The new leadership team at Veradigm Inc. (NASDAQ: MDRX), a
leading provider of healthcare data and technology solutions, has
provided refreshed estimated, unaudited ranges of financial
information for fiscal 2023. Dr. Shih-Yin Ho, Interim CEO, and Lee
Westerfield, Interim CFO, will discuss Veradigm’s mission, business
and operations, and innovation strategy, as well as its estimated
financial information for fiscal 2023, at the J.P. Morgan
Healthcare Conference on Wednesday, January 10, 2024 at 11:15 AM
PST.
Management currently estimates the following unaudited ranges of
financial information for fiscal 2023:
- Revenue on a GAAP basis is estimated between $608 million and
$622 million. Estimated revenue includes a favorable customer
litigation settlement, contributing approximately $16 million on a
GAAP basis that reflects services provided over prior years.
- Adjusted EBITDA(1) is estimated between $122 million and $135
million. Such range, now excludes approximately $16 million
favorable customer litigation settlement and certain other legal
settlements that were previously included in prior Adjusted EBITDA
guidance as of September 18, 2023.
- GAAP Net Income from continuing operations is estimated between
$49 million and $58 million.
- Non-GAAP diluted earnings per share(1) is estimated between
$0.79 and $0.88. GAAP diluted earnings per share is estimated
between $0.39 and $0.46.
- Net Cash is estimated to exceed $232 million as of December 31,
2023, comprised of Cash and cash equivalents, which is expected to
exceed $440 million, and Debt of $208 million that consists solely
of the principal amount of the 2019 convertible notes; our senior
secured credit facility remains undrawn.
(1) Please refer to the “Explanation of Non-GAAP Financial
Measures” section.
“The state of Veradigm is fundamentally healthy. Its financials
rest on a solid foundation that is evident in its net cash position
and its high-quality mix of recurring subscription revenue. We
believe our fiscal health enables us to invest in strategic
opportunities for growth, product initiatives for margin expansion,
and share repurchases for returns to shareholders – all in all,
fulfilling our mission to address unmet client needs for healthtech
and to elevate ROI and shareholder value.
“Along with our CEO Dr. Shih-Yin Ho and President & Chief
Commercial Officer Tom Langan, I see a team committed to driving
accelerated growth, delivering products that our customers value. I
lead a finance and accounting team of professionals, and we are
committed to fostering a robust financial controls environment, and
striving to report timely and useful financials to
shareholders.
“Our estimated financial information that we announced today
reflects a renewal of those commitments. We look forward to sharing
more about our financial position and long-term strategy,” said Lee
Westerfield, Interim Chief Financial Officer.
The J.P Morgan Healthcare Conference webcast and presentation
will be available in the investor section of the company's website
at investor.veradigm.com.
Table 1 Veradigm Inc. Bridge of Guidance issued
September 18, 2023 to Estimated Range issued January 10, 2024
(In millions, except earnings per share) (Unaudited)
Guidance issuedSeptember 18, 2023 Variance
Estimated RangeJanuary 10, 2024 Revenue (a)
$615 - $635 ($7) - ($13) $608 - $622
Adjusted EBITDA
(b) $160 - $170 ($35) - ($38) $122 - $135
Non-GAAP
Earnings per share (c) $0.80 - $0.90 ($0.01) - ($0.02) $0.79 -
$0.88 (a) Revenue variance reflects provider segment revenue
shortfall. Estimated Range of revenue, on a GAAP basis, includes a
favorable customer litigation settlement contributing approximately
$16 million that reflects services provided over prior years. (b)
Adjusted EBITDA variance reflects Revenue variance, certain
favorable and unfavorable legal settlements, including the customer
litigation settlement described above, and additional personnel
expense accruals. The $16 million favorable customer litigation
settlement and certain other legal settlements were previously
reflected in the Company’s Adjusted EBITDA guidance issued on
September 18, 2023. The Company’s exclusion of these items from its
estimated range of Adjusted EBITDA is a change in the Company’s
policy regarding the presentation of this measure. (c) Non-GAAP
Earnings per share variance reflects Revenue and Adjusted EBITDA
variances, favorable upside in other income and interest income.
Table 2 Veradigm Inc. Reconciliation of
Non-GAAP Financial Information - Estimated Adjusted EBITDA
Range (In millions) (Unaudited)
EstimatedLow
End EstimatedHigh End GAAP Net Income from Continuing
Operations
$49
$58
Plus: Interest (income)/expense, net
($17
)
($17
)
Other (income)/expense
($13
)
($13
)
Depreciation and amortization
$49
$49
Income tax (benefit)/provision
$16
$19
Stock-based compensation expense
$14
$14
Transaction and other
$25
$26
Adjusted EBITDA
$122
$135
Veradigm Inc. Reconciliation of Non-GAAP Financial
Information - Estimated Non-GAAP Earnings Per Share Range (In
millions, except earnings per share) (Unaudited)
EstimatedLow End EstimatedHigh End GAAP Net Income
from Continuing Operations
$49
$58
Plus: Tax rate alignment
($11
)
($11
)
Acquisition-related amortization
$14
$14
Stock-based compensation expense
$14
$14
Transaction and other
$19
$20
Non-GAAP Net Income
$86
$96
Non-GAAP effective tax rate
24
%
24
%
Weighted shares outstanding - diluted
124.7
124.7
Less the net effect of convertible notes and note hedges
(15.6
)
(15.6
)
Non-GAAP Weighted shares outstanding - diluted
109.1
109.1
Net Income (loss) per share - diluted
$0.39
$0.46
Non-GAAP Net Income (loss) per share - diluted
$0.79
$0.88
About Veradigm®
Veradigm is a healthcare technology company that drives value
through its unique combination of platforms, data, expertise,
connectivity, and scale. The Veradigm Network features a dynamic
community of solutions and partners providing advanced insights,
technology, and data-driven solutions for the healthcare provider,
payer, and biopharma markets. For more information about how
Veradigm is fulfilling its mission of Transforming Health,
Insightfully, visit www.veradigm.com, or find Veradigm on LinkedIn,
Facebook, Twitter, and YouTube.
© 2024 Veradigm Inc. and/or its affiliates. All rights
reserved.
Disclaimer and Forward-Looking Statement Information
The estimated financial results contained in this press release
are preliminary, and final results for fiscal year 2023 may change.
These preliminary results are based upon our estimates and are
subject to completion of our financial closing procedures. In
addition, these preliminary results have not been audited by our
independent registered public accounting firm. This summary of
recent results is not a comprehensive statement of our financial
results for fiscal 2023.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, but are not limited
to, statements regarding the Company’s strategic priorities, growth
opportunities and commitments. These forward-looking statements are
based on the current beliefs and expectations of the Company’s
management with respect to future events, only speak as of the date
that they are made and are subject to significant risks and
uncertainties. Such statements can be identified by the use of
words such as “future,” “anticipates,” “believes,” “estimates,”
“expects,” “intends,” “plans,” “predicts,” “will,” “would,”
“could,” “continue,” “can,” “may,” “look forward,” “aim,” “hopes,”
and similar terms, although not all forward-looking statements
contain such words or expressions. Actual results could differ
significantly from those set forth in the forward-looking
statements.
Important factors that may cause actual results to differ
materially from those in the forward-looking statements, in
addition to the risks identified in the Form 8-K accompanying this
press release, include, but are not limited to, a further material
delay in the Company’s financial reporting or ability to hold an
annual meeting of shareholders, including as a result of the
recently-announced leadership changes, an inability to timely
prepare restated financial statements, unanticipated factors or
factors that the Company currently believes will not cause delay,
the impacts of the previously disclosed, ongoing independent
investigation by the Audit Committee of the Board of Directors of
the Company that relates to the Company’s financial reporting,
internal controls over financial reporting and disclosure controls,
including on the Company’s remediation efforts and preparation of
financial statements or other factors that could cause additional
delay or adjustments, the possibility that the ongoing review may
identify additional errors and material weaknesses or other
deficiencies in the Company’s accounting practices, the likelihood
that the control deficiencies identified or that may be identified
in the future will result in additional material weaknesses in the
Company’s internal control over financial reporting, the Company
being delisted if the Company is unable to regain compliance with
Nasdaq Listing Rule 5250(c)(1) and Nasdaq Listing Rule 5620(a) or
meet any of the interim milestones imposed by the Nasdaq Hearings
Panel (the “Panel”) in its decision, the possibility that the
Company subsequently fails to remain in compliance with Nasdaq
Listing Rule 5250(c)(1) or Nasdaq Listing Rule 5620(a) or
experiences violations of additional Nasdaq Listing Rules, the
possibility that the Nasdaq Listing and Hearing Review Council
reviews the Panel’s decision or that the Panel revises its decision
in light of the Company’s failure to hold an annual meeting in the
time period required by Nasdaq Listing Rule 5620(a) and other
factors contained in the “Risk Factors” section and elsewhere in
the Company’s filings with the SEC from time to time, including,
but not limited to, its Annual Report on Form 10-K and its
Quarterly Reports on Form 10-Q. The Company does not undertake to
update any forward-looking statements to reflect changed
assumptions, the impact of circumstances or events that may arise
after the date of the forward-looking statements, or other changes
over time, except as required by law.
Explanation of Non-GAAP Financial Measures
Veradigm reports its financial results in accordance with U.S.
generally accepted accounting principles, or GAAP. To supplement
this information, Veradigm presents Adjusted EBITDA and non-GAAP
diluted earnings per share, which are considered non-GAAP financial
measures under Section 101 of Regulation G under the Securities
Exchange Act of 1934, as amended. The definitions of these non-GAAP
financial measures are presented below:
- Adjusted EBITDA is a non-GAAP financial measure and consists of
GAAP net income/(loss) from continuing operations, and adjusts for:
interest (income)/expense, net; other (income)/expense;
depreciation and amortization; stock-based compensation expense;
and transaction and other costs. Reconciliation to GAAP net
income/(loss) from operations are found in Table 2 within this
press release.
- Non-GAAP diluted earnings per share consist of non-GAAP net
income, as defined below, divided by non-GAAP diluted weighted
shares outstanding, as defined below, during the applicable
period.
- Non-GAAP net income attributable to Veradigm Inc. consists of
GAAP net income/(loss) from continuing operations and adds back
acquisition-related amortization; stock-based compensation expense;
and transaction and other costs. Non-GAAP net income measure would
also include a GAAP to non-GAAP tax rate alignment adjustment.
- Non-GAAP diluted weighted shares outstanding consists of
diluted weighted shares outstanding, as reported, less the dilutive
impact of 0.875% convertible notes due to the intent to settle the
principal in cash and shares to be delivered at settlement by the
convertible note hedge.
Acquisition-Related Amortization. Acquisition-related
amortization expense is a non-cash expense arising primarily from
the acquisition of intangible assets in connection with
acquisitions or investments. Veradigm excludes acquisition-related
amortization expense from non-GAAP gross profit, non-GAAP operating
income, non-GAAP net income, and Adjusted EBITDA because it
believes (i) the amount of such expenses in any specific period may
not directly correlate to the underlying performance of Veradigm
business operations and (ii) such expenses can vary significantly
between periods because of new acquisitions and full amortization
of previously acquired intangible assets. Investors should note
that the use of these intangible assets contributed to revenue in
the periods presented and will contribute to future revenue
generation, and the related amortization expense will recur in
future periods.
Stock-Based Compensation Expense. Stock-based
compensation expense is a non-cash expense arising from the grant
of stock-based awards. Veradigm excludes stock-based compensation
expense from non-GAAP gross profit, non-GAAP operating income,
non-GAAP net income and Adjusted EBITDA because it believes (i) the
amount of such expenses in any specific period may not directly
correlate to the underlying performance of Veradigm business
operations and (ii) such expenses can vary significantly between
periods as a result of the timing and valuation of grants of new
stock-based awards, including grants in connection with
acquisitions. Investors should note that stock-based compensation
is a key incentive offered to employees whose efforts contributed
to the operating results in the periods presented and are expected
to contribute to operating results in future periods, and such
expense will recur in future periods.
Transaction and Other Costs. Transaction and other costs
relate to certain favorable and unfavorable legal settlements,
investigations, restatement-related accounting and legal advisory
services and other charges incurred in connection with activities
that are considered not reflective of our core business. Veradigm
excludes transaction and other costs, in whole or in part, from
non-GAAP gross profit, non-GAAP operating income, non-GAAP net
income and Adjusted EBITDA because it believes (i) the amount of
such expenses in any specific period may not directly correlate to
the underlying performance of Veradigm business operations and (ii)
such expenses can vary significantly between periods.
Non-Cash Charges to Interest Expense and Other. Non-cash
charges to interest expense include the amortization of the fair
value of the conversion option embedded in the 0.875% convertible
notes issued by Veradigm during the fourth quarter of 2019. Other
includes certain other income and expense and impairments on
long-term investments.
Tax Rate Alignment. Tax rate alignment aligns the
applicable period’s effective tax rate to the expected annual
non-GAAP effective tax rate.
Management also believes that non-GAAP diluted earnings per
share and Adjusted EBITDA provide useful supplemental information
to management and investors regarding the underlying performance of
Veradigm’s business operations. Acquisition-related amortization,
stock-based compensation expense and transaction and other costs
recorded in accordance with GAAP can make it difficult to make
meaningful comparisons of the underlying operations of the business
without considering the non-GAAP adjustments provided and discussed
herein.
Management also uses this information internally for forecasting
and budgeting, as it believes that these measures are indicative of
core operating results. In addition, management may use non-GAAP
diluted earnings per share and Adjusted EBITDA to measure
achievement under Veradigm’s stock and cash incentive compensation
plans. Note, however, that non-GAAP diluted earnings per share and
Adjusted EBITDA are performance measures only, and they do not
provide any measure of cash flow or liquidity. Non-GAAP financial
measures are not in accordance with, or an alternative for,
measures of financial performance prepared in accordance with GAAP
and may be different from non-GAAP measures used by other
companies. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with Veradigm’s results of
operations as determined in accordance with GAAP. Investors and
potential investors are encouraged to review the definitions and
reconciliations of non-GAAP financial measures with GAAP financial
measures contained within this press release.
As noted above, the estimated non-GAAP financial measures and
GAAP financial measures in this press release are preliminary, and
final results for fiscal year 2023 may change. These preliminary
results are based upon our estimates and are subject to completion
of our financial closing procedures. In addition, these preliminary
results have not been audited by our independent registered public
accounting firm. This summary of recent results is not a
comprehensive statement of our financial results for fiscal
2023.
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version on businesswire.com: https://www.businesswire.com/news/home/20240110998932/en/
Investors: Jenny Gelinas
312-506-1237 jenny.gelinas@veradigm.com Media: Concetta Rasiarmos 312-447-2466
concetta.rasiarmos@veradigm.com
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