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 the Quarterly Period Ended November 26, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 001-12392
NDCHealth Corporation
(Exact name of registrant as specified in charter)
| DELAWARE | 58-0977458 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| NDC 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 report)
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 ¨.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). 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 – 36,054,270 shares
outstanding as of March 8, 2005
NDCHEALTH CORPORATION
FORM 10-Q
FOR THE FISCAL QUARTER ENDED NOVEMBER 26, 2004
TABLE OF CONTENTS
PART I—FINANCIAL INFORMATION
Item 1—FINANCIAL STATEMENTS
NDCHealth Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended |
||||||||
| (In thousands, except per share data) | November 26, 2004 |
November 28, 2003 |
||||||
| (As Restated) | ||||||||
| Revenue |
$ | 117,407 | $ | 109,238 | ||||
| Operating Expenses: |
||||||||
| Cost of Service |
70,962 | 53,593 | ||||||
| Sales, General and Administrative |
26,123 | 23,618 | ||||||
| Depreciation and Amortization |
10,399 | 8,756 | ||||||
| Restructuring and Other Charges |
2,216 | 1,798 | ||||||
| 109,700 | 87,765 | |||||||
| Operating Income |
7,707 | 21,473 | ||||||
| Other Income (Expense): |
||||||||
| Interest and Other Income |
78 | 155 | ||||||
| Interest and Other Expense |
(6,175 | ) | (7,319 | ) | ||||
| Minority Interest in Earnings |
(135 | ) | (267 | ) | ||||
| (6,232 | ) | (7,431 | ) | |||||
| Income from Continuing Operations before Income Taxes |
1,475 | 14,042 | ||||||
| Provision for Income Taxes |
574 | 5,256 | ||||||
| Income from Continuing Operations |
901 | 8,786 | ||||||
| (Loss) from Discontinued Operations |
(5,670 | ) | (1,221 | ) | ||||
| Net Income (Loss) |
$ | (4,769 | ) | $ | 7,565 | |||
| Basic (Loss) Earnings Per Share: |
||||||||
| Income from Continuing Operations |
$ | 0.03 | $ | 0.25 | ||||
| Discontinued Operations |
$ | (0.16 | ) | $ | (0.04 | ) | ||
| Basic (Loss) Income Per Share |
$ | (0.13 | ) | $ | 0.22 | |||
| Weighted Average Shares |
35,667 | 34,824 | ||||||
| Diluted (Loss) Earnings Per Share: |
||||||||
| Income from Continuing Operations |
$ | 0.03 | $ | 0.25 | ||||
| Discontinued Operations |
$ | (0.16 | ) | $ | (0.03 | ) | ||
| Diluted (Loss) Income Per Share |
$ | (0.13 | ) | $ | 0.21 | |||
| Weighted Average Shares |
35,894 | 35,619 | ||||||
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
2
NDCHealth Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Six Months Ended |
||||||||
| (In thousands, except per share data) | November 26, 2004 |
November 28, 2003 |
||||||
| (As Restated) | ||||||||
| Revenue |
$ | 226,535 | $ | 211,903 | ||||
| Operating Expenses: |
||||||||
| Cost of Service |
137,673 | 105,089 | ||||||
| Sales, General and Administrative |
49,852 | 45,920 | ||||||
| Depreciation and Amortization |
20,836 | 17,397 | ||||||
| Restructuring and Other Charges |
2,216 | 3,297 | ||||||
| 210,577 | 171,703 | |||||||
| Operating Income |
15,958 | 40,200 | ||||||
| Other Income (Expense): |
||||||||
| Interest and Other Income |
143 | 257 | ||||||
| Interest and Other Expense |
(12,579 | ) | (14,540 | ) | ||||
| Minority Interest in Earnings |
(243 | ) | (418 | ) | ||||
| (12,679 | ) | (14,701 | ) | |||||
| Income from Continuing Operations before Income Taxes |
3,279 | 25,499 | ||||||
| Provision for Income Taxes |
1,278 | 9,552 | ||||||
| Income from Continuing Operations |
2,001 | 15,947 | ||||||
| Loss from Discontinued Operations |
(13,735 | ) | (1,755 | ) | ||||
| Net (Loss) Income |
$ | (11,734 | ) | $ | 14,192 | |||
| Basic (Loss) Earnings Per Share: |
||||||||
| Income from Continuing Operations |
$ | 0.06 | $ | 0.46 | ||||
| Discontinued Operations |
$ | (0.39 | ) | $ | (0.05 | ) | ||
| Basic (Loss) Income Per Share |
$ | (0.33 | ) | $ | 0.41 | |||
| Weighted Average Shares |
35,653 | 34,785 | ||||||
| Diluted (Loss) Earnings Per Share: |
||||||||
| Income from Continuing Operations |
$ | 0.06 | $ | 0.45 | ||||
| Discontinued Operations |
$ | (0.38 | ) | $ | (0.05 | ) | ||
| Diluted (Loss) Income Per Share |
$ | (0.33 | ) | $ | 0.40 | |||
| Weighted Average Shares |
35,948 | 35,367 | ||||||
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
3
NDCHealth Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended |
||||||||
| (In thousands) | November 26, 2004 |
November 28, 2003 |
||||||
| (As Restated) | ||||||||
| Cash flows from operating activities: |
||||||||
| Net (loss) income |
$ | (11,734 | ) | $ | 14,192 | |||
| Adjustments to reconcile net (loss) income to cash provided by operating activities: |
||||||||
| Loss on discontinued operations |
13,735 | 1,755 | ||||||
| Non-cash restructuring and other charges |
317 | 453 | ||||||
| Depreciation and amortization |
20,836 | 17,397 | ||||||
| Deferred income taxes |
1,083 | 8,156 | ||||||
| Allowance for doubtful accounts |
4,213 | 4,459 | ||||||
| Other, net |
2,640 | 2,410 | ||||||
| Total |
31,090 | 48,822 | ||||||
| Changes in assets and liabilities, net of the effects of acquisitions: |
||||||||
| Accounts receivable |
(1,014 | ) | (8,908 | ) | ||||
| Prepaid expenses and other assets |
7,310 | 978 | ||||||
| Accounts payable and accrued liabilities |
(9,240 | ) | 7,881 | |||||
| Accrued interest on long-term debt |
(210 | ) | (214 | ) | ||||
| Deferred revenue |
(15,536 | ) | 4,423 | |||||
| Net cash provided by operating activities |
12,400 | 52,982 | ||||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(17,963 | ) | (21,639 | ) | ||||
| Proceeds from the sale of equipment |
513 | 2,148 | ||||||
| Acquisitions and other investing activities |
(2,412 | ) | (6,347 | ) | ||||
| Net cash used in investing activities |
(19,862 | ) | (25,838 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net borrowings under lines of credit |
38,500 | — | ||||||
| Net principal payments under long-term debt arrangements |
(39,208 | ) | (1,916 | ) | ||||
| Net cash used in refinancing activities |
— | (395 | ) | |||||
| Net cash received related to stock activities |
510 | 2,647 | ||||||
| Dividends paid |
(2,880 | ) | (2,820 | ) | ||||
| Net cash used in financing activities |
(3,078 | ) | (2,484 | ) | ||||
| Net cash used in discontinued operations |
(2,834 | ) | (2,285 | ) | ||||
| (Decrease) increase in cash and cash equivalents |
(13,374 | ) | 22,375 | |||||
| Cash and cash equivalents, beginning of period |
27,617 | 15,150 | ||||||
| Cash and cash equivalents, end of period |
$ | 14,243 | $ | 37,525 | ||||
| Supplemental Disclosures |
||||||||
| Cash paid for |
||||||||
| Interest |
$ | 10,433 | $ | 14,971 | ||||
| Income taxes (refunded) paid |
$ | (499 | ) | $ | 755 | |||
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
4
NDCHealth Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| (In thousands, except share data) | November 26, 2004 |
May 28, 2004 |
||||||
| (As Restated) | ||||||||
| ASSETS |
||||||||
| Current Assets: |
||||||||
| Cash and Cash Equivalents |
$ | 14,243 | ||||||