DEFA14A 1 d169371ddefa14a.htm DEFA14A DEFA14A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

 

 

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  Preliminary Proxy Statement
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  Definitive Proxy Statement
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  Soliciting Material under §240.14a-12

NEXTGEN HEALTHCARE, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LOGO

NextGen Healthcare Is Poised for Accelerating Shareholder Value Creation Leadership has transformed NextGen With our new CEO, NextGen Healthcare has Healthcare into a market leader with a powerhouse management team a winning platform and exceptionally engaged employees A robust foundation is now in place. NextGen Healthcare’s director nominees We have never been better positioned have deep, diverse, relevant expertise and to accelerate growth and create significant, are committed to serving the best interests sustainable value of ALL shareholders Vote “FOR” All Proposals on the WHITE Proxy Card, Including: Reincorporating into Eliminating Cumulative Electing each of NextGen Delaware Voting Healthcare’s Highly Qualified Nominees Vote by Internet or mail today — it is simple and will take only a few minutes now. NXGNproxy@mackenziepartners.com Your proxy card, voting instruction form or emailed voting instructions are Toll-Free: (800) 322-2885 easy to follow.


LOGO

In 2015, We Launched a Multiphase Transformation Journey to Revitalize NextGen Healthcare Phase I Phase II Phase III July 2015 – Dec 2016 Jan 2017 – Dec 2019 Jan 2020+ Stabilized the Company Made Foundational Investments to Drive Material Growth in Accelerating Growth Company Health and Performance • Brought on and supported • Enhancing “Surround” delivery executive team (CEO/CFO/ • Increased R&D and focus on • Diversified revenue • Growing platform capabilities CTO) product quality “Surround Solutions” • Extending footprint in high- • Ended quarterly dividend • Built a commercial foundation • Expanded services growth markets • Assessed, streamlined • Invested in talent and culture • Established new partnerships and • Continuing business development the portfolio business development initiatives • Pursued strategic M&A and strategic M&A • Instilled operational excellence Divested hospital business in 2015 to focus on Restructured the organization, eliminating Assessed and profitable elements of the portfolio layers of management and business units Realigned the Discontinued NGNow, reallocated spend into more Acquired HealthFusion, a highly ranked Portfolio attractive development programs SaaS offering that unlocked new and profitable ambulatory practice segments Ended quarterly dividend in 2016, providing ~$42M cash flow annually for investment in company Increased R&D Investment and Focus, Turning Core Offerings into “Best in KLAS” R&D Spend (% of Total Revenue) 18% 19% 18% 17% 17% 13% 14% “NextGen Healthcare is 12% 12% the only company we can remember to improve in every single feedback area we measure.” FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 —KLAS Executive, 2019 $ 540M Total R&D spend (FY16-FY21) Ranks #6 on Top 100 Market Leader in the Summer Top Practice Management Top Ambulatory EMR in 2021 Healthcare Technology 2021 Medical Practice Solution in 2021 Best in KLAS Best in KLAS Report (11–75 Companies of 2021 Management Customer Report (11–75 providers), won providers) Success Report for three consecutive years


LOGO

Unlocked High-Growth Markets Through Strategic M&A Customer Testimonials NextGen Healthcare has no debt and benefits from strong free cash flow and a solid balance sheet “A key reason we selected NextGen Combined Markets Are Large and Growing Between 10% to 20% Annually Healthcare is because the innovative Entrada (2017): Core mobile capabilities, augmenting the EHR and software suite brings our practice to the next level and provides a more effective way for Mobile and improving the provider experience our patients and providers to interact. ” Analytics Eagle Dream (2017): Population health management capabilities, broadens offering and cross-sell opportunity — Practice Administrator, Orthopaedic & Sports Medicine Center Inforth Technologies (2019): Vertically integrated solutions and High-Growth domain expertise to accel in musculoskeletal physician practices Specialties Topaz (2019): Vertically integrated solutions and domain expertise to access and expand the behavioral health market “The [NextGen Healthcare] integrated platform allows us to reach more patients Medfusion (2019): Broadens solution-set to include a next- and provide potentially life-saving mental Patient generation patient portal, self-scheduling and patient payments health counsel.” Engagement OTTO Health (2019): Expands capabilities to enable virtual visits — Chief Information Officer, DVHC through embedded technologies and professional services Broadened Partnerships and Scale: Driving $100M+ in Annual Revenue with Potential to Scale Even Further Established Programs that Incentivize and Prioritize People — Now a Talent Destination Transformational Employee Engagement 2015 – 2020 Improved culture* by 105% Improved recognition and rewards* by 58% % Top 5 Company in DivHERsity Improved senior manager relationships* by 60 (SMEs/Startup) by JobsForHer in India    Improved company potential* by 111% *Voice Of The Employee (V.O.T.E) Annual engagement Survey Scores from 2015 through 2020


LOGO

Results Show We Are On the Right Track We Are Poised For Accelerated Value Creation Strong Momentum in Recurring Revenues Subscription Growth and Major Near-Term Cross Total Recurring Revenue ($M) Sell Opportunities Subscription Services Revenue ($M) %+ 91 of FY21 total revenue $503 123%+ 80% $489 $468 $474 $148 $448 $128 $117 $415 $106 $95 $65 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 %+ + % % 25 of bookings now from 300M in free cash 6 to 8 annual revenue growth new clients1 flow generated by executing our organic (FY16 – FY21) growth agenda “Over the past few years, the “We continue to applaud the “Mgt has improved product quality company has made significant turnaround the company has made” and customer experience, leading investments in its product portfolio to reduced attrition, new customer and restructured its sales force Jun 14, 2021 wins… we see a compelling to put a greater emphasis on platform strategy taking shape that expanding its footprint. This is should drive revs (sic)” paying off” May 26, 2021 Jul 29, 21


LOGO

NextGen Healthcare Has a Powerhouse Management Team to Fully Capitalize On the Transformational Changes That Have Been Made David Sides, MBA, MHA PRESIDENT AND CEO Well-bonded team’s talent, history of success, and Accomplished Leader with Proven Record diversity of ideas and Growing, Scaling and Diversifying Premier experience will continue to fuel Healthcare Technology/Software Companies the Company’s growth Strategic, Results-Oriented Executive 10 of 12 Extensive leadership experience, including at a global leader in Members of executive team are new since 2016 virtual care and one of the largest suppliers of health information technology services, devices and hardware Talent Diverse Ideas As COO of Teladoc, led all commercial functions as History of Experience to revenues doubled in 2020 and are on track to exceed Success Fuel Growth $2B in 2021 Owned Cerner’s global P&L for the consulting business, including all functions from sales through implementation At Cerner, created new methodologies for deployment, David Sides James Arnold Srinivas Velamoor new service lines and development plans for 3,500 President and CEO EVP and CFO EVP, Chief Growth and Strategy Officer associates, growing the consulting business from $643M in 2008 to $1.031B in 2012 Led the full-scale turnaround of Streamline Health Solutions as CEO, growing revenue, EBITDA and cash Donna Greene David Metcalfe Jeffrey Linton flow organically EVP, HR EVP, CTO EVP, GC Recruited by TPG to lead iMDsoft as CEO; delivered >30% increase in revenue while investing in new systems and processes Dr. Betty Rabinowitz Allen Plunk David Slazyk “New CEO is a Perfect Fit” “CEO Hire a Strong Fit, Validating Chief Medical EVP, Operations Chief Information and Officer Security Officer Board’s Vision to Transform Ambulatory Care” September 20, 2021 “NXGN — ALERT: Good Catch” September 21, 2021 Colleen Edwards Mitchell Waters John Beck September 20, 2021 SVP, Marketing EVP, Commercial EVP, Chief Solutions Growth Officer


LOGO

Independent Director Nominees Represent All Shareholders’ Interests and Have Relevant Skills and Experience to Build On Progress and Drive Value Creation Advancing Diversity and New Perspectives: a Majority of the Board (Five of Nine) New In the Past Four Years David Sides, Julie D. Geraldine McGinty, MBA, MHA Klapstein MD, MBA, FACR New President and CEO Independent Independent Proven record growing, scaling and diversifying An experienced entrepreneur and healthcare Current faculty member at Weill Cornell Medicine premier global healthcare software and technology CEO with 20 years of public/private in New York City, serving as Senior Associate Dean technology companies Board experience, including at Amedisys (Chair for Clinical Affairs and Associate Professor of Most recently, COO of Teladoc Health, the global of Compensation Committee and Member of Clinical Radiology and Chief Strategy Officer and leader in virtual care, where he led worldwide Quality and Governance Committees); at MultiPlan Chief Contracting Officer for Weill Cornell Medicine commercial and operations teams (Member of Audit Committee); at Oak Street Health Physician Organization (Chair of Compensation Committee and Member of In 2019, was named one of the Most Powerful Previously CEO of Streamline Health, which offers Compliance Committee); and at Revecore RCM solutions for healthcare providers; CEO of Women in Health IT by Health Data magazine iMDsoft, a provider of clinical information systems Among other leadership roles, was founding NXGN will benefit from her internationally and EMRs for critical, perioperative and acute CEO of Availity, one of the nation’s largest health recognized expertise in healthcare strategy and care organizations; SVP, World Wide Consulting information networks optimizing the automated an unwavering advocacy for patient-centered of Cerner, a supplier of health information delivery of critical business and clinical care with strong support for the intersection of technology services, devices and hardware information among healthcare stakeholders technology and healthcare Former director at EMIS Group, a major provider Experience with Healthcare IT and Revenue Cycle of healthcare software, IT and related services, Management is directly relevant to NXGN’s business and at Streamline Health. American College of Healthcare Executives fellow Pamela Puryear, DARNELL DENT, PhD, MBA MPA Director Nominee Skills Independent Independent Healthcare IT Exec An influential thought leader with expertise in +25-year executive leading managed healthcare Strategy / M&A driving value creation through human capital plans and advising on plan organizational management, organizational transformation, development and strategy innovation and operational excellence, with focus Strategic advisor to Softheon, provider of cloud- Governance / Comp in pharmaceutical, medical device and pharmacy based health insurance exchange technology, sectors of the healthcare industry and Virgin Pulse, global provider of employee Finance / Accounting Has served as Executive Vice President and Chief well-being solutions Human Resources Officer (CHRO) at Walgreens Previously, CEO of FirstCare Health Plans. Earlier, Boots Alliance; Senior Vice President and CHRO senior executive at University of Pittsburgh Public Co. BOD at Zimmer Biomet; and Chief Talent Officer at Medical Center Health Plan, UnitedHealthCare, Pfizer and Hospira. Has also worked in financial Community Health Plan of Washington, Health services, and led an Organization Development Net, Lincoln National Corporation Clinical Operations consulting practice working with clients in healthcare, consumer products and insurance NACD Board Leadership Fellow, Chair of NACD Austin Advisory Board. Past Chair of Association Currently serves on the boards of Petplan of Community Affiliated Health Plans and of Texas Human Capital and Rockley Photonics where she chairs both Association of Community Health Plans. Previously, Compensation Committees and serves on one director at Adaptis (Audit Committee member) Nomination/Governance Committee Commercialization


LOGO

Independent Directors with Institutional Knowledge to Build on Transformation Jeffrey H. Margolis Craig A. Barbarosh 4 of 9 Chair Vice Chair DIRECTOR NOMINEES ARE DIVERSE BY GENDER, RACE 35 years of healthcare industry experience An experienced board director and attorney, including as CEO of data-driven SaaS technology specializing in financial and operational 8 of 9 companies restructuring and M&A Currently serves on the boards of Hoag Hospital Extensive board leadership, including DIRECTOR NOMINEES and Hoag Clinic in Orange County, CA, Alignment currently serving as Chair of Landec Corporation, ARE INDEPENDENT Healthcare, TriNetX, a director at Evolent Health (member of Strategy and as a Senior Advisor to Blackstone. and Compensation Committees), and a director at Has authored several books on Sabra Health Care REIT (Chair of Audit Committee transforming the healthcare industry and member of Compensation Committee) Provides NXGN with perspectives and insights Has provided NXGN’s Board with valuable about strategic growth opportunities, mentors guidance on governance and a series of strategic ~5 YEAR executives and leverages his industry connections transactions to help advance the Company AVERAGE Tenure <5 Years 5-10 Years >10 Years George H. Bristol Morris Panner Independent Independent As the Company evolves, so should the Board’s composition. As part Former CFO and investment banker, where A senior executive with significant expertise in of our refreshment efforts, we have he has experience analyzing, evaluating and healthcare technology companies, including with identified five new highly qualified understanding financial statements and advising SaaS capabilities, and the law on the complexities of strategic and transactional directors, including our new CEO. Currently, CEO of Ambra Health, a cloud-based financial matters healthcare software company that manages Decades-long career assisting shareholders diagnostic imaging and related healthcare data With their appointments, we have and managers of businesses formulating and Former Assistant United States Attorney and legal advanced Board diversity and executing corporate financial transactions and advisor to U.S. government agencies, including the added decades of highly relevant strategies to maximize shareholder value Department of Justice experience across providers, Breadth of his experience helps NXGN navigate Experience at software companies, including constantly changing business developments and health insurance, life sciences and at healthcare software companies, and his capital markets legal training, have shaped NXGN’s strategic enterprise software to execute development and operating/execution plans our strategy and deliver leading performance and growth.


LOGO

Vote Your WHITE Proxy Card Today “FOR” All Proposals and Each NextGen Healthcare Director Nominee Vote for Growth and Value Creation Discard Sheldon’s Blue Card    Any shareholder with questions about the Annual Meeting or in need of assistance in voting their shares should contact: NXGNproxy@mackenziepartners.com Toll-Free: (800) 322-2885 Certain Information Concerning the Participants forward-looking statements and additional risks and uncertainties are set forth in NextGen Healthcare has filed a definitive proxy statement and supplement to the proxy Part I, Item A of our most recent Annual Report on Form 10-K and subsequently filed statement (the “Supplement”) with the U.S. Securities and Exchange Commission (the Quarterly Reports on Form 10-Q, including but not limited to: volatility and uncertainty “SEC”), together with the associated WHITE proxy card attached to the Supplement, in the global economy, financial markets and on our customers in light of the continuing in connection with the solicitation of proxies for NextGen Healthcare’s 2021 Annual COVID-19 pandemic, including the potential (i) slowdown or shutdown of preventive Meeting of Shareholders (the “Definitive Proxy Statement”). WE URGE SHAREHOLDERS and elective medical procedures, (ii) delay in the contracting for additional products TO READ THE DEFINITIVE PROXY STATEMENT AND SUPPLEMENT (INCLUDING ANY and services by our customers and (iii) delay in the sales cycle for new customers; OTHER AMENDMENTS OR SUPPLEMENTS TO SUCH PROXY STATEMENT) AND ANY a determination by the jury that the Company has liability in litigation advanced OTHER RELEVANT DOCUMENTS THAT NEXTGEN HEALTHCARE WILL FILE WITH THE by a former director and shareholder; the volume and timing of systems sales and SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE installations; length of sales cycles and the installation process; the possibility that THEY WILL CONTAIN IMPORTANT INFORMATION. NextGen Healthcare and certain of products will not achieve or sustain market acceptance; seasonal patterns of sales and its directors and executive officers are participants in the solicitation of proxies from customer buying behavior; impact of incentive payments under The American Recovery shareholders in respect of the 2021 Annual Meeting. Information regarding the names and Reinvestment Act on sales and the ability of the Company to meet continued of NextGen Healthcare’s directors and executive officers and their respective interests certification requirements; uncertainties related to the future impact of U.S. tax reform; in NextGen Healthcare by security holdings or otherwise are set forth in the Definitive the impact of governmental and regulatory agency investigations; the development by Proxy Statement and Supplement. To the extent holdings of such participants in competitors of new or superior technologies; the timing, cost and success or failure of NextGen Healthcare’s securities are not reported, or have changed since the amounts new product and service introductions, development and product upgrade releases; described, in the Definitive Proxy Statement, such changes will be reflected on Initial undetected errors or bugs in software; product liability; changing economic, political Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership or regulatory influences in the health-care industry; changes in product-pricing on Form 4 filed with the SEC. Details concerning the nominees of NextGen Healthcare’s policies; availability of third-party products and components; competitive pressures Board of Directors for election at the 2021 Annual Meeting are included in the Definitive including product offerings, pricing and promotional activities; the Company’s ability Proxy Statement and Supplement. or inability to attract and retain qualified personnel; the impact of any proxy contest at the 2021 Annual Meeting of Shareholders; possible regulation of the Company’s Shareholders will be able to obtain, free of charge, copies of the Definitive Proxy software by the U.S. Food and Drug Administration; changes of accounting estimates Statement, Supplement, any other amendments or supplements thereto and any other and assumptions used to prepare the prior periods’ financial statements; disruptions documents when filed by NextGen Healthcare with the SEC in connection with the caused by acquisitions of companies, products, or technologies; the extent to which Annual Meeting at the SEC’s website (http://www.sec.gov), at NextGen Healthcare’s the COVID-19 pandemic and measures taken in response thereto could adversely affect website (https://investor.nextgen.com), by emailing NXGNproxy@mackenziepartners. our financial condition and results of operations; and general economic conditions. A com or by calling MacKenzie Partners at (800) 322-2885. significant portion of the Company’s quarterly sales of software product licenses and computer hardware is concluded in the last month of a fiscal quarter, generally with Forward Looking Statements a concentration of such revenues earned in the final ten business days of that month. This communication may contain forward-looking statements within the meaning of Due to these and other factors, the Company’s revenues and operating results are the federal securities laws, including but not limited to, statements regarding future very difficult to forecast. A major portion of the Company’s costs and expenses, such events including but not limited to the COVID-19 pandemic, developments in the as personnel and facilities, are of a fixed nature and, accordingly, a shortfall or decline healthcare sector and regulatory framework, the Company’s future performance, as in quarterly and/or annual revenues typically results in lower profitability or losses. well as management’s expectations, beliefs, intentions, plans, estimates or projections As a result, comparison of the Company’s period-to-period financial performance is relating to the future (including, without limitation, statements concerning revenue, not necessarily meaningful and should not be relied upon as an indicator of future net income, and earnings per share). Risks and uncertainties exist that may cause the performance. These forward-looking statements speak only as of the date hereof. The results to differ materially from those set forth in these forward-looking statements. Company undertakes no obligation to publicly update any forward-looking statements, Factors that could cause the anticipated results to differ from those described in the whether as a result of new information, future events or otherwise.