
	Sales, general and administrative		76,961			12,545			—			89,506			—			89,506
	Depreciation and amortization		24,374			7,996			(4,584	)(1,5)		27,786			—			27,786
	Restructuring and impairment charges		—			10,488			—			10,488			—			10,488
			276,279			69,183			(11,424	)		334,038			—			334,038
Operating income (loss)			77,102			(23,546	)		2,548			56,104			—			56,104
Other income (expense):
	Interest and other income		1,779			168			(352	)(1)		1,595			—			1,595
	Interest and other expense		(9,693	)		(1,393	)		(762	)(1,4)		(11,848	)		(21,588	)(1,2)		(33,436	)
	Valuation adjustment		(41,000	)		—			—			(41,000	)		—			(41,000	)
	Minority interest in losses		1,863			—			9,210	(2)		11,073			—			11,073
			(47,051	)		(1,225	)		8,096			(40,180	)		(21,588	)		(61,768	)
Income (loss) before income taxes and equity in losses of affiliated companies			30,051			(24,771	)		10,644			15,924			(21,588	)		(5,664	)
Provision for income taxes			12,877			60			3,832	(6)		16,769			(7,772	)(3)		8,997
Income (loss) before equity in losses of affiliated companies			17,174			(24,831	)		6,812			(845	)		(13,816	)		(14,661	)
Equity in losses of affiliated companies			(2,064	)		—			1,514	(3)		(550	)		—			(550	)
Net income (loss)		$	15,110		$	(24,831	)	$	8,326		$	(1,395	)	$	(13,816	)	$	(15,211	)
Basic earnings (loss) per share		$	0.44								$	(0.04	)				$	(0.44	)
	Number of shares		34,087									34,489						34,489
Diluted earnings (loss) per share		$	0.43								$	(0.04	)				$	(0.44	)
	Number of shares		35,496									34,489						34,489

See notes to the pro forma Combined Statement of Operations.

EX-99.2.(C) 6 g79481exv99w2wxcy.htm NOTES TO PRO FORMA COMBINED STATEMENT OF OPERATION

EXHIBIT 99.2(c)

NOTES TO PRO FORMA COMBINED STATEMENT OF OPERATIONS

a) The following pro forma adjustments were made to the historical combined statement of operations of NDCHealth for the year ended May 31, 2002 to reflect the acquisition of TechRx as if it had occurred on June 1, 2001.

(1)	To eliminate inter-company transactions. NDCHealth and TechRx provide services to one another and therefore have related revenues and expenses. TechRx has recorded amounts related to its Market Development Agreement with NDCHealth as amortization expense. These inter-company transactions have been eliminated so that the Combined Statement of Income reflects revenues and expenses associated only with other non-related entities.
(2)	To reflect the minority partners’ interest in the losses of TechRx. Because NDCHealth does not have complete ownership of TechRx, this amount reflects the minority partners’ interest in TechRx’s operating losses.
(3)	To eliminate NDCHealth’s equity in TechRx’s losses. NDCHealth previously accounted for its investment in TechRx under the cost method. Due to NDCHealth’s additional investment in TechRx in the fourth quarter of fiscal 2002, Accounting Principles Board Opinion No. 18 requires TechRx to be treated as if NDCHealth had accounted for TechRx as an equity investment since the inception of the initial investment.
(4)	To reflect the incremental interest costs of $1,115 associated with borrowing the cash portion of the acquisition price.
(5)	To reflect the amortization of acquired intangibles of $1,416. NDCHealth’s acquisition of a controlling interest in TechRx has resulted in acquired intangibles and goodwill.
(6)	To reflect the income tax effect of the above adjustments.

b) The following pro forma adjustments were made to the historical combined statement of operations of NDCHealth for the year ended May 31, 2002 to reflect the change in its capital structure as if it had occurred on June 1, 2001.

(1)	To reflect the redemption of the 5% Convertible Subordinated Notes due 2003 ($7,188 reduced interest expense, $584 reduced amortization of issuance costs) and the issuance of new debt with an assumed weighted average interest rate of 8.8% as if these events had occurred on June 1, 2001.
(2)	To remove the incremental interest costs of $1,115 associated with borrowing the cash portion of the acquisition price under our previous line of credit.
(3)	To reflect the income tax effect of the above adjustments.

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EX-99.1

Text of Press Release

EX-99.2.(A)

Introduction to Pro Forma Information

EX-99.2.(B)

Pro Forma Combined Statement of Operations

EX-99.2.(C)

Notes to Pro Forma Combined Statement of Operation