Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. | mdrx-8ka_20201012.htm |
Exhibit 99.1
Allscripts Healthcare Solutions, Inc.
Summary of Unaudited Pro Forma Financial Information
(Dollars in thousands, except per share amounts)
Overview
On October 15, 2020, Allscripts Healthcare Solutions, Inc. (the “Company”), Allscripts Healthcare, LLC and Allscripts Software, LLC, (collectively, the “EPSi Sellers”) completed the previously-announced divestiture of the EPSi Sellers’ business providing budgeting, long-range planning, cost accounting and financial decision support solutions, software and services for healthcare organizations, commonly referred to as “EPSi” (including the RealCost Platform) (the “EPSi Business”) to Strata Decision Technology LLC, an Illinois limited liability company (“Strata”), pursuant to an Asset Purchase Agreement, dated July 30, 2020, for a purchase price of $365,000,000 (the “EPSi Divestiture”). The EPSi Divestiture was structured as the sale of assets primarily related to the EPSi Business (and the transfer of certain liabilities in connection therewith) by the EPSi Sellers to Strata.
Basis of Presentation
The unaudited pro forma consolidated balance sheet as of September 30, 2020 provides the financial position of the Company giving effect to the disposition of the EPSi business. The unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2020 and the year ended December 31, 2019 have been prepared to show the operating results of the Company giving effect to the disposition of EPSi as if the transaction had occurred on January 1, 2019.
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 October 30, 2020 and the audited consolidated financial statements for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2020.
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 financial performance and financial position would have been without the consolidation of EPSi for the periods presented. Actual results may differ significantly from those reflected here in the unaudited pro forma consolidated financial statements for various reasons, including but not limited to, the differences between the assumptions used to prepare the unaudited pro forma condensed consolidated financial statements and actual results had the transaction actually occurred on January 1, 2019.
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2020
|
(In thousands, except per share amounts) |
|
Allscripts Historical |
|
|
Sale of EPSi |
|
|
|
|
Pro Forma |
|
|||
|
ASSETS |
|
|
|
|
|
|
|
|
|
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Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
218,701 |
|
|
$ |
297,767 |
|
|
(A) |
|
$ |
516,468 |
|
|
Restricted cash |
|
|
6,209 |
|
|
|
0 |
|
|
|
|
|
6,209 |
|
|
Accounts receivable, net of allowance of $37,025 and $23,879 as of September 30, 2020 and December 31, 2019, respectively |
|
|
381,888 |
|
|
|
0 |
|
|
|
|
|
381,888 |
|
|
Contract assets, net of allowance of $1,068 and $0 as of September 30, 2020 and December 31, 2019, respectively |
|
|
101,333 |
|
|
|
0 |
|
|
|
|
|
101,333 |
|
|
Prepaid expenses and other current assets |
|
|
135,869 |
|
|
|
0 |
|
|
|
|
|
135,869 |
|
|
Assets held for sale |
|
|
104,782 |
|
|
|
(104,782 |
) |
|
|
|
|
0 |
|
|
Total current assets |
|
|
948,782 |
|
|
|
192,985 |
|
|
|
|
|
1,141,767 |
|
|
Fixed assets, net |
|
|
70,027 |
|
|
|
0 |
|
|
|
|
|
70,027 |
|
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Software development costs, net |
|
|
241,656 |
|
|
|
0 |
|
|
|
|
|
241,656 |
|
|
Intangible assets, net |
|
|
329,011 |
|
|
|
0 |
|
|
|
|
|
329,011 |
|
|
Goodwill |
|
|
1,287,197 |
|
|
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0 |
|
|
|
|
|
1,287,197 |
|
|
Deferred taxes, net |
|
|
5,881 |
|
|
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0 |
|
|
|
|
|
5,881 |
|
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Contract assets - long-term, net of allowance of $4,273 and $0 as of September 30, 2020 and December 31, 2019, respectively |
|
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42,805 |
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0 |
|
|
|
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42,805 |
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Right-of-use assets - operating leases |
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102,217 |
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0 |
|
|
|
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102,217 |
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Other assets |
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118,689 |
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0 |
|
|
|
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|
118,689 |
|
|
Total assets |
|
$ |
3,146,265 |
|
|
$ |
192,985 |
|
|
|
|
$ |
3,339,250 |
|
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (CONTINUED)
AS OF SEPTEMBER 30, 2020
|
(In thousands, except per share amounts) |
|
Allscripts Historical |
|
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Sale of EPSi |
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|
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Pro Forma |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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|
|
|
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|
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Accounts payable |
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$ |
53,627 |
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$ |
59,921 |
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(B) |
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$ |
113,548 |
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Accrued expenses |
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|
166,180 |
|
|
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0 |
|
|
|
|
|
166,180 |
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Accrued compensation and benefits |
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|
97,515 |
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|
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0 |
|
|
|
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|
97,515 |
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Deferred revenue |
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|
339,239 |
|
|
|
0 |
|
|
|
|
|
339,239 |
|
|
Current maturities of long-term debt |
|
|
48,293 |
|
|
|
(20,000 |
) |
|
(C) |
|
|
28,293 |
|
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Current operating lease liabilities |
|
|
22,317 |
|
|
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0 |
|
|
|
|
|
22,317 |
|
|
Liabilities related to assets held for sale |
|
|
17,479 |
|
|
|
(17,479 |
) |
|
|
|
|
0 |
|
|
Total current liabilities |
|
|
744,650 |
|
|
|
22,442 |
|
|
|
|
|
767,092 |
|
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Long-term debt |
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|
1,026,048 |
|
|
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0 |
|
|
|
|
|
1,026,048 |
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Deferred revenue |
|
|
11,570 |
|
|
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0 |
|
|
|
|
|
11,570 |
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Deferred taxes, net |
|
|
24,534 |
|
|
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0 |
|
|
|
|
|
24,534 |
|
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Long-term operating lease liabilities |
|
|
98,866 |
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|
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0 |
|
|
|
|
|
98,866 |
|
|
Other liabilities |
|
|
32,210 |
|
|
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0 |
|
|
|
|
|
32,210 |
|
|
Total liabilities |
|
|
1,937,878 |
|
|
|
22,442 |
|
|
|
|
|
1,960,320 |
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Commitments and contingencies |
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|
|
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Stockholders’ equity: |
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Preferred stock: $0.01 par value, 1,000 shares authorized, no shares issued and outstanding as of September 30, 2020 and December 31, 2019 |
|
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0 |
|
|
|
0 |
|
|
|
|
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0 |
|
|
Common stock: $0.01 par value, 349,000 shares authorized as of September 30, 2020 and December 31, 2019; 274,471 and 157,978 shares issued and outstanding as of September 30, 2020, respectively; 272,609 and 162,475 shares issued and outstanding as of December 31, 2019, respectively |
|
|
2,744 |
|
|
|
0 |
|
|
|
|
|
2,744 |
|
|
Treasury stock: at cost, 116,493 and 110,134 shares as of September 30, 2020 and December 31, 2019, respectively |
|
|
(625,246 |
) |
|
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0 |
|
|
|
|
|
(625,246 |
) |
|
Additional paid-in capital |
|
|
1,929,396 |
|
|
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0 |
|
|
|
|
|
1,929,396 |
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|
Accumulated deficit |
|
|
(94,706 |
) |
|
|
170,543 |
|
|
(D) |
|
|
75,837 |
|
|
Accumulated other comprehensive loss |
|
|
(3,801 |
) |
|
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0 |
|
|
|
|
|
(3,801 |
) |
|
Total stockholders’ equity |
|
|
1,208,387 |
|
|
|
170,543 |
|
|
|
|
|
1,378,930 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
3,146,265 |
|
|
$ |
192,985 |
|
|
|
|
$ |
3,339,250 |
|
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020
|
(In thousands, except per share amounts) |
|
Allscripts Historical |
|
|
EPSi Historical |
|
|
Pro Forma |
|
|||
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Revenue: |
|
|
|
|
|
|
|
|
|
|
|
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Software delivery, support and maintenance |
|
$ |
770,180 |
|
|
$ |
(24,591 |
) |
|
$ |
745,589 |
|
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Client services |
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|
454,786 |
|
|
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(8,786 |
) |
|
|
446,000 |
|
|
Total revenue |
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|
1,224,966 |
|
|
|
(33,377 |
) |
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|
1,191,589 |
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Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
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Software delivery, support and maintenance |
|
|
225,879 |
|
|
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(3,189 |
) |
|
|
222,690 |
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Client services |
|
|
420,185 |
|
|
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(8,667 |
) |
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|
411,518 |
|
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Amortization of software development and acquisition-related assets |
|
|
95,860 |
|
|
|
(4,366 |
) |
|
|
91,494 |
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Total cost of revenue |
|
|
741,924 |
|
|
|
(16,222 |
) |
|
|
725,702 |
|
|
Gross profit |
|
|
483,042 |
|
|
|
(17,155 |
) |
|
|
465,887 |
|
|
Selling, general and administrative expenses |
|
|
309,139 |
|
|
|
(4,761 |
) |
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|
304,378 |
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Research and development |
|
|
158,913 |
|
|
|
(3,314 |
) |
|
|
155,599 |
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Asset impairment charges |
|
|
210 |
|
|
|
0 |
|
|
|
210 |
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Amortization of intangible and acquisition-related assets |
|
|
19,347 |
|
|
|
0 |
|
|
|
19,347 |
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Loss from operations |
|
|
(4,567 |
) |
|
|
(9,080 |
) |
|
|
(13,647 |
) |
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Interest expense |
|
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(31,280 |
) |
|
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0 |
|
|
|
(31,280 |
) |
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Other income, net |
|
|
45 |
|
|
|
0 |
|
|
|
45 |
|
|
Impairment of long-term investments |
|
|
(1,575 |
) |
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|
0 |
|
|
|
(1,575 |
) |
|
Equity in net income of unconsolidated investments |
|
|
17,417 |
|
|
|
0 |
|
|
|
17,417 |
|
|
Loss before income taxes |
|
|
(19,960 |
) |
|
|
(9,080 |
) |
|
|
(29,040 |
) |
|
Income tax provision |
|
|
(7,457 |
) |
|
|
2,361 |
|
|
|
(5,096 |
) |
|
Net loss |
|
|
(27,417 |
) |
|
|
(6,719 |
) |
|
|
(34,136 |
) |
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Net loss attributable to non-controlling interests |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
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Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders |
|
$ |
(27,417 |
) |
|
$ |
(6,719 |
) |
|
$ |
(34,136 |
) |
|
Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders per share - Basic |
|
$ |
(0.17 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.21 |
) |
|
Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders per share - Diluted |
|
$ |
(0.17 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.21 |
) |
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2019
|
(In thousands, except per share amounts) |
|
Allscripts Historical |
|
|
EPSi Historical |
|
|
Pro Forma |
|
|||
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Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
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Software delivery, support and maintenance |
|
$ |
1,126,486 |
|
|
$ |
(35,551 |
) |
|
$ |
1,090,935 |
|
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Client services |
|
|
645,191 |
|
|
|
(10,774 |
) |
|
|
634,417 |
|
|
Total revenue |
|
|
1,771,677 |
|
|
|
(46,325 |
) |
|
|
1,725,352 |
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Software delivery, support and maintenance |
|
|
358,946 |
|
|
|
(9,409 |
) |
|
|
349,537 |
|
|
Client services |
|
|
583,111 |
|
|
|
(10,557 |
) |
|
|
572,554 |
|
|
Amortization of software development and acquisition-related assets |
|
|
116,040 |
|
|
|
0 |
|
|
|
116,040 |
|
|
Total cost of revenue |
|
|
1,058,097 |
|
|
|
(19,966 |
) |
|
|
1,038,131 |
|
|
Gross profit |
|
|
713,580 |
|
|
|
(26,359 |
) |
|
|
687,221 |
|
|
Selling, general and administrative expenses |
|
|
419,774 |
|
|
|
(6,155 |
) |
|
|
413,619 |
|
|
Research and development |
|
|
254,509 |
|
|
|
(4,185 |
) |
|
|
250,324 |
|
|
Asset impairment charges |
|
|
10,837 |
|
|
|
0 |
|
|
|
10,837 |
|
|
Goodwill impairment charge |
|
|
25,700 |
|
|
|
0 |
|
|
|
25,700 |
|
|
Amortization of intangible and acquisition-related assets |
|
|
27,216 |
|
|
|
0 |
|
|
|
27,216 |
|
|
Loss from operations |
|
|
(24,456 |
) |
|
|
(16,019 |
) |
|
|
(40,475 |
) |
|
Interest expense |
|
|
(43,172 |
) |
|
|
0 |
|
|
|
(43,172 |
) |
|
Other loss, net |
|
|
(138,902 |
) |
|
|
0 |
|
|
|
(138,902 |
) |
|
Impairment of long-term investments |
|
|
(651 |
) |
|
|
0 |
|
|
|
(651 |
) |
|
Equity in net income of unconsolidated investments |
|
|
665 |
|
|
|
0 |
|
|
|
665 |
|
|
Loss before income taxes |
|
|
(206,516 |
) |
|
|
(16,019 |
) |
|
|
(222,535 |
) |
|
Income tax benefit |
|
|
23,914 |
|
|
|
4,165 |
|
|
|
28,079 |
|
|
Net loss |
|
|
(182,602 |
) |
|
|
(11,854 |
) |
|
|
(194,456 |
) |
|
Net loss attributable to non-controlling interests |
|
|
424 |
|
|
|
0 |
|
|
|
424 |
|
|
Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders |
|
$ |
(182,178 |
) |
|
$ |
(11,854 |
) |
|
$ |
(194,032 |
) |
|
Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders per share - Basic |
|
$ |
(1.10 |
) |
|
$ |
(0.07 |
) |
|
$ |
(1.17 |
) |
|
Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders per share - Diluted |
|
$ |
(1.10 |
) |
|
$ |
(0.07 |
) |
|
$ |
(1.17 |
) |
|
The Company's Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2020, the Unaudited Pro Forma Consolidated Statement of Operations for the Nine Months Ended September 30, 2020 and the Year Ended December 31, 2019 include the following: |
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(A) |
Proceeds received, net of transaction expenses paid out at closing and debt repayment. |
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(B) |
Taxes payable on gain, assuming a blended federal and state statutory rate of 26%. |
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(C) |
Reduction of debt for repayment upon deal close as required by covenants. |
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(D) |
Gain on transaction (net of transaction fees and expenses). |
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