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"The hallmarks of our FY’19 performance were: 1) significant bookings
growth and deal-size growth, 2) Best-in-
Fiscal 2019 Fourth Quarter and Year-End Highlights
As a result of the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASC 606”), the GAAP comparisons below compare fourth quarter and fiscal year 2019 results under ASC 606 to the fourth quarter and fiscal year 2018 results under the legacy revenue guidance (“ASC 605”). A reconciliation of fourth quarter and fiscal year results for fiscal 2019 from ASC 606 to ASC 605 can be found in the tables at the end of the press release.
On a GAAP basis, revenue for the fiscal 2019 fourth quarter was
On a GAAP basis, net income for the fiscal 2019 fourth quarter was
On a GAAP basis, fully diluted net income per share was
For the fiscal year ended
On a GAAP basis, net income for the fiscal year 2019 was
On a GAAP basis, fully diluted net income per share was
Fiscal 2020 Financial Outlook
The company is providing initial outlook for fiscal 2020 and expects:
-
Revenue of between
$543 million and $559 million -
Non-GAAP EPS of between
$0.86 and $0.94
Conference Call Information
NextGen Healthcare will host a conference call to discuss its fiscal
2019 fourth quarter and year-end results on
2019 Annual Shareholders' Meeting
In addition, NextGen Healthcare will hold its 2019 Annual Shareholders'
Meeting on
About
NextGen Healthcare is enabling the transformation of ambulatory care by providing a range of software, services, and analytics solutions to medical and dental group practices. The company's portfolio delivers foundational capabilities to empower physician success, enrich the patient care experience, and enable the transition to value-based healthcare. Visit www.nextgen.com for additional information.
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
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
The normalized non-GAAP tax rate applied to fiscal year 2019 was
22.0%, compared to 30.5% for fiscal year 2018, which was updated as a
result of the enactment of the new tax reform legislation on
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, net securities litigation defense costs, 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. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
|
(In thousands, except per share data) |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
| Three Months Ended March 31, | Fiscal Year Ended March 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenues: | ||||||||||||||||
| Recurring | $ | 120,151 | $ | 118,598 | $ | 473,921 | $ | 476,214 | ||||||||
| Software, hardware, and other non-recurring | 14,634 | 17,177 | 55,252 | 54,805 | ||||||||||||
| Total revenues | 134,785 | 135,775 | 529,173 | 531,019 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Recurring | 48,174 | 48,856 | 191,496 | 194,360 | ||||||||||||
| Software, hardware, and other non-recurring | 5,959 | 6,775 | 26,711 | 25,085 | ||||||||||||
| Amortization of capitalized software costs and acquired intangible assets | 7,924 | 6,346 | 28,490 | 22,090 | ||||||||||||
| Total cost of revenue | 62,057 | 61,977 | 246,697 | 241,535 | ||||||||||||
| Gross profit | 72,728 | 73,798 | 282,476 | 289,484 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 44,710 | 65,709 | 164,879 | 193,226 | ||||||||||||
| Research and development costs, net | 19,813 | 21,098 | 80,994 | 81,259 | ||||||||||||
| Amortization of acquired intangible assets | 1,028 | 1,795 | 4,344 | 7,810 | ||||||||||||
| Impairment of assets | — | 3,757 | — | 3,757 | ||||||||||||
| Restructuring costs | 640 | 481 | 640 | 611 | ||||||||||||
| Total operating expenses | 66,191 | 92,840 | 250,857 | 286,663 | ||||||||||||
| Income (loss) from operations | 6,537 | (19,042 | ) | 31,619 | 2,821 | |||||||||||
| Interest income | 103 | 19 | 216 | 55 | ||||||||||||
| Interest expense | (595 | ) | (1,073 | ) | (2,814 | ) | (3,323 | ) | ||||||||
| Other income (expense), net | (117 | ) | 85 | 267 | 37 | |||||||||||
| Income (loss) before provision for (benefit of) income taxes | 5,928 | (20,011 | ) | 29,288 | (410 | ) | ||||||||||
| Provision for (benefit of) income taxes | 2,000 | (8,964 | ) | 4,794 | (2,830 | ) | ||||||||||
| Net income (loss) | $ | 3,928 | $ | (11,047 | ) | $ | 24,494 | $ | 2,420 | |||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.06 | $ | (0.17 | ) | $ | 0.38 | $ | 0.04 | |||||||
| Diluted | $ | 0.06 | $ | (0.17 | ) | $ | 0.38 | $ | 0.04 | |||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 64,749 | 63,888 | 64,417 | 63,435 | ||||||||||||
| Diluted | 64,917 | 63,888 | 64,600 | 63,440 | ||||||||||||
| NEXTGEN HEALTHCARE, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
|
(In thousands, except per share data) |
||||||||
|
(Unaudited) |
||||||||
| March 31, 2019 | March 31, 2018 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 33,079 | $ | 28,845 | ||||
| Restricted cash and cash equivalents | 1,443 | 2,373 | ||||||
| Accounts receivable, net | 87,459 | 84,962 | ||||||
| Contract assets | 13,242 | — | ||||||
| Inventory | 120 | 180 | ||||||
| Income taxes receivable | 3,682 | 8,122 | ||||||
| Prepaid expenses and other current assets | 20,826 | 17,180 | ||||||
| Total current assets | 159,851 | 141,662 | ||||||
| Equipment and improvements, net | 21,404 | 26,795 | ||||||
| Capitalized software costs, net | 37,855 | 26,318 | ||||||
| Deferred income taxes, net | 6,194 | 9,219 | ||||||
| Contract assets, net of current | 3,747 | — | ||||||
| Intangibles, net | 52,595 | 74,091 | ||||||
| Goodwill | 218,771 | 218,875 | ||||||
| Other assets | 32,478 | 18,795 | ||||||
| Total assets | $ | 532,895 | $ | 515,755 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,432 | $ | 4,213 | ||||
| Contract liabilities | 56,009 | 54,079 | ||||||
| Accrued compensation and related benefits | 25,663 | 27,910 | ||||||
| Income taxes payable | 64 | 73 | ||||||
| Other current liabilities | 41,064 | 48,317 | ||||||
| Total current liabilities | 128,232 | 134,592 | ||||||
| Contract liabilities, net of current | — | 1,173 | ||||||
| Deferred compensation | 5,905 | 6,086 | ||||||
| Line of credit | 11,000 | 37,000 | ||||||
| Other noncurrent liabilities | 11,812 | 13,494 | ||||||
| Total liabilities | 156,949 | 192,345 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' equity: | ||||||||
| Common stock | ||||||||
| $0.01 par value; authorized 100,000 shares; issued and outstanding 64,838 and 63,995 shares at March 31, 2019 and March 31, 2018, respectively | 648 | 640 | ||||||
| Additional paid-in capital | 264,908 | 244,462 | ||||||
| Accumulated other comprehensive loss | (1,231 | ) | (400 | ) | ||||
| Retained earnings (1) | 111,621 | 78,708 | ||||||
| Total shareholders' equity | 375,946 | 323,410 | ||||||
| Total liabilities and shareholders' equity | $ | 532,895 | $ | 515,755 | ||||
|
____________________ |
||
|
(1) |
Includes cumulative effect adjustment related to the adoption of ASC 606. | |
| NEXTGEN HEALTHCARE, INC. | ||||||||||||||||
| NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
|
(In thousands, except per share data) |
||||||||||||||||
|
RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE |
||||||||||||||||
| Three Months Ended March 31, | Fiscal Year Ended March 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Income before provision for income taxes - GAAP | $ | 5,928 | $ | (20,011 | ) | $ | 29,288 | $ | (410 | ) | ||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Acquisition costs, net | 1,010 | 339 | 3,068 | 1,908 | ||||||||||||
| Amortization of acquired intangible assets | 5,316 | 6,029 | 21,496 | 23,380 | ||||||||||||
| Amortization of deferred debt issuance costs | 178 | 803 | 710 | 1,610 | ||||||||||||
| Restructuring costs | 640 | 481 | 640 | 611 | ||||||||||||
| Securities litigation defense costs and settlement, net of insurance | 202 | 19,984 | (5,205 | ) | 20,700 | |||||||||||
| Share-based compensation | 4,153 | 3,611 | 16,102 | 12,196 | ||||||||||||
| Impairment of assets | — | 3,757 | — | 3,757 | ||||||||||||
| Other non-run-rate expenses* | 1,492 | — | 5,471 | 263 | ||||||||||||
| Total adjustments to GAAP income before provision for income taxes: | 12,991 | 35,004 | 42,282 | 64,425 | ||||||||||||
| Income before provision for income taxes - Non-GAAP | 18,919 | 14,993 | 71,570 | 64,015 | ||||||||||||
| Provision for income taxes | 4,161 | 4,573 | 15,745 | 19,525 | ||||||||||||
| Net income - Non-GAAP | $ | 14,758 | $ | 10,420 | $ | 55,825 | $ | 44,490 | ||||||||
| Diluted net income per share - Non-GAAP | $ | 0.23 | $ | 0.16 | $ | 0.86 | $ | 0.70 | ||||||||
| Weighted-average shares outstanding (diluted): | 64,917 | 63,888 | 64,600 | 63,440 | ||||||||||||
|
RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE UNDER ASC 605 |
||||||||||||||||
| Income before provision for income taxes - Non-GAAP | 18,919 | 71,570 | ||||||||||||||
| Adjustments due to adoption of ASC 606 | (3,100 | ) | (8,799 | ) | ||||||||||||
| Income before provision for income taxes - Non-GAAP under ASC 605 | 15,819 | 62,771 | ||||||||||||||
| Provision for income taxes | 3,481 | 13,810 | ||||||||||||||
| Net income - Non-GAAP under ASC 605 | $ | 12,338 | $ | 48,961 | ||||||||||||
| Diluted net income per share - Non-GAAP under ASC 605 | $ | 0.19 | $ | 0.76 | ||||||||||||
| Weighted-average shares outstanding (diluted): | 64,917 | 64,600 | ||||||||||||||
|
|
||||||||||||||||
| * Other non-run-rate expenses consist primarily of severance and other employee-related costs and professional services costs not related to core operations. |
We adopted Accounting Standards Update No. 2014-09, Revenue from
Contracts with Customers: Topic 606 (“ASC 606”) and all related
amendments as of
The impact of the adoption of ASC 606 on our consolidated statements of
net income for the three months and fiscal year ended
| Three Months Ended March 31, 2019 | ||||||||||||
| As reported under | Adjustments due to | As disclosed under | ||||||||||
| ASC 606 | adoption of ASC 606 | ASC 605 | ||||||||||
| Revenues: | ||||||||||||
| Subscription services | $ | 29,884 | $ | (2,039 | ) | $ | 27,845 | |||||
| Support and maintenance | 40,242 | (1,473 | ) | 38,769 | ||||||||
| Managed services | 24,155 | 3,770 | 27,925 | |||||||||
| Electronic data interchange and data services | 25,870 | (25 | ) | 25,845 | ||||||||
| Total recurring revenues | 120,151 | 233 | 120,384 | |||||||||
| Software license and hardware | 9,109 | (662 | ) | 8,447 | ||||||||
| Other non-recurring services | 5,525 | (82 | ) | 5,443 | ||||||||
| Total software, hardware, and other non-recurring revenues | 14,634 | (744 | ) | 13,890 | ||||||||
| Total revenue | 134,785 | (511 | ) | 134,274 | ||||||||
| Total cost of revenue | 62,057 | 30 | 62,087 | |||||||||
| Gross profit | 72,728 | (541 | ) | 72,187 | ||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 44,710 | 2,559 | 47,269 | |||||||||
| Research and development costs, net | 19,813 | — | 19,813 | |||||||||
| Amortization of acquired intangibles | 1,028 | — | 1,028 | |||||||||
| Restructuring costs | 640 | — | 640 | |||||||||
| Total operating expenses | 66,191 | 2,559 | 68,750 | |||||||||
| Income from operations | 6,537 | (3,100 | ) | 3,437 | ||||||||
| Interest and other income, net | (609 | ) | — | (609 | ) | |||||||
| Income before provision for income taxes | 5,928 | (3,100 | ) | 2,828 | ||||||||
| Provision for income taxes | 2,000 | (432 | ) | 1,568 | ||||||||
| Net income | $ | 3,928 | $ | (2,668 | ) | $ | 1,260 | |||||
| Fiscal Year Ended March 31, 2019 | ||||||||||||
| As reported under | Adjustments due to | As disclosed under | ||||||||||
| ASC 606 | adoption of ASC 606 | ASC 605 | ||||||||||
| Revenues: | ||||||||||||
| Subscription services | $ | 117,502 | $ | (7,548 | ) | $ | 109,954 | |||||
| Support and maintenance | 160,798 | (5,262 | ) | 155,536 | ||||||||
| Managed services | 98,203 | 12,516 | 110,719 | |||||||||
| Electronic data interchange and data services | 97,418 | (136 | ) | 97,282 | ||||||||
| Total recurring revenues | 473,921 | (430 | ) | 473,491 | ||||||||
| Software license and hardware | 35,122 | (1,830 | ) | 33,292 | ||||||||
| Other non-recurring services | 20,130 | 382 | 20,512 | |||||||||
| Total software, hardware, and other non-recurring revenues | 55,252 | (1,448 | ) | 53,804 | ||||||||
| Total revenue | 529,173 | (1,878 | ) | 527,295 | ||||||||
| Total cost of revenue | 246,697 | 159 | 246,856 | |||||||||
| Gross profit | 282,476 | (2,037 | ) | 280,439 | ||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 164,879 | 6,762 | 171,641 | |||||||||
| Research and development costs, net | 80,994 | — | 80,994 | |||||||||
| Amortization of acquired intangibles | 4,344 | — | 4,344 | |||||||||
| Restructuring costs | 640 | — | 640 | |||||||||
| Total operating expenses | 250,857 | 6,762 | 257,619 | |||||||||
| Income from operations | 31,619 | (8,799 | ) | 22,820 | ||||||||
| Interest and other income, net | (2,331 | ) | — | (2,331 | ) | |||||||
| Income before provision for income taxes | 29,288 | (8,799 | ) | 20,489 | ||||||||
| Provision for income taxes | 4,794 | (1,982 | ) | 2,812 | ||||||||
| Net income | $ | 24,494 | $ | (6,817 | ) | $ | 17,677 | |||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190528005724/en/
Source:
Media Contact:
NextGen Healthcare
Cynthia Ragland,
(949) 255-2600 x75416
cragland@nextgen.com
or
Investor
Contact:
Westwicke Partners
Bob East or Asher Dewhurst
Westwicke
Partners
443-213-0500