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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2022

OR

 

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

 

Commission file number 001-35547

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

36-4392754

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

222 Merchandise Mart, Suite 2024

Chicago, IL 60654

(Address of Principal Executive Offices, Zip Code)

(800) 334-8534

(Registrant's Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on which Registered

Common Stock, par value $0.01 per share

MDRX

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

 

 

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 No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of August 1, 2022, there were 110,792,560 shares of the registrant's $0.01 par value common stock outstanding.

 

1


ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

FORM 10-Q

For the Fiscal Quarter Ended June 30, 2022

TABLE OF CONTENTS

 

 

 

 

 

PAGE

PART I. FINANCIAL INFORMATION

 

3

Item 1.

 

Financial Statements (unaudited)

 

3

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

29

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

38

Item 4.

 

Controls and Procedures

 

38

PART II. OTHER INFORMATION

 

39

Item 1.

 

Legal Proceedings

 

39

Item 1A.

 

Risk Factors

 

39

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

39

Item 6.

 

Exhibits

 

40

SIGNATURES

 

41

 

 

 

2


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

 

June 30, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

500,164

 

 

$

132,517

 

Restricted cash

 

 

1,307

 

 

 

1,308

 

Accounts receivable, net of allowance of $12,581 and $13,360 as of
   June 30, 2022 and December 31, 2021, respectively

 

 

166,746

 

 

 

171,622

 

Contract assets, net of allowance of $564 and $576 as of June 30, 2022 and December 31, 2021, respectively

 

 

49,029

 

 

 

63,429

 

Prepaid expenses and other current assets

 

 

91,521

 

 

 

60,511

 

Current assets attributable to discontinued operations

 

 

20,000

 

 

 

331,955

 

Total current assets

 

 

828,767

 

 

 

761,342

 

Fixed assets, net

 

 

14,971

 

 

 

9,819

 

Software development costs, net

 

 

82,541

 

 

 

74,688

 

Intangible assets, net

 

 

149,210

 

 

 

149,690

 

Goodwill

 

 

524,149

 

 

 

506,607

 

Deferred taxes, net

 

 

7

 

 

 

0

 

Contract assets - long-term, net of allowance of $1,201 and $1,534 as of June 30, 2022 and December 31, 2021, respectively

 

 

19,358

 

 

 

28,174

 

Right-of-use assets - operating leases

 

 

15,904

 

 

 

18,324

 

Other assets

 

 

79,309

 

 

 

83,429

 

Long-term assets attributable to discontinued operations

 

 

0

 

 

 

793,156

 

Total assets

 

$

1,714,216

 

 

$

2,425,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3


ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Unaudited)

(In thousands, except per share amounts)

 

June 30, 2022

 

 

December 31, 2021

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

18,014

 

 

$

5,281

 

Accrued expenses

 

 

82,964

 

 

 

54,518

 

Accrued compensation and benefits

 

 

34,001

 

 

 

31,055

 

Deferred revenue

 

 

84,882

 

 

 

120,748

 

Current operating lease liabilities

 

 

6,095

 

 

 

6,133

 

Current liabilities attributable to discontinued operations

 

 

30,372

 

 

 

329,347

 

Total current liabilities

 

 

256,328

 

 

 

547,082

 

Long-term debt

 

 

199,895

 

 

 

350,062

 

Deferred revenue

 

 

2,021

 

 

 

1,839

 

Deferred taxes, net

 

 

10,861

 

 

 

16,625

 

Long-term operating lease liabilities

 

 

13,873

 

 

 

16,754

 

Other liabilities

 

 

34,890

 

 

 

33,823

 

Long-term liabilities attributable to discontinued operations

 

 

0

 

 

 

50,906

 

Total liabilities

 

 

517,868

 

 

 

1,017,091

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock: $0.01 par value, 1,000 shares authorized,
   
no shares issued and outstanding as of June 30, 2022 and December 31, 2021

 

 

0

 

 

 

0

 

Common stock: $0.01 par value, 349,000 shares authorized as of June 30, 2022
   and December 31, 2021;
279,175 and 110,793 shares issued and outstanding
   as of June 30, 2022, respectively;
276,705 and 116,114 shares issued
   and outstanding as of December 31, 2021, respectively

 

 

2,790

 

 

 

2,766

 

Treasury stock: at cost, 168,383 and 160,591 shares as of June 30, 2022 and
   December 31, 2021, respectively

 

 

(1,465,177

)

 

 

(1,321,805

)

Additional paid-in capital

 

 

1,923,805

 

 

 

1,962,386

 

Retained earnings

 

 

738,864

 

 

 

767,556

 

Accumulated other comprehensive loss

 

 

(3,934

)

 

 

(2,765

)

Total stockholders’ equity

 

 

1,196,348

 

 

 

1,408,138

 

Total liabilities and stockholders’ equity

 

$

1,714,216

 

 

$

2,425,229

 

 

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

4


ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

(In thousands, except per share amounts)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Provider

 

$

118,939

 

 

$

115,904

 

 

$

237,604

 

 

$

227,074

 

 

Payer & Life Sciences

 

 

31,959

 

 

 

25,302

 

 

 

55,966

 

 

 

47,784

 

 

Total revenue

 

 

150,898

 

 

 

141,206

 

 

 

293,570

 

 

 

274,858

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Provider

 

 

58,326

 

 

 

60,094

 

 

 

115,343

 

 

 

118,960

 

 

Payer & Life Sciences

 

 

13,090

 

 

 

12,693

 

 

 

25,264

 

 

 

24,562

 

 

Total cost of revenue

 

 

71,416

 

 

 

72,787

 

 

 

140,607

 

 

 

143,522

 

 

    Gross profit

 

 

79,482

 

 

 

68,419

 

 

 

152,963

 

 

 

131,336

 

 

Selling, general and administrative expenses

 

 

59,847

 

 

 

28,124

 

 

 

101,165

 

 

 

60,288

 

 

Research and development

 

 

22,750

 

 

 

20,942

 

 

 

46,170

 

 

 

41,602

 

 

Asset impairment charges

 

 

0

 

 

 

172

 

 

 

0

 

 

 

172

 

 

Amortization of intangible and acquisition-related assets

 

 

2,241

 

 

 

2,363

 

 

 

4,412

 

 

 

4,727

 

 

(Loss) income from operations

 

 

(5,356

)

 

 

16,818

 

 

 

1,216

 

 

 

24,547

 

 

Interest expense

 

 

(1,887

)

 

 

(2,949

)

 

 

(4,023

)

 

 

(6,092

)

 

Other income, net

 

 

2,133

 

 

 

16,528

 

 

 

2,145

 

 

 

17,326

 

 

Equity in net loss of unconsolidated investments

 

 

(207

)

 

 

(86

)

 

 

(605

)

 

 

(64

)

 

(Loss) income from continuing operations before income taxes

 

 

(5,317

)

 

 

30,311

 

 

 

(1,267

)

 

 

35,717

 

 

Income tax benefit (provision)

 

 

8,579

 

 

 

(4,168

)

 

 

23,000

 

 

 

(5,274

)

 

Income from continuing operations, net of tax

 

 

3,262

 

 

 

26,143

 

 

 

21,733

 

 

 

30,443

 

 

Loss from discontinued operations

 

 

(3,797

)

 

 

(6,178

)

 

 

(8,818

)

 

 

(358

)

 

Gain on sale of discontinued operations

 

 

2,765

 

 

 

0

 

 

 

2,765

 

 

 

647

 

 

Income tax effect on discontinued operations

 

 

(66,256

)

 

 

1,961

 

 

 

(56,849

)

 

 

251

 

 

(Loss) income from discontinued operations, net of tax

 

 

(67,288

)

 

 

(4,217

)

 

 

(62,902

)

 

 

540

 

 

Net (loss) income

 

$

(64,026

)

 

$

21,926

 

 

$

(41,169

)

 

$

30,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.03

 

 

$

0.19

 

 

$

0.19

 

 

$

0.22

 

 

Discontinued operations

 

 

(0.59

)

 

 

(0.03

)

 

 

(0.55

)

 

 

0.00

 

 

Net (loss) income per share - Basic

 

$

(0.56

)

 

$

0.16

 

 

$

(0.36

)

 

$

0.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.03

 

 

$

0.18

 

 

$

0.17

 

 

$

0.21

 

 

Discontinued operations

 

 

(0.57

)

 

 

(0.03

)

 

 

(0.46

)

 

 

0.00

 

 

Net (loss) income per share - Diluted

 

$

(0.54

)

 

$

0.15

 

 

$

(0.29

)

 

$

0.21

 

 

 

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

5


ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Net (loss) income

 

$

(64,026

)

 

$

21,926

 

 

$

(41,169

)

 

$

30,983

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(717

)

 

 

421

 

 

 

(867

)

 

 

520

 

 

Change in fair value of derivatives qualifying as cash flow hedges

 

 

(153

)

 

 

(828

)

 

 

(404

)

 

 

(1,509

)

 

Other comprehensive (loss) income before income tax benefit

 

 

(870

)

 

 

(407

)

 

 

(1,271

)

 

 

(989

)

 

Income tax benefit related to items in other comprehensive income (loss)

 

 

38

 

 

 

214

 

 

 

102

 

 

 

390

 

 

Total other comprehensive income (loss)

 

 

(832

)

 

 

(193

)

 

 

(1,169

)

 

 

(599

)

 

Comprehensive (loss) income

 

$

(64,858

)

 

$

21,733

 

 

$

(42,338

)

 

$

30,384

 

 

 

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

 

6


ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

277,696

 

 

 

275,241

 

 

 

276,705

 

 

 

274,558

 

Common stock issued under stock compensation plans,
    net of shares withheld for employee taxes

 

 

1,479

 

 

 

1,427

 

 

 

2,470

 

 

 

2,110

 

Balance at end of period

 

 

279,175

 

 

 

276,668

 

 

 

279,175

 

 

 

276,668

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

2,776

 

 

$

2,751

 

 

$

2,766

 

 

$

2,745

 

Common stock issued under stock compensation plans,
    net of shares withheld for employee taxes

 

 

14

 

 

 

15

 

 

 

24

 

 

 

21

 

Balance at end of period

 

$

2,790

 

 

$

2,766

 

 

$

2,790

 

 

$

2,766

 

Number of treasury stock shares

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

(162,904

)

 

 

(134,616

)

 

 

(160,591

)

 

 

(134,616

)

Issuance of treasury stock

 

 

0

 

 

 

33

 

 

 

0

 

 

 

33

 

Purchase of treasury stock

 

 

(5,479

)

 

 

(6,397

)

 

 

(7,792

)

 

 

(6,397

)

Accelerated share repurchase program

 

 

0

 

 

 

(10,677

)

 

 

0

 

 

 

(10,677

)

Balance at end of period

 

 

(168,383

)

 

 

(151,657

)

 

 

(168,383

)

 

 

(151,657

)

Treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

(1,371,484

)

 

$

(870,558

)

 

$

(1,321,805

)

 

$

(870,558

)

Issuance of treasury stock

 

 

0

 

 

 

465

 

 

 

0

 

 

 

465

 

Purchase of treasury stock

 

 

(93,693

)

 

 

(108,953

)

 

 

(143,372

)

 

 

(108,953

)

Accelerated share repurchase program

 

 

0

 

 

 

(195,452

)

 

 

0

 

 

 

(195,452

)

Balance at end of period

 

$

(