National Data Corp. has come a long way from its inception as a credit card authorization and transaction processor, surviving a frenetic period in the 1980s when it provided services such as operator assistance for Sprint customers and telemarketing for Ginsu knives.

Since chairman and chief executive Robert A. Yellowlees took the reins 2#1/2 years ago, he streamlined operations, refocusing the company on its core businesses. With investor confidence restored, the stock price tripled.

Founded 28 years ago, National Data has recently expanded its payment systems to encompass a range of new services, including debit and procurement cards, electronic signature capture, and check guarantee through two Chicago-based companies acquired last year - Yes Check Services Inc. and Mercantile Systems Inc.

"I don't know anyone that has a broader array of products and services," said Mr. Yellowlees. "If a merchant needs payment systems, they've got one- stop shopping with us."

National Data provides transaction processing for 350,000 merchants and more than 200 bank clients worldwide. The company also plays a major role in health care payment applications and services. (See related story on page 17).

Mr. Yellowlees, 56, served on National Data's board of directors for 10 years while running his own consulting firm, Spectrum Research Group. Before that, he spent 23 years at IBM Corp. in marketing, product development, and finance.

Sporting a pink shirt, slacks, and loafers on a casual day at the office, Mr. Yellowlees said, "Markets change rapidly and businesses need to change with them."

The company has dramatically narrowed its focus since the 1980s. Greg Lewis, vice president of worldwide marketing for Verifone, a Redwood City, Calif.-based terminal manufacturer, worked for National Data through the early 1980s and described it at that time as a company with many irons in the fire.

Not only did National Data provide operator assistance for Sprint and other companies, it also staffed travel reservation centers and furnished third-party processing for petroleum credit cards.

But losing the Sprint contract in 1990 sent stock prices tumbling and revenues falling. Those who follow the company say discontinuing its communications ventures enabled National Data to refocus its position.

"Bob has figured out which two horses he wants . . . and he's in the race, whereas before we were always looking for new horses," said Mr. Lewis. "From what I hear, he's headed in the right direction."

Steven S. Birer, an analyst who follows the company for Hambrecht & Quist in San Francisco said Mr. Yellowlees had "done a nice turnaround job, which prior management teams were not able to do."

Although the company had come through a "rocky period," which included losing a shareholder lawsuit, Mr. Yellowlees "has certainly returned shareholder value in the period of time he's been there," said Mr. Birer.

The stock sold for $26.50 per share at midday Wednesday, compared with $8 in October of 1993.

Under Mr. Yellowlees, the company has invested tens of millions of dollars to upgrade its technological infrastructure. NDC's advanced computer network processes up to 250 transactions per second, worth $40 billion a year in its combined market segments, said the chairman.

Strengthening personnel and productivity "is reflected in our earnings growth," he added.

In the second quarter of fiscal 1995, ended Nov. 30, 1994, revenues increased 18% to almost $60 million and earnings jumped 36% to $3.5 million, compared with the year-earlier period. Net income increased 31% in fiscal 1994 to $11 million, compared with $8.5 million in fiscal 1993.

Based in Atlanta, National Data occupies two five-story modern buildings in Corporate Square, an office complex in the Emory University district. The mortgages on the buildings are the only debts on NDC's books, said the chairman.

Through smoke-colored windows, a white building topped with the large black letters FFMC, can be seen across the parking lot. First Financial Management Corp., with more than $2 billion in revenues for fiscal 1994, is the parent of NDC's biggest rival, Nabanco, the largest transaction processor in the world. Although the First Financial subsidiary is based in Jacksonville, Fla., the next-door neighbor is a reminder that competition is ever-present.

According to Credit Card News, National Data ranks ninth among credit card acquiring processors, behind Nabanco, National City Processing Co., Card Establishment Services, and others.

POS News ranks it fourth in the number of terminals serviced, behind Buypass, Deluxe Data, and Concord Computing.

Mr. Birer said that in the past, National Data's merchant portfolio growth was "sluggish in comparison" with that of some competitors. But he said the company has placed increased emphasis on directly acquiring merchants by boosting its sales force and its product line.

While the traditional credit card market is maturing, two growth areas for the transaction processing business include debit and procurement card services.

National Data, with its eye on the future, in June announced the NDC Procurement Card Service, which is the centerpiece of its drive to attain a piece of the estimated $400 billion in sales volume generated by corporate purchases - a highly competitive emerging market.

While the majority of large office suppliers, such as Office Depot or Staples, accept credit card payments, it has been estimated that nearly half of the suppliers that corporations do business with do not.

NDC, in promoting its new procurement card service, receives a list of companies to call on through corporations and its bank clients. These merchants are prospects for NDC's new system, said Kevin Shea, executive vice president of Integrated Payment Systems.

Mr. Shea said, "We're told what we have is market leading." For competitive reasons he declined to divulge the number of new clients or transactions processed so far.

Automated Debit Reconciliation, NDC's newest software package, has been tested over the past year and is now available to interested clients. It is designed for the settlement side of financial transactions to give clients a clear understanding of their debit settlement position, or cash flow, at the end of each day.

Paula Charles, group vice president of Integrated Payment Systems, and her staff demonstrate the new system in the customer briefing center, or sales room, at company headquarters.

Among samples of various computers, monitors, and terminals, the debit program is brought to the screen as prospective clients get a firsthand view of how the program can streamline their debit reconciliation process, cutting labor time from a whole day to half an hour, said Ms. Charles.

As the future unfolds, Mr. Yellowlees said the company will continue to expand its three main businesses: integrated payment services, health care, and cash management.

"Our main thrust is to be clear about what the market demands," he said, "(to) invest in new products, technology, architectural infrastructure, and the people side of the equation so they're equipped to respond to a changing marketplace."

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