<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 1, 1996
---------------
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)
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
The following financial statements, pro forma financial information and exhibits
are filed as part of this report.
(a) Financial Statements of the Business Acquired:
(1) Equifax Healthcare EDI Services, Inc. Balance Sheets for
the years ended June 30, 1996 and 1995.
(2) Equifax Healthcare EDI Services, Inc. Statements of
Operations for the years ended June 30, 1996 and 1995.
(3) Equifax Healthcare EDI Services, Inc. Statements of
Shareholder's Equity for the years ended June 30, 1996 and
1995.
(4) Equifax Healthcare EDI Services, Inc. Statements of Cash
Flows for the years ended June 30, 1996 and 1995.
(5) Notes to the Financial Statements.
(6) Report of Independent Public Accountants.
(b) Pro Forma Financial Information
(1) Pro Forma Financial Information. Unaudited Pro Forma
Condensed Combined Balance Sheet as of August 31, 1996.
(2) Unaudited Pro Forma Condensed Combined Income Statement
for the fiscal year ended May 31, 1996.
(3) Unaudited Pro Forma Condensed Combined Income Statement
for the three months ended August 31, 1996.
(4) Notes to Unaudited Pro Forma Condensed Combined Financial
Statements.
(c) Exhibits.
Exhibit No. Description
----------- -----------
2 Stock Purchase Agreement dated September
3, 1996, as amended on September 24, 1996
(Pursuant to the regulations (the
"Regulations") under the Securities and
Exchange Act of 1934, as amended, the
Registrant has omitted all schedules and
similar attachments to the Stock Purchase
Agreement. The Registrant agrees to
furnish upon the request of the Commission
and in accordance with the Regulations,
copies of all such omitted schedules and
similar attachments.)
23 Consent of Arthur Andersen LLP
<PAGE>
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: October 30, 1996 By: /s/ M.P. Stevenson, Jr.
---------------- ----------------------------
M.P. Stevenson, Jr.
Interim Chief Financial Officer
<PAGE>
Equifax Healthcare EDI Services, Inc.
Financial Statements as of June 30, 1996 and 1995
Together With
Auditors' Report
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholder of
Equifax Healthcare EDI Services, Inc.:
We have audited the accompanying balance sheets of EQUIFAX HEALTHCARE EDI
SERVICES, INC. (a wholly owned subsidiary of Equifax Inc.) as of June 30, 1996
and 1995, and the related statements of operations, shareholder's equity, and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Equifax Healthcare EDI
Services, Inc. as of June 30, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
September 18, 1996
<PAGE>
EQUIFAX HEALTHCARE EDI SERVICES, INC.
BALANCE SHEETS
JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
ASSETS 1996 1995
- ---------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 248,935 $ 253,692
Accounts receivable, net of allowance for doubtful accounts of
$489,230 and $292,552 in 1996 and 1995, respectively 2,400,280 3,041,476
Interest receivable 0 241,389
Deferred taxes (Note 3) 418,048 379,216
Other current assets 242,810 266,383
------------- -------------
Total current assets 3,310,073 4,182,156
PROPERTY AND EQUIPMENT, net (Note 2) 2,166,097 1,927,298
GOODWILL, net (Note 2) 11,728,396 12,561,582
PURCHASED SOFTWARE, net (Note 2) 4,932,326 6,520,006
LONG-TERM INVESTMENTS--CONVERTIBLE NOTE (Note 2) 0 10,025,404
CONSULTING FEES, net (Note 7) 0 333,330
OTHER ASSETS 0 4,869
------------- -------------
Total assets $ 22,136,892 $ 35,554,645
============= =============
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY 1996 1995
- ---------------------------------------------------------------- ------------- -------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 539,852 $ 470,121
Accrued expenses 1,116,946 1,534,034
Accrued income taxes (Note 3) 534,227 0
Accrued relocation costs 118,162 304,208
Unearned income 46,563 161,693
Current portion of capital lease 38,033 234,871
Note payable 7,053 9,403
------------- -------------
Total current liabilities 2,400,836 2,714,330
DEFERRED TAXES (Note 3) 1,725,729 2,253,658
CAPITAL LEASE OBLIGATIONS, noncurrent 32,228 5,250
SHAREHOLDER'S EQUITY:
Common stock, $1 par value; 3,000,000 shares authorized;
500 shares issued and outstanding in 1996 and 1995 500 500
Additional paid-in capital 15,322,332 31,930,147
Retained earnings (accumulated deficit) 2,655,267 (1,349,240)
------------- -------------
Total shareholder's equity 17,978,099 30,581,407
------------- -------------
Total liabilities and shareholder's equity $ 22,136,892 $ 35,554,645
============= =============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
<PAGE>
EQUIFAX HEALTHCARE EDI SERVICES, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
REVENUES $16,756,851 $12,775,344
COST OF SERVICES 2,768,312 2,219,343
----------- -----------
13,988,539 10,556,001
----------- -----------
OPERATING EXPENSES:
Salaries and benefits 5,873,912 5,427,661
Depreciation and amortization 2,999,739 2,745,529
General and administrative expenses 2,475,585 2,344,649
Corporate overhead (Note 6) 1,357,169 390,738
Vendor commissions 1,324,871 728,329
Temporary and contract labor 876,028 486,202
Restructuring charges (Note 2) 352,800 0
Miscellaneous 588,075 434,016
----------- -----------
Total operating expenses 15,848,179 12,557,124
----------- -----------
Loss from operations (1,859,640) (2,001,123)
GAIN ON SALE OF INVESTMENT (Note 2) 8,232,257 0
OTHER INCOME 453,044 264,907
INTEREST EXPENSE (29,927) (57,238)
----------- -----------
Income (loss) before income tax expense (benefit) 6,795,734 (1,793,454)
INCOME TAX EXPENSE (BENEFIT) 2,791,227 (670,504)
----------- -----------
NET INCOME (LOSS) $ 4,004,507 $(1,122,950)
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
EQUIFAX HEALTHCARE EDI SERVICES, INC.
STATEMENTS OF SHAREHOLDER'S EQUITY
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
Retained
Additional Earnings
Common Paid-In (Accumulated
Stock Capital Deficit) Total
------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
BALANCE, June 30, 1994 $500 $ 7,364,311 $ (226,290) $ 7,138,521
Contributions from parent company 0 12,180,836 0 12,180,836
Contribution of net assets of Electronic
Tabulating Services 0 12,385,000 0 12,385,000
Net loss 0 0 (1,122,950) (1,122,950)
---- ----------- ---------- -----------
BALANCE, June 30, 1995 500 31,930,147 (1,349,240) 30,581,407
Return of capital to parent company 0 (16,607,815) 0 (16,607,815)
Net income 0 0 4,004,507 4,004,507
---- ----------- ---------- -----------
BALANCE, June 30, 1996 $500 $15,322,332 $2,655,267 $17,978,099
==== =========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
EQUIFAX HEALTHCARE EDI SERVICES, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 4,004,507 $ (1,122,950)
------------ ------------
Adjustments to reconcile net income (loss) to net cash used in operating
activities (net of ETS acquisition):
Depreciation and amortization 2,999,739 2,745,529
Gain on sale of PCN investment (8,232,257) 0
Loss on sale of fixed assets 30,073 0
Changes in assets and liabilities:
Accounts receivable 641,196 (1,276,218)
Interest receivable 241,389 (241,389)
Change in current deferred taxes (38,832) (316,105)
Other current assets 23,573 41,693
Consulting fees 333,330 0
Other assets 4,869 (2,619)
Other current liabilities (86,273) 551,876
Deferred taxes (358,427) (487,618)
Other noncurrent liabilities 32,228 (512,537)
------------ ------------
Total adjustments (4,409,392) 502,612
------------ ------------
Net cash used in operating activities (404,885) (620,338)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,462,978) (755,180)
Increase in investment in convertible note (88,400) (10,025,404)
Proceeds from sale of investment 18,356,062 0
Proceeds from sale of fixed assets 445,730 0
------------ ------------
Net cash provided by (used in) investing activities 17,250,414 (10,780,584)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations (240,121) (483,609)
Payments on short-term borrowings (2,350) (280,943)
Capital (distribution to) contribution from parent company (16,607,815) 12,180,836
------------ ------------
Net cash (used in) provided by financing activities (16,850,286) 11,416,284
------------ ------------
(DECREASE) INCREASE IN CASH (4,757) 15,362
CASH AT BEGINNING OF YEAR 253,692 238,330
------------ ------------
CASH AT END OF YEAR $ 248,935 $ 253,692
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for taxes $ 2,881,290 $ 0
============ ============
Interest paid $ 29,927 $ 57,238
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
EQUIFAX HEALTHCARE EDI SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
1. NATURE OF OPERATIONS
Equifax Healthcare EDI Services, Inc. (the "Company" or "EDI") is a wholly
owned subsidiary of Equifax Inc. ("Equifax" or the "Parent"). The Company
provides electronic eligibility verification and claims processing
services to health care providers and other electronic communications
among healthcare providers, payors, intermediaries, and financial
institutions. Cooperative Healthcare Network ("CHN") was acquired by
Equifax in January 1994. Electronic Tabulating Services ("ETS") was
acquired in September 1994. Effective January 1, 1995, CHN was merged into
ETS to form the Company. Financial information for ETS has been included
in these financial statements as of September 1, 1994. See Note 8 where
discussed.
2. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Revenue Recognition
The Company's revenues are primarily derived from fee income associated
with claims and eligibility processing fees charged on a per transaction
or per site basis and registration/renewal and start-up costs. Per
transaction and per site revenues are recognized in the month network
subscribers receive services. Registration/renewal and start-up fees are
recognized at the beginning of the respective contract period.
Property and Equipment
Property and equipment are stated at cost. Improvements which extend the
useful lives of the assets are capitalized, while repairs and maintenance
are charged to operations as incurred. Depreciation is provided over the
estimated useful lives of the assets using the straight-line method. The
useful lives of property and equipment range from three to eight years.
<PAGE>
-2-
The following summarizes the components of property and equipment at June
30, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
----------- ------------
<S> <C> <C>
Computer hardware $2,080,849 $2,387,867
Office equipment 315,003 311,171
Telephone and miscellaneous equipment 305,541 286,921
Leasehold improvements 241,599 32,486
Computer software 354,057 61,076
----------- ------------
3,297,049 3,079,521
Accumulated depreciation (1,130,952) (1,152,223)
----------- ------------
$2,166,097 $1,927,298
----------- ------------
</TABLE>
Depreciation expense for 1996 and 1995 was $708,570 and $605,619,
respectively.
Goodwill
The Company recognized goodwill in conjunction with the purchase of ETS.
Goodwill is amortized on the straight-line basis over 20 years. During the
year ended June 30, 1996, the Company reduced goodwill by $169,502 to
reflect a purchase price adjustment. Amortization expense was $663,684 and
$606,170 for 1996 and 1995, respectively.
Purchased Software
The Company capitalized purchased software costs in conjunction with the
acquisitions of CHN and ETS of $1,000,000 and $7,000,000, respectively.
These amounts are reflected in the financial statements net of $3,067,674
of accumulated amortization. Purchased software is being amortized on the
straight-line basis over five years. Amortization expense was $1,600,404
and $1,367,070 for 1996 and 1995, respectively.
Restructuring Charges
During 1996, EDI initiated a restructuring program designed to streamline
operations. A restructuring charge of $352,800 was recorded to accrue
severance and termination benefits for affected employees. Of these
expenses, $211,116 was paid as of June 30, 1996 and $141,684 is included
in accrued expenses.
Migration Costs
During 1996, the Company began merging the computer systems used by CHN
and ETS. As of June 30, 1996, costs of approximately $945,000 have been
capitalized and are included in fixed assets. An estimate of costs to
complete this project has not been made.
Gain on Sale of Investment
In April 1995, the Company invested in Physicians Computer Networks, Inc.
("PCN") by purchasing a $10,000,000 note, which was convertible to stock
at 130% of the base price of $4 per share, adjusted for the dilutive
effect of additional issuances of stock by PCN. In
<PAGE>
-3-
May 1996, PCN had an additional public offering, at which time the Company
converted the note into stock and then sold the shares at a pretax gain of
$8,232,257. The related federal tax liability of $2,881,290 was paid by the
Parent as of June 30, 1996.
3. INCOME TAXES
The provision for income taxes for the years ended June 30, 1996 and 1995
consisted of the following:
<TABLE>
<CAPTION>
1996 1995
---------------- --------------
<S> <C> <C>
Provision (benefit) for federal income taxes:
Current $2,726,913 $ (72,599)
Deferred (375,447) (464,472)
Total provision (benefit) for federal ---------------- --------------
income taxes 2,351,466 (537,071)
---------------- --------------
Provision (benefit) for state income taxes:
Current 511,143 2,696
Deferred (71,382) (136,129)
Total provision (benefit) for state
income taxes ---------------- --------------
439,761 (133,433)
---------------- --------------
Total $2,791,227 $(670,504)
================ ==============
</TABLE>
Temporary differences resulting in a deferred tax liability at June 30,
1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
---------------- --------------
<S> <C> <C>
Current:
Assets:
Bad debt expense $ 134,410 $ 98,749
Miscellaneous accruals 234,443 211,980
Other 49,195 68,487
---------------- --------------
418,048 379,216
Liability 0 0
---------------- --------------
Total current deferred tax $ 418,048 $ 379,216
================ ==============
</TABLE>
<PAGE>
-4-
<TABLE>
<CAPTION>
1996 1995
---------------- --------------
<S> <C> <C>
Noncurrent:
Asset:
Miscellaneous $ 18,546 $ 2,750
---------------- --------------
Liabilities:
Purchased software amortization (1,594,508) (2,191,132)
Depreciation (35,972) (20,671)
Amortization (74,342) (44,605)
Other (39,453) 0
---------------- --------------
(1,744,275) (2,256,408)
---------------- --------------
Total noncurrent deferred tax $(1,725,729) $(2,253,658)
================ ===============
</TABLE>
Differences between the statutory rate and the effective rate are due
primarily to goodwill amortization.
4. COMMITMENTS
The Company leases certain office space and equipment under noncancelable
operating lease agreements which expire through fiscal 2002. Future
minimum annual lease payments under the related noncancelable operating
leases, net of sublease, as of June 30, 1996 are as follows:
1997 $ 894,396
1998 848,909
1999 583,987
2000 468,004
2001 502,192
Thereafter 376,644
-----------
Total $3,674,132
===========
Rental expense under noncancelable operating lease agreements for the
years ended June 30, 1996 and 1995 totaled $766,160 and $732,948,
respectively.
The Company is party to various claims and assessments in the ordinary
course of business. In management's opinion, these matters will not have a
material effect on the Company's financial position, results of
operations, or cash flows.
5. SIGNIFICANT CUSTOMERS
A substantial portion of the Company's revenues are derived from a limited
number of customers. During the year ended June 30, 1996, three customers
accounted for 46% of total revenues. Individually, each of these customers
accounted for 14% to 16% of total revenues. During 1996, the contract with
another of these significant customers was renegotiated which resulted in
a one-time payment to the Company of $1.5 million which is included in
1996 revenues.
The contracts with two of these significant customers will expire on
December 31, 1996 and September 30, 1997. The Company will review these
contracts, but there can be no guarantee that the contracts will be
renewed. If either or both of these contracts are not renewed, it could
have a material adverse affect on the Company's results of operations and
liquidity. Revenues from these customers were $3.4 million for the year
ended June 30, 1996 excluding the one-time payment discussed above.
<PAGE>
-5-
6. RELATED-PARTY TRANSACTION
The Company is allocated certain costs from Equifax. During 1996 and 1995,
the Parent allocated costs of $1,357,169 and $390,738, respectively.
7. CONSULTING AGREEMENT
As part of the purchase of ETS, a consulting agreement with a former
member of ETS management was capitalized. The amount was being amortized
over the life of the agreement (30 months). The liability under this
agreement is included in accrued expenses. The asset and liability at June
30, 1995 were $333,330 and $331,250, respectively. During 1996, the
agreement ceased; accordingly, the asset and liability were removed from
the accounting records.
8. ACQUISITION OF ETS AND CREATION OF EDI
ETS was acquired by Equifax on September 1, 1994 in exchange for 355,666
shares of Equifax stock. The following summarizes the net assets acquired:
Current assets $ 631,802
Property and equipment 534,970
Goodwill 8,665,595
Purchased software 7,000,000
Other intangibles 500,000
------------
17,332,367
Liabilities assumed (4,947,367)
------------
Net assets transferred $12,385,000
============
Effective January 1, 1995, CHN was then merged into ETS to form EDI.
9. SUBSEQUENT EVENTS
On September 6, 1996, the Company entered into an agreement to be acquired
by National Data Corporation for $46,925,000 in cash, subject to
adjustments for changes in working capital since June 30, 1996. The
effective date of the transaction will be October 1, 1996.
<PAGE>
-6-
On August 16, 1996, the Company entered into a software licensing
agreement with Intermed Healthcare Systems, Inc. ("Intermed") requiring
the Company to pay Intermed $117,000 in past-due licensing fees and
$508,000 for use of its software in future periods. The $117,000 is
included in accrued expenses as of June 30, 1996. In accordance with the
agreement, the Company paid $625,000 during September 1996. An additional
fee of $175,000 is payable by Equifax under this agreement when the
license is transferred to National Data Corporation.
<PAGE>
Pro Forma Financial Information (Unaudited)
The following pro forma financial information has been prepared as if the
Equifax Health EDI transaction had taken place on August 31, 1996 for the pro
forma condensed combined balance sheet and June 1, 1995 for the pro forma
condensed combined income statements. For comparability purposes, Equifax Health
EDI's twelve months ended June 30, 1996 and three months ended August 31, 1996,
are used in conjunction with National Data Corporation's twelve months ended May
31, 1996 and three months ended August 31, 1996. Accordingly, Equifax Health
EDI's operating results for June 1996 were duplicated in each of the twelve
months ended May 31, 1996 and the three months ended August 31, 1996. Equifax
Health EDI's revenue and net income, excluding non-recurring and unusual items
for that period were $1,349,000 and $46,000.
The pro forma condensed combined income statement for the fiscal year ended May
31, 1996, also includes the impact of the Company's acquisition of the Merchant
Automated Point-of-Sale Program ("MAPP") from MasterCard International
Incorporated on April 1, 1996 as if the acquisition had occurred on June 1,
1995. The operations of MAPP from April 1, 1996 forward, as well as the balance
sheet data are reflected in the National Data Corporation historical balance
sheet at May 31, 1996. It is suggested that these pro forma condensed combined
financial statements be read in conjunction with the pro forma condensed
combined financial statements and notes thereto included in the Company's
Form 8-K filed on April 15, 1996 regarding the MAPP acquisition.
National Data Corporation and Equifax Health EDI's non-recurring and unusual
items have been excluded from the pro forma condensed combined income
statements, as follows (in millions):
NDC Equifax Health EDI
------------------ ------------------
FY 1996 FY 1997 FY 1996 FY 1997
------------------ ------------------
Restructuring charges $ 44.1 $ - $ 0.4 $ -
One-time payment from a major
customer - - (1.5) -
Gain on sale of investments - - (8.2) (8.2)
Amortization of intangibles - - 2.2 0.6
------------------ ------------------
Net adjustments to increase
(decrease) historical operating
income $ 44.1 $ - $ (7.1) $ (7.6)
------------------ ------------------
Intangible assets acquired as a result of Equifax Health EDI's business
acquisitions have no fair value to the Company as of the acquisition date.
These acquisitions have been accounted for using the purchase method. Any
adjustments to the purchase price allocations are not expected to be material to
the pro forma financial information taken as a whole.
The pro forma financial information presented is unaudited, for information
purposes only and is not necessarily indicative of the operating results that
would have occurred had the acquisition taken place on the dates indicated, nor
are they necessarily indicative of the results of future operations. Historical
income statements of the acquired company have been adjusted to reflect
differing fiscal years. Non-recurring items were excluded from the pro forma
presentation. The pro forma financial information should be read in conjunction
with the accompanying notes.
<PAGE>
NATIONAL DATA CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET
AUGUST 31, 1996
(in thousands)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Equifax Pro Forma Pro Forma
NDC Health EDI Adjustments Combined
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 10,656 $ 64 $ 299 b $ 11,019
Accounts receivable, net 66,722 2,612 -- 69,334
Other current assets 7,971 92 -- 8,063
-------- ------ -------- --------
Total current assets 85,349 2,768 299 88,416
-------- ------ -------- --------
Property and equipment, net of depreciation 49,220 1,989 -- 51,209
Acquired intangibles and goodwill, net 220,640 -- 44,079 b 264,719
Other 14,208 -- -- 14,208
-------- ------ -------- --------
Total Assets $369,417 $4,757 $ 44,378 $418,552
======== ====== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 50,315 $2,046 $ -- $ 52,361
Line of credit payable 15,000 -- 47,000 b 62,000
Notes and earn-out payable 1,479 7 -- 1,486
Mortgage payable 10,892 -- -- 10,892
Deferred income 5,125 48 -- 5,173
Other current liabilities 11,778 34 -- 11,812
-------- ------ -------- --------
Total current liabilities 94,589 2,135 47,000 143,724
-------- ------ -------- --------
Notes payable on acquired businesses 3,103 -- -- 3,103
Other long-term liabilities 9,750 -- -- 9,750
-------- ------ -------- --------
Total liabilities 107,442 2,135 47,000 156,577
-------- ------ -------- --------
Minority interest 19,841 -- -- 19,841
Shareholders' Equity 242,134 2,622 (2,622) 242,134
-------- ------ -------- --------
Total Liabilities and Shareholders' Equity $369,417 $4,757 $ 44,378 $418,552
======== ====== ======== ========
</TABLE>
See Notes to Pro Forma Condensed Combined Financial Statements.
<PAGE>
NATIONAL DATA CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE FISCAL YEAR ENDED MAY 31, 1996
(in thousands except per share data)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAPP
6/1/95 to Equifax Pro Forma Pro Forma
NDC 3/31/96 Health EDI Adjustments Combined
---------- --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Revenue $ 325,803 $42,780 $ 15,257 $ -- $ 383,840
--------- ------- -------- -------- ---------
Operating Expenses:
Cost of service 163,323 23,816 12,167 4,950 b 204,256
Sales, general and administrative 130,246 11,847 3,833 -- 145,926
--------- ------- -------- -------- ---------
293,569 35,663 16,000 4,950 350,182
--------- ------- -------- -------- ---------
Operating income (loss) 32,234 7,117 (743) (4,950) 33,658
--------- ------- -------- -------- ---------
Other income (expense):
Interest and other income 4,476 -- 453 (3,917)c 1,012
Interest and other expense (3,750) -- (30) (3,113)d (6,893)
Minority interest (628) -- -- (103)e (731)
--------- ------- -------- -------- ---------
98 -- 423 (7,133) (6,612)
--------- ------- -------- -------- ---------
Income (loss) before income taxes 32,332 7,117 (320) (12,083) 27,046
Provision (benefit) for income taxes 10,993 2,420 (131) (4,086)f 9,196
--------- ------- -------- -------- ---------
Net income (loss) $ 21,339 $ 4,697 $ (189) $ (7,997) $ 17,850
========= ======= ======== ======== =========
Number of common and common equivalent
shares 27,189 27,189
Earnings per share $ 0.79 $ 0.66
--------- ---------
</TABLE>
See Notes to Pro Forma Condensed Combined Financial Statements.
<PAGE>
NATIONAL DATA CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE THREE MONTHS ENDED AUGUST 31, 1996
(in thousands except per share data)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Equifax Pro Forma Pro Forma
NDC Health EDI Adjustments Combined
---------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
Revenue $ 101,164 $ 3,856 $ - $ 105,020
---------------- ---------------- --------------- -----------------
Operating Expenses:
Cost of service 49,076 2,113 441 b 51,630
Sales, general and administrative 38,154 1,742 - 39,896
---------------- ---------------- --------------- -----------------
87,230 3,855 441 91,526
---------------- ---------------- --------------- -----------------
Operating income (loss) 13,934 1 (441) 13,494
---------------- ---------------- --------------- -----------------
Other income (expense):
Interest and other income 319 61 - 380
Interest and other expense (935) (1) (671)d (1,607)
Minority interest (498) - - (498)
---------------- ---------------- --------------- -----------------
(1,114) 60 (671) (1,725)
---------------- ---------------- --------------- -----------------
Income (loss) before income taxes 12,820 61 (1,112) 11,769
Provision (benefit) for income taxes 4,615 24 (402)f 4,237
---------------- ---------------- --------------- -----------------
Net income (loss) $ 8,205 $ 37 $ (710) $ 7,532
---------------- ---------------- --------------- -----------------
Number of common and common
equivalent shares 27,800 27,800
Earnings per share $ 0.30 $ 0.27
--------------- -----------------
</TABLE>
See Notes to Pro Forma Condensed Combined Financial Statements.
<PAGE>
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note 1. Narrative description of pro forma adjustments
----------------------------------------------
a. Stockholder's equity adjustments represent the elimination of the book
equity of Equifax Health EDI, which in this presentation is the value of
the net assets acquired.
b. The Company will fund the purchase price by utilizing its credit
facility.
Intangibles and goodwill associated with Equifax Health EDI are calculated
as follows:
Purchase price $46,701,422
Less: Net assets acquired (2,622,136)
------------
$44,079,286
===========
An approximate weighted average life of 25 years is assumed for
amortization of these intangibles.
Intangibles and goodwill associated with the MAPP acquisition totaled
$126,120,000. These intangibles and goodwill have an approximate weighted
average life of 34 years for amortization of these intangibles.
The pro forma adjustment to reflect amortization expense for the periods
presented is as follows:
<TABLE>
<CAPTION>
Equifax MAPP Total
------- ---- -----
Health EDI
----------
<S> <C> <C> <C>
Fiscal year ended May 31, 1996 $1,763,000 $3,187,000 $4,950,000
Three months ended August 31, 1996 441,000 * 441,000
</TABLE>
c. Interest and other income is reduced by the following amounts to reflect
pro forma reduction in funds available for investment purposes had the MAPP
transaction occurred on June 1, 1995. The average interest rate earned on
investments was approximately 5% in all periods presented.
Fiscal year ended May 31, 1996 $3,917,000
Three months ended August 31, 1996 *
<PAGE>
d. Interest expense is increased by the estimated amount of interest that
would have been incurred if $47,000,000 related to the Health EDI
transaction and $9,000,000 related to the MAPP transactions, were borrowed
on June 1, 1995 and continued to remain outstanding through August 31,
1996. The interest calculation is estimated based on the Company's average
LIBOR borrowing rate of 5.7% in all periods presented.
<TABLE>
<CAPTION>
Equifax MAPP Total
------- ---- -----
Health EDI
----------
<S> <C> <C> <C>
Fiscal year ended May 31, 1996 $2,685,000 $428,000 $3,113,000
Three months ended August 31, 1996 671,000 * 671,000
</TABLE>
e. Minority interest (per the terms of the MAPP agreement) for the first two
years is calculated at 1% of operating income (adjusted for amortization of
purchase price), before income taxes. The additional minority interest
assuming the MAPP transaction occurred on June 1, 1995 is presented as
follows:
<TABLE>
<S> <C>
Fiscal year ended May 31, 1996 $103,000
Three months ended August 31, 1996 *
</TABLE>
f. Income tax rates for the periods presented were computed using the
effective rates for those periods.
g. Earnings per share is presented using the weighted average fully diluted
number of shares outstanding.
* Pro forma adjustment not necessary, as the impact of the MAPP transaction
is already reflected in the historical results.
<PAGE>
COMMISSION FILE NUMBER 001-12392
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS FILED ON FORM 8-K
DATED OCTOBER 1, 1996
NATIONAL DATA CORPORATION
National Data Plaza
Atlanta, Georgia 30329-2010
<PAGE>
NATIONAL DATA CORPORATION
FORM 8-K
INDEX TO EXHIBITS
------------------------------
Exhibit
Numbers Description
- ------- -----------
2 Stock Purchase Agreement, dated September 3,
1996, as amended on September 24, 1996**
23 Consent of Arthur Andersen LLP**
** - Exhibit originally filed with the Registrant's Form 8-K on October 7, 1996
is not affected by this Form 8-K/A.
