cern-20210331

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 0-15386

CERNER CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

43-1196944

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer Identification No.)

2800 Rock Creek Parkway

North Kansas City,

64117

(Address of principal executive offices)

(Zip Code)

(816) 221-1024

(Registrant's telephone number, including area code)

_________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	CERN	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


Class						Outstanding at April 30, 2021
Common Stock, $0.01 par value per share						301,317,068 shares

Table of Contents

CERNER CORPORATION

TABLE OF CONTENTS


Part I.	Financial Information:

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets as of March 3 1 , 202 1 (unaudited) and December 31 , 20 20	1

	Condensed Consolidated Statements of Operations for the Three Months Ended March 3 1 , 202 1 and March 31 , 20 20 (unaudited)	2

	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 3 1 , 202 1 and March 31 , 20 20 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended M ar ch 3 1 , 202 1 and March 31 , 20 20 (unaudited)	4

	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months En ded March 3 1 , 202 1 and March 31 , 20 20 (unaudited)	5

	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28

Item 4.	Controls and Procedures	29

Part II.	Other Information:

Item 1.	Legal Proceedings	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 6.	Exhibits	31

Signatures

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

CERNER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2021 (unaudited) and December 31, 2020


(In thousands, except share data)	2021		2020

Assets
Current assets:
Cash and cash equivalents	$	997,861	$	615,615
Short-term investments	476,362		442,473
Receivables, net	1,175,139		1,168,712
Inventory	30,442		23,027
Prepaid expenses and other	375,376		401,160
Total current assets	3,055,180		2,650,987

Property and equipment, net	1,803,027		1,804,083
Right-of-use assets	102,871		104,536
Software development costs, net	1,028,513		1,009,349
Goodwill	912,043		914,520
Intangible assets, net	316,368		329,249
Long-term investments	492,704		510,220
Other assets	197,704		198,152

Total assets	$	7,908,410	$	7,521,096

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable	$	279,256	$	235,755
Current installments of long-term debt	225,000		—
Deferred revenue	407,736		393,293
Accrued payroll and tax withholdings	313,184		309,814
Other current liabilities	237,964		229,764
Total current liabilities	1,463,140		1,168,626

Long-term debt	1,611,102		1,336,069
Deferred income taxes	372,037		376,035
Other liabilities	149,694		157,799
Total liabilities	3,595,973		3,038,529

Shareholders' Equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 374,048,596 shares issued at March 31, 2021 and 373,224,832 shares issued at December 31, 2020	3,740		3,732
Additional paid-in capital	2,368,227		2,288,806
Retained earnings	6,580,612		6,475,551
Treasury stock, 72,276,054 shares at March 31, 2021 and

SEC Form 10-Q filed by Cerner Corporation