mdrx-8k_20181231.htm

 

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): December 31, 2018

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-35547

36-4392754

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

222 Merchandise Mart Plaza, Suite 2024,

Chicago, Illinois 60654

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (800) 334-8534

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))

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.  

 

 

 

1


Item 2.01Completion of Acquisition or Disposition of Assets

On December 31, 2018, Allscripts Healthcare, LLC, a North Carolina limited liability company (“Healthcare LLC”) and wholly-owned subsidiary of Allscripts Healthcare Solutions, Inc., a Delaware corporation (“Allscripts”), and Allscripts Next, LLC, a Delaware limited liability company and wholly-owned subsidiary of Healthcare LLC (“Next LLC” and, together with Healthcare LLC, the “Seller”), completed the previously announced transactions contemplated by that certain Unit Purchase Agreement (the “Purchase Agreement”), dated as of December 7, 2018, by and among Seller, ACP Accelerate I LLC, a Delaware limited liability company, ACP Accelerate II LLC, a Delaware limited liability company, TA XII-A, L.P., a Delaware limited partnership, TA XII-B, L.P. a Delaware limited partnership, TA Investors XII L.P., a Delaware limited partnership, the California State Teachers’ Retirement System, White Plaza Group Trust, Performance EFFEM PE Fund, L.P.: Series 2018, a Delaware limited partnership, GI Netsmart Holdings LLC, a Delaware limited liability company, Pacific Opportunity LP, a Delaware limited partnership, Pacific Opportunity II LP, a Delaware limited partnership, and Bay Opportunities LP, a Delaware limited partnership, (collectively, the “Purchasers”), and, solely for the limited purposes set forth therein, Allscripts, pursuant to which the Seller sold to the Purchasers, severally and upon the terms and conditions of the Purchase Agreement, all of the Class A Common Units (the “Units”) of Netsmart LLC, a Delaware limited liability company (the “Company”), held by it (the “Sale”) in exchange for $566,610,567, plus up to $8,389,433 in the event the Company’s Net Debt Amount is less than the Target Net Debt Amount (each as defined in the Purchase Agreement) as of the end of the day on December 31, 2018 (as determined following the closing pursuant to the terms of the Purchase Agreement).

Allscripts’ unaudited pro forma consolidated financial information giving effect to the Sale is filed as Exhibit 99.1hereto.

The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, a copy of which is attached as Exhibit 2.1 to our Form 8-K filed with the Securities and Exchange Commission on December 11, 2018, which is incorporated herein by reference.

Item 9.01.Financial Statements and Exhibits.

(b)Pro forma financial information.

Allscripts’ unaudited pro forma consolidated financial information giving effect to the Sale is filed as Exhibit 99.1 hereto.

(d)Exhibits:

 

 

 

Exhibit No.

 

Description

 

 

 

 

 

2.1

 

Unit Purchase Agreement, dated as of December 7, 2018, by and among Allscripts Healthcare, LLC, Allscripts Next, LLC, ACP Accelerate I LLC, ACP Accelerate II LLC, TA XII-A, L.P., TA XII-B, L.P., TA Investors XII L.P., GI Netsmart Holdings LLC, Pacific Opportunity LP, Pacific Opportunity II LP, Bay Opportunities LP, and, solely for the limited purposes set forth therein, Allscripts Healthcare Solutions, Inc. (filed as Exhibit 2.1 to the Current Report on Form 8-K filed on December 11, 2018 and incorporated herein by reference).

 

 

 

 

 

99.1

 

Unaudited pro forma consolidated financial information.

 

 

 

 

 

2


SIGNATURE

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.

 

 

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

Date:  January 7, 2019

 

 

 

 

 

 

By:

 

/s/ Dennis M. Olis

 

 

 

 

Dennis M. Olis

Chief Financial Officer

 

 

3

mdrx-ex991_7.htm

Exhibit 99.1

Allscripts Healthcare Solutions, Inc.

Summary of Unaudited Pro Forma Financial Information

(Dollars in thousands, except per share amounts)

Overview

On December 31, 2018, Allscripts Healthcare Solutions, Inc. (“the Company”) sold all of the Class A Common Units of Netsmart LLC,  Delaware limited liability company (“Netsmart”) held by several of the Company’s wholly-owned subsidiaries in exchange for $566.6 million plus up to $8.4 million in the event Netsmart’s Net Debt Amount is less than the Target Debt Amount as defined by in the Unit Purchase Agreement as of the end of the day on December 31, 2018 (as determined following the closing pursuant to the terms of the Unit Purchase Agreement).

Basis of Presentation

The unaudited pro forma consolidated balance sheet as of September 30, 2018 has been prepared to give effect to the elimination of Netsmart’s assets, liabilities and equity balances as a result of the disposition of Netsmart as if it had occurred on September 30, 2018. The unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2018 and the years ended December 31, 2017 and 2016 have been prepared to give effect to the elimination of revenues and costs as a result of the disposition of Netsmart as if it had occurred on January 1, 2017.

The unaudited financial information for the Company was derived from, and should be read in conjunction with, the Company’s unaudited interim consolidated financial statements included in its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on November 2, 2018 and the audited consolidated financial statements for the years ended December 31, 2017 and 2016 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2018.

The pro forma adjustments are described in the notes to the unaudited pro forma financial information. The unaudited pro forma financial information included herein is for informational purposes only and is not necessarily indicative of what the Company's historical financial performance and financial position would have been without the consolidation of Netsmart. In addition, the unaudited pro forma financial information is not necessarily indicative of the Company’s results to be expected in the future.


 

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2018

(In thousands, except per share amounts)

 

Allscripts

Historical (A)

 

 

Netsmart

Historical

 

 

 

Sale of Netsmart

 

 

 

Pro Forma

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

111,775

 

 

$

(14,050

)

 

 

$

566,611

 

(D)

 

$

664,336

 

 

Restricted cash

 

 

8,016

 

 

 

(3,717

)

 

 

 

 

 

 

 

 

4,299

 

 

Accounts receivable, net of allowance of $61,926

   as of September 30, 2018

 

 

520,381

 

 

 

(71,624

)

(E)

 

 

 

 

 

 

 

448,757

 

 

Contract assets

 

 

71,745

 

 

 

(10,887

)

 

 

 

 

 

 

 

 

60,858

 

 

Prepaid expenses and other current assets

 

 

131,826

 

 

 

(17,170

)

 

 

 

 

 

 

 

 

114,656

 

 

Total current assets

 

 

843,743

 

 

 

(117,448

)

 

 

 

566,611

 

 

 

 

1,292,906

 

 

Fixed assets, net

 

 

160,225

 

 

 

(30,715

)

 

 

 

 

 

 

 

 

129,510

 

 

Software development costs, net

 

 

239,359

 

 

 

(39,510

)

 

 

 

 

 

 

 

 

199,849

 

 

Intangible assets, net

 

 

873,635

 

 

 

(420,999

)

 

 

 

 

 

 

 

 

452,636

 

 

Goodwill

 

 

2,207,967

 

 

 

(814,666

)

 

 

 

 

 

 

 

 

1,393,301

 

 

Deferred taxes, net

 

 

5,566

 

 

 

0

 

 

 

 

 

 

 

 

 

5,566

 

 

Contract assets - long-term

 

 

52,555

 

 

 

0

 

 

 

 

 

 

 

 

 

52,555

 

 

Other assets

 

 

135,030

 

 

 

(1,958

)

 

 

 

 

 

 

 

 

133,072

 

 

Total assets

 

$

4,518,080

 

 

$

(1,425,296

)

 

 

$

566,611

 

 

 

$

3,659,395

 

 



 

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS (CONTINUED)

AS OF SEPTEMBER 30, 2018

(In thousands, except per share amounts)

 

Allscripts

Historical (A)

 

 

Netsmart

Historical

 

 

 

Sale of Netsmart

 

 

 

Pro Forma

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

126,709

 

 

$

(12,910

)

 

 

$

95,228

 

(F)

 

$

209,027

 

 

Accrued expenses

 

 

120,326

 

 

 

(12,436

)

 

 

 

 

 

 

 

 

107,890

 

 

Accrued compensation and benefits

 

 

107,799

 

 

 

(20,923

)

 

 

 

 

 

 

 

 

86,876

 

 

Deferred revenue

 

 

506,568

 

 

 

(68,775

)

 

 

 

 

 

 

 

 

437,793

 

 

Current maturities of long-term debt

 

 

19,516

 

 

 

0

 

 

 

 

 

 

 

 

 

19,516

 

 

Current maturities of non-recourse long-term

   debt - Netsmart

 

 

4,257

 

 

 

(4,257

)

 

 

 

 

 

 

 

 

0

 

 

Current maturities of capital lease obligations

 

 

9,190

 

 

 

(8,118

)

 

 

 

 

 

 

 

 

1,072

 

 

Total current liabilities

 

 

894,365

 

 

 

(127,419

)

 

 

 

95,228

 

 

 

 

862,174

 

 

Long-term debt

 

 

1,002,026

 

 

 

0

 

 

 

 

 

 

 

 

 

1,002,026

 

 

Non-recourse long-term debt - Netsmart

 

 

788,489

 

 

 

(788,489

)

 

 

 

 

 

 

 

 

0

 

 

Long-term capital lease obligations

 

 

4,606

 

 

 

(2,814

)

 

 

 

 

 

 

 

 

1,792

 

 

Deferred revenue

 

 

21,804

 

 

 

(4,977

)

 

 

 

 

 

 

 

 

16,827

 

 

Deferred taxes, net

 

 

124,294

 

 

 

(62,668

)

 

 

 

 

 

 

 

 

61,626

 

 

Other liabilities

 

 

95,575

 

 

 

(4,089

)

 

 

 

 

 

 

 

 

91,486

 

 

Liabilities attributable to discontinued operations

 

 

2,261

 

 

 

0

 

 

 

 

 

 

 

 

 

2,261

 

 

Total liabilities

 

 

2,933,420

 

 

 

(990,456

)

 

 

 

95,228

 

 

 

 

2,038,192

 

 

Redeemable convertible non-controlling interest -

   Netsmart

 

 

467,981

 

 

 

(467,981

)

 

 

 

 

 

 

 

 

0

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock: $0.01 par value, 1,000 shares

   authorized, no shares issued and outstanding

   as of September 30, 2018

 

 

0

 

 

 

0

 

 

 

 

 

 

 

 

 

0

 

 

Common stock: $0.01 par value, 349,000 shares

   authorized as of September 30, 2018; 270,506 and

   174,707 shares issued and outstanding as of

   September 30, 2018, respectively

 

 

2,708

 

 

 

(102,084

)

 

 

 

102,084

 

 

 

 

2,708

 

 

Treasury stock: at cost, 96,099 as of September 30, 2018

 

 

(423,521

)

 

 

0

 

 

 

 

 

 

 

 

 

(423,521

)

 

Additional paid-in capital

 

 

1,765,103

 

 

 

108,832

 

 

 

 

 

 

 

 

 

1,873,935

 

 

Accumulated (deficit) retained earnings

 

 

(251,363

)

 

 

26,290

 

 

 

 

369,299

 

(D)

 

 

144,226

 

 

Accumulated other comprehensive loss

 

 

(5,452

)

 

 

0

 

 

 

 

 

 

 

 

 

(5,452

)

 

Total Allscripts Healthcare Solutions, Inc.'s

   stockholders' equity

 

 

1,087,475

 

 

 

33,038

 

 

 

 

471,383

 

 

 

 

1,591,896

 

 

Non-controlling interest

 

 

29,204

 

 

 

103

 

 

 

 

 

 

 

 

 

29,307

 

 

Total stockholders’ equity

 

 

1,116,679

 

 

 

33,141

 

 

 

 

471,383

 

 

 

 

1,621,203

 

 

Total liabilities and stockholders’ equity

 

$

4,518,080

 

 

 

(1,425,296

)

 

 

$

566,611

 

 

 

$

3,659,395

 

 



 

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

 

 

(In thousands, except per share amounts)

 

Allscripts Historical (B)

 

 

Netsmart

Historical

 

 

Intercompany Activity (C)

 

 

 

Pro Forma

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software delivery, support and maintenance

 

$

996,569

 

 

$

(157,479

)

 

$

85

 

 

 

$

839,175

 

 

Client services

 

 

565,213

 

 

 

(103,455

)

 

 

6,682

 

 

 

 

468,440

 

 

Total revenue

 

 

1,561,782

 

 

 

(260,934

)

 

 

6,767

 

 

 

 

1,307,615

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software delivery, support and maintenance

 

 

328,534

 

 

 

(45,213

)

 

 

103

 

 

 

 

283,424

 

 

Client services

 

 

480,231

 

 

 

(75,107

)

 

 

6,666

 

 

 

 

411,790

 

 

Amortization of software development and

   acquisition-related assets

 

 

101,008

 

 

 

(24,991

)

 

 

0

 

 

 

 

76,017

 

 

Total cost of revenue

 

 

909,773

 

 

 

(145,311

)

 

 

6,769

 

 

 

 

771,231

 

 

Gross profit

 

 

652,009

 

 

 

(115,623

)

 

 

(2

)

 

 

 

536,384

 

 

Selling, general and administrative expenses

 

 

425,365

 

 

 

(74,390

)

 

 

0

 

 

 

 

350,975

 

 

Research and development

 

 

220,066

 

 

 

(17,845

)

 

 

93

 

 

 

 

202,314

 

 

Asset impairment charges

 

 

30,075

 

 

 

0

 

 

 

0

 

 

 

 

30,075

 

 

Amortization of intangible and acquisition-related assets

 

 

37,210

 

 

 

(17,665

)

 

 

84

 

 

 

 

19,629

 

 

Loss from operations

 

 

(60,707

)

 

 

(5,723

)

 

 

(179

)

 

 

 

(66,609

)

 

Interest expense

 

 

(80,843

)

 

 

43,917

 

 

 

0

 

 

 

 

(36,926

)

 

Other loss, net

 

 

(590

)

 

 

7

 

 

 

0

 

 

 

 

(583

)

 

Gain on sale of businesses, net

 

 

172,258

 

 

 

0

 

 

 

0

 

 

 

 

172,258

 

 

Impairment of long-term investments

 

 

(15,487

)

 

 

0

 

 

 

0

 

 

 

 

(15,487

)

 

Equity in net income of unconsolidated investments

 

 

529

 

 

 

0

 

 

 

0

 

 

 

 

529

 

 

Income from continuing operations before income taxes

 

 

15,160

 

 

 

38,201

 

 

 

(179

)

 

 

 

53,182

 

 

Income tax benefit (provision)

 

 

3,020

 

 

 

(8,938

)

 

 

0

 

 

 

 

(5,918

)

 

Income from continuing operations, net of tax

 

 

18,180

 

 

 

29,263

 

 

 

(179

)

 

 

 

47,264

 

 

Income from discontinued operations, net of tax

 

 

3,731

 

 

 

0

 

 

 

0

 

 

 

 

3,731

 

 

Net income

 

 

21,911

 

 

 

29,263

 

 

 

(179

)

 

 

 

50,995

 

 

Less: Net loss attributable to non-controlling interests

 

 

3,494

 

 

 

0

 

 

 

(149

)

 

 

 

3,345

 

 

Less: Accretion of redemption preference on redeemable

   convertible non-controlling interest - Netsmart

 

 

(36,446

)

 

 

36,446

 

 

 

0

 

 

 

 

0

 

 

Net (loss) income attributable to Allscripts Healthcare

   Solutions, Inc. stockholders

 

$

(11,041

)

 

$

65,709

 

 

$

(328

)

 

 

$

54,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to Allscripts Healthcare

   Solutions, Inc. stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.09

)

 

$

0.37

 

 

$

0.00

 

 

 

$

0.28

 

 

Discontinued operations

 

 

0.03

 

 

 

0.00

 

 

 

0.00

 

 

 

 

0.03

 

 

Net (loss) income attributable to Allscripts Healthcare

   Solutions, Inc. stockholders per share

 

$

(0.06

)

 

$

0.37

 

 

$

0.00

 

 

 

$

0.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.09

)

 

$

0.37

 

 

$

0.00

 

 

 

$

0.28

 

 

Discontinued operations

 

 

0.03

 

 

 

0.00

 

 

 

0.00

 

 

 

 

0.03

 

 

Net (loss) income attributable to Allscripts Healthcare

   Solutions, Inc. stockholders per share

 

$

(0.06

)

 

$

0.37

 

 

$

0.00

 

 

 

$

0.31

 

 



 

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2017

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

 

 

(In thousands, except per share amounts)

 

Allscripts Historical (B)

 

 

Netsmart

Historical

 

 

Intercompany Activity (C)

 

 

 

Pro Forma

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software delivery, support and maintenance

 

$

1,156,391

 

 

$

(199,194

)

 

$

990

 

 

 

$

958,187

 

 

Client services

 

 

649,951

 

 

 

(119,880

)

 

 

9,450

 

 

 

 

539,521

 

 

Total revenue

 

 

1,806,342

 

 

 

(319,074

)

 

 

10,440

 

 

 

$

1,497,708

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software delivery, support and maintenance

 

 

368,192

 

 

 

(51,886

)

 

 

807

 

 

 

 

317,113

 

 

Client services

 

 

541,388

 

 

 

(87,762

)

 

 

9,445

 

 

 

 

463,071

 

 

Amortization of software development and

   acquisition-related assets

 

 

114,601

 

 

 

(29,876

)

 

 

0

 

 

 

 

84,725

 

 

Total cost of revenue

 

 

1,024,181

 

 

 

(169,524

)

 

 

10,252

 

 

 

 

864,909

 

 

Gross profit

 

 

782,161

 

 

 

(149,550

)

 

 

188

 

 

 

 

632,799

 

 

Selling, general and administrative expenses

 

 

486,271

 

 

 

(85,588

)

 

 

5

 

 

 

 

400,688

 

 

Research and development

 

 

220,219

 

 

 

(18,024

)

 

 

87

 

 

 

 

202,282

 

 

Amortization of intangible and acquisition-related assets

 

 

33,754

 

 

 

(16,465

)

 

 

56

 

 

 

 

17,345

 

 

Income from operations

 

 

41,917

 

 

 

(29,473

)

 

 

40

 

 

 

 

12,484

 

 

Interest expense

 

 

(87,479

)

 

 

49,939

 

 

 

0

 

 

 

 

(37,540

)

 

Other income, net

 

 

413

 

 

 

(925

)

 

 

0

 

 

 

 

(512

)

 

Impairment and losses on long-term investments

 

 

(165,290

)

 

 

0

 

 

 

0

 

 

 

 

(165,290

)

 

Equity in net income of unconsolidated investments

 

 

821

 

 

 

0

 

 

 

0

 

 

 

 

821

 

 

Loss from continuing operations before

   income taxes

 

 

(209,618

)

 

 

19,541

 

 

 

40

 

 

 

 

(190,037

)

 

Income tax benefit

 

 

50,767

 

 

 

(45,253

)

 

 

0

 

 

 

 

5,514

 

 

Loss from continuing operations, net of tax

 

 

(158,851

)

 

 

(25,712

)

 

 

40

 

 

 

 

(184,523

)

 

Income from discontinued operations, net of tax

 

 

4,676

 

 

 

0

 

 

 

0

 

 

 

 

4,676

 

 

Net loss

 

 

(154,175

)

 

 

(25,712

)

 

 

40

 

 

 

 

(179,847

)

 

Less: Net loss attributable to non-controlling interests

 

 

1,566

 

 

 

0

 

 

 

0

 

 

 

 

1,566

 

 

Less: Accretion of redemption preference on redeemable

   convertible non-controlling interest - Netsmart

 

 

(43,850

)

 

 

43,850

 

 

 

0

 

 

 

 

0

 

 

Net loss attributable to Allscripts Healthcare

   Solutions, Inc. stockholders

 

$

(196,459

)

 

$

18,138

 

 

$

40

 

 

 

$

(178,281

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to Allscripts Healthcare

   Solutions, Inc. stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(1.12

)

 

$

0.10

 

 

$

0.00

 

 

 

$

(1.02

)

 

Discontinued operations

 

 

0.03

 

 

 

0.00

 

 

 

0.00

 

 

 

 

0.03

 

 

Net loss attributable to Allscripts Healthcare

   Solutions, Inc. stockholders per share

 

$

(1.09

)

 

$

0.10

 

 

$

0.00

 

 

 

$

(0.99

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(1.12

)

 

$

0.10

 

 

$

0.00

 

 

 

$

(1.02

)

 

Discontinued operations

 

 

0.03

 

 

 

0.00

 

 

 

0.00

 

 

 

 

0.03

 

 

Net loss attributable to Allscripts Healthcare

   Solutions, Inc. stockholders per share

 

$

(1.09

)

 

$

0.10

 

 

$

0.00

 

 

 

$

(0.99

)

 

 



 

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

 

 

(In thousands, except per share amounts)

 

Allscripts Historical (B)

 

 

Netsmart

Historical (A)

 

 

Intercompany Activity (C)

 

 

 

Pro Forma

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software delivery, support and maintenance

 

$

1,003,618

 

 

$

(106,882

)

 

$

2,563

 

 

 

$

899,299

 

 

Client services

 

 

546,281

 

 

 

(66,479

)

 

 

6,968

 

 

 

 

486,770

 

 

Total revenue

 

 

1,549,899

 

 

 

(173,361

)

 

 

9,531

 

 

 

 

1,386,069

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software delivery, support and maintenance

 

 

331,055

 

 

 

(38,938

)

 

 

2,115

 

 

 

 

294,232

 

 

Client services

 

 

459,174

 

 

 

(46,718

)

 

 

6,867

 

 

 

 

419,323

 

 

Amortization of software development and

   acquisition-related assets

 

 

88,631

 

 

 

(17,416

)

 

 

0

 

 

 

 

71,215

 

 

Total cost of revenue

 

 

878,860

 

 

 

(103,072

)

 

 

8,982

 

 

 

 

784,770

 

 

Gross profit

 

 

671,039

 

 

 

(70,289

)

 

 

549

 

 

 

 

601,299

 

 

Selling, general and administrative expenses

 

 

392,865

 

 

 

(58,331

)

 

 

(13

)

 

 

 

334,521

 

 

Research and development

 

 

187,906

 

 

 

(9,399

)

 

 

27

 

 

 

 

178,534

 

 

Asset impairment charges

 

 

4,650

 

 

 

0

 

 

 

0

 

 

 

 

4,650

 

 

Amortization of intangible and acquisition-related assets

 

 

25,847

 

 

 

(9,971

)

 

 

8

 

 

 

 

15,884

 

 

Income from operations

 

 

59,771

 

 

 

7,412

 

 

 

527

 

 

 

 

67,710

 

 

Interest expense

 

 

(68,141

)

 

 

38,663

 

 

 

0

 

 

 

 

(29,478

)

 

Other income, net

 

 

1,087

 

 

 

(258

)

 

 

0

 

 

 

 

829

 

 

Equity in net loss of unconsolidated investments

 

 

(7,501

)

 

 

0

 

 

 

0

 

 

 

 

(7,501

)

 

Loss from continuing operations before income taxes

 

 

(14,784

)

 

 

45,817

 

 

 

527

 

 

 

 

31,560

 

 

Income tax benefit (expense)

 

 

17,814

 

 

 

(18,123

)

 

 

0

 

 

 

 

(309

)

 

Net income

 

 

3,030

 

 

 

27,694

 

 

 

527

 

 

 

 

31,251

 

 

Less: Net income attributable to non-controlling interests

 

 

(146

)

 

 

0

 

 

 

0

 

 

 

 

(146

)

 

Less: Accretion of redemption preference on redeemable

   convertible non-controlling interest - Netsmart

 

 

(28,536

)

 

 

28,536

 

 

 

0

 

 

 

 

0

 

 

Net (loss) income attributable to Allscripts Healthcare

   Solutions, Inc. stockholders

 

$

(25,652

)

 

$

56,230

 

 

$

527

 

 

 

$

31,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to Allscripts Healthcare

   Solutions, Inc. stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.14

)

 

$

0.30

 

 

$

0.00

 

 

 

$

0.16

 

 

Diluted

 

$

(0.14

)

 

$

0.30

 

 

$

0.00

 

 

 

$

0.16

 

 

 

 

 


 

 

The Company's Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2018, the Unaudited Pro Forma Consolidated Statement of Operations for the Nine Months Ended September 30, 2018 and the Years Ended December 31, 2017 and 2016 include the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(A)

As reported in the Quarterly Report on Form 10-Q filed by the Company with the SEC on November 2, 2018. Netsmart activity for the year ended December 31, 2016 includes activity from March 17, 2016 through December 31, 2016.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(B)

As reported in the Annual Report on Form 10-K filed by the Company with the SEC on February 26, 2018. During the first quarter of 2018, the Company changed the presentation of certain bundled revenue streams. Such revenue was previously included as part of software, delivery, support and maintenance revenue. Under the new presentation, such revenue is included as part of client services revenue. The revenue previously reported for the years ended December 31, 2017 and 2016 has been recast to match to the new presentation by reducing software delivery, support and maintenance and increasing client services by $18.3 and $8.7 million, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(C)

Represents intercompany transactions that would not have been eliminated if Netsmart's results were not consolidated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(D)

Represents the proceeds and gain, net of tax from the sale of Netsmart as if it had occurred on September 30, 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(E)

Netsmart's balance for allowance for doubtful accounts was $13,238 as of September 30, 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(F)

The pro forma tax rate of 20.5% differs from the blended federal and state statutory rate of 26% due to the application of valuation allowances relating to use of NOLs and tax credits.