<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 22, 2000
--------------
Commission File No. 001-12392
---------
NATIONAL DATA CORPORATION
-------------------------
(Exact name of registrant as specified in charter)
DELAWARE 58-0977458
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
National Data Plaza, Atlanta, Georgia 30329-2010
------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 728-2000
--------------
NONE
----
(Former name, former address and former fiscal year, if
changed since last year)
<PAGE>
Item 5. Other Events
------------
On March 22, 2000, National Data Corporation announced earnings for the fiscal
third quarter ending February 29, 2000, as well as a decision to divest its
Physician and Hospital Support Services ("PHSS") business. A copy of the press
release, with related attachments, is filed herewith as Exhibit 99.1 and is
incorporated herein by reference.
The decision to divest PHSS follows board decisions made last quarter. These
decisions were to create separate eHealth and eCommerce companies and to
increase focus on its core business areas. Related to that decision,
the board also decided to evaluate strategic alternatives for the Health
Management Services business. Accordingly, the board has decided to pursue the
divestiture of PHSS and to place the business into a discontinued operations
category.
Additionally, the Company has prepared restated statements of income for the
fiscal year ended May 31, 1999 and the nine months ended February 29, 2000,
excluding the discontinued operations, with a note explaining the discontinued
operations. These restated financial statements and note are filed herewith as
Exhibit 99.2 and are incorporated herein by this reference.
Item 7. Financial Statements and Exhibits
- ------------------------------------------
(c) 99.1 Press Release, with related attachments, dated March 22, 2000,
announcing earnings for the fiscal third quarter ending February 29,
2000, as well as a decision to divest its PHSS business.
99.2 Discontinued operations note, Unaudited Restated Consolidated
Statements of Income for the fiscal year ended May 31, 1999 and the
nine months ended February 29, 2000 (by quarter) including and
excluding Restructuring Charges, share assumptions used in calculating
earnings per share, and Segment Information (Unaudited) for the nine
month periods ended February 29, 2000 and February 28, 1999.
When used in this report, press releases, and elsewhere by management of
National Data Corporation, from time to time, the words "believes."
"anticipates," "expects," and similar expressions are intended to identify
forward-looking statements concerning the Company's operations, economic
performance and financial condition, including in particular, the Company's
ability to realize the benefits of the change in our business, the write-offs,
and the charges, including growth in revenue and earnings. These statements are
based on a number of assumptions and estimates that are inherently subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Company, and reflect future business decisions which are subject
to change. A variety of
<PAGE>
factors could cause actual results to differ materially from those anticipated
in the Company's forward-looking statements, some of which include competition
in the market for the Company's services, continued expansion of the Company's
product and service offerings, product demand, market and customer acceptance,
the effect of economic conditions, competition, pricing, development
difficulties, the ability to consummate and integrate acquisitions, and other
risk factors that are discussed from time to time in the Company's Securities
and Exchange Commission ("SEC") reports and other filings. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof. The Company undertakes no obligations to publicly
release the results of any revisions to these forward-looking statements that
may be made to reflect events or circumstances after the date hereof, or
thereof, as the case may be, or to reflect the occurrence of unanticipated
events.
<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 hereunto duly authorized.
NATIONAL DATA CORPORATION
-------------------------
(Registrant)
By: /s/ David H. Shenk
----------------------
David H. Shenk
Interim Chief Financial Officer
(Principal Financial Officer
and Chief Accounting Officer)
Date: March 30, 2000
--------------
<PAGE>
Exhibit 99.1.1
Contact: Betty Feezor
404-728-2363 For Immediate Release
---------------------
NDC ANNOUNCES THIRD QUARTER EARNINGS
Atlanta, March 22, 2000 - National Data Corporation (NYSE:NDC) announced
earnings for the fiscal third quarter ending February 29, 2000, as well as a
decision to divest its PHSS business.
The decision to divest PHSS follows board decisions made last quarter.
These decisions were to create separate eHealth and eCommerce companies as part
of a strategy to increase focus in its core business areas, as well as to
evaluate strategic alternatives for the health management services business.
Accordingly, the board has decided to pursue the divestiture of PHSS and to
place the business into a discontinued operations category.
Revenue for the quarter, net of discontinued operations, was $167.7
million. Operating income was $27.8 million with 16.5% operating margin. Income
before discontinued operations was $14.7 million. Basic earnings per share was
$.45 per share. Fully diluted EPS was $.44 per share. The impact of discontinued
operations was a loss of $13.5 million, or loss of $.41 per share. Diluted EPS
for the company was $.04. The charge taken in the quarter includes current
period and projected future operating losses from PHSS.
The results compare to the same period last year with revenue of $165.4
million, operating income of $33.4 million and income before discontinued
operations of $17.9 million.
For the nine month period, net of discontinued operations, revenue was
$512.4 million compared to $492.2 million in fiscal 1999. Income before
discontinued operations, which
-more--
<PAGE>
NDC Announces Third Quarter Earnings
Page Two
includes restructuring and impairment charges taken in the second fiscal quarter
of 2000, was $22.4 million compared with $52.3 million in 1999. Basic EPS before
discontinued operations was $.67.per share. Fully diluted EPS was $.65 per
share. Additional charges for the cumulative effect of change in accounting
principle related to PHSS are reported in the nine month results, for a net loss
from discontinued operations of $31.8 million, or a loss of $.95 per share on a
year-to-date basis. Diluted EPS for the company for the nine-month period was a
loss of $.28 per share.
The balance sheet remains strong. Accounts receivable management resulted
in continued improvement in DSO. Net of discontinued operations, DSO decreased
from 63 to 51 days compared to the position at the end of last fiscal year. Cash
flow continues to be strong. Cash earnings per share, as reflected by EBITDA,
were $4.83 per share on an annualized basis.
Robert A. Yellowlees, chairman and chief executive officer said, "Our major
emphasis is to re-establish our revenue growth model. To that end, we are making
excellent progress in repositioning the business for sustained long term growth
from our core operations. During this quarter, a number of actions have been
taken to further rationalize non-strategic business activities. While these
steps result in short-term revenue declines, when netted against core business
revenue and earnings, they should improve results next year.
"We have concentrated on three parallel priorities for the second half of
this year. The first and the highest is revenue growth from the continued
broadening of our product offerings and their acceptance for our core network-
based information business. The second is the program to separate into two
businesses so as to gain additional focus and speed in responding to
-more-
<PAGE>
NDC Announces Third Quarter Earnings
Page Three
new market opportunities in the new economy. Finally, we are rationalizing those
business and product areas that do not fit with our core network-based
information strategy so that the two new entities will be leaner and more
focused.
"We are making excellent progress in all three areas.
"Acceptance has grown for new offerings and others have been announced
during the quarter. We have already completed a great deal of implementation
planning since the decision in the last quarter to form the eHealth and
eCommerce businesses. Our internal planning has advanced to the point that we
will have next year's operating plan built around these new formats. And
substantially all of our operations are expected to be conducting business in a
pro forma version of that new structure by the start of the new fiscal year on
June 1.
"Management and the board have also completed the evaluation of strategic
alternatives relating to PHSS. While we continue to see substantial opportunity
in the market for high quality health management services, we feel that the
development of it requires a more singular focus than we can provide at the
moment. The size and diversity of opportunities in our core network-based
information businesses demand the full measure of our management time and
resources. Therefore, we concluded that we should divest this business and are
actively pursuing that course.
"I want to thank our employees in this area for their continued efforts.
Even as we are pursuing divestiture, we are continuing to make investments in
systems and facilities, as well as new marketing initiatives. These are centered
around the key locations that now make up this business. We feel that these
steps will even further enhance the ability of this unit and its employees to
deliver expanded services to its client base. They should also add to its value,
as
-more-
<PAGE>
NDC Announces Third Quarter Earnings
Page Four
should the numerous initiatives undertaken by NDC over the last two years to
strengthen operations.
"The long-term opportunity in our markets is excellent. We are taking
action now to concentrate our strategy and management priorities around these
opportunities."
####
When used in this report, press releases, and elsewhere by management of
National Data Corporation, from time to time, the words "believes,"
"anticipates," "expects," and similar expressions are intended to identify
forward-looking statements concerning the Company's operations, economic
performance and financial condition, including in particular, the Company's
ability to realize the benefits of the change in our business, the write-offs,
and the charges, including growth in revenue and earnings. These statements are
based on a number of assumptions and estimates which are inherently subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Company, and reflect future business decisions which are subject
to change. A variety of factors could cause actual results to differ materially
from those anticipated in the Company's forward-looking statements, some of
which include competition in the market for the Company's services, continued
expansion of the Company's product and service offerings, product demand, market
and customer acceptance, the effect of economic conditions, competition,
pricing, development difficulties, the ability to consummate and integrate
acquisitions, and other risk factors that are discussed from time to time in the
Company's Securities and Exchange Commission ("SEC") reports and other filings.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligations to publicly release the results of any revisions to these forward-
looking statements that may be made to reflect events or circumstances after the
date hereof, or thereof, as the case may be, or to reflect the occurrence of
unanticipated events.
<PAGE>
Exhibit 99.1.2
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
NATIONAL DATA CORPORATION
(In thousands, except per share data)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Three Months Ended February 29/28,
------------------------------------
2000 1999
------------ --------------
<S> <C>
Revenues $ 167,695 $ 165,437
- -----------------------------------------------------------------------------------------------
Operating expenses:
Cost of service 83,101 78,513
Sales, general and administrative 56,843 53,491
--------------------------------
139,944 132,004
================================
Operating income 27,751 33,433
- --------------------------------------------------------------------------------------------
Other income (expense):
Interest and other income 600 336
Interest and other expense (3,352) (3,601)
Minority interest in earnings (1,031) (834)
--------------------------------
(3,783) (4,099)
--------------------------------
Income before income taxes and discontinued operations 23,968 29,334
Provision for income taxes 9,228 11,440
- --------------------------------------------------------------------------------------------
Income before discontinued operations 14,740 17,894
Discontinued operations (13,546) 792
- --------------------------------------------------------------------------------------------
Net income $ 1,194 $ 18,686
================================
Basic earnings per share:
Income before discontinued operations $ 0.45 $ 0.53
--------------------------------
Discontinued operations $ (0.41) 0.02
--------------------------------
Basic earnings per share $ 0.04 $ 0.55
================================
Diluted earnings per share:
Income before discontinued operations $ 0.44 $ 0.50
--------------------------------
Discontinued operations $ (0.41) $ 0.02
--------------------------------
Diluted earnings per share $ 0.04 $ 0.52
--------------------------------
</TABLE>
<PAGE>
Exhibit 99.1.3
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
NATIONAL DATA CORPORATION
(In thousands, except per share data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended February 29/28,
---------------------------------------
2000 1999
--------------- --------------
<S> <C> <C>
Revenues $ 512,444 $ 492,164
- --------------------------------------------------------------------------------------------------------
Operating expenses:
Cost of service 253,877 238,802
Sales, general and administrative 177,116 155,711
Restructuring and impairment charges 34,393 -
---------------------------------------
465,386 394,513
---------------------------------------
Operating income 47,058 97,651
- --------------------------------------------------------------------------------------------------------
Other income (expense):
Interest and other income 4,991 1,710
Interest and other expense (9,835) (11,001)
Minority interest in earnings (3,025) (2,646)
---------------------------------------
(7,869) (11,937)
---------------------------------------
Income before income taxes and discontinued operations 39,189 85,714
Provision for income taxes 16,757 33,429
- --------------------------------------------------------------------------------------------------------
Income before discontinued operations 22,432 52,285
Discontinued operations (31,769) (1,540)
- --------------------------------------------------------------------------------------------------------
Net income (loss) $ (9,337) $ 50,745
=======================================
Basic earnings (loss) per share:
Income before discontinued operations $ 0.67 $ 1.55
---------------------------------------
Discontinued operations $ (0.95) (0.05)
---------------------------------------
Basic earnings (loss) per share $ (0.28) $ 1.51
=======================================
Diluted earnings (loss) per share:
Income before discontinued operations $ 0.65 $ 1.48
---------------------------------------
Discontinued operations $ (0.95) $ (0.05)
---------------------------------------
Diluted earnings (loss) per share $ (0.28) $ 1.44
---------------------------------------
</TABLE>
<PAGE>
Exhibit 99.1.4
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
NATIONAL DATA CORPORATION
(In thousands, except share and per share data)
- -----------------------------------------------------------------------------------------------------------------------------
February 29, May 31,
2000 1999
------------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 949 $ 3,414
Billed accounts receivable 101,200 124,072
Unbilled accounts receivable 3,098 3,048
Allowance for doubtful accounts (6,960) (5,184)
-------- --------
Accounts receivable, net 97,338 121,936
-------- --------
Income tax receivable - 8,348
Inventory 9,396 7,927
Net merchant processing receivable 8,218 -
Deferred income taxes 4,610 1,191
Prepaid expenses and other current assets 16,843 13,023
-------- --------
Total current assets 137,354 155,839
-------- --------
Property and equipment, net 95,929 94,368
Intangible assets, net 352,114 369,076
Deferred income taxes 24,098 13,963
Investment 25,768 -
Other 5,325 5,397
Net assets of discontinued operations 49,183 104,454
-------- --------
Total Assets $689,771 $743,097
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit $ 20,000 $ 35,000
Current portion of long-term debt 94 6,148
Obligations under capital leases 9,202 11,980
Accounts payable and accrued liabilities 70,641 58,562
Net merchant processing payable - 1,794
Income tax payable 5,134 -
Deferred income 27,928 29,945
-------- --------
Total current liabilities 132,999 143,429
-------- --------
Long-term debt 147,070 147,190
Obligations under capital leases 8,252 15,469
Other long-term liabilities 15,758 9,183
-------- --------
Total liabilities 304,079 315,271
-------- --------
Commitments and contingencies
Minority interest in equity of subsidiaries 19,539 18,732
Shareholders' equity:
Preferred stock, par value $1.00 per share; 1,000,000 shares authorized, none issued - -
Common stock, par value $.125 per share; 200,000,000 and 100,000,000 shares authorized at February
29, 2000 and May 31, 1999, respectively, 33,953,008 and 33,953,031 shares issued, respectively. 4,244 4,244
Capital in excess of par value 341,542 345,639
Treasury stock, at cost, 1,095,320 and 175,442 shares, respectively (28,867) (5,857)
Unrealized holding gain 5,176 -
Retained earnings 54,047 70,865
Deferred compensation (7,380) (3,215)
Cumulative translation adjustment (2,609) (2,582)
-------- --------
Total shareholders' equity 366,153 409,094
-------- --------
Total Liabilities and Shareholders' Equity $689,771 $743,097
======== ========
</TABLE>
<PAGE>
Exhibit 99.1.5
National Data Corporation
Segment Information (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Health Restructuring
Information and Impairment ll Other and
Third Quarter ended February 29, 2000 Services eCommerce Charge Corporate Totals
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 85,869 $ 81,826 $ - $ - $167,695
Depreciation and Amortization 6,450 4,843 - 673 11,966
EBITDA 24,271 19,859 - (4,413) 39,717
Income before income tax and discontinued operations 17,617 13,810 - (7,459) 23,968
Third Quarter ended February 28, 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Revenues $ 83,655 $ 81,782 $ - $ - $165,437
Depreciation and Amortization 7,352 5,176 - 499 13,027
EBITDA 26,046 24,114 - (3,700) 46,460
Income before income tax and discontinued operations 18,438 17,757 - (6,861) 29,334
Year to Date ended February 29, 2000
- ----------------------------------------------------------------------------------------------------------------------------------
Revenues $256,615 $255,829 $ - $ - $512,444
Depreciation and Amortization 21,093 15,479 - 1,803 38,375
EBITDA 60,057 68,455 - (8,686) 119,826
Income before income tax and discontinued operations 38,088 49,315 (34,393) (13,821) 39,189
Year to Date ended February 28, 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Revenues $248,666 $243,498 $ - $ - $492,164
Depreciation and Amortization 19,972 15,419 - 1,364 36,755
EBITDA 70,831 72,815 - (9,240) 134,406
Income before income tax and discontinued operations 50,125 53,708 - (18,119) 85,714
</TABLE>
<PAGE>
Exhibit 99.2.1
Discontinued Operations
In the third quarter fiscal 2000, Management took action on a formal plan to
divest non-core units that were acquired through the PHSS acquisition in
December 1997. Over the last year, the Company has made significant progress in
implementing programs to improve the underlying efficiency of these business
activities. The result has been expected short term losses from the closed
operations offsetting gains from those that would be the nucleus for longer term
growth. The Company has made management changes. It has closed locations that
did not have the critical mass for long-term profitable growth. It has
implemented a number of new systems initiatives that will improve productivity
and offer the infrastructure to process greater volume in the future. NDC
believes that there is a significant demand for these services in the market and
that these changes represent steps that can improve profitability from new
revenue streams. In spite of these investments and actions taken to strengthen
the business for future growth, the Company has concluded that these operations
no longer logically integrate with NDC's core Health Information Services
business. The core business includes Internet oriented network, information
management and strategic provider point of use platforms. Management and the
Board believe that the magnitude of opportunity in its core business requires
singular focus of management time and resources. Thus, the decision was made to
move to divest the line of business and account for it as discontinued
operations in accordance with Accounting Principles Board Opinion No. 30,
"Reporting the Results of Operations". Accordingly, results of these operations
have been classified as discontinued and prior periods have been restated.
The operating results of the discontinued operations are summarized as follows
(In thousands, except per share data):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
February 29/28, February 29/28,
------------------------------------------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ 26,250 $30,298 $ 81,270 $86,775
Operating income (loss) (5,053) 1,397 (12,088) (2,215)
Income (loss) from operations (3,165) 792 (7,628) (1,540)
Projected phase-out loss from operations,
net of tax (10,381) -- (10,381) --
---------------------------------------------------------------
Income (loss) on discontinued operations
before cumulative effect of change in
accounting principle (13,546) 792 (18,009) (1,540)
Cumulative effect of change in accounting
principle -- -- (13,760) --
---------------------------------------------------------------
Net income (loss) on discontinued
operations $(13,546) $ 792 $(31,769) $(1,540)
===============================================================
Earnings (loss) per share:
From operations $ (0.10) $ 0.02 $ (0.23) $ (0.05)
Projected phase-out loss from operations (0.31) -- (0.31) --
Cumulative effect of change in accounting
principle -- -- (0.41) --
---------------------------------------------------------------
Total $ (0.41) $ 0.02 $ (0.95) $ (0.05)
===============================================================
</TABLE>
For the Physician Management Services component of the discontinued operation,
the Company continued the accounting policy followed by this business prior to
its acquisition by the Company. The Company maintained this generally accepted
policy after the acquisition for Physician Management Services offerings for
which the Company invoices and collects amounts on its customer's behalf.
Previously, for customers where the amount and timing of collection of their
accounts receivable could be reasonably estimated, the Company estimated the
fees that it expected to invoice those customers upon collection of their
accounts receivable. It recognized such revenues when substantially all services
to be performed by the Company had been completed. Estimated costs to complete
were accrued separately.
<PAGE>
Effective June 1, 1999, the Company elected to change its revenue recognition
policy. Effective with the change in policy, the Company will recognize revenue
when the services are billed to the customer, at which point all services to be
performed by the Company have been completed. The impact of this change results
in the elimination of estimated, or unbilled receivables and related accrued
collection costs. Management believes that this change is appropriate and is
consistent with recent authoritative literature, specifically SEC Staff
Accounting Bulletin No. 101, issued December 3, 1999.
The cumulative after tax effect of this change in accounting principle was $13.8
million, net of income taxes of $8.6 million, at June 1, 1999. The cumulative
after tax effect on both the basic and diluted earnings per share was $(0.41).
The net assets of discontinued operations are summarized as follows (In
thousands):
February 29, 2000 May 31, 1999
----------------- ------------
Current assets $ 34,506 $ 56,989
Property and equipment, net 6,040 11,536
Intangible assets, net 36,453 55,248
Other assets 1,421 2,512
Current liabilities (10,885) (13,008)
Long-term debt (5,500) (5,500)
Other long-term liabilities (2,471) (3,323)
Provision for estimated losses (10,381) --
----------- -----------
Net assets of discontinued operations $ 49,183 $104,454
=========== ===========
Management considers the carrying value of the net assets of the discontinued
operations to be less than or equal to the approximate fair value to be received
on disposal.
<PAGE>
Exhibit 99.2.2
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
NATIONAL DATA CORPORATION
Restatement of Income for Discontinued Operations
<TABLE>
<CAPTION>
(In thousands, except per share data)
- -----------------------------------------------------------------------------------------------------------------------------------
FY 1999 FY 2000
------------------------------------------------------ --------------------------------
Qtr1 Qtr 2 Qtr 3 Qtr 4 Total Qtr1 Qtr 2 Qtr 3
------------------------------------------------------ --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $163,738 $162,989 $165,437 $176,883 $669,047 $175,548 $169,201 $167,695
------------------------------------------------------ --------------------------------
Operating expenses:
Cost of service 79,593 80,696 78,513 82,455 321,259 83,719 87,057 83,101
Sales, general and administrative 50,835 51,385 53,491 53,300 209,009 55,467 64,806 56,843
Non-recurring charge 0 0 0 0 0 0 34,393 0
------------------------------------------------------ --------------------------------
130,428 132,081 132,004 135,755 530,268 139,186 186,256 139,944
------------------------------------------------------ --------------------------------
Operating income 33,310 30,908 33,433 41,128 138,779 36,362 (17,055) 27,751
- ---------------- ------------------------------------------------------ --------------------------------
Other income (expense):
Interest and other income 530 844 336 535 2,284 1,669 2,722 600
Interest and other expense (3,597) (3,803) (3,601) (3,892) (14,932) (3,081) (3,402) (3,352)
Minority interest (995) (817) (834) (1,163) (3,809) (1,071) (923) (1,031)
------------------------------------------------------ --------------------------------
(4,062) (3,776) (4,099) (4,520) (16,457) (2,483) (1,603) (3,783)
------------------------------------------------------ --------------------------------
Income before income taxes and
discontinued operations 29,248 27,132 29,334 36,608 122,322 33,879 (18,658) 23,968
Provision for income taxes 11,408 10,581 11,440 13,697 47,124 13,042 (5,513) 9,228
- -------------------------- ------------------------------------------------------ --------------------------------
Income before discontinued
operations $ 17,840 $ 16,551 $ 17,894 $ 22,911 $ 75,198 $ 20,837 $(13,145) $ 14,740
====================================================== ================================
Discontinued operations (1,517) (814) 792 (2,220) (3,761) (15,900) (2,323) (13,546)
------------------------------------------------------ --------------------------------
Net income $ 16,323 $ 15,737 $ 18,686 $ 20,691 $ 71,437 $ 4,937 $(15,468) $ 1,194
====================================================== ================================
Basic earnings before discontinued
operations (1) $ 0.53 $ 0.49 $ 0.53 $ 0.68 $ 2.23 $ 0.62 $ (0.39) $ 0.45
====================================================== ================================
Discontinued operations (1) $ (0.04) $ (0.02) $ 0.02 $ (0.07) $ (0.11) $ (0.47) $ (0.07) $ (0.41)
------------------------------------------------------ --------------------------------
Basic earnings per share (1) $ 0.48 $ 0.47 $ 0.55 $ 0.61 $ 2.12 $ 0.15 $ (0.46) $ 0.04
====================================================== ================================
Diluted earnings before discontinued
operations (1) $ 0.51 $ 0.48 $ 0.50 $ 0.64 $ 2.11 $ 0.58 $ (0.39) $ 0.44
====================================================== ================================
Discontinued operations (1) $ (0.04) $ (0.02) $ 0.02 $ (0.07) $ (0.11) $ (0.47) $ (0.07) $ (0.41)
------------------------------------------------------ --------------------------------
Diluted earnings per share (1) $ 0.47 $ 0.45 $ 0.52 $ 0.58 $ 2.02 $ 0.14 $ (0.46) $ 0.04
====================================================== ================================
</TABLE>
(1) Note: See the specific share counts utilized in earnings per share on
Exhibit 99.2.4
<PAGE>
Exhibit 99.2.3
PROFORMA UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (Excludes
Restructuring Charges)
NATIONAL DATA CORPORATION
Restatement of Income for Discontinued Operations
<TABLE>
<CAPTION>
(In thousands, except per share data)
----------------------------------------------------------------------------------------------------------------------------------
FY 1999 FY 2000
------------------------------------------------------- ----------------------------------
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total Qtr 1 Qtr 2 Qtr 3
------------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $163,738 $162,989 $165,437 $176,883 $669,047 $175,548 $169,201 $167,695
- ------- ------------------------------------------------------- ----------------------------------
Operating expenses:
Cost of service 79,593 80,696 78,513 82,455 321,259 83,719 87,057 (1) 83,101
Sales, general and administrative 50,835 51,385 53,491 53,300 209,009 55,467 64,806 (1) 56,843
------------------------------------------------------- ----------------------------------
130,428 132,081 132,004 135,755 530,268 139,186 151,863 139,944
------------------------------------------------------- ----------------------------------
Operating income 33,310 30,908 33,433 41,128 138,779 36,362 17,338 27,751
- ---------------- ------------------------------------------------------- ----------------------------------
Other income (expense):
Interest and other income 530 844 336 535 2,284 1,669 2,722 600
Interest and other expense (3,597) (3,803) (3,601) (3,892) (14,932) (3,081) (3,402) (3,352)
Minority interest (995) (817) (834) (1,163) (3,809) (1,071) (923) (1,031)
------------------------------------------------------- ----------------------------------
(4,062) (3,776) (4,099) (4,520) (16,457) (2,483) (1,603) (3,783)
------------------------------------------------------- ----------------------------------
Income before income taxes and
discontinued operations 29,248 27,132 29,334 36,608 122,322 33,879 15,735 23,968
======================================================= ==================================
Provision for income taxes 11,408 10,581 11,440 13,697 47,124 13,042 6,524 9,228
- -------------------------- ------------------------------------------------------- ----------------------------------
Income before discontinued
operations $ 17,840 $ 16,551 $ 17,894 $ 22,911 $ 75,198 $ 20,837 $ 9,211 $ 14,740
======================================================= ==================================
Discontinued operations (1,517) (814) 792 (2,220) (3,761) (15,900) (2,323) (13,546)
------------------------------------------------------- ----------------------------------
Net income $ 16,323 $ 15,737 $ 18,686 $ 20,691 $ 71,437 $ 4,937 $ 6,888 $ 1,194
======================================================= ==================================
Basic earnings before discontinued
operations (2) $ 0.53 $ 0.49 $ 0.53 $ 0.68 $ 2.23 $ 0.62 $ 0.28 $ 0.45
======================================================= ==================================
Discontinued operations (2) $ (0.04) $ (0.02) $ 0.02 $ (0.07) $ (0.11) $ (0.47) $ (0.07) $ (0.41)
------------------------------------------------------- ----------------------------------
Basic earnings per share (2) $ 0.48 $ 0.47 $ 0.55 $ 0.61 $ 2.12 $ 0.15 $ 0.21 $ 0.04
======================================================= ==================================
Diluted earnings before discontinued
operations (2) $ 0.51 $ 0.48 $ 0.50 $ 0.64 $ 2.11 $ 0.58 $ 0.27 $ 0.44
======================================================= ==================================
Discontinued operations (2) $ (0.04) $ (0.02) $ 0.02 $ (0.07) $ (0.11) $ (0.47) $ (0.07) $ (0.41)
------------------------------------------------------- ----------------------------------
Diluted earnings per share (2) $ 0.47 $ 0.45 $ 0.52 $ 0.58 $ 2.02 $ 0.14 $ 0.20 $ 0.04
======================================================= ==================================
</TABLE>
(1) As discussed in the 10-Q for the quarter ended November 30, 1999, the
Company incurred unusual expenses in addition to the $34,393 restructuring
charge. Excluding the amounts recorded in the discontinued operations, these
unusual expenses were $1,888 of Cost of Service Provided and $9,227 of Sales,
General and Administrative expenses.
(2) Note: See the specific share counts utilized in earnings per share on
Exhibit 99.2.4
<PAGE>
EXHIBIT 99.2.4
SHARE ASSUMPTIONS USED IN CALCULATING EARNINGS PER SHARE
NATIONAL DATA CORPORATION
Restatement of Income for Discontinued Operations
<TABLE>
(In thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
Results Including Restructuring Charges FY 1999 FY 2000
---------------------------------------- -------------------------------
Qtr1 Qtr 2 Qtr 3 Qtr 4 Total Qtr1 Qtr 2 Qtr 3 YTD
---------------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Basic earnings before discontinued operations 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920 33,392
======================================== ===============================
Discontinued operations 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920 33,392
---------------------------------------- -------------------------------
Basic earnings per share 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920 33,392
======================================== ===============================
Diluted earnings before discontinued operations 35,039 34,808 38,038 37,900 37,823 38,017 33,376 36,562 34,402
======================================== ===============================
Discontinued operations 33,723 33,681 35,286 33,766 33,725 33,876 33,376 32,920 33,392
---------------------------------------- -------------------------------
Diluted earnings per share 35,039 34,808 38,038 37,900 37,823 35,265 33,376 33,810 33,392
======================================== ===============================
Results Excluding Restructuring Charges FY 1999 FY 2000
---------------------------------------- -----------------------
Qtr1 Qtr 2 Qtr 3 Qtr 4 Total Qtr1 Qtr 2 Qtr 3
---------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Basic earnings before discontinued operations 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920
======================================== =======================
Discontinued operations 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920
---------------------------------------- -----------------------
Basic earnings per share 33,723 33,681 33,728 33,766 33,725 33,876 33,376 32,920
======================================== =======================
Diluted earnings before discontinued operations 35,039 34,808 38,038 37,900 37,823 38,017 34,128 36,562
======================================== =======================
Discontinued operations 33,723 33,681 35,286 33,766 33,725 33,876 33,376 32,920
---------------------------------------- -----------------------
Diluted earnings per share 35,039 34,808 38,038 37,900 37,823 35,265 34,128 33,810
======================================== =======================
</TABLE>
<PAGE>
Exhibit 99.2.5
National Data Corporation
Segment Information (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Restated
Health Restructuring
Information and Impairment All Other and
First Quarter ended August 31, 1999 Services eCommerce Charge Corporate Totals
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 85,719 $ 89,829 $ - $ - $175,548
Depreciation and Amortization 7,323 5,346 - 598 13,267
EBITDA 24,616 27,007 - (1,993) 49,630
Income before income tax and discontinued operations 16,948 20,330 - (3,399) 33,879
Net income (loss) on discontinued operations (15,900) (15,900)
First Quarter ended August 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
Revenues $ 81,341 $ 82,397 $ - $ - $163,738
Depreciation and Amortization 6,058 4,979 - 427 11,464
EBITDA 20,646 26,184 - (2,057) 44,773
Income before income tax and discontinued operations 14,480 19,826 - (5,058) 29,248
Net income (loss) on discontinued operations (1,517) (1,517)
Second Quarter ended November 30, 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Revenues $ 85,027 $ 84,174 $ - $ - $169,201
Depreciation and Amortization 7,320 5,291 - 531 13,142
EBITDA 11,170 21,591 - (2,281) 30,480
Income before income tax and discontinued operations 3,525 15,175 (34,393) (2,965) (18,658)
Net income (loss) on discontinued operations (2,323) (2,323)
Second Quarter ended November 30, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
Revenues $ 83,670 $ 79,319 $ - $ - $162,989
Depreciation and Amortization 6,561 5,264 - 438 12,263
EBITDA 24,138 22,517 - (3,483) 43,172
Income before income tax and discontinued operations 17,207 16,125 - (6,200) 27,132
Net income (loss) on discontinued operations (814) (814)
</TABLE>
<PAGE>
National Data Corporation
Segment Information (Unaudited)
(In Thousands)
<TABLE>
Third Quarter ended February 29, 2000
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 85,869 $ 81,826 $ - $ - $167,695
Depreciation and Amortization 6,450 4,843 - 673 11,966
EBITDA 24,271 19,859 - (4,413) 39,717
Income before income tax and discontinued operations 17,617 13,810 (7,459) 23,968
Net income (loss) on discontinued operations (13,546) (13,546)
Third Quarter ended February 28, 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Revenues $ 83,655 $ 81,782 $ - $ - $165,437
Depreciation and Amortization 7,352 5,176 - 499 13,027
EBITDA 26,046 24,114 - (3,700) 46,460
Income before income tax and discontinued operations 18,438 17,757 - (6,861) 29,334
Net income (loss) on discontinued operations 792 792
</TABLE>
