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10-Q

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


☐	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.

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.

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

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

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.

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.

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.

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	)