þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
California (State or other jurisdiction of incorporation or organization) | 95-2888568 (IRS Employer Identification No.) | |
18111 Von Karman Avenue, Suite 800, Irvine, California (Address of principal executive offices) | 92612 (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.01 Par Value | NASDAQ Global Select Market |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o | Emerging growth company o |
* For purposes of this Annual Report on Form 10-K, in addition to those shareholders which fall within the definition of “affiliates” under Rule 405 of the Securities Act of 1933, as amended, holders of ten percent or more of the Registrant’s common stock are deemed to be affiliates for purposes of this Report. |
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• | Focus on the ambulatory client segment. In October 2015, we sold our former Hospital Solutions division to focus on our core ambulatory clients. Further, a recent operational reorganization better allows us to serve the needs of our ambulatory clients through a simpler, more nimble, and focused organization. We believe it is essential to protect, build |
• | Platform as a service. With the introduction of our API 2.0 framework and our continued leverage of the Mirth interoperability platform, we will continue our evolution to plug and play extensibility and information sharing that allows our customers to innovate and deploy high-fidelity extensions to our core applications without the costs, risks (security, performance, etc.) or complexity commonly associated with direct binding. We have also introduced platform-enabled automation capabilities to empower our clients to drive cost out of their processes while supporting their needs to implement the highly personalized workflows that are required to support value based care. Our acquisition of Entrada and its cloud-based, mobile application in April 2017 demonstrates our commitment to innovation that becomes essential for practitioners by improving their clinical productivity with documentation support services that seamlessly integrate into their electronic health record. We believe there is significant opportunity to extend the solutions we offer existing and new clients through value-added services such as RCM and EDI. |
• | Population health software and services. We are migrating into applications, analytics and services that will enable our clients to proactively manage the health of patient populations. We are establishing strong development partnerships with our most innovative customers who are actively participating in shared-risk contracts, and working together with them to create progressive population health capabilities. We support extraordinary information sharing capabilities vital to managing patient populations through Mirth interoperability offerings. |
Segment Revenue Breakdown Fiscal Year Ended March 31, | Segment Revenue Growth (Decline) Fiscal Year Ended March 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||||
Software and Related Solutions | $ | 423,593 | $ | 398,449 | $ | 395,259 | 6.3 | % | 0.8 | % | 9.1 | % | ||||||||
RCM and Related Services | 86,031 | 86,559 | 76,962 | (0.6 | )% | 12.5 | % | 15.3 | % | |||||||||||
Hospital Solutions (1) | — | 7,469 | 18,004 | (100 | )% | (58.5 | )% | 15.3 | % | |||||||||||
Consolidated | $ | 509,624 | $ | 492,477 | $ | 490,225 | 3.5 | % | 0.5 | % | 10.2 | % |
• | failure to achieve projected synergies and performance targets; |
• | potentially dilutive issuances of our securities, the incurrence of debt and contingent liabilities and amortization expenses related to intangible assets with indefinite useful lives, which could adversely affect our results of operations and financial condition; |
• | using cash as acquisition currency may adversely affect interest or investment income, which may in turn adversely affect our earnings and /or earnings per share; |
• | unanticipated expenses or difficulty in fully or effectively integrating or retaining the acquired technologies, software products, services, business practices, management teams or personnel, which would prevent us from realizing the intended benefits of the acquisition; |
• | failure to maintain uniform standard controls, policies and procedures across acquired businesses; |
• | difficulty in predicting and responding to issues related to product transition such as development, distribution and client support; |
• | the possible adverse effect of such acquisitions on existing relationships with third party partners and suppliers of technologies and services; |
• | the possibility that staff or clients of the acquired company might not accept new ownership and may transition to different technologies or attempt to renegotiate contract terms or relationships, including maintenance or support agreements; |
• | the assumption of known and unknown liabilities; |
• | the possibility of disputes over post-closing purchase price adjustments such as performance-based earnouts; |
• | the possibility that the due diligence process in any such acquisition may not completely identify material issues associated with product quality, product architecture, product development, intellectual property issues, regulatory risks, |
• | difficulty in entering geographic and/or business markets in which we have no or limited prior experience; |
• | difficulty in integrating acquired operations due to geographical distance and language and cultural differences; |
• | diversion of management's attention from other business concerns; and |
• | the possibility that acquired assets become impaired, or that acquired assets lead us to determine that existing assets become impaired, requiring us to take a charge to earnings which could be significant. |
• | state and federal privacy and confidentiality laws; |
• | our contracts with clients and partners; |
• | state laws regulating healthcare professionals; |
• | Medicaid laws; |
• | the HIPAA and related rules proposed by CMS; and |
• | CMS standards for Internet transmission of health data. |
• | the size and timing of orders from clients; |
• | the specific mix of software, hardware and services in client orders; |
• | the length of sales cycles and installation processes; |
• | the ability of our clients to obtain financing for the purchase of our products; |
• | changes in pricing policies or price reductions by us or our competitors; |
• | the timing of new product announcements and product introductions by us or our competitors; |
• | changes in revenue recognition or other accounting guidelines employed by us and/or established by the Financial Accounting Standards Board ("FASB") or other rule-making bodies; |
• | changes in government healthcare policies and regulations, such as the shift from fee-for-service reimbursement to value-based reimbursement; |
• | accounting policies concerning the timing of the recognition of revenue; |
• | the availability and cost of system components; |
• | the financial stability of clients; |
• | market acceptance of new products, applications and product enhancements; |
• | our ability to develop, introduce and market new products, applications and product enhancements; |
• | our success in expanding our sales and marketing programs; |
• | deferrals of client orders in anticipation of new products, applications, product enhancements, or public/private sector initiatives; |
• | execution of or changes to our strategy; |
• | personnel changes; and |
• | general market/economic factors. |
• | actual or anticipated quarterly variations in operating results; |
• | rumors about our performance, software solutions, or merger and acquisition activity; |
• | changes in expectations of future financial performance or changes in estimates of securities analysts; |
• | governmental regulatory action; |
• | health care reform measures; |
• | client relationship developments; |
• | purchases or sales of company stock; |
• | activities by one or more of our major shareholders concerning our policies and operations; |
• | changes occurring in the markets in general; |
• | macroeconomic conditions, both nationally and internationally; and |
• | other factors, many of which are beyond our control. |
Square Feet | Notes | ||
Primary Operating Locations | |||
Horsham, Pennsylvania | 92,800 | (2) (4) | |
Irvine, California | 83,100 | (1) (2) (4) | |
Bangalore, India | 73,800 | (4) | |
St. Louis, Missouri | 54,900 | (3) | |
San Diego, California | 40,000 | (2) (4) | |
Atlanta, Georgia | 35,500 | (2) (4) | |
Hunt Valley, Maryland | 34,000 | (3) | |
North Canton, Ohio | 22,100 | (3) | |
South Jordan, Utah | 7,300 | (3) | |
Other locations | 2,800 | ||
Total Primary Operating Locations | 446,300 | ||
Vacated or Subleased Locations | |||
Austin, Texas | 43,700 | ||
Costa Mesa, California | 25,100 | ||
Horsham, Pennsylvania | 17,200 | ||
Solana Beach, California | 12,000 | ||
Other locations | 6,900 | ||
Total Vacated or Subleased Locations | 104,900 | ||
Total Leased Properties | 551,200 |
High | Low | ||
Three Months Ended | |||
June 30, 2015 | $17.95 | $15.33 | |
September 30, 2015 | $17.06 | $12.01 | |
December 31, 2015 | $16.74 | $12.11 | |
March 31, 2016 | $17.50 | $12.51 | |
June 30, 2016 | $15.31 | $11.10 | |
September 30, 2016 | $13.04 | $11.13 | |
December 31, 2016 | $14.18 | $10.61 | |
March 31, 2017 | $15.90 | $13.07 |
Declaration Date | Record Date | Payment Date | Per Share Dividend | |||||
May 20, 2015 | June 12, 2015 | July 6, 2015 | $ | 0.175 | ||||
July 22, 2015 | September 11, 2015 | October 5, 2015 | 0.175 | |||||
October 21, 2015 | December 11, 2015 | January 4, 2016 | 0.175 | |||||
Fiscal year 2016 | $ | 0.525 |
* | $100 invested on March 31, 2012 in stock or index, including reinvestment of dividends. Fiscal year ended March 31. |
Fiscal Year Ended March 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
Statements of net income and comprehensive income data: | |||||||||||||||||||
Revenue | $ | 509,624 | $ | 492,477 | $ | 490,225 | $ | 444,667 | $ | 460,229 | |||||||||
Cost of revenue | 223,134 | 225,615 | 223,164 | 220,163 | 189,652 | ||||||||||||||
Gross profit | 286,490 | 266,862 | 267,061 | 224,504 | 270,577 | ||||||||||||||
Selling, general and administrative | 163,623 | 156,234 | 158,172 | 149,214 | 148,353 | ||||||||||||||
Research and development costs, net | 78,341 | 65,661 | 69,240 | 41,524 | 30,865 | ||||||||||||||
Amortization of acquired intangible assets | 10,435 | 5,367 | 3,693 | 4,805 | 4,859 | ||||||||||||||
Impairment of assets | — | 32,238 | — | 5,873 | 17,400 | ||||||||||||||
Restructuring costs | 7,078 | — | — | — | — | ||||||||||||||
Income from operations | 27,013 | 7,362 | 35,956 | 23,088 | 69,100 | ||||||||||||||
Interest income | 14 | 428 | 111 | 269 | 76 | ||||||||||||||
Interest expense | (3,156 | ) | (1,304 | ) | (341 | ) | — | (183 | ) | ||||||||||
Other expense, net | (262 | ) | (166 | ) | (62 | ) | (356 | ) | (79 | ) | |||||||||
Income before provision for income taxes | 23,609 | 6,320 | 35,664 | 23,001 | 68,914 | ||||||||||||||
Provision for income taxes | 5,368 | 663 | 8,332 | 7,321 | 26,190 | ||||||||||||||
Net income | $ | 18,241 | $ | 5,657 | $ | 27,332 | $ | 15,680 | $ | 42,724 | |||||||||
Basic net income per share | $ | 0.30 | $ | 0.09 | $ | 0.45 | $ | 0.26 | $ | 0.72 | |||||||||
Diluted net income per share | $ | 0.29 | $ | 0.09 | $ | 0.45 | $ | 0.26 | $ | 0.72 | |||||||||
Basic weighted average shares outstanding | 61,818 | 60,635 | 60,259 | 59,918 | 59,392 | ||||||||||||||
Diluted weighted average shares outstanding | 62,010 | 61,233 | 60,849 | 60,134 | 59,462 | ||||||||||||||
Dividends declared per common share | $ | — | $ | 0.525 | $ | 0.70 | $ | 0.70 | $ | 0.70 |
March 31, 2017 | March 31, 2016 | March 31, 2015 | March 31, 2014 | March 31, 2013 | |||||||||||||||
Balance sheet data: | |||||||||||||||||||
Cash, cash equivalents, and marketable securities | $ | 37,673 | $ | 36,473 | $ | 130,585 | $ | 113,801 | $ | 118,011 | |||||||||
Working capital | $ | 18,108 | $ | 45,931 | $ | 100,893 | $ | 124,782 | $ | 158,156 | |||||||||
Total assets | $ | 473,221 | $ | 530,790 | $ | 460,521 | $ | 451,351 | $ | 452,126 | |||||||||
Long-term line of credit | $ | 15,000 | $ | 105,000 | $ | — | $ | — | $ | — | |||||||||
Total liabilities | $ | 168,178 | $ | 261,413 | $ | 176,981 | $ | 156,261 | $ | 145,077 | |||||||||
Total shareholders’ equity | $ | 305,043 | $ | 269,377 | $ | 283,540 | $ | 295,090 | $ | 307,049 |
Fiscal Year Ended March 31, | ||||||||
2017 | 2016 | 2015 | ||||||
Revenues: | ||||||||
Software license and hardware | 12.9 | % | 14.3 | % | 16.7 | % | ||
Software related subscription services | 17.1 | 11.2 | 9.1 | |||||
Total software, hardware and related | 29.9 | 25.6 | 25.8 | |||||
Support and maintenance | 31.2 | 33.5 | 34.5 | |||||
Revenue cycle management and related services | 16.2 | 16.9 | 15.1 | |||||
Electronic data interchange and data services | 17.5 | 16.7 | 15.6 | |||||
Professional services | 5.2 | 7.3 | 9.0 | |||||
Total revenues | 100.0 | 100.0 | 100.0 | |||||
Cost of revenue: | ||||||||
Software license and hardware | 4.8 | 5.6 | 5.9 | |||||
Software related subscription services | 7.2 | 5.4 | 4.2 | |||||
Total software, hardware and related | 12.0 | 11.0 | 10.1 | |||||
Support and maintenance | 5.6 | 6.4 | 5.9 | |||||
Revenue cycle management and related services | 11.1 | 11.7 | 11.1 | |||||
Electronic data interchange and data services | 10.0 | 10.2 | 9.8 | |||||
Professional services | 5.1 | 6.6 | 8.6 | |||||
Total cost of revenue | 43.8 | 45.8 | 45.5 | |||||
Gross profit | 56.2 | 54.2 | 54.5 | |||||
Operating expenses: | ||||||||
Selling, general and administrative | 32.1 | 31.7 | 32.3 | |||||
Research and development costs, net | 15.4 | 13.3 | 14.1 | |||||
Amortization of acquired intangible assets | 2.0 | 1.1 | 0.8 | |||||
Impairment of assets | — | 6.5 | — | |||||
Restructuring costs | 1.4 | — | — | |||||
Total operating expenses | 50.9 | 52.7 | 47.1 | |||||
Income from operations | 5.3 | 1.5 | 7.3 | |||||
Interest income | — | 0.1 | — | |||||
Interest expense | (0.6 | ) | (0.3 | ) | (0.1 | ) | ||
Other expense, net | (0.1 | ) | — | — | ||||
Income before provision for income taxes | 4.6 | 1.3 | 7.3 | |||||
Provision for income taxes | 1.1 | 0.1 | 1.7 | |||||
Net income | 3.6 | % | 1.1 | % | 5.6 | % |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenues: | |||||||||||
Software license and hardware | $ | 65,547 | $ | 70,523 | $ | 81,649 | |||||
Software related subscription services | 87,050 | 55,403 | 44,592 | ||||||||
Total software, hardware and related | 152,597 | 125,926 | 126,241 | ||||||||
Support and maintenance | 158,803 | 165,200 | 169,219 | ||||||||
Revenue cycle management and related services | 82,552 | 83,006 | 74,237 | ||||||||
Electronic data interchange and data services | 88,951 | 82,343 | 76,358 | ||||||||
Professional services | 26,721 | 36,002 | 44,170 | ||||||||
Total revenues | $ | 509,624 | $ | 492,477 | $ | 490,225 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Total cost of revenue | $ | 223,134 | $ | 225,615 | $ | 223,164 | |||||
Gross profit | 286,490 | 266,862 | 267,061 | ||||||||
Gross margin % | 56.2 | % | 54.2 | % | 54.5 | % |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Selling, general and administrative | $ | 163,623 | $ | 156,234 | $ | 158,172 | |||||
Selling, general and administrative, as a percentage of revenue | 32.1 | % | 31.7 | % | 32.3 | % |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Gross expenditures | $ | 86,590 | $ | 80,336 | $ | 83,841 | |||||
Capitalized software costs | (8,249 | ) | (14,675 | ) | (14,601 | ) | |||||
Research and development costs, net | $ | 78,341 | $ | 65,661 | $ | 69,240 | |||||
Research and development costs, net, as a percentage of revenue | 15.4 | % | 13.3 | % | 14.1 | % | |||||
Capitalized software costs as a percentage of gross expenditures | 9.5 | % | 18.3 | % | 17.4 | % |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Amortization of acquired intangible assets | $ | 10,435 | $ | 5,367 | $ | 3,693 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Interest income | $ | 14 | $ | 428 | $ | 111 | |||||
Interest expense | (3,156 | ) | (1,304 | ) | (341 | ) | |||||
Other expense, net | (262 | ) | (166 | ) | (62 | ) |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Provision for income taxes | $ | 5,368 | $ | 663 | $ | 8,332 | |||||
Effective tax rate | 22.7 | % | 10.5 | % | 23.4 | % |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income | $ | 18,241 | $ | 5,657 | $ | 27,332 | |||||
Net income per share: | |||||||||||
Basic | $ | 0.30 | $ | 0.09 | $ | 0.45 | |||||
Diluted | $ | 0.29 | $ | 0.09 | $ | 0.45 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenue: | |||||||||||
Software and Related Solutions | $ | 423,593 | $ | 398,449 | $ | 395,259 | |||||
RCM and Related Services | 86,031 | 86,559 | 76,962 | ||||||||
Hospital Solutions (1) | — | 7,469 | 18,004 | ||||||||
Consolidated revenue | $ | 509,624 | $ | 492,477 | $ | 490,225 | |||||
Gross profit: | |||||||||||
Software and Related Solutions | $ | 278,121 | $ | 252,136 | $ | 256,922 | |||||
RCM and Related Services | 28,274 | 27,694 | 21,514 | ||||||||
Hospital Solutions (1) | — | 2,568 | 4,876 | ||||||||
Unallocated cost of revenue (2) | (19,905 | ) | (15,536 | ) | (16,251 | ) | |||||
Consolidated gross profit | $ | 286,490 | $ | 266,862 | $ | 267,061 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash and cash equivalents and marketable securities | $ | 37,673 | $ | 36,473 | $ | 130.585 | |||||
Unused portion of revolving credit agreement (1) | 235,000 | 145,000 | — | ||||||||
Total liquidity | $ | 272,673 | $ | 181,473 | $ | 130,585 | |||||
Net income | $ | 18,241 | $ | 5,657 | $ | 27,332 | |||||
Net cash provided by operating activities | $ | 110,592 | $ | 40,796 | $ | 82,758 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income | $ | 18,241 | $ | 5,657 | $ | 27,332 | |||||
Non-cash expenses | 62,147 | 81,013 | 23,546 | ||||||||
Cash from net income, as adjusted | $ | 80,388 | $ | 86,670 | $ | 50,878 | |||||
Change in deferred revenue | $ | (5,493 | ) | $ | (8,390 | ) | $ | (5,610 | ) | ||
Change in accounts receivable | 5,535 | 9,929 | 4,744 | ||||||||
Change in other assets and liabilities | 30,162 | (47,413 | ) | 32,746 | |||||||
Net cash provided by operating activities | $ | 110,592 | $ | 40,796 | $ | 82,758 |
For the year ended March 31, | |||||||||||||||||||||
Contractual Obligations | Total | 2018 | 2019 | 2020 | 2021 | 2,022 | 2023 and beyond | ||||||||||||||
Operating lease obligations | $ | 60,109 | $ | 8,136 | $ | 8,350 | $ | 8,067 | $ | 8,037 | $ | 7,713 | $ | 19,806 | |||||||
Remaining lease obligations for vacated properties (1) | 6,599 | 2,487 | 1,413 | 794 | 816 | 551 | 538 | ||||||||||||||
Line of credit obligations (Note 9) | 15,000 | — | — | — | 15,000 | — | — | ||||||||||||||
Contingent consideration liabilities | 18,817 | 18,817 | — | — | — | — | — | ||||||||||||||
Purchase commitments (2) | 3,800 | 1,250 | 1,250 | 1,300 | — | ||||||||||||||||
Total | $ | 104,325 | $ | 30,690 | $ | 11,013 | $ | 10,161 | $ | 23,853 | $ | 8,264 | $ | 20,344 |
(1) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
(2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and |
(3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. |
Page | |
(1) Index to Financial Statements: | |
(2) The following supplementary financial statement schedule of Quality Systems, Inc., required to be included in Item 15(a)(2) on Form 10-K is filed as part of this Report. | |
Schedules other than that listed above have been omitted since they are either not required, not applicable, or because the information required is included in the Consolidated Financial Statements or the notes thereto. | |
(3) The exhibits listed in the Index to Exhibits hereof are attached hereto or incorporated herein by reference and filed as a part of this Report. | |
Incorporated by Reference | ||||||
Exhibit Number | Exhibit Description | Filed Herewith | Form | Exhibit | Filing Date | |
3.1 | Restated Articles of Incorporation of Quality Systems, Inc. filed with the Secretary of State of California on September 8, 1989(Registration No. 333-00161) | S-1 | 3.1 | January 11, 1996 | ||
3.2 | Certificate of Amendment to Articles of Incorporation of Quality Systems, Inc. filed with the Secretary of State of California effective March 4, 2005 | 10-K | 3.1.1 | June 14, 2005 | ||
3.3 | Certificate of Amendment to Articles of Incorporation of Quality Systems, Inc. filed with the Secretary of State of California effective October 6, 2005 | 8-K | 3.01 | October 11, 2005 | ||
3.4 | Certificate of Amendment to Articles of Incorporation of Quality Systems, Inc. filed with the Secretary of State of California effective March 3, 2006 | 8-K | 3.1 | March 6, 2006 | ||
3.5 | Amended and Restated Bylaws of Quality Systems, Inc., effective October 30, 2008 | 8-K | 3.1 | October 31, 2008 | ||
3.6 | Certificate of Amendment to Articles of Incorporation of Quality Systems, Inc. filed with the Secretary of State of California effective October 6, 2011 | 8-K | 3.1 | October 6, 2011 | ||
10.1 | * | Form of Non-Qualified Stock Option Agreement for Amended and Restated 1998 Stock Option Plan | 10-Q | 10.2 | December 23, 2004 | |
10.2 | * | Form of Incentive Stock Option Agreement for Amended and Restated 1998 Stock Option Plan | 10-Q | 10.1 | December 23, 2004 | |
10.3 | * | Amended and Restated 1998 Stock Option Plan | 10-K | 10.10.1 | June 14, 2005 | |
10.4 | * | Second Amended and Restated 2005 Stock Option and Incentive Plan | DEF14A | Appendix I | July 1, 2011 | |
10.5 | * | Form of Nonqualified Stock Option Agreement for 2005 Stock Incentive Plan | 8-K | 10.2 | June 5, 2007 | |
10.6 | * | Form of Incentive Stock Option Agreement for 2005 Stock Incentive Plan | 8-K | 10.3 | June 5, 2007 | |
10.7 | * | 2009 Quality Systems, Inc. Amended and Restated Deferred Compensation Plan. | 10-K | 10.8 | May 30, 2013 | |
10.8 | * | Form of Outside Directors Amended and Restated Restricted Stock Agreement | 8-K | 10.2 | February 2, 2010 | |
10.9 | * | Form of Outside Director's Restricted Stock Unit Agreement | 8-K | 10.1 | August 15, 2011 | |
10.10 | * | Employment Arrangement dated September 19, 2012 between Quality Systems, Inc., and Daniel Morefield | 8-K | 10.1 | September 25, 2012 | |
10.11 | * | Form of Indemnification Agreement | 8-K | 10.1 | January 28, 2013 | |
10.12 | * | Form of Executive Officer Restricted Stock Agreement | 8-K | 10.2 | May 28, 2013 | |
10.13 | * | Description of 2014 Director Compensation Program | 8-K | 10.3 | May 28, 2013 | |
10.14 | * | Agreement by and among Quality Systems, Inc., the Clinton Group, Inc. and certain of its affiliates, dated as of July 17, 2013 | 8-K | 10.1 | July 17, 2013 | |
10.15 | * | Share Purchase Agreement by and among Quality Systems, Inc., each of the shareholders of Mirth Corporation identified on Annex A thereto, and Jon Teichrow dated as of September 9, 2013 | 10-Q | 2.1 | October 31, 2013 | |
10.16 | * | Form of Performance-Based Restricted Stock Unit Agreement. | 10-K | 10.17 | May 29, 2014 | |
10.17 | * | Quality Systems, Inc. 2014 Employee Share Purchase Plan | DEF14A | Annex A | June 27, 2014 | |
10.18 | * | Executive Employment Agreement, dated June 3, 2015, between Quality Systems, Inc. and John R. Frantz | 8-K | 10.1 | June 4, 2015 | |
10.19 | * | Separation Agreement and General Release, dated June 24, 2015, between Quality Systems, Inc. and Steven Plochocki | 8-K | 10.1 | June 24, 2015 | |
10.20 | * | Quality Systems, Inc. 2015 Equity Incentive Plan | 8-K | 10.1 | August 14, 2015 | |
10.21 | * | Form of Employee Restricted Stock Award Grant Notice and Restricted Stock Award Agreement for 2015 Equity Incentive Plan | 8-K | 10.2 | August 14, 2015 | |
10.22 | * | Form of Outside Director Restricted Stock Award Grant Notice and Restricted Stock Award Agreement for 2015 Equity Incentive Plan | 8-K | 10.3 | August 14, 2015 | |
10.23 | * | Form of Stock Option Grant Notice, Option Agreement and Notice of Exercise for 2015 Equity Incentive Plan | 8-K | 10.4 | August 14, 2015 |
10.24 | * | Agreement and Plan of Merger, dated October 30, 2015, by and among Quality Systems, Inc., Ivory Merger Sub, Inc., HealthFusion Holdings, Inc. and Seth Flam, Sol Lizerbram, and Jonathan Flam, as the Securityholder Representative Committee. | 8-K | 2.1 | October 30, 2015 | |
10.25 | Description of 2016 Director Compensation Program | 8-K | 10.1 | December 8, 2015 | ||
10.26 | * | Credit Agreement, dated as of January 4, 2016, among Quality Systems, Inc., JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as syndication agent, and Bank of the West, KeyBank National Association and Wells Fargo Bank, National Association, as co-documentation agents | 10-Q | 10.1 | January 29, 2016 | |
10.27 | * | Employment Offer Letter, dated January 27, 2016, between David Metcalfe and Quality Systems, Inc. | 8-K | 10.1 | January 28, 2016 | |
10.28 | * | Employment Offer Letter, dated February 16, 2016, between James R. Arnold and Quality Systems, Inc. | 8-K | 10.1 | February 18, 2016 | |
10.29 | Description of 2017 Director Compensation Program | 8-K | 10.1 | August 18, 2016 | ||
10.30 | * | Form of Change of Control Severance Agreement, entered into with the Company's named executive officers effective December 27, 2016. | 8-K | 10.1 | January 3, 2017 | |
10.31 | * | Form of Performance Stock Award Grant Notice and Performance/Restricted Stock Award Agreement for 2015 Equity Incentive Plan, entered into with the Company's named executive officers effective December 29, 2016. | 8-K | 10.2 | January 3, 2017 | |
10.32 | * | Form of Restricted Stock Award Grant Notice and Performance/Restricted Stock Award Agreement for 2015 Equity Incentive Plan, entered into with the Company's named executive officers effective December 29, 2016. | 8-K | 10.3 | January 3, 2017 | |
10.33 | * | Separation Agreement and General Release, dated March 31, 2017, between Daniel J. Morefield and Quality Systems, Inc. | 8-K | 10.1 | April 4, 2017 | |
10.34 | Agreement and Plan of Merger, dated April 11, 2017, by and among Quality Systems, Inc., Engage Merger Sub, Inc., Entrada, Inc. and FCA Venture Partners V, LP, as the Company Stockholders' Representative | 8-K | 2.1 | April 12, 2017 | ||
21 | List of subsidiaries. | X | ||||
23.1 | Consent of Independent Registered Public Accounting Firm — PricewaterhouseCoopers LLP. | X | ||||
31.1 | Certification of Principal Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||
31.2 | Certification of Principal Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||
32.1 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | ||||
101.INS | ** | XBRL Instance | ||||
101.SCH | ** | XBRL Taxonomy Extension Schema | ||||
101.CAL | ** | XBRL Taxonomy Extension Calculation | ||||
101.DEF | ** | XBRL Taxonomy Extension Definition | ||||
101.LAB | ** | XBRL Taxonomy Extension Label | ||||
101.PRE | ** | XBRL Taxonomy Extension Presentation |
* | This exhibit is a management contract or a compensatory plan or arrangement. |
** | XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of section 11 or 12 of the Securities and Exchange Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these section. |
By: | /s/ John R. Frantz | ||
John R. Frantz | |||
Chief Executive Officer (Principal Executive Officer) | |||
By: | /s/ James R. Arnold | ||
James R. Arnold | |||
Chief Financial Officer (Principal Financial Officer) | |||
Signature | Title | Date | ||
/s/ Jeffrey H. Margolis | Chairman of the Board and Director | May 19, 2017 | ||
Jeffrey H. Margolis | ||||
/s/ Craig A. Barbarosh | Vice Chairman of the Board and Director | May 19, 2017 | ||
Craig A. Barbarosh | ||||
/s/ John R. Frantz | Chief Executive Officer (Principal Executive Officer) and Director | May 19, 2017 | ||
John R. Frantz | ||||
/s/ James R. Arnold | Chief Financial Officer (Principal Financial Officer) | May 19, 2017 | ||
James R. Arnold | ||||
/s/ George H. Bristol | Director | May 19, 2017 | ||
George H. Bristol | ||||
/s/ James C. Malone | Director | May 19, 2017 | ||
James C. Malone | ||||
/s/ Morris Panner | Director | May 19, 2017 | ||
Morris Panner | ||||
/s/ D. Russell Pflueger | Director | May 19, 2017 | ||
D. Russell Pflueger | ||||
/s/ Sheldon Razin | Chairman Emeritus and Director | May 19, 2017 | ||
Sheldon Razin | ||||
/s/ Lance E. Rosenzweig | Director | May 19, 2017 | ||
Lance E. Rosenzweig |
March 31, 2017 | March 31, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 37,673 | $ | 27,176 | |||
Restricted cash and cash equivalents (Note 2) | 4,916 | 5,320 | |||||
Marketable securities | — | 9,297 | |||||
Accounts receivable, net (Note 10) | 83,407 | 94,024 | |||||
Inventory | 158 | 555 | |||||
Income taxes receivable | 2,679 | 32,709 | |||||
Prepaid expenses and other current assets | 17,969 | 14,910 | |||||
Total current assets | 146,802 | 183,991 | |||||
Equipment and improvements, net | 27,426 | 25,790 | |||||
Capitalized software costs, net | 13,607 | 13,250 | |||||
Deferred income taxes, net | 11,265 | 8,198 | |||||
Intangibles, net | 69,213 | 91,675 | |||||
Goodwill | 185,898 | 188,837 | |||||
Other assets | 19,010 | 19,049 | |||||
Total assets | $ | 473,221 | $ | 530,790 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,618 | $ | 11,126 | |||
Deferred revenue | 52,383 | 57,935 | |||||
Accrued compensation and related benefits | 24,513 | 18,670 | |||||
Income taxes payable | 405 | 91 | |||||
Other current liabilities | 46,775 | 50,238 | |||||
Total current liabilities | 128,694 | 138,060 | |||||
Deferred revenue, net of current | 1,394 | 1,335 | |||||
Deferred compensation | 6,629 | 6,357 | |||||
Line of credit | 15,000 | 105,000 | |||||
Other noncurrent liabilities | 16,461 | 10,661 | |||||
Total liabilities | 168,178 | 261,413 | |||||
Commitments and contingencies (Note 14) | |||||||
Shareholders' equity: | |||||||
Common stock | |||||||
$0.01 par value; authorized 100,000 shares; issued and outstanding 62,455 and 60,978 shares at March 31, 2017 and March 31, 2016, respectively | 625 | 610 | |||||
Additional paid-in capital | 228,549 | 211,262 | |||||
Accumulated other comprehensive loss | (358 | ) | (481 | ) | |||
Retained earnings | 76,227 | 57,986 | |||||
Total shareholders' equity | 305,043 | 269,377 | |||||
Total liabilities and shareholders' equity | $ | 473,221 | $ | 530,790 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenues: | |||||||||||
Software license and hardware | $ | 65,547 | $ | 70,523 | $ | 81,649 | |||||
Software related subscription services | 87,050 | 55,403 | 44,592 | ||||||||
Total software, hardware and related | 152,597 | 125,926 | 126,241 | ||||||||
Support and maintenance | 158,803 | 165,200 | 169,219 | ||||||||
Revenue cycle management and related services | 82,552 | 83,006 | 74,237 | ||||||||
Electronic data interchange and data services | 88,951 | 82,343 | 76,358 | ||||||||
Professional services | 26,721 | 36,002 | 44,170 | ||||||||
Total revenues | 509,624 | 492,477 | 490,225 | ||||||||
Cost of revenue: | |||||||||||
Software license and hardware | 24,654 | 27,506 | 28,803 | ||||||||
Software related subscription services | 36,744 | 26,622 | 20,672 | ||||||||
Total software, hardware and related | 61,398 | 54,128 | 49,475 | ||||||||
Support and maintenance | 28,317 | 31,329 | 28,866 | ||||||||
Revenue cycle management and related services | 56,370 | 57,591 | 54,406 | ||||||||
Electronic data interchange and data services | 51,102 | 50,153 | 48,244 | ||||||||
Professional services | 25,947 | 32,414 | 42,173 | ||||||||
Total cost of revenue | 223,134 | 225,615 | 223,164 | ||||||||
Gross profit | 286,490 | 266,862 | 267,061 | ||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 163,623 | 156,234 | 158,172 | ||||||||
Research and development costs, net | 78,341 | 65,661 | 69,240 | ||||||||
Amortization of acquired intangible assets | 10,435 | 5,367 | 3,693 | ||||||||
Impairment of assets | — | 32,238 | — | ||||||||
Restructuring costs | 7,078 | — | — | ||||||||
Total operating expenses | 259,477 | 259,500 | 231,105 | ||||||||
Income from operations | 27,013 | 7,362 | 35,956 | ||||||||
Interest income | 14 | 428 | 111 | ||||||||
Interest expense | (3,156 | ) | (1,304 | ) | (341 | ) | |||||
Other expense, net | (262 | ) | (166 | ) | (62 | ) | |||||
Income before provision for income taxes | 23,609 | 6,320 | 35,664 | ||||||||
Provision for income taxes | 5,368 | 663 | 8,332 | ||||||||
Net income | $ | 18,241 | $ | 5,657 | $ | 27,332 | |||||
Other comprehensive income: | |||||||||||
Foreign currency translation, net of tax | 80 | (382 | ) | (117 | ) | ||||||
Unrealized gain on marketable securities, net of tax | 43 | 93 | 107 | ||||||||
Comprehensive income | $ | 18,364 | $ | 5,368 | $ | 27,322 | |||||
Net income per share: | |||||||||||
Basic | $ | 0.30 | $ | 0.09 | $ | 0.45 | |||||
Diluted | $ | 0.29 | $ | 0.09 | $ | 0.45 | |||||
Weighted-average shares outstanding: | |||||||||||
Basic | 61,818 | 60,635 | 60,259 | ||||||||
Diluted | 62,010 | 61,233 | 60,849 | ||||||||
Dividends declared per common share | $ | — | $ | 0.525 | $ | 0.70 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balance, March 31, 2014 | 60,206 | $ | 602 | $ | 194,739 | $ | 99,931 | $ | (182 | ) | $ | 295,090 | ||||||||||
Common stock issued under stock plans, net of shares withheld for taxes | 79 | 1 | 383 | — | — | 384 | ||||||||||||||||
Common stock issued for earnout settlement | 18 | — | 284 | — | — | 284 | ||||||||||||||||
Tax benefit related to stock options | — | — | (228 | ) | — | — | (228 | ) | ||||||||||||||
Stock-based compensation | — | — | 3,472 | — | — | 3,472 | ||||||||||||||||
Dividends declared | — | — | — | (42,784 | ) | — | (42,784 | ) | ||||||||||||||
Components of other comprehensive income (loss): | ||||||||||||||||||||||
Unrealized gain on marketable securities | — | — | — | — | 107 | 107 | ||||||||||||||||
Translation adjustments | — | — | — | — | (117 | ) | (117 | ) | ||||||||||||||
Net income | — | — | — | 27,332 | — | 27,332 | ||||||||||||||||
Balance, March 31, 2015 | 60,303 | 603 | 198,650 | 84,479 | (192 | ) | 283,540 | |||||||||||||||
Common stock issued under stock plans, net of shares withheld for taxes | 241 | 3 | 989 | — | — | 992 | ||||||||||||||||
Common stock issued for earnout settlement | 434 | 4 | 9,269 | — | — | 9,273 | ||||||||||||||||
Tax benefit related to stock options | — | — | (941 | ) | — | — | (941 | ) | ||||||||||||||
Stock-based compensation | — | — | 3,295 | — | — | 3,295 | ||||||||||||||||
Dividends declared | — | — | — | (32,150 | ) | — | (32,150 | ) | ||||||||||||||
Components of other comprehensive income (loss): | ||||||||||||||||||||||
Unrealized gain on marketable securities | — | — | — | — | 93 | 93 | ||||||||||||||||
Translation adjustments | — | — | — | — | (382 | ) | (382 | ) | ||||||||||||||
Net income | — | — | — | 5,657 | — | 5,657 | ||||||||||||||||
Balance, March 31, 2016 | 60,978 | 610 | 211,262 | 57,986 | (481 | ) | 269,377 | |||||||||||||||
Common stock issued under stock plans, net of shares withheld for taxes | 1,043 | 11 | 1,299 | — | — | 1,310 | ||||||||||||||||
Common stock issued for earnout settlement | 434 | 4 | 9,269 | — | — | 9,273 | ||||||||||||||||
Tax benefit related to stock options | — | — | (879 | ) | — | — | (879 | ) | ||||||||||||||
Stock-based compensation | — | — | 7,598 | — | — | 7,598 | ||||||||||||||||
Components of other comprehensive income: | ||||||||||||||||||||||
Unrealized gain on marketable securities | — | — | — | — | 43 | 43 | ||||||||||||||||
Translation adjustments | — | — | — | — | 80 | 80 | ||||||||||||||||
Net income | — | — | — | 18,241 | — | 18,241 | ||||||||||||||||
Balance, March 31, 2017 | 62,455 | $ | 625 | $ | 228,549 | $ | 76,227 | $ | (358 | ) | $ | 305,043 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 18,241 | $ | 5,657 | $ | 27,332 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 10,080 | 8,834 | 9,323 | ||||||||
Amortization of capitalized software costs | 7,892 | 9,891 | 12,817 | ||||||||
Amortization of other intangibles | 22,462 | 11,014 | 7,127 | ||||||||
Amortization of debt issuance costs | 1,076 | 258 | — | ||||||||
Loss on disposal of equipment and improvements | 530 | 205 | 51 | ||||||||
Provision for bad debts | 5,082 | 3,573 | 855 | ||||||||
Provision for inventory obsolescence | 418 | 48 | 25 | ||||||||
Share-based compensation | 7,598 | 3,295 | 3,472 | ||||||||
Deferred income taxes | (129 | ) | 10,030 | (12,061 | ) | ||||||
Change in fair value of contingent consideration | 4,247 | 261 | 1,937 | ||||||||
Restructuring costs, net of amounts paid | 2,891 | — | — | ||||||||
Loss on disposition of Hospital Solutions Division | — | 1,366 | — | ||||||||
Impairment of assets | — | 32,238 | — | ||||||||
Changes in assets and liabilities, net of amounts acquired: | |||||||||||
Accounts receivable | 5,535 | 9,929 | 4,744 | ||||||||
Inventory | (21 | ) | 17 | 187 | |||||||
Accounts payable | (6,590 | ) | (271 | ) | 1,281 | ||||||
Deferred revenue | (5,493 | ) | (8,390 | ) | (5,610 | ) | |||||
Accrued compensation and related benefits | 5,237 | (5,914 | ) | 8,098 | |||||||
Income taxes | 34,740 | (40,471 | ) | 18,178 | |||||||
Deferred compensation | 272 | 607 | 941 | ||||||||
Other assets and liabilities | (3,476 | ) | (1,381 | ) | 4,061 | ||||||
Net cash provided by operating activities | 110,592 | 40,796 | 82,758 | ||||||||
Cash flows from investing activities: | |||||||||||
Additions to capitalized software costs | (8,249 | ) | (14,675 | ) | (14,601 | ) | |||||
Additions to equipment and improvements | (12,165 | ) | (14,013 | ) | (6,531 | ) | |||||
Proceeds from sales and maturities of marketable securities | 9,291 | 8,795 | 11,077 | ||||||||
Purchases of marketable securities | — | (6,637 | ) | (12,123 | ) | ||||||
Payments for acquisitions, net of cash acquired | (282 | ) | (163,843 | ) | (2,345 | ) | |||||
Net cash used in investing activities | (11,405 | ) | (190,373 | ) | (24,523 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from line of credit | — | 173,509 | — | ||||||||
Principal repayments on line of credit | (90,000 | ) | (68,509 | ) | — | ||||||
Proceeds from issuance of shares under employee plans | 1,310 | 992 | 383 | ||||||||
Dividends paid | — | (42,850 | ) | (42,770 | ) | ||||||
Payment of debt issuance costs | — | (5,382 | ) | — | |||||||
Net cash provided by (used in) financing activities | (88,690 | ) | 57,760 | (42,387 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 10,497 | (91,817 | ) | 15,848 | |||||||
Cash and cash equivalents at beginning of period | 27,176 | 118,993 | 103,145 | ||||||||
Cash and cash equivalents at end of period | $ | 37,673 | $ | 27,176 | $ | 118,993 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for income taxes | $ | 4,800 | $ | 33,246 | $ | 3,814 | |||||
Cash refunds from income taxes | 29,575 | 2,344 | 1,291 | ||||||||
Cash paid for interest | 1,958 | 781 | — | ||||||||
Common stock issued for settlement of share-based contingent consideration | 9,273 | 9,273 | — | ||||||||
Non-cash investing and financing activities: | |||||||||||
Tenant improvement allowance from landlord | $ | 4,813 | $ | 2,933 | $ | — | |||||
Dividends declared but not paid | — | — | 10,700 | ||||||||
Unpaid additions to equipment and improvements | 82 | 295 | 849 | ||||||||
On January 4, 2016, we acquired HealthFusion in a transaction summarized as follows: | |||||||||||
Fair value of net assets acquired | $ | — | $ | 198,258 | $ | — | |||||
Cash paid, net of cash acquired | — | (163,843 | ) | — | |||||||
Unpaid portion of purchase price | — | (282 | ) | — | |||||||
Fair value of contingent consideration | — | (16,700 | ) | — | |||||||
Liabilities assumed | $ | — | $ | 17,433 | $ | — | |||||
On March 11, 2015, we acquired Gennius in a transaction summarized as follows: | |||||||||||
Fair value of net assets acquired | $ | — | $ | — | $ | 2,571 | |||||
Cash paid | — | — | (2,345 | ) | |||||||
Liabilities assumed | $ | — | $ | — | $ | 226 |
• | Computer equipment - 3 to 5 years |
• | Furniture and fixtures - 3 to 7 years |
• | Leasehold improvements - lesser of lease term or estimated useful life of asset |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Earnings per share — Basic: | |||||||||||
Net income | $ | 18,241 | $ | 5,657 | $ | 27,332 | |||||
Weighted-average shares outstanding — Basic | 61,818 | 60,635 | 60,259 | ||||||||
Net income per common share — Basic | $ | 0.30 | $ | 0.09 | $ | 0.45 | |||||
Earnings per share — Diluted: | |||||||||||
Net income | $ | 18,241 | $ | 5,657 | $ | 27,332 | |||||
Weighted-average shares outstanding | 61,818 | 60,635 | 60,259 | ||||||||
Effect of potentially dilutive securities | 192 | 598 | 590 | ||||||||
Weighted-average shares outstanding — Diluted | 62,010 | 61,233 | 60,849 | ||||||||
Net income per common share — Diluted | $ | 0.29 | $ | 0.09 | $ | 0.45 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Costs and expenses: | |||||||||||
Cost of revenue | $ | 514 | $ | 404 | $ | 373 | |||||
Research and development costs, net | 973 | 318 | 396 | ||||||||
Selling, general and administrative | 6,111 | 2,573 | 2,703 | ||||||||
Total share-based compensation | 7,598 | 3,295 | 3,472 | ||||||||
Income tax benefit | (2,637 | ) | (1,018 | ) | (1,054 | ) | |||||
Decrease in net income | $ | 4,961 | $ | 2,277 | $ | 2,418 |
Balance at | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
March 31, 2017 | |||||||||||||||
ASSETS | |||||||||||||||
Cash and cash equivalents (1) | $ | 37,673 | $ | 37,673 | $ | — | $ | — | |||||||
Restricted cash and cash equivalents | 4,916 | 4,916 | — | — | |||||||||||
$ | 42,589 | $ | 42,589 | $ | — | $ | — | ||||||||
LIABILITIES | |||||||||||||||
Contingent consideration related to acquisitions | $ | 18,817 | $ | — | $ | 18,817 | $ | — | |||||||
$ | 18,817 | $ | — | $ | 18,817 | $ | — |
Balance at | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
March 31, 2016 | |||||||||||||||
ASSETS | |||||||||||||||
Cash and cash equivalents (1) | $ | 27,176 | $ | 27,176 | $ | — | $ | — | |||||||
Restricted cash and cash equivalents | 5,320 | 5,320 | — | — | |||||||||||
Marketable securities (2) | 9,297 | 9,297 | — | — | |||||||||||
$ | 41,793 | $ | 41,793 | $ | — | $ | — | ||||||||
LIABILITIES | |||||||||||||||
Contingent consideration related to acquisitions | $ | 23,843 | $ | — | $ | — | $ | 23,843 | |||||||
$ | 23,843 | $ | — | $ | — | $ | 23,843 |
Total Liabilities | ||||
Balance at March 31, 2015 | $ | 16,155 | ||
Contingent consideration related to acquisition of HealthFusion (Note 5) | 16,700 | |||
Settlement of share-based contingent consideration related to Mirth | (9,273 | ) | ||
Fair value adjustments, net | 261 | |||
Balance at March 31, 2016 | $ | 23,843 | ||
Settlement of share-based contingent consideration related to Mirth | (9,273 | ) | ||
Fair value adjustments, net | 4,247 | |||
Transfer of HealthFusion contingent consideration to Level 2 | (18,817 | ) | ||
Balance at March 31, 2017 | $ | — |
Initial purchase price | $ | 165,000 | |
Contingent consideration | 16,700 | ||
Working capital and other adjustments | 1,349 | ||
Total purchase price | $ | 183,049 |
January 4, 2016 | |||
Fair value of the net tangible assets acquired and liabilities assumed: | |||
Acquired cash and cash equivalents | $ | 2,225 | |
Accounts receivable, net | 1,514 | ||
Prepaid expenses and other current assets | 4,645 | ||
Equipment and improvements, net | 767 | ||
Capitalized software costs, net | 307 | ||
Other assets | 700 | ||
Accounts payable | (1,085 | ) | |
Accrued compensation and related benefits | (533 | ) | |
Deferred revenue | (1,067 | ) | |
Deferred income taxes, net | (9,089 | ) | |
Other liabilities | (2,721 | ) | |
Total net tangible assets acquired and liabilities assumed | (4,337 | ) | |
Fair value of identifiable intangible assets acquired: | |||
Software technology | 42,500 | ||
Customer relationships | 28,500 | ||
Trade name | 4,000 | ||
Goodwill | 112,386 | ||
Total identifiable intangible assets acquired | 187,386 | ||
Total purchase price | $ | 183,049 |
Pro forma year ended March 31, 2016 (unaudited) | Pro forma year ended March 31, 2015 (unaudited) | ||||
Combined revenues | 518,708 | 516,579 | |||
Combined net income | 134 | 12,471 |
March 31, 2017 | March 31, 2016 | ||||||
Software and Related Solutions | $ | 153,608 | $ | 156,547 | |||
RCM and Related Services | 32,290 | 32,290 | |||||
Total goodwill | $ | 185,898 | $ | 188,837 |
March 31, 2017 | |||||||||||||||
Customer Relationships | Trade Name and Contracts | Software Technology | Total | ||||||||||||
Gross carrying amount | $ | 50,550 | $ | 5,480 | $ | 67,810 | $ | 123,840 | |||||||
Accumulated amortization | (28,972 | ) | (2,088 | ) | (23,567 | ) | (54,627 | ) | |||||||
Net intangible assets | $ | 21,578 | $ | 3,392 | $ | 44,243 | $ | 69,213 |
March 31, 2016 | |||||||||||||||
Customer Relationships | Trade Name and Contracts | Software Technology | Total | ||||||||||||
Gross carrying amount | $ | 50,550 | $ | 7,368 | $ | 67,810 | $ | 125,728 | |||||||
Accumulated amortization | (19,618 | ) | (2,895 | ) | (11,540 | ) | (34,053 | ) | |||||||
Net intangible assets | $ | 30,932 | $ | 4,473 | $ | 56,270 | $ | 91,675 |
Estimated Remaining Amortization Expense: | |||||||||||
Operating Expense | Cost of Revenue | Total | |||||||||
For the year ended March 31, | |||||||||||
2018 | 7,264 | 11,851 | 19,115 | ||||||||
2019 | 4,852 | 11,851 | 16,703 | ||||||||
2020 | 3,855 | 11,851 | 15,706 | ||||||||
2021 | 3,006 | 7,968 | 10,974 | ||||||||
2022 | 1,868 | 180 | 2,048 | ||||||||
2023 and beyond | 4,125 | 542 | 4,667 | ||||||||
Total | $ | 24,970 | $ | 44,243 | $ | 69,213 |
March 31, 2017 | March 31, 2016 | ||||||
Gross carrying amount | $ | 104,948 | $ | 96,699 | |||
Accumulated amortization | (91,341 | ) | (83,449 | ) | |||
Net capitalized software costs | $ | 13,607 | $ | 13,250 |
For the year ended March 31, | |||
2018 | $ | 6,200 | |
2019 | 5,200 | ||
2020 | 2,000 | ||
2021 | 207 | ||
Total | $ | 13,607 |
March 31, 2017 | March 31, 2016 | ||||||
Accounts receivable, gross | $ | 93,377 | $ | 104,467 | |||
Sales return reserve | (7,213 | ) | (7,541 | ) | |||
Allowance for doubtful accounts | (2,757 | ) | (2,902 | ) | |||
Accounts receivable, net | $ | 83,407 | $ | 94,024 |
March 31, 2017 | March 31, 2016 | ||||||
Prepaid expenses | $ | 14,884 | $ | 11,804 | |||
Other current assets | 3,085 | 3,106 | |||||
Prepaid expenses and other current assets | $ | 17,969 | $ | 14,910 |
March 31, 2017 | March 31, 2016 | ||||||
Computer equipment | $ | 22,014 | $ | 32,213 | |||
Internal-use software | 13,053 | 10,201 | |||||
Furniture and fixtures | 10,472 | 9,799 | |||||
Leasehold improvements | 16,360 | 13,408 | |||||
Equipment and improvements, gross | 61,899 | 65,621 | |||||
Accumulated depreciation and amortization | (34,473 | ) | (39,831 | ) | |||
Equipment and improvements, net | $ | 27,426 | $ | 25,790 |
March 31, 2017 | March 31, 2016 | ||||||
Professional services | $ | 21,889 | $ | 23,128 | |||
Software license, hardware and other | 12,680 | 14,913 | |||||
Support and maintenance | 9,691 | 11,902 | |||||
Software related subscription services | 8,123 | 7,992 | |||||
Deferred revenue | $ | 52,383 | $ | 57,935 |
March 31, 2017 | March 31, 2016 | ||||||
Payroll, bonus and commission | $ | 15,836 | $ | 9,683 | |||
Vacation | 8,677 | 8,987 | |||||
Accrued compensation and related benefits | $ | 24,513 | $ | 18,670 |
March 31, 2017 | March 31, 2016 | ||||||
Contingent consideration and other liabilities related to acquisitions | $ | 18,817 | $ | 24,153 | |||
Care services liabilities | 4,957 | 5,339 | |||||
Customer credit balances and deposits | 4,124 | 4,123 | |||||
Accrued consulting and outside services | 2,496 | 3,650 | |||||
Accrued EDI expense | 2,490 | 2,604 | |||||
Accrued royalties | 2,033 | 2,341 | |||||
Accrued self insurance expense | 1,697 | 1,862 | |||||
Accrued outsourcing costs | 1,588 | 1,604 | |||||
Deferred rent | 1,370 | 828 | |||||
Lease obligations | 1,057 | — | |||||
Accrued legal expense | 853 | 864 | |||||
Employee benefit plan withholdings | 739 | 213 | |||||
Sales tax payable | 448 | 655 | |||||
Other accrued expenses | 4,106 | 2,002 | |||||
Other current liabilities | $ | 46,775 | $ | 50,238 | |||
Deferred rent and lease obligations | $ | 11,402 | $ | 6,577 | |||
Uncertain tax positions | 4,762 | 3,955 | |||||
Other liabilities | 297 | 129 | |||||
Other noncurrent liabilities | $ | 16,461 | $ | 10,661 |
Fiscal Year Ended March 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Current: | |||||||||||
Federal taxes | $ | 3,443 | $ | (9,338 | ) | $ | 18,055 | ||||
State taxes | 1,556 | (403 | ) | 1,887 | |||||||
Foreign taxes | 498 | 374 | 262 | ||||||||
Total current taxes | 5,497 | (9,367 | ) | 20,204 | |||||||
Deferred: | |||||||||||
Federal taxes | $ | 824 | $ | 10,474 | $ | (9,804 | ) | ||||
State taxes | (879 | ) | (100 | ) | (1,771 | ) | |||||
Foreign taxes | (74 | ) | (344 | ) | (297 | ) | |||||
Total deferred taxes | (129 | ) | 10,030 | (11,872 | ) | ||||||
Provision for income taxes | $ | 5,368 | $ | 663 | $ | 8,332 |
Fiscal Year Ended March 31, | ||||||||
2017 | 2016 | 2015 | ||||||
Current: | ||||||||
Federal income tax statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
Increase (decrease) resulting from: | ||||||||
Research and development tax credits | (12.5 | ) | (23.4 | ) | (4.4 | ) | ||
Qualified production activities income deduction | (3.2 | ) | — | (5.4 | ) | |||
Foreign rate differential | (1.7 | ) | (10.2 | ) | (1.6 | ) | ||
Net operating loss carryback | — | 9.1 | — | |||||
Other non-recurring adjustments for state taxes | — | — | (1.8 | ) | ||||
Meals and entertainment | 0.8 | 3.7 | 0.8 | |||||
Stock option deduction | 0.8 | 3.7 | 0.6 | |||||
State income taxes, net of federal benefit | 1.4 | (5.2 | ) | 2.0 | ||||
Acquisition expenses | 5.7 | (3.6 | ) | — | ||||
Other | (3.6 | ) | 1.4 | (1.8 | ) | |||
Effective income tax rate | 22.7 | % | 10.5 | % | 23.4 | % |
March 31, 2017 | March 31, 2016 | ||||||
Deferred tax assets: | |||||||
Net operating losses | $ | 11,811 | $ | 17,920 | |||
Deferred revenue | 7,337 | 10,682 | |||||
Accrued compensation and benefits | 7,063 | 5,868 | |||||
Deferred rent | 5,446 | 2,760 | |||||
Research and development credit | 4,328 | 3,611 | |||||
Compensatory stock option expense | 4,028 | 2,664 | |||||
Allowance for doubtful accounts | 3,974 | 4,176 | |||||
Deferred compensation | 2,642 | 2,586 | |||||
Foreign deferred taxes | 1,173 | 1,098 | |||||
State income taxes | 329 | 445 | |||||
Inventory valuation | 232 | 68 | |||||
Other | 169 | 265 | |||||
Total deferred tax assets | 48,532 | 52,143 | |||||
Deferred tax liabilities: | |||||||
Intangible assets | $ | (18,038 | ) | $ | (22,972 | ) | |
Capitalized software costs | (7,494 | ) | (9,644 | ) | |||
Accounts receivable | (5,538 | ) | (5,096 | ) | |||
Accelerated depreciation | (2,348 | ) | (2,434 | ) | |||
Prepaid expenses | (1,776 | ) | (1,249 | ) | |||
Total deferred tax liabilities | (35,194 | ) | (41,395 | ) | |||
Valuation allowance | (2,073 | ) | (2,551 | ) | |||
Deferred tax assets, net | $ | 11,265 | $ | 8,198 |
Balance as of March 31, 2015 | $ | 3,763 | |
Additions for prior year tax positions | 235 | ||
Reductions for prior year tax positions | (43 | ) | |
Balance as of March 31, 2016 | $ | 3,955 | |
Additions for prior year tax positions | 920 | ||
Additions for current year tax positions | 139 | ||
Reductions for prior year tax positions | (252 | ) | |
Balance as of March 31, 2017 | $ | 4,762 |
Number of Shares | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Life (years) | Aggregate Intrinsic Value (in thousands) | ||||||||||
Outstanding, March 31, 2014 | 1,370,101 | $ | 27.85 | 5.8 | |||||||||
Granted | 469,650 | 15.97 | 7.2 | ||||||||||
Forfeited/Canceled | 203,575 | 24.85 | 4.9 | ||||||||||
Outstanding, March 31, 2015 | 1,636,176 | $ | 24.82 | 5.5 | $ | 8 | |||||||
Granted | 1,414,000 | $ | 15.51 | 7.6 | |||||||||
Exercised | (800 | ) | $ | 15.99 | 6.2 | $ | 1 | ||||||
Forfeited/Canceled | (572,090 | ) | $ | 24.65 | 4.6 | ||||||||
Expired | (30,000 | ) | $ | 22.81 | |||||||||
Outstanding, March 31, 2016 | 2,447,286 | $ | 19.55 | 6.3 | $ | 574 | |||||||
Granted | 1,146,500 | 11.30 | 7.2 | ||||||||||
Forfeited/Canceled | (708,371 | ) | 16.86 | 3.4 | |||||||||
Outstanding, March 31, 2017 | 2,885,415 | $ | 15.41 | 6.2 | $ | 3,150 | |||||||
Vested and expected to vest, March 31, 2017 | 2,613,171 | $ | 16.87 | 6.1 | $ | 2,496 | |||||||
Exercisable, March 31, 2017 | 812,120 | $ | 22.16 | 4.7 | $ | 125 |
Year Ended | Year Ended | Year Ended | |||
March 31, 2017 | March 31, 2016 | March 31, 2015 | |||
Expected term | 6.0 - 6.6 years | 3.8 - 3.9 years | 4.8 years | ||
Expected volatility | 36.9% - 37.4% | 38.3% - 41.1% | 36.1% - 36.6% | ||
Expected dividends | —% | 0.0% - 5.3% | 4.3% - 4.4% | ||
Risk-free rate | 1.2% - 2.1% | 1.1% - 1.6% | 1.6% - 1.7% |
Option Grant Date | Number of Shares | Exercise Price | Vesting Terms (1) | Expiration | |||||||
January 31, 2017 | 90,000 | $ | 15.01 | Four years | January 31, 2025 | ||||||
November 1, 2016 | 50,000 | $ | 12.71 | Four years | November 1, 2024 | ||||||
July 11, 2016 | 150,000 | $ | 12.60 | Four years | July 11, 2024 | ||||||
May 31, 2016 | 100,000 | $ | 12.71 | Five years | May 31, 2024 | ||||||
May 25, 2016 | 216,500 | $ | 12.78 | Four years | May 25, 2024 | ||||||
May 24, 2016 | 540,000 | $ | 12.93 | Four years | May 24, 2024 | ||||||
Fiscal year 2017 grants | 1,146,500 | ||||||||||
March 1, 2016 | 450,000 | $ | 15.60 | Four years | March 1, 2024 | ||||||
February 1, 2016 | 200,000 | $ | 14.20 | Four years | February 1, 2024 | ||||||
January 4, 2016 | 200,000 | $ | 16.85 | (2) | January 4, 2024 | ||||||
August 17, 2015 | 150,000 | $ | 12.80 | (3) | August 17, 2023 | ||||||
May 22, 2015 | 414,000 | $ | 16.64 | Five years | May 22, 2023 | ||||||
Fiscal year 2016 grants | 1,414,000 | ||||||||||
March 11, 2015 | 10,000 | $ | 15.84 | Five years | March 11, 2023 | ||||||
September 2, 2014 | 20,000 | $ | 15.63 | Five years | September 2, 2022 | ||||||
June 3, 2014 | 439,650 | $ | 15.99 | Five years | June 3, 2022 | ||||||
Fiscal year 2015 grants | 469,650 |
Number of Shares | Weighted- Average Grant-Date Fair Value per Share | ||||||
Non-vested, March 31, 2014 | 991,560 | $ | 7.73 | ||||
Granted | 469,650 | 3.50 | |||||
Vested | (269,785 | ) | 8.24 | ||||
Forfeited/Canceled | (123,135 | ) | 6.57 | ||||
Non-vested, March 31, 2015 | 1,068,290 | $ | 5.81 | ||||
Granted | 1,414,000 | 4.44 | |||||
Vested | (311,740 | ) | 5.44 | ||||
Forfeited/Canceled | (310,800 | ) | 5.45 | ||||
Non-vested, March 31, 2016 | 1,859,750 | $ | 4.67 | ||||
Granted | 1,146,500 | 5.00 | |||||
Vested | (540,595 | ) | 3.87 | ||||
Forfeited/Canceled | (392,360 | ) | 4.50 | ||||
Non-vested, March 31, 2017 | 2,073,295 | $ | 5.09 |
Number of Shares | Weighted- Average Grant-Date Fair Value per Share | ||||||
Outstanding, March 31, 2014 | 64,571 | $ | 20.74 | ||||
Granted | 48,414 | $ | 15.77 | ||||
Vested | (34,780 | ) | $ | 21.33 | |||
Outstanding, March 31, 2015 | 78,205 | $ | 17.94 | ||||
Granted | 165,634 | $ | 14.06 | ||||
Vested | (51,092 | ) | $ | 20.14 | |||
Canceled | (1,500 | ) | $ | 17.95 | |||
Outstanding, March 31, 2016 | 191,247 | $ | 14.44 | ||||
Granted | 909,456 | 12.93 | |||||
Vested | (92,543 | ) | 15.25 | ||||
Canceled | (105,212 | ) | 13.00 | ||||
Outstanding, March 31, 2017 | 902,948 | $ | 12.92 |
For the year ended March 31, | |||||||||||||||||||||
Contractual Obligations | Total | 2018 | 2019 | 2020 | 2021 | 2,022 | 2023 and beyond | ||||||||||||||
Operating lease obligations | $ | 60,109 | $ | 8,136 | $ | 8,350 | $ | 8,067 | $ | 8,037 | $ | 7,713 | $ | 19,806 | |||||||
Remaining lease obligations for vacated properties (1) | 6,599 | 2,487 | 1,413 | 794 | 816 | 551 | 538 | ||||||||||||||
Line of credit obligations (Note 9) | 15,000 | — | — | — | 15,000 | — | — | ||||||||||||||
Contingent consideration liabilities | 18,817 | 18,817 | — | — | — | — | — | ||||||||||||||
Purchase commitments (2) | 3,800 | 1,250 | 1,250 | 1,300 | — | ||||||||||||||||
Total | $ | 104,325 | $ | 30,690 | $ | 11,013 | $ | 10,161 | $ | 23,853 | $ | 8,264 | $ | 20,344 |
Fiscal Year Ended March 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Revenue: | ||||||||||||
Software and Related Solutions | $ | 423,593 | $ | 398,449 | $ | 395,259 | ||||||
RCM and Related Services | 86,031 | 86,559 | 76,962 | |||||||||
Hospital Solutions (1) | — | 7,469 | 18,004 | |||||||||
Consolidated revenue | $ | 509,624 | $ | 492,477 | $ | 490,225 | ||||||
Gross profit: | ||||||||||||
Software and Related Solutions | $ | 278,121 | $ | 252,136 | $ | 256,922 | ||||||
RCM and Related Services | 28,274 | 27,694 | 21,514 | |||||||||
Hospital Solutions (1) | — | 2,568 | 4,876 | |||||||||
Unallocated cost of revenue (2) | (19,905 | ) | (15,536 | ) | (16,251 | ) | ||||||
Consolidated gross profit | $ | 286,490 | $ | 266,862 | $ | 267,061 |
Quarter Ended | |||||||||||||||||||||||||||||||
(Unaudited) | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||
Software license and hardware | $ | 16,581 | $ | 16,995 | $ | 17,182 | $ | 14,789 | $ | 18,497 | $ | 16,150 | $ | 19,687 | $ | 16,189 | |||||||||||||||
Software related subscription services | 23,139 | 22,546 | 21,490 | 19,875 | 19,015 | 11,705 | 12,437 | 12,246 | |||||||||||||||||||||||
Total software, hardware and related | 39,720 | 39,541 | 38,672 | 34,664 | 37,512 | 27,855 | 32,124 | 28,435 | |||||||||||||||||||||||
Support and maintenance | 41,898 | 39,924 | 38,974 | 38,007 | 39,792 | 39,519 | 42,176 | 43,713 | |||||||||||||||||||||||
Revenue cycle management and related services | 20,515 | 20,048 | 20,936 | 21,053 | 20,376 | 21,594 | 20,793 | 20,243 | |||||||||||||||||||||||
Electronic data interchange and data services | 23,424 | 21,790 | 21,613 | 22,124 | 20,930 | 20,643 | 20,581 | 20,189 | |||||||||||||||||||||||
Professional services | 6,828 | 6,565 | 6,971 | 6,357 | 9,302 | 7,421 | 9,695 | 9,584 | |||||||||||||||||||||||
Total revenues | 132,385 | 127,868 | 127,166 | 122,205 | 127,912 | 117,032 | 125,369 | 122,164 | |||||||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||||||||||
Software license and hardware | 5,427 | 5,680 | 6,427 | 7,120 | 7,357 | 6,530 | 6,578 | 7,041 | |||||||||||||||||||||||
Software related subscription services | 9,637 | 9,345 | 8,675 | 9,087 | 9,168 | 5,533 | 5,963 | 5,958 | |||||||||||||||||||||||
Total software, hardware and related | 15,064 | 15,025 | 15,102 | 16,207 | 16,525 | 12,063 | 12,541 | 12,999 | |||||||||||||||||||||||
Support and maintenance | 7,414 | 7,299 | 7,036 | 6,568 | 7,455 | 7,537 | 8,394 | 7,943 | |||||||||||||||||||||||
Revenue cycle management and related services | 14,318 | 13,462 | 14,359 | 14,231 | 14,018 | 14,381 | 14,680 | 14,512 | |||||||||||||||||||||||
Electronic data interchange and data services | 12,870 | 12,662 | 12,807 | 12,763 | 12,851 | 12,437 | 12,539 | 12,326 | |||||||||||||||||||||||
Professional services | 6,304 | 5,904 | 6,693 | 7,046 | 8,406 | 7,367 | 8,444 | 8,197 | |||||||||||||||||||||||
Total cost of revenue | 55,970 | 54,352 | 55,997 | 56,815 | 59,255 | 53,785 | 56,598 | 55,977 | |||||||||||||||||||||||
Gross profit | 76,415 | 73,516 | 71,169 | 65,390 | 68,657 | 63,247 | 68,771 | 66,187 | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||
Selling, general and administrative (1) | 42,710 | 37,542 | 42,790 | 40,581 | 40,272 | 39,395 | 37,396 | 39,171 | |||||||||||||||||||||||
Research and development costs, net | 22,111 | 19,714 | 18,292 | 18,224 | 16,077 | 14,518 | 17,981 | 17,085 | |||||||||||||||||||||||
Amortization of acquired intangible assets | 2,546 | 2,568 | 2,617 | 2,704 | 2,675 | 897 | 898 | 897 | |||||||||||||||||||||||
Impairment of assets (2) | — | — | — | — | 32,238 | — | — | — | |||||||||||||||||||||||
Restructuring costs | 2,393 | 231 | 701 | 3,753 | — | — | — | — | |||||||||||||||||||||||
Total operating expenses | 69,760 | 60,055 | 64,400 | 65,262 | 91,262 | 54,810 | 56,275 | 57,153 | |||||||||||||||||||||||
Income (loss) from operations | 6,655 | 13,461 | 6,769 | 128 | (22,605 | ) | 8,437 | 12,496 | 9,034 | ||||||||||||||||||||||
Interest income | 5 | — | 1 | 8 | 27 | 55 | 44 | 302 | |||||||||||||||||||||||
Interest expense | (711 | ) | (629 | ) | (803 | ) | (1,013 | ) | (1,295 | ) | (6 | ) | (3 | ) | — | ||||||||||||||||
Other expense, net | (116 | ) | (4 | ) | (55 | ) | (87 | ) | (19 | ) | (43 | ) | (54 | ) | (50 | ) | |||||||||||||||
Income (loss) before provision for (benefit of) income taxes | 5,833 | 12,828 | 5,912 | (964 | ) | (23,892 | ) | 8,443 | 12,483 | 9,286 | |||||||||||||||||||||
Provision for (benefit of) income taxes | 1,418 | 2,342 | 1,925 | (317 | ) | (7,570 | ) | 1,141 | 4,168 | 2,924 | |||||||||||||||||||||
Net income (loss) | $ | 4,415 | $ | 10,486 | $ | 3,987 | $ | (647 | ) | $ | (16,322 | ) | $ | 7,302 | $ | 8,315 | $ | 6,362 | |||||||||||||
Net income (loss) per share: | |||||||||||||||||||||||||||||||
Basic (3) | 0.07 | 0.17 | 0.06 | (0.01 | ) | (0.27 | ) | 0.12 | 0.14 | 0.11 | |||||||||||||||||||||
Diluted (3) | 0.07 | 0.17 | 0.06 | (0.01 | ) | (0.27 | ) | 0.12 | 0.14 | 0.10 | |||||||||||||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||||||||||||
Basic | 62,345 | 62,093 | 61,658 | 61,179 | 60,899 | 60,867 | 60,461 | 60,312 | |||||||||||||||||||||||
Diluted | 62,348 | 62,093 | 62,052 | 61,676 | 60,899 | 61,279 | 61,194 | 61,064 | |||||||||||||||||||||||
Dividends declared per common share | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 0.175 | $ | 0.175 | $ | 0.175 |
Sales Return Reserve | |||||||||||||||
(in thousands) For the year ended | Balance at Beginning of Year | Additions Charged Against Revenue | Deductions | Balance at End of Year | |||||||||||
March 31, 2017 | $ | 7,541 | $ | 11,330 | $ | (11,658 | ) | $ | 7,213 | ||||||
March 31, 2016 | $ | 8,835 | $ | 6,737 | $ | (8,031 | ) | $ | 7,541 | ||||||
March 31, 2015 | $ | 10,530 | $ | 8,038 | $ | (9,733 | ) | $ | 8,835 |
Allowance for Doubtful Accounts | |||||||||||||||
(in thousands) For the year ended | Balance at Beginning of Year | Additions Charged to Costs and Expenses | Deductions | Balance at End of Year | |||||||||||
March 31, 2017 | $ | 2,902 | $ | 5,082 | $ | (5,227 | ) | $ | 2,757 | ||||||
March 31, 2016 | $ | 3,303 | $ | 3,573 | $ | (3,974 | ) | $ | 2,902 | ||||||
March 31, 2015 | $ | 6,295 | $ | 855 | $ | (3,847 | ) | $ | 3,303 |
Valuation Allowance on Deferred Tax Assets | |||||||||||||||||||
(in thousands) For the year ended | Balance at Beginning of Year | Additions Charged to Costs and Expenses | Acquisition-related Additions | Deductions | Balance at End of Year | ||||||||||||||
March 31, 2017 | $ | 2,551 | $ | — | $ | (267 | ) | $ | (211 | ) | $ | 2,073 | |||||||
March 31, 2016 | $ | 1,840 | $ | 112 | $ | 599 | $ | — | $ | 2,551 | |||||||||
March 31, 2015 | $ | 2,288 | $ | — | $ | — | $ | (448 | ) | $ | 1,840 |
Exhibit Number | Description | |
21 | List of subsidiaries. | |
23.1 | Consent of Independent Registered Public Accounting Firm — PricewaterhouseCoopers LLP. | |
31.1 | Certification of Principal Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Principal Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS* | XBRL Instance | |
101.SCH* | XBRL Taxonomy Extension Schema | |
101.CAL* | XBRL Taxonomy Extension Calculation | |
101.DEF* | XBRL Taxonomy Extension Definition | |
101.LAB* | XBRL Taxonomy Extension Label | |
101.PRE* | XBRL Taxonomy Extension Presentation |
* | XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of section 11 or 12 of the Securities and Exchange Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these section. |
1. | HealthFusion Holdings, Inc. |
2. | HealthFusion Inc. |
3. | Matrix Management Solutions, LLC |
4. | Mirth, LLC |
5. | Mirth Limited |
6. | NextGen Healthcare Information Systems, LLC |
7. | NextGen RCM Services, LLC |
8. | NextGen Healthcare India Pvt. Ltd. |
9. | QSI Management, LLC |
10. | ViaTrack Systems, LLC |
1. | I have reviewed this Annual Report on Form 10-K of Quality Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 19, 2017 | By: | /s/ John R. Frantz |
John R. Frantz | |||
Chief Executive Officer | |||
(Principal Executive Officer) |
1. | I have reviewed this Annual Report on Form 10-K of Quality Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 19, 2017 | By: | /s/ James R. Arnold |
James R. Arnold | |||
Chief Financial Officer | |||
(Principal Financial Officer) |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 19, 2017 | By: | /s/ John R. Frantz |
John R. Frantz | |||
Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: | May 19, 2017 | By: | /s/ James R. Arnold |
James R. Arnold | |||
Chief Financial Officer | |||
(Principal Financial Officer) |
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Document and Entity Information - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
May 17, 2017 |
Sep. 30, 2016 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | QUALITY SYSTEMS, INC | ||
Entity Central Index Key | 0000708818 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2017 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 582,893 | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Common Stock, Shares Outstanding | 62,698,811 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Thousands |
Mar. 31, 2017 |
Mar. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 62,437 | 60,978 |
Common stock, shares outstanding | 62,437 | 60,978 |
Consolidated Statements of Income (Loss) (Unaudited) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Revenues: | |||
Software license and hardware | $ 65,547,000 | $ 70,523,000 | $ 81,649,000 |
Software related subscription services | 87,050,000 | 55,403,000 | 44,592,000 |
Total software, hardware and related | 152,597,000 | 125,926,000 | 126,241,000 |
Support and maintenance | 158,803,000 | 165,200,000 | 169,219,000 |
Revenue cycle management and related services | 82,552,000 | 83,006,000 | 74,237,000 |
Electronic data interchange and data services | 88,951,000 | 82,343,000 | 76,358,000 |
Professional services | 26,721,000 | 36,002,000 | 44,170,000 |
Total revenues | 509,624,000 | 492,477,000 | 490,225,000 |
Cost of revenue: | |||
Software license and hardware | 24,654,000 | 27,506,000 | 28,803,000 |
Software related subscription services | 36,744,000 | 26,622,000 | 20,672,000 |
Total software, hardware and related | 61,398,000 | 54,128,000 | 49,475,000 |
Support and maintenance | 28,317,000 | 31,329,000 | 28,866,000 |
Revenue cycle management and related services | 56,370,000 | 57,591,000 | 54,406,000 |
Electronic data interchange and data services | 51,102,000 | 50,153,000 | 48,244,000 |
Professional services | 25,947,000 | 32,414,000 | 42,173,000 |
Total cost of revenue | 223,134,000 | 225,615,000 | 223,164,000 |
Gross profit | 286,490,000 | 266,862,000 | 267,061,000 |
Operating expenses: | |||
Selling, general and administrative | 163,623,000 | 156,234,000 | 158,172,000 |
Research and development costs, net | 78,341,000 | 65,661,000 | 69,240,000 |
Amortization of acquired intangible assets | 10,435,000 | 5,367,000 | 3,693,000 |
Impairment of goodwill and other assets | 0 | 32,238,000 | |
Restructuring costs | 7,078,000 | 0 | 0 |
Total operating expenses | 259,477,000 | 259,500,000 | 231,105,000 |
Income from operations | 27,013,000 | 7,362,000 | 35,956,000 |
Interest income | 14,000 | 428,000 | 111,000 |
Interest expense | (3,156,000) | (1,304,000) | (341,000) |
Other expense, net | (262,000) | (166,000) | (62,000) |
Income before provision for income taxes | 23,609,000 | 6,320,000 | 35,664,000 |
Provision for income taxes | 5,368,000 | 663,000 | 8,332,000 |
Net income | 18,241,000 | 5,657,000 | 27,332,000 |
Foreign currency translation, net of tax | 80,000 | (382,000) | (117,000) |
Unrealized gain (loss) on marketable securities, net of tax | 43,000 | 93,000 | 107,000 |
Comprehensive income | $ 18,364,000 | $ 5,368,000 | $ 27,322,000 |
Net income per share: | |||
Earnings Per Share, Basic | $ 0.30 | $ 0.09 | $ 0.45 |
Diluted (in usd per share) | $ 0.29 | $ 0.09 | $ 0.45 |
Weighted-average shares outstanding: | |||
Basic (in usd per share) | 61,818,000 | 60,635,000 | 60,259,000 |
Diluted (in usd per share) | 62,010,000 | 61,233,000 | 60,849,000 |
Dividends declared per common share | $ 0 | $ 0.525 | $ 0.7 |
Cash and Cash Equivalents Statement $ in Thousands |
12 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Cash and Cash Equivalents [Line Items] | |
Cash and Cash Equivalents, at Carrying Value | $ 37,673 |
Maturity of Time Deposits | 90 days |
Selected Quarterly Operating Results Statement - USD ($) |
3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
|
Software, hardware and supplies revenues | $ 16,581,000 | $ 16,995,000 | $ 17,182,000 | $ 14,789,000 | $ 18,497,000 | $ 16,150,000 | $ 19,687,000 | $ 16,189,000 |
Software related subscription services revenue | 23,139,000 | 22,546,000 | 21,490,000 | 19,875,000 | 19,015,000 | 11,705,000 | 12,437,000 | 12,246,000 |
Total software, hardware and related | 39,720,000 | 39,541,000 | 38,672,000 | 34,664,000 | 37,512,000 | 27,855,000 | 32,124,000 | 28,435,000 |
Maintenance Revenue | 41,898,000 | 39,924,000 | 38,974,000 | 38,007,000 | 39,792,000 | 39,519,000 | 42,176,000 | 43,713,000 |
Revenue cycle management and related services revenue | 20,515,000 | 20,048,000 | 20,936,000 | 21,053,000 | 20,376,000 | 21,594,000 | 20,793,000 | 20,243,000 |
Electronic data interchange services revenues | 23,424,000 | 21,790,000 | 21,613,000 | 22,124,000 | 20,930,000 | 20,643,000 | 20,581,000 | 20,189,000 |
Sales Revenue, Services, Other | 6,828,000 | 6,565,000 | 6,971,000 | 6,357,000 | 9,302,000 | 7,421,000 | 9,695,000 | 9,584,000 |
Total revenues | 132,385,000 | 127,868,000 | 127,166,000 | 122,205,000 | 127,912,000 | 117,032,000 | 125,369,000 | 122,164,000 |
Software, hardware and supplies charges | 5,427,000 | 5,680,000 | 6,427,000 | 7,120,000 | 7,357,000 | 6,530,000 | 6,578,000 | 7,041,000 |
Technology Services Costs | 9,637,000 | 9,345,000 | 8,675,000 | 9,087,000 | 9,168,000 | 5,533,000 | 5,963,000 | 5,958,000 |
Total software, hardware and related | 15,064,000 | 15,025,000 | 15,102,000 | 16,207,000 | 16,525,000 | 12,063,000 | 12,541,000 | 12,999,000 |
Cost of Services, Maintenance Costs | 7,414,000 | 7,299,000 | 7,036,000 | 6,568,000 | 7,455,000 | 7,537,000 | 8,394,000 | 7,943,000 |
Revenue cycle management and related services cost | 14,318,000 | 13,462,000 | 14,359,000 | 14,231,000 | 14,018,000 | 14,381,000 | 14,680,000 | 14,512,000 |
Electronic data interchange services cost | 12,870,000 | 12,662,000 | 12,807,000 | 12,763,000 | 12,851,000 | 12,437,000 | 12,539,000 | 12,326,000 |
Other Cost of Services | 6,304,000 | 5,904,000 | 6,693,000 | 7,046,000 | 8,406,000 | 7,367,000 | 8,444,000 | 8,197,000 |
Total cost of revenue | 55,970,000 | 54,352,000 | 55,997,000 | 56,815,000 | 59,255,000 | 53,785,000 | 56,598,000 | 55,977,000 |
Gross Profit | 76,415,000 | 73,516,000 | 71,169,000 | 65,390,000 | 68,657,000 | 63,247,000 | 68,771,000 | 66,187,000 |
Selling, General and Administrative Expense | 42,710,000 | 37,542,000 | 42,790,000 | 40,581,000 | 40,272,000 | 39,395,000 | 37,396,000 | 39,171,000 |
Research and development costs, net | 22,111,000 | 19,714,000 | 18,292,000 | 18,224,000 | 16,077,000 | 14,518,000 | 17,981,000 | 17,085,000 |
Amortization of Intangible Assets Acquired | 2,546,000 | 2,568,000 | 2,617,000 | 2,704,000 | 2,675,000 | 897,000 | 898,000 | 897,000 |
Asset Impairment Charges | 0 | 0 | 0 | 0 | 32,238,000 | 0 | 0 | 0 |
Restructuring Costs | 2,393,000 | 231,000 | 701,000 | 3,753,000 | 0 | 0 | 0 | 0 |
Total operating expenses | 69,760,000 | 60,055,000 | 64,400,000 | 65,262,000 | 91,262,000 | 54,810,000 | 56,275,000 | 57,153,000 |
Operating Income (Loss) | 6,655,000 | 13,461,000 | 6,769,000 | 128,000 | (22,605,000) | 8,437,000 | 12,496,000 | 9,034,000 |
Interest Income, Other | 5,000 | 0 | 1,000 | 8,000 | 27,000 | 55,000 | 44,000 | 302,000 |
Interest Expense, Other | (711,000) | (629,000) | (803,000) | (1,013,000) | (1,295,000) | (6,000) | (3,000) | 0 |
Other Expenses | (116,000) | (4,000) | (55,000) | (87,000) | (19,000) | (43,000) | (54,000) | (50,000) |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 5,833,000 | 12,828,000 | 5,912,000 | (964,000) | (23,892,000) | 8,443,000 | 12,483,000 | 9,286,000 |
Income Tax Expense (Benefit) | 1,418,000 | 2,342,000 | 1,925,000 | (317,000) | (7,570,000) | 1,141,000 | 4,168,000 | 2,924,000 |
Net Income (Loss) Attributable to Parent | $ 4,415,000 | $ 10,486,000 | $ 3,987,000 | $ (647,000) | $ (16,322,000) | $ 7,302,000 | $ 8,315,000 | $ 6,362,000 |
Earnings Per Share, Basic | $ 0.07 | $ 0.17 | $ 0.06 | $ (0.01) | $ (0.27) | $ 0.12 | $ 0.14 | $ 0.11 |
Diluted (in usd per share) | $ 0.07 | $ 0.17 | $ 0.06 | $ (0.01) | $ (0.27) | $ 0.12 | $ 0.14 | $ 0.10 |
Basic (in usd per share) | 62,345,000 | 62,093,000 | 61,658,000 | 61,179,000 | 60,899,000 | 60,867,000 | 60,461,000 | 60,312,000 |
Weighted Average Number of Shares Outstanding, Diluted | 62,348,000 | 62,093,000 | 62,052,000 | 61,676,000 | 60,899,000 | 61,279,000 | 61,194,000 | 61,064,000 |
Common Stock, Dividends, Per Share, Declared | $ 0.000 | $ 0.000 | $ 0.000 | $ 0.00 | $ 0.000 | $ 0.175 | $ 0.175 | $ 0.175 |
Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation. The consolidated financial statements include the accounts of Quality Systems, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). Each of the terms “we,” “us,” or “our” as used herein refers collectively to the Company, unless otherwise stated. All intercompany accounts and transactions have been eliminated. Business Segments. The Company has prepared operating segment information based on the manner in which management disaggregates the Company’s operations for making internal operating decisions. Effective July 1, 2016, we revised our reportable operating segments. See Note 15 for additional details. Basis of Presentation. Certain prior period amounts have been reclassified to conform to current year presentation. References to amounts in the consolidated financial statement sections are in thousands, except shares and per share data, unless otherwise specified. Use of Estimates. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and recording revenue and expenses during the period. Revenue Recognition. We generate revenue from sales of licensing rights and subscriptions to our software products, hardware and third party software products, support and maintenance services, RCM, EDI, and professional services, such as implementation, training, and consulting performed for clients who use our products. We generally recognize revenue provided that persuasive evidence of an arrangement exists, fees are considered fixed or determinable, delivery of the product or service has occurred, and collection is considered probable. Revenue from the delivered elements (generally software licenses) are generally recognized upon physical or electronic delivery. In certain transactions where collection is not considered probable, the revenue is deferred until collection occurs. If the fee is not fixed or determinable, then the revenue recognized in each period (subject to application of other revenue recognition criteria) will be the lesser of the aggregate amounts due and payable or the amount of the arrangement fee that would have been recognized if the fees were being recognized using the residual method. We assess whether fees are considered fixed or determinable at the inception of the arrangement and negotiated fees generally are based on a specific volume of products to be delivered and not subject to change based on variable pricing mechanisms, such as the number of units copied or distributed or the expected number of users. A typical system sale may contain multiple elements, but most often includes software licenses, maintenance and support, implementation and training. Revenue on arrangements involving multiple elements is generally allocated to each element using the residual method when evidence of fair value only exists for the undelivered elements. The fair value of an element is based on vendor-specific objective evidence (“VSOE”), which is based on the price charged when the same element is sold separately. We generally establish VSOE for the related undelivered elements based on the bell-shaped curve method. VSOE is established on maintenance for certain clients based on stated renewal rates only if the rate is determined to be substantive and falls within our customary pricing practices. VSOE calculations are updated and reviewed on a quarterly or annual basis, depending on the nature of the product or service. Under the residual method, we defer revenue related to the undelivered elements based on VSOE of fair value of each undelivered element and allocate the remainder of the contract price, net of all discounts, to the delivered elements. If VSOE of fair value of any undelivered element does not exist, all revenue is deferred until VSOE of fair value of the undelivered element is established or the element has been delivered. Revenue related to arrangements that include hosting services is recognized in accordance to the revenue recognition criteria described above only if the client has the contractual right to take possession of the software at any time without incurring a significant penalty, and it is feasible for the client to either host the software on its own equipment or through another third party. Otherwise, the arrangement is accounted for as a service contract in which the entire arrangement is deferred and recognized over the period that the hosting services are being provided. From time to time, we offer future purchase discounts on our products and services as part of our arrangements. Such discounts that are incremental to the range of discounts reflected in the pricing of the other elements of the arrangement, that are incremental to the range of discounts typically given in comparable transactions, and that are significant, are assessed as an additional element of the arrangement. Revenue deferred related to future purchase options are not recognized until either the client exercises the discount offer or the offer expires. Revenue from professional services, including implementation, training, and consulting services, are generally recognized as the corresponding services are performed. Revenue from software related subscription services and support and maintenance revenue are recognized ratably over the contractual service period. Revenue from EDI and data services and other transaction processing services are recognized at the time the services are provided to clients. Revenue from RCM and related services is derived from services fees for ongoing billing, collections, and other related services, and are generally calculated as a percentage of total client collections. We recognize RCM and related services revenue at the time collections are made by the client as the services fees are not fixed or determinable until such time. We record revenue net of sales tax obligation in the consolidated statements of net income and comprehensive income. Cash and Cash Equivalents. Cash and cash equivalents consist primarily of cash and money market funds with original maturities of less than 90 days. We had cash deposits held at U.S. banks and financial institutions at March 31, 2017 of which $36,572 was in excess of the Federal Deposit Insurance Corporation insurance limit of $250 per owner. Our cash deposits are exposed to credit loss for amounts in excess of insured limits in the event of nonperformance by the institutions; however, we do not anticipate nonperformance by these institutions. Money market funds in which we hold a portion of our excess cash are invest in very high grade commercial and governmental instruments, and therefore bear low market risk. Restricted Cash and Cash Equivalents. Restricted cash and cash equivalents consist of cash that is being held by the Company acting as an agent for the disbursement of certain state social and care services programs. We record an offsetting liability when we initially receive such cash from the programs. We relieve both restricted cash and cash equivalents and the related liability when amounts are disbursed. We earn an administrative fee based on a percentage of the funds disbursed on behalf of the government social and care service programs. Marketable Securities. Marketable securities are classified as available-for-sale and are recorded at fair value, based on quoted market rates when observable or valuation analysis when appropriate. Unrealized gains and losses, are included in shareholders’ equity. Realized gains and losses on investments are included in other income and expense. Accounts Receivable Reserves. We maintain reserves for potential sales returns and uncollectible accounts receivable. In aggregate, such reserves reduce our gross accounts receivable to estimated net realizable value. Our standard contracts generally do not contain provisions for clients to return products or services. However, we historically have accepted sales returns under certain circumstances. Accordingly, we estimate sales return reserves, including reserves for returns and other credits, based upon the rate of historical returns by revenue type in relation to the corresponding gross revenues and recognize revenue, net of an allowance for sales returns. If we are unable to estimate the returns, revenue recognition may be delayed until the rights of return period lapses, provided also, that all other criteria for revenue recognition have been met. If we experience changes in practices related to sales returns or changes in actual return rates that deviate from the historical data on which our reserves had been established, our revenues may be adversely affected. Allowances for doubtful accounts and other uncollectible accounts receivable related to estimated losses resulting from our clients’ inability to make required payments are established based on our historical experience of bad debt expense and the aging of our accounts receivable balances, net of deferred revenue and specifically reserved accounts. Specific reserves are based on our estimate of the probability of collection for certain troubled accounts. Accounts are written off as uncollectible only after we have expended extensive collection efforts. Our allowances for doubtful accounts are based on our assessment of the collectibility of client accounts. We regularly review the adequacy of these allowances by considering internal factors such as historical experience, credit quality and age of the client receivable balances as well as external factors such as economic conditions that may affect a client’s ability to pay and review of major third-party credit-rating agencies, as needed. Inventory. Inventory consists of hardware for specific client orders and spare parts and are valued at lower of cost (first-in, first-out) and net realizable value. Our provision for inventory obsolescence reduces our inventory to net realizable value. Equipment and Improvements. Equipment and improvements are stated at cost less accumulated depreciation and amortization. Repair and maintenance costs that do not improve service potential or extend economic life are expensed as incurred. Depreciation and amortization of equipment and improvements are recorded over the estimated useful lives of the assets, or the related lease terms if shorter, by the straight-line method. Useful lives generally have the following ranges:
Depreciation expense related to our equipment and improvements was $10,080, $8,834, and $9,323 for the years ended March 31, 2017, 2016, and 2015, respectively. Capitalized Software Costs. Software development costs, consisting primarily of employee salaries and benefits, incurred in the research and development of new software products and enhancements to existing software products for external sale are expensed as incurred, and reported as net research and development costs in the consolidated statements of net income and comprehensive income, until technological feasibility has been established. After technological feasibility is established, additional external-sale software development costs are capitalized. Amortization of capitalized software is recorded using the greater of the ratio of current revenues to the total of current and expected revenues of the related product or the straight-line method over the estimated economic life of the related product, which is typically three years. We perform ongoing assessments of the net realizable value of such capitalized software costs. If a determination is made that capitalized amounts are not recoverable based on the projected undiscounted cash flows to be generated from the applicable software, any excess unamortized capitalized software costs are written off. In addition to the assessment of net realizable value, we routinely review the remaining estimated lives of our capitalized software costs and record adjustments, if deemed necessary. The total of capitalized software costs incurred in the development of products for external sale are reported as capitalized software costs within our consolidated balance sheets. We also incur costs to develop software applications for our internal-use and costs for the development of Software as a Service ("SaaS") based products sold to our clients. The development costs of our SaaS-based products are considered internal-use for accounting purposes. Our internal-use capitalized costs are stated at cost and amortized using the straight-line method over the estimated useful lives of the assets, which is typically three to seven years. Application development stage costs generally include costs associated with internal-use software configuration, coding, installation and testing. Costs related to the preliminary project stage and post-implementation activities are expensed as incurred. Costs of significant upgrades and enhancements that result in additional functionality are also capitalized, whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Capitalized software costs for developing SaaS-based products are reported as capitalized software costs within our consolidated balance sheets and capitalized software costs for developing our internal-use software applications are reported as equipment and improvements within our consolidated balance sheets. During the year ended March 31, 2016, we recorded a $32,238 non-cash impairment charge after making a determination that the previously capitalized software costs related to the NextGen Now development project was not recoverable. Refer to Note 8 for additional information. Business Combinations. In accordance with the accounting for business combinations, we allocate the purchase price of the acquired business to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The fair values of acquired assets and liabilities assumed represent our best estimate of fair value. The estimated fair value of the acquired tangible and intangible assets and liabilities assumed were determined using multiple valuation approaches depending on the type and nature of tangible or intangible asset acquired, including but not limited to the income approach, the excess earnings method and the relief from royalty method approach. The purchase price allocation methodology contains uncertainties as it requires us make assumptions and to apply judgment to estimate the fair value of acquired assets and liabilities, including, but not limited to, intangible assets, goodwill, deferred revenue, and contingent consideration liabilities. We estimate the fair value of the contingent consideration liabilities based on the probability of achieving certain business, strategic, or financial milestones and our projection of expected results, as needed. Unanticipated events or circumstances may occur which could affect the accuracy of our fair value estimates, including assumptions regarding industry economic factors and business strategies. Any adjustments to fair value subsequent to the measurement period are reflected in the consolidated statements of net income and comprehensive income. Goodwill. Goodwill acquired in a business combination is measured as the excess of the purchase price, or consideration transferred, over the net acquisition date fair values of the assets acquired and the liabilities assumed. Goodwill is not amortized as it has been determined to have an indefinite useful life. We test goodwill for impairment annually during our first fiscal quarter, referred to as the annual test date. Based on our assessment, we have determined that there was no impairment to our goodwill as of June 30, 2016. We will also test for impairment between annual test dates if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is performed at a reporting-unit level, which is defined as an operating segment or one level below an operating segment (referred to as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. As part of our annual goodwill impairment test, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we conduct a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their carrying values. If the carrying amount of the reporting unit exceeds the reporting unit's fair value, we perform the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit's goodwill with the carrying value of that goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss. During the years ended March 31, 2017 and March 31, 2016, we did not identify any events or circumstances that would require an interim goodwill impairment test. Intangible Assets. Intangible assets consist of customer relationships, trade names and contracts, and software technology. These intangible assets are recorded at fair value and are reported net of accumulated amortization. We currently amortize the intangible assets over periods ranging from 7 months to 10 years using a method that reflects the pattern in which the economic benefits of the intangible asset are consumed. We assess the recoverability of intangible assets at least annually or whenever adverse events or changes in circumstances indicate that impairment may have occurred. If the future undiscounted cash flows expected to result from the use of the related assets are less than the carrying value of such assets, impairment is deemed to have occurred and a loss is recognized to reduce the carrying value of the intangible assets to fair value, which is determined by discounting estimated future cash flows. In addition to the impairment assessment, we routinely review the remaining estimated lives of our intangible assets and record adjustments, if deemed necessary. We determined that there was no impairment to our intangible assets as of March 31, 2017 and March 31, 2016. Long-Lived Assets. We assess the recoverability of long-lived assets at least annually or whenever adverse events or changes in circumstances indicate that impairment may have occurred. If the future undiscounted cash flows expected to result from the use of the related assets are less than the carrying value of such assets, impairment is deemed to have occurred and a loss is recognized to reduce the carrying value of the long-lived assets to fair value, which is determined by discounting estimated future cash flows. In addition to the impairment assessment, we routinely review the remaining estimated lives of our long-lived assets and record adjustments, if deemed necessary. Income Taxes. Income taxes are provided based on current taxable income and the future tax consequences of temporary differences between the basis of assets and liabilities for financial and tax reporting. The deferred income tax assets and liabilities represent the future state and federal tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred income taxes are also recognized for operating losses that are available to offset future taxable income and tax credits that are available to offset future income taxes. At each reporting period, we assess the realizable value of deferred tax assets based on, among other things, estimates of future taxable income and adjusts the related valuation allowance as necessary. We make a number of assumptions and estimates in determining the appropriate amount of expense to record for income taxes. The assumptions and estimates consider the taxing jurisdiction in which we operate as well as current tax regulations. Accruals are established for estimates of tax effects for certain transactions and future projected profitability based on our interpretation of existing facts and circumstances. Advertising Costs. Advertising costs are expensed as incurred. We do not have any direct-response advertising. Advertising costs, which include trade shows and conventions, were approximately $7,111, $7,890, and $7,079 for the years ended March 31, 2017, 2016, and 2015, respectively, and were included in selling, general and administrative expenses in the accompanying consolidated statements of net income and comprehensive income. Earnings per Share. We provide a dual presentation of “basic” and “diluted” earnings per share (“EPS”). Shares below are in thousands.
The computation of diluted net income per share does not include 2,999, 1,926 and 1,656 options for the years ended March 31, 2017, 2016, and 2015 respectively, because their inclusion would have an anti-dilutive effect on net income per share. Share-Based Compensation. The following table shows total share-based compensation expense included in the consolidated statements of net income and comprehensive income for the for the fiscal year ended March 31, 2017, 2016, and 2015:
Recent Accounting Standards. Recent accounting pronouncements requiring implementation in future periods are discussed below or in the notes, where applicable. We do not believe that any other recently issued, but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update ("ASU") 2017-04, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of Step two of the goodwill impairment test. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. ASU 2017-04 is effective prospectively for annual and interim periods beginning after December 15, 2019, and early adoption is permitted on goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 is effective for us in the fourth quarter of fiscal 2020, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted in two scenarios as identified in the new standard. ASU 2017-01 is effective for us in the first quarter of fiscal 2019, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 provides guidance on the classification of restricted cash and cash equivalents in the statement of cash flows. Although it does not provide a definition of restricted cash or restricted cash equivalents, it states that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. ASU 2016-18 is effective for us in the first quarter of fiscal 2019, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"). ASU 2016-16 requires the recognition of current and deferred income taxes for intra-entity asset transfers when the transaction occurs. ASU 2016-16 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. ASU 2016-16 is effective for us in the first quarter of fiscal 2019, and we are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 is intended to add and clarify guidance on the classification of certain cash receipts and cash payments in the statement of cash flows to eliminate diversity in practice related to how such cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. ASU 2016-15 is effective for us in the first quarter of fiscal 2019, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies the accounting for and reporting on share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The amendments in this update are to be applied differently upon adoption with certain amendments being applied prospectively, retrospectively and under a modified retrospective transition method. We expect to adopt ASU 2016-09 in the first quarter of fiscal 2018, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which is intended to improve financial reporting about leasing transactions. The new guidance will require lessees to recognize on their balance sheets the assets and liabilities for the rights and obligations created by leases and to disclose key information about the leasing arrangements. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 is effective for us in the first quarter of fiscal 2020. We are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Arrangement ("ASU 2015-05"), which requires a customer to determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. Upon adoption, an entity has the option to apply the provisions of ASU 2015-05 either prospectively to all arrangements entered into or materially modified, or retrospectively. The adoption of this new standard did not have material impact on our consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ("ASU 2014-15"), which incorporates and expands upon certain principles that currently exist in U.S. auditing standards. ASU 2014-15 provides guidance regarding management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. The new standard requires management to perform interim and annual evaluations and sets forth principles for considering the mitigating effect of management's plans. The standard mandates certain disclosures when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. ASU 2014-15 is effective for us commencing fiscal year ending March 31, 2017. The adoption of this new standard has not had, and is not expected to have, an impact on our consolidated financial statements. In May 2014, the FASB, along with the International Accounting Standards Board, issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using International Financial Reporting Standards and GAAP. The core principle of this updated guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new revenue standard also requires additional disclosure about revenue and provides improved guidance for multiple element arrangements. In July 2015 decision, the FASB issued ASU 2015-14, Deferral of Effective Date ("ASU 2015-14") to delay the effective date by one year. In addition, the FASB issued ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, and ASU 2016-20, all of which do not change the core principle of the guidance, but rather help to provide further interpretive clarifications on the new revenue standard. Companies are permitted to adopt this new guidance following either a full retrospective or modified retrospective approach. We have performed an initial assessment of the potential impacts to our business processes, systems, and controls that could result from the implementation of the new revenue standard. Additionally, based on our initial assessment, we currently believe that impact on our consolidated financial statements could be material. We expect that revenue related to hardware, EDI, maintenance, and certain subscriptions would remain substantially unchanged, and we are the process of evaluating the impact of the new revenue standard on our other revenue streams. We continue to evaluate all potential impacts of this new revenue standard, including our method of adoption, and our preliminary assessments are subject to change. We expect to implement this new revenue standard when it becomes effective for us in the first quarter of fiscal 2019. |
Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2017 and March 31, 2016:
___________________________________ (1) Cash equivalents consist primarily of money market funds. (2) Marketable securities consist of available-for-sale money market instruments and fixed-income securities, including certificates of deposit, corporate bonds and notes, and municipal securities. The contingent consideration liability as of March 31, 2017 relates to the acquisition of HealthFusion (see Note 5). Prior to March 31, 2017, the categorization of the framework used to measure fair value of the contingent consideration liability was considered to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used. We had assessed the fair value of the contingent consideration liability on a recurring basis and any adjustments to fair value subsequent to the measurement period were reflected in the consolidated statements of net income and comprehensive income. Key assumptions included discount rates and probability-adjusted achievement estimates of certain revenue targets that were not observable in the market. As of the end of the HealthFusion contingent consideration liability measurement period on December 31, 2016, the actual revenue target achievement rate was utilized to compute the ending contingent consideration liability. Accordingly, the contingent consideration liability was transferred into the Level 2 valuation hierarchy because the fair value was determined based on other significant observable inputs. The following table presents activity in our financial assets and liabilities measured at fair value using significant unobservable inputs (Level 3), as of and for the years ended March 31, 2017:
During the year ended March 31, 2017, we issued shares of common stock to settle $9,273 in contingent consideration liabilities related to the acquisition of Mirth and recorded $4,247 of net fair value adjustments to contingent consideration liabilities, of which $3,817 was related to HealthFusion and $430 was related to Mirth. The fair value adjustments to contingent consideration liabilities are included as a component of selling, general and administrative expense in the consolidated statements of net income and comprehensive income. We believe that the fair value of other financial assets and liabilities, including accounts receivable, accounts payable, and line of credit, approximate their respective carrying values due to their nominal credit risk. Non-Recurring Fair Value Measurements We have certain assets, including goodwill and other intangible assets, which are measured at fair value on a non-recurring basis and are adjusted to fair value only if an impairment charge is recognized. The categorization of the framework used to measure fair value of the assets is considered to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used. During the year ended March 31, 2017, we recorded certain adjustments to HealthFusion goodwill (see Note 5). |
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Business Combinations and Disposals | Business Combinations and Disposals HealthFusion Acquisition On January 4, 2016, we completed our acquisition of HealthFusion Holdings, Inc. ("HealthFusion") pursuant to the Agreement and Plan of Merger (the “Merger Agreement"), dated October 30, 2015. HealthFusion provides Web-based, cloud computing software for physicians, medical billing service providers, and hospitals. Its flagship product, MediTouch®, is a fully-integrated, cloud-based software suite consisting of clearinghouse, practice management, electronic health records, and patient portals with rich functionality to enable mobility, workflow automation, and advanced reporting and analytics aimed primarily at small-to-mid-size physician practices. The acquisition of HealthFusion is part of our strategy to expand its client base and cloud-based solution capabilities in the ambulatory market. Over time, we plan to expand the HealthFusion platform to satisfy the needs of practices of increasing size and complexity. The purchase price totaled $183,049, which included working capital and other customary adjustments and the fair value of contingent consideration related to an additional $25,000 of cash in the form of an earnout, subject to HealthFusion achieving certain revenue targets through December 31, 2016. The initial estimated fair value of contingent consideration of $16,700 was based on a Monte Carlo-based valuation model that considered, among other assumptions and inputs, our estimate of projected HealthFusion revenues. As of March 31, 2017, the fair value of the contingent consideration was $18,817. The acquisition was initially funded by a draw against the revolving credit agreement (see Note 9), a portion of which was subsequently repaid from existing cash on hand. We accounted for the HealthFusion acquisition as a purchase business combination using the acquisition method of accounting. The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The fair values of acquired assets and liabilities assumed represent management’s estimate of fair value. The estimated fair value of the acquired tangible and intangible assets and liabilities assumed were determined using multiple valuation approaches depending on the type of tangible or intangible asset acquired, including but not limited to the income approach, the excess earnings method and the relief from royalty method approach. The goodwill represents the excess of the purchase price over the net identifiable assets acquired and liabilities assumed. Goodwill primarily represents, among other factors, the value of synergies expected to be realized and the assemblage of all assets that enable us to create new client relationships, neither of which qualify as separate amortizable intangible assets. Goodwill arising from the acquisition of HealthFusion was determined as the excess of the purchase price over the net acquisition date fair values of the acquired assets and the liabilities assumed, and is not deductible for tax purposes. HealthFusion operates under our Software and Related Solutions segment. During the years ended March 31, 2017, we recorded a $2,938 adjustment to HealthFusion goodwill related to changes in deferred taxes based on the filing of final tax returns. The purchase price for the HealthFusion acquisition was considered final as of March 31, 2017. The total purchase price for the HealthFusion acquisition is summarized as follows:
Including the effect of certain acquisition-related fair value adjustments, amortization of acquired intangible assets, and interest expense associated with the revolving credit agreement, the acquisition of HealthFusion contributed revenues of $8,781 and estimated net loss of $1,149 to our consolidated results for the year ended March 31, 2016. The following table presents unaudited supplemental pro forma consolidated revenue and net income as if the acquisition of HealthFusion had occurred on April 1, 2014 (the beginning of the comparable prior annual reporting period).
The pro forma revenue and net income were derived by combining our historical results with HealthFusion's historical results, after applying our accounting policies and making adjustments related to the amortization of acquired intangible assets and interest expense associated with the revolving credit agreement. Specifically, the pro forma combined net income for the year ended March 31, 2016 includes $14,900 of estimated amortization of acquired intangible assets and $3,600 of estimated interest expense. For the year ended March 31, 2015, the pro forma combined net income includes $15,800 of estimated amortization of acquired intangible assets, $8,300 of estimated acquisition-related fair value adjustments, and $5,200 of estimated interest expense. Acquisition-related transaction costs incurred prior to the acquisition date have been eliminated from pro forma combined net income and we also considered the estimated inconsequential tax effects of the acquisition for the purposes of preparing the unaudited supplemental pro forma information. Hospital Disposition On October 22, 2015, we closed an Asset Purchase Agreement (the “Purchase Agreement”) with Quadramed Affinity Corporation in which we sold and assigned substantially all assets and liabilities of the former Hospital Solutions division. We believe that the Hospital disposition will allow us to focus our efforts and resources on our core ambulatory business. The financial terms of the transaction and the amount of consideration received were not significant. Since the Hospital disposition did not and is not expected to have a major effect on our operations and financial results, separate discontinued operations reporting is not provided. We incurred a loss on the Hospital disposition of $1,366 in the year ended March 31, 2016, which was recorded in our consolidated statements of net income and comprehensive income as a component of selling, general and administrative expense. The loss was measured as the total consideration received and expected to be received less the lower of carrying value or fair value of the former Hospital Solutions division. Additionally, we incurred $387 in direct incremental costs of disposition and $335 in severance and other employee-related costs in connection with the Hospital disposition during the year ended March 31, 2016, which were recorded in our consolidated statements of net income and comprehensive income as a component of selling, general and administrative expense. |
Goodwill |
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Goodwill | Goodwill We do not amortize goodwill as it has been determined to have an indefinite useful life. During the year ended March 31, 2017, we recorded certain adjustments to HealthFusion goodwill (see Note 5). We have also determined that the change in reportable operating segments as a result of our ongoing reorganization efforts (see Note 15) did not have a significant impact on the amount of goodwill that is allocated to each reporting unit and each reportable operating segment. Goodwill by reportable operating segment consists of the following:
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Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets In connection with the HealthFusion acquisition, we recorded $75,000 of intangible assets related to customer relationships, trade names and software technology (see Note 5 for additional information). We are amortizing the HealthFusion customer relationships over 10 years and trade names and software technology over 5 years. The weighted average amortization period for the total amount of intangible assets acquired is 6.9 years. Our definite-lived intangible assets, other than capitalized software development costs, are summarized as follows:
Amortization expense related to customer relationships and trade name and contracts recorded as operating expenses in the consolidated statements of net income and comprehensive income was $10,435, $5,368, and $3,709 for the years ended March 31, 2017, 2016 and 2015, respectively. Amortization expense related to software technology recorded as cost of revenue was $12,027, $5,646, and $3,418 for the years ended March 31, 2017, 2016, and 2015, respectively. The following table summarizes the remaining estimated amortization of definite-lived intangible assets as of March 31, 2017:
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Capitalized Software Costs |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized Software Costs | Capitalized Software Costs Our capitalized software costs are summarized as follows:
Amortization expense related to capitalized software costs was $7,892, $9,891, and $12,817 for the years ended March 31, 2017, 2016, and 2015, respectively, and is recorded as cost of revenue in the consolidated statements of net income and comprehensive income. The following table presents the remaining estimated amortization of capitalized software costs as of March 31, 2017. The estimated amortization is comprised of (i) amortization of released products and (ii) the expected amortization for products that are not yet available for sale based on their estimated economic lives and projected general release dates.
During the year ended March 31, 2016, we recorded a non-cash impairment charge of $32,238 that is reflected within the impairment of assets caption in our consolidated statements of net income and comprehensive income. The impairment relates to the previously capitalized investment in the NextGen Now development project, which we deemed to have zero net realizable value. The impairment charge did not result in any cash expenditures. The impairment charge followed our assessment of the NextGen Now development project and the MediTouch platform that we obtained through our acquisition of HealthFusion. We had determined that the MediTouch platform offered the most efficient path to providing a high-quality, robust, cloud-based solution for ambulatory care and decided to cease further investment in NextGen Now and immediately discontinued all efforts to use or repurpose the NextGen Now platform. |
Line of Credit (Notes) |
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Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
LIne of Credit | Line of Credit On January 4, 2016, we entered into a $250,000 revolving credit agreement (“Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as syndication agent, and certain other lenders. The Credit Agreement is secured by substantially all of our existing and future property and material domestic subsidiaries. The Credit Agreement provides a subfacility of up to $10,000 for letters of credit and a subfacility of up to $10,000 for swing-line loans. The Credit Agreement matures on January 4, 2021 and the full balance of the revolving loans and all other obligations under the agreement must be paid at that time. The revolving loans under the Credit Agreement will be available for letters of credit, working capital and general corporate purposes. We were in compliance with all financial and non-financial covenants under the Credit Agreement as of March 31, 2017. The revolving loans under the Credit Agreement bear interest at our option of either, (a) a base rate based on the highest of (i) the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A., as its prime rate, (ii) the greater of (A) the federal funds effective rate and (B) the overnight bank funding rate (as determined by the Federal Reserve Bank of New York) plus 0.50% and (iii) the one-month British Bankers Association London Interbank Offered Rate ("LIBOR") plus 1.00%) plus an applicable margin based on our leverage ratio from time to time, ranging from 0.50% to 1.50%, or (b) a LIBOR-based rate (subject to a floor of 0.00%) plus an applicable margin based on our leverage ratio from time to time, ranging from 1.50% to 2.50%. We will also pay a commitment fee of between 0.25% and 0.45%, payable quarterly in arrears, on the average daily unused amount of the revolving facility based on our leverage ratio from time to time. The revolving loans are subject to customary representations, warranties and ongoing affirmative and negative covenants and agreements. The negative covenants include, among other things, limitations on indebtedness, liens, asset sales, mergers and acquisitions, investments, transactions with affiliates, dividends and other restricted payments, subordinated indebtedness and amendments to subordinated indebtedness documents and sale and leaseback transactions. The Credit Agreement also requires us to maintain (1) a maximum leverage ratio of (a) 3.00 to 1.00 for any such fiscal quarter ending on or prior to September 30, 2016, (b) 2.75 to 1.00 for any such fiscal quarter ending after September 30, 2016 and on or prior to September 30, 2017 and (c) 2.50 to 1.00 for any such fiscal quarter ending after September 30, 2017; and (2) a minimum fixed charge coverage ratio of 3.00 to 1.00 at the end of each fiscal quarter through the term of the loan. As of March 31, 2017, we had $15,000 in outstanding loans and $235,000 of unused credit under the Credit Agreement. As of March 31, 2016, we had $105,000 in outstanding loans and $145,000 of unused credit under the Credit Agreement.The interest rates as of March 31, 2017 and 2016 was approximately 2.3% and 2.4%, respectively. During the years ended March 31, 2017 and 2016 we recorded $1,899 and $969 of interest expense, respectively, and the weighted average interest rates were approximately 2.4% and 3.2%, respectively. Debt issuance costs and other related fees paid to legal advisors and third parties in connection with securing the Credit Agreement totaled $5,382. The deferred debt issuance costs are reported as a component of other assets on the consolidated balance sheet and are being amortized to interest expense over the term of the Credit Agreement. During the years ended March 31, 2017 and 2016 we recorded $1,076 and 258, respectively, in amortization of deferred debt issuance costs related to the Credit Agreement. |
Composition of Certain Financial Statement Captions |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of Certain Financial Statement Captions | Composition of Certain Financial Statement Captions Accounts receivable may include amounts invoiced for undelivered products and services at each period end. Undelivered products and services are included as a component of the deferred revenue balance on the accompanying consolidated balance sheets.
Inventory is comprised of finished goods of computer systems and components. Prepaid expenses and other current assets are summarized as follows:
Equipment and improvements are summarized as follows:
The current portion of deferred revenues are summarized as follows:
Accrued compensation and related benefits are summarized as follows:
Other current and noncurrent liabilities are summarized as follows:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block] | A reconciliation of the beginning and ending amount of unrecognized tax benefits, which is recorded within other noncurrent liabilities in our consolidated balance sheet, is as follows:
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Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income Taxes The provision for income taxes consists of the following components:
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The provision for income taxes differs from the amount computed at the federal statutory rate as follows:
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The net deferred tax assets and liabilities in the accompanying consolidated balance sheets consist of the following:
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Income Taxes | Income Taxes The provision for income taxes consists of the following components:
The provision for income taxes differs from the amount computed at the federal statutory rate as follows:
The net deferred tax assets and liabilities in the accompanying consolidated balance sheets consist of the following:
The deferred tax assets and liabilities have been shown net in the accompanying consolidated balance sheets as noncurrent. As of March 31, 2017 and March 31, 2016, we had federal net operating loss (“NOL”) carryforwards of $31,032 and $45,202, respectively. The federal NOL carryforwards were inherited in connection with our acquisition of HealthFusion in January 2016 and Gennius in March 2015. The NOL carryforwards expire in various amounts starting on 2029 for both federal and state tax purposes. As of March 31, 2017, we had state NOL carryforwards of approximately $950, related to the HealthFusion acquisition state NOL tax attribute. The utilization of the federal NOL carryforwards is subject to limitations under the rules regarding changes in stock ownership as determined by the Internal Revenue Code. As of March 31, 2017 and March 31, 2016, the research and development tax credit carryforward available to offset future federal and state taxes was $4,328 and $3,611 respectively. The credits expire in various amounts starting in 2019. We expect to receive the full benefit of the deferred tax assets recorded with the exception of certain state credits and state NOL carryforwards for which we have recorded a valuation allowance. We have not recorded any U.S. income tax or foreign withholding tax on the earnings of our India foreign subsidiary as these amounts are intended to be indefinitely reinvested. As of March 31, 2017, the cumulative amount of undistributed earnings of our foreign subsidiary was $7,555. Determination of the potential amount of unrecognized deferred U.S. income tax liability and foreign withholding tax is not practicable because of the complexities associated with its hypothetical calculation. Uncertain tax positions A reconciliation of the beginning and ending amount of unrecognized tax benefits, which is recorded within other noncurrent liabilities in our consolidated balance sheet, is as follows:
During the year ended March 31, 2017, we recorded additional net liabilities of $668 mostly related to various state tax planning benefits recorded in the current year for prior year tax positions. The total amount of unrecognized tax benefit that, if recognized, would decrease the income tax provision is $4,762. Our practice is to recognize interest related to income tax matters as interest expense in the consolidated statements of net income and comprehensive income. We had approximately $297 and $129 of accrued interest related to income tax matters as of March 31, 2017 and 2016, respectively. We recognized $170 and $57 of interest related to income tax matters in the consolidated statements of net income and comprehensive income in the years ended March 31, 2017 and 2016, respectively, and $309 in the year ended March 31, 2015. No penalties related to income tax matters were accrued or recognized in our consolidated financial statements for all periods presented. We are no longer subject to U.S. federal income tax examinations for tax years before fiscal years ended 2014. With a few exceptions, we are no longer subject to state or local income tax examinations for tax years before fiscal years ended 2013. We do not anticipate that total unrecognized tax benefits will significantly change due to the settlement of audits or the expiration of statute of limitations within the next twelve months. e are no longer subject to U.S. federal income tax examinations for tax years before fiscal years ended 2014. With a few exceptions, we are no longer subject to state or local income tax examinations for tax years before fiscal years ended 2013. We do not anticipate that total unrecognized tax benefits will significantly change due to the settlement of audits or the expiration of statute of limitations within the next twelve months. |
Employee Benefit Plans (Notes) |
12 Months Ended |
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Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Employee Benefit Plans We provide a 401(k) plan to substantially all of our employees. Participating employees may defer up to the IRS limit per year based on the IRC. The annual contribution is determined by a formula set by our Board of Directors and may include matching and/or discretionary contributions. The amount of the Company match is discretionary and subject to change. The retirement plans may be amended or discontinued at the discretion of the Board of Directors. Contributions of $2,735, $1,063 and $949 were made by the Company to the 401(k) plan for the years ended March 31, 2017, 2016, and 2015, respectively. We have a deferred compensation plan (the “Deferral Plan”) for the benefit of those employees who qualify. Participating employees may defer up to 75% of their salary and 100% of their annual bonus for a Deferral Plan year. In addition, we may, but are not required to, make contributions into the Deferral Plan on behalf of participating employees, and the amount of the Company match is discretionary and subject to change. Each employee's deferrals together with earnings thereon are accrued as part of our long-term liabilities. Investment decisions are made by each participating employee from a family of mutual funds. The deferred compensation liability was $6,629 and $6,357 at March 31, 2017 and 2016, respectively. To offset this liability, we have purchased life insurance policies on some of the participants. The Company is the owner and beneficiary of the policies and the cash values are intended to produce cash needed to help make the benefit payments to employees when they retire or otherwise leave the Company. We intend to hold the life insurance policy until the death of the plan participant. The cash surrender value of the life insurance policies for deferred compensation was $8,115 and $7,155 at March 31, 2017 and 2016, respectively. The values of the life insurance policies and our related obligations are included on the accompanying consolidated balance sheets in long-term other assets and long-term deferred compensation, respectively. We made contributions of $65, $120 and $86 to the Deferral Plan for the years ended March 31, 2017, 2016, and 2015, respectively. |
Share-Based Awards |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Awards | Share-Based Awards Employee Stock Option and Incentive Plans In October 2005, our shareholders approved a stock option and incentive plan (the “2005 Plan”) under which 4,800,000 shares of common stock were reserved for the issuance of awards, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance shares, performance units (including performance options) and other share-based awards. The 2005 Plan provides that our employees and directors may, at the discretion of the Board of Directors ("Board") or a duly designated compensation committee, be granted certain share-based awards. In the case of option awards granted under the 2005 Plan, the exercise price of each option is determined based on the date of grant and expire no later than 10 years from the date of grant. Awards granted pursuant to the 2005 Plan are subject to the vesting schedule or performance metrics set forth in the agreements pursuant to which they are granted. Upon a change of control of our Company, as such term is defined in the 2005 Plan, awards under the 2005 Plan will fully vest under certain circumstances. The 2005 Plan expired on May 25, 2015. As of March 31, 2017, there were 885,665 outstanding options under the 2005 Plan. In August 2015, our shareholders approved a stock option and incentive plan (the “2015 Plan”) under which 11,500,000 shares of common stock were reserved for the issuance of awards, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock awards and restricted stock unit awards, performance stock awards and other share-based awards. The 2015 Plan provides that our employees and directors may, at the discretion of the Board of Directors or a duly designated compensation committee, be granted certain share-based awards. In the case of option awards granted under the 2015 Plan, the exercise price of each option is determined based on the date of grant and expire no later than 10 years from the date of grant. Awards granted pursuant to the 2015 Plan are subject to the vesting schedule or performance metrics set forth in the agreements pursuant to which they are granted. Upon a change of control of our Company, as such term is defined in the 2015 Plan, awards under the 2015 Plan will fully vest under certain circumstances. As of March 31, 2017, there were 1,999,750 outstanding options, 902,948 outstanding shares of restricted stock awards, 118,999 outstanding shares of performance stock awards, and 7,876,341 shares available for future grant under the 2015 Plan. The following table summarizes the stock option transactions during the years ended March 31, 2017, 2016, and 2015:
We utilize the Black-Scholes valuation model for estimating the fair value of share-based compensation with the following assumptions:
During the years ended March 31, 2017, 2016, and 2015, a total of 1,146,500, 1,414,000, and 469,650 options, respectively, to purchase shares of common stock were granted under the 2015 Plan at an exercise price equal to the market price of our common stock on the date of grant, as summarized below:
(1) Options vest in equal annual installments on each grant anniversary date commencing one year following the date of grant. (2) 100,000 options fully vest on March 31, 2017 and the remaining 100,000 options vest on March 31, 2018. (3) Option vests in five equal annual installments beginning on July 1, 2016. The weighted-average grant date fair value of stock options granted during the years ended March 31, 2017, 2016, and 2015 was $5.00, $4.44, and $3.50 per share, respectively. Non-vested stock option award activity during the years ended March 31, 2017, 2016, and 2015 is summarized as follows:
As of March 31, 2017, $7,834 of total unrecognized compensation costs related to stock options is expected to be recognized over a weighted-average period of 3 years. This amount does not include the cost of new options that may be granted in future periods or any changes in our forfeiture percentage. The total fair value of options vested during the years ended March 31, 2017, 2016, and 2015 was $2,090, $1,697, and $2,224, respectively. Restricted stock awards activity during the years ended March 31, 2017 is summarized as follows:
Share-based compensation expense related to restricted stock awards was $3,691, $940, and $877 for the years ended March 31, 2017, 2016, and 2015, respectively. The weighted-average grant date fair value for the restricted stock awards was estimated using the market price of the common stock on the date of grant. The fair value of the restricted stock awards is amortized on a straight-line basis over the vesting period, which is generally between one and three years. As of March 31, 2017, $8,810 of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted-average period of 2 years. This amount does not include the cost of new restricted stock awards that may be granted in future periods. On December 29, 2016, the Compensation Committee of the Board granted 123,082 performance stock awards to certain executive officers, of which 118,999 share are currently outstanding. The performance stock awards vest in four equal increments on each of the first four anniversaries of the grant date, subject in each case to the executive officer’s continued service and achievement of certain Company performance goals, including strong Company stock price performance. Share-based compensation expense related to the performance stock awards was $78 for the for the fiscal year ended March 31, 2017. Employee Share Purchase Plan On August 11, 2014, our shareholders approved an Employee Share Purchase Plan (the “Purchase Plan”) under which 4,000,000 shares of common stock were reserved for future grant. The Purchase Plan allows eligible employees to purchase shares through payroll deductions of up to 15% of total base salary at a price equal to 90% of the lower of the fair market values of the shares as of the beginning or the end of the corresponding offering period. Any shares purchased under the Purchase Plan are subject to a six-month holding period. Employees are limited to purchasing no more than 1,500 shares on any single purchase date and no more than $25,000 in total fair market value of shares during any one calendar year. As of March 31, 2017, we have issued 238,622 shares under the Purchase Plan and 3,761,378 shares are available for future issuance. Share-based compensation expense recorded for the employee share purchase plan was $359, $291, and $116 for the years ended March 31, 2017, 2016, and 2015, respectively. |
Commitments, Guarantees and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments, Guarantees and Contingencies | Commitments, Guarantees and Contingencies We lease facilities and offices under irrevocable operating lease agreements expiring at various dates with rent escalation clauses. Rent expense related to these leases is recognized on a straight-line basis over the lease terms. Rent expense for the years ended March 31, 2017, 2016, and 2015 was $8,610, $7,309 and $7,416, respectively. The following table summarizes our significant contractual obligations at March 31, 2017 and the effect that such obligations are expected to have on our liquidity and cash in future periods:
_______________________ (1) Remaining lease obligations for vacated properties relates to remaining lease obligations at certain locations, including Austin, Solana Beach, Costa Mesa, and a portion of Horsham, that we have vacated and are actively marketing the locations for sublease as part of our reorganization efforts. Refer to Note 16 for additional details. Total obligations have not been reduced by projected sublease rentals or by minimum sublease rentals of $1.6 million due in future periods under non-cancelable subleases. (2) Purchase commitments relates to payments due under certain non-cancelable agreements to purchase goods and services. The deferred compensation liability as of March 31, 2017 was $6,629, which is not included in the table above as the timing of future benefit payments to employees is not readily determinable. The uncertain tax position liability as of March 31, 2017 was $4,762, which is not included in the table above as the timing of expected payments is not readily determinable. Commitments and Guarantees Our software license agreements include a performance guarantee that our software products will substantially operate as described in the applicable program documentation for a period of 365 days after delivery. To date, we have not incurred any significant costs associated with our performance guarantee or other related warranties and do not expect to incur significant warranty costs in the future. Therefore, no accrual has been made for potential costs associated with these warranties. Certain arrangements also include performance guarantees related to response time, availability for operational use, and other performance-related guarantees. Certain arrangements also include penalties in the form of maintenance credits should the performance of the software fail to meet the performance guarantees. To date, we have not incurred any significant costs associated with these warranties and do not expect to incur significant warranty costs in the future. Therefore, no accrual has been made for potential costs associated with these warranties. We have historically offered short-term rights of return in certain sales arrangements. If we are able to estimate returns for these types of arrangements and all other criteria for revenue recognition have been met, revenue is recognized and these arrangements are recorded in the consolidated financial statements. If we are unable to estimate returns for these types of arrangements, revenue is not recognized in the consolidated financial statements until the rights of return expire, provided also, that all other criteria of revenue recognition have been met. Our standard sales agreements contain an indemnification provision pursuant to which we shall indemnify, hold harmless, and reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any United States patent, any copyright or other intellectual property infringement claim by any third-party with respect to our software. As we have not incurred any significant costs to defend lawsuits or settle claims related to these indemnification agreements, we believe that our estimated exposure on these agreements is currently minimal. Accordingly, we have no liabilities recorded for these indemnification obligations. Hussein Litigation On October 7, 2013, a complaint was filed against our Company and certain of our officers and directors in the Superior Court of the State of California for the County of Orange, captioned Ahmed D. Hussein v. Sheldon Razin, Steven Plochocki, Quality Systems, Inc. and Does 1-10, inclusive, No. 30-2013-00679600-CU-NP-CJC, by Ahmed Hussein, a former director and significant shareholder of our Company. We filed a demurrer to the complaint, which the Court granted on April 10, 2014. An amended complaint was filed on April 25, 2014. The amended complaint generally alleges fraud and deceit, constructive fraud, negligent misrepresentation and breach of fiduciary duty in connection with statements made to our shareholders regarding our financial condition and projected future performance. The amended complaint seeks actual damages, exemplary and punitive damages and costs. We filed a demurrer to the amended complaint. On July 29, 2014, the Court sustained the demurrer with respect to the breach of fiduciary duty claim, and overruled the demurrer with respect to the fraud and deceit claims. On August 28, 2014, we filed an answer and also filed a cross-complaint against the plaintiff, alleging that the plaintiff breached fiduciary duties owed to the Company, Mr. Razin and Mr. Plochocki. Mr. Razin and Mr. Plochocki have dismissed their claims against Hussein, leaving QSI as the sole plaintiff in the cross-complaint. On June 26, 2015, we filed a motion for summary judgment, which the Court granted on September 16, 2015, dismissing all claims against us. On September 23, 2015, the plaintiff filed an application for reconsideration of the Court's summary judgment order, which the Court denied. On October 28, 2015, the plaintiff filed a motion for summary judgment, seeking to dismiss our cross-complaint, which the Court denied on March 3, 2016. On May 9, 2016, the plaintiff filed a motion for summary adjudication, seeking to again dismiss our cross-complaint, which the Court denied on August 5, 2016. On August 5, 2016, the plaintiff filed a motion for judgment on the pleadings, seeking to again dismiss our cross-complaint, which the Court denied on September 2, 2016. Trial is set for June 1, 2017 on QSI's cross-complaint. At this time, we are unable to estimate the probability or the amount of liability, if any, related to this claim. Federal Securities Class Action On November 19, 2013, a putative class action complaint was filed on behalf of the shareholders of our Company other than the defendants against us and certain of our officers and directors in the United States District Court for the Central District of California by one of our shareholders. After the Court appointed lead plaintiffs and lead counsel for this action, and recaptioned the action In re Quality Systems, Inc. Securities Litigation, No. 8L13-cv-01818-CJC(JPRx), lead plaintiffs filed an amended complaint on April 7, 2014. The amended complaint, which is substantially similar to the litigation described above under the caption “Hussein Litigation,” generally alleges that statements made to our shareholders regarding our financial condition and projected future performance were false and misleading in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the individual defendants are liable for such statements because they are controlling persons under Section 20(a) of the Exchange Act. The complaint seeks compensatory damages, court costs and attorneys' fees. We filed a motion to dismiss the amended complaint on June 20, 2014, which the Court granted on October 20, 2014, dismissing the complaint with prejudice. Plaintiffs filed a motion for reconsideration of the Court's order, which the Court denied on January 5, 2015. On January 30, 2015, Plaintiffs filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit, captioned In re Quality Systems, Inc. Securities Litigation, No. 15-55173. Plaintiffs filed their opening brief and we answered. Oral argument was held on December 5, 2016. The Court's decision remains pending. We believe that the plaintiffs' claims are without merit and continue to defend against them vigorously. At this time, we are unable to estimate the probability or the amount of liability, if any, related to this claim. Shareholder Derivative Litigation On January 24, 2014, a complaint was filed against our Company and certain of our officers and current and former directors in the United States District Court for the Central District of California, captioned Timothy J. Foss, derivatively on behalf of himself and all others similarly situated, vs. Craig A. Barbarosh, George H. Bristol, James C. Malone, Peter M. Neupert, Morris Panner, D. Russell Pflueger, Steven T. Plochocki, Sheldon Razin, Lance E. Rosenzweig and Quality Systems, Inc., No. SACV14-00110-DOC-JPPx, by Timothy J. Foss, a shareholder of ours. The complaint arises from the same allegations as the Hussein litigation and federal securities class action litigation described above and generally alleges breach of fiduciary duties, abuse of control and gross mismanagement by our directors, in addition to unjust enrichment and insider selling by individual directors. The complaint seeks compensatory damages, restitution and disgorgement of all profits, court costs, attorneys’ fees and implementation of enhanced corporate governance procedures. The parties have agreed to stay this litigation until the United States Court of Appeals for the Ninth Circuit issues a ruling on the pending appeal described above under the caption “Federal Securities Class Action”. We believe that the plaintiff’s claims are without merit and intend to defend against them vigorously. At this time, we are unable to estimate the probability or the amount of liability, if any, related to this claim. |
Operating Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segment Information | Operating Segment Information Effective July 1, 2016, we revised our reportable operating segments. As part of our ongoing reorganization efforts, we refined the measurement of our segment data to better reflect our current internal organizational structure whereby certain functions that formerly existed within each individual operating segment have changed. Our operating segments consist of the Software and Related Solutions segment and the RCM and Related Services segment, which is consistent with the disaggregated financial information used and evaluated by our chief operating decision maker (consisting of our Chief Executive Officer) to assess performance and make decisions about the allocation of resources. Revenue and gross profit are the key measures of segment profitability used by our chief operating decision maker to measure segment operating performance and to make key business decisions. The revenues and gross profit of each segment are derived from distinct product and services within each segment. The Software and Related Solutions segment aggregates the revenues and gross profit of our software-related products and services, including software license and hardware, software-related subscription services, support and maintenance, EDI and data services, and certain professional services, such as implementation, training, and consulting. The RCM and Related Services segment aggregates the revenues and gross profit of our RCM services and certain related ancillary service offerings. Certain functional roles that do not engage in revenue generating activities, such as product solutions and strategy, research and development, and certain corporate general and administrative functions, including finance, human resources, marketing, and legal, are considered to be shared-services and are not controlled by segment-level leadership. Although the segments may derive direct benefits as a result of such shared-services functions, our chief operating decision maker evaluates performance based upon stand-alone segment revenues and gross profit. Accordingly, the shared-services functions are not considered separate operating segments, and the related operating expenses are not included within our operating segments disclosure. Additionally, total assets are managed at a consolidated level and thus are also not included within our operating segments disclosure. Accounting policies for each of our operating segments are the same as those applied to our consolidated financial statements. Operating segment data for the fiscal years ended March 31, 2017, 2016 and 2015 is summarized in the table below. Prior period data has been retroactively reclassified to present all segment information on a comparable basis. The change in reportable segments has no impact to consolidated revenues and consolidated cost of revenue, nor does it affect our presentation of revenue and cost of revenue on the consolidated statements of net income and comprehensive income.
___________________________________ (1) The former Hospital Solutions division was divested in October 2015 and therefore, does not represent a distinct operating segment. Historical amounts for Hospital Solutions have not been revised. (2) Consists of amortization of acquired software technology and amortization of capitalized software costs not allocated to the operating segments for the purposes of measuring performance. |
Restructuring Plan |
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Mar. 31, 2017 | |
Restructuring Costs [Abstract] | |
Restructuring Plan | Restructuring Plan We continue to evaluate the organizational structure of our company with the objective of achieving greater synergies and further integration of our products and services, in support of our business strategies. In fiscal year 2016, we initiated a three-phase plan intended to better position our organization for future success. In the first phase, we redesigned the organization to more effectively support the execution of our strategy. This phase included implementing a series of actions with the objective of enabling a more efficient, integrated and client-centered delivery of the holistic solutions that we believe is required by our ambulatory care clients. During this phase, we transformed our management team with the appointment of a new Chief Executive Officer, Chief Financial Officer, Chief Technology Officer, Chief Operating Officer, and Chief Strategy Officer. Under phase two of our reorganization, we have continued to build our infrastructure and enhance our healthcare information technology capabilities to drive future revenue growth. The third phase of the plan will consist of developing and marketing the services and solutions that we believe will accelerate revenue growth. The overall plan also includes a multi-year initiative, called NextGen 2.0, to merge our business units into a more streamlined, functional-based organization structure and to realign our organizational structure by consolidating the sales, marketing, information services, and software development responsibilities into single, company-wide roles to achieve greater efficiency. As a result, our reportable segments have changed. The first phase was completed in April 2016, when we announced a corporate restructuring plan, which was approved by our Board of Directors. For the fiscal year ended March 31, 2017, we recorded $7,078 of restructuring costs within operating expenses in our consolidated statements of net income and comprehensive income. The restructuring costs consist primarily of payroll-related costs, such as severance, outplacement costs, and continuing healthcare coverage, associated with the involuntary separation of employees pursuant to a one-time benefit arrangement, which were accrued when it was probable that the benefits will be paid and the amount were reasonably estimable. Also included in restructuring costs was $1,661 of facilities-related costs associated with accruals for the remaining lease obligations at certain locations, including Solana Beach, Costa Mesa, and a portion of Horsham with contractual lease terms ending between January 2018 and September 2023. We have vacated each of the locations or portions thereof and are actively marketing the locations for sublease. We estimated the remaining lease obligations at fair value as of the cease-use date for each location based on the future contractual lease obligations, reduced by projected sublease rentals that could be reasonably obtained for the locations after a period of marketing, and adjusted for the effect deferred rents that have been recognized under the lease. The effect of discounting future cash flows using a credit-adjusted risk free rate was not significant. Sublease income and commencement dates were estimated based on data available from rental activity in the local markets. Significant judgment was required to estimate the remaining lease obligations at fair value and actual results could vary from the estimates, resulting in potential future adjustments to amounts previously recorded. As of March 31, 2017, the remaining restructuring liability associated with payroll-related costs was $606, which we expect to settle in the first quarter of fiscal 2018, and the remaining lease obligation, net of estimated projected sublease rentals, was $2,285. Refer to Note 14 for estimated timing of payments related to remaining lease obligations. The restructuring plan was substantially complete by the end of fiscal 2017. |
Significant Accounting Policies (Policies) |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation. The consolidated financial statements include the accounts of Quality Systems, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). Each of the terms “we,” “us,” or “our” as used herein refers collectively to the Company, unless otherwise stated. All intercompany accounts and transactions have been eliminated. |
Basis of Presentation | |
Recent Accounting Standards | Recent Accounting Standards. Recent accounting pronouncements requiring implementation in future periods are discussed below or in the notes, where applicable. We do not believe that any other recently issued, but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update ("ASU") 2017-04, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of Step two of the goodwill impairment test. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. ASU 2017-04 is effective prospectively for annual and interim periods beginning after December 15, 2019, and early adoption is permitted on goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 is effective for us in the fourth quarter of fiscal 2020, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted in two scenarios as identified in the new standard. ASU 2017-01 is effective for us in the first quarter of fiscal 2019, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 provides guidance on the classification of restricted cash and cash equivalents in the statement of cash flows. Although it does not provide a definition of restricted cash or restricted cash equivalents, it states that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. ASU 2016-18 is effective for us in the first quarter of fiscal 2019, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"). ASU 2016-16 requires the recognition of current and deferred income taxes for intra-entity asset transfers when the transaction occurs. ASU 2016-16 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. ASU 2016-16 is effective for us in the first quarter of fiscal 2019, and we are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 is intended to add and clarify guidance on the classification of certain cash receipts and cash payments in the statement of cash flows to eliminate diversity in practice related to how such cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. ASU 2016-15 is effective for us in the first quarter of fiscal 2019, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies the accounting for and reporting on share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The amendments in this update are to be applied differently upon adoption with certain amendments being applied prospectively, retrospectively and under a modified retrospective transition method. We expect to adopt ASU 2016-09 in the first quarter of fiscal 2018, and we currently do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which is intended to improve financial reporting about leasing transactions. The new guidance will require lessees to recognize on their balance sheets the assets and liabilities for the rights and obligations created by leases and to disclose key information about the leasing arrangements. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 is effective for us in the first quarter of fiscal 2020. We are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Arrangement ("ASU 2015-05"), which requires a customer to determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. Upon adoption, an entity has the option to apply the provisions of ASU 2015-05 either prospectively to all arrangements entered into or materially modified, or retrospectively. The adoption of this new standard did not have material impact on our consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ("ASU 2014-15"), which incorporates and expands upon certain principles that currently exist in U.S. auditing standards. ASU 2014-15 provides guidance regarding management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. The new standard requires management to perform interim and annual evaluations and sets forth principles for considering the mitigating effect of management's plans. The standard mandates certain disclosures when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. ASU 2014-15 is effective for us commencing fiscal year ending March 31, 2017. The adoption of this new standard has not had, and is not expected to have, an impact on our consolidated financial statements. In May 2014, the FASB, along with the International Accounting Standards Board, issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using International Financial Reporting Standards and GAAP. The core principle of this updated guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new revenue standard also requires additional disclosure about revenue and provides improved guidance for multiple element arrangements. In July 2015 decision, the FASB issued ASU 2015-14, Deferral of Effective Date ("ASU 2015-14") to delay the effective date by one year. In addition, the FASB issued ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, and ASU 2016-20, all of which do not change the core principle of the guidance, but rather help to provide further interpretive clarifications on the new revenue standard. Companies are permitted to adopt this new guidance following either a full retrospective or modified retrospective approach. We have performed an initial assessment of the potential impacts to our business processes, systems, and controls that could result from the implementation of the new revenue standard. Additionally, based on our initial assessment, we currently believe that impact on our consolidated financial statements could be material. We expect that revenue related to hardware, EDI, maintenance, and certain subscriptions would remain substantially unchanged, and we are the process of evaluating the impact of the new revenue standard on our other revenue streams. We continue to evaluate all potential impacts of this new revenue standard, including our method of adoption, and our preliminary assessments are subject to change. We expect to implement this new revenue standard when it becomes effective for us in the first quarter of fiscal 2019. |
Contingent Consideration Policy | March 31, 2017 relates to the acquisition of HealthFusion (see Note 5). Prior to March 31, 2017, the categorization of the framework used to measure fair value of the contingent consideration liability was considered to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used. We had assessed the fair value of the contingent consideration liability on a recurring basis and any adjustments to fair value subsequent to the measurement period were reflected in the consolidated statements of net income and comprehensive income. Key assumptions included discount rates and probability-adjusted achievement estimates of certain revenue targets that were not observable in the market. As of the end of the HealthFusion contingent consideration liability measurement period on December 31, 2016, the actual revenue target achievement rate was utilized to compute the ending contingent consideration liability. Accordingly, the contingent consideration liability was transferred into the Level 2 valuation hierarchy because the fair value was determined based on other significant observable inputs. |
Non-Recurring Fair Value Measurements | Non-Recurring Fair Value Measurements We have certain assets, including goodwill and other intangible assets, which are measured at fair value on a non-recurring basis and are adjusted to fair value only if an impairment charge is recognized. The categorization of the framework used to measure fair value of the assets is considered to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used. |
Summary of Significant Accounting Policies (Tables) - USD ($) $ in Thousands |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | Share-Based Compensation. The following table shows total share-based compensation expense included in the consolidated statements of net income and comprehensive income for the for the fiscal year ended March 31, 2017, 2016, and 2015:
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Cash, Uninsured Amount | $ 36,572 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Advertising Expense | $ 7,111 | $ 7,890 | $ 7,079 |
Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of assets and liabilities on a recurring basis | The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2017 and March 31, 2016:
___________________________________ (1) Cash equivalents consist primarily of money market funds. (2) Marketable securities consist of available-for-sale money market instruments and fixed-income securities, including certificates of deposit, corporate bonds and notes, and municipal securities. |
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Company's assets and liabilities measured at fair value using significant unobservable inputs (Level 3) | The following table presents activity in our financial assets and liabilities measured at fair value using significant unobservable inputs (Level 3), as of and for the years ended March 31, 2017:
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Business Combinations and Dispositions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition |
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Summary of purchase price allocation |
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Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Goodwill | Goodwill by reportable operating segment consists of the following:
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Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets, other than capitalized software development costs | Our definite-lived intangible assets, other than capitalized software development costs, are summarized as follows:
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Estimated amortization of intangible assets with determinable lives | The following table summarizes the remaining estimated amortization of definite-lived intangible assets as of March 31, 2017:
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Capitalized Software Costs (Tables) |
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Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized software development costs | Our capitalized software costs are summarized as follows:
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Estimated amortization of capitalized software costs | The following table presents the remaining estimated amortization of capitalized software costs as of March 31, 2017. The estimated amortization is comprised of (i) amortization of released products and (ii) the expected amortization for products that are not yet available for sale based on their estimated economic lives and projected general release dates.
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Composition of Certain Financial Statement Captions (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Accounts Receivable |
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Summary of Inventories | Inventory is comprised of finished goods of computer systems and components. |
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Summary of Prepaid Expense and Other Assets, Current | Prepaid expenses and other current assets are summarized as follows:
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Summary of Equipment and improvements | Equipment and improvements are summarized as follows:
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Summary of Current and non-current deferred revenue | The current portion of deferred revenues are summarized as follows:
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Summary of Accrued compensation and related benefits | Accrued compensation and related benefits are summarized as follows:
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Summary of Other current liabilities | Other current and noncurrent liabilities are summarized as follows:
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Share Based Awards (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | stock option transactions during the years ended March 31, 2017, 2016, and 2015:
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Schedule of Share Based Compensation Valuation Assumption | We utilize the Black-Scholes valuation model for estimating the fair value of share-based compensation with the following assumptions:
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Summary of stock options granted | During the years ended March 31, 2017, 2016, and 2015, a total of 1,146,500, 1,414,000, and 469,650 options, respectively, to purchase shares of common stock were granted under the 2015 Plan at an exercise price equal to the market price of our common stock on the date of grant, as summarized below:
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Schedule of Employee Stock Options and Performance Based Awards by Nonvested Stock options | Non-vested stock option award activity during the years ended March 31, 2017, 2016, and 2015 is summarized as follows:
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Operating Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating segment data |
___________________________________ (1) The former Hospital Solutions division was divested in October 2015 and therefore, does not represent a distinct operating segment. Historical amounts for Hospital Solutions have not been revised. (2) Consists of amortization of acquired software technology and amortization of capitalized software costs not allocated to the operating segments for the purposes of measuring performance. |
Summary of Significant Accounting Policies (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||||||
Capitalized Computer Software, Impairments | $ 32,238,000 | ||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,999,000 | 1,926,000 | 1,656,000 | ||||||||
Net Income (Loss) Attributable to Parent | $ 4,415,000 | $ 10,486,000 | $ 3,987,000 | $ (647,000) | $ (16,322,000) | $ 7,302,000 | $ 8,315,000 | $ 6,362,000 | $ 18,241,000 | $ 5,657,000 | $ 27,332,000 |
Basic (in usd per share) | 62,345,000 | 62,093,000 | 61,658,000 | 61,179,000 | 60,899,000 | 60,867,000 | 60,461,000 | 60,312,000 | 61,818,000 | 60,635,000 | 60,259,000 |
Earnings Per Share, Basic | $ 0.07 | $ 0.17 | $ 0.06 | $ (0.01) | $ (0.27) | $ 0.12 | $ 0.14 | $ 0.11 | $ 0.30 | $ 0.09 | $ 0.45 |
Costs and expenses: | |||||||||||
Total share-based compensation | $ 7,598,000 | $ 3,295,000 | $ 3,472,000 | ||||||||
Income tax benefit | (2,637,000) | (1,018,000) | (1,054,000) | ||||||||
Dilutive Securities, Effect on Basic Earnings Per Share | $ 192,000 | $ 598,000 | $ 590,000 | ||||||||
Weighted Average Number of Shares Outstanding, Diluted | 62,348,000 | 62,093,000 | 62,052,000 | 61,676,000 | 60,899,000 | 61,279,000 | 61,194,000 | 61,064,000 | 62,010,000 | 61,233,000 | 60,849,000 |
Diluted (in usd per share) | $ 0.07 | $ 0.17 | $ 0.06 | $ (0.01) | $ (0.27) | $ 0.12 | $ 0.14 | $ 0.10 | $ 0.29 | $ 0.09 | $ 0.45 |
Increase Decrease in Net Income | $ 4,961,000 | $ 2,277,000 | $ 2,418,000 | ||||||||
Cost of revenue [Member] | |||||||||||
Costs and expenses: | |||||||||||
Total share-based compensation | 514,000 | 404,000 | 373,000 | ||||||||
Research and development costs [Member] | |||||||||||
Costs and expenses: | |||||||||||
Total share-based compensation | 973,000 | 318,000 | 396,000 | ||||||||
Selling, general and administrative [Member] | |||||||||||
Costs and expenses: | |||||||||||
Total share-based compensation | $ 6,111,000 | $ 2,573,000 | $ 2,703,000 |
Summary of Significant Accounting Policies Accounting Policy Details - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Accounting Policies [Abstract] | |||
Capitalized Computer Software, Impairments | $ 32,238 | ||
Cash, Uninsured Amount | $ 36,572 | ||
Cash, FDIC Insured Amount | 250 | ||
Depreciation | 10,080 | 8,834 | $ 9,323 |
Advertising Expense | $ 7,111 | $ 7,890 | $ 7,079 |
Fair Value Measurements (Details 1) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jan. 04, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Company's assets measured at fair value using significant unobservable inputs (Level 3) | ||||
Balance at April 1, 2016 | $ 23,843 | $ 16,155 | ||
Settlement of contingent consideration related acquisitions | (9,273) | 9,273 | ||
Fair value adjustments | 261 | |||
Balance at December 31, 2016 | 0 | 23,843 | $ 16,155 | |
Contingent Consideration Arrangements, Change in Fair Value | (18,817) | |||
Change in fair value of contingent consideration | 4,247 | $ 261 | $ 1,937 | |
HealthFusion [Member] | ||||
Company's assets measured at fair value using significant unobservable inputs (Level 3) | ||||
Contingent Consideration Arrangements, Change in Fair Value | $ 16,700 | |||
Change in fair value of contingent consideration | 3,817 | |||
Mirth [Member] | ||||
Company's assets measured at fair value using significant unobservable inputs (Level 3) | ||||
Change in fair value of contingent consideration | $ 430 |
Fair Value Measurement (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 04, 2016 |
Mar. 31, 2016 |
|
Business Combination, Separately Recognized Transactions [Line Items] | ||
Fair value adjustments | $ 261 | |
HealthFusion [Member] | ||
Fair Value Measurements (Textual) | ||
Total preliminary purchase price | $ 183,049 |
Business Combinations and Dispositions - HealthFusion Acquisition - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jan. 04, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Business Acquisition [Line Items] | |||
Fair Value Measurement with Unobservable Inputs Reconciliation Recurring Basis Liability Acquisition | $ 16,700,000 | ||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ (18,817,000) | ||
Goodwill | 185,898,000 | 188,837,000 | |
Fair value adjustments | 261,000 | ||
Fair value of contingent consideration | 18,817,000 | $ 24,153,000 | |
Goodwill, Purchase Accounting Adjustments | |||
HealthFusion [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Change in Range of Outcomes, Contingent Consideration, Liability, Value, High | $ 25,000 | ||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 16,700,000 | ||
Initial purchase price | 165,000,000 | ||
Preliminary working capital and other adjustments | 1,349,000 | ||
Total preliminary purchase price | 183,049,000 | ||
Acquired cash and cash equivalents | 2,225,000 | ||
Accounts receivable, net | 1,514,000 | ||
Prepaid expenses and other current assets | 4,645,000 | ||
Other assets | 700,000 | ||
Accounts payable | (1,085,000) | ||
Accrued compensation and related benefits | (533,000) | ||
Deferred revenues | (1,067,000) | ||
Deferred income taxes, net | (9,089,000) | ||
Other liabilities | (2,721,000) | ||
Total preliminary net tangible assets acquired and liabilities assumed | (4,337,000) | ||
Intangible assets | 75,000,000 | ||
Goodwill | 112,386,000 | ||
Total preliminary identifiable intangible assets acquired | 187,386,000 | ||
Total preliminary purchase price | 183,049,000 | ||
Goodwill, Purchase Accounting Adjustments | $ 2,938,000 | ||
HealthFusion [Member] | Computer Software, Intangible Asset [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | 42,500,000 | ||
HealthFusion [Member] | Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | 4,000,000 | ||
HealthFusion [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | 28,500,000 | ||
HealthFusion [Member] | Equipment and Improvements, Net [Member] | |||
Business Acquisition [Line Items] | |||
Property, plant and equipment | 767,000 | ||
HealthFusion [Member] | Software Development [Member] | |||
Business Acquisition [Line Items] | |||
Property, plant and equipment | $ 307,000 |
Business Combinations and Dispositions (Details 1) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Mar. 31, 2016 |
Jan. 04, 2016 |
---|---|---|---|
Fair value of identifiable intangible assets acquired: | |||
Goodwill | $ 185,898 | $ 188,837 | |
HealthFusion [Member] | |||
Fair value of the net tangible assets acquired and liabilities assumed: | |||
Deferred revenues | $ (1,067) | ||
Fair value of identifiable intangible assets acquired: | |||
Goodwill | $ 112,386 |
Business Combinations and Dispositions - Hospital Disposition (Details Textual) |
12 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Business Acquisition [Line Items] | |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 1,366 |
Severance Costs | 387 |
Business Exit Costs | $ 335 |
Goodwill (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Mar. 31, 2016 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 185,898 | $ 188,837 |
NextGen Division [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 156,547 | |
Software and Related Solutions [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 153,608 | |
RCM Services Division [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 32,290 |
Intangible Assets (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Jan. 04, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Finite Lived Intangible Assets [Line Items] | ||||
2017 (remaining three months) | $ 19,115 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 16,703 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 15,706 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 10,974 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 2,048 | |||
Intangible assets, other than capitalized software development costs | ||||
Gross carrying amount | 123,840 | $ 125,728 | ||
Accumulated amortization | (54,627) | (34,053) | ||
Net intangible assets | 69,213 | 91,675 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling after Year Five | 4,667 | |||
Amortization | (22,462,000) | (11,014,000) | $ (7,127,000) | |
Customer Relationships [Member] | ||||
Intangible assets, other than capitalized software development costs | ||||
Amortization | (10,435,000) | (5,368,000) | (3,709,000) | |
Operating Expense [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
2017 (remaining three months) | 7,264 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 4,852 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 3,855 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 3,006 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 1,868 | |||
Intangible assets, other than capitalized software development costs | ||||
Net intangible assets | 24,970 | |||
Finite-Lived Intangible Assets, Amortization Expense, Rolling after Year Five | 4,125 | |||
Cost of Revenue [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
2017 (remaining three months) | 11,851 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 11,851 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 11,851 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 7,968 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 180 | |||
Intangible assets, other than capitalized software development costs | ||||
Net intangible assets | 44,243 | |||
Finite-Lived Intangible Assets, Amortization Expense, Rolling after Year Five | 542 | |||
Software and Software Development Costs [Member] | ||||
Intangible assets, other than capitalized software development costs | ||||
Amortization | (12,027,000) | (5,646,000) | $ (3,418,000) | |
Customer Relationships [Member] | ||||
Intangible assets, other than capitalized software development costs | ||||
Gross carrying amount | 50,550 | 50,550 | ||
Accumulated amortization | (28,972) | (19,618) | ||
Net intangible assets | 21,578 | 30,932 | ||
Trade Name & Contracts [Member] | ||||
Intangible assets, other than capitalized software development costs | ||||
Gross carrying amount | 5,480 | 7,368 | ||
Accumulated amortization | (2,088) | (2,895) | ||
Net intangible assets | 3,392 | 4,473 | ||
Software Technology [Member] | ||||
Intangible assets, other than capitalized software development costs | ||||
Gross carrying amount | 67,810 | 67,810 | ||
Accumulated amortization | (23,567) | (11,540) | ||
Net intangible assets | $ 44,243 | $ 56,270 | ||
HealthFusion [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 75,000,000 | |||
Intangible assets, other than capitalized software development costs | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years 11 months | |||
HealthFusion [Member] | Customer Relationships [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 28,500,000 | |||
Intangible assets, other than capitalized software development costs | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |||
HealthFusion [Member] | Software Technology [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 42,500,000 | |||
Intangible assets, other than capitalized software development costs | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years |
Intangible Assets (Details 1) - USD ($) |
Mar. 31, 2017 |
Mar. 31, 2016 |
---|---|---|
Estimated amortization of intangible assets with determinable lives | ||
2017 (remaining three months) | $ 19,115 | |
2017 | 16,703 | |
2018 | 15,706 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 10,974 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 2,048 | |
Net intangible assets | $ 69,213 | $ 91,675 |
Capitalized Software Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Research and Development [Abstract] | |||
Capitalized Computer Software, Amortization | $ (7,892) | $ (9,891) | $ (12,817) |
Capitalized software development costs | |||
Gross carrying amount | 104,948 | 96,699 | |
Accumulated amortization | (91,341) | (83,449) | |
Net capitalized software costs | $ 13,607 | $ 13,250 |
Capitalized Software Costs (Details 1) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Research and Development [Abstract] | |||
Capitalized Computer Software, Impairments | $ 32,238,000 | ||
Activity related to net capitalized software costs | |||
Amortization expense related to capitalized software costs | $ (7,892,000) | (9,891,000) | $ (12,817,000) |
Estimated amortization of capitalized software costs | |||
2017 (remaining three months) | 6,200,000 | ||
2018 | 5,200,000 | ||
2019 | 2,000,000 | ||
2020 | 207,000 | ||
Total | 13,607,000 | ||
Amortization of capitalized software costs | $ 7,892,000 | $ 9,891,000 | $ 12,817,000 |
Line of Credit (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Jan. 04, 2016 |
|
Line of Credit Facility [Line Items] | ||||
Line of credit | $ 15,000,000 | $ 105,000,000 | ||
Remaining borrowing capacity | $ 235,000,000 | $ 145,000,000 | ||
Line of Credit Facility, Interest Rate at Period End | 2.3125% | 2.40% | ||
Interest expense | $ 1,899,000 | |||
Debt, Weighted Average Interest Rate | 2.35% | 3.20% | ||
Debt Instrument, Fee Amount | $ 5,382,000 | |||
Amortization of debt issuance costs | $ (1,076,000) | $ (258,000) | $ 0 | |
Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 250,000 | |||
Letter of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 10,000 | |||
Swing-Line Loans [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 10,000 |
Composition of Certain Financial Statement Captions (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|---|
Summary of Accounts Receivable | |||
Accounts receivable, gross | $ 93,377 | $ 104,467 | |
Sales return reserve | (7,213) | (7,541) | |
Allowance for doubtful accounts | (2,757) | (2,902) | |
Accounts receivable, net | 83,407 | 94,024 | |
Summary of Prepaid Expense and Other Assets, Current | |||
Prepaid Expense, Current | 14,884 | 11,804 | |
Other Assets, Current | 3,085 | 3,106 | |
Prepaid Expense and Other Assets, Current | 17,969 | 14,910 | |
Summary of Equipment and improvements | |||
Computer equipment | 22,014 | 32,213 | |
Internal-use software | 13,053 | 10,201 | |
Furniture and fixtures | 10,472 | 9,799 | |
Leasehold improvements | 16,360 | 13,408 | |
Equipment and improvements, gross | 61,899 | 65,621 | |
Accumulated depreciation | (34,473) | (39,831) | |
Equipment and improvements, net | 27,426 | 25,790 | |
Summary of Current and non-current deferred revenue | |||
Professional services | 21,889 | 23,128 | |
Undelivered software, hardware and other | 12,680 | 14,913 | |
Support and Maintenance | 9,691 | 11,902 | |
Software related subscription services | 8,123 | 7,992 | |
Deferred revenue | 52,383 | 57,935 | |
Deferred revenue, net of current | 1,394 | 1,335 | |
Summary of Accrued compensation and related benefits | |||
Vacation | 8,677 | 8,987 | |
Payroll, bonus and commission | 15,836 | 9,683 | |
Accrued compensation and related benefits | 24,513 | 18,670 | |
Summary of Other current liabilities | |||
Fair value of contingent consideration | 18,817 | 24,153 | |
Customer Deposits, Current | 4,124 | 4,123 | |
Care Services Liabilities Current | 4,957 | 5,339 | |
Self Insurance Reserve, Current | 1,697 | 1,862 | |
Accrued consulting services, Current | 2,496 | 3,650 | |
Electronic Data Interchange Expense Current | 2,490 | 2,604 | |
Deferred Rent Credit, Current | 1,370 | 828 | |
Capital Lease Obligations, Current | 1,057 | 0 | |
Accrued Outsourcing Expenses | 1,588 | 1,604 | |
Accrued Royalties, Current | 2,033 | 2,341 | |
Accrued Employee Benefits, Current | 739 | 213 | |
Taxes Payable | 448 | 655 | |
Accrued Professional Fees | 853 | 864 | |
Other Accrued Liabilities, Current | 4,106 | 2,002 | |
Other Liabilities, Current | 46,775 | 50,238 | |
Deferred Rent Credit, Noncurrent | 11,402 | 6,577 | |
Unrecognized Tax Benefits | 4,762 | 3,955 | $ 3,763 |
Accrued Income Taxes, Noncurrent | 3,955 | ||
Other Liabilities | 297 | 129 | |
Other Liabilities, Noncurrent | $ 16,461 | $ 10,661 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Operating Loss Carryforwards [Line Items] | |||||||||||
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | $ 668 | ||||||||||
Tax Credit Carryforward, Amount | $ 4,328 | $ 3,611 | 4,328 | $ 3,611 | |||||||
Undistributed Earnings of Foreign Subsidiaries | 7,555 | 7,555 | |||||||||
Income Tax Examination, Interest Accrued | 297 | 129 | 297 | 129 | |||||||
Income Tax Examination, Interest Expense | 170 | 57 | $ 309 | ||||||||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | 11,811 | 17,920 | $ 11,811 | $ 17,920 | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% | 35.00% | ||||||||
Current Federal Tax Expense (Benefit) | $ 3,443 | $ (9,338) | $ 18,055 | ||||||||
Provision for income taxes | 1,418 | $ 2,342 | $ 1,925 | $ (317) | (7,570) | $ 1,141 | $ 4,168 | $ 2,924 | $ 5,368 | $ 663 | $ 8,332 |
Effective tax rate (as a percentage) | 22.70% | 10.50% | 23.43% | ||||||||
Liability for unrecognized tax benefits | 4,762 | 3,955 | $ 4,762 | $ 3,955 | $ 3,763 | ||||||
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions | 920 | 235 | |||||||||
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | (252) | (43) | |||||||||
Current State and Local Tax Expense (Benefit) | 1,556 | (403) | 1,887 | ||||||||
Current Foreign Tax Expense (Benefit) | 498 | 374 | 262 | ||||||||
Current Income Tax Expense (Benefit) | 5,497 | (9,367) | 20,204 | ||||||||
Deferred Federal Income Tax Expense (Benefit) | 824 | 10,474 | (9,804) | ||||||||
Deferred State and Local Income Tax Expense (Benefit) | (879) | (100) | (1,771) | ||||||||
Deferred Foreign Income Tax Expense (Benefit) | (74) | (344) | (297) | ||||||||
Deferred Federal, State and Local, Tax Expense (Benefit) | $ (129) | $ 10,030 | $ (11,872) | ||||||||
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Percent | (1250000.00%) | (2340000.00%) | (440000.00%) | ||||||||
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Percent | (320000.00%) | 0.00% | (540000.00%) | ||||||||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 0.00% | ||||||||||
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Percent | (170000.00%) | (1020000.00%) | (160000.00%) | ||||||||
Effective Income Tax Rate Reconciliation, Deduction, Other, Percent | 0.00% | 910000.00% | 0.00% | ||||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | (140000.00%) | (520000.00%) | (200000.00%) | ||||||||
Effective Income Tax Rate Reconciliation,Other Reconciling Items, Percent | 0.00% | 0.00% | (180000.00%) | ||||||||
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Meals and Entertainment, Percent | 80000.00% | 370000.00% | 80000.00% | ||||||||
Effective Income Tax Rate Reconciliation, Deduction, Percent | (570000.00%) | (360000.00%) | 0.00% | ||||||||
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Percent | 80000.00% | 370000.00% | 60000.00% | ||||||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent | (360000.00%) | 140000.00% | (180000.00%) | ||||||||
Deferred Tax Assets, Deferred Income | 7,337 | 10,682 | $ 7,337 | $ 10,682 | |||||||
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Employee Compensation | 7,063 | 5,868 | 7,063 | 5,868 | |||||||
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Deferred Rent | 5,446 | 2,760 | 5,446 | 2,760 | |||||||
Deferred Tax Assets, in Process Research and Development | 4,328 | 3,611 | 4,328 | 3,611 | |||||||
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost | 4,028 | 2,664 | 4,028 | 2,664 | |||||||
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Allowance for Doubtful Accounts | 3,974 | 4,176 | 3,974 | 4,176 | |||||||
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Other | 2,642 | 2,586 | 2,642 | 2,586 | |||||||
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | 1,173 | 1,098 | 1,173 | 1,098 | |||||||
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 329 | 445 | 329 | 445 | |||||||
Deferred Tax Assets, Inventory | 232 | 68 | 232 | 68 | |||||||
Deferred Tax Assets, Tax Deferred Expense, Other | 169 | 265 | 169 | 265 | |||||||
Deferred Tax Assets, Gross | 48,532 | 52,143 | 48,532 | 52,143 | |||||||
Deferred Tax Liabilities, Intangible Assets | (18,038) | (22,972) | (18,038) | (22,972) | |||||||
Deferred Tax Liabilities, Deferred Expense, Capitalized Software | (7,494) | (9,644) | (7,494) | (9,644) | |||||||
Deferred Tax Liabilities, Other | (5,538) | (5,096) | (5,538) | (5,096) | |||||||
Deferred Tax Liabilities, Other Finite-Lived Assets | (2,348) | (2,434) | (2,348) | (2,434) | |||||||
Deferred Tax Liabilities, Prepaid Expenses | (1,776) | (1,249) | (1,776) | (1,249) | |||||||
Deferred Tax Liabilities, Deferred Expense | (35,194) | (41,395) | (35,194) | (41,395) | |||||||
Deferred Tax Assets, Valuation Allowance | (2,073) | (2,551) | (2,073) | (2,551) | |||||||
Deferred Tax Assets, Net | 11,265 | 8,198 | 11,265 | 8,198 | |||||||
Domestic Tax Authority [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Operating Loss Carryforwards | 31,032 | 45,202 | 31,032 | 45,202 | |||||||
Operating Loss Carryforwards | 31,032 | $ 45,202 | 31,032 | $ 45,202 | |||||||
State and Local Jurisdiction [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Operating Loss Carryforwards | 950 | 950 | |||||||||
Operating Loss Carryforwards | $ 950 | $ 950 |
Employee Benefit Plans (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Contributions by Employer | $ 2,735 | $ 1,063 | $ 949 |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 75.00% | ||
Defined Contribution Plan, Maximum Annual Bonus Contributions Per Employee, Percent | 100.00% | ||
Deferred Compensation Liability, Classified, Noncurrent | $ 6,629 | 6,357 | |
Cash Surrender Value of Life Insurance | 8,115 | 7,155 | |
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 65 | $ 120 | $ 86 |
Earnings Per Share (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Weighted-average shares outstanding for basic and diluted net income per share | |||||||||||
Net income | $ 4,415,000 | $ 10,486,000 | $ 3,987,000 | $ (647,000) | $ (16,322,000) | $ 7,302,000 | $ 8,315,000 | $ 6,362,000 | $ 18,241,000 | $ 5,657,000 | $ 27,332,000 |
Basic net income per share: | |||||||||||
Basic (in usd per share) | 62,345,000 | 62,093,000 | 61,658,000 | 61,179,000 | 60,899,000 | 60,867,000 | 60,461,000 | 60,312,000 | 61,818,000 | 60,635,000 | 60,259,000 |
Earnings Per Share, Basic | $ 0.07 | $ 0.17 | $ 0.06 | $ (0.01) | $ (0.27) | $ 0.12 | $ 0.14 | $ 0.11 | $ 0.30 | $ 0.09 | $ 0.45 |
Diluted net income per share: | |||||||||||
Basic (in usd per share) | 62,345,000 | 62,093,000 | 61,658,000 | 61,179,000 | 60,899,000 | 60,867,000 | 60,461,000 | 60,312,000 | 61,818,000 | 60,635,000 | 60,259,000 |
Weighted-average shares outstanding - Diluted | 62,348,000 | 62,093,000 | 62,052,000 | 61,676,000 | 60,899,000 | 61,279,000 | 61,194,000 | 61,064,000 | 62,010,000 | 61,233,000 | 60,849,000 |
Diluted (in usd per share) | $ 0.07 | $ 0.17 | $ 0.06 | $ (0.01) | $ (0.27) | $ 0.12 | $ 0.14 | $ 0.10 | $ 0.29 | $ 0.09 | $ 0.45 |
Earnings Per Share (Details Textual) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Earnings Per Share [Abstract] | |||
Options excluded from the computation of diluted net income per share | 2,999 | 1,926 | 1,656 |
Share Based Awards (Details Textual) - USD ($) |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 29, 2016 |
Aug. 11, 2014 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Aug. 31, 2015 |
Mar. 31, 2014 |
Oct. 31, 2005 |
|
Share Based Awards (Textual) [Abstract] | ||||||||
Outstanding options under 1998 and 2005 plan | 2,885,415,000 | 2,447,286 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 123,082 | |||||||
Weighted-average grant date fair value per share of stock options | $ 5.00 | $ 4.44 | $ 3.50 | |||||
Number of shares granted | 1,146,500 | |||||||
Total share-based compensation | $ 7,598,000 | $ 3,295,000 | $ 3,472,000 | |||||
Fair value of options vested | 2,090,000 | 1,697,000 | 2,224,000 | |||||
Employee Stock Option [Member] | ||||||||
Share Based Awards (Textual) [Abstract] | ||||||||
Total unrecognized compensation costs | $ 7,834,000 | |||||||
Stock option recognized over weighted average period (in years) | 3 years | |||||||
Restricted Stock Units Award [Member] | ||||||||
Share Based Awards (Textual) [Abstract] | ||||||||
Total share-based compensation | $ 3,691,000 | 940,000 | 877,000 | |||||
Total unrecognized compensation costs | $ 8,810,000 | |||||||
Stock option recognized over weighted average period (in years) | 2 years | |||||||
Employee Share Purchase Plan [Member] | ||||||||
Share Based Awards (Textual) [Abstract] | ||||||||
Total share-based compensation | $ 359,000 | $ 291,000 | $ 116,000 | |||||
2005 Stock Options Plan [Member] | ||||||||
Share Based Awards (Textual) [Abstract] | ||||||||
Common stock reserved | 4,800,000 | |||||||
Outstanding options under 1998 and 2005 plan | 885,665 | |||||||
2005 Stock Options Plan [Member] | Restricted Stock Units Award [Member] | ||||||||
Share Based Awards (Textual) [Abstract] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 48,414.00 | |||||||
Number of Shares Outstanding | 64,571.00 | |||||||
Two Thousand Fifteen Stock Options Plan [Member] | ||||||||
Share Based Awards (Textual) [Abstract] | ||||||||
Common stock reserved | 11,500,000 | |||||||
Outstanding options under 1998 and 2005 plan | 1,999,750 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 902,948 | |||||||
Shares available for future grant | 7,876,341 | |||||||
Two Thousand Fifteen Stock Options Plan [Member] | Restricted Stock Units Award [Member] | ||||||||
Share Based Awards (Textual) [Abstract] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 909,456 | 165,634 | ||||||
Number of Shares Outstanding | 902,948 | 191,247 | 78,205 | |||||
Two Thousand Fifteen Stock Options Plan [Member] | Employee Stock Option [Member] | ||||||||
Share Based Awards (Textual) [Abstract] | ||||||||
Expiration period (in years) | 10 years | |||||||
Employee Share Purchase Plan [Member] | ||||||||
Employee Stock Purchase Plan [Abstract] | ||||||||
Shares reserved for future grant | 4,000,000 | 3,761,378 | ||||||
Maximum percentage of gross payroll deduction | 15.00% | |||||||
Purchase price as a percentage of fair market value | 90.00% | |||||||
Maximum shares purchase in a single transaction | 1,500 | |||||||
Maximum amount purchased in a calendar year | $ 25,000 | |||||||
Shares issued | 238,622 |
Share Based Awards (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Number of Shares | ||
Outstanding, April 1, 2016 | 2,447,286 | |
Granted | (1,146,500) | |
Forfeited/Canceled | (708,371) | |
Outstanding, December 31, 2016 | 2,885,415,000 | 2,447,286 |
Vested and expected to vest, September 30, 2016 | 2,613,171,000 | |
Exercisable, December 31, 2016 | 812,120,000 | |
Weighted- Average Exercise Price per Share | ||
Outstanding, April 1, 2016 (in dollars per share) | $ 19.55 | |
Granted (in dollars per share) | 11.30 | |
Forfeited/Canceled (in dollars per share) | 16.86 | |
Outstanding, June 30, 2016 (in dollars per share) | 15.41 | $ 19.55 |
Vested and expected to vest, June 30, 2016 (in dollars per share) | 16.87 | |
Exercisable, June 30, 2016 (in dollars per share) | $ 20 | |
Weighted- Average Remaining Contractual Life (years) | ||
Outstanding | 6 years 2 months | 6 years 3 months |
Granted | 7 years 2 months | |
Forfeited/Canceled | 3 years 5 months | |
Vested and expected to vest, September 30, 2016 | 6 years 1 month | |
Exercisable, December 31, 2016 | 4 years 8 months | |
Aggregate Intrinsic Value Outstanding Beginning Balance | $ 574 | |
Aggregate Intrinsic Value Outstanding Ending Balance | 3,150 | $ 574 |
Aggregate Intrinsic Value Vested and expected to vest | 2,496 | |
Aggregate Intrinsic Value Exercisable | $ 125 |
Share Based Awards (Details 1) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Deferred Federal, State and Local, Tax Expense (Benefit) | $ (129) | $ 10,030 | $ (11,872) |
Schedule of Share Based Compensation Valuation Assumption | |||
Weighted-average grant date fair value per share of stock options | $ 5.00 | $ 4.44 | $ 3.50 |
Share Based Awards (Details 2) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 29, 2016 |
Mar. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 123,082 | |
Summary of stock options granted | ||
Number of shares granted | 1,146,500 | |
Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date First November Two Thousand Sixteen [Member] | ||
Summary of stock options granted | ||
Option Grant Date | November 1, 2016 | |
Number of shares granted | 50,000 | |
Exercise Price Granted (in usd per share) | $ 12.71 | |
Vesting period | 4 years | |
Expiration | Nov. 01, 2024 | |
Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date Thirty First May Two Thousand Sixteen [Member] [Member] | ||
Summary of stock options granted | ||
Option Grant Date | May 31, 2016 | |
Number of shares granted | 100,000 | |
Exercise Price Granted (in usd per share) | $ 12.71 | |
Vesting period | 5 years | |
Expiration | May 31, 2024 | |
Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date Twenty Fifth May Two Thousand Sixteen [Member] | ||
Summary of stock options granted | ||
Option Grant Date | May 25, 2016 | |
Number of shares granted | 216,500 | |
Exercise Price Granted (in usd per share) | $ 12.8 | |
Vesting period | 4 years | |
Expiration | May 25, 2024 | |
Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date May Twenty Fourth Two Thousand Sixteen [Member] | ||
Summary of stock options granted | ||
Option Grant Date | May 24, 2016 | |
Number of shares granted | 540,000 | |
Exercise Price Granted (in usd per share) | $ 12.9 | |
Vesting period | 4 years | |
Expiration | May 24, 2024 | |
Two Thousand Fifteen Stock Options Plan [Member] | OptionGrantDateJulyEleventh [Member] | ||
Summary of stock options granted | ||
Option Grant Date | July 11, 2016 | |
Number of shares granted | 150,000 | |
Exercise Price Granted (in usd per share) | $ 12.60 | |
Vesting period | 4 years | |
Expiration | Jul. 11, 2024 | |
Performance Shares [Member] | ||
Summary of stock options granted | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | $ 78 |
Share Based Awards (Details 3) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share Based Compensation Arrangement by Share Based Payment Awards Options Vested in Period Fair Value | $ 2,090 | $ 1,697 | $ 2,224 |
Allocated Share-based Compensation Expense | $ 7,598 | $ 3,295 | $ 3,472 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |||
Non-Vested Number of Shares Outstanding Beginning Balance | 1,859,750 | 1,068,290 | 991,560 |
Non-Vested Number of Shares Granted | 1,146,500 | 1,414,000 | 469,650 |
Non-Vested Number of Shares Vested | (540,595) | (311,740) | (269,785) |
Non-Vested Number of Shares Forfeited | (392,360) | (310,800) | (123,135) |
Non-Vested Number of Shares Outstanding Ending Balance | 2,073,295 | 1,859,750 | 1,068,290 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted Average Fair Value per Share Price Beginning Balance | $ 4.67 | $ 5.81 | $ 7.73 |
Weighted-average grant date fair value per share of stock options | 5.00 | 4.44 | 3.50 |
Weighted Average Fair Value per Share Price Vested | 3.87 | 5.44 | 8.24 |
Weighted Average Fair Value per Share Price Forfeited | 4.50 | 5.45 | 6.57 |
Weighted Average Fair Value per Share Price Ending Balance | $ 5.09 | $ 4.67 | $ 5.81 |
Employee Share Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated Share-based Compensation Expense | $ 359 | $ 291 | $ 116 |
Restricted Stock Units Award [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated Share-based Compensation Expense | $ 3,691 | $ 940 | $ 877 |
Share Based Awards Share Based Awards - Restricted (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 29, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 1,146,500 | |||
Allocated Share-based Compensation Expense | $ 7,598 | $ 3,295 | $ 3,472 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Granted | 123,082 | |||
Restricted Stock Units Award [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 3,691 | $ 940 | $ 877 | |
Restricted Stock Units Award [Member] | Two Thousand Fifteen Stock Options Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Number of Shares Outstanding Beginning Balance | 191,247 | 78,205 | ||
Granted | 909,456 | 165,634 | ||
Vested | (92,543) | (51,092) | ||
Number of Shares Outstanding Ending Balance | 902,948 | 191,247 | 78,205 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Weighted Average Grant-Date Fair Value per Share, Beginning of Period (in dollars per share) | $ 14.44 | $ 17.94 | ||
Weighted Average Grant-Date Fair Value per Share, Granted (in dollars per share) | 12.93 | 14.06 | ||
Weighted Average Grant-Date Fair Value per Share, Vested (in dollars per share) | 15.25 | 20.14 | ||
Weighted Average Grant-Date Fair Value per Share, End of Period (in dollars per share) | $ 12.92 | $ 14.44 | $ 17.94 | |
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | (105,212) | (1,500) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 13.00 | $ 17.95 | ||
Restricted Stock Units Award [Member] | Two Thousand Five Stock Options Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Number of Shares Outstanding Beginning Balance | 64,571.00 | |||
Granted | 48,414.00 | |||
Vested | (34,780) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Weighted Average Grant-Date Fair Value per Share, Beginning of Period (in dollars per share) | $ 20.74 | |||
Weighted Average Grant-Date Fair Value per Share, Granted (in dollars per share) | 15.77 | |||
Weighted Average Grant-Date Fair Value per Share, Vested (in dollars per share) | $ 21.33 | |||
Award Grant Date Twenty-Nine December Two Thousand Sixteen [Member] | Two Thousand Fifteen Stock Options Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 118,999 |
Commitments Guarantees and Contingencies (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Operating Leases, Future Minimum Payments Due | $ 60,109 | ||
Operating Leases, Rent Expense | 8,610 | $ 7,309 | $ 7,416 |
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals | $ 1,600 | ||
Commitments Guarantees and Contingencies (Textual) | |||
Applicable program documentation period | 365 days | ||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 8,136 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 8,350 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 8,067 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 8,037 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 7,713 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 19,806 | ||
Other Commitment | 6,599 | ||
Other Commitment, Due in Next Twelve Months | 2,487 | ||
Other Commitment, Due in Second Year | 1,413 | ||
Other Commitment, Due in Third Year | 794 | ||
Other Commitment, Due in Fourth Year | 816 | ||
Other Commitment, Due in Fifth Year | 551 | ||
Purchase Commitment, Remaining Minimum Amount Committed | 538 | ||
Long-term Line of Credit | 15,000 | 105,000 | |
Long-term Line of Credit, Noncurrent | 15,000 | ||
Business Combination, Contingent Consideration, Liability | 18,817 | $ 24,153 | |
Purchase Obligation | 3,800 | ||
Purchase Obligation, Due in Next Twelve Months | 1,250 | ||
Purchase Obligation, Due in Second Year | 1,250 | ||
Purchase Obligation, Due in Third Year | 1,300 | ||
Contractual Obligation | 104,325 | ||
Contractual Obligation, Due in Next Fiscal Year | 30,690 | ||
Contractual Obligation, Due in Second Year | 11,013 | ||
Contractual Obligation, Due in Third Year | 10,161 | ||
Contractual Obligation, Due in Fourth Year | 23,853 | ||
Contractual Obligation, Due in Fifth Year | 8,264 | ||
Contractual Obligation, Due after Fifth Year | $ 20,344 |
Operating Segment Information (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Segment Operating Data | |||||||||||
Revenue | $ 132,385,000 | $ 127,868,000 | $ 127,166,000 | $ 122,205,000 | $ 127,912,000 | $ 117,032,000 | $ 125,369,000 | $ 122,164,000 | $ 509,624,000 | $ 492,477,000 | $ 490,225,000 |
Gross Profit | 76,415,000 | 73,516,000 | 71,169,000 | 65,390,000 | 68,657,000 | 63,247,000 | 68,771,000 | 66,187,000 | 286,490,000 | 266,862,000 | 267,061,000 |
Operating income | (6,655,000) | (13,461,000) | (6,769,000) | (128,000) | 22,605,000 | (8,437,000) | (12,496,000) | (9,034,000) | (27,013,000) | (7,362,000) | (35,956,000) |
Research and development costs, net | $ 22,111,000 | $ 19,714,000 | $ 18,292,000 | $ 18,224,000 | $ 16,077,000 | $ 14,518,000 | $ 17,981,000 | $ 17,085,000 | 78,341,000 | 65,661,000 | 69,240,000 |
Amortization of capitalized software costs | 7,892,000 | 9,891,000 | 12,817,000 | ||||||||
Software and Related Solutions [Member] | |||||||||||
Segment Operating Data | |||||||||||
Revenue | 423,593,000 | 398,449,000 | 395,259,000 | ||||||||
Gross Profit | 278,121,000 | 252,136,000 | 256,922,000 | ||||||||
RCM Services Division [Member] | |||||||||||
Segment Operating Data | |||||||||||
Revenue | 86,031,000 | 86,559,000 | 76,962,000 | ||||||||
Gross Profit | 28,274,000 | 27,694,000 | 21,514,000 | ||||||||
Hospital Solutions Division [Member] | |||||||||||
Segment Operating Data | |||||||||||
Revenue | 0 | 7,469,000 | 18,004,000 | ||||||||
Gross Profit | 0 | 2,568,000 | 4,876,000 | ||||||||
Unallocated Cost of Revenue [Member] | |||||||||||
Segment Operating Data | |||||||||||
Gross Profit | $ (19,905,000) | $ (15,536,000) | $ (16,251,000) |
Restructuring Plan (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Restructuring Costs [Abstract] | |||
Restructuring expense | $ 7,078 | $ 0 | $ 0 |
Other Restructuring Costs | 1,661 | ||
Restructuring Costs, Liability | 606 | ||
Restructuring and Related Cost, Expected Cost | $ 2,285 |
Label | Element | Value |
---|---|---|
Unpaid additions to equipment and improvements | qsii_Unpaidadditionstoequipmentandimprovements | $ 0 |
Mirth [Member] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | us-gaap_BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedLiabilities | 17,433,000 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | us-gaap_BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAssets | $ 198,258,000 |
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