- Fourth quarter GAAP EPS of $4.82; 71% year-over-year growth
in non-GAAP diluted EPS to $0.29
- Closed sales of EPSi and CarePort Health and recognized a
combined pre-tax gain of $1.2 billion
- Repurchased $280 million of stock in the quarter and ended
the quarter in a net cash position
Allscripts Healthcare Solutions, Inc. (Nasdaq: MDRX)
(Allscripts) announced its financial results for the three and
twelve months ended December 31, 2020.
Bookings(1) were $220 million in the fourth quarter of 2020.
This result compares with $312 million in the fourth quarter of
2019. Contract revenue backlog totaled $4.1 billion as of December
31, 2020.
Fourth quarter 2020 GAAP revenue was $386 million compared with
$414 million in the fourth quarter of 2019. Non-GAAP revenue(2) was
$415 million in the fourth quarter of 2020 compared with $452
million in the fourth quarter of 2019.
On a GAAP basis in the fourth quarter of 2020, loss from
operations was $68 million and included $17 million of severance
and restructuring charges and $75 million of asset impairments.
GAAP loss from operations in the fourth quarter of 2019 was $55
million and included $20 million of severance and restructuring
charges and $33 million of asset impairments. Non-GAAP income from
operations(2) in the fourth quarter of 2020 was $66 million
compared with $44 million in the fourth quarter of 2019.
GAAP net income in the fourth quarter of 2020 totaled $728
million compared with net loss of $19 million in the fourth quarter
of 2019. Non-GAAP net income(2) in the fourth quarter of 2020 was
$45 million compared with $28 million in the fourth quarter of
2019.
GAAP earnings per share in the fourth quarter of 2020 was $4.82
compared with loss per share of $0.12 in the fourth quarter of
2019. Non-GAAP diluted earnings per share(2) in the fourth quarter
of 2020 were $0.29 compared with $0.17 in the fourth quarter of
2019.
Adjusted EBITDA(2) totaled $97 million in the fourth quarter of
2020, compared with $74 million in the fourth quarter of 2019.
Stock repurchases totaled $280 million in the fourth quarter of
2020.
“Allscripts saw continued progress in the fourth quarter as we
benefitted from the decisive and strategic actions we took in 2020,
which included resetting our cost base and solutions portfolio to
more effectively compete in this uncertain environment,” said Paul
M. Black, Allscripts Chief Executive Officer. “We believe
Allscripts is well positioned to succeed with our robust, highly
relevant solutions portfolio which spans the provider, payer and
life sciences markets. Our strong and flexible balance sheet
enables us to continue our investments to drive growth as well as
return additional capital to shareholders. Looking ahead, we expect
to continue to leverage the work we have done to drive improved
margins and free cash flow generation.”
2021 Financial Outlook(3)
For the full year 2021, Allscripts currently expects to
achieve:
- Revenue of $1.5 billion
- Adjusted EBITDA between $240 million and $260 million
- Free cash flow between $90 million and $100 million
Conference Call
Allscripts will conduct a conference call today, Thursday,
February 25th, 2021, at 4:30 PM Eastern Time to discuss its
earnings release and other information. Participants may access the
conference call via webcast at http://investor.allscripts.com.
Participants also may access the conference call by dialing +1
(877) 269-7756 or +1 (201) 689-7817 (international) and requesting
Conference ID # 13715828.
A replay of the call will be available approximately two hours
after the conclusion of the call, for a period of four weeks, on
the Allscripts Investor Relations website or by calling +1 (877)
660-6853 or +1 (201) 612-7415 - Conference ID # 13715828.
Supplemental and non-GAAP financial information (both including
and excluding discontinued operations) is also available at
http://investor.allscripts.com.
Footnotes
(1)
Bookings reflect the value of executed contracts for software,
hardware and other client services, for all business units while
they were owned by the Company.
(2)
Non-GAAP figures include results from divested businesses during
the period they were still owned. GAAP figures reflect the results
of divested businesses as discontinued operations in all periods
presented.
(3)
In providing financial guidance, the company does not reconcile
Adjusted EBITDA and free cash flow to the corresponding GAAP
financial measures. Allscripts does not provide guidance for the
various reconciling items since certain items that impact GAAP net
income and operating cash flow such as acquisition-related
amortization, asset impairment charges and restructuring and other
costs, any of which may be significant, are either outside of its
control and/or cannot be reasonably predicted. Please see the
“Explanation of Non-GAAP Financial Measures” at the end of this
press release for detailed information on calculating non-GAAP
measures. For a reconciliation of other non-GAAP items, see the
non-GAAP financial reconciliation tables in this release (Tables 4
and 5).
NOTE: All percentage changes described within this press release
are calculated from full dollar amounts as illustrated in the
accompanying financial statements and Allscripts Supplemental
Financial Data Workbook, posted on the Investor Relations website.
Rounding differences may occur when individually calculating
percentages or totals from rounded amounts included within the
press release body compared to full dollar amounts in the
tables.
About Allscripts
Allscripts (Nasdaq: MDRX) is a leader in healthcare information
technology solutions that advance clinical, financial and
operational results. Our innovative solutions connect people,
places and data across an Open, Connected Community of Health™.
Connectivity empowers caregivers to make better decisions and
deliver better care for healthier populations. To learn more, visit
www.allscripts.com, Twitter, YouTube and It
Takes A Community: The Allscripts Blog.
© 2021 Allscripts Healthcare, LLC and/or its affiliates. All
Rights Reserved.
Allscripts, the Allscripts logo, and other Allscripts marks are
trademarks of Allscripts Healthcare, LLC and/or its affiliates. All
other products are trademarks of their respective holders, all
rights reserved. Reference to these products is not intended to
imply affiliation with or sponsorship of Allscripts Healthcare, LLC
and/or its affiliates.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our 2021 outlook,
profitability initiatives, and plans to return capital to
shareholders. These forward-looking statements are based on the
current beliefs and expectations of Allscripts management, only
speak as of the date that they are made and are subject to
significant risks and uncertainties. Such statements can be
identified by the use of words such as “future,” “anticipates,”
“believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,”
“will,” “would,” “could,” “can,” “may,” and similar terms. Actual
results could differ significantly from those set forth in the
forward-looking statements, and reported results should not be
considered an indication of future performance or events. Certain
factors that could cause Allscripts actual results to differ
materially from those described in the forward-looking statements
include, but are not limited to: our ability to achieve the margin
targets associated with our margin improvement initiatives within
the contemplated time periods, if at all; the magnitude, severity
and duration of the COVID-19 pandemic, including the impacts of the
pandemic, along with the impacts of our responses and the responses
by governments and other businesses to the pandemic, on our
business, our employees, our clients and our suppliers; security
breaches resulting in unauthorized access to our or our clients’
computer systems or data, including denial-of-services, ransomware
or other Internet-based attacks; our use of the proceeds from the
sale of our EPSi and CarePort businesses; the failure by Practice
Fusion to comply with the terms of its settlement agreements with
the U.S. Department of Justice (the “DOJ”); the costs and burdens
of compliance by Practice Fusion with the terms of its settlement
agreements with the DOJ; additional investigations and proceedings
from governmental entities or third parties other than the DOJ
related to the same or similar conduct underlying the DOJ’s
investigations into Practice Fusion’s business practices; our
ability to recover from third parties (including insurers) any
amounts required to be paid in connection with Practice Fusion’s
settlement agreements with the DOJ and related inquiries; the
expected financial results of businesses acquired by us; the
successful integration of businesses acquired by us; the
anticipated and unanticipated expenses and liabilities related to
businesses acquired by us, including the civil investigation by the
U.S. Attorney’s Office involving our Enterprise Information
Solutions business (the “EIS business”); our failure to compete
successfully; consolidation in our industry; current and future
laws, regulations and industry initiatives; increased government
involvement in our industry; the failure of markets in which we
operate to develop as quickly as expected; our or our customers’
failure to see the benefits of government programs; changes in
interoperability or other regulatory standards; our ability to
maintain and expand our business with existing clients or
effectively transition clients to newer products; the effects of
the realignment of our sales, services and support organizations;
market acceptance of our products and services; the
unpredictability of the sales and implementation cycles for our
products and services; our ability to manage future growth; our
ability to introduce new products and services; our ability to
establish and maintain strategic relationships; risks associated
with investments and acquisitions; the performance of our products;
our ability to protect our intellectual property rights; the
outcome of other legal proceedings involving us; our ability to
hire, retain and motivate key personnel; performance by our content
and service providers; liability for use of content; price
reductions; our ability to license and integrate third-party
technologies; risks related to global operations; variability of
our quarterly operating results; risks related to our outstanding
indebtedness; changes in tax rates or laws; business disruptions;
our ability to maintain proper and effective internal controls; and
asset and long-term investment impairment charges. Additional
information about these and other risks, uncertainties, and factors
affecting our business is contained in our filings with the
Securities and Exchange Commission, including under the caption
“Risk Factors” in our most recent Allscripts Annual Report on Form
10-K and subsequent Quarterly Reports on Form 10-Qs. Allscripts
does not undertake to update forward-looking statements to reflect
changed assumptions, the impact of circumstances or events that may
arise after the date of the forward-looking statements, or other
changes in its business, financial condition or operating results
over time.
Table 1 Allscripts Healthcare Solutions, Inc.
Condensed Consolidated Balance Sheets (In millions)
(Unaudited)
December 31, December 31,
2020
2019
ASSETS Current assets: Cash and cash equivalents
$531.1
$129.6
Restricted cash
$6.4
$7.9
Accounts receivable, net
$347.3
$424.4
Contract assets
$106.7
$93.3
Income tax receivable
$25.4
$0.0
Prepaid expenses and other current assets
$136.3
$144.2
Current assets attributable to discontinued operations
$0.0
$41.9
Total current assets
$1,153.2
$841.3
Fixed assets, net
$72.2
$87.9
Software development costs, net
$193.2
$222.7
Intangible assets, net
$286.6
$367.1
Goodwill
$974.7
$974.1
Deferred taxes, net
$5.8
$5.7
Contract assets - long-term
$43.7
$63.5
Right-of-use assets - operating leases
$96.6
$95.8
Other assets
$91.6
$119.6
Long-term assets attributable to discontinued operations
$0.0
$428.0
Total assets
$2,917.6
$3,205.7
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities: Accounts payable
$35.9
$102.8
Accrued expenses
$100.2
$270.3
Accrued compensation and benefits
$118.8
$65.8
Deferred revenue
$334.8
$335.6
Current maturities of long-term debt
$0.0
$364.5
Current operating lease liabilities
$22.3
$22.3
Current liabilities attributable to discontinued operations
$322.8
$49.4
Total current liabilities
$934.8
$1,210.7
Long-term debt
$167.6
$551.0
Deferred revenue
$3.4
$11.1
Deferred taxes, net
$18.2
$21.0
Long-term operating lease liabilities
$93.5
$93.6
Other liabilities
$33.9
$30.3
Long-term liabilities attributable to discontinued operations
$0.0
$2.8
Total liabilities
$1,251.4
$1,920.5
Total stockholders’ equity
$1,666.2
$1,285.2
Total liabilities and stockholders’ equity
$2,917.6
$3,205.7
Note: The condensed consolidated balance sheets reflect the
results of Careport Health and EPSi as discontinued operations in
all periods presented.
Table 2
Allscripts Healthcare Solutions, Inc. Condensed
Consolidated Statements of Operations (In millions, except per
share amounts) (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2020
2019
2020
2019
Revenue: Software delivery, support and maintenance
$241.3
$248.9
$914.7
$1,004.2
Client services
145.1
165.4
588.0
628.4
Total revenue
386.4
414.3
1,502.7
1,632.6
Cost of revenue: Software delivery, support and maintenance
71.3
80.0
288.0
319.1
Client services
123.9
154.4
530.6
595.3
Amortization of software development and acquisition-related assets
(a)
30.2
27.3
118.4
107.9
Total cost of revenue
225.4
261.7
937.0
1,022.3
Gross profit
161.0
152.6
565.7
610.3
Selling, general and administrative expenses
93.8
108.3
389.9
400.8
Research and development
54.3
60.1
206.1
245.4
Impairments
74.7
32.5
75.0
36.5
Amortization of intangible and acquisition-related assets
6.3
6.8
25.6
27.2
Income (loss) from operations
(68.1
)
(55.1
)
(130.9
)
(99.6
)
Interest expense, net (b)
(6.1
)
(11.5
)
(32.4
)
(41.6
)
Other (c)
(0.6
)
3.0
14.0
(140.5
)
Income (loss) before income taxes
(74.8
)
(63.6
)
(149.3
)
(281.7
)
Income tax (provision) benefit
10.1
29.7
16.7
43.3
Income (loss) from continuing operations, net of tax
(64.7
)
(33.9
)
(132.6
)
(238.4
)
Income (loss) from discontinued operations
16.8
20.1
71.4
75.2
Gain (loss) on sale of discontinued operations
1,156.5
0.0
1,156.5
0.0
Income tax (provision) from discontinued operations
(380.8
)
(5.2
)
(394.9
)
(19.4
)
Income (loss) from discontinued operations, net of tax
792.5
14.9
833.0
55.8
Net income (loss)
727.8
(19.0
)
700.4
(182.6
)
Net (income) loss attributable to non-controlling interest
0.0
0.0
0.0
0.4
Net Income (loss) attributable to Allscripts Healthcare Solutions,
Inc. stockholders
$727.8
($19.0
)
$700.4
($182.2
)
Income (loss) from continuing operations per share - basic
($0.43
)
($0.21
)
($0.83
)
($1.43
)
Income (loss) from discontinued operations per share - basic
$5.25
$0.09
$5.23
$0.33
Income (loss) per share - basic
$4.82
($0.12
)
$4.40
($1.10
)
Income (loss) from continuing operations per share - diluted
($0.43
)
($0.21
)
($0.83
)
($1.43
)
Income (loss) from discontinued operations per share - diluted
$5.25
$0.09
$5.23
$0.33
Income (loss) per share - diluted
$4.82
($0.12
)
$4.40
($1.10
)
Weighted average common shares outstanding: Basic
150.9
162.4
159.3
166.3
Diluted
150.9
162.4
159.3
166.3
Three Months Ended December
31,
Twelve Months Ended December
31,
2020
2019
2020
2019
(a) Amortization of software development and
acquisition-related assets includes: Amortization of capitalized
software development costs
$22.7
$18.4
$86.3
$72.9
Amortization of acquisition-related intangible assets
7.5
8.9
32.1
35.0
Total amortization of software development and acquisition-related
assets
$30.2
$27.3
$118.4
$107.9
(b) Interest expense are comprised of the following for the
periods presented: Interest expense
(4.0
)
(7.2
)
(18.1
)
(26.6
)
Interest income
0.3
0.3
1.7
1.6
Non-cash charges to interest (expense) income
0.1
(0.1
)
$0.0
(0.1
)
Amortization of discounts and debt issuance costs
(2.5
)
(4.5
)
(16.0
)
(16.5
)
Interest expense, net
($6.1
)
($11.5
)
($32.4
)
($41.6
)
(c) Other is comprised of the following for the periods
presented: Equity net income (loss) of unconsolidated investments
(0.2
)
0.1
17.2
0.7
DOJ settlement
0.0
0.0
0.0
(145.0
)
Other income (expense)
(0.4
)
2.9
(3.2
)
3.8
Other
($0.6
)
$3.0
$14.0
($140.5
)
Note: The condensed consolidated statements of operations
reflect the results of Careport Health and EPSi as discontinued
operations in all periods presented.
Table 3 Allscripts Healthcare
Solutions, Inc. Condensed Consolidated Statements of Cash
Flows (In millions) (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2020
2019
2020
2019
Cash flows from operating activities: Net income (loss)
$727.8
($19.0
)
$700.4
($182.6
)
Less: Income(loss) from discontinued operations
792.5
14.9
833.0
55.8
Income (loss) from continuing operations
($64.7
)
($33.9
)
($132.6
)
($238.4
)
Non-cash adjustments to net income (loss): Depreciation and
amortization
46.4
50.0
192.3
198.2
Operating right-to-use asset amortization
5.1
5.7
20.7
21.9
Stock-based compensation expense
8.1
9.4
34.0
39.0
Deferred Taxes
(6.2
)
(34.9
)
(3.3
)
(38.0
)
Asset impairment charges
74.7
6.8
75.0
10.8
Goodwill impairment
0.0
25.7
0.0
25.7
Impairment (recovery) of long-term investments
0.0
1.7
1.6
0.7
Equity in net income of unconsolidated investments
0.2
0.0
(17.2
)
(0.6
)
Other (income) loss, net
(5.1
)
7.2
(5.9
)
10.0
Total non-cash adjustments to net income (loss)
123.2
71.6
297.2
267.7
Cash impact of changes in operating assets and liabilities: Assets
(63.9
)
(77.1
)
0.7
(25.7
)
Liabilities
61.0
61.3
(5.8
)
(133.2
)
Accrued DOJ settlement
(58.4
)
0.0
(147.2
)
145.0
Total cash impact of changes on operating assets and liabilities
(61.3
)
(15.8
)
(152.3
)
(13.9
)
Net cash provided by (used in) operating activities - continuing
operations
(2.8
)
21.9
12.3
15.4
Net cash provided by (used in) operating activities - discontinued
operations
(175.8
)
(9.5
)
(119.0
)
30.9
Net cash provided by (used in) operating activities
(178.6
)
12.4
(106.7
)
46.3
Cash flows from investing activities: Capital expenditures
(9.2
)
(3.1
)
(17.0
)
(16.5
)
Capitalized software
(16.3
)
(25.2
)
(88.0
)
(103.3
)
Cash paid for business acquisitions, net of cash acquired
0.0
0.0
0.0
(23.4
)
Cash received from sale of business
1,710.0
0.0
1,710.0
0.0
Sales (purchases) of equity securities, other investments and
related intangible assets, net
(3.2
)
0.0
(7.1
)
(8.2
)
Sale of other investments
0.0
0.0
24.9
1.0
Cash provided by (used in) investing activities - Continuing
Operations
1,681.3
(28.3
)
1,622.8
(150.4
)
Cash provided by (used in) investing activities - Discontinued
Operations
(1.2
)
(2.5
)
(7.6
)
(10.7
)
Net cash provided by (used in) investing activities
1,680.1
(30.8
)
1,615.2
(161.1
)
Cash flows from financing activities: Taxes paid related to net
share settlement of equity awards
(0.4
)
(0.5
)
(6.0
)
(7.3
)
Proceeds from issuance of 0.875% Convertible Senior Notes
5.4
218.0
4.7
218.0
Payments for issuance costs on 0.875% Convertible Senior Notes
(5.4
)
(5.4
)
(5.4
)
(5.4
)
Payments for capped call transaction on 0.875% Convertible Senior
Notes
0.0
(17.2
)
0.0
(17.2
)
Repayment of Convertible Senior Notes, net of issuance costs
0.0
0.0
(352.3
)
0.0
Credit facility payments
(1,140.0
)
(205.0
)
(1,315.0
)
(220.0
)
Credit facility borrowings, net of issuance costs
230.0
30.1
903.6
279.2
Repurchase of common stock
(79.6
)
(9.3
)
(134.9
)
(111.5
)
Accelerated share repurchase program
(200.0
)
0.0
(200.0
)
0.0
Repurchase of unsettled common stock
0.0
9.3
0.0
0.0
Payment of acquisition and other financing obligations
0.0
(3.1
)
(4.4
)
(14.7
)
Purchases of subsidiary shares owned by non-controlling interest
0.0
0.0
0.0
(53.8
)
Net cash provided by (used in) financing activities - continuing
operations
(1,190.0
)
16.9
(1,109.7
)
67.3
Net cash provided by (used in) financing activities - discontinued
operations
0.0
0.0
0.0
0.0
Net cash provided by (used in) financing activities
(1,190.0
)
16.9
(1,109.7
)
67.3
Effect of exchange rate changes on cash and cash equivalents
1.1
0.3
1.2
0.2
Net increase (decrease) in cash and cash equivalents
312.6
(1.2
)
400.0
(47.3
)
Cash, cash equivalents and restricted cash, beginning of period
224.9
138.7
137.5
184.8
Cash, cash equivalents and restricted cash, end of period
$537.5
$137.5
$537.5
$137.5
Note: The condensed consolidated statements of cash flows
reflect the results of Careport Health and EPSi as discontinued
operations in all periods presented.
Table 4 Allscripts
Healthcare Solutions, Inc. Condensed Non-GAAP Financial
Information (In millions, except per share amounts and
percentages) (Unaudited)
Three Months Ended December
31, Twelve Months Ended December 31,
2020
2019
2020
2019
Total revenue, as reported
$386.4
$414.3
$1,502.7
$1,632.6
Acquisition-related deferred revenue adjustments
0.0
0.5
0.0
2.0
Non-GAAP revenue related to businesses reported as discontinued
operations
28.1
36.7
136.8
139.1
Total non-GAAP revenue
$414.5
$451.5
$1,639.5
$1,773.7
Gross profit, as reported
$161.0
$152.6
$565.7
$610.3
Acquisition-related deferred revenue adjustments
0.0
0.5
0.0
2.0
Acquisition-related amortization
7.5
8.9
32.1
35.0
Stock-based compensation expense
1.5
1.6
6.0
6.2
Restructuring and other
0.0
0.4
2.8
8.4
Non-GAAP gross profit related to businesses reported as
discontinued operations
22.7
27.9
102.3
104.9
Total non-GAAP gross profit
$192.7
$191.9
$708.9
$766.8
Income (loss) from operations, as reported
($68.1
)
($55.1
)
($130.9
)
($99.6
)
Acquisition-related deferred revenue adjustments
0.0
0.5
0.0
2.0
Acquisition-related amortization
13.8
15.7
57.7
62.1
Stock-based compensation expense
9.5
10.1
38.4
42.5
Impairments (recovery)
74.7
32.5
75.0
36.5
Restructuring and other
16.8
19.5
66.2
53.9
Non-GAAP income from operations related to businesses reported as
discontinued operations
19.1
20.7
79.5
77.1
Total non-GAAP income from operations
$65.8
$43.9
$185.9
$174.5
Net income (loss) attributable to Allscripts Healthcare
Solutions, Inc. stockholders, as reported
$727.8
($19.0
)
$700.4
($182.2
)
Loss (income) from discontinued operations
(16.8
)
(20.1
)
(71.4
)
(75.2
)
(Gain) on sale of business, net
(1,156.5
)
0.0
(1,156.5
)
0.0
Income tax provision from discontinued operations
380.8
5.2
394.9
19.4
Income (loss) from continuing operations, net of tax
($64.7
)
($33.9
)
($132.6
)
($238.0
)
Acquisition-related deferred revenue adjustments
0.0
0.5
0.0
2.0
Acquisition-related amortization
13.8
15.7
57.7
62.1
Stock-based compensation expense
9.5
10.1
38.4
42.5
Restructuring and other
16.8
20.3
66.2
200.1
Non-cash charges to interest expense and other
1.2
(1.1
)
14.4
8.8
Impairments
74.7
34.2
76.6
37.2
Equity in net loss (income) of unconsolidated investments and
non-controlling interest
0.2
(0.1
)
(17.2
)
(0.9
)
Tax rate alignment
(19.9
)
(33.5
)
(37.5
)
(60.4
)
Non-GAAP net income related to businesses reported as discontinued
operations
13.4
15.8
56.5
58.6
Non-GAAP net income attributable to Allscripts Healthcare
Solutions, Inc.
$45.0
$28.0
$122.5
$112.0
Non-GAAP effective tax rate
24%
24%
24%
24%
Weighted shares outstanding - basic
150.9
162.4
159.3
166.3
Weighted shares outstanding - diluted
155.9
164.9
162.0
168.1
GAAP Income (loss) from continuing operations per share -
basic
($0.43
)
($0.21
)
($0.83
)
($1.43
)
Non-GAAP Income (loss) per share - diluted
$0.29
$0.17
$0.76
$0.67
Table 5 Allscripts Healthcare Solutions, Inc.
Non-GAAP Financial Information - Adjusted EBITDA (In
millions, except percentages) (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December 31,
2020
2019
2020
2019
Net income (loss) from continuing operations, as reported
($64.7
)
($33.9
)
($132.6
)
($238.4
)
Plus:
Interest expense and other, net (a)
4.0
7.3
17.7
25.3
Depreciation and amortization
46.4
52.3
192.3
198.2
Equity in net (income) loss of unconsolidated investments
0.2
(0.2
)
(17.2
)
(0.7
)
Tax provision/(benefit)
(10.1
)
(29.7
)
(16.7
)
(43.3
)
EBITDA
($24.2
)
($4.2
)
$43.5
($58.9
)
Plus:
Acquisition-related deferred revenue adjustments
0.0
0.5
0.0
2.0
Stock-based compensation expense
9.5
10.1
38.4
42.6
Restructuring and other
16.8
10.4
66.2
187.9
Impairments (recovery)
74.7
34.2
76.6
37.2
Adjusted EBITDA from continuing operations
76.8
51.0
224.7
210.8
Adjusted EBITDA related to businesses reported as discontinued
operations
20.0
22.8
87.2
84.3
Adjusted EBITDA
$96.8
$73.8
$311.9
$295.1
Adjusted EBITDA margin from continuing operations (b)
19.9
%
12.3
%
15.0
%
12.9
%
Adjusted EBITDA margin (c)
23.4
%
16.3
%
19.0
%
16.6
%
(a) Interest expense and other, net has been adjusted from the
amounts presented in the statements of operations in order to
remove the amortization of the fair value of the cash conversion
option embedded in the 1.25% and 0.875% Cash Convertible Notes and
deferred debt issuance costs from interest expense since such
amortization is also included in depreciation and amortization.
(b) Adjusted EBITDA margin from continuing operations is
calculated by dividing adjusted EBITDA from continuing operations
by non-GAAP revenue from continuing operations.
(c) Adjusted EBITDA margin is calculated by dividing adjusted
EBITDA by non-GAAP revenue.
Explanation of Non-GAAP Financial Measures
Allscripts reports its financial results in accordance with U.S.
generally accepted accounting principles, or GAAP. To supplement
this information, Allscripts presents non-GAAP revenue, gross
profit, gross margin, income from operations, Adjusted EBITDA,
Adjusted EBITDA margin, effective income tax rate, net income,
diluted earnings per share and free cash flow, which are considered
non-GAAP financial measures under Section 101 of Regulation G under
the Securities Exchange Act of 1934, as amended. The definitions of
non-GAAP financial measures are presented below:
- Non-GAAP revenue consists of GAAP revenue, as reported, and
adds back recognized deferred revenue from Practice Fusion and
NantHealth’s provider/patient solutions business and non-material
consolidated affiliates that is eliminated for GAAP purposes due to
purchase accounting adjustments as well as revenue from businesses
reported as discontinued operations. Reconciliations to GAAP
revenue are found in Table 4 within this press release.
- Non-GAAP gross profit consists of GAAP gross profit, as
reported, and excludes acquisition-related deferred revenue
adjustments, acquisition-related amortization, stock-based
compensation expense and restructuring and other costs. Non-GAAP
gross profit includes results from businesses reported as
discontinued operations. Non-GAAP gross margin consists of non-GAAP
gross profit as a percentage of non-GAAP revenue in the applicable
period. Reconciliations to GAAP gross profit are found in Table 4
within this press release.
- Non-GAAP income from operations consists of GAAP income (loss)
from operations, as reported, and excludes acquisition-related
deferred revenue adjustments, acquisition-related amortization,
stock-based compensation expense, impairment charges and
restructuring and other costs. Non-GAAP income from operations
includes results from businesses reported as discontinued
operations. Reconciliations to GAAP income (loss) from operations
are found in Table 4 within this press release.
- Adjusted EBITDA is a non-GAAP measure and consists of GAAP net
income/(loss), as reported, and adjusts for: acquisition-related
deferred revenue adjustments; depreciation and amortization;
stock-based compensation expense; restructuring and other costs;
impairment charges; interest expense and other, net; equity in net
earnings of unconsolidated investments; and tax provision
(benefit). Adjusted EBITDA includes results from businesses
reported as discontinued operations. Reconciliations to GAAP net
income/(loss) are found in Table 5 within this press release.
- Adjusted EBITDA margin is a non-GAAP measure that is calculated
by dividing Adjusted EBITDA by non-GAAP revenue. See the
reconciliations in Table 4 within this press release with respect
to non-GAAP revenue and in Table 5 within this press release with
respect to Adjusted EBITDA.
- Non-GAAP effective income tax rate is based on non-GAAP pre-tax
earnings and consists of the statutory federal income tax rate,
Allscripts effective state income tax rate and adjustments for
permanent differences.
- Non-GAAP net income consists of GAAP net income/(loss), as
reported, and adds back acquisition-related deferred revenue
adjustments; acquisition-related amortization; stock-based
compensation expense; restructuring and other costs; non-cash
charges to interest expense and other; impairment charges and
equity in net earnings of unconsolidated investments. Non-GAAP net
income includes a GAAP to non-GAAP tax rate alignment adjustment.
Non-GAAP net income also includes results from businesses reported
as discontinued operations.
- Non-GAAP net income attributable to Allscripts Healthcare
Solutions, Inc. is a non-GAAP measure and consists of non-GAAP net
income, as described above, with an adjustment to reduce non-GAAP
net income for the percentage of non-controlling interest outside
Allscripts ownership position. Reconciliations to GAAP net
income/(loss) attributable to Allscripts Healthcare Solutions, Inc.
are found in Table 4 within this press release.
- Non-GAAP diluted earnings per share consist of non-GAAP net
income, as defined above, divided by weighted shares outstanding –
diluted during the applicable period.
- Free cash flow consists of GAAP cash flows provided by
operating activities in the applicable period, net of capital
expenditures and capitalized software costs, including those
incurred by businesses presented as discontinued operations.
Acquisition-Related Deferred Revenue Adjustments.
Deferred revenue adjustments include acquisition-related deferred
revenue adjustments, which reflect the fair value adjustments to
deferred revenue acquired in a business acquisition. The fair value
of acquired deferred revenue represents an amount equivalent to the
estimated cost plus an appropriate profit margin, to perform
services related to the acquiree's software and product support,
which assumes a legal obligation to do so, based on the deferred
revenue balances as of the acquisition date. Allscripts adds back
acquisition-related deferred revenue adjustments for its non-GAAP
financial measures because it believes the inclusion of this amount
directly correlates to the underlying performance of Allscripts
operations.
Acquisition-Related Amortization. Acquisition-related
amortization expense is a non-cash expense arising primarily from
the acquisition of intangible assets in connection with
acquisitions or investments. Allscripts excludes
acquisition-related amortization expense from non-GAAP gross
profit, non-GAAP operating income, and non-GAAP net income because
it believes (i) the amount of such expenses in any specific period
may not directly correlate to the underlying performance of
Allscripts business operations and (ii) such expenses can vary
significantly between periods because of new acquisitions and full
amortization of previously acquired intangible assets. Investors
should note that the use of these intangible assets contributed to
revenue in the periods presented and will contribute to future
revenue generation, and the related amortization expense will recur
in future periods.
Stock-Based Compensation Expense. Stock-based
compensation expense is a non-cash expense arising from the grant
of stock-based awards. Allscripts excludes stock-based compensation
expense from non-GAAP gross profit, non-GAAP operating income,
non-GAAP net income and Adjusted EBITDA because it believes (i) the
amount of such expenses in any specific period may not directly
correlate to the underlying performance of Allscripts business
operations and (ii) such expenses can vary significantly between
periods as a result of the timing and valuation of grants of new
stock-based awards, including grants in connection with
acquisitions. Investors should note that stock-based compensation
is a key incentive offered to employees whose efforts contributed
to the operating results in the periods presented and are expected
to contribute to operating results in future periods, and such
expense will recur in future periods.
Impairments. Impairments reflect non-cash charges related
to the retirement of hosting assets, the abandonment of a lease,
our decision to discontinue several software development projects
and the impairment of several intangible assets.
Restructuring and Other Costs. Restructuring and other
costs relate to certain legal proceedings and investigations,
consulting, severance, incentive compensation and other charges
incurred in connection with activities that are considered not
reflective of our core business.
Allscripts excludes restructuring and other costs, in whole or
in part, from non-GAAP gross profit, non-GAAP operating income,
non-GAAP net income and Adjusted EBITDA because it believes (i) the
amount of such expenses in any specific period may not directly
correlate to the underlying performance of Allscripts business
operations and (ii) such expenses can vary significantly between
periods.
Non-Cash Charges to Interest Expense and Other. Non-cash
charges to interest expense include the amortization of the fair
value of the conversion option embedded in the 1.25 percent Cash
Convertible Notes and 0.875 percent Convertible Notes issued by
Allscripts during the second quarter of 2013 and fourth quarter of
2019, respectively.
Equity in Net loss (income) of Unconsolidated
Investments. Equity in net loss (income) of unconsolidated
investments represents Allscripts share of the equity earnings of
our investments in third parties accounted for under the equity
method, including the amortization of cost basis adjustments.
Tax Rate Alignment. Tax rate alignment aligns the
applicable period’s effective tax rate to the expected annual
non-GAAP effective tax rate.
Results from Businesses Reported as Discontinued
Operations. Results from businesses reported as discontinued
operations reflect results from EPSi and CarePort Health which were
both divested in the fourth quarter of 2020. These results are
added back to GAAP results to provide more insight into how the
company performed while these businesses were owned.
Management also believes that non-GAAP revenue, gross profit,
gross margin, income from operations, effective income tax rate,
net income, diluted earnings per share, Adjusted EBITDA, Adjusted
EBITDA margin and free cash flow provide useful supplemental
information to management and investors regarding the underlying
performance of Allscripts business operations. Acquisition
accounting adjustments and restructuring and other costs made in
accordance with GAAP can make it difficult to make meaningful
comparisons of the underlying operations of the business without
considering the non-GAAP adjustments provided and discussed
herein.
Management also uses this information internally for forecasting
and budgeting, as it believes that these measures are indicative of
core operating results. In addition, management may use non-GAAP
gross profit, operating income, net income, diluted earnings per
share, Adjusted EBITDA and/or Adjusted EBITDA margin to measure
achievement under Allscripts stock and cash incentive compensation
plans. Note, however, that non-GAAP gross profit, operating income,
net income, diluted earnings per share, Adjusted EBITDA and
Adjusted EBITDA margin are performance measures only, and they do
not provide any measure of cash flow or liquidity. Allscripts
considers free cash flow to be a liquidity measure that provides
useful information to management and investors about the amount of
cash generated by the business after capital expenditures and
capitalized software costs. Free cash flow provides management and
investors a valuable measure to determine the quantity of capital
generated that can be deployed to create additional shareholder
value by a variety of means. Non-GAAP financial measures are not in
accordance with, or an alternative for, measures of financial
performance prepared in accordance with GAAP and may be different
from non-GAAP measures used by other companies. Non-GAAP measures
have limitations in that they do not reflect all of the amounts
associated with Allscripts results of operations as determined in
accordance with GAAP. Investors and potential investors are
encouraged to review the definitions and reconciliations of
non-GAAP financial measures with GAAP financial measures contained
within the attached condensed consolidated financial
statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210225006161/en/
Investors: Stephen Shulstein 312-386-6735
stephen.shulstein@allscripts.com
Media: Concetta Rasiarmos
312-447-2466 concetta.rasiarmos@allscripts.com
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