Time is Short. The NextGen Healthcare Board of Directors Urges Shareholders to Vote “FOR” All Proposals on the WHITE Proxy Card TODAY
ATLANTA–(BUSINESS WIRE)–$NXGN #NextGenHealthcare–NextGen Healthcare, Inc. (Nasdaq: NXGN), a leading provider of ambulatory-focused technology solutions, today announced that leading independent proxy advisory firms, Institutional Shareholder Services (“ISS”) and Glass Lewis & Co (“Glass Lewis”), have recommended that NextGen Healthcare shareholders use the Company’s WHITE proxy card and vote “FOR,” among other proposals:
- The reincorporation of the Company to Delaware;
- The elimination of cumulative voting in the election of directors; and
- The election of each of NextGen Healthcare’s director nominees.
Both ISS’s and Glass Lewis’s recommendations were issued in connection with NextGen Healthcare’s 2021 Annual Meeting of Shareholders, scheduled to be held on October 13, 2021.
In making its recommendations, ISS stated in its October 1, 2021 report1:
- “On balance, the recent changes to the board and management appear sufficient to put the company in a stronger position to execute its strategy to grow revenue by delivering an expanded product and service suite to existing customers.”
In making its recommendations, Glass Lewis stated in its October 4, 2021 report1:
- “Given the circumstances, we believe shareholders will likely be best served supporting the board’s current slate, one that already reflects a significant refreshment that includes the Company’s recently-hired CEO and three other brand new nominees.”
Also in the ISS report recommending that shareholders vote on the Company’s WHITE proxy card:
On the Company’s management team:
- “These two recent additions [David Sides and Sri Velamoor] to the executive team have expressed a vision for how the company will execute the next stage of its strategy, and further disruption in the boardroom may jeopardize the potential for success.”
- “Recent additions to the executive team may finally help to deliver the revenue growth that has consistently been on the horizon.”
On the Board’s actions to revitalize the Company after Sheldon Razin resigned as Chair:
- “A turnaround strategy appears to have been necessary in 2015 when management and the board leadership transitioned away from the dissident, partially due to industry developments and partially to address some of the company’s prior strategic mistakes, such as the failed acquisitions within the Hospital Solutions Division.”
- “The board’s decisions at that time, including increased investment in R&D and strategic M&A to address gaps in product offerings, appear to have been prudent.”
- “As expected, the shift from perpetual licenses to subscription revenue has created pressure on the company’s gross margin. Despite that, adjusted operating margin has been moving in the right direction since 2015…and the company has been able to report improvements in its operating margins despite increased investment in R&D.”
- ISS also recognizes that NextGen Healthcare has “brought in a highly qualified CEO, prioritized growth by creating a new executive role, and refreshed with three new board members who appear to have relevant experience across providers, health insurance, life sciences, and enterprise software.”
On Sheldon Razin:
- “While it is impossible to determine the cause of this dysfunction from the outside, it is clear that the common denominator that has been at the center of the proxy fights and has held the longest tenure on the board is Razin himself.”
On the Company’s corporate governance:
- “The current board structure features a number of provisions that are considered best practice, including annual reelection of all directors, separation of chairman and CEO roles, majority vote standard for M&A and charter and bylaw amendments, and shareholders’ right to call special meetings. Seven of the current eight board members are independent.”
In recommending that shareholders vote “FOR” the elimination of cumulative voting:
- “A majority vote standard ensures board accountability in uncontested elections.”
- “Similarly, the proposed elimination of cumulative voting is appropriate, in this case, because of the simultaneous proxy access and director resignation policy.”
- “Given that there are voting items on ballot to provide for the safeguards necessary if cumulative voting were to be removed, support for this proposal is warranted.”
In recommending that shareholders vote “FOR” the reincorporation to Delaware:
- “On balance, the reincorporation would be favorable in terms of its impact on shareholder rights.”
NextGen Healthcare issued the following statement:
Both ISS’s and Glass Lewis’s recommendations further validate our belief that efforts to revitalize the Company are working and that NextGen Healthcare is poised for accelerating growth and shareholder value creation.
- Leadership has transformed NextGen Healthcare into a market leader with a winning platform and exceptionally engaged employees.
- A robust foundation is now in place.
- With our new CEO David Sides, NextGen Healthcare has a powerhouse management team to ensure we capture our many market opportunities.
- NextGen Healthcare’s director nominees have deep, diverse, relevant expertise and are committed to serving the best interests of ALL shareholders.
In short, NextGen Healthcare has never been better positioned for sustained success. We urge our shareholders to ensure we continue our progress and can focus on the future, not the past.
To follow the recommendations of both ISS and Glass Lewis, shareholders should vote on the WHITE proxy card today. NextGen Healthcare shareholders are advised to discard any blue proxy cards they receive from Sheldon Razin.
Time is short. Please vote now in order to have your vote recorded promptly. Simply follow the instructions to vote by Internet on your WHITE proxy card or WHITE voting instruction form from your bank or brokerage firm. If you get email delivery of your proxy materials, the email will contain a link or instructions on how to vote your shares.
Approving the reincorporation and cumulative voting proposals will effectively result in giving NextGen Healthcare shareholders the opportunity to vote “FOR” ALL candidates on the NextGen Healthcare slate of nine director nominees under plurality voting, which is a “one share, one vote” standard. Eliminating cumulative voting provides important benefits, including ensuring that a dissident minority shareholder like Sheldon is unable to cumulate shares and override the will of the majority in the election of directors.
Any shareholder with questions about the Annual Meeting or in
need of assistance in voting their shares should contact:
MacKenzie Partners, Inc.
Toll-Free: (800) 322-2885
Information about the meeting is also available at www.nextgen.com/annual-meeting
About NextGen Healthcare, Inc.
NextGen Healthcare, Inc. (Nasdaq: NXGN) is a leading provider of ambulatory-focused technology solutions. We are empowering the transformation of ambulatory care—partnering with medical, behavioral and dental providers in their journey to value-based care to make healthcare better for everyone. We go beyond EHR and PM. Our integrated solutions help increase clinical productivity, enrich the patient experience, and ensure healthy financial outcomes. We believe in better. Learn more at nextgen.com, and follow us on Facebook, Twitter, LinkedIn, YouTube and Instagram.
Certain Information Concerning the Participants
NextGen Healthcare has filed a definitive proxy statement and supplement to the proxy statement (the “Supplement”) with the U.S. Securities and Exchange Commission (the “SEC”), together with the associated WHITE proxy card attached to the Supplement, in connection with the solicitation of proxies for NextGen Healthcare’s 2021 Annual Meeting of Shareholders (the “Definitive Proxy Statement”). WE URGE SHAREHOLDERS TO READ THE DEFINITIVE PROXY STATEMENT AND SUPPLEMENT (INCLUDING ANY OTHER AMENDMENTS OR SUPPLEMENTS TO SUCH PROXY STATEMENT) AND ANY OTHER RELEVANT DOCUMENTS THAT NEXTGEN HEALTHCARE WILL FILE WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. NextGen Healthcare and certain of its directors and executive officers are participants in the solicitation of proxies from shareholders in respect of the 2021 Annual Meeting. Information regarding the names of NextGen Healthcare’s directors and executive officers and their respective interests in NextGen Healthcare by security holdings or otherwise are set forth in the Definitive Proxy Statement and Supplement. To the extent holdings of such participants in NextGen Healthcare’s securities are not reported, or have changed since the amounts described, in the Definitive Proxy Statement, such changes will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Details concerning the nominees of NextGen Healthcare’s Board of Directors for election at the 2021 Annual Meeting are included in the Definitive Proxy Statement and Supplement.
Shareholders will be able to obtain, free of charge, copies of the Definitive Proxy Statement, Supplement, any other amendments or supplements thereto and any other documents when filed by NextGen Healthcare with the SEC in connection with the Annual Meeting at the SEC’s website (http://www.sec.gov), at NextGen Healthcare’s website (https://investor.nextgen.com), by emailing [email protected] or by calling MacKenzie Partners at (800) 322-2885.
Forward Looking Statements
This communication may contain forward-looking statements within the meaning of the federal securities laws, including but not limited to, statements regarding future events including but not limited to the COVID-19 pandemic, developments in the healthcare sector and regulatory framework, the Company’s future performance, as well as management’s expectations, beliefs, intentions, plans, estimates or projections relating to the future (including, without limitation, statements concerning revenue, net income, and earnings per share). Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements and additional risks and uncertainties are set forth in Part I, Item A of our most recent Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q, including but not limited to: volatility and uncertainty in the global economy, financial markets and on our customers in light of the continuing COVID-19 pandemic, including the potential (i) slowdown or shutdown of preventive and elective medical procedures, (ii) delay in the contracting for additional products and services by our customers and (iii) delay in the sales cycle for new customers; a determination by the jury that the Company has liability in litigation advanced by a former director and shareholder; the volume and timing of systems sales and installations; length of sales cycles and the installation process; the possibility that products will not achieve or sustain market acceptance; seasonal patterns of sales and customer buying behavior; impact of incentive payments under The American Recovery and Reinvestment Act on sales and the ability of the Company to meet continued certification requirements; uncertainties related to the future impact of U.S. tax reform; the impact of governmental and regulatory agency investigations; the development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; product liability; changing economic, political or regulatory influences in the health-care industry; changes in product-pricing policies; availability of third-party products and components; competitive pressures including product offerings, pricing and promotional activities; the Company’s ability or inability to attract and retain qualified personnel; the impact of any proxy contest at the 2021 Annual Meeting of Shareholders; possible regulation of the Company’s software by the U.S. Food and Drug Administration; changes of accounting estimates and assumptions used to prepare the prior periods’ financial statements; disruptions caused by acquisitions of companies, products, or technologies; the extent to which the COVID-19 pandemic and measures taken in response thereto could adversely affect our financial condition and results of operations; and general economic conditions. A significant portion of the Company’s quarterly sales of software product licenses and computer hardware is concluded in the last month of a fiscal quarter, generally with a concentration of such revenues earned in the final ten business days of that month. Due to these and other factors, the Company’s revenues and operating results are very difficult to forecast. A major portion of the Company’s costs and expenses, such as personnel and facilities, are of a fixed nature and, accordingly, a shortfall or decline in quarterly and/or annual revenues typically results in lower profitability or losses. As a result, comparison of the Company’s period-to-period financial performance is not necessarily meaningful and should not be relied upon as an indicator of future performance. These forward-looking statements speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
1 Permission to use quotes neither sought nor obtained
Barrett Golden / Sharon Stern
Joele Frank, Wilkinson Brimmer Katcher
Investor Relations Contact