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CPSI Announces First Quarter 2014 Results

Company Announces Regular Quarterly Cash Dividend of $0.57 Per Share

MOBILE, Ala.--(BUSINESS WIRE)--May 1, 2014-- Computer Programs and Systems, Inc. (NASDAQ: CPSI):

Highlights:

  • Revenues of $52.1 million;
  • 12-month backlog of $170.4 million;
  • Earnings per diluted share of $0.69;
  • Cash provided by operations of $13.2 million; and
  • Quarterly dividend of $0.57 per share.

Computer Programs and Systems, Inc. (NASDAQ: CPSI), a leading provider of healthcare information solutions, today announced results for the first quarter ended March 31, 2014.

The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.57 (fifty-seven cents) per share, payable on May 30, 2014, to stockholders of record as of the close of business on May 15, 2014.

Total revenues for the first quarter ended March 31, 2014, increased 5% to $52.1 million, compared with total revenues of $49.5 million for the prior-year first quarter. Net income for the quarter ended March 31, 2014, increased 11% to $7.7 million, or $0.69 per diluted share, compared with $6.9 million, or $0.63 per diluted share, for the quarter ended March 31, 2013. Cash provided by operations for the first quarter of 2014 was $13.2 million, compared with $5.5 million for the prior-year first quarter. Cash collections for the first quarter ended March 31, 2014, were $50.0 million, compared with cash collections of $43.1 million for the prior-year first quarter.

CPSI’s 12-month backlog as of March 31, 2014, was $170.4 million, consisting of $53.2 million in non-recurring system purchases and $117.2 million in recurring payments for support, Business Management Services and SAAS contracts. The backlog total excludes amounts related to systems installed during 2012 under contracts for which a portion of the consideration was to be received and revenue recognized in subsequent periods upon hospitals successfully achieving meaningful use designation. Although the related system installations were substantially completed during 2012 and no additional such contracts have been offered since 2012, the total remaining accumulated unrecognized revenue related to such contracts as of March 31, 2014, was approximately $2.6 million.

A listen-only simulcast and replay of CPSI’s first quarter 2014 conference call will be available on-line at the Company’s website, www.cpsi.com, on May 2, 2014, beginning at 9:00 a.m. Eastern Time.

About Computer Programs and Systems, Inc.

CPSI is a leading provider of electronic health records systems for more than 650 community, rural and critical access hospitals and their 12,000 providers. Founded in 1979, the Company is dedicated to meeting the ever-changing needs of health IT, while optimizing the quality of care for communities in 46 states and the District of Columbia. CPSI provides a complete information and patient care system from business office to bedside combined with comprehensive implementation, training and ongoing support from our staff of approximately 1,400 healthcare and business professionals. CPSI’s wholly owned subsidiary, TruBridge, LLC, focuses exclusively on providing business office, consulting and managed IT services to rural and community healthcare organizations, regardless of their IT vendor. To join the conversation with CPSI, connect with us on Facebook, Twitter (@cpsiehr) and on the CPSI blog. For more information, visit www.cpsi.com or www.trubridge.net.

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified generally by the use of forward-looking terminology and words such as “expects,” “anticipates,” “estimates,” “believes,” “predicts,” “intends,” “plans,” “potential,” “may,” “continue,” “should,” “will” and words of comparable meaning. Without limiting the generality of the preceding statement, all statements in this press release relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and future financial results are forward-looking statements. We caution investors that any such forward-looking statements are only predictions and are not guarantees of future performance. Certain risks, uncertainties and other factors may cause actual results to differ materially from those projected in the forward-looking statements. Such factors may include: overall business and economic conditions affecting the healthcare industry; government regulation of the healthcare and health insurance industries; government regulation of our products and customers, including changes in healthcare policy affecting Medicare and Medicaid reimbursement rates and qualifying technological standards; the potential effects of the federal healthcare reform legislation enacted in 2010, and implementing regulations, on the businesses of our hospital customers; the funding uncertainties associated with and potential expenditures required by the American Recovery and Reinvestment Act of 2009 in connection with the adoption of electronic health records; saturation of our target market and hospital consolidations; changes in customer purchasing priorities, capital expenditures and demand for information technology systems; competition with companies that have greater financial, technical and marketing resources than we have; failure to develop new technology and products in response to market demands; fluctuations in quarterly financial performance due to, among other factors, timing of customer installations; failure of our products to function properly resulting in claims for medical losses; changes in accounting principles generally accepted in the United States; breaches of security and viruses in our systems resulting in customer claims against us and harm to our reputation; potential intellectual property claims against us; general economic conditions, including changes in the financial and credit markets that may affect the availability and cost of credit to us or our customers; interruptions in our power supply and/or telecommunications capabilities and other risk factors described from time to time in our public releases and reports filed with the Securities and Exchange Commission, including, but not limited to, our most recent Annual Report on Form 10-K. We also caution investors that the forward-looking information described herein represents our outlook only as of this date, and we undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this press release.

 

COMPUTER PROGRAMS AND SYSTEMS, INC.

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share data)

 
     

Three Months Ended
March 31,

 
  2014         2013  
Sales revenues:      
System sales $ 20,453 $ 20,722
Support and maintenance 18,245 17,677
Business management, consulting and managed IT services     13,396         11,150  
Total sales revenues 52,094 49,549
 
Cost of sales:
System sales 11,193 13,251
Support and maintenance 7,374 7,239
Business management, consulting and managed IT services     9,092         6,940  
Total cost of sales     27,659         27,430  
Gross profit 24,435 22,119
 
Operating expenses:
Sales and marketing 3,964 3,576
General and administrative     8,484         8,434  
Total operating expenses     12,448         12,010  
 
Operating income 11,987 10,109
Other (expense) income     (41 )       137  
Income before taxes 11,946 10,246
Provision for income taxes     4,231         3,302  
Net income   $ 7,715       $ 6,944  
 
Basic earnings per share   $ 0.69       $ 0.63  
Diluted earnings per share   $ 0.69       $ 0.63  
 
Weighted average shares outstanding:
Basic 11,163 11,078
Diluted 11,163 11,078
 

 

COMPUTER PROGRAMS AND SYSTEMS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

 
     

March 31,
2014

       

Dec. 31,
2013

 
  (Unaudited)    
ASSETS
Current assets:
Cash and cash equivalents $ 18,549 $ 11,729
Investments 10,705 10,703

Accounts receivable, net of allowance for doubtful accounts of $1,425 and $1,125, respectively

24,448 20,076
Financing receivables, current portion, net 24,006 25,387
Inventories 1,476 1,589
Deferred tax assets 2,918 2,366
Prepaid expenses and other     935       901  
Total current assets 83,037 72,751
 
Financing receivables, net of current portion 593 551
Property and equipment, net     18,381       19,232  
Total assets   $ 102,011     $ 92,534  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 2,871 $ 3,214
Deferred revenue 10,568 9,581
Accrued vacation 4,087 3,695
Income taxes payable 6,058 797
Other accrued liabilities     5,689       4,164  
Total current liabilities 29,273 21,451
 
Deferred tax liabilities 1,519 2,001
 
Stockholders’ equity:
Common stock, par value $0.001 per share, 30,000 shares authorized, 11,164 and 11,159 shares issued and outstanding, 11 11
Additional paid-in capital 35,383 34,644
Accumulated other comprehensive income 58 11
Retained earnings     35,767       34,416  
Total stockholders’ equity     71,219       69,082  
Total liabilities and stockholders’ equity   $ 102,011     $ 92,534  
 

 

COMPUTER PROGRAMS AND SYSTEMS, INC.

Unaudited Other Supplemental Information

(In thousands)

 

The following table summarizes cash flow and free cash flow for the Company:

 
     

Three Months Ended
March 31,

 
  2014         2013  
Cash Flow Information      
Net cash provided by operating activities $ 13,158 $ 5,522
Net cash used in investing activities (6 ) (1,998 )
Net cash used in financing activities (6,331 ) (5,632 )
 
Free Cash Flow
Net cash provided by operating activities $ 13,158 $ 5,522
Less: Purchases of capital assets     (79 )       (1,998 )  
Free cash flow   $ 13,079       $ 3,524    
 

Free cash flow is a non-GAAP financial measure which CPSI defines as net cash provided by operating activities less purchases of capital assets. The most directly comparable GAAP financial measure is net cash provided by operating activities. The Company believes free cash flow is a useful measure of performance and uses this measure as an indication of the financial resources of the Company and its ability to generate cash.

Source: Computer Programs and Systems, Inc.

Computer Programs and Systems, Inc.
Boyd Douglas, 251-639-8100
President and Chief Executive Officer