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CPSI Announces Third Quarter 2014 Results

Company Announces Regular Quarterly Cash Dividend of $0.57 Per Share

MOBILE, Ala.--(BUSINESS WIRE)--Oct. 30, 2014-- Computer Programs and Systems, Inc. (NASDAQ: CPSI):

Highlights:

  • Revenues of $53.3 million;
  • 12-month backlog of $165.8 million;
  • Earnings per diluted share of $0.83;
  • Cash provided by operations of $11.6 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 third quarter and nine months ended September 30, 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 November 28, 2014, to stockholders of record as of the close of business on November 13, 2014.

Total revenues for the third quarter ended September 30, 2014, were $53.3 million, compared with total revenues of $46.8 million for the prior-year third quarter. Net income for the quarter ended September 30, 2014, increased 29% to $9.4 million, or $0.83 per diluted share, compared with $7.3 million, or $0.66 per diluted share, for the quarter ended September 30, 2013. Cash provided by operations for the third quarter of 2014 was $11.6 million, compared with $7.5 million for the prior-year third quarter. Cash collections for the third quarter ended September 30, 2014, were $52.4 million, compared with cash collections of $44.2 million for the prior-year third quarter.

Total revenues for the nine months ended September 30, 2014, were $158.5 million, compared with total revenues of $149.6 million for the prior-year period. Net income for the nine months ended September 30, 2014, increased 15% to $26.2 million, or $2.34 per diluted share, compared with $22.7 million, or $2.05 per diluted share, for the nine months ended September 30, 2013. Cash provided by operations for the first nine months of 2014 was $26.1 million, compared with $14.3 million for the prior-year period. Cash collections for the first nine months of 2014 were $153.9 million, compared with cash collections of $133.3 million for the prior-year period.

CPSI’s 12-month backlog as of September 30, 2014, was $165.8 million, consisting of $44.2 million in non-recurring system purchases and $121.6 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 September 30, 2014, was approximately $1.4 million.

CPSI will hold a live webcast to discuss third quarter 2014 results on October 31, 2014, at 9:00 a.m. Eastern time. A 30-day online replay will be available approximately one hour following the conclusion of the live webcast. To listen to the live webcast or access the replay, visit the Company’s website, www.cpsi.com.

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

September 30,

Nine Months Ended

September 30,

2014     2013 2014     2013
Sales revenues:
System sales $ 20,756 $ 16,185 $ 61,873 $ 59,284
Support and maintenance 18,244 17,997 54,943 53,412
Business management, consulting and managed IT services   14,327     12,598     41,659     36,894  
Total sales revenues 53,327 46,780 158,475 149,590
 
Cost of sales:
System sales 11,087 11,242 33,573 37,576
Support and maintenance 7,454 7,134 21,955 21,547
Business management, consulting and managed IT services   9,526     7,750     28,073     22,217  
Total cost of sales   28,067     26,126     83,601     81,340  
Gross profit 25,260 20,654 74,874 68,250
 
Operating expenses:
Sales and marketing 3,561 3,286 11,159 10,997
General and administrative   7,524     6,342     23,483     22,970  
Total operating expenses   11,085     9,628     34,642     33,967  
 
Operating income 14,175 11,026 40,232 34,283
Other income   69     113     94     387  
Income before taxes 14,244 11,139 40,326 34,670
Provision for income taxes   4,889     3,870     14,150     11,971  
Net income 9,355 7,269 26,176 22,699
Less: Net income attributable to participating securities (unvested restricted stock)   (152 )   (51 )   (404 )   (171 )
Net income attributable to common stockholders $ 9,203   $ 7,218   $ 25,772   $ 22,528  
 
Basic and diluted earnings per share $ 0.83   $ 0.66   $ 2.34   $ 2.05  
 
Weighted average shares outstanding used in basic and diluted per common share computations 11,028 11,003 11,019 10,996
 

       

COMPUTER PROGRAMS AND SYSTEMS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except per share data)

 
Sept. 30,

2014

Dec. 31,

2013

(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 18,008 $ 11,729
Investments 10,684 10,703

Accounts receivable, net of allowance for doubtful accounts of $1,412 and $1,125, respectively

24,462 20,076
Financing receivables, current portion, net 23,790 25,387
Inventories 1,877 1,589
Deferred tax assets 2,700 2,366
Prepaid income taxes 970 -
Prepaid expenses and other   1,276     901
Total current assets 83,767 72,751
 
Financing receivables, net of current portion 440 551
Property and equipment, net   17,257     19,232
Total assets $ 101,464   $ 92,534
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 3,918 $ 3,214
Deferred revenue 7,072 9,581
Accrued vacation 4,175 3,695
Income taxes payable - 797
Other accrued liabilities   5,980     4,164
Total current liabilities 21,145 21,451
 
Deferred tax liabilities 1,010 2,001
 
Stockholders’ equity:
Common stock, par value $0.001 per share, 30,000 shares authorized, 11,209 and 11,159 shares issued and outstanding 11 11
Additional paid-in capital 37,859 34,644
Accumulated other comprehensive (loss) income (12 ) 11
Retained earnings   41,451     34,416
Total stockholders’ equity   79,309     69,082
Total liabilities and stockholders’ equity $ 101,464   $ 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

September 30,

Nine Months Ended

September 30,

2014     2013 2014     2013
Cash Flow Information
Net cash provided by operating activities $ 11,596 $ 7,546 $ 26,069 $ 14,322
Net cash used in investing activities (534 ) (578 ) (770 ) (3,360 )
Net cash used in financing activities (6,348 ) (5,637 ) (19,021 ) (16,961 )
 
Free Cash Flow
Net cash provided by operating activities $ 11,596 $ 7,546 $ 26,069 $ 14,322
Less: Purchases of capital assets   (495 )   (568 )   (751 )   (3,316 )
Free cash flow $ 11,101   $ 6,978   $ 25,318   $ 11,006  
 

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