CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Report”) and certain information incorporated herein by reference contain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this Report, other than statements that are purely historical, are forward-looking statements. Words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “should,” “would,” “could,” “may,” and similar expressions also identify forward-looking statements. These forward-looking statements include, without limitation, discussions of the impact of the COVID-19 pandemic and measures taken in response thereto, as well as our product development plans, business strategies, future operations, financial condition and prospects, share repurchases, developments in and the impacts of government regulation and legislation and market factors influencing our results. Our expectations, beliefs, objectives, intentions and strategies regarding our future results are not guarantees of future performance and are subject to risks and uncertainties, both foreseen and unforeseen, that could cause actual results to differ materially from results contemplated in our forward-looking statements. These risks and uncertainties include, but are not limited to, our ability to continue to develop new products and increase systems sales in markets characterized by rapid technological evolution, consolidation, and competition from larger, better-capitalized competitors. Many other economic, competitive, governmental and technological factors could affect our ability to achieve our goals, and interested persons are urged to review any risks that may be described in “Item 1A. Risk Factors” as set forth herein and other risk factors appearing in our most recent Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (“Annual Report”), as supplemented by additional risk factors, if any, in our interim filings on our Quarterly Reports on Form 10-Q, as well as in our other public disclosures and filings with the Securities and Exchange Commission (“SEC”). Because of these risk factors, as well as other variables affecting our financial condition and results of operations, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. We assume no obligation to update any forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of the filing of this Report. Each of the terms “NextGen Healthcare,” “NextGen,” “we,” “us,” “our,” or the “Company” as used throughout this Report refers collectively to NextGen Healthcare, Inc. and its wholly-owned subsidiaries, unless otherwise indicated.
This management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided as a supplement to the condensed consolidated financial statements and notes thereto included elsewhere in this Report in order to enhance your understanding of our results of operations and financial condition and should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and related notes thereto included elsewhere in this Report. Historical results of operations, percentage margin fluctuations and any trends that may be inferred from the discussion below are not necessarily indicative of the operating results for any future period.
NextGen Healthcare is a leading provider of innovative, cloud-based, healthcare technology solutions that empower healthcare practices to manage the risk and complexity of delivering care in the United States healthcare system. Our combination of technological breadth, depth, and domain expertise makes us a preferred solution provider and trusted advisor for our clients. In addition to highly configurable core clinical and financial capabilities, our portfolio includes tightly integrated solutions that deliver on ambulatory healthcare imperatives, including consumerism, digitization, risk allocation, regulatory influence, and integrated care and health equity.
We serve clients across all 50 states. Over 100,000 providers use NextGen Healthcare solutions to deliver care in nearly every medical specialty in a wide variety of practice models including accountable care organizations (“ACOs”), independent physician associations (“IPAs”), managed service organizations (“MSOs”), Veterans service organizations (“VSOs”), and dental service organizations (“DSOs”). Our clients range from some of the largest and most progressive multi-specialty groups in the country to sole practitioners with a wide variety of business models. With the addition of behavioral health to our medical and oral health capabilities, we continue to extend our share not only in federally qualified health centers (“FQHCs”) but also in the growing integrated care market.
Our company was incorporated in California in 1974. Previously named Quality Systems, Inc., we changed our corporate name to NextGen Healthcare, Inc. in September 2018, and in 2021, we changed our state of incorporation to Delaware. Our principal executive offices are located at 3525 Piedmont Rd., NE, Building 6, Suite 700, Atlanta, Georgia. Our principal website is www.nextgen.com. We operate on a fiscal year ending on March 31.
Our Vision, Mission and Strategy
NextGen Healthcare’s vision is better healthcare outcomes for all. We strive to achieve this vision by delivering innovative solutions and insights aimed at creating healthier communities. We focus on improving care delivered in ambulatory settings but do so recognizing that the entire healthcare ecosystem needs to work in concert to achieve the quadruple aim… “to improved patient experience, improved provider experience, improve the health of a population, and reduce per capita health care costs.”
Our long-term strategy is to position NextGen Healthcare as both the essential, integrated, delivery platform and the most trusted advisor for the ambulatory practices of the future. To that end, we primarily serve organizations that provide or orchestrate care in
ambulatory settings and do so across diverse practice sizes, specialties, care modalities, and business models. These customers include conventional practices as well as new market entrants.
We plan to continue investing in our current capabilities as well as building and/or acquiring new capabilities. In October 2019, we acquired Topaz Information Systems, LLC for its behavioral health solutions. In December 2019, we acquired Medfusion, Inc. for its Patient Experience Platform capabilities (i.e., patient portal, self-scheduling, and patient pay) and OTTO Health, LLC for its virtual care solutions, notably telemedicine. The integration of these acquired technologies has made NextGen Healthcare’s solutions among the most comprehensive in the market. Further, we are also actively innovating our business models and exploring new high-growth market domains as we extend our position as the essential, integrated, delivery platform and trusted impact partner for the ambulatory practices of the future.
Market Opportunity, and Trends
The scale and scope of the healthcare industry continues to expand. Annual United States healthcare spend today represents nearly $4.1 trillion and ~20% of GDP. A significant portion of this spend is directed towards the treatment of chronic conditions and administering an increasingly complex system with diverse stakeholders. While there are several convergent market forces reshaping the healthcare industry landscape, we are focused on six trends we believe will materially impact the markets we participate in and our customer value proposition:
NextGen Healthcare is well positioned to play a key role in guiding our clients through short-term and long-term changes that impact healthcare in the United States and is committed to helping them deliver better outcomes.
Our Value Proposition
NextGen Healthcare’s value proposition to our clients can be summarized by the four “I’s” as follows:
NextGen Healthcare delivers value to our clients in several ways. Our solutions enable our clients to address current needs while preparing for the needs of the future including expanding access to health services, enhancing the coordination and management of care, and optimizing patient outcomes while also ensuring the sustainability of their practices. Specifically, we offer a range of solutions to allow clinicians to practice anywhere and in new and innovative collaboration models.
NextGen Healthcare provides integrated cloud-based solutions and services that align with our client’s strategic imperatives. Ultimately, this value is reflected in the overall insights and impact delivered to the client. The foundation for our integrated ambulatory care platform is a core of our industry-leading EHR and practice management (“PM”) systems that support clinical, financial and patient engagement activities.
We optimize the core with an automation and workflow layer that gives our clients control over how platform capabilities are implemented to drive their desired outcomes. The workflow layer includes mobile and voice-enabled capabilities proven to reduce physician burden. Recognizing that engaged patients are key to positive outcomes, our patient experience platform enables our clients to create personalized care experiences that enhance trust and drive patient loyalty. Further, we support the advances in integrated care that focuses on the whole person with solutions supporting behavioral and oral health. Our cloud-based population health and analytics engine allows our clients to improve results in both fee-for-service and fee-for-value environments.
In support of extensibility, we surround the core with open, web-based application programming interfaces (“APIs”) to drive the secure exchange of health and patient data with connected health solutions. Our commitment to interoperability, defragmenting care and our experience powering many of the nation’s HIE’s places us in a unique position to enable our clients to leverage this technology to lower the cost of care and improve the patient and provider experience by providing an integrated community patient record.
Finally, to ensure our clients get maximum value from our solutions, we have augmented our technology with key services aligned with their needs, helping to ensure they reach their organizational goals. We partner with our clients to optimize their information technology (“IT”) operations, enhance revenue cycle processes across fee-for-service and fee-for-value models, service line expansion and operations, as well as advise on long-term strategy.
Positioning NextGen Healthcare for Growth. As NextGen Healthcare applies this value proposition framework across the ambulatory care market, we incorporate some or all our current solution offerings within three broad domains illustrated in Figure 1 below:
Figure 1: NextGen Healthcare Solutions Domains
Results of Operations
The following table presents our disaggregated revenues for the three months ended June 30, 2022 and 2021 (in thousands):
Software, hardware, and other non-recurring revenues: Software license and hardware
We generate revenue from sales of licensing rights and subscriptions to our software solutions, hardware and third-party software products, support and maintenance, managed services, transactional and data services, and other non-recurring services, including implementation, training, and consulting services performed for clients who use our products.
Beginning in fiscal year 2023, in order to align the presentation of disaggregated revenue with the manner in which management reviews such information, we revised our presentation of disaggregated revenues by major revenue categories to reclassify revenues related to patient pay services and certain other services from the managed services category into the transactional and data services category, which replaced the prior EDI and data services category. The prior period presentation of revenues disaggregated by our major revenue categories and by occurrence above have been reclassified to conform to current year presentation.
Consolidated revenue for the three months ended June 30, 2022 increased $7.2 million compared to the prior year period due to a $7.4 million increase in recurring revenues, partially offset by a $0.2 million decrease in software, hardware and other non-recurring revenues. The increase in recurring revenues was driven by a $4.5 million increase in subscription services, $2.7 million increase in managed services, and a $0.7 million increase in support and maintenance, offset by $0.5 million decrease in transactional and data services. The increase in subscription services was primarily due to higher subscriptions of our NextGen Office and insights solutions, including interoperability, population health, virtual visits, mobile, and financial analytics, due to higher recent bookings. The increase in managed services revenue was primarily due to an increase in revenue cycle management (“RCM”) and hosting services revenues associated with higher recent bookings. Support and maintenance increased $0.7 million primarily due to our annual Consumer Price Index (“CPI”) fee increases, partially offset by client attrition. Transactional and data services revenue decreased due to lower volume of data services, partially offset by higher EDI transaction volumes compared to the prior year. Software, hardware, and other non-recurring revenues decreased $0.2 million due to lower software bookings, partially offset by higher professional services revenue from more hours incurred in the current year.
Bookings reflect the estimated annual value of our executed contracts, adjusted to include the effect of pre-acquisition bookings if applicable, and are believed to provide a broad indicator of the general direction and progress of the business. Total bookings were $39.2 million and $34.3 million for the three months ended June 30, 2022 and 2021, respectively. The increase is due to higher bookings RCM and transactional and data services, including patient pay services, partially offset by lower bookings in subscriptions of mobile, population health, and virtual visits solutions.
We continue to see overall practice volumes at healthy, pre-pandemic levels. This reflects in our volume- and transaction-based solutions, as noted above, and reflects an ongoing industry trend of procedure volumes migrating out of higher cost settings, like hospitals, favoring lower cost care settings and independent healthcare providers. We also continue to see healthy activity levels in our current pipeline. Sales development activities, such as lead generation and demos, indicate a positive demand environment. We have not been significantly impacted by the current economic concerns and general market conditions, and we continue to constructively engage prospects and our clients to find ways to achieve better outcomes for all.
Cost of Revenue and Gross Profit
The following table presents our consolidated cost of revenue and gross profit for the three months ended June 30, 2022 and 2021 (in thousands):
Cost of revenue consists primarily of compensation expense, including share-based compensation, for personnel that deliver our products and services. Cost of revenue also includes amortization of capitalized software costs and acquired technology, third party consultant and outsourcing costs, costs associated with our EDI business partners and clearinghouses, hosting service costs, third party software costs and royalties, and other costs directly associated with delivering our products and services. Refer to Note 7, “Intangible Assets” and Note 8, “Capitalized Software Costs” of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information on current period amortization of capitalized software costs and acquired technology and an estimate of future expected amortization.
Share-based compensation expense included in cost of revenue was $0.6 million and $0.5 million for the three months ended June 30, 2022 and 2021, respectively.
Gross profit for the three months ended June 30, 2022 was relatively flat at $73.2 million compared to the prior year due to an $7.2 million increase in revenues as discussed above, offset by a $7.3 million increase in cost of revenue associated with the higher revenues. Our gross margin decreased to 47.8% for the three months ended June 30, 2022 compared to the prior year period.
The increase in cost of revenue for the three months ended June 30, 2022 compared to the prior year period was due to higher costs of subscription services and managed services, including higher hosting costs associated with delivering our software solutions and higher salaries and benefits from increased employee headcount. Transactional and data services costs also increased due to higher third party costs, partially offset by a decrease in salaries and benefits. Software, hardware, and other non-recurring services revenue costs increased compared to the prior periods primarily due to higher salaries and benefits from increased employee headcount and an increase in consulting costs associated with the delivery of our professional services as we accelerate Spring’21 migration. These increases in cost of revenue were partially offset by lower amortization of capitalized software costs and acquired intangible assets, as noted above.
Selling, General and Administrative Expense
The following table presents our selling, general and administrative expense for the three months ended June 30, 2022 and 2021 (in thousands):
Selling, general and administrative expense consists of compensation expense, including share-based compensation, for management and administrative personnel, selling and marketing expense, facilities costs, depreciation, professional service fees, including legal and accounting services, legal settlements, acquisition and transaction-related costs, and other general corporate and administrative expenses.
Share-based compensation expense included in selling, general and administrative expenses was $6.6 million and $4.9 million for the three months ended June 30, 2022 and 2021, respectively. Refer to Note 13, “Stockholders’ Equity” of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information of our share-based awards and related incentive plans.
Selling, general and administrative expenses increased $0.5 million in the three months ended June 30, 2022 compared to the prior year. The increase was primarily due to increases in travel, conferences, and conventions costs as these activities begin to resume, higher personnel costs from our annual merit increases, higher commissions, and increased employee insurance costs, and
increases in consulting and marketing costs. These increases were partially offset by lower legal and related costs associated with the Hussein Litigation matter that concluded in July 2021, as discussed further in Note 15, “Commitments, Guarantees and Contingencies.”
Research and Development Costs, net
Research and development costs, as a percentage of revenue
Capitalized software costs as a percentage of gross expenditures
Gross research and development expenditures, including costs expensed and costs capitalized, consist of compensation expense, including share-based compensation for research and development personnel, certain third-party consultant fees, software maintenance costs, and other costs related to new product development and enhancement to our existing products.
The healthcare information systems and services industry is characterized by rapid technological change, requiring us to engage in continuing investments in our research and development to update, enhance and improve our systems. This includes expansion of our software and service offerings that support pay-for-performance initiatives around accountable care organizations, bringing greater ease of use and intuitiveness to our software products, enhancing our managed cloud and hosting services to lower our clients’ total cost of ownership, expanding our interoperability and enterprise analytics capabilities, and furthering development and enhancements of our portfolio of specialty-focused templates within our electronic health records software.
The capitalization of software development costs results in a reduction to our reported net research and development costs. Our software capitalization rate, or capitalized software costs as a percentage of gross expenditures, has varied historically and may continue to vary based on the nature and status of specific projects and initiatives in progress. Although changes in software capitalization rates have no impact on our overall cash flows, it results in fluctuations in the amount of software development costs that may be capitalized or expensed up front and the amount of net research and development costs reported in our condensed consolidated statements of net income and comprehensive income, and ultimately also affects the future amortization of our previously capitalized software development costs. Refer to Note 8, “Capitalized Software Costs” of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information on current period amortization of capitalized software costs and an estimate of future expected amortization.
Share-based compensation expense included in research and development costs was $1.6 million and $1.0 million for the three months ended June 30, 2022 and 2021, respectively.
Net research and development costs for the three months ended June 30, 2022 increased $2.5 million compared to the prior year period due to $5.9 million higher gross expenditures, offset by $3.5 million higher capitalization of software costs.
The increase in gross expenditures in the three months ended June 30, 2022 compared to the prior year was primarily driven by higher personnel costs due to our annual merit increases and increased headcount as well as an increase in consulting costs. Our software capitalization rate fluctuates due to differences in the nature and status of our projects and initiatives during a given year, which affects the amount of development costs that may be capitalized.
Amortization of Acquired Intangible Assets
The following table presents our amortization of acquired intangible assets for the three months ended June 30, 2022 and 2021 (in thousands):
Amortization of acquired intangible assets $ 705 $ 881
Amortization of acquired intangible assets included in operating expense consists of the amortization related to our customer relationships and trade names intangible assets acquired as part of our business combinations. Refer to Note 7, “Intangible Assets” of our notes to condensed consolidated financial statements included elsewhere in this Report for an estimate of future expected amortization.
Amortization of acquired intangible assets for the three months ended June 30, 2022 decreased $0.2 million compared to the prior year period due to lower amortization of the customer relationships intangible assets associated with Medfusion and HealthFusion as these assets are amortized under the accelerated method of amortization.
Interest and Other Income and Expense
The following table presents our interest expense for the three months ended June 30, 2022 and 2021 (in thousands):
Interest expense relates to our revolving credit agreement and the related amortization of deferred debt issuance costs. Refer to Note 9, “Line of Credit” of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information.
The changes in interest expense are primarily caused by fluctuations in outstanding balances under our revolving credit agreement and the related amortization of debt issuance costs. As of June 30, 2022 and June 30, 2021, we had no outstanding balances under the revolving credit agreement. Interest income is earned from funds in our money market accounts. The fluctuation of other income and expense compared to the prior year period are primarily due to changes to the India foreign exchange rates.
Provision for (Benefit of) Income Taxes
The following table presents our provision for (benefit of) income taxes for the three months ended June 30, 2022 and 2021 (in thousands):
The decrease in the effective tax rate for the three months ended June 30, 2022 compared to the prior period was primarily due to the impact of reduced pre-tax book income on rate reconciling items and the increased net benefit of discrete items in the current period compared to prior year, offset by a net decrease of the research and development credit, foreign rate differential benefit, and higher nondeductible officer compensation.
Liquidity and Capital Resources
The following table presents selected financial statistics and information for the three months ended June 30, 2022 and 2021 (in thousands):
(1) As of June 30, 2022, we had no outstanding loans under our $300.0 million
revolving credit agreement.
We had no outstanding borrowings under our revolving credit agreement as of June 30, 2022, March 31, 2022, and June 30, 2021. Our principal sources of liquidity are our cash generated from operations, driven mostly by our net income and working capital management, our cash and cash equivalents, and our revolving credit agreement.
We believe that our cash and cash equivalents balance as of June 30, 2022, together with our cash flows from operating activities and liquidity provided by our revolving credit agreement, will be sufficient to meet our working capital and capital expenditure requirements for the next twelve months.
At present, we are conducting business as usual with certain modifications to employee travel, employee work locations, and marketing events, among other modifications. However, the extent to which COVID-19 may continue to impact our business, financial results, cash flows, and liquidity requirements depends on numerous evolving factors including, but not limited to, the magnitude and duration of COVID-19; the impact on our employees; the extent to which it impacts worldwide macroeconomic conditions, including interest rates, employment rates, and health insurance coverage; the speed of the recovery; and governmental and business reactions to the pandemic. We continue to monitor the broader implications of the global COVID-19 pandemic and may take further actions that we determine are in the best interests of our employees, customers, partners, suppliers, and shareholders.
Cash and Cash Equivalents
As of June 30, 2022, our cash and cash equivalents balance of $40.4 million compares to $59.8 million as of March 31, 2022 and $63.0 million as of June 30, 2021.
We may continue to use a portion of our funds as well as available financing from our revolving credit agreement, to the extent permissible, for share repurchases, future acquisitions, or other similar business activities, although the specific timing and amount of funds to be used is not currently determinable. We intend to expend some of our available funds for the development of products complementary to our existing product line as well as new versions of certain of our products. These developments are intended to take advantage of more powerful technologies and to increase the integration of our products.
Our investment policy is determined by our Board of Directors. Excess cash, if any, may be invested in very liquid short term assets including tax exempt and taxable money market funds, certificates of deposit and short term municipal bonds with average maturities of 365 days or less at the time of purchase. Our Board of Directors continues to review alternate uses for our cash including an expansion of our investment policy and other items. Any or all of these programs could significantly impact our investment income in future periods.
Cash Flows from Operating Activities
The following table summarizes our condensed consolidated statements of cash flows for the three months ended June 30, 2022 and 2021 (in thousands):
Net cash provided by operating activities $ (4,645 ) $ 313
For the three months ended June 30, 2022, cash used by operating activities increased $5.0 million compared to the prior year period, primarily due to a $4.9 million decrease in cash from changes in accounts receivable, $2.5 million lower cash from net income, as adjusted for non-cash expenses, and $0.8 million of decreases in cash from changes in other assets and liabilities, partially offset by an increase in cash of $3.2 million from net changes in contract assets and liabilities. The decrease in cash from changes in accounts receivable is primarily due to higher accounts receivable from our annual CPI fee increases and increases in invoicing from higher recent bookings, partially offset by continued efforts to resolve aged balances and improve collections. Net income for the three months decreased $1.7 million compared to the prior year period, as described in the sections above. Non-cash expenses decreased primarily due to lower depreciation, lower amortization of our operating right of use assets, lower amortization of our purchased intangibles, and lower amortization of capitalized software costs, partially offset by higher share-based compensation expense. The decrease in cash from changes in other assets and liabilities is primarily due to lower accruals of legal expenses and deferred payroll taxes, as well as higher prepaid commissions, prepaid insurance, and other general prepaid expenses. These decreases were partially offset by an increase in cash from changes in accounts payable due to timing of invoice
payments. The increase in cash from changes in net contract assets and liabilities was primarily due to higher invoicing associated with higher bookings and sales volume and our annual CPI fee increases.
Cash Flows from Investing Activities
Net cash used in investing activities for the three months ended June 30, 2022 was $9.5 million compared with $6.5 million in the prior year period. The increase in net cash used in investing activities is primarily due to higher additions to capitalized software, partially offset by lower additions in equipment and improvements in the current period.
Cash Flows from Financing Activities
Net cash used in financing activities for the three months ended June 30, 2022 was $4.1 million compared with $2.3 million cash used in financing activities in the prior year period. The decrease in cash used in financing activities is primarily due to $2.5 million in share repurchases in the current period, higher payments for taxes related to net share settlement of equity awards, partially offset by higher proceeds from the issuance of shares under our employee equity plans in the three months ended June 30, 2022.
On March 12, 2021, we entered into a $300 million second amended and restated revolving credit agreement (the “Credit Agreement”). The Credit Agreement matures on March 12, 2026 and the full balance of the revolving loans and all other obligations under the Credit Agreement must be paid at that time. In addition, we are required to prepay the revolving loan balance if at any time the aggregate principal amount outstanding under the Credit Agreement exceeds the aggregate commitments thereunder. On May 17, 2022, we entered into an amendment to the Credit Agreement, which, among other changes, provides more favorable terms and flexibility with regards to our ability to obtain additional revolving credit commitments and/or term loans thereunder, including amendments to the net leverage ratio and definition of restricted payments.
As of June 30, 2022, we had no outstanding borrowings under the Credit Agreement. Refer to Note 9, “Line of Credit” of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information.
Non-cancelable Operating Leases
As of June 30, 2022, the total amount of future lease payments under operating leases was $19.0 million, of which $8.7 million is short-term. Our operating leases have a weighted average remaining lease term of 2.5 years. Included in our total future lease payments are $10.2 million of remaining lease obligations for vacated properties, of which $5.4 million is short-term. Remaining lease obligations for vacated properties relates to certain locations, including Cary, Brentwood, North Canton, Fairport and portions of Atlanta, Horsham, St. Louis, Hunt Valley, and Bangalore that we have vacated as part of our reorganization efforts and are actively marketing for sublease. Refer to Note 5, “Leases” of our notes to consolidated financial statements included elsewhere in this Report for additional information. The remaining obligations have not been reduced by projected sublease rentals or by minimum sublease rentals of $2.2 million due in future periods under non-cancelable subleases.
As of June 30, 2022, we had minimum purchase commitments of $186.0 million related to payments due under certain non-cancelable agreements to purchase goods and services, of which $30.3 million is due within the next 12 months.
Share Repurchase Program
In October 2021, the Board authorized a share repurchase program under which we may repurchase up to $60.0 million of our outstanding shares of common stock through March 2023. The timing and amount of any share repurchases under the share repurchase program will be determined by our management at its discretion based on ongoing assessments of the capital needs of the business, the market price of our common stock and general market conditions. The program does not obligate the Company to acquire any particular amount of our common stock, and the share repurchase program may be suspended or discontinued at any time at our discretion.
During the three months ended June 30, 2022, we repurchased 0.1 million shares of common stock for a total of $2.5 million at a weighted-average share repurchase price of approximately $16.93. As of June 30, 2022, $21.6 million remained available for share repurchases pursuant to the Company’s share repurchase program.
Deferred compensation liability was $7.2 million, for which timing of future benefit payments to employees is not determinable. To offset this liability, we have purchased life insurance policies on some of the participants. The Company is the owner and beneficiary of the policies and the cash values are intended to produce cash needed to help make the benefit payments to employees when they retire or otherwise leave the Company. The cash surrender value of the life insurance policies for deferred compensation was $7.3 million.
We have an uncertain tax position liability of $4.2 million as of June 30, 2022, for which timing of expected payments is not determinable.
Off-Balance Sheet Arrangements
During the three months ended, we did not have any relationships with unconsolidated organizations, financial partnerships, or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other limited purposes.
New Accounting Pronouncements
Refer to Note 1, “Summary of Significant Accounting Policies” of our notes to condensed consolidated financial statements included elsewhere in this Report for a discussion of new accounting standards.
Critical Accounting Policies and Estimates
The discussion and analysis of our condensed consolidated financial statements and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends, and other factors we believe to be reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. On a regular basis, we review the accounting policies and update our assumptions, estimates, and judgments, as needed, to ensure that our condensed consolidated financial statements are presented fairly and in accordance with GAAP. Actual results could differ materially from our estimates under different assumptions or conditions. To the extent that there are material differences between our estimates and actual results, our financial condition or results of operations will be affected.
We describe our significant accounting policies in Note 1, “Summary of Significant Accounting Policies,” of our notes to consolidated financial statements included in our Annual Report. We discuss our critical accounting policies and estimates in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report.
There have been no other material changes in our significant accounting policies or critical accounting policies and estimates since the fiscal year ended March 31, 2022.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS