<PAGE>   1



                       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 March 31, 1998

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

                         Commission file number: 0-26090

                              COMPDENT CORPORATION
             (Exact name of registrant as specified in its charter)

                 DELAWARE                                   04-3185995
     (State or other jurisdiction of                     (I.R.S. Employer
      incorporation or organization)                    Identification No.)

                              CompDent Corporation
                        100 Mansell Court East, Suite 400
                             Roswell, Georgia 30076
                    (Address of principal executive offices)

                                 (770) 998-8936
              (Registrant's telephone number, including area code)

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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
           Class                              Outstanding at April 30, 1998
           -----                              -----------------------------
<S>                                           <C>       
Common Stock, $.01 par value                             10,112,629
</TABLE>



<PAGE>   2



                      COMPDENT CORPORATION AND SUBSIDIARIES


                                      INDEX

<TABLE>
<CAPTION>
                                                                                                       Page #
<S>                                                                                                    <C>
Part I.    Financial Information                                                                          3

           Item 1.       Financial Statements                                                             4

           Item 2.       Management's Discussion and Analysis of Financial Condition
                         and Results of Operations                                                       10

Part II.   Other Information

           Item 1.       Legal Proceedings                                                               14

           Item 2.       Changes in Securities                                                           14

           Item 4.       Submission of Matters to a Vote of  Security Holders                            14

           Item 5.       Other Information                                                               14

           Item 6.       Exhibits and Reports Filed on Form 8-K                                          14

Signatures                                                                                               15

Exhibit Index                                                                                            16
</TABLE>


                                                                               2

<PAGE>   3



                         PART I. - FINANCIAL INFORMATION

           This Quarterly Report on Form 10-Q contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The Company's actual results
could differ materially from those set forth in the forward-looking statements.
Certain factors that might cause such a difference include, among others, risk
associated with the general competitive and pricing pressures in the
marketplace, the risks associated with the successful completion of new
acquisitions, the effective integration of new acquisitions and continued growth
in the dental coverage marketplace. Other risk factors are described in CompDent
Corporation's Annual Report on Form 10-K for the year ended December 31, 1997 as
filed with the Securities and Exchange Commission.


                                                                               3


<PAGE>   4


ITEM 1. FINANCIAL STATEMENTS

                      COMPDENT CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                             MARCH 31,    DECEMBER 31,
                                                               1998           1997
                                                             --------     ------------
                                                            (UNAUDITED)
<S>                                                         <C>           <C>     
                  ASSETS
Current assets:
     Cash and cash equivalents                               $ 15,568       $ 21,963
     Premiums receivable from subscribers                       4,556          5,554
     Patient accounts receivable, net of allowance for
          doubtful accounts of $320 in 1998 and 
          $1,188 in 1997                                        2,201          1,668
     Income taxes receivable                                       --            175
     Deferred income taxes                                      5,081          5,081
     Other current assets                                       4,067          2,842
                                                             --------       --------
         Total current assets                                  31,473         37,283
                                                             --------       --------

Restricted funds                                                2,234          2,321
Property and equipment, net of accumulated depreciation         8,691          6,292
Excess of purchase price over net assets acquired             100,072         96,296
Noncompetition agreements                                         168            325
Reinsurance receivable                                          5,467          5,417
Investment in DHDC                                              1,500          1,500
Other assets                                                    1,849          1,437
                                                             --------       --------
                                                             $151,454       $150,871
                                                             ========       ========

              LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Unearned revenue                                        $  9,231       $  9,538
     Accounts payable and accrued expenses                     13,552         14,855
     Accrued interest payable                                     152            109
     Dental claims reserves                                     1,839          1,502
     Other current liabilities                                     63             63
                                                             --------       --------
         Total current liabilities                             24,837         26,067
                                                             --------       --------

Aggregate reserves for life policies and contracts              5,355          5,331
Notes payable                                                  55,102         56,595
Deferred compensation expense                                     287            298
Deferred income taxes                                           1,887          1,887
Other liabilities                                               1,217            417
                                                             --------       --------
         Total liabilities                                     88,685         90,595
                                                             --------       --------

Stockholders' equity:
     Common stock                                                 101            101
     Additional paid-in capital                                97,618         97,618
     Retained deficit                                         (34,950)       (37,443)
                                                             --------       --------
         Total stockholders' equity                            62,769         60,276
                                                             --------       --------
                                                             $151,454       $150,871
                                                             ========       ========
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                                                               4

<PAGE>   5

                      COMPDENT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                       MARCH 31,   
                                                                ---------------------
                                                                  1998          1997
                                                                -------       -------
                                                              (UNAUDITED)    (UNAUDITED)
<S>                                                           <C>            <C>    
Revenues:
     Subscriber premiums                                        $35,422       $35,636
     Affiliated practice revenue                                  5,292            --
     Other revenue                                                1,728         2,199
                                                                -------       -------
         Total revenue                                           42,442        37,835
                                                                -------       -------
Expenses:
     Dental care providers' fees and claim costs                 19,428        19,544
     Commissions                                                  3,265         3,172
     Premium taxes                                                  261           265
     DHMI operating expenses                                      4,605            --
     General and administration                                   8,374         7,860
     Depreciation and amortization                                1,379         1,321
                                                                -------       -------
         Total expenses                                          37,312        32,162
                                                                -------       -------
              Operating income                                    5,130         5,673
                                                                -------       -------
Other (income) expense:
     Interest income                                               (254)         (161)
     Interest expense                                             1,013           708
     Other, net                                                      --           (45)
                                                                -------       -------
                                                                    759           502
                                                                -------       -------

         Income before provision for income taxes                 4,371         5,171
         Income tax provision                                     1,878         2,332
                                                                -------       -------
              Net income                                        $ 2,493       $ 2,839
                                                                =======       =======

Net income per common share - basic                             $  0.25       $  0.28
                                                                =======       =======

Net income per common share - fully diluted                     $  0.25       $  0.28
                                                                =======       =======

Weighted average common shares outstanding - basic               10,113        10,071
                                                                =======       =======

Weighted average common shares outstanding - fully diluted       10,175        10,167
                                                                =======       =======
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                                                               5

<PAGE>   6



                      COMPDENT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                             THREE MONTHS ENDED
                                                                                  MARCH 31,
                                                                             1998           1997
                                                                           --------       --------
                                                                         (UNAUDITED)    (UNAUDITED)
<S>                                                                      <C>            <C>     
Cash flows from operating activities:
         Net income                                                        $  2,493       $  2,839
     Adjustments to reconcile net income to net cash provided by
       operating activities:
         Depreciation and amortization                                        1,379          1,348
         Gain on sale of property and equipment                                  --            (10)
         Deferred income tax expense                                             --            553
         Changes in assets and liabilities:
            Premiums receivable from subscribers                                465         (1,033)
            Income taxes receivable/payable                                   1,313            856
            Other assets                                                     (1,687)          (662)
            Unearned revenue                                                   (307)           201
            Accounts payable and accrued expenses                            (1,453)        (1,393)
            Other liabilities                                                  (854)        (1,242)
                                                                           --------       --------
                Net cash provided by operating activities                     1,349          1,457
                                                                           --------       --------

Cash flows from investing activities:
     Additions to property and equipment                                     (2,838)          (873)
     Decrease (increase) in restricted cash                                      87             (2)
     Proceeds from sale of property and equipment                                --             18
     Payments made in connection with proposed business acquisitions             --           (242)
     Purchase of businesses, net of cash acquired                            (3,500)          (473)
                                                                           --------       --------
                Net cash provided by (used) in investing activities          (6,251)        (1,572)
                                                                           --------       --------

Cash flows from financing activities:
     Borrowings (repayments) under credit agreement                          (1,493)        (3,663)
     Tax benefit realized from exercise of nonqualified stock options            --            583
                                                                           --------       --------
                Net cash used in financing activities                        (1,493)        (3,080)
                                                                           --------       --------

Decrease in cash and cash equivalents                                        (6,395)        (3,195)
Cash and cash equivalents, beginning of period                               21,963         26,959
                                                                           --------       --------
Cash and cash equivalents, end of period                                   $ 15,568       $ 23,764
                                                                           ========       ========

Supplemental disclosures of cash flow information:
     Cash paid during the period for:
         Interest                                                          $    970       $    718
                                                                           ========       ========
         Income taxes                                                      $    434       $    340
                                                                           ========       ========

 Non-cash investing and financing activities:
     Stock issued in exchange for business acquired                        $      0       $  1,141
                                                                           ========       ========
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                                                               6

<PAGE>   7
 


                      COMPDENT CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                                 MARCH 31, 1998

1.  BASIS OF PRESENTATION

     The unaudited consolidated balance sheet as of March 31, 1998, the
unaudited consolidated statements of operations for the three months ended March
31, 1998 and 1997, and the unaudited consolidated statements of cash flows for
the three months ended March 31, 1998 and 1997, in the opinion of management,
have been prepared on the same basis as the audited consolidated financial
statements and include all significant adjustments, consisting of normal
recurring adjustments, necessary for the fair presentation of the results of the
interim periods. The data disclosed in these notes to the financial statements
for these periods are also unaudited. The consolidated financial statements and
notes thereto should be read in conjunction with the consolidated financial
statements and notes thereto as of December 31, 1997 and 1996, and for the years
ended December 31, 1997, 1996, and 1995, included in the 1997 Annual Report of
CompDent Corporation and Subsidiaries (the "Company", except as the context
otherwise requires) and on Form 10-K. Operating results of the Company for the
three months ended March 31, 1998, are not necessarily indicative of the results
that may be expected for the entire year ending December 31, 1998.

2.  BUSINESS COMBINATIONS

     Effective March 21, 1997, the Company completed the acquisition of American
Dental Providers, Inc. ("AMDP"), and Diamond Dental & Vision, Inc. ("DDV"). The
aggregate purchase price of $1.7 million consisted of $0.5 million in cash and
$1.2 million of Company common stock issued at fair market value. AMDP provides
managed dental care services through a network of dental care providers, and DDV
provides a vision plan and referral fee-for-service dental plan to the Arkansas
market. The Company funded the cash portion of the purchase with cash available
from operations. The acquisition of AMDP and DDV was accounted for using the
purchase method of accounting with the results of operations of the businesses
acquired included from the effective date of the acquisition. The acquisition
resulted in excess of cost over fair value of net assets acquired of $2.9
million which will be amortized over 40 years. During the second quarter of
1997, the Company revised its allocation of the purchase price of AMDP and DDV
which resulted in a decrease to the excess of purchase price over net assets
acquired of $0.5 million to $2.4 million.

     During the fourth quarter of 1997, the Company changed it's policy
regarding the recoverability of goodwill to a discounted projection of future
cash flows using an economic rate of return that would be customary for
evaluating the present value of future cash flows in connection with current
dental benefit company transactions.  This resulted in AMDP'S and DDV's
goodwill being reduced to $0.

     The following is a summary of assets acquired, liabilities assumed, and
consideration paid in connection with the acquisition:

<TABLE>
     <S>                                                 <C>        
     Fair value of assets acquired                       $ 2,652,000
     Cash paid and fair value of stock issued
          for assets acquired, net of cash acquired       (1,614,000)
     Acquisition costs paid                                 (416,000)
                                                         -----------
     Liabilities assumed                                 $   622,000
                                                         ===========
</TABLE>

     Effective July 2, 1997, the Company completed the acquisition of 21 dental
facilities from The Workman Management Group, Ltd. ("Workman"). The dental
facilities are located in central and southern Illinois. The purchase price
consisted of $15.5 million in cash and funding for the acquisition was obtained
from cash available from operations and from the Company's revolving line of
credit. In addition, the Company granted an aggregate of 70,000 non-qualified
options to the selling shareholders. Concurrent with the acquisition, the
Company entered into a 40-year agreement to manage the dental practices which
are operating in the dental facilities. The acquisition of Workman was accounted
for using the purchase method of accounting with the results of operations of
the businesses acquired included from the effective


                                                                               7

<PAGE>   8

date of the acquisition. The acquisition resulted in excess of cost over fair
value of net assets acquired of $15.2 million which will be amortized over 40
years. During the fourth quarter of 1997, the Company revised its allocation
of the purchase price of workman which resulted in an increase to the excess of
purchase price over net assets acquired of $1,780 to $16,980.

     The following is a summary of assets acquired, liabilities assumed, and
consideration paid in connection with the acquisition:

<TABLE>
     <S>                                  <C>         
     Fair value of assets acquired        $ 18,040,000
     Cash paid, net of cash acquired       (15,340,000)
     Acquisition costs paid                   (990,000)
                                          ------------
     Liabilities assumed                  $  1,710,000
                                          ============
</TABLE>

     During the third and fourth quarter of 1997, the Company completed the
acquisition of several dental facilities from three additional dental groups.
Effective July 2, 1997, the Company completed the acquisition of one dental
facility located in southern Florida from the Old Cutler Dental Associates,
P.A. ("Old Cutler").  Effective September 26, 1997, the Company completed the
acquisition of one dental facility located in central Tennessee from Robert T.
Winfree, D.D.S., P.C. ("Winfree"). Effective November 7, 1997, the Company
completed the acquisition of Stratman Management Group ("Stratman") and its six
dental facilities located in Indiana.  The purchase price of these facilities
consisted of $4,957 in cash less discharge of liabilities related to the
purchased assets.  Funding for the acquisitions was obtained from cash
available from operations and from the Company's revolving line of credit.
Concurrent with the acquisitions, the Company entered into 40-year agreements
to manage the dental practices which are operating in the dental facilities.
Each acquisition was accounted for using the purchase method of accounting with
the results of operations of the businesses acquired included from the
effective date of the acquisition.  The acquisitions resulted in excess of cost
over fair value of net assets acquired of $5,490 which will be amortized over
40 years.  During the fourth quarter of 1997, the Company revised its
allocation of the purchase prices for Old Cutler, Winfree, and Stratman which
resulted in an increase to the excess of purchase price over net assets acquired
of $38 to $5,528.

     The following is a summary of assets acquired, liabilities assumed and
consideration paid in connection with the acquisitions:

<TABLE>
     <S>                                                       <C>        
     Fair value of assets acquired, including goodwill         $  6,465,000
     Cash paid for assets acquired, net of cash acquired         (4,957,000)
     Acquisition costs paid                                        (227,000)  
                                                               ------------
     Liabilities assumed                                       $  1,281,000
                                                               ============
</TABLE>

     Effective January 2, 1998, the Company completed the acquisition of five
dental facilities from Michael H. Reznik, D.D.S., P.C. ("Reznik"). The dental
facilities are located in Atlanta, Georgia. The purchase price consisted of $3.5
million in cash less discharge of liabilities related to the purchased assets.
Funding for the acquisition was obtained from cash available from operations and
from the Company's revolving line of credit. Concurrent with the acquisition,
the Company 


                                                                               8

<PAGE>   9

entered into a 40-year agreement to manage the dental practices which are
operating in the dental facilities. The acquisition of Reznik was accounted for
using the purchase method of accounting with the results of operations of the
business acquired included from the effective date of the acquisition. The
acquisition resulted in excess of cost over fair value of net assets acquired of
$4.0 million which will be amortized over 40 years.

     The following is a summary of assets acquired, liabilities assumed, and
consideration paid in connection with the acquisition:

<TABLE>
     <S>                                  <C>        
     Fair value of assets acquired        $ 4,149,000
     Cash paid, net of cash acquired       (3,500,000)
     Acquisition costs paid                  (150,000)
                                          -----------
     Liabilities assumed                  $   499,000
                                          ===========
</TABLE>

     Unaudited pro forma results of operations of the Company for the three
months ended March 31, 1998 and 1997, are included below. Such pro forma
presentation has been prepared assuming that the AMDP, DDV, Workman, Old Cutler,
Winfree, Stratman and Reznik acquisitions had occurred as of January 1, 1997.

<TABLE>
<CAPTION>
                                             Three Months Ended
                                                 March 31,
                                                 ---------
(in thousands, except per share data)        1998          1997
                                           --------      -------
<S>                                        <C>           <C>    
Revenues                                   $ 42,442      $42,057
                                           ========      =======

Net income                                 $  2,493      $ 2,422
                                           ========      =======

Net income per common share                $    .25      $   .24
                                           ========      =======
</TABLE>

     The pro forma results include the historical accounts of the Company,
historical accounts of the acquired businesses, and pro forma adjustments
including the amortization of the excess purchase price over the fair value of
the net assets acquired, calculation of interest expense on amounts borrowed to
fund these acquisitions and the applicable income tax effects of these
adjustments. The pro forma results of operations are not necessarily indicative
of actual results which may have occurred had the operations of the acquired
companies been combined in prior periods.


3.  CONTINGENT LIABILITIES


     Management does not believe there are currently any asserted or unasserted
claims that will have a material adverse effect on the financial position
results of operations or cash flows of the Company.


                                                                               9

<PAGE>   10


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the attached
consolidated financial statements and notes thereto, and with the Company's
audited financial statements and notes thereto for the year ended December 31,
1997.

 Three months ended March 31, 1998 and 1997

     Total revenue increased $4.6 million, or 12.2% to $42.4 million in the
first quarter of 1998 as compared to $37.8 million for the same period in 1997.
This increase was attributable to $5.3 million of affiliated practice revenue
from Dental Health Management, Inc. ("DHMI"), the Company's dental practice
management company, which commenced operations in the third quarter of 1997,
which was partially offset by a $0.2 million decrease in subscriber premiums.
Other revenue, which consists of third party administrator fees and indemnity
fees, decreased $0.5 million during the first quarter of 1998 versus the same
period in 1997.

     Dental care providers' fees and claim costs decreased $0.1 million, or 0.6%
in the first quarter of 1998 to $19.4 million from $19.5 million for the first
quarter of 1997. Dental care providers' fees represent capitation payments paid
to dentists under the Company's managed dental care plans. Under managed dental
care plans, capitation payments to panel dentists are fixed under the
participating dental agreement regardless of the extent of services provided.
Dental claim costs represent amounts payable to dental care providers under
dental indemnity and specialty insurance plans. Dental care providers' fees and
claim costs were 54.8% of subscriber premiums in both the first quarter of 1998
and the first quarter of 1997.

     Commission expense increased $93,000, or 2.9%, to $3.3 million in the first
quarter of 1998 from $3.2 million in the first quarter of 1997. As a percentage
of subscriber premiums, commissions increased to 9.2% in the first quarter of
1998 from 8.9% in the first quarter of 1997. This increase reflects a shift in
emphasis toward reliance on independent agents and away from a direct sales
force.

     General and administrative expenses ("G&A") and DHMI operating expenses
increased $5.1 million, or 65.1%, to $13.0 million in the first quarter of 1998
from $7.9 million in the first quarter of 1997. Of the increase, $4.6 million
was the result of expenses related to the generation of affiliated practice
revenue from DHMI. As a percentage of revenues, G&A expenses, excluding DHMI
operating expenses, decreased to 19.7% in the first quarter of 1998 from 20.8%
in the first quarter of 1997. This was the result of the growth in the revenues
at DHM offsetting some of the initial infrastructure.

     Depreciation and amortization expense increased $58,000, or 4.4%, to $1.4
million in the first quarter of 1998 from $1.3 million in the first quarter of
1997. The increase was primarily due to additional goodwill obtained as a result
of the acquisitions made by DHMI in the third and fourth quarters of 1997 and
January 1998, which was partially offset by a decrease principally due to the
goodwill impairment the Company realized during the fourth quarter of 1997.

     Net interest expense increased $0.3, or 51.2%  million to $0.8 million in
the first quarter of 1998 from $0.5 million in the first quarter of 1997. This
increase related principally to interest on additional debt incurred to finance
DHMI acquisitions in the third and fourth quarters of 1997 and first quarter of
1998 offset by the implementation of a cash management system which reduced
outstanding non-interest bearing cash balances. Any future acquisitions may
cause the Company to incur additional indebtedness under its revolving credit
facility or otherwise.

     In the first quarter of 1998, the Company's effective income tax rate
decreased to 43.0% compared to 45.1% in the first quarter of 1997. This decrease
resulted from reduced goodwill amortization due to impairment and deductible
goodwill recorded in connection with the asset purchases


                                                                              10


<PAGE>   11
made by DHMI.

As a result of the above mentioned factors, the net income for the first quarter
of 1998 was $2.5 million, or $0.25 per share, compared to net income of $2.8
million, or $0.28 per share, for the same period in 1997.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary source of cash in the three months ended March 31,
1998, was $1.3 million of cash provided by operating activities. The primary
uses of cash for the period were the acquisition of Reznik and the purchases of
property and equipment.

     Cash flows from operating activities were $1.3 million for the three months
ended March 31, 1998, and $1.5 million for the three months ended March 31,
1997. Cash flows from operations consist primarily of subscriber premiums and
investment income net of capitation payments to panel dentists, claims paid,
broker and agent commissions, general and administrative expenses and income tax
payments. The Company receives premium payments in advance of anticipated
capitation payments and claims and invests cash balances in excess of current
needs in interest-bearing accounts.

     Cash used in investing activities was $6.3 million and $1.6 million for
the three months ended March 31, 1998 and 1997, respectively. The increase in
cash used during the three months ended March 31, 1998, related primarily to
increased use of cash for acquisitions. Capital expenditures increased $2.0
million during the three months ended March 31, 1998, compared to the three
months ended March 31, 1997, due primarily to purchases of leasehold
improvements and dental equipment for the Company's dental office management
business, and telephone and computer purchases. The Company has entered into a
joint initiative with Golder, Thoma, Cressey, Rauner Fund V ("GTCR"), a leading
private equity firm relating to the development of 35 to 50 de novo dental
offices within the next two years. Under this arrangement, the Company has
agreed to fund certain development costs (including the purchase of dental
equipment, supplies, and leasehold improvements) in an amount equal to amounts
funded by GTCR in connection with the joint initiative, not to exceed $15.0
million. The Company anticipates capital expenditures will continue to increase
as the Company meets its funding obligations under this arrangement.

     Cash flows used in financing activities for the three months ended March 
31, 1998, was $1.5 million, representing repayments under the Company's 
revolving line of credit. For the three months ended March 31, 1997, financing 
activities used $3.1 million of cash flow, consisting almost entirely of 
repayments under the Company's revolving line of credit.

     On June 30, 1995, the Company obtained a reducing revolving $35.0 million
line of credit (the "Credit Facility") from banks. The Credit Facility
subsequently was amended to increase the available line of credit to $65.0
million. The Credit Facility pursuant to a second amendment, entered into on
March 16, 1998 requires a 50% reduction in available borrowings on December 31,
1999, and expiration of the Credit Facility on December 31, 2000. Outstanding
indebtedness under the Credit Facility bears interest, at the Company's option,
at a rate equal to the prime rate plus up to .25% or LIBOR plus up to 1.75%,
with the margin over the prime rate and LIBOR decreasing as the ratio of
consolidated debt to EBITDA decreases. Currently, borrowings under the Credit
Facility bear interest at the LIBOR-based rate. The Credit Facility prohibits
payment of dividends and other distributions and restricts or prohibits the
Company from making certain acquisitions, incurring indebtedness, incurring
liens, disposing of assets or making investments, and requires it to maintain
certain financial ratios on an ongoing basis. The Credit Facility is
collateralized by pledges of the stock of the Company's direct and indirect
subsidiaries. The Company had $55.1 million of borrowings outstanding as of
March 31, 1998, under the Credit Facility.

     The Company believes that cash flow generated by operations will be
sufficient to fund its normal working capital needs and capital expenditures for
at least the next 24 months. 


                                                                              11


<PAGE>   12

Historically, the Company's operations have not been capital intensive; however,
the Company's recent initiative in the establishment of dental offices through
its subsidiary operation, DHMI, will present capital needs, the extent of which
is indeterminate. Any acquisitions the Company may consummate in the future may
require additional financing under the Credit Facility or otherwise.

     Under applicable insurance laws of most states in which the Company
conducts business, the Company's subsidiaries operating in the particular states
are required to maintain a minimum level of net worth and reserves. The Company
may be required from time to time to invest funds in one or more of its
subsidiaries to meet regulatory capital requirements. Applicable laws generally
limit the ability of the Company's subsidiaries to pay dividends to the extent
that required regulatory capital would be impaired and dividend payments are
further restricted under the Credit Facility.

RECENTLY ISSUED ACCOUNTING STANDARDS

     The Board has issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes standards for the way
that public business enterprises report information about operating segments in
annual financial statements and requires selected information about operating
segments in interim financial reports.

     This Statement requires that a public business enterprise report financial
and descriptive information about its reportable operating segments. Operating
segments are components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. Generally, financial information is required to be reported on the
basis that it is used internally for evaluating segment performance and deciding
how to allocate resources to segments.

     The financial information required includes a measure of segment profit or
loss, certain specific revenue and expense items, segment assets and a
reconciliation of each category to the general financial statements. The
descriptive information required includes the way that the operating segments
were determined, the products and services provided by the operating segments,
differences between the measurements used in reporting segment information and
those used in the general purpose financial statements, and changes in the
measurement of segment amounts from period to period.

     This Statement is effective for financial statements for periods beginning
after December 15, 1998, with restatement of earlier periods required in the
initial year of application. This Statement need not be applied to interim
financial statements in the initial year of its application, but comparative
information for interim periods in the initial year of application is to be
reported in financial statements for interim periods in the second year of
application. The Company is currently determining if these disclosure
requirements will be applicable and, therefore, required in future periods.
Because SFAS 131 requires additional disclosure, the adoption of SFAS 131 will
not adversely effect the Company's operating results.


                                                                              12

<PAGE>   13
     The Emerging Issues Task Force (EITF) has issued EITF Issue No. 97-2
("Issue 97-2"), Application of FASB Statement No. 94, Consolidation of All
Majority-Owned Subsidiaries, and APB Opinion No. 16, Business Combinations, to
Physician Practice Management Entities and Certain Other Entities with
Contractual Management Arrangements, that establishes standards for determining
whether a physician practice management group ("PPM") has a controlling
financial interest in a physician practice based on a contractual management
agreement.  For purposes of Issue 97-2, the practices of medicine, denistry,
and veterinary science are collectively referred to as "physician practices."

     Under Issue 97-2, when such a controlling financial interest exists,
consolidation of the physician practice is required.  A controlling financial
interest is defined based on the term of the contractual arrangement, control
over decision making, and the extent of the PPM's financial interest in the
physician practice and is deemed to exist if the following six criteria are met:
1) the contractual arrangement has a term that is either (i) the entire
remaining legal life of the physician practice entity or (ii) a period of 10
years or more; 2) the contractual arrangement is not terminable by the physician
practice except in the case of gross negligence, fraud, or other illegal acts by
the PPM, or bankruptcy of the PPM; 3) PPM has exclusive authority over all
decision making related to ongoing, major, or central operations of the
physician practice, except for the dispensing of medical services; 4) PPM has
exclusive authority over all decision making related to total practice
compensation of the licensed medical professionals as well as the ability to
establish and implement guidelines for the selection, hiring, and firing of
them; 5) PPM's financial interest in the physician practice is unilaterally
salable or transferable by the PPM; 6) PPM's financial interest in the physician
practice provides the PPM with the right to receive income as on-going fees and
as proceeds from the sale of its interest in the physician practice, in an
amount that fluctuates based on the performance of the operations of the
physician practice and the change in the fair value thereof. If the six criteria
are met, then the transaction between the PPM and physician practice in which
the PPM executes a management agreement with the physician practice is
considered to be a business combination to be accounted for under APB 16.
Finally, Issue 97-2 establishes the presumption that an employee of a physician
practice that is consolidated by the PPM should be considered an employee of the
PPM and its subsidiaries for purposes of determining the method of accounting
for stock-based compensation.

     For all arrangements that exist on November 20, 1997, this Issue is
effective for financial statements for fiscal years ending after December 15,
1998.  The effect of initially applying the consensus may be reported as the
effect of a change in accounting principle or may be retroactively reported by
restating the financial statements of prior periods. 

     The Company is currently evaluating the four dental acquisitions made
during 1997 to determine compliance with the provisions of Issues 97-2.

YEAR 2000 COMPLIANCE

     By the end of 1998, the Company expects that its various administrative
systems will have the capability to process transactions dated beyond 1999. The
costs to complete the Company's efforts to modify or replace such systems are
not expected to be material.


                                                                              13
<PAGE>   14



                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     Various legal proceedings have arisen or may arise in the normal course of
business.  Management does not believe there are currently any asserted or
unasserted claims that will have a material adverse effect on the financial
position, results of operations, or cash flows of the Company.

ITEM 2.  CHANGES IN SECURITIES

     None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

ITEM 5. OTHER INFORMATION

     The Company has entered into a five-year Employment Agreement with Keith J.
Yoder, Executive Vice President, Chief Financial Officer and Treasurer. The
Agreement generally provides for a continuation of base salary and continuation
of certain benefits for two years following termination of employment without
cause, in the event of a breach by the Company, or upon a material change in the
duties, title, compensation, and/or location of Mr. Yoder within one year
following a change of control of the Company (as defined). Mr. Yoder is subject
to a two-year restriction on competition with the Company following termination
of employment for any reason. See Exhibit 10.1

ITEM 6.  EXHIBITS AND REPORTS FILED ON FORM 8-K

     (a) Exhibits.

          10.1 Employment Agreement between CompDent Corporation and Mr. Keith
               J. Yoder.

          27   Financial Data Schedule (for SEC use only)

     (b) Reports on Form 8-K.

          None.



                                                                              14

<PAGE>   15


                                   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.


                                    COMPDENT CORPORATION


Date:  May 14, 1998                 By:  /s/ Keith J. Yoder
                                         ---------------------------------------
                                         Keith J. Yoder
                                         Chief Financial Officer and Treasurer
                                         (Signing as duly authorized officer and
                                         chief financial officer)




                                                                             15
<PAGE>   16


                                  EXHIBIT INDEX


10.1     Employment Agreement between CompDent Corporation and Mr. Keith J.
         Yoder.

EX-27    Financial Data Schedule (for SEC use only).




                                                                              16