Computer Programs and Systems, Inc. Announces Fourth Quarter and Year-End 2013 Results and 2014 Guidance

Computer Programs and Systems, Inc. Announces Fourth Quarter and Year-End 2013 Results and 2014 Guidance

January 30, 2014

Company Announces $0.06 Increase in Regular Quarterly Cash Dividend to $0.57 Per Share

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

Highlights:

Computer Programs and Systems, Inc. (NASDAQ: CPSI), a leading provider of healthcare information solutions, today announced results for the fourth quarter and year ended December 31, 2013.

The Company also announced that its Board of Directors has approved an increase in the regular quarterly cash dividend of $0.06 to $0.57 (fifty-seven cents) per share, payable on February 28, 2014, to stockholders of record as of the close of business on February 13, 2014.

Total revenues for the fourth quarter ended December 31, 2013, increased 7% to $51.3 million, compared with total revenues of $47.9 million for the prior-year fourth quarter. Net income for the quarter ended December 31, 2013, increased 10% to $10.0 million, or $0.90 per diluted share, compared with $9.1 million, or $0.83 per diluted share, for the quarter ended December 31, 2012. Cash provided by operations for the fourth quarter of 2013 was $14.7 million, compared with $14.3 million for the prior-year fourth quarter. Cash collections for the fourth quarter ended December 31, 2013, were $56.2 million, compared with cash collections of $53.2 million for the prior-year fourth quarter.

Total revenues for the year ended December 31, 2013, increased 10% to $200.9 million, compared with total revenues of $183.3 million for the prior year. Net income for the year ended December 31, 2013, increased 9% to $32.7 million, or $2.95 per diluted share, compared with $30.0 million, or $2.71 per diluted share, for the year ended December 31, 2012. Cash provided by operations for 2013 was $29.0 million, compared with $32.2 million for the prior year. Cash collections for 2013 were $189.6 million, compared with cash collections of $184.0 million for the prior year.

During 2012, the Company installed systems 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 such contracts were offered during 2013, the total remaining accumulated unrecognized revenue related to such contracts as of December 31, 2013, was approximately $2.7 million.

For 2014, the Company anticipates total revenues of $205.0 million to $215.0 million and net income of approximately $36.0 million to $38.0 million, or $3.25 to $3.40 per diluted share. CPSI’s 12-month backlog as of December 31, 2013, was $167.1 million, consisting of $50.9 million in non-recurring system purchases and $116.2 million in recurring payments for support, Business Management Services and SAAS contracts. The backlog amounts exclude amounts to be recognized in subsequent periods upon hospitals successfully achieving Meaningful Use designation.

A listen-only simulcast and replay of CPSI’s fourth quarter and year-end 2013 conference call will be available on-line at the Company’s website, www.cpsi.com, on January 31, 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 45 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, 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

December 31,

  Year Ended

December 31,

2013   2012 2013   2012
Sales revenues:
System sales $ 20,509 $ 20,089 $ 79,792 $ 72,553

Support and maintenance (1)

18,094 16,966 71,506 67,293
Business management, consulting

 

and managed IT services (1)

  12,671   10,860   49,565   43,463
Total sales revenues 51,274 47,915 200,863 183,309
 
Cost of sales:
System sales 10,264 12,912 47,840 49,019
Support and maintenance (1) 7,093 7,127 28,640 27,710
Business management, consulting and managed IT services (1)   8,430   6,636   30,646   25,919
Total cost of sales   25,787   26,675   107,126   102,648
Gross profit 25,487 21,240 93,737 80,661
 
Operating expenses:
Sales and marketing 3,740 3,630 14,737 14,290
General and administrative   5,786   5,248   28,756   25,094
Total operating expenses   9,526   8,878   43,493   39,384
 
Operating income 15,961 12,362 50,244 41,277
Other income, net   80   110   467   721
Income before taxes 16,041 12,472 50,711 41,998
Provision for income taxes   5,996   3,333   17,968   12,025
Net income $ 10,045 $ 9,139 $ 32,743 $ 29,973
 
Basic earnings per share $ 0.90 $ 0.83 $ 2.95 $ 2.71
Diluted earnings per share $ 0.90 $ 0.83 $ 2.95 $ 2.71
 
Weighted average shares outstanding:
Basic 11,159 11,074 11,101 11,066
Diluted 11,159 11,074 11,101 11,066
 

(1) Prior year amounts have been reclassified to reflect the current presentation.

 
 
 

COMPUTER PROGRAMS AND SYSTEMS, INC.
Condensed Consolidated Balance Sheets
(in thousands)

 
  Dec. 31,

2013

  Dec. 31,

2012

(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 11,729 $ 8,912
Investments 10,703 10,675

Accounts receivable, net of allowance for doubtful accounts of $1,125 and $1,124, respectively

20,076 19,705
Financing receivables, current portion, net 25,387 4,618
Inventories 1,589 1,682
Deferred tax assets 2,366 2,464

Prepaid income taxes (1)

– 1,064
Prepaid expenses and other   901     1,081  
Total current assets 72,751 50,201
 
Financing receivables, net of current portion 551 7,863
Property and equipment 27,748 26,528
Accumulated depreciation   (8,516 )   (7,498 )
Total assets $ 92,534   $ 77,094  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 3,214 $ 2,980
Deferred revenue 9,581 7,453
Accrued vacation 3,695 3,506

Income taxes payable (1)

797 –

Other accrued liabilities (1)

  4,164     3,777  
Total current liabilities 21,451 17,716
 
Deferred tax liabilities 2,001 2,176
 
Stockholders’ equity:

Common stock, par value $0.001 per share, 30,000 shares authorized, 11,159 and 11,078 shares issued and outstanding

11 11
Additional paid-in capital 34,644 32,848
Accumulated other comprehensive income 11 28
Retained earnings   34,416     24,315  
Total stockholders’ equity   69,082     57,202  
Total liabilities and stockholders’ equity $ 92,534   $ 77,094  
 

(1) Prior year amounts have been reclassified to reflect the current presentation.

 
 
 

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

December 31,

  Year Ended

December 31,

2013   2012 2013   2012
Cash Flow Information
Net cash provided by operating activities $ 14,725 $ 14,252 $ 29,047 $ 32,207
Net cash used in investing activities (325 ) 4,952 (3,685 ) 1,482
Net cash used in financing activities (5,585 ) (16,122 ) (22,546 ) (31,440 )
 
Free Cash Flow
Net cash provided by operating activities $ 14,725 $ 14,252 $ 29,047 $ 32,207
Less: Purchases of capital assets   (314 )   (2,039 )   (3,630 )   (4,363 )
Free cash flow $ 14,411   $ 12,213   $ 25,417   $ 27,844  
 

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.

 
 

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

Source: Computer Programs and Systems, Inc.