Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | QUALITY SYSTEMS, INC | |
Entity Central Index Key | 708,818 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 63,367,937 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 23,337 | $ 37,673 |
Restricted cash and cash equivalents | 5,915 | 4,916 |
Accounts receivable, net | 81,605 | 83,407 |
Inventory | 100 | 158 |
Income taxes receivable | 2,303 | 2,679 |
Prepaid expenses and other current assets | 18,283 | 17,969 |
Total current assets | 131,543 | 146,802 |
Equipment and improvements, net | 27,832 | 27,426 |
Capitalized software costs, net | 17,948 | 13,607 |
Deferred income taxes, net | 12,266 | 11,265 |
Intangibles, net | 79,165 | 69,213 |
Goodwill | 202,272 | 185,898 |
Other assets | 18,883 | 19,010 |
Total assets | 489,909 | 473,221 |
Current liabilities: | ||
Accounts payable | 5,007 | 4,618 |
Deferred revenue | 51,471 | 52,383 |
Accrued compensation and related benefits | 14,388 | 24,513 |
Income taxes payable | 2,265 | 405 |
Other current liabilities | 32,618 | 46,775 |
Total current liabilities | 105,749 | 128,694 |
Deferred revenue, net of current | 1,438 | 1,394 |
Deferred compensation | 6,386 | 6,629 |
Line of credit | 45,000 | 15,000 |
Other noncurrent liabilities | 17,148 | 16,461 |
Total liabilities | 175,721 | 168,178 |
Commitments and contingencies (Note 13) | ||
Shareholders' equity: | ||
$0.01 par value; authorized 100,000 shares; issued and outstanding 63,370 and 62,455 shares at June 30, 2017 and March 31, 2017, respectively | 634 | 625 |
Additional paid-in capital | 233,742 | 228,549 |
Accumulated other comprehensive loss | (372) | (358) |
Retained earnings (1) | 80,184 | 76,227 |
Total shareholders' equity | 314,188 | 305,043 |
Total liabilities and shareholders' equity | $ 489,909 | $ 473,221 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
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 | 63,370 | 62,455 |
Common stock, shares outstanding | 63,370 | 62,455 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||
Software license and hardware | $ 12,800,000 | $ 14,789,000 |
Software related subscription services | 23,906,000 | 19,875,000 |
Total software, hardware and related | 36,706,000 | 34,664,000 |
Support and maintenance | 41,116,000 | 38,007,000 |
Revenue cycle management and related services | 21,403,000 | 21,053,000 |
Electronic data interchange and data services | 23,312,000 | 22,124,000 |
Professional services | 8,385,000 | 6,357,000 |
Total revenues | 130,922,000 | 122,205,000 |
Cost of revenue: | ||
Software license and hardware | 5,373,000 | 7,120,000 |
Software related subscription services | 10,430,000 | 9,087,000 |
Total software, hardware and related | 15,803,000 | 16,207,000 |
Support and maintenance | 7,623,000 | 6,568,000 |
Revenue cycle management and related services | 15,361,000 | 14,231,000 |
Electronic data interchange and data services | 13,158,000 | 12,763,000 |
Professional services | 7,224,000 | 7,046,000 |
Total cost of revenue | 59,169,000 | 56,815,000 |
Gross profit | 71,753,000 | 65,390,000 |
Operating expenses: | ||
Selling, general and administrative | 42,977,000 | 40,581,000 |
Research and development costs, net | 19,989,000 | 18,224,000 |
Amortization of other intangibles | 2,047,000 | 2,704,000 |
Restructuring costs | 0 | 3,753,000 |
Total operating expenses | 65,013,000 | 65,262,000 |
Income from operations | 6,740,000 | 128,000 |
Interest income | 9,000 | 8,000 |
Interest expense | (677,000) | (1,013,000) |
Other expense, net | (22,000) | (87,000) |
Income (loss) before provision for (benefit of) income taxes | 6,050,000 | (964,000) |
Provision for (benefit of) income taxes | 2,154,000 | (317,000) |
Net income (loss) | 3,896,000 | (647,000) |
Foreign currency translation, net of tax | (14,000) | (122,000) |
Unrealized gain on marketable securities, net of tax | 0 | 10,000 |
Comprehensive income (loss) | $ 3,882,000 | $ (759,000) |
Net income (loss) per share: | ||
Basic (in usd per share) | $ 0.06 | $ (0.01) |
Diluted (in usd per share) | $ 0.06 | $ (0.01) |
Weighted-average shares outstanding: | ||
Basic (in usd per share) | 62,636 | 61,179 |
Diluted (in usd per share) | 62,643 | 61,179 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 3,896,000 | $ (647,000) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | (2,774,000) | (2,554,000) |
Amortization of capitalized software costs | 1,271,000 | 2,371,000 |
Other Depreciation and Amortization | 5,448,000 | 5,732,000 |
Amortization of debt issuance costs | 269,000 | 269,000 |
Loss on disposal of equipment and improvements | 16,000 | 40,000 |
Provision for bad debts | 2,091,000 | 762,000 |
Provision for inventory obsolescence | 20,000 | 130,000 |
Share-based compensation | 2,041,000 | 1,259,000 |
Deferred income taxes | 0 | 40,000 |
Excess tax benefit from share-based compensation | 420,000 | 0 |
Change in fair value of contingent consideration | 0 | 2,574,000 |
Restructuring Costs | 0 | 1,308,000 |
Changes in assets and liabilities, net of amounts acquired: | ||
Accounts receivable | 1,546,000 | 11,467,000 |
Inventory | 38,000 | (5,000) |
Accounts payable | (841,000) | (7,029,000) |
Deferred revenue | (1,102,000) | (3,433,000) |
Accrued compensation and related benefits | (10,245,000) | (5,721,000) |
Income taxes | 2,157,000 | (423,000) |
Deferred compensation | (243,000) | 260,000 |
Other assets and liabilities | 3,238,000 | 1,425,000 |
Net cash provided by operating activities | 12,794,000 | 12,933,000 |
Cash flows from investing activities: | ||
Additions to capitalized software costs | (5,248,000) | (2,948,000) |
Additions to equipment and improvements | (2,471,000) | (3,462,000) |
Proceeds from sales and maturities of marketable securities | 0 | 9,291,000 |
Payments for (Proceeds from) Previous Acquisition | (33,856,000) | 0 |
Net cash provided by (used in) investing activities | (41,575,000) | 2,881,000 |
Cash flows from financing activities: | ||
Proceeds from Lines of Credit | 30,000,000 | 0 |
Principal repayments on line of credit | 0 | (17,000,000) |
Proceeds from issuance of shares under employee plans | (3,970,000) | (359,000) |
Payment of contingent consideration related to acquisitions | 18,817,000 | 0 |
Payments Related to Tax Withholding for Share-based Compensation | (708,000) | 0 |
Net cash provided by (used in) financing activities | 14,445,000 | (16,641,000) |
Net decrease in cash and cash equivalents | (14,336,000) | (827,000) |
Cash and cash equivalents at beginning of period | 37,673,000 | 27,176,000 |
Cash and cash equivalents at end of period | 23,337,000 | 26,349,000 |
Cash paid for income taxes | 157,000 | 146,000 |
Cash refunds from income taxes | 579,000 | 81,000 |
Cash paid for interest | 411,000 | 736,000 |
Tenant Improvement Allowance Received from Landlord | 980,000 | 3,094,000 |
Unpaid additions to equipment and improvements | $ 591,000 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2017 | |
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. We have determined that the Company operates in one segment as of June 30, 2017 . We have made such determination by first identifying our Chief Executive Officer as our chief operating decision maker ("CODM") and considering the measures used by our CODM to allocate resources. Our CODM utilizes consolidated revenue and consolidated operating results to assess performance and make decisions about allocation of resources. Previously, through the end of fiscal year 2017, we operated under two reportable segments, consisting of the Software and Related Solutions segment and the RCM and Related Services segment, which was consistent with the disaggregated financial information used and evaluated by our CODM to assess performance and make decisions about the allocation of resources. However, as part of our reorganization efforts that were substantially complete as of the end of fiscal year 2017, our internal organizational structure whereby certain functions that formerly existed within each individual operating segment has continued to evolve. Our former Chief Operating Officer was previously responsible for leading the operations of our former RCM and Related Services business while our former Chief Client Officer led our client success organization, consisting of the Software and Related Solutions business and other functions, such as sales and marketing. Upon the resignation of our former Chief Operating Officer in April 2017 and concurrent appointment of our former Chief Client Officer as Chief Operating Officer, our entire portfolio of software and services were aligned under our new Chief Operating Officer in an effort to provide our clients with an even more simplified experience and more effectively deliver a consolidated financial solution to our clients, rather than components of a solution. As a result of such changes in our internal organization structure, the CODM now operates the Company as a single functional organization. The CODM measures company-wide performance by reviewing consolidated revenue and operating results and evaluates the impact of allocating resources to overall profit and margins on a consolidated basis. Basis of Presentation. The accompanying unaudited consolidated financial statements as of June 30, 2017 and for the three months ended June 30, 2017 have been prepared in accordance with the requirements of Quarterly Report on Form 10-Q and Article 10 of the Securities and Exchange Commission Regulation S-X and therefore do not include all information and notes which would be presented were such consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These consolidated financial statements should be read in conjunction with the audited consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017 . In the opinion of management, the accompanying consolidated financial statements reflect all adjustments which are necessary for a fair statement of the results of operations and cash flows for the periods presented. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full year. References to amounts in the consolidated financial statement sections are in thousands, except shares and per share data, unless otherwise specified. Significant Accounting Policies . There have been no material changes to our significant accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017 . Share-Based Compensation. The following table shows total share-based compensation expense included in the consolidated statements of comprehensive income for the three months ended June 30, 2017 and 2016 : Three Months Ended June 30, 2017 2016 Costs and expenses: Cost of revenue $ 137 $ 149 Research and development costs, net 361 83 Selling, general and administrative 1,543 1,027 Total share-based compensation 2,041 1,259 Income tax benefit (716 ) (412 ) Decrease in net income $ 1,325 $ 847 Recent Accounting Standards. Recent accounting pronouncements requiring implementation in future periods are discussed below or in the notes, where applicable. In May 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-09, Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"). ASU 2017-09 clarifies the changes to terms or conditions of a share-based payment award that require an entity to apply modification accounting. ASU 2017-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early application is permitted and prospective application is required. ASU 2017-09 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 January 2017, the FASB issued 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 Accounting Standards Update ("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 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 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 adopted ASU 2016-09 in the first quarter of fiscal 2018. As permitted by ASU 2016-09, we have made an accounting policy election to account for forfeitures as they occur, which was adopted on a modified retrospective basis and resulted in a cumulative-effect adjustment of $0.1 million to retained earnings and additional paid-in capital as of April 1, 2017. ASU 2016-09 also eliminates additional paid-in capital pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled, which was adopted on a prospective basis. The requirements to recognize previously unrecognized excess tax benefits on a modified retrospective basis did not have an impact on our consolidated financial statements. Upon adoption of ASU 2016-09, excess tax benefits and tax deficiencies are recognized in the income statement, and the tax effects of exercised or vested awards are treated as discrete items in the period they occur. The provisions of ASU 2016-09 could have an impact to our future income tax expense, including increased volatility in our effective tax rate on a quarter by quarter basis due to a number of factors, including fluctuations in the stock price and the timing of stock option exercises and vesting of restricted share awards. Additionally, ASU 2016-09 addresses presentation of excess tax benefits and deficiencies and employee taxes paid related to shares withheld for tax withholdings purposes on the statement of cash flows, including a requirement to present excess tax benefits and deficiencies as an operating activity in the same manner as other cash flows related to income taxes on the statement of cash flows, which will be adopted on a prospective basis, and presentation of employee taxes paid related to shares withheld for tax withholdings purposes as a financing activity, which is consistent with our current presentation and thus did not impact 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 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 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 March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) –Principal versus Agent Consideration ("ASU 2016-08"). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing ("ASU 2016-10”). In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) – Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16 ("ASU 2016-11") and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) –Narrow Scope Improvements and Practical Expedients ("ASU 2016-12"). The new ASUs do not change the core principle of the guidance in Topic 606 (as amended by ASU 2014-09), but rather help to provide further interpretive clarifications on the new guidance in ASU 2014-09. ASU 2014-09, as amended by ASU 2015-14, is effective for us in the first quarter of fiscal 2019. 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 internal controls that could result from the implementation of the new revenue standard. Based on our initial assessment, we currently believe that the 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. A significant amount of work remains as we continue to evaluate all potential impacts of the new revenue standard, and develop and implement the necessary changes to our current accounting systems, processes, and internal controls. Accordingly, our preliminary assessments are subject to change. We expect that the new revenue standard will result in additional complexity to our revenue recognition, including an increased amount of significant judgments and estimates as compared to our current revenue recognition. We currently expect to implement the new revenue standard when it becomes effective for us in the first quarter of fiscal 2019 utilizing the modified retrospective transition method. Under this transition method, prior period amounts will not be adjusted and the cumulative effect from prior periods of applying the new revenue standard will be recognized in our consolidated balance sheets as of the date of adoption, including an adjustment to retained earnings. 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. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
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 June 30, 2017 and March 31, 2017 : Balance at Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) June 30, ASSETS Cash and cash equivalents (1) $ 23,337 $ 23,337 $ — $ — Restricted cash and cash equivalents 5,915 5,915 — — $ 29,252 $ 29,252 $ — $ — Balance at Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) March 31, 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 (2) $ 18,817 $ — $ 18,817 $ — $ 18,817 $ — $ 18,817 $ — ___________________________________ (1) Cash equivalents consist primarily of money market funds. (2) The contingent consideration liability as of March 31, 2017 relates to the acquisition of HealthFusion, which was settled during the quarter ended June 30, 2017. The measurement period of the contingent consideration liability ended on December 31, 2016, and thus the actual revenue achievement rate was utilized to compute the ending contingent consideration liability as of March 31, 2017. Accordingly, the contingent consideration liability was reflected under a Level 2 valuation hierarchy because the fair value was determined based on other significant observable inputs. 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 three months ended June 30, 2017 , no adjustments were recorded. |
Business Combinations and Dispo
Business Combinations and Dispositions | 3 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Business Combinations and Disposals | Business Combinations Entrada Acquisition On April 14, 2017, we completed our acquisition of Entrada, Inc. ("Entrada") pursuant to the terms of the Agreement and Plan of Merger, dated April 11, 2017 (the "Agreement"). Based in Nashville, TN, Entrada is a leading provider of cloud-based solutions that are reshaping the way care is delivered by leveraging the power of mobile whenever and wherever care happens. Entrada’s best-in-class mobile application integrates with multiple clinical platforms and all major electronic health record systems. Entrada enables organizations to maximize their existing technology investments while simultaneously enhancing physician and staff productivity. The acquisition of Entrada and its cloud-based, mobile application is part of our commitment to deliver systematic solutions that meet its clients' transforming work requirements to become increasingly nimble and mobile. The preliminary purchase price totaled $33,958 , which included preliminary working capital and other customary adjustments. The acquisition was primarily funded by a draw against our revolving credit agreement (see Note 7). We accounted for the Entrada acquisition as a purchase business combination using the acquisition method of accounting. The preliminary purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their preliminary estimated fair values as of the acquisition date. The preliminary fair values of acquired assets and liabilities assumed represent management’s estimate of fair value and are subject to change if additional information, such as changes to deferred taxes and/or working capital, becomes available. We expect to finalize the purchase price allocation as soon as practicable within the measurement period, but not later than one year following the acquisition date. The preliminary 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. In connection with the Entrada acquisition, we recorded $15,400 of intangible assets related to customer relationships, trade names and software technology. We are amortizing the Entrada 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 6.1 years. The preliminary amount of goodwill represents the excess of the preliminary purchase price over the preliminary 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 Entrada is not deductible for tax purposes. The total preliminary purchase price for the Entrada acquisition is summarized as follows: Initial purchase price $ 34,000 Preliminary working capital and other adjustments (42 ) Total preliminary purchase price $ 33,958 April 14, 2017 Preliminary fair value of the net tangible assets acquired and liabilities assumed: Acquired cash and cash equivalents $ 102 Accounts receivable, net 1,835 Prepaid expense and other current assets 145 Equipment and improvements, net 134 Capitalized software costs, net 364 Deferred income taxes, net 1,041 Accounts payable (639 ) Accrued compensation and related benefits (120 ) Deferred revenues (234 ) Other liabilities (444 ) Total preliminary net tangible assets acquired and liabilities assumed 2,184 Preliminary fair value of identifiable intangible assets acquired: Goodwill 16,374 Software technology 10,500 Customer relationships 3,300 Trade name 1,600 Total preliminary identifiable intangible assets acquired 31,774 Total preliminary purchase price $ 33,958 The pro forma effects of the Entrada acquisition would not have been material to the Company's results of operations and are therefore not presented. |
Goodwill
Goodwill | 3 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill 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 goodwill as of June 30, 2017 . 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. 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. The qualitative assessment includes consideration of factors such as margin of fair values of the reporting units as of the most recent quantitative impairment assessment compared to the relative carrying value of net assets for each reporting unit and the potential adverse changes in fair value since the most recent quantitative impairment assessment by considering changes in macroeconomic variables, changes in the industry in which we operate, and relevant company- and reporting unit-specific factors. 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. As of June 30, 2017 , our qualitative assessment indicated that it was more likely than not that the fair value of all reporting units with goodwill exceeded its respective net carrying values and, therefore, additional impairment testing was not deemed necessary. We do not amortize goodwill as it has been determined to have an indefinite useful life. The carrying amount of goodwill was $202,272 and $185,898 as of June 30, 2017 and March 31, 2017 , respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Our definite-lived intangible assets, other than capitalized software development costs, are summarized as follows: June 30, 2017 Customer Relationships Trade Name and Contracts Software Technology Total Gross carrying amount $ 53,850 $ 7,080 $ 78,310 $ 139,240 Accumulated amortization (30,685 ) (2,422 ) (26,968 ) (60,075 ) Net intangible assets $ 23,165 $ 4,658 $ 51,342 $ 79,165 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 Amortization expense related to customer relationships and trade name and contracts recorded as operating expenses in the consolidated statements of comprehensive income was $2,047 and $2,704 for the three months ended June 30, 2017 and 2016 , respectively. Amortization expense related to software technology recorded as cost of revenue was $3,401 and $3,027 for the three months ended June 30, 2017 and 2016 , respectively. The following table summarizes the remaining estimated amortization of definite-lived intangible assets as of June 30, 2017 : Amortization Expense Recorded As: Operating Expense Cost of Revenue Total For the year ended March 31, 2018 (remaining nine months) 5,839 10,464 16,303 2019 5,502 13,951 19,453 2020 4,505 13,951 18,456 2021 3,656 10,068 13,724 2022 2,518 2,280 4,798 2023 and beyond 5,803 628 6,431 Total $ 27,823 $ 51,342 $ 79,165 |
Capitalized Software Costs
Capitalized Software Costs | 3 Months Ended |
Jun. 30, 2017 | |
Research and Development [Abstract] | |
Capitalized Software Costs | Capitalized Software Costs Our capitalized software costs are summarized as follows: June 30, March 31, Gross carrying amount $ 110,560 $ 104,948 Accumulated amortization (92,612 ) (91,341 ) Net capitalized software costs $ 17,948 $ 13,607 Amortization expense related to capitalized software costs was $1,271 and $2,371 for the three months ended June 30, 2017 and 2016 , respectively, and is recorded as cost of revenue in the consolidated statements of comprehensive income. The following table presents the remaining estimated amortization of capitalized software costs as of June 30, 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. For the year ended March 31, 2018 (remaining nine months) $ 5,800 2019 7,200 2020 3,300 2021 1,648 Total $ 17,948 |
Line of Credit (Notes)
Line of Credit (Notes) | 3 Months Ended |
Jun. 30, 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 covenants under the Credit Agreement as of June 30, 2017 . As of June 30, 2017 , we had $45,000 in outstanding loans and $205,000 of unused credit under the Credit Agreement. As of March 31, 2017, we had $15,000 in outstanding loans under the Credit Agreement. Interest expense related to the Credit Agreement was $407 and $740 for the three months ended June 30, 2017 and 2016 , respectively. Amortization of deferred debt issuance costs was $269 for both the three months ended June 30, 2017 and 2016 . |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 3 Months Ended |
Jun. 30, 2017 | |
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. June 30, March 31, Accounts receivable, gross $ 90,366 $ 93,377 Sales return reserve (6,694 ) (7,213 ) Allowance for doubtful accounts (2,067 ) (2,757 ) Accounts receivable, net $ 81,605 $ 83,407 Inventory is comprised of computer systems and components. Prepaid expenses and other current assets are summarized as follows: June 30, March 31, Prepaid expenses $ 15,694 $ 14,884 Other current assets 2,589 3,085 Prepaid expenses and other current assets $ 18,283 $ 17,969 Equipment and improvements are summarized as follows: June 30, March 31, Computer equipment $ 22,848 $ 22,014 Internal-use software 12,168 13,053 Furniture and fixtures 11,762 10,472 Leasehold improvements 17,078 16,360 Equipment and improvements, gross 63,856 61,899 Accumulated depreciation and amortization (36,024 ) (34,473 ) Equipment and improvements, net $ 27,832 $ 27,426 The current portion of deferred revenues are summarized as follows: June 30, March 31, Professional services $ 22,257 $ 21,889 Software license, hardware and other 12,391 12,680 Support and maintenance 8,499 9,691 Software related subscription services 8,324 8,123 Deferred revenue $ 51,471 $ 52,383 Accrued compensation and related benefits are summarized as follows: June 30, March 31, Payroll, bonus and commission $ 5,297 $ 15,836 Vacation 9,091 8,677 Accrued compensation and related benefits $ 14,388 $ 24,513 Other current and noncurrent liabilities are summarized as follows: June 30, March 31, Care services liabilities $ 5,915 $ 4,957 Customer credit balances and deposits 4,477 4,124 Accrued consulting and outside services 2,560 2,496 Deferred rent and lease obligations 2,417 2,427 Accrued EDI expense 2,276 2,490 Accrued royalties 2,021 2,033 Accrued self insurance expense 1,996 1,697 Accrued outsourcing costs 1,787 1,588 Accrued hosting costs 1,772 401 Accrued conferences and advertising costs 1,136 234 Accrued legal expense 1,056 853 Employee benefit plan withholdings 761 739 Sales tax payable 597 448 Contingent consideration and other liabilities related to acquisitions — 18,817 Other accrued expenses 3,847 3,471 Other current liabilities $ 32,618 $ 46,775 Deferred rent and lease obligations $ 11,749 $ 11,402 Uncertain tax positions 5,103 4,762 Other liabilities 296 297 Other noncurrent liabilities $ 17,148 $ 16,461 |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the three months ended June 30, 2017 was $2,154 and the benefit of income taxes for the three months ended June 30, 2016 was $317 . The effective tax rates were 35.6% and 32.9% for the three months ended June 30, 2017 and 2016 , respectively. The effective rate for the three months ended June 30, 2017 increased compared to the prior year period primarily due to the impact of share-based compensation shortfall expense in current period, offset by a favorable benefit in current period of state taxes and exclusion of certain non-deductible acquisition-related costs. Additionally, we adopted ASU 2016-09 (see Note 1), which requires excess tax expense and benefits to be recorded in the income statement. (income tax expense and/or benefit). Prior to adoption of ASU 2016-09, such amounts were recorded to additional paid-in capital and did not impact the effective tax rate. The deferred tax assets and liabilities have been shown net in the accompanying consolidated balance sheets as noncurrent. We expect to receive the full benefit of the deferred tax assets recorded with the exception of certain state credits, state net operating loss carryforwards, and foreign accumulated minimum tax credits, for which we have recorded a valuation allowance. Uncertain tax positions We had liabilities of $5,103 and $4,762 for unrecognized tax benefits related to various federal, state and local income tax matters as of June 30, 2017 and March 31, 2017 , respectively. If recognized, this amount would reduce our effective tax rate. 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 . |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share The dual presentation of “basic” and “diluted” earnings per share is provided below. Share amounts below are in thousands. Three Months Ended June 30, 2017 2016 Earnings per share — Basic: Net income (loss) $ 3,896 $ (647 ) Weighted-average shares outstanding — Basic 62,636 61,179 Net income (loss) per common share — Basic $ 0.06 $ (0.01 ) Earnings per share — Diluted: Net income (loss) $ 3,896 $ (647 ) Weighted-average shares outstanding 62,636 61,179 Effect of potentially dilutive securities 7 — Weighted-average shares outstanding — Diluted 62,643 61,179 Net income (loss) per common share — Diluted $ 0.06 $ (0.01 ) The computation of diluted net income per share does not include 2,568 and 2,767 options to acquire shares of common stock for the three months ended June 30, 2017 and 2016 , respectively, because their inclusion would have an anti-dilutive effect on net income per share. |
Share-Based Awards
Share-Based Awards | 3 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 , there were 759,185 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 June 30, 2017 , there were 1,964,375 outstanding options, 1,497,033 outstanding shares of restricted stock awards, 114,916 outstanding shares of performance stock awards, and 6,026,095 shares available for future grant under the 2015 Plan. The following table summarizes the stock option transactions during the three months ended June 30, 2017 : Number of Shares Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding, April 1, 2017 2,885,415 $ 15.41 6.2 $ 3,150 Granted 309,000 16.02 7.9 Exercised (214,105 ) 16.63 6.5 $ 116 Forfeited/Canceled (256,750 ) 16.21 5.7 Outstanding, June 30, 2017 2,723,560 $ 16.62 6.1 $ 7,652 Vested and expected to vest, June 30, 2017 2,438,142 $ 16.87 6.0 $ 5,459 Exercisable, June 30, 2017 889,205 $ 20.99 4.6 $ 1,185 We utilize the Black-Scholes valuation model for estimating the fair value of share-based compensation with the following assumptions: Three Months Ended June 30, 2017 2016 Expected term 5.6 - 5.7 years 6.0 years Expected volatility 37.6% - 37.7% 37.4% Expected dividends —% —% Risk-free rate 1.9% 1.5% The weighted-average grant date fair value of stock options granted during the three months ended June 30, 2017 and 2016 was $6.12 and $4.92 per share, respectively. During the three months ended June 30, 2017 , a total of 309,000 options 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: Option Grant Date Number of Shares Exercise Price Vesting Terms (1) Expiration June 13, 2017 249,000 $ 16.37 Four years June 13, 2025 May 24, 2017 60,000 $ 14.57 Four years May 24, 2025 Total 309,000 __________________________________ (1) Options vest in equal annual installments on each grant anniversary date commencing one year following the date of grant. Non-vested stock option award activity during the three months ended June 30, 2017 is summarized as follows: Non-Vested Number of Shares Weighted- Average Grant-Date Fair Value per Share Outstanding, April 1, 2017 2,073,295 $ 5.09 Granted 309,000 6.12 Vested (353,690 ) 5.02 Forfeited/Canceled (194,250 ) 4.63 Outstanding, June 30, 2017 1,834,355 $ 4.92 As of June 30, 2017 , $8,184 of total unrecognized compensation costs related to stock options is expected to be recognized over a weighted-average period of 3.3 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 three months ended June 30, 2017 and 2016 was $1,776 and $1,353 , respectively. Restricted stock awards activity during the three months ended June 30, 2017 is summarized as follows: Number of Shares Weighted- Average Grant-Date Fair Value per Share Outstanding, April 1, 2017 902,948 $ 12.92 Granted 757,631 15.43 Vested (129,197 ) 12.78 Canceled (34,349 ) 12.86 Outstanding, June 30, 2017 1,497,033 $ 14.29 Share-based compensation expense related to restricted stock awards was $1,539 and $545 for the three months ended June 30, 2017 and 2016 , 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 two to three years. As of June 30, 2017 , $18,519 of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted-average period of 2.4 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 114,916 shares 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 $73 for the three months ended June 30, 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 June 30, 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 $97 and $126 for the three months ended June 30, 2017 and 2016 , respectively. |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Jun. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | Concentration of Credit Risk We had cash deposits at U.S. banks and financial institutions which exceeded federally insured limits at June 30, 2017 . We are exposed to credit loss for amounts in excess of insured limits in the event of non-performance by the institutions; however, we do not anticipate non-performance by these institutions. |
Commitments, Guarantees and Con
Commitments, Guarantees and Contingencies | 3 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Guarantees and Contingencies | Commitments, Guarantees and Contingencies 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 on our cross-complaint began June 12, 2017. On July 26, 2017, the Court issued a statement of decision granting Hussein’s motion for judgment on our cross-complaint. We believe the Court’s decision on our cross-complaint was erroneous and we are evaluating a potential appeal. 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. Oral argument was held on December 5, 2016. On July 28, 2017, the Ninth Circuit issued a decision reversing and remanding the District Court's order on our motion to dismiss. We believe that the plaintiffs' claims are without merit and continue to defend against them vigorously, including by evaluating potential challenges to the Ninth Circuit decision. 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 described above under the captions “Hussein Litigation” and “Federal Securities Class Action” 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,” and will meet and confer to discuss process going forward. 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. Other Regulatory Matters In April 2017, we received a request for documents and information from the U.S. Attorney's Office for the District of Vermont pursuant to a Civil Investigative Demand (“CID”). The CID relates to an investigation concerning the certification we obtained for our software under the U.S. Department of Health and Human Services' Electronic Health Record Incentive Program. Given the highly-regulated nature of our industry, we may, from time to time, be subject to subpoenas, requests for information, or investigations from various government agencies. It is our practice to respond to such matters in a cooperative, thorough and timely manner. We are currently responding to this CID and intend to cooperate fully with the government. Requests and investigations of this nature may lead to the assertion of claims or the commencement of legal proceedings against us, as well as other material liabilities. In addition, our responses to the CID require time and effort, which can result in additional cost to us. At this time, we are unable to estimate the probability or the amount of liability, if any, related to this claim. |
Restructuring Plan
Restructuring Plan | 3 Months Ended |
Jun. 30, 2017 | |
Restructuring Costs [Abstract] | |
Restructuring Plan | Restructuring Plan In fiscal year 2016, as part of our reorganization efforts, we recorded $7,078 of restructuring costs within operating expenses in our consolidated statements of net income and comprehensive income. The restructuring plan was substantially complete by the end of fiscal 2017. The restructuring costs consisted 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 would be paid and the amounts were reasonably estimable. Also included in restructuring costs were certain 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 June 30, 2017 , the remaining lease obligation, net of estimated projected sublease rentals, was $1,932 . |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 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. |
Segment Reporting, Policy [Policy Text Block] | Business Segments. We have determined that the Company operates in one segment as of June 30, 2017 . We have made such determination by first identifying our Chief Executive Officer as our chief operating decision maker ("CODM") and considering the measures used by our CODM to allocate resources. Our CODM utilizes consolidated revenue and consolidated operating results to assess performance and make decisions about allocation of resources. Previously, through the end of fiscal year 2017, we operated under two reportable segments, consisting of the Software and Related Solutions segment and the RCM and Related Services segment, which was consistent with the disaggregated financial information used and evaluated by our CODM to assess performance and make decisions about the allocation of resources. However, as part of our reorganization efforts that were substantially complete as of the end of fiscal year 2017, our internal organizational structure whereby certain functions that formerly existed within each individual operating segment has continued to evolve. Our former Chief Operating Officer was previously responsible for leading the operations of our former RCM and Related Services business while our former Chief Client Officer led our client success organization, consisting of the Software and Related Solutions business and other functions, such as sales and marketing. Upon the resignation of our former Chief Operating Officer in April 2017 and concurrent appointment of our former Chief Client Officer as Chief Operating Officer, our entire portfolio of software and services were aligned under our new Chief Operating Officer in an effort to provide our clients with an even more simplified experience and more effectively deliver a consolidated financial solution to our clients, rather than components of a solution. As a result of such changes in our internal organization structure, the CODM now operates the Company as a single functional organization. The CODM measures company-wide performance by reviewing consolidated revenue and operating results and evaluates the impact of allocating resources to overall profit and margins on a consolidated basis. |
Basis of Presentation | Basis of Presentation. The accompanying unaudited consolidated financial statements as of June 30, 2017 and for the three months ended June 30, 2017 have been prepared in accordance with the requirements of Quarterly Report on Form 10-Q and Article 10 of the Securities and Exchange Commission Regulation S-X and therefore do not include all information and notes which would be presented were such consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These consolidated financial statements should be read in conjunction with the audited consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017 . In the opinion of management, the accompanying consolidated financial statements reflect all adjustments which are necessary for a fair statement of the results of operations and cash flows for the periods presented. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full year. References to amounts in the consolidated financial statement sections are in thousands, except shares and per share data, unless otherwise specified. |
Recent Accounting Standards | Recent Accounting Standards. Recent accounting pronouncements requiring implementation in future periods are discussed below or in the notes, where applicable. In May 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-09, Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"). ASU 2017-09 clarifies the changes to terms or conditions of a share-based payment award that require an entity to apply modification accounting. ASU 2017-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early application is permitted and prospective application is required. ASU 2017-09 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 January 2017, the FASB issued 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 Accounting Standards Update ("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 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 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 adopted ASU 2016-09 in the first quarter of fiscal 2018. As permitted by ASU 2016-09, we have made an accounting policy election to account for forfeitures as they occur, which was adopted on a modified retrospective basis and resulted in a cumulative-effect adjustment of $0.1 million to retained earnings and additional paid-in capital as of April 1, 2017. ASU 2016-09 also eliminates additional paid-in capital pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled, which was adopted on a prospective basis. The requirements to recognize previously unrecognized excess tax benefits on a modified retrospective basis did not have an impact on our consolidated financial statements. Upon adoption of ASU 2016-09, excess tax benefits and tax deficiencies are recognized in the income statement, and the tax effects of exercised or vested awards are treated as discrete items in the period they occur. The provisions of ASU 2016-09 could have an impact to our future income tax expense, including increased volatility in our effective tax rate on a quarter by quarter basis due to a number of factors, including fluctuations in the stock price and the timing of stock option exercises and vesting of restricted share awards. Additionally, ASU 2016-09 addresses presentation of excess tax benefits and deficiencies and employee taxes paid related to shares withheld for tax withholdings purposes on the statement of cash flows, including a requirement to present excess tax benefits and deficiencies as an operating activity in the same manner as other cash flows related to income taxes on the statement of cash flows, which will be adopted on a prospective basis, and presentation of employee taxes paid related to shares withheld for tax withholdings purposes as a financing activity, which is consistent with our current presentation and thus did not impact 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 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 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 March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) –Principal versus Agent Consideration ("ASU 2016-08"). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing ("ASU 2016-10”). In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) – Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16 ("ASU 2016-11") and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) –Narrow Scope Improvements and Practical Expedients ("ASU 2016-12"). The new ASUs do not change the core principle of the guidance in Topic 606 (as amended by ASU 2014-09), but rather help to provide further interpretive clarifications on the new guidance in ASU 2014-09. ASU 2014-09, as amended by ASU 2015-14, is effective for us in the first quarter of fiscal 2019. 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 internal controls that could result from the implementation of the new revenue standard. Based on our initial assessment, we currently believe that the 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. A significant amount of work remains as we continue to evaluate all potential impacts of the new revenue standard, and develop and implement the necessary changes to our current accounting systems, processes, and internal controls. Accordingly, our preliminary assessments are subject to change. We expect that the new revenue standard will result in additional complexity to our revenue recognition, including an increased amount of significant judgments and estimates as compared to our current revenue recognition. We currently expect to implement the new revenue standard when it becomes effective for us in the first quarter of fiscal 2019 utilizing the modified retrospective transition method. Under this transition method, prior period amounts will not be adjusted and the cumulative effect from prior periods of applying the new revenue standard will be recognized in our consolidated balance sheets as of the date of adoption, including an adjustment to retained earnings. 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. |
Contingent Consideration Policy | The contingent consideration liability as of March 31, 2017 relates to the acquisition of HealthFusion, which was settled during the quarter ended June 30, 2017. The measurement period of the contingent consideration liability ended on December 31, 2016, and thus the actual revenue achievement rate was utilized to compute the ending contingent consideration liability as of March 31, 2017. Accordingly, the contingent consideration liability was reflected under a 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. During the three months ended June 30, 2017 , no adjustments were recorded. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
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 comprehensive income for the three months ended June 30, 2017 and 2016 : Three Months Ended June 30, 2017 2016 Costs and expenses: Cost of revenue $ 137 $ 149 Research and development costs, net 361 83 Selling, general and administrative 1,543 1,027 Total share-based compensation 2,041 1,259 Income tax benefit (716 ) (412 ) Decrease in net income $ 1,325 $ 847 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 and March 31, 2017 : Balance at Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) June 30, ASSETS Cash and cash equivalents (1) $ 23,337 $ 23,337 $ — $ — Restricted cash and cash equivalents 5,915 5,915 — — $ 29,252 $ 29,252 $ — $ — Balance at Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) March 31, 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 (2) $ 18,817 $ — $ 18,817 $ — $ 18,817 $ — $ 18,817 $ — ___________________________________ (1) Cash equivalents consist primarily of money market funds. (2) The contingent consideration liability as of March 31, 2017 relates to the acquisition of HealthFusion, which was settled during the quarter ended June 30, 2017. The measurement period of the contingent consideration liability ended on December 31, 2016, and thus the actual revenue achievement rate was utilized to compute the ending contingent consideration liability as of March 31, 2017. Accordingly, the contingent consideration liability was reflected under a Level 2 valuation hierarchy because the fair value was determined based on other significant observable inputs. |
Business Combinations and Dis23
Business Combinations and Dispositions (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | Initial purchase price $ 34,000 Preliminary working capital and other adjustments (42 ) Total preliminary purchase price $ 33,958 |
Summary of purchase price allocation | April 14, 2017 Preliminary fair value of the net tangible assets acquired and liabilities assumed: Acquired cash and cash equivalents $ 102 Accounts receivable, net 1,835 Prepaid expense and other current assets 145 Equipment and improvements, net 134 Capitalized software costs, net 364 Deferred income taxes, net 1,041 Accounts payable (639 ) Accrued compensation and related benefits (120 ) Deferred revenues (234 ) Other liabilities (444 ) Total preliminary net tangible assets acquired and liabilities assumed 2,184 Preliminary fair value of identifiable intangible assets acquired: Goodwill 16,374 Software technology 10,500 Customer relationships 3,300 Trade name 1,600 Total preliminary identifiable intangible assets acquired 31,774 Total preliminary purchase price $ 33,958 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
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: June 30, 2017 Customer Relationships Trade Name and Contracts Software Technology Total Gross carrying amount $ 53,850 $ 7,080 $ 78,310 $ 139,240 Accumulated amortization (30,685 ) (2,422 ) (26,968 ) (60,075 ) Net intangible assets $ 23,165 $ 4,658 $ 51,342 $ 79,165 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 |
Estimated amortization of intangible assets with determinable lives | The following table summarizes the remaining estimated amortization of definite-lived intangible assets as of June 30, 2017 : Amortization Expense Recorded As: Operating Expense Cost of Revenue Total For the year ended March 31, 2018 (remaining nine months) 5,839 10,464 16,303 2019 5,502 13,951 19,453 2020 4,505 13,951 18,456 2021 3,656 10,068 13,724 2022 2,518 2,280 4,798 2023 and beyond 5,803 628 6,431 Total $ 27,823 $ 51,342 $ 79,165 |
Capitalized Software Costs (Tab
Capitalized Software Costs (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Research and Development [Abstract] | |
Capitalized software development costs | Our capitalized software costs are summarized as follows: June 30, March 31, Gross carrying amount $ 110,560 $ 104,948 Accumulated amortization (92,612 ) (91,341 ) Net capitalized software costs $ 17,948 $ 13,607 |
Estimated amortization of capitalized software costs | The following table presents the remaining estimated amortization of capitalized software costs as of June 30, 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. For the year ended March 31, 2018 (remaining nine months) $ 5,800 2019 7,200 2020 3,300 2021 1,648 Total $ 17,948 |
Composition of Certain Financ26
Composition of Certain Financial Statement Captions (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Accounts Receivable | 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. June 30, March 31, Accounts receivable, gross $ 90,366 $ 93,377 Sales return reserve (6,694 ) (7,213 ) Allowance for doubtful accounts (2,067 ) (2,757 ) Accounts receivable, net $ 81,605 $ 83,407 |
Summary of Inventories | Inventory is comprised of computer systems and components. |
Summary of Prepaid Expense and Other Assets, Current | Prepaid expenses and other current assets are summarized as follows: June 30, March 31, Prepaid expenses $ 15,694 $ 14,884 Other current assets 2,589 3,085 Prepaid expenses and other current assets $ 18,283 $ 17,969 |
Summary of Equipment and improvements | Equipment and improvements are summarized as follows: June 30, March 31, Computer equipment $ 22,848 $ 22,014 Internal-use software 12,168 13,053 Furniture and fixtures 11,762 10,472 Leasehold improvements 17,078 16,360 Equipment and improvements, gross 63,856 61,899 Accumulated depreciation and amortization (36,024 ) (34,473 ) Equipment and improvements, net $ 27,832 $ 27,426 |
Summary of Current and non-current deferred revenue | The current portion of deferred revenues are summarized as follows: June 30, March 31, Professional services $ 22,257 $ 21,889 Software license, hardware and other 12,391 12,680 Support and maintenance 8,499 9,691 Software related subscription services 8,324 8,123 Deferred revenue $ 51,471 $ 52,383 |
Summary of Accrued compensation and related benefits | Accrued compensation and related benefits are summarized as follows: June 30, March 31, Payroll, bonus and commission $ 5,297 $ 15,836 Vacation 9,091 8,677 Accrued compensation and related benefits $ 14,388 $ 24,513 |
Summary of Other current liabilities | Other current and noncurrent liabilities are summarized as follows: June 30, March 31, Care services liabilities $ 5,915 $ 4,957 Customer credit balances and deposits 4,477 4,124 Accrued consulting and outside services 2,560 2,496 Deferred rent and lease obligations 2,417 2,427 Accrued EDI expense 2,276 2,490 Accrued royalties 2,021 2,033 Accrued self insurance expense 1,996 1,697 Accrued outsourcing costs 1,787 1,588 Accrued hosting costs 1,772 401 Accrued conferences and advertising costs 1,136 234 Accrued legal expense 1,056 853 Employee benefit plan withholdings 761 739 Sales tax payable 597 448 Contingent consideration and other liabilities related to acquisitions — 18,817 Other accrued expenses 3,847 3,471 Other current liabilities $ 32,618 $ 46,775 Deferred rent and lease obligations $ 11,749 $ 11,402 Uncertain tax positions 5,103 4,762 Other liabilities 296 297 Other noncurrent liabilities $ 17,148 $ 16,461 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Weighted-average shares outstanding for basic and diluted net income per share | The dual presentation of “basic” and “diluted” earnings per share is provided below. Share amounts below are in thousands. Three Months Ended June 30, 2017 2016 Earnings per share — Basic: Net income (loss) $ 3,896 $ (647 ) Weighted-average shares outstanding — Basic 62,636 61,179 Net income (loss) per common share — Basic $ 0.06 $ (0.01 ) Earnings per share — Diluted: Net income (loss) $ 3,896 $ (647 ) Weighted-average shares outstanding 62,636 61,179 Effect of potentially dilutive securities 7 — Weighted-average shares outstanding — Diluted 62,643 61,179 Net income (loss) per common share — Diluted $ 0.06 $ (0.01 ) |
Share Based Awards (Tables)
Share Based Awards (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | The following table summarizes the stock option transactions during the three months ended June 30, 2017 : Number of Shares Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding, April 1, 2017 2,885,415 $ 15.41 6.2 $ 3,150 Granted 309,000 16.02 7.9 Exercised (214,105 ) 16.63 6.5 $ 116 Forfeited/Canceled (256,750 ) 16.21 5.7 Outstanding, June 30, 2017 2,723,560 $ 16.62 6.1 $ 7,652 Vested and expected to vest, June 30, 2017 2,438,142 $ 16.87 6.0 $ 5,459 Exercisable, June 30, 2017 889,205 $ 20.99 4.6 $ 1,185 |
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: Three Months Ended June 30, 2017 2016 Expected term 5.6 - 5.7 years 6.0 years Expected volatility 37.6% - 37.7% 37.4% Expected dividends —% —% Risk-free rate 1.9% 1.5% |
Summary of stock options granted | During the three months ended June 30, 2017 , a total of 309,000 options 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: Option Grant Date Number of Shares Exercise Price Vesting Terms (1) Expiration June 13, 2017 249,000 $ 16.37 Four years June 13, 2025 May 24, 2017 60,000 $ 14.57 Four years May 24, 2025 Total 309,000 |
Schedule of Employee Stock Options and Performance Based Awards by Nonvested Stock options | Non-vested stock option award activity during the three months ended June 30, 2017 is summarized as follows: Non-Vested Number of Shares Weighted- Average Grant-Date Fair Value per Share Outstanding, April 1, 2017 2,073,295 $ 5.09 Granted 309,000 6.12 Vested (353,690 ) 5.02 Forfeited/Canceled (194,250 ) 4.63 Outstanding, June 30, 2017 1,834,355 $ 4.92 |
Schedule of Other Share-based Compensation, Activity [Table Text Block] | Restricted stock awards activity during the three months ended June 30, 2017 is summarized as follows: Number of Shares Weighted- Average Grant-Date Fair Value per Share Outstanding, April 1, 2017 902,948 $ 12.92 Granted 757,631 15.43 Vested (129,197 ) 12.78 Canceled (34,349 ) 12.86 Outstanding, June 30, 2017 1,497,033 $ 14.29 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Costs and expenses: | ||
Total share-based compensation | $ 2,041 | $ 1,259 |
Income tax benefit | (716) | (412) |
Increase Decrease in Net Income | 1,325 | 847 |
Cost of revenue [Member] | ||
Costs and expenses: | ||
Total share-based compensation | 137 | 149 |
Research and development costs [Member] | ||
Costs and expenses: | ||
Total share-based compensation | 361 | 83 |
Selling, general and administrative [Member] | ||
Costs and expenses: | ||
Total share-based compensation | $ 1,543 | $ 1,027 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 | |
LIABILITIES | |||
Fair value of contingent consideration | $ 0 | $ 18,817 | |
Fair Value, Measurements, Recurring [Member] | |||
ASSETS | |||
Cash and cash equivalents | [1] | 23,337 | 37,673 |
Restricted cash and cash equivalents | 5,915 | 4,916 | |
Total | 29,252 | 42,589 | |
LIABILITIES | |||
Fair value of contingent consideration | 18,817 | ||
Total | 18,817 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | |||
ASSETS | |||
Cash and cash equivalents | [1] | 23,337 | 37,673 |
Restricted cash and cash equivalents | 5,915 | 4,916 | |
Total | 29,252 | 42,589 | |
LIABILITIES | |||
Fair value of contingent consideration | 0 | ||
Total | 0 | ||
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | |||
ASSETS | |||
Cash and cash equivalents | [1] | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 | |
Total | 0 | 0 | |
LIABILITIES | |||
Fair value of contingent consideration | 18,817 | ||
Total | 18,817 | ||
Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | |||
ASSETS | |||
Cash and cash equivalents | [1] | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 | |
Total | $ 0 | 0 | |
LIABILITIES | |||
Fair value of contingent consideration | 0 | ||
Total | $ 0 | ||
[1] | Cash equivalents consist primarily of money market funds. |
Business Combinations and Dis31
Business Combinations and Dispositions - Entrada - USD ($) $ in Thousands | Apr. 14, 2017 | Jun. 30, 2017 | Mar. 31, 2017 |
Business Acquisition [Line Items] | |||
Preliminary working capital and other adjustments | $ (42) | ||
Goodwill | $ 202,272 | $ 185,898 | |
Entrada [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Consideration Transferred | 33,958 | ||
Initial purchase price | 34,000 | ||
Preliminary working capital and other adjustments | (42) | ||
Acquired cash and cash equivalents | 102 | ||
Accounts receivable, net | 1,835 | ||
Prepaid expense and other current assets | 145 | ||
Deferred income taxes, net | 1,041 | ||
Accounts payable | (639) | ||
Accrued compensation and related benefits | (120) | ||
Deferred revenues | (234) | ||
Other liabilities | (444) | ||
Total preliminary net tangible assets acquired and liabilities assumed | 2,184 | ||
Goodwill | 16,374 | ||
Total preliminary identifiable intangible assets acquired | 31,774 | ||
Total preliminary purchase price | 33,958 | ||
Finite-lived Intangible Assets Acquired | $ 15,400 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years 1 month | ||
Entrada [Member] | Computer Software, Intangible Asset [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 10,500 | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||
Entrada [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 3,300 | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||
Entrada [Member] | Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 1,600 | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||
Entrada [Member] | Equipment and Improvements, Net [Member] | |||
Business Acquisition [Line Items] | |||
Property, plant and equipment | $ 134 | ||
Entrada [Member] | Software Development [Member] | |||
Business Acquisition [Line Items] | |||
Property, plant and equipment | $ 364 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 202,272 | $ 185,898 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | |
Finite Lived Intangible Assets [Line Items] | |||
2018 (remaining nine months) | $ 16,303 | ||
2,019 | 19,453 | ||
2,020 | 18,456 | ||
2,021 | 13,724 | ||
2,022 | 4,798 | ||
2023 and beyond | 6,431 | ||
Intangible assets, other than capitalized software development costs | |||
Gross carrying amount | 139,240 | $ 123,840 | |
Accumulated amortization | (60,075) | (54,627) | |
Net intangible assets | 79,165 | 69,213 | |
Amortization | $ (2,047,000) | $ (2,704,000) | |
Document Period End Date | Jun. 30, 2017 | ||
Operating Expense [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
2018 (remaining nine months) | $ 5,839 | ||
2,019 | 5,502 | ||
2,020 | 4,505 | ||
2,021 | 3,656 | ||
2,022 | 2,518 | ||
2023 and beyond | 5,803 | ||
Intangible assets, other than capitalized software development costs | |||
Net intangible assets | 27,823 | ||
Cost of Sales [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
2018 (remaining nine months) | 10,464 | ||
2,019 | 13,951 | ||
2,020 | 13,951 | ||
2,021 | 10,068 | ||
2,022 | 2,280 | ||
2023 and beyond | 628 | ||
Intangible assets, other than capitalized software development costs | |||
Net intangible assets | 51,342 | ||
Customer Relationships [Member] | |||
Intangible assets, other than capitalized software development costs | |||
Gross carrying amount | 53,850 | 50,550 | |
Accumulated amortization | (30,685) | (28,972) | |
Net intangible assets | 23,165 | 21,578 | |
Trade Name & Contracts [Member] | |||
Intangible assets, other than capitalized software development costs | |||
Gross carrying amount | 7,080 | 5,480 | |
Accumulated amortization | (2,422) | (2,088) | |
Net intangible assets | 4,658 | 3,392 | |
Software Technology [Member] | |||
Intangible assets, other than capitalized software development costs | |||
Gross carrying amount | 78,310 | 67,810 | |
Accumulated amortization | (26,968) | (23,567) | |
Net intangible assets | 51,342 | $ 44,243 | |
Software Technology [Member] | Cost of Sales [Member] | |||
Intangible assets, other than capitalized software development costs | |||
Amortization | (3,401,000) | (3,027,000) | |
Customer relations, trade name and contracts [Member] | Operating Expense [Member] | |||
Intangible assets, other than capitalized software development costs | |||
Amortization | $ (2,047,000) | $ (2,704,000) |
Capitalized Software Costs (Det
Capitalized Software Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | |
Research and Development [Abstract] | |||
Capitalized Computer Software, Amortization | $ (1,271) | $ (2,371) | |
Capitalized software development costs | |||
Gross carrying amount | 110,560 | $ 104,948 | |
Accumulated amortization | (92,612) | (91,341) | |
Net capitalized software costs | $ 17,948 | $ 13,607 |
Capitalized Software Costs (D35
Capitalized Software Costs (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Activity related to net capitalized software costs | ||
Amortization expense related to capitalized software costs | $ (1,271) | $ (2,371) |
Estimated amortization of capitalized software costs | ||
2018 (remaining nine months) | 5,800 | |
2,019 | 7,200 | |
2,020 | 3,300 | |
2,021 | 1,648 | |
Total | $ 17,948 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) | 3 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Jan. 04, 2016 | |
Line of Credit Facility [Line Items] | ||||
Loans outstanding | $ 45,000,000 | $ 15,000,000 | ||
Remaining borrowing capacity | 205,000,000 | |||
Interest expense | 407,000 | $ 740,000 | ||
Amortization of debt issuance costs | $ (269,000) | $ (269,000) | ||
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 Financ37
Composition of Certain Financial Statement Captions (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Summary of Accounts Receivable | ||
Accounts receivable, gross | $ 90,366 | $ 93,377 |
Sales return reserve | (6,694) | (7,213) |
Allowance for doubtful accounts | (2,067) | (2,757) |
Accounts receivable, net | 81,605 | 83,407 |
Summary of Prepaid Expense and Other Assets, Current | ||
Prepaid Expense, Current | 15,694 | 14,884 |
Other Assets, Current | 2,589 | 3,085 |
Prepaid Expense and Other Assets, Current | 18,283 | 17,969 |
Summary of Equipment and improvements | ||
Computer equipment | 22,848 | 22,014 |
Internal-use software | 12,168 | 13,053 |
Furniture and fixtures | 11,762 | 10,472 |
Leasehold improvements | 17,078 | 16,360 |
Equipment and improvements, gross | 63,856 | 61,899 |
Accumulated depreciation | (36,024) | (34,473) |
Equipment and improvements, net | 27,832 | 27,426 |
Summary of Current and non-current deferred revenue | ||
Professional services | 22,257 | 21,889 |
Undelivered software, hardware and other | 12,391 | 12,680 |
Support and Maintenance | 8,499 | 9,691 |
Software related subscription services | 8,324 | 8,123 |
Deferred revenue | 51,471 | 52,383 |
Deferred revenue, net of current | 1,438 | 1,394 |
Summary of Accrued compensation and related benefits | ||
Payroll, bonus and commission | 5,297 | 15,836 |
Vacation | 9,091 | 8,677 |
Accrued compensation and related benefits | 14,388 | 24,513 |
Summary of Other current liabilities | ||
Care Services Liabilities Current | 5,915 | 4,957 |
Customer Deposits, Current | 4,477 | 4,124 |
Accrued consulting services, Current | 2,560 | 2,496 |
Deferred Rent Credit, Current | 2,417 | 2,427 |
Electronic Data Interchange Expense Current | 2,276 | 2,490 |
Accrued Royalties, Current | 2,021 | 2,033 |
Self Insurance Reserve, Current | 1,996 | 1,697 |
Accrued Outsourcing Expenses | 1,787 | 1,588 |
Accrued Hosting Costs | 1,772 | 401 |
Accrued Advertising | 1,136 | 234 |
Accrued Professional Fees | 1,056 | 853 |
Accrued Employee Benefits, Current | 761 | 739 |
Taxes Payable | 597 | 448 |
Contingent consideration and other liabilities related to acquisitions | 0 | 18,817 |
Other Accrued Liabilities, Current | 3,847 | 3,471 |
Other Liabilities, Current | 32,618 | 46,775 |
Deferred Rent Credit, Noncurrent | 11,749 | 11,402 |
Unrecognized Tax Benefits | 5,103 | 4,762 |
Other Liabilities | 296 | 297 |
Other Liabilities, Noncurrent | $ 17,148 | $ 16,461 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Provision for (benefit of) income taxes | $ 2,154 | $ (317) | |
Effective tax rate (as a percentage) | 35.60% | 32.90% | |
Liability for unrecognized tax benefits | $ 5,103 | $ 4,762 | |
Period within which the company does not anticipate total unrecognized tax benefits to change | within the next twelve months |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Weighted-average shares outstanding for basic and diluted net income per share | ||
Net income (in dollars) | $ 3,896,000 | $ (647,000) |
Basic net income per share: | ||
Weighted-average shares outstanding - Basic | 62,636 | 61,179 |
Basic net income per common share (in usd per share) | $ 0.06 | $ (0.01) |
Diluted net income per share: | ||
Weighted-average shares outstanding - Basic | 62,636 | 61,179 |
Effect of potentially dilutive securities | 7 | 0 |
Weighted-average shares outstanding - Diluted | 62,643 | 61,179 |
Diluted net income per common share (in usd per share) | $ 0.06 | $ (0.01) |
Earnings Per Share (Details Tex
Earnings Per Share (Details Textual) - shares | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||
Options excluded from the computation of diluted net income per share | 2,568 | 2,767 |
Share Based Awards (Details Tex
Share Based Awards (Details Textual) - USD ($) | Aug. 11, 2014 | Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Aug. 31, 2015 | Oct. 31, 2005 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 40.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 37.60% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 309,000 | |||||
Share Based Awards (Textual) [Abstract] | ||||||
Document Period End Date | Jun. 30, 2017 | |||||
Outstanding options under 1998 and 2005 plan | 2,723,560,000 | 2,885,415 | ||||
Weighted-average grant date fair value per share of stock options | $ 6.12 | $ 4.92 | ||||
Total share-based compensation | $ 2,041,000 | $ 1,259,000 | ||||
Fair value of options vested | $ 1,776,000 | $ 1,353,000 | ||||
Employee Stock Purchase Plan [Abstract] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 37.70% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.00% | 0.00% | ||||
Employee Stock Option [Member] | ||||||
Share Based Awards (Textual) [Abstract] | ||||||
Total unrecognized compensation costs | $ 8,184,000 | |||||
Stock option recognized over weighted average period (in years) | 3 years 3 months | |||||
Restricted Stock Units Award [Member] | ||||||
Share Based Awards (Textual) [Abstract] | ||||||
Total share-based compensation | $ 1,539,000 | $ 545,000 | ||||
Total unrecognized compensation costs | $ 18,519,000 | |||||
Stock option recognized over weighted average period (in years) | 2 years 5 months | |||||
Employee Share Purchase Plan [Member] | ||||||
Share Based Awards (Textual) [Abstract] | ||||||
Total share-based compensation | $ 97,000 | $ 126,000 | ||||
2005 Stock Options Plan [Member] | ||||||
Share Based Awards (Textual) [Abstract] | ||||||
Common stock reserved | 4,800,000 | |||||
Outstanding options under 1998 and 2005 plan | 759,185 | |||||
2005 Stock Options Plan [Member] | Employee Stock Option [Member] | ||||||
Share Based Awards (Textual) [Abstract] | ||||||
Expiration period (in years) | 10 years | |||||
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, Gross | 309,000 | |||||
Share Based Awards (Textual) [Abstract] | ||||||
Common stock reserved | 11,500,000 | |||||
Outstanding options under 1998 and 2005 plan | 1,964,375 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 1,497,033 | |||||
Shares available for future grant | 6,026,095 | |||||
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 | 757,631 | |||||
Number of Shares Outstanding | 1,497,033 | 902,948 | ||||
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 | |||||
Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years 7 months | |||||
Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years 8 months |
Share Based Awards (Details)
Share Based Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 16.63 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Remaining Contractual Term | 6 years 6 months | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 116 | |
Number of Shares | ||
Outstanding, April 1, 2017 | 2,885,415 | |
Forfeited/Canceled | (256,750) | |
Outstanding, June 30, 2017 | 2,723,560,000 | 2,885,415 |
Vested and expected to vest, June 30, 2017 | 2,438,142,000 | |
Exercisable, June 30, 2017 | 889,205,000 | |
Weighted- Average Exercise Price per Share | ||
Outstanding, April 1, 2016 (in dollars per share) | $ 15.41 | |
Granted (in dollars per share) | 16.02 | |
Forfeited/Canceled (in dollars per share) | 16.21 | |
Outstanding, June 30, 2016 (in dollars per share) | 16.62 | $ 15.41 |
Vested and expected to vest, June 30, 2016 (in dollars per share) | 16.87 | |
Exercisable, June 30, 2016 (in dollars per share) | $ 20.99 | |
Weighted- Average Remaining Contractual Life (years) | ||
Outstanding | 6 years 1 month | 6 years 2 months |
Granted | 7 years 11 months | |
Forfeited/Canceled | 5 years 8 months | |
Vested and expected to vest, June 30, 2017 | 6 years | |
Exercisable, June 30, 2017 | 4 years 7 months | |
Aggregate Intrinsic Value Outstanding Beginning Balance | $ 3,150 | |
Aggregate Intrinsic Value Outstanding Ending Balance | 7,652 | $ 3,150 |
Aggregate Intrinsic Value Vested and expected to vest | 5,459 | |
Aggregate Intrinsic Value Exercisable | $ 1,185 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 214,105 |
Share Based Awards (Details 1)
Share Based Awards (Details 1) - $ / shares | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 309,000 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Remaining Contractual Term | 6 years 6 months | |
Schedule of Share Based Compensation Valuation Assumption | ||
Weighted-average grant date fair value per share of stock options | $ 6.12 | $ 4.92 |
Share Based Awards (Details 2)
Share Based Awards (Details 2) | 3 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Summary of stock options granted | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 309,000 |
Two Thousand Fifteen Stock Options Plan [Member] | |
Summary of stock options granted | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 309,000 |
Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date Thirteen June Two Thousand Seventeen [Member] [Member] | |
Summary of stock options granted | |
Number of shares granted | 249,000 |
Exercise Price Granted (in usd per share) | $ / shares | $ 16.37 |
Vesting period | 4 years |
Expiration | Jun. 13, 2025 |
Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date Twenty-four May Two Thousand Seventeen [Member] | |
Summary of stock options granted | |
Number of shares granted | 60,000 |
Exercise Price Granted (in usd per share) | $ / shares | $ 14.57 |
Vesting period | 4 years |
Expiration | May 24, 2025 |
Share Based Awards (Details 3)
Share Based Awards (Details 3) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Allocated Share-based Compensation Expense | $ 2,041 | $ 1,259 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Non-Vested Number of Shares Outstanding Beginning Balance | 2,073,295 | |
Non-Vested Number of Shares Granted | 309,000 | |
Non-Vested Number of Shares Vested | (353,690) | |
Non-Vested Number of Shares Forfeited | (194,250) | |
Non-Vested Number of Shares Outstanding Ending Balance | 1,834,355 | |
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 | $ 5.09 | |
Weighted-average grant date fair value per share of stock options | 6.12 | $ 4.92 |
Weighted Average Fair Value per Share Price Vested | 5.02 | |
Weighted Average Fair Value per Share Price Forfeited | 4.63 | |
Weighted Average Fair Value per Share Price Ending Balance | $ 4.92 | |
Employee Share Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Allocated Share-based Compensation Expense | $ 97 | $ 126 |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Allocated Share-based Compensation Expense | $ 73 |
Share Based Awards Share Based
Share Based Awards Share Based Awards - Restricted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $ 2,041 | $ 1,259 | |
Restricted Stock Units Award [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $ 1,539 | $ 545 | |
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 | 902,948 | ||
Granted | 757,631 | ||
Vested | (129,197) | ||
Number of Shares Outstanding Ending Balance | 1,497,033 | ||
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) | $ 12.92 | ||
Weighted Average Grant-Date Fair Value per Share, Granted (in dollars per share) | 15.43 | ||
Weighted Average Grant-Date Fair Value per Share, Vested (in dollars per share) | 12.78 | ||
Weighted Average Grant-Date Fair Value per Share, End of Period (in dollars per share) | $ 14.29 | ||
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | (34,349) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 12.86 | ||
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 | 114,916 | 123,082 |
Commitments Guarantees and Cont
Commitments Guarantees and Contingencies (Details Textual) | 3 Months Ended |
Jun. 30, 2017 | |
Commitments Guarantees and Contingencies (Textual) | |
Applicable program documentation period | 365 days |
Restructuring Plan (Details)
Restructuring Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | |
Restructuring Costs [Abstract] | |||
Restructuring expense | $ 0 | $ 3,753 | $ 7,078 |
Restructuring and Related Cost, Expected Cost | $ 1,932 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Aug. 01, 2017 | Jun. 30, 2017 |
Subsequent Events [Abstract] | ||
Subsequent Events [Text Block] | On July 31, 2017, we entered into an Agreement and Plan of Merger (the “Agreement”) to acquire EagleDream Health Inc. (“EagleDream Health”), a cloud-based analytics company that drives meaningful insight across clinical, financial and administrative data to optimize practice performance. Based in Rochester, NY, EagleDream Health empowers organizations with intuitive analytics and actionable intelligence to achieve successful population health management. Our acquisition of EagleDream Health will enable us to enhance the care experience and increase patient engagement for ambulatory clinics and health systems while reducing the per capita cost of healthcare and improving the work-life balance for clinicians and staff. The transaction is expected to close promptly upon the satisfaction of customary closing conditions and will be settled in all cash with a value of approximately $26,000 . | |
Subsequent Event [Member] | EagleDreamHealth [Member] | ||
Business Acquisition [Line Items] | ||
Business Combination, Consideration Transferred | $ 26,000 |
Uncategorized Items - qsii-2017
Label | Element | Value |
Liabilities Assumed | us-gaap_LiabilitiesAssumed1 | $ 1,437,000 |
Fair Value of Assets Acquired | us-gaap_FairValueOfAssetsAcquired | 35,293,000 |
Payments to Acquire Businesses, Gross | us-gaap_PaymentsToAcquireBusinessesGross | $ 33,856,000 |