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 November 30, 1997.
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 - 33,715,404 shares
---------------------------------------------------
Outstanding as of January 5, 1998
-----------------------------------
<PAGE>
<TABLE>
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
NATIONAL DATA CORPORATION
(In thousands, except per share data)
- -------------------------------------------------------------------------
<CAPTION>
Three Months Ended
November 30,
----------------------
1997 1996
------- -------
<S> <C> <C>
Revenue $ 120,035 $ 102,575
Operating Expenses:
Cost of service 57,356 49,092
Sales, general and administrative 41,836 37,858
-------- --------
99,192 86,950
-------- --------
Operating income 20,843 15,625
Other income (expense):
Interest and other income 455 910
Interest and other expense (2,170) (1,401)
Minority interest (607) (186)
-------- -------
(2,322) (677)
-------- -------
Income before income taxes 18,521 14,948
Provision for income taxes 7,038 5,381
-------- -------
Net income $ 11,483 $ 9,567
======== =======
Earnings per common and
common equivalent shares $ 0.41 $ 0.34
======== =======
See Notes to Unaudited Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
NATIONAL DATA CORPORATION
(In thousands, except per share data)
- -----------------------------------------------------------------------
<CAPTION>
Six Months Ended
November 30,
----------------------
1997 1996
--------- ---------
<S> <C> <C>
Revenue $ 240,137 $ 203,739
Operating Expenses:
Cost of service 116,326 98,168
Sales, general and administrative 83,335 76,012
--------- --------
199,661 174,180
--------- --------
Operating income 40,476 29,559
Other income (expense):
Interest and other income 940 1,229
Interest and other expense (4,484) (2,336)
Minority interest (1,308) (684)
-------- --------
(4,852) (1,791)
-------- --------
Income before income taxes 35,624 27,768
Provision for income taxes 13,537 9,996
-------- --------
Net income $ 22,087 $ 17,772
======== ========
Earnings per common and
common equivalent shares $ 0.79 $ 0.64
======== ========
See Notes to Unaudited Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NATIONAL DATA CORPORATION
(In thousands)
- ------------------------------------------------------------------------
<CAPTION>
Six Months Ended November 30,
1997 1996
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 22,087 $ 17,772
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 10,060 9,368
Amortization of acquired intangibles
and goodwill 9,469 5,996
Minority interest in earnings 1,308 684
Provision for bad debts 559 907
Other, net 521 200
Changes in current assets and liabilities
which provided (used) cash, net of the
effects of acquisitions:
Accounts receivable, net (7,544) (3,692)
Merchant processing working capital 3,295 7,778
Inventory 390 (11)
Prepaid expenses and other assets (391) 1,530
Accounts payable and
accrued liabilities (11,658) (3,833)
Income taxes payable (879) 917
-------- --------
Net cash provided by operating activities 27,217 37,616
-------- --------
Cash flows from investing activities:
Capital expenditures (9,311) (8,003)
Business acquisitions, net of cash acquired (8,717) (48,049)
-------- --------
Net cash used in investing activities (18,028) (56,052)
-------- --------
Cash flows from financing activities:
Net repayments under lines of credit - (30,000)
Payments on notes and earn-out payable (1,130) (1,139)
Net principal payments under capital lease
arrangements and other long-term debt (1,283) (3,917)
Net proceeds from the issuance of
long-term debt - 139,682
Net proceeds from the issuance
of stock plans 3,331 4,413
Distributions to minority interests (3,134) (970)
Dividends paid (3,982) (3,919)
-------- --------
Net cash (used in) provided by
financing activities (6,198) 104,150
-------- --------
Increase in cash and cash equivalents 2,991 85,714
Cash and cash equivalents, beginning of period 19,240 9,768
-------- --------
Cash and cash equivalents, end of period $ 22,231 $ 95,482
========= ========
See Notes to Unaudited Condensed Financial Statements.
</TABLE>
<PAGE>
<TABLE>
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
NATIONAL DATA CORPORATION
(In thousands, except share data)
- ----------------------------------------------------------------------
<CAPTION>
November 30, May 31,
1997 1997
---------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 22,231 $ 19,240
Accounts receivable
(less allowances of $2,524 and $2,868) 86,172 78,269
Deferred income taxes 2,584 2,584
Inventory 2,082 2,260
Prepaid expenses and other current assets 11,656 6,271
--------- ---------
Total current assets 124,725 108,624
Property and equipment, net 51,109 49,907
Intangible assets, net 346,799 348,476
Deferred income taxes 9,037 9,037
Other 5,152 5,639
--------- ---------
Total Assets $ 536,822 $ 521,683
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 49,338 $ 51,789
Notes and earn-out payable 305 1,372
Income taxes payable 3,541 4,282
Obligations under capital leases 2,378 2,513
Deferred income 5,391 7,389
--------- ---------
Total current liabilities 60,953 67,345
Long-term debt 151,654 149,750
Obligations under capital leases 2,530 2,287
Other long-term liabilities 3,269 3,653
--------- ---------
Total liabilities 218,406 223,035
Minority interest in equity
of subsidiaries 19,468 21,138
Commitments and contingencies
Shareholders' Equity:
Preferred stock, par value $1.00 per share,
1,000,000 shares authorized; none issued - -
Common stock, par value $.125 per share,
100,000,000 shares authorized; 26,789,020
and 26,564,668 shares issued and
outstanding, respectively. 3,349 3,321
Capital in excess of par value 187,152 182,695
Retained earnings 111,247 93,139
Cumulative translation adjustment (1,064) (727)
--------- ---------
300,684 278,428
Less: Deferred compensation (1,736) (918)
--------- ---------
Total Shareholders' Equity 298,948 277,510
Total Liabilities and
Shareholders' Equity $ 536,822 $ 521,683
========= =========
See Notes to Unaudited Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
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 1997 consolidated
financial statements to conform to the fiscal 1998 presentation. It
is suggested that these financial statements be read in conjunction
with the financial statements and notes thereto included in the
Company's latest annual report on Form 10-K for the fiscal year ended
May 31, 1997.
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 such interim periods.
NOTE 2 - EARNINGS PER SHARE:
Primary earnings per common share and common equivalent share are
computed by dividing net income by the weighted average number of
common shares and common equivalent shares outstanding during the
period. Common equivalent shares represent stock options that, if
exercised, 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 are assumed to have a dilutive effect on
earnings per share.
Fully diluted earnings per common and common equivalent share are
computed by the same method as described for primary earnings per
share except that the higher of (1) the ending market share price for
the period or (2) the average market share price for the period is
used to compute the fully diluted earnings per share, as compared to
the average market share price for primary earnings per share. The
convertible notes issued in fiscal 1997 have an antidilutive effect
on fully diluted earnings per share; accordingly, the notes are
excluded from earnings per share calculations. Earnings per share
calculations are presented in the accompanying financial statements.
The primary and fully diluted number of common and common equivalent
shares outstanding are as follows (In thousands):
Quarter Ended November Six Months Ended
30, November 30,
1997 1996 1997 1996
Primary 28,139 27,979 28,170 27,896
Fully Diluted 28,139 28,043 28,170 27,953
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"),
"Earnings per Share". SFAS No. 128 requires primary earnings per
share to be replaced with "basic earnings per share". Basic earnings
per share is computed by dividing reported earnings available to
common stockholders by weighted average shares outstanding. No
dilution for any potentially dilutive securities is included. Fully
diluted earnings per share will be called "diluted earnings per
share". The standard is intended to simplify existing computational
guidelines, revise the disclosure requirements, and increase
comparability of earnings per share on an international basis. The
pronouncement is effective for financial statements issued after
December 15, 1997 and is not expected to have a material impact on
the Company's reported earnings per share.
<PAGE>
NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION:
Supplemental cash flow disclosures, including non-cash investing and
financing activities, for the six months ended November 30, 1997 and
1996 are as follows (In thousands):
1997 1996
Income taxes paid $ 14,278 $ 8,441
Interest paid 4,268 1,649
Property and equipment capital leases 1,455 675
NOTE 4 - SUBSEQUENT EVENTS:
The Company's strategy includes the continued expansion of its
presence in the health information services market through
investments in research and development, marketing, alliances and
acquisitions. These are designed to introduce new services and
distribution capability. In some instances, it is felt that
investment in acquisitions can accelerate this or do so with lower
risk than an internal start up program. In the second quarter, two
transactions were closed which expanded the company's health
information services. The first greatly expanded the Company's data
base and information management capability. The second transaction
expands the outsourcing service offerings available to hospitals and
physician groups.
On December 15, 1997, the Company acquired two related health care
database information management businesses based in Phoenix, Arizona.
In this transaction the Company acquired the stock of Source
Informatics Inc., a privately held company, and the stock of a
subsidiary of Pharmaceutical Marketing Services Inc. ("PMSI"), which
holds its Over-The-Counter Physician Survey business unit as well as
PMSI's interest in a joint venture it formed with Source Informatics,
Inc. Under the terms of the agreements, the Company paid $35.7
million and issued 2,670,298 shares of its common stock, giving the
total transaction a value of approximately $128.7 million.
On December 19, 1997, the Company completed a merger with Physician
Support Systems, Inc. (PSS). This transaction is being accounted for
under the pooling of interests method of accounting. The Company
issued 4,237,784 shares of its common stock in exchange for PSS'
9,742,033 shares issued and outstanding, giving the total transaction
a value of approximately $139.8 million.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Revenue
<TABLE>
<CAPTION>
(In millions)
Quarter Ending November 30,
1997 1996 Increase
------------ ----------- --------
Revenue:
<S> <C> <C> <C> <C> <C>
Health Information Services $ 48.2 40% $ 41.4 40% 16%
Integrated Payment Systems 38.8 32% 31.7 31% 22%
Global Payment Systems 39.8 34% 35.4 35% 12%
Intercompany Revenue (6.8) (6%) (5.9) (6%) 15%
------ ---- ------ ---- -----
Total Revenue $120.0 100% $102.6 100% 17%
====== ==== ====== ==== =====
</TABLE>
Total revenue for the second quarter of fiscal 1998 was $120.0
million, an increase of $17.4 million (17%) from the same period in
fiscal 1997. The increase was the result of increased revenue in
Health Information Services, $6.8 million (16%); Integrated Payment
Systems, $7.1 million (22%); and Global Payment Systems, $4.4 million
(12%).
<TABLE>
<CAPTION>
(In millions)
Six Months Ending November 30,
1997 1996 Increase
------------ ------------ --------
Revenue:
<S> <C> <C> <C> <C> <C>
Health Information Services $ 95.7 40% $ 79.5 39% 20%
Integrated Payment Systems 77.5 32% 63.7 31% 22%
Global Payment Systems 80.2 33% 71.7 35% 12%
Intercompany Revenue (13.3) (5%) (11.2) (5%) 19%
------ ---- ------ ---- ----
Total Revenue $240.1 100% $203.7 100% 18%
====== ==== ====== ==== ====
</TABLE>
Total revenue for the first half of fiscal 1998 was $240.1
million, an increase of $36.4 million (18%) from the same period in
fiscal 1997. The increase was the result of increased revenue in
Health Information Services, $16.2 million (20%); Integrated Payment
Systems, $13.8 million (22%); and Global Payment Systems, $8.4
million (12%).
Health Information Services. Revenue reflected growth from
internally developed products and services as well as new ones
from acquisitions. Equifax Healthcare EDI Services, Inc. and Health
Communications Services, Inc. were acquired during fiscal 1997. Two
smaller United Kingdom-based pharmacy systems companies were acquired
during the first quarter of fiscal 1998. A divestiture during the
second quarter of fiscal 1998 is also reflected in the results.
Revenues during the second quarter were $48.2 million versus
$41.4 million during the same quarter last year. For the first half,
the comparable revenue results were $95.7 million and $79.5 million,
respectively.
<PAGE>
Integrated Payment Systems. Second quarter and year-to-date
revenue indicated the effect of programs directed at new vertical
industry offerings and new distribution programs in addition to
growth in the basic market demand. Revenue totaled $38.8 million in
the quarter versus $31.7 million last year, and $77.5 million for the
first half versus $63.7 million in the comparable period last year.
Global Payment Systems. Revenue for the periods include historic
network services, new services of deployment revenue and back office
services, including the impact of the purchase of a portion of
Electronic Data Systems Corporation's ("EDS") card processing
business and a joint marketing and service alliance with EDS in the
third quarter fiscal 1997. The second quarter revenue totaled $39.8
million versus $35.4 million last year. For the first six months,
revenue was $80.2 million versus $71.7 million.
Costs and Expenses
The following table represents the primary components of cost of
service as a percentage of total revenue for the periods ending
November 30:
Second Quarter Six Months
-------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
Cost of Service:
Operations 38% 37% 39% 37%
Depreciation and Amortization 7% 7% 7% 7%
Hardware Sales 3% 4% 2% 4%
---- ---- ---- ----
48% 48% 48% 48%
==== ==== ==== ====
Total cost of service as a percentage of revenue remained
constant at 48% for both the second quarter and first six months of
fiscal 1998 and 1997. Cost of operations increased $7.4 million
(19%) in the second quarter of fiscal 1998 and increased $18.3
million (20%) in the first half of fiscal 1998, when compared to the
same periods last year. These increases were primarily a result of
increased operating costs associated with the revenue growth and
acquisitions. As a percentage of revenue, cost of operations was 38%
for the second quarter of fiscal 1998, compared to 37% for the same
period last year. For the first six months of fiscal 1998, as a
percentage of revenue; cost of operation was 39% compared to 37% for
the comparable period last year. The increase is attributable to the
gross margins realized from the acquisitions completed after January
1, 1997.
As a percentage of revenue, depreciation and amortization costs
remained constant at 7% in both second quarter and six-month periods
of fiscal 1998 and 1997. Depreciation and amortization expense
increased $1.4 million (20%) during the second quarter and $2.5
million (18%) during the first half of fiscal 1998 as a result of
acquisitions accounted for as purchase transactions completed during
fiscal 1997.
As a percentage of revenue, hardware costs remained constant at
3% in both the second quarter periods. However, in the first half,
hardware costs as a percentage of revenue was 2% for fiscal 1998
compared to 4% for fiscal 1997. This decrease also reflects a shift
away from one-time sales activity to increasing the recurring revenue
base. Hardware sales costs decreased $0.3 million (8%) during the
second quarter and $3.3 million (41%) during the first half of fiscal
1998.
<PAGE>
As a percentage of revenue, sales, general and administrative
("SG&A") expense decreased to 35% for the second quarter and first
six months of fiscal 1998 from 37% for both periods in fiscal 1997.
SG&A expenses decreased as a percentage of revenue since revenues
grew at a faster rate than these expenses. SG&A expenses increased
$4.0 million (11%) for the second quarter of fiscal 1998 and $7.3
(10%) for the first half of fiscal 1998 as compared to the same
periods of fiscal 1997. These increases were primarily due to
expenses associated with investments made in product development and
distribution channel expansion for future revenue growth. In
addition, the Company realized higher SG&A expense ratios in acquired
businesses.
EBITDA
Earnings before interest, taxes, depreciation and amortization
("EBITDA") were $30.5 million for the second quarter of fiscal 1998
and $23.8 million for the same quarter of fiscal 1997, a 28% gain.
As a percentage of revenue, EBITDA was 25% in the second quarter of
fiscal 1998 versus 23% for the same period in fiscal 1997. EBITDA was
$60.2 million for the first six months of fiscal 1998 and $45.0
million for the same period of fiscal 1997, a 34% gain.
The Company's EBITDA formula and 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 form of measurement and provides a comparable operating
income measure, excluding the impact of the amortization of acquired
intangibles and potential timing differences associated with capital
expenditures and the related depreciation charges.
Operating Income
Operating income increased 33%, from $15.6 million to $20.8
million, in the second quarter of fiscal 1998. As a percentage of
revenue, operating income increased to 17.4% in the second quarter of
fiscal 1998 from 15.2% in the same quarter last year.
Operating income increased 37%, from $29.6 million to $40.5
million, in the first six months of fiscal 1998. As a percentage of
revenue, operating income increased to 16.9% in the first six months
of fiscal 1998 from 14.5% in the same period last year.
<PAGE>
Liquidity and Capital Resources
Cash flow from operations provides the Company with a
significant source of liquidity to meet its needs. At November 30,
1997, the Company and its subsidiaries had cash and cash equivalents
totaling $22.2 million. Cash provided by operations, before changes
in working capital, was $44.0 million for the first six months of
fiscal 1998, an increase of $9.1 million (26%) compared to the same
period in the prior year. This difference is primarily driven by
the increase in depreciation and amortization resulting from the
fiscal 1997 acquisition activities and higher net income for the
first six months of fiscal 1998. However, net cash provided by
operating activities decreased 28% to $27.2 million for the first six
months of fiscal 1998, from $37.6 million in the same period in
fiscal 1997.
Cash was required in the first six month of fiscal 1998 to fund
net changes in working capital of $16.8 million, compared to cash
provided by net changes in working capital of $2.7 million for the
same period of fiscal 1997. The change in working capital resulted
primarily from changes in net merchant processing funds and the
timing and payments on accounts payable and accrued liabilities. The
changes in net merchant processing working capital reflect normal
fluctuations in the timing of credit card sales processed. The
changes due to accounts payable and accrued liabilities primarily
relate to the timing of payroll and related liabilities and amounts
expended in connection with the restructuring accrual established in
fiscal 1996.
For the first six months of fiscal 1998, cash used in investing
activities decreased to $18.0 million, compared to $56.1 million in
the same period of fiscal 1997. Capital expenditures increased 16%
during the first six months of fiscal 1998, as the Company continues
to invest in capital programs related to growth in the business and
acceleration of certain strategic initiatives. Also during the first
quarter of fiscal 1998, the Company completed the acquisition of two
United Kingdom-based pharmacy systems companies. During the first
six months of fiscal 1997, the Company expended $48.0 million on
acquisition activities, primarily the Equifax Healthcare EDI
Services, Inc. acquisition completed on October 1, 1996. As
indicated in Note 4 to the Unaudited Condensed Consolidated Financial
Statements, the Company completed two purchase acquisitions and one
merger accounted as a pooling transaction in December 1997. The
Company has financed its acquisition program through cash flows from
operations, equity, debt offerings and the exchange of shares.
Net cash used in financing activities was $6.2 million for the
fist six months of fiscal 1998. Net cash provided by financing
activities for the same period in fiscal 1997 was $104.2 million.
During the first six months of fiscal 1997, the Company paid the full
balance of $30.0 million on its line of credit, and completed an
issuance of long-term convertible public debt, providing net proceeds
of $139.7 million.
The Company has an unsecured $125.0 million revolving line of
credit facility which expires in December 2002. As of November 30,
1997, there were no amounts outstanding under the facility. However,
during December 1997, the Company borrowed $62.0 million to finance
the acquisitions and related costs discussed in Note 4 to the
Unaudited Condensed Consolidated Financial Statements. Management
believes that its current level of cash and borrowing capacity, along
with future cash flows from operations, are sufficient to meet the
needs of its existing operations and its planned requirements for the
foreseeable future. The Company regularly evaluates cash
requirements for current operations, commitments, development
activities and strategic acquisitions. The Company may elect to
raise additional funds for these purposes, either through the
issuance of additional debt, equity or otherwise, as appropriate.
<PAGE>
Forward-Looking Information
When used in this report, press releases and elsewhere by
management or the Company from time to time, the words "believes,"
"anticipates," "expects" and similar expressions are intended to
identify forward-looking statements concerning the Company's
operations, economic performance and financial condition, including
in particular, the likelihood of the Company's success in developing
and expanding its business. These statements are based on a number
of assumptions and estimates which are inherently subject to
significant uncertainties and contingencies, many of which are beyond
the control of the Company, and reflect future business decisions
which are subject to change. A variety of factors could cause actual
results to differ materially from those anticipated in the Company's
forward-looking statements, some of which include competition in the
market for the Company's services, continued expansion of the
Company's processing and payment systems markets, successfully
completing and integrating acquisitions in existing and new markets
and other risk factors that are discussed from time to time in the
Company's Securities and Exchange Commission ("SEC") reports and
other filings. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. The Company undertakes no obligations to publicly release
the results of any revisions to these forward-looking statements that
may be made to reflect events or circumstances after the date hereof,
or thereof, as the case may be, or to reflect the occurrence of
unanticipated events.
<PAGE>
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 SECURITITES
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's annual meeting of stockholders was held on October 23,
1997. At the annual meeting, the stockholders of the Company
approved the following items:
1. Election of two directors in Class II, Edward L. Barlow and Neil
Williams, to serve until the annual meeting of stockholders in 2000,
or until their successors are duly elected and qualified;
2. Adoption of the Company's 1997 Stock Option Plan.
ITEM 5 - OTHER INFORMATION
None
ITEM 6 - EXHIBITS AND REPORTS FILED ON FORM 8-K
(a) Exhibits:
Exhibit 27 - Financial Data Schedule
(b) Reports Filed on Form 8-K:
None
<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: January 14, 1998 By: /s/ Robert L. Walker
_______________ ________________________
Robert L. Walker
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1997
<PERIOD-END> NOV-30-1997
<CASH> 22,231
<SECURITIES> 0
<RECEIVABLES> 88,696
<ALLOWANCES> 2,524
<INVENTORY> 2,082
<CURRENT-ASSETS> 124,725
<PP&E> 132,274
<DEPRECIATION> 81,165
<TOTAL-ASSETS> 536,822
<CURRENT-LIABILITIES> 60,953
<BONDS> 151,654
0
0
<COMMON> 3,349
<OTHER-SE> 295,599
<TOTAL-LIABILITY-AND-EQUITY> 536,822
<SALES> 240,137
<TOTAL-REVENUES> 240,137
<CGS> 116,326
<TOTAL-COSTS> 199,661
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,484
<INCOME-PRETAX> 35,624
<INCOME-TAX> 13,537
<INCOME-CONTINUING> 22,087
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,087
<EPS-PRIMARY> 0.79
<EPS-DILUTED> 0.79
</TABLE>
