0001564590-19-037552.txt : 20191023
0001564590-19-037552.hdr.sgml : 20191023
20191023161523
ACCESSION NUMBER: 0001564590-19-037552
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 14
CONFORMED PERIOD OF REPORT: 20191023
ITEM INFORMATION: Results of Operations and Financial Condition
ITEM INFORMATION: Financial Statements and Exhibits
FILED AS OF DATE: 20191023
DATE AS OF CHANGE: 20191023
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: NEXTGEN HEALTHCARE, INC.
CENTRAL INDEX KEY: 0000708818
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
IRS NUMBER: 952888568
STATE OF INCORPORATION: CA
FISCAL YEAR END: 0331
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-12537
FILM NUMBER: 191163918
BUSINESS ADDRESS:
STREET 1: 18111 VON KARMAN AVENUE
STREET 2: SUITE 800
CITY: IRVINE
STATE: CA
ZIP: 92612
BUSINESS PHONE: 949-255-2600
MAIL ADDRESS:
STREET 1: 18111 VON KARMAN AVENUE
STREET 2: SUITE 800
CITY: IRVINE
STATE: CA
ZIP: 92612
FORMER COMPANY:
FORMER CONFORMED NAME: QUALITY SYSTEMS, INC
DATE OF NAME CHANGE: 20180823
FORMER COMPANY:
FORMER CONFORMED NAME: NEXTGEN HEALTHCARE, INC
DATE OF NAME CHANGE: 20180823
FORMER COMPANY:
FORMER CONFORMED NAME: QUALITY SYSTEMS, INC
DATE OF NAME CHANGE: 20100804
8-K
1
nxgn-8k_20191023.htm
8-K
nxgn-8k_20191023.htm
false000070881800007088182019-10-232019-10-23
UNITED STATES
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):
October 23, 2019
NEXTGEN HEALTHCARE, INC.
(Exact name of Registrant as Specified in Its Charter)
California
001-12537
95-2888568
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
18111 Von Karman Avenue, Suite 800
Irvine, California
92612
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s Telephone Number, Including Area Code: (949) 255-2600
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock (Par Value $0.01)
NXGN
NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02
Results of Operations and Financial Condition.
On October 23, 2019, NextGen Healthcare, Inc. (the “Company”) issued a press release announcing its financial performance for the period ended September 30, 2019. A copy of the press release is attached to this Form 8-K as Exhibit 99.1, and is incorporated herein by reference.
The information in this Item 2.02 of this Form 8-K, as well as Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Cover Page Interactive Data File (embedded within the Inline XBRL document).
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.
NextGen Healthcare, Inc. Reports Fiscal 2020 Second Quarter
IRVINE, Calif. – (BUSINESS WIRE) – NextGen Healthcare, Inc. (NASDAQ: NXGN), a leading provider of ambulatory-focused healthcare technology solutions, announced today its fiscal 2020 second quarter ended September 30, 2019 operating results.
Fiscal 2020 Second Quarter Highlights
On a GAAP basis, revenue for the fiscal 2020 second quarter was $134.3 million compared to $130.3 million a year ago.
On a GAAP basis, net income for the fiscal 2020 second quarter was $6.1 million compared with net income of $13.1 million in the fiscal 2019 second quarter.
On a GAAP basis, fully diluted net income per share was $0.09 in the fiscal 2020 second quarter compared to net income per share of $0.20 per share for the same period a year ago. On a non-GAAP basis, fully diluted earnings per share for the fiscal 2020 second quarter remained at $0.24 compared to the second quarter a year ago.
Cash flow from operations was $23.8 million in the fiscal 2020 second quarter compared to $11.9 million for the same period a year ago. Free cash flow was $17.1 million compared to $5.5 million in the same period a year ago.
“I’m pleased to report a solid second quarter in which we delivered revenue growth and positive free cash flow, as well as strong bookings bolstered by cross-selling, RCM traction, multiple “all-in” deals, and competitive displacements. Immediately after quarter end, we completed the acquisition of Topaz Information Solutions, which expands our capabilities to better serve behavioral health providers and enables our planned growth in this important market. Halfway through our fiscal year, we are confident that our current position will enable us to deliver on our full year outlook,” said Rusty Frantz, president and chief executive officer of NextGen Healthcare.
Fiscal 2020 Financial Outlook
The Company is reiterating their outlook for fiscal 2020 and expects:
•
Revenue of between $536 million and $550 million
•
Non-GAAP EPS of between $0.82 and $0.90
Conference Call Information
NextGen Healthcare will host a conference call to discuss its fiscal 2020 second quarter operating results on Wednesday, October 23, 2019 at 5:00 PM ET (2:00 PM PT). Shareholders and interested participants may listen to a live broadcast of the conference call by dialing 866-750-8947 or 720-405-1352 for international callers, and
referencing participant code 7179172 approximately 15 minutes prior to the call. A recording of the live webcast will be available on investor.nextgen.com after the call. It will be archived for 90 days until January 22, 2020.
About NextGen Healthcare, Inc
We empower the transformation of ambulatory care—partnering with medical, behavioral and dental providers in their journey to value-based care to make healthcare better for everyone. We go beyond EHR and PM. Our integrated solutions help increase clinical productivity, enrich the patient experience, and ensure healthy financial outcomes. We believe in better. Learn more at nextgen.com, and follow us on Facebook, Twitter, LinkedIn and Instagram.
Media Contact: NextGen Healthcare Cynthia Ragland (949) 255-2600 x 75416 cragland@nextgen.com
or
Investor Contact:
Westwicke Partners
Bob East or Asher Dewhurst
Westwicke Partners
443-213-0500
SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS
This news release may contain forward-looking statements within the meaning of the federal securities laws, including but not limited to, statements regarding future events, developments in the healthcare sector and regulatory framework, the Company's future performance, as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future (including, without limitation, statements concerning revenue, net income, and earnings per share). Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements and additional risks and uncertainties are set forth in Part I, Item A of our most recent Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q, including but not limited to: the volume and timing of systems sales and installations; length of sales cycles and the installation process; the possibility that products will not achieve or sustain market acceptance; seasonal patterns of sales and customer buying behavior; impact of incentive payments under The American Recovery and Reinvestment Act on sales and the ability of the Company to meet continued certification requirements; uncertainties related to the future impact of U.S. tax reform; the impact of governmental and regulatory agency investigations; the development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; product liability; changing economic, political or regulatory influences in the health-care industry; changes in product-pricing policies; availability of third-party products and components; competitive pressures including product offerings, pricing and promotional activities; the Company's ability or inability to attract and retain qualified personnel; possible regulation of the Company's software by the U.S. Food and Drug Administration; changes of accounting estimates and assumptions used to prepare the prior periods' financial statements; disruptions caused by acquisitions of companies, products, or technologies; and general economic conditions. A 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 a concentration of such revenues earned in the final ten business days of that month. Due to these and other factors, the Company's revenues and operating results are very difficult to forecast. A major portion of the Company's costs and expenses, such as personnel and facilities, are of a fixed nature and, accordingly, a shortfall or decline in
quarterly and/or annual revenues typically results in lower profitability or losses. As a result, comparison of the Company's period-to-period financial performance is not necessarily meaningful and should not be relied upon as an indicator of future performance. These forward-looking statements speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
USE OF NON-GAAP FINANCIAL MEASURES
This news release contains certain non-GAAP (Generally Accepted Accounting Principles) financial measures, which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. These non-GAAP measures are not in accordance with or a substitute for U.S. GAAP. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying financial tables. Other companies may calculate non-GAAP measures differently than NextGen Healthcare, Inc., which limits comparability between companies. The Company believes that its presentation of non-GAAP diluted earnings per share provides useful supplemental information to investors and management regarding the Company's financial condition and results. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. The Company calculates free cash flow by as total net cash provided by operating activities, net of cash used for the additions of capitalized software costs and equipment and improvements. The Company calculates non-GAAP diluted earnings per share by excluding net acquisition costs, amortization of acquired intangible assets, amortization of deferred debt issuance costs, restructuring costs, net securities litigation defense costs and settlement, share-based compensation, impairment of assets, and other non-run-rate expenses from GAAP income before provision for income taxes.
The Company utilizes a normalized non-GAAP tax rate to provide better consistency across the interim reporting periods within a given fiscal year by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency, and which are not necessarily reflective of the Company’s longer-term operations. The normalized non-GAAP tax rate applied to each quarter of fiscal year 2019 was 22.0% and is expected to remain at 22.0% for each quarter of fiscal year 2020. The determination of this rate is based on the consideration of both historic and projected financial results. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occur that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.
The Company’s future period guidance in this release includes adjustments for items not indicative of the Company’s core operations. Such adjustments are generally expected to be of a nature similar to those adjustments applied to the Company’s historic GAAP financial results in the determination of the Company’s non-GAAP diluted earnings per share. Such adjustments, however, may be affected by changes in ongoing assumptions and judgments as to the items that are excluded in the calculation of non-GAAP adjusted net income and adjusted diluted earnings per share, as described in this release. The exact amount and probable significance of these adjustments, including net acquisition costs, restructuring costs, net securities litigation defense costs, impairment of assets, and other non-run-rate expenses, are not currently determinable without unreasonable efforts, but may be significant. These items cannot be reliably quantified or forecasted due to the combination of their historic and expected variability. It is therefore not practicable to reconcile this non-GAAP guidance to the most comparable GAAP measures.
NEXTGEN HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended September 30,
Six Months Ended September 30,
2019
2018
2019
2018
Revenues:
Recurring
$
120,589
$
116,317
$
240,036
$
236,324
Software, hardware, and other non-recurring
13,667
14,004
26,081
27,197
Total revenues
134,256
130,321
266,117
263,521
Cost of revenue:
Recurring
50,328
47,172
100,868
95,325
Software, hardware, and other non-recurring
6,563
7,022
12,841
14,176
Amortization of capitalized software costs and acquired intangible assets
8,843
6,924
17,256
13,468
Total cost of revenue
65,734
61,118
130,965
122,969
Gross profit
68,522
69,203
135,152
140,552
Operating expenses:
Selling, general and administrative
39,046
34,229
79,174
78,865
Research and development costs, net
19,789
18,371
41,840
40,499
Amortization of acquired intangible assets
865
1,121
1,730
2,289
Impairment of assets
1,916
—
2,405
—
Restructuring costs
175
—
1,882
—
Total operating expenses
61,791
53,721
127,031
121,653
Income from operations
6,731
15,482
8,121
18,899
Interest income
36
40
115
69
Interest expense
(387
)
(769
)
(859
)
(1,499
)
Other income, net
210
237
77
611
Income before provision for income taxes
6,590
14,990
7,454
18,080
Provision for income taxes
509
1,896
129
2,338
Net income
$
6,081
$
13,094
$
7,325
$
15,742
Net income per share:
Basic
$
0.09
$
0.20
$
0.11
$
0.25
Diluted
$
0.09
$
0.20
$
0.11
$
0.24
Weighted-average shares outstanding:
Basic
65,401
64,265
65,209
64,143
Diluted
65,560
64,857
65,445
64,362
NEXTGEN HEALTHCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
September 30, 2019
March 31, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
42,930
$
33,079
Restricted cash and cash equivalents
7,501
1,443
Accounts receivable, net
83,708
87,459
Contract assets
11,973
13,242
Inventory
58
120
Income taxes receivable
3,272
3,682
Prepaid expenses and other current assets
20,612
20,826
Total current assets
170,054
159,851
Equipment and improvements, net
22,049
21,404
Capitalized software costs, net
39,076
37,855
Operating lease assets
38,230
—
Deferred income taxes, net
6,166
6,194
Contract assets, net of current
3,175
3,747
Intangibles, net
42,290
52,595
Goodwill
218,771
218,771
Other assets
33,017
32,478
Total assets
$
572,828
$
532,895
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
4,837
$
5,432
Contract liabilities
54,101
56,009
Accrued compensation and related benefits
21,825
25,663
Income taxes payable
—
64
Operating lease liabilities
9,947
—
Other current liabilities
41,545
41,064
Total current liabilities
132,255
128,232
Deferred compensation
5,933
5,905
Line of credit
—
11,000
Operating lease liabilities, net of current
41,622
—
Other noncurrent liabilities
1,890
11,812
Total liabilities
181,700
156,949
Commitments and contingencies
Shareholders' equity:
Common stock
$0.01 par value; authorized 100,000 shares; issued and outstanding 65,436 and 64,838 shares at September 30, 2019 and March 31, 2019, respectively
654
648
Additional paid-in capital
272,848
264,908
Accumulated other comprehensive loss
(1,320
)
(1,231
)
Retained earnings
118,946
111,621
Total shareholders' equity
391,128
375,946
Total liabilities and shareholders' equity
$
572,828
$
532,895
NEXTGEN HEALTHCARE, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE
Three Months Ended September 30,
Six Months Ended September 30,
2019
2018
2019
2018
Income before provision for income taxes - GAAP
$
6,590
$
14,990
$
7,454
$
18,080
Non-GAAP adjustments:
Acquisition costs, net
739
315
739
1,949
Amortization of acquired intangible assets
5,152
5,409
10,305
10,865
Amortization of deferred debt issuance costs
178
178
355
355
Impairment of assets
1,916
—
2,405
—
Restructuring costs
175
—
1,882
—
Securities litigation defense costs and settlement, net of insurance
339
(5,715
)
376
(5,436
)
Share-based compensation
4,316
4,135
9,207
7,251
Other non-run-rate expenses*
815
691
905
2,639
Total adjustments to GAAP income before provision for income taxes:
13,630
5,013
26,174
17,623
Income before provision for income taxes - Non-GAAP
20,220
20,003
33,628
35,703
Provision for income taxes
4,448
4,401
7,398
7,855
Net income - Non-GAAP
$
15,772
$
15,602
$
26,230
$
27,848
Diluted net income per share - Non-GAAP
$
0.24
$
0.24
$
0.40
$
0.43
Weighted-average shares outstanding (diluted):
65,560
64,857
65,445
64,362
* Other non-run-rate expenses for the three and six months ended September 30, 2019 consist primarily of excess lease-related expense for vacated facilities and other costs, including retention bonuses, related to the restructuring plan. Other non-run-rate expenses for the three and six months ended September 30, 2018 consist primarily of severance and other employee-related costs.
The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements containing historical data, it is the date up through which that historical data is presented. If there is no historical data in the report, use the filing date. The format of the date is CCYY-MM-DD.
The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.