Resources

Resources

nextgen-advisors

Hear from NextGen's expert advisors with insights and advice on the evolving COVID-19 pandemic and beyond.

Read Blog
covid-resources

The financial and clinical challenges you face now are evolving rapidly. Here are resources, solutions, and ideas we think will help.

Read Now

NextGen Healthcare Reports Fiscal 2023 Second Quarter Results

10/25/2022 4:05:00 PM

Raises Fiscal 2023 Financial Guidance

REMOTE-FIRST COMPANY/NEW YORK--(BUSINESS WIRE)--Oct. 25, 2022-- NextGen Healthcare, Inc. (Nasdaq: NXGN), a leading provider of innovative, cloud-based healthcare technology solutions, today announced its operating results for the fiscal second quarter ended September 30, 2022.

Fiscal 2023 Second Quarter Highlights

  • Total revenue was $159.4 million compared to $149.3 million for the same period a year ago, an increase of 7%.
  • Recurring revenue was $143.5 million compared to $135.6 million for the same period a year ago, an increase of 6%.
  • Non-recurring revenue was $15.9 million compared to $13.7 million for the same period a year ago, an increase of 17%.
  • Bookings, which reflects annual contract value, was $37.4 million and included several deals greater than $1.0 million.
  • Fully diluted net income per share was $0.20 compared to a net loss of $0.10 for the same period a year ago.
  • On a non-GAAP basis, fully diluted earnings per share was $0.25 compared to $0.29 for the same period a year ago.
  • Board authorized new share repurchase program under which the Company may repurchase up to an additional $100 million of its outstanding shares of common stock through March 2025.

“We are pleased with the team’s consistent performance and solid execution, which has resulted in exceeding our initial growth targets and increasing financial guidance for the remainder of the year,” said David Sides, President and Chief Executive Officer of NextGen Healthcare. “Notably, we’ve seen expanded adoption of our integrated solutions and are continuing to develop next generation improvements that will further enhance the patient and provider experience.”

Based on the first half performance and updated view of the business, our revised guidance for fiscal 2023 is now as follows:

  • Revenue is expected between $630 million and $640 million, from between $621 million and $633 million.
  • Adjusted EBITDA is expected between $110 million and $115 million, from between $109 million and $114 million.
  • Non-GAAP earnings per share is expected between $0.93 and $0.99, from between $0.92 and $0.98.

Conference Call Information

NextGen Healthcare will host a conference call today at 5:00 p.m. EDT to discuss operating results from its fiscal 2023 second quarter. Shareholders and interested participants may listen to a live broadcast of the call by dialing 800-343-5172 or 203-518-9848 for international callers and referencing participant code NXGNQ223 approximately 15 minutes prior to the call. A recording of the live webcast will be available on investor.nextgen.com after the call. It will be archived for 90 days.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding our fiscal year 2023 outlook, financial and operating results, strategic priorities, growth initiatives and expected capital expenditures. These forward-looking statements are based on the current beliefs, expectations, and assumptions of the Company's management relating to the future (including, without limitation, statements concerning revenue, net income, and earnings per share). The words “positioned,” “proposed,” “potential,” “project,” “expect,” “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “estimate, “strategy,” “expectations,” “future,” “likely,” “may,” “should,” “will,” variations thereof or similar expressions are intended to identify such forward-looking statements.

Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements, including but not limited to: changes in laws and regulations applicable to our business; changes in market conditions and receptivity to our services and offerings; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; our ability to maintain and expand our business with existing clients or effectively transition clients to newer products; our ability to attract new partners and successfully capture new opportunities; our ability to develop and grow partner relationships; our ability to attract and retain key employees; our ability to anticipate or respond quickly to market changes, execute our strategy and manage growth; the impact of litigation and governmental and regulatory agency investigations; 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; the impact of the COVID-19 pandemic on our operations and demand for our services; impact of breaches or failures of the Company’s information security measures or unauthorized access to a customer’s data; disruptions caused by acquisitions of companies, products, or technologies; and general economic conditions. Additional discussion of these and other risks, uncertainties and factors affecting our business is contained in our filings with the SEC, including our most recent Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q.

A significant portion of the Company's quarterly sales of software product licenses and computer hardware is concluded in the last month of a fiscal quarter, generally with a concentration of such revenues earned in the final ten business days of that month. Due to these and other factors, the Company's revenues and operating results are very difficult to forecast. A major portion of the Company's costs and expenses, such as personnel and facilities, are of a fixed nature and, accordingly, a shortfall or decline in quarterly and/or annual revenues typically results in lower profitability or losses. As a result, comparison of the Company's period-to-period financial performance is not necessarily meaningful and should not be relied upon as an indicator of future performance. These forward-looking statements speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

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 NextGen Healthcare, Inc., which limits comparability between companies. The Company believes that its presentation of non-GAAP diluted earnings per share provides useful supplemental information to investors and management regarding the Company's financial condition and results. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.

The Company calculates non-GAAP diluted earnings per share by excluding net acquisition costs, amortization of acquired intangible assets, amortization of deferred debt issuance costs, gain on disposition of Commercial Dental assets, impairment of assets, restructuring costs, shareholder disputes and related costs, net of insurance, which include net securities litigation defense, proxy contest, and related costs, share-based compensation, and other non-run-rate expenses from GAAP income before provision for income taxes.

The Company utilizes a normalized non-GAAP tax rate to provide better consistency across the interim reporting periods within a given fiscal year by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency, and which are not necessarily reflective of the Company’s longer-term operations. The normalized non-GAAP tax rate applied to each quarter of fiscal year 2023 is 20.0%. The determination of this rate is based on the consideration of both historic and projected financial results. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occur that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.

The Company calculates free cash flow as total net cash provided by operating activities, net of cash used for the additions of capitalized software costs and equipment and improvements. The Company calculates net debt as line of credit less cash and cash equivalents. The Company calculates non-GAAP adjusted EBITDA by excluding net acquisition costs, amortization of acquired intangible assets, impairment of assets, restructuring costs, shareholder disputes and related costs, net of insurance, which include net securities litigation defense, proxy contest, and related costs, share-based compensation, and other non-run-rate expenses from GAAP income from operations and then adding back amortization of capitalized software costs and depreciation as presented within the condensed consolidated statements of cash flows. Non-GAAP adjusted EBITDA margin is calculated as non-GAAP adjusted EBITDA divided by total revenues. The Company calculates Rule of 40 as annual revenue growth rate plus non-GAAP adjusted EBITDA margin.

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, impairment of assets, restructuring costs, shareholder disputes and related costs, which include net securities litigation defense, proxy contest, and related 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.

About NextGen Healthcare, Inc.

NextGen Healthcare, Inc. (Nasdaq: NXGN) is a leading provider of innovative healthcare technology solutions. We are reimagining ambulatory healthcare with award-winning solutions that enable high-performing practices to create healthier communities. We partner with medical, behavioral and dental providers in their journey toward whole person health and value-based care. Our highly integrated, intelligent and interoperable solutions go beyond EHR and Practice Management to increase clinical quality and productivity, enrich the patient experience and drive superior financial performance. We are on a quest to achieve better healthcare outcomes for all. Learn more at nextgen.com, and follow us on Facebook, Twitter, LinkedIn, YouTube and Instagram.

NEXTGEN HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended
September 30,

 

 

Six Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring

$

143,503

 

 

$

135,609

 

 

$

283,262

 

 

$

267,990

 

Software, hardware, and other non-recurring

 

15,940

 

 

 

13,677

 

 

 

29,483

 

 

 

27,380

 

Total revenues

 

159,443

 

 

 

149,286

 

 

 

312,745

 

 

 

295,370

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring

 

65,039

 

 

 

57,119

 

 

 

127,283

 

 

 

114,279

 

Software, hardware, and other non-recurring

 

10,797

 

 

 

7,610

 

 

 

21,473

 

 

 

15,107

 

Amortization of capitalized software costs and acquired intangible assets

 

6,744

 

 

 

7,969

 

 

 

13,878

 

 

 

16,053

 

Total cost of revenue

 

82,580

 

 

 

72,698

 

 

 

162,634

 

 

 

145,439

 

Gross profit

 

76,863

 

 

 

76,588

 

 

 

150,111

 

 

 

149,931

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

44,886

 

 

 

63,891

 

 

 

93,920

 

 

 

112,377

 

Research and development costs, net

 

20,857

 

 

 

18,518

 

 

 

42,652

 

 

 

37,839

 

Amortization of acquired intangible assets

 

705

 

 

 

881

 

 

 

1,410

 

 

 

1,762

 

Impairment of assets

 

805

 

 

 

1,195

 

 

 

1,329

 

 

 

1,577

 

Restructuring costs

 

321

 

 

 

 

 

 

321

 

 

 

539

 

Total operating expenses

 

67,574

 

 

 

84,485

 

 

 

139,632

 

 

 

154,094

 

Income (loss) from operations

 

9,289

 

 

 

(7,897

)

 

 

10,479

 

 

 

(4,163

)

Interest income

 

74

 

 

 

17

 

 

 

120

 

 

 

29

 

Interest expense

 

(325

)

 

 

(320

)

 

 

(655

)

 

 

(637

)

Other income (expense), net

 

10,292

 

 

 

(12

)

 

 

10,287

 

 

 

(34

)

Income (loss) before provision for (benefit of) income taxes

 

19,330

 

 

 

(8,212

)

 

 

20,231

 

 

 

(4,805

)

Provision for (benefit of) income taxes

 

5,707

 

 

 

(1,441

)

 

 

5,460

 

 

 

(882

)

Net income (loss)

$

13,623

 

 

$

(6,771

)

 

$

14,771

 

 

$

(3,923

)

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.20

 

 

$

(0.10

)

 

$

0.22

 

 

$

(0.06

)

Diluted

$

0.20

 

 

$

(0.10

)

 

$

0.22

 

 

$

(0.06

)

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

67,806

 

 

 

67,406

 

 

 

67,698

 

 

 

67,291

 

Diluted

 

68,422

 

 

 

67,406

 

 

 

68,353

 

 

 

67,291

 

NEXTGEN HEALTHCARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

 

 

 

September 30, 2022

 

 

March 31, 2022

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

70,728

 

 

$

59,829

 

Restricted cash and cash equivalents

 

 

7,580

 

 

 

6,918

 

Accounts receivable, net

 

 

76,948

 

 

 

76,057

 

Contract assets

 

 

25,474

 

 

 

25,157

 

Income taxes receivable

 

 

3,052

 

 

 

6,507

 

Prepaid expenses and other current assets

 

 

34,363

 

 

 

37,102

 

Total current assets

 

 

218,145

 

 

 

211,570

 

Equipment and improvements, net

 

 

7,398

 

 

 

9,120

 

Capitalized software costs, net

 

 

49,791

 

 

 

43,958

 

Operating lease assets

 

 

5,197

 

 

 

11,316

 

Deferred income taxes, net

 

 

19,128

 

 

 

19,259

 

Contract assets, net of current

 

 

1,595

 

 

 

1,910

 

Intangibles, net

 

 

19,739

 

 

 

24,303

 

Goodwill

 

 

267,212

 

 

 

267,212

 

Other assets

 

 

38,933

 

 

 

39,026

 

Total assets

 

$

627,138

 

 

$

627,674

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

12,414

 

 

$

9,125

 

Contract liabilities

 

 

62,498

 

 

 

61,280

 

Accrued compensation and related benefits

 

 

28,113

 

 

 

48,736

 

Income taxes payable

 

 

172

 

 

 

99

 

Operating lease liabilities

 

 

7,095

 

 

 

8,089

 

Other current liabilities

 

 

58,320

 

 

 

53,533

 

Total current liabilities

 

 

168,612

 

 

 

180,862

 

Deferred compensation

 

 

6,981

 

 

 

7,230

 

Operating lease liabilities, net of current

 

 

5,147

 

 

 

11,934

 

Other noncurrent liabilities

 

 

4,556

 

 

 

4,570

 

Total liabilities

 

 

185,296

 

 

 

204,596

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common stock, $0.01 par value; authorized 100,000 shares; 70,351 shares and 69,245 shares issued at September 30, 2022 and March 31, 2022, respectively; 67,605 shares and 67,075 shares outstanding at September 30, 2022 and March 31, 2022, respectively

 

 

704

 

 

 

692

 

Treasury stock, at cost, 2,746 shares and 2,170 shares at September 30, 2022 and March 31, 2022, respectively

 

 

(45,752

)

 

 

(35,874

)

Additional paid-in capital

 

 

343,809

 

 

 

329,917

 

Accumulated other comprehensive loss

 

 

(1,942

)

 

 

(1,909

)

Retained earnings

 

 

145,023

 

 

 

130,252

 

Total shareholders' equity

 

 

441,842

 

 

 

423,078

 

Total liabilities and shareholders' equity

 

$

627,138

 

 

$

627,674

NEXTGEN HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Three Months Ended
September 30,

 

 

Six Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

13,623

 

 

$

(6,771

)

 

$

14,771

 

 

$

(3,923

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of capitalized software costs

 

5,371

 

 

 

5,751

 

 

 

10,725

 

 

 

11,617

 

Amortization of debt issuance costs

 

127

 

 

 

127

 

 

 

254

 

 

 

254

 

Amortization of other intangibles

 

2,078

 

 

 

3,099

 

 

 

4,564

 

 

 

6,198

 

Deferred income taxes

 

 

 

 

1

 

 

 

 

 

 

29

 

Depreciation

 

1,354

 

 

 

1,673

 

 

 

2,646

 

 

 

3,781

 

Excess tax deficiency (benefit) from share-based compensation

 

(23

)

 

 

816

 

 

 

(434

)

 

 

640

 

Gain on disposition of Commercial Dental assets

 

(10,296

)

 

 

 

 

 

(10,296

)

 

 

 

Impairment of assets

 

805

 

 

 

1,195

 

 

 

1,329

 

 

 

1,577

 

Loss on disposal of equipment and improvements

 

33

 

 

 

39

 

 

 

74

 

 

 

77

 

Loss on foreign currency exchange rates

 

1

 

 

 

 

 

 

7

 

 

 

 

Non-cash operating lease costs

 

768

 

 

 

1,459

 

 

 

1,682

 

 

 

3,087

 

Provision for bad debts

 

359

 

 

 

40

 

 

 

600

 

 

 

679

 

Share-based compensation

 

8,687

 

 

 

5,223

 

 

 

17,453

 

 

 

11,635

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(63

)

 

 

1,467

 

 

 

(1,527

)

 

 

4,874

 

Contract assets

 

124

 

 

 

(136

)

 

 

(2

)

 

 

(1,055

)

Accounts payable

 

(2,676

)

 

 

5,442

 

 

 

3,153

 

 

 

1,108

 

Contract liabilities

 

(75

)

 

 

1,225

 

 

 

1,739

 

 

 

643

 

Accrued compensation and related benefits

 

2,246

 

 

 

5,643

 

 

 

(20,422

)

 

 

(16,321

)

Income taxes

 

4,125

 

 

 

(9,788

)

 

 

3,934

 

 

 

(9,324

)

Deferred compensation

 

(200

)

 

 

(88

)

 

 

(249

)

 

 

655

 

Operating lease liabilities

 

(2,012

)

 

 

(2,684

)

 

 

(4,097

)

 

 

(5,360

)

Other assets and liabilities

 

14,085

 

 

 

6,433

 

 

 

7,892

 

 

 

9,608

 

Net cash provided by operating activities

 

38,441

 

 

 

20,166

 

 

 

33,796

 

 

 

20,479

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions to capitalized software costs

 

(9,418

)

 

 

(6,175

)

 

 

(18,416

)

 

 

(11,713

)

Additions to equipment and improvements

 

(971

)

 

 

(683

)

 

 

(1,426

)

 

 

(1,685

)

Proceeds from disposition of Commercial Dental assets

 

11,253

 

 

 

 

 

 

11,253

 

 

 

 

Net cash provided by (used in) investing activities

 

864

 

 

 

(6,858

)

 

 

(8,589

)

 

 

(13,398

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of shares under employee plans

 

507

 

 

 

438

 

 

 

2,575

 

 

 

1,109

 

Repurchase of common stock

 

(7,373

)

 

 

 

 

 

(9,878

)

 

 

 

Payments for taxes related to net share settlement of equity awards

 

(2,456

)

 

 

(2,232

)

 

 

(6,124

)

 

 

(5,201

)

Net cash used in financing activities

 

(9,322

)

 

 

(1,794

)

 

 

(13,427

)

 

 

(4,092

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(90

)

 

 

 

 

 

(219

)

 

 

 

Net increase in cash, cash equivalents, and restricted cash

 

29,893

 

 

 

11,514

 

 

 

11,561

 

 

 

2,989

 

Cash, cash equivalents, and restricted cash at beginning of period

 

48,415

 

 

 

70,050

 

 

 

66,747

 

 

 

78,575

 

Cash, cash equivalents, and restricted cash at end of period

$

78,308

 

 

$

81,564

 

 

$

78,308

 

 

$

81,564

 

NEXTGEN HEALTHCARE, INC.

SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands)

 

The following table presents our revenues disaggregated by our major revenue categories and by occurrence:

 

 

Three Months Ended
September 30,

 

 

Six Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Recurring revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription services

$

43,416

 

 

$

41,139

 

 

$

86,175

 

 

$

79,423

 

Support and maintenance

 

38,150

 

 

 

39,004

 

 

 

77,288

 

 

 

77,490

 

Managed services

 

31,055

 

 

 

28,207

 

 

 

61,700

 

 

 

56,115

 

Transactional and data services

 

30,882

 

 

 

27,259

 

 

 

58,099

 

 

 

54,962

 

Total recurring revenues

 

143,503

 

 

 

135,609

 

 

 

283,262

 

 

 

267,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software, hardware, and other non-recurring revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software license and hardware

 

7,916

 

 

 

8,068

 

 

 

14,115

 

 

 

15,282

 

Other non-recurring services

 

8,024

 

 

 

5,609

 

 

 

15,368

 

 

 

12,098

 

Total software, hardware and other non-recurring revenues

 

15,940

 

 

 

13,677

 

 

 

29,483

 

 

 

27,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

$

159,443

 

 

$

149,286

 

 

$

312,745

 

 

$

295,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring revenues as a percentage of total revenues

 

90.0

%

 

 

90.8

%

 

 

90.6

%

 

 

90.7

%

NEXTGEN HEALTHCARE, INC.

NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

 

RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE

 

 

Three Months Ended
September 30,

 

 

Six Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Income (loss) before provision for income taxes - GAAP

$

19,330

 

 

$

(8,212

)

 

$

20,231

 

 

$

(4,805

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs, net

 

225

 

 

 

 

 

 

225

 

 

 

 

Amortization of acquired intangible assets

 

2,078

 

 

 

3,100

 

 

 

4,564

 

 

 

6,199

 

Amortization of deferred debt issuance costs

 

127

 

 

 

127

 

 

 

254

 

 

 

254

 

Gain on disposition of Commercial Dental assets

 

(10,296

)

 

 

 

 

 

(10,296

)

 

 

 

Impairment of assets

 

805

 

 

 

1,195

 

 

 

1,329

 

 

 

1,577

 

Restructuring costs

 

321

 

 

 

 

 

 

321

 

 

 

539

 

Shareholder disputes and related costs, net of insurance

 

224

 

 

 

22,134

 

 

 

345

 

 

 

26,992

 

Share-based compensation

 

8,687

 

 

 

5,223

 

 

 

17,453

 

 

 

11,635

 

Other non-run-rate expenses*

 

205

 

 

 

1,309

 

 

 

612

 

 

 

4,028

 

Total adjustments to GAAP income before provision for income taxes:

 

2,376

 

 

 

33,088

 

 

 

14,807

 

 

 

51,224

 

Income before provision for income taxes - Non-GAAP

 

21,706

 

 

 

24,876

 

 

 

35,038

 

 

 

46,419

 

Provision for income taxes

 

4,342

 

 

 

4,975

 

 

 

7,008

 

 

 

9,284

 

Net income - Non-GAAP

$

17,364

 

 

$

19,901

 

 

$

28,030

 

 

$

37,135

 

Diluted net income per share - Non-GAAP

$

0.25

 

 

$

0.29

 

 

$

0.41

 

 

$

0.55

 

Weighted-average shares outstanding (diluted):

 

68,422

 

 

 

67,699

 

 

 

68,353

 

 

 

67,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Other non-run-rate expenses for the three months ended September 30, 2022 consist of $205 excess lease-related expense for vacated facilities.

 

Other non-run-rate expenses for the three months ended September 30, 2021 consist primarily of $353 excess lease-related expense for vacated facilities, lease termination costs, and other costs, $458 of executive transition costs, and $498 of incremental costs and penalties primarily due to the cancellation of certain events directly associated with the COVID-19 pandemic.

 

Other non-run-rate expenses for the six months ended September 30, 2022 consist of $462 excess lease-related expense for vacated facilities and $150 of professional services costs not related to core operations.

 

Other non-run-rate expenses for the six months ended September 30, 2021 consist primarily of $823 excess lease-related expense for vacated facilities, lease termination costs, and other costs, including retention bonuses, related to the restructuring plan, $2,707 of executive transition costs, including severance and other costs related to the departure of the CEO, and $498 of incremental costs and penalties primarily due to the cancellation of certain events directly associated with the COVID-19 pandemic.

 

RECONCILIATION OF FREE CASH FLOW

 

 

Three Months Ended
September 30,

 

 

Six Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net cash provided by operating activities

$

38,441

 

 

$

20,166

 

 

$

33,796

 

 

$

20,479

 

Additions to capitalized software costs

 

(9,418

)

 

 

(6,175

)

 

 

(18,416

)

 

 

(11,713

)

Additions to equipment and improvements

 

(971

)

 

 

(683

)

 

 

(1,426

)

 

 

(1,685

)

Free cash flow

$

28,052

$

13,308

$

13,954

$

7,081

NEXTGEN HEALTHCARE, INC.

NON-GAAP FINANCIAL MEASURES

(In thousands)

 
RECONCILIATION OF ADJUSTED EBITDA

 

Three Months Ended
September 30,

 

 

Six Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Income (loss) from operations - GAAP

$

9,289

 

 

$

(7,897

)

 

$

10,479

 

 

$

(4,163

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs, net

 

225

 

 

 

 

 

 

225

 

 

 

 

Amortization of acquired intangible assets

 

2,078

 

 

 

3,100

 

 

 

4,564

 

 

 

6,199

 

Impairment of assets

 

805

 

 

 

1,195

 

 

 

1,329

 

 

 

1,577

 

Restructuring costs

 

321

 

 

 

 

 

 

321

 

 

 

539

 

Shareholder disputes and related costs, net of insurance

 

224

 

 

 

22,134

 

 

 

345

 

 

 

26,992

 

Share-based compensation

 

8,687

 

 

 

5,223

 

 

 

17,453

 

 

 

11,635

 

Other non-run-rate expenses*

 

205

 

 

 

1,309

 

 

 

612

 

 

 

4,028

 

Total adjustments to GAAP income from operations

 

12,545

 

 

 

32,961

 

 

 

24,849

 

 

 

50,970

 

Income from operations - Non-GAAP

 

21,834

 

 

 

25,064

 

 

 

35,328

 

 

 

46,807

 

Amortization of capitalized software costs

 

5,371

 

 

 

5,751

 

 

 

10,725

 

 

 

11,617

 

Depreciation

 

1,354

 

 

 

1,673

 

 

 

2,646

 

 

 

3,781

 

Depreciation and Amortization - Non-GAAP

 

6,725

 

 

 

7,424

 

 

 

13,371

 

 

 

15,398

 

Adjusted EBITDA - Non-GAAP

$

28,559

 

 

$

32,488

 

 

$

48,699

 

 

$

62,205

 

Total revenues

$

159,443

 

 

$

149,286

 

 

$

312,745

 

 

$

295,370

 

Adjusted EBITDA margin - Non-GAAP

 

17.9

%

 

 

21.8

%

 

 

15.6

%

 

 

21.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Other non-run-rate expenses for the three months ended September 30, 2022 consist of $205 excess lease-related expense for vacated facilities.

 

Other non-run-rate expenses for the three months ended September 30, 2021 consist primarily of $353 excess lease-related expense for vacated facilities, lease termination costs, and other costs, $458 of executive transition costs, and $498 of incremental costs and penalties primarily due to the cancellation of certain events directly associated with the COVID-19 pandemic.

 

Other non-run-rate expenses for the six months ended September 30, 2022 consist of $462 excess lease-related expense for vacated facilities and $150 of professional services costs not related to core operations.

 

Other non-run-rate expenses for the six months ended September 30, 2021 consist primarily of $823 excess lease-related expense for vacated facilities, lease termination costs, and other costs, including retention bonuses, related to the restructuring plan, $2,707 of executive transition costs, including severance and other costs related to the departure of the CEO, and $498 of incremental costs and penalties primarily due to the cancellation of certain events directly associated with the COVID-19 pandemic.

 

 

Media Relations Contact
Tami Andrade
(949) 517-2380
tandrade@nextgen.com

Investor Relations Contact
James Hammerschmidt
(949) 237-6112
jhammerschmidt@nextgen.com

Source: NextGen Healthcare, Inc.