Exhibit 99.2
Allscripts Healthcare Solutions, Inc.
Summary of Unaudited Pro Forma Financial Information
(Dollars in thousands, except per share amounts)
Overview
On May 2, 2022, Allscripts Healthcare Solutions, Inc., a Delaware corporation (the “Company”), Allscripts Healthcare, LLC, a North Carolina limited liability company (“Allscripts Healthcare”), Allscripts Software, LLC, a Delaware limited liability company (“Allscripts Software”), PF2 EIS LLC, a Delaware limited liability company (“PF2”), Allscripts IHC, LLC, a Delaware limited liability company (“Allscripts IHC”), and Allscripts Healthcare US, LP, a Delaware limited partnership (together with Allscripts Healthcare, Allscripts Software, PF2 and Allscripts IHC, the “Sellers”), completed the previously-announced divestiture of the net assets of the Sellers’ Hospital and Large Physician Practices business segment (the “Hospitals and Large Physician Practices Business”) to Altera Digital Health Inc. (formerly known as Harris Dawn Holdings Inc.), a Delaware corporation (“Buyer”), a wholly-owned subsidiary of Constellation Software Inc., an Ontario corporation, pursuant to a Purchase Agreement, dated March 2, 2022 (the “Divestiture”).
At the closing of the Divestiture, Buyer acquired substantially all of the assets of the Hospitals and Large Physician Practices Business, including the Sellers’ Sunrise and TouchWorks solutions for $670 million in cash paid at closing and the opportunity to earn up to an additional $30 million based on the Hospitals and Large Physician Practices Business’ revenue through calendar year 2023. Certain assets of the Sellers relating to the Hospitals and Large Physician Practices Business were excluded from the transaction and retained by the Sellers. In addition, Buyer assumed certain liabilities related to the Hospitals and Large Physician Practices Business under the terms of the Purchase Agreement.
Basis of Presentation
The unaudited pro forma consolidated balance sheet as of December 31, 2021 provides the financial position of the Company giving effect to the disposition of the Hospitals and Large Physician Practices Business. The unaudited pro forma consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019 have been prepared to show the operating results of the Company giving effect to the disposition of the Hospitals and Large Physician Practices Business 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 audited consolidated financial statements for the years ended December 31, 2021, 2020 and 2019 included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2022.
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 the Hospitals and Large Physician Practices Business 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.
Financial Tables Follow
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2021
| | | | | | | | | | | | | | |
(In thousands, except per share amounts) | | Allscripts Historical (A) | | | Sale of Hospitals and Large Physician Practices Business | | | | | Pro Forma | |
ASSETS | | | | | | | | | | | |
Current assets: | | | | | | | | | | | |
Cash and cash equivalents | | $ | 188,351 | | | $ | 475,450 | | | (B) | | $ | 663,801 | |
Restricted cash | | | 2,169 | | | | (861 | ) | | | | | 1,308 | |
Accounts receivable, net of allowance of $29,943 as of December 31, 2021 | | | 327,069 | | | | (155,447 | ) | | (F) | | | 171,622 | |
Contract assets, net of allowance of $1,068 as of December 31, 2021 | | | 124,811 | | | | (61,382 | ) | | (G) | | | 63,429 | |
Prepaid expenses and other current assets | | | 118,942 | | | | (48,937 | ) | | (H) | | | 70,005 | |
Total current assets | | | 761,342 | | | | 208,823 | | | | | | 970,165 | |
Fixed assets, net | | | 47,902 | | | | (38,083 | ) | | | | | 9,819 | |
Software development costs, net | | | 172,104 | | | | (97,416 | ) | | | | | 74,688 | |
Intangible assets, net | | | 235,930 | | | | (86,240 | ) | | | | | 149,690 | |
Goodwill | | | 974,478 | | | | (467,871 | ) | | | | | 506,607 | |
Deferred taxes, net | | | 6,607 | | | | (6,607 | ) | | | | | 0 | |
Contract assets - long-term, net of allowance of $2,273 as of December 31, 2021 | | | 56,797 | | | | (28,623 | ) | | (G) | | | 28,174 | |
Right-of-use assets - operating leases | | | 68,909 | | | | (50,585 | ) | | | | | 18,324 | |
Other assets | | | 101,160 | | | | (120 | ) | | (H) | | | 101,040 | |
Total assets | | $ | 2,425,229 | | | $ | (566,722 | ) | | | | $ | 1,858,507 | |
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (CONTINUED)
AS OF DECEMBER 31, 2021
| | | | | | | | | | | | | | |
(In thousands, except per share amounts) | | Allscripts Historical (A) | | | Sale of Hospitals and Large Physician Practices Business | | | | | Pro Forma | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | |
Accounts payable | | $ | 16,836 | | | $ | 52,445 | | | (C) | | $ | 69,281 | |
Accrued expenses | | | 92,525 | | | | (38,007 | ) | | | | | 54,518 | |
Accrued compensation and benefits | | | 92,222 | | | | (61,167 | ) | | | | | 31,055 | |
Deferred revenue | | | 325,900 | | | | (205,152 | ) | | | | | 120,748 | |
Current operating lease liabilities | | | 19,599 | | | | (13,466 | ) | | | | | 6,133 | |
Total current liabilities | | | 547,082 | | | | (265,347 | ) | | | | | 281,735 | |
Long-term debt | | | 350,062 | | | | (175,000 | ) | | (D) | | | 175,062 | |
Deferred revenue | | | 4,407 | | | | (2,568 | ) | | | | | 1,839 | |
Deferred taxes, net | | | 16,625 | | | | 0 | | | | | | 16,625 | |
Long-term operating lease liabilities | | | 64,822 | | | | (48,068 | ) | | | | | 16,754 | |
Other liabilities | | | 34,093 | | | | (270 | ) | | | | | 33,823 | |
Total liabilities | | | 1,017,091 | | | | (491,253 | ) | | | | | 525,838 | |
Commitments and contingencies | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | |
Preferred stock: $0.01 par value, 1,000 shares authorized, no shares issued and outstanding as of December 31, 2021 | | | 0 | | | | 0 | | | | | | 0 | |
Common stock: $0.01 par value, 349,000 shares authorized as of December 31, 2021; 276,705 and 116,114 shares issued and outstanding as of December 31, 2021, respectively | | | 2,766 | | | | 0 | | | | | | 2,766 | |
Treasury stock: at cost, 160,591 shares as of December 31, 2021 | | | (1,321,805 | ) | | | 0 | | | | | | (1,321,805 | ) |
Additional paid-in capital | | | 1,962,386 | | | | 0 | | | | | | 1,962,386 | |
Accumulated deficit | | | 767,556 | | | | (75,469 | ) | | (E) | | | 692,087 | |
Accumulated other comprehensive loss | | | (2,765 | ) | | | 0 | | | | | | (2,765 | ) |
Total stockholders’ equity | | | 1,408,138 | | | | (75,469 | ) | | | | | 1,332,669 | |
Total liabilities and stockholders’ equity | | $ | 2,425,229 | | | $ | (566,722 | ) | | | | $ | 1,858,507 | |
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2021
| | | | | | | | | | | | | | |
(In thousands, except per share amounts) | | Allscripts Historical (A) | | | Hospitals and Large Physician Practices Business Historical | | | | | Pro Forma | |
Revenue: | | | | | | | | | | | |
Software delivery, support and maintenance | | $ | 916,186 | | | $ | (440,955 | ) | | | | $ | 475,231 | |
Client services | | | 586,851 | | | | (481,281 | ) | | | | | 105,570 | |
Total revenue | | | 1,503,037 | | | | (922,236 | ) | | | | | 580,801 | |
Cost of revenue: | | | | | | | | | | | |
Software delivery, support and maintenance | | | 278,551 | | | | (124,574 | ) | | | | | 153,977 | |
Client services | | | 486,221 | | | | (387,890 | ) | | | | | 98,331 | |
Amortization of software development and acquisition-related assets | | | 118,700 | | | | (79,052 | ) | | | | | 39,648 | |
Total cost of revenue | | | 883,472 | | | | (591,516 | ) | | | | | 291,956 | |
Gross profit | | | 619,565 | | | | (330,720 | ) | | | | | 288,845 | |
Selling, general and administrative expenses | | | 313,814 | | | | (203,467 | ) | | | | | 110,347 | |
Research and development | | | 193,671 | | | | (109,198 | ) | | | | | 84,473 | |
Asset impairment charges | | | 11,772 | | | | (11,239 | ) | | | | | 533 | |
Amortization of intangible and acquisition-related assets | | | 23,109 | | | | (13,827 | ) | | | | | 9,282 | |
Income (loss) from operations | | | 77,199 | | | | 7,011 | | | | | | 84,210 | |
Interest expense | | | (13,166 | ) | | | 1,316 | | | (I) | | | (11,850 | ) |
Other income (loss), net | | | 87,666 | | | | (871 | ) | | | | | 86,795 | |
Gain on sale of businesses, net | | | 8,370 | | | | 0 | | | | | | 8,370 | |
Equity in net income of unconsolidated investments | | | 1,757 | | | | 0 | | | | | | 1,757 | |
Income (loss) from continuing operations before income taxes | | | 161,826 | | | | 7,456 | | | | | | 169,282 | |
Income tax (provision) benefit | | | (27,851 | ) | | | (843 | ) | | | | | (28,694 | ) |
Income (loss) from continuing operations, net of tax | | $ | 133,975 | | | $ | 6,613 | | | | | $ | 140,588 | |
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2020
| | | | | | | | | | | | | | |
(In thousands, except per share amounts) | | Allscripts Historical (A) | | | Hospitals and Large Physician Practices Business Historical | | | | | Pro Forma | |
Revenue: | | | | | | | | | | | |
Software delivery, support and maintenance | | $ | 923,737 | | | $ | (466,908 | ) | | | | $ | 456,829 | |
Client services | | | 578,963 | | | | (478,025 | ) | | | | | 100,938 | |
Total revenue | | | 1,502,700 | | | | (944,933 | ) | | | | | 557,767 | |
Cost of revenue: | | | | | | | | | | | |
Software delivery, support and maintenance | | | 287,954 | | | | (140,177 | ) | | | | | 147,777 | |
Client services | | | 530,652 | | | | (429,136 | ) | | | | | 101,516 | |
Amortization of software development and acquisition-related assets | | | 118,399 | | | | (81,772 | ) | | | | | 36,627 | |
Total cost of revenue | | | 937,005 | | | | (651,085 | ) | | | | | 285,920 | |
Gross profit | | | 565,695 | | | | (293,848 | ) | | | | | 271,847 | |
Selling, general and administrative expenses | | | 389,941 | | | | (241,668 | ) | | | | | 148,273 | |
Research and development | | | 206,061 | | | | (127,661 | ) | | | | | 78,400 | |
Asset impairment charges | | | 74,969 | | | | (64,794 | ) | | | | | 10,175 | |
Amortization of intangible and acquisition-related assets | | | 25,604 | | | | (13,758 | ) | | | | | 11,846 | |
Loss (income) from operations | | | (130,880 | ) | | | 154,033 | | | | | | 23,153 | |
Interest expense | | | (34,104 | ) | | | 0 | | | | | | (34,104 | ) |
Other income (loss), net | | | 54 | | | | (1,201 | ) | | | | | (1,147 | ) |
Impairment of long-term investments | | | (1,575 | ) | | | 0 | | | | | | (1,575 | ) |
Equity in net income of unconsolidated investments | | | 17,194 | | | | 155 | | | | | | 17,349 | |
(Loss) income from continuing operations before income taxes | | | (149,311 | ) | | | 152,987 | | | | | | 3,676 | |
Income tax benefit (provision) | | | 16,692 | | | | (33,961 | ) | | | | | (17,269 | ) |
(Loss) Income from continuing operations, net of tax | | $ | (132,619 | ) | | $ | 119,026 | | | | | $ | (13,593 | ) |
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 (A) | | | Hospitals and Large Physician Practices Business Historical | | | | | Pro Forma | |
Revenue: | | | | | | | | | | | |
Software delivery, support and maintenance | | $ | 1,010,993 | | | $ | (539,146 | ) | | | | $ | 471,847 | |
Client services | | | 621,618 | | | | (508,535 | ) | | | | | 113,083 | |
Total revenue | | | 1,632,611 | | | | (1,047,681 | ) | | | | | 584,930 | |
Cost of revenue: | | | | | | | | | | | |
Software delivery, support and maintenance | | | 319,140 | | | | (169,152 | ) | | | | | 149,988 | |
Client services | | | 595,310 | | | | (513,335 | ) | | | | | 81,975 | |
Amortization of software development and acquisition-related assets | | | 107,874 | | | | (47,645 | ) | | | | | 60,229 | |
Total cost of revenue | | | 1,022,324 | | | | (730,132 | ) | | | | | 292,192 | |
Gross profit | | | 610,287 | | | | (317,549 | ) | | | | | 292,738 | |
Selling, general and administrative expenses | | | 400,808 | | | | (236,067 | ) | | | | | 164,741 | |
Research and development | | | 245,443 | | | | (180,027 | ) | | | | | 65,416 | |
Asset impairment charges | | | 10,837 | | | | (8,062 | ) | | | | | 2,775 | |
Goodwill impairment charge | | | 25,700 | | | | (25,700 | ) | | | | | 0 | |
Amortization of intangible and acquisition-related assets | | | 27,188 | | | | (524 | ) | | | | | 26,664 | |
(Loss) income from operations | | | (99,689 | ) | | | 132,831 | | | | | | 33,142 | |
Interest expense | | | (43,172 | ) | | | 0 | | | | | | (43,172 | ) |
Other loss, net | | | (138,904 | ) | | | (990 | ) | | | | | (139,894 | ) |
Impairment of long-term investments | | | (651 | ) | | | (1,045 | ) | | | | | (1,696 | ) |
Equity in net income of unconsolidated investments | | | 665 | | | | 119 | | | | | | 784 | |
(Loss) income from continuing operations before income taxes | | | (281,751 | ) | | | 130,915 | | | | | | (150,836 | ) |
Income tax benefit (provision) | | | 43,340 | | | | (20,138 | ) | | | | | 23,202 | |
(Loss) income from continuing operations, net of tax | | $ | (238,411 | ) | | $ | 110,777 | | | | | $ | (127,634 | ) |
The Company's Unaudited Pro Forma Consolidated Balance Sheets as of December 31, 2021 and the Unaudited Pro Forma Consolidated Statement of Operations for the Years Ended December 31, 2021, 2020 and 2019 include the following:
| |
(A) | As reported in the Annual Report on Form 10-K filed by the Company with the SEC on February 25, 2022. |
(B) | Represents proceeds received, net of $20 million transaction expenses and debt repayment. |
(C) | Represents taxes payable on the gain calculated based on specific taxable basis of US and international assets included in the sale. |
(D) | Represents the reduction of debt for repayment upon deal close as necessitated by covenant restrictions on the sale. |
(E) | Represents the after tax loss on the transaction, net of transaction fees and expenses. |
(F) | The Hospitals and Large Physician Practices Business balance for allowance for doubtful accounts was $16,584 as of December 31, 2021. |
(G) | The Hospitals and Large Physician Practices Business balance for allowance was $492 for short-term and $739 for long-term as of December 31, 2021. |
(H) | Includes the current and long-term receivable amounts for the contingent consideration expected for the first and second year earnouts. |
(I) | Represents the interest expense removed, assuming the complete paydown of $175 million credit facility draw in the relevant periods. |
