CPSI Announces Fourth Quarter and Year-End 2020 Results
Company Launches Transformation Initiative with Goal of $80 million in Adjusted EBITDA in 2024; Targets Three-Year Average Organic Recurring Revenue Growth Rate of 5% to 8%
Highlights for Fourth Quarter 2020:
- Revenues of $66.8 million;
- GAAP net income of $3.1 million and non-GAAP net income of $7.8 million;
- GAAP earnings per diluted share of $0.22 and non-GAAP earnings per diluted share of $0.55;
- Adjusted EBITDA of $12.3 million;
- Bookings of $21.2 million;
- 47,000 shares repurchased for $1.3 million;
- Cash provided by operations of $16.2 million; and
- Net debt of $64.1 million
MOBILE, Ala.–(BUSINESS WIRE)–$CPSI–CPSI (NASDAQ: CPSI), a community healthcare solutions company, today announced results for the fourth quarter and year ended December 31, 2020.
Total revenues for the quarter ended December 31, 2020, were $66.8 million, compared with total revenues of $70.6 million for the prior-year fourth quarter. GAAP net income for the quarter ended December 31, 2020, was $3.1 million, or $0.22 per diluted share, compared with $11.2 million, or $0.78 per diluted share, for the quarter ended December 31, 2019. Cash provided by operations for the fourth quarter of 2020 was $16.2 million, compared with $18.1 million for the prior-year quarter. Net debt at December 31, 2020, was $64.1 million.
Total revenues for the year ended December 31, 2020, were $264.5 million, compared with total revenues of $274.6 million for the prior year. GAAP net income for the year ended December 31, 2020, was $14.2 million, or $0.98 per diluted share, compared with $20.5 million, or $1.43 per diluted share, for the year ended December 31, 2019. Cash provided by operations for 2020 was $49.1 million, compared with $43.6 million for the prior year.
Commenting on the Company’s financial performance for the fourth quarter of 2020, Matt Chambless, chief financial officer of CPSI, stated, “The fourth quarter ended with solid metrics across the board, especially considering the lingering effect of the pandemic on patient volumes and a higher concentration of Software as a Service (SaaS) implementations for our Thrive solution. Mostly notably, the quarter’s $16.2 million of operating cash flows were the third highest in Company history, allowing for 13% annual growth in operating cash flows despite the pandemic’s headwinds. We are proud of our execution during this disruptive year, and we believe that we are well positioned for future growth and increasing shareholder value. With a comfortable leverage profile, ample capacity to deploy capital, and a realistic plan for significant top and bottom line growth, we are ready to capitalize on a more favorable post-COVID environment.
“Looking forward, the Company expects to achieve three-year annual organic recurring revenue growth of 5% to 8%. The continued growth of TruBridge among both existing and new customers will continue to be our primary catalyst for recurring revenue growth, supported by an accelerating shift in software and support revenues from license to SaaS. For 2021, we expect recurring revenue growth at the higher end of that 5% to 8% range, with total expected revenues of $270 to $280 million. GAAP net margin is expected to be 6.5% to 7.5%, and Adjusted EBITDA margin is expected to be 16.5% to 17.5% as we anticipate incremental margin pressure from the continued SaaS transition.”
Boyd Douglas, president and chief executive officer of CPSI, stated, “We have turned our attention to a journey of transformation that will drive long-term sustainability and exciting growth for CPSI. Over the past several months, we collaborated with a premier consulting group to review our strategy and growth opportunities. As a result, we are focused on modernizing our business and achieving great success in a post-COVID world both in the current markets we serve and by reaching adjacent markets through innovation. The core growth component of this transformation plan is highlighted by TruBridge cross sales, net new TruBridge sales, the continued retention of our valuable EHR client base and cost optimization. This aggressive, yet obtainable, plan is intended to provide sizeable shareholder returns over the next three to four years culminating in an end-goal of achieving $80 million in Adjusted EBITDA in 2024.”
CPSI will hold a live webcast to discuss fourth quarter 2020 results today, Tuesday, February 9, 2021, at 4:30 p.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 CPSI
CPSI is a leading provider of healthcare solutions and services for community hospitals, their clinics and post-acute care facilities. Founded in 1979, CPSI is the parent of four companies – Evident, LLC, American HealthTech, Inc., TruBridge, LLC and iNetXperts, Corp. d/b/a Get Real Health. Our combined companies are focused on helping improve the health of the communities we serve, connecting communities for a better patient care experience, and improving the financial operations of our customers. Evident provides comprehensive EHR solutions for community hospitals and their affiliated clinics. American HealthTech is one of the nation’s largest providers of EHR solutions and services for post-acute care facilities. TruBridge focuses on providing business, consulting and managed IT services, along with its complete RCM solution, for all care settings. Get Real Health focuses on solutions aimed at improving patient engagement for individuals and healthcare providers. For more information, visit www.cpsi.com.
Forward-Looking Statements
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 the Company’s future financial and operational 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: the global pandemic related to the novel coronavirus COVID-19 (including the rate of spread, duration and geographic coverage of the COVID-19 pandemic, the rate and extent to which the virus mutates, the status of testing capabilities, the development, distribution, and efficacy of vaccines for COVID-19 or any mutant strains and the development and effectiveness of therapeutic remedies), which has decreased our hospital customers’ patient volumes and negatively impacted our variable revenues, and could negatively impact our gross margins and income, as well as our financial position and/or liquidity; federal, state and local government actions to address and contain the impact of COVID-19 and their impact on us and our hospital clients; operational disruptions and heightened cybersecurity risks due to a significant percentage of our workforce working remotely; overall business and economic conditions affecting the healthcare industry, including the effects of the federal healthcare reform legislation enacted in 2010, and implementing regulations, on the businesses of our hospital customers; government regulation of our products and services and the healthcare and health insurance industries, including changes in healthcare policy affecting Medicare and Medicaid reimbursement rates and qualifying technological standards; changes in customer purchasing priorities, capital expenditures and demand for information technology systems; saturation of our target market and hospital consolidations; 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; our substantial indebtedness, and our ability to incur additional indebtedness in the future; our potential inability to generate sufficient cash in order to meet our debt service obligations; restrictions on our current and future operations because of the terms of our senior secured credit facilities; market risks related to interest rate changes; 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; failure of our products to function properly resulting in claims for medical and other losses; breaches of security and viruses in our systems resulting in customer claims against us and harm to our reputation; failure to maintain customer satisfaction through new product releases free of undetected errors or problems; failure to convince customers to migrate to current or future releases of our products; interruptions in our power supply and/or telecommunications capabilities, including those caused by natural disaster; our ability to attract and retain qualified client service and support personnel; failure to properly manage growth in new markets we may enter; misappropriation of our intellectual property rights and potential intellectual property claims and litigation against us; changes in accounting principles generally accepted in the United States; significant charges to earnings if our goodwill or intangible assets become impaired; fluctuations in quarterly financial performance due to, among other factors, timing of customer installations; 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 and Quarterly Report on Form 10-Q. Relative to our dividend policy, the payment of cash dividends is subject to the discretion of our Board of Directors and will be determined in light of then-current conditions, including our earnings, our leverage, our operations, our financial conditions, our capital requirements and other factors deemed relevant by our Board of Directors. In the future, our Board of Directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions. 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. | ||||||||||||||||
| Condensed Consolidated Statements of Income | ||||||||||||||||
| (In ‘000s, except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||
| Sales revenues: | ||||||||||||||||
| System sales and support |
$ |
36,657 |
|
$ |
41,475 |
|
$ |
152,954 |
|
$ |
165,352 |
|
||||
| TruBridge |
|
30,192 |
|
|
29,163 |
|
|
111,534 |
|
|
109,282 |
|
||||
| Total sales revenues |
|
66,849 |
|
|
70,638 |
|
|
264,488 |
|
|
274,634 |
|
||||
| Costs of sales: | ||||||||||||||||
| System sales and support |
|
17,460 |
|
|
19,102 |
|
|
69,361 |
|
|
73,872 |
|
||||
| TruBridge |
|
14,781 |
|
|
14,956 |
|
|
58,881 |
|
|
56,617 |
|
||||
| Total costs of sales |
|
32,241 |
|
|
34,058 |
|
|
128,242 |
|
|
130,489 |
|
||||
| Gross profit |
|
34,608 |
|
|
36,580 |
|
|
136,246 |
|
|
144,145 |
|
||||
| Operating expenses: | ||||||||||||||||
| Product development |
|
8,265 |
|
|
9,178 |
|
|
33,457 |
|
|
36,861 |
|
||||
| Sales and marketing |
|
5,661 |
|
|
6,612 |
|
|
24,185 |
|
|
27,774 |
|
||||
| General and administrative |
|
11,886 |
|
|
9,012 |
|
|
46,129 |
|
|
43,921 |
|
||||
| Amortization of acquisition-related intangibles |
|
2,822 |
|
|
2,866 |
|
|
11,421 |
|
|
11,006 |
|
||||
| Total operating expenses |
|
28,634 |
|
|
27,668 |
|
|
115,192 |
|
|
119,562 |
|
||||
| Operating income |
|
5,974 |
|
|
8,912 |
|
|
21,054 |
|
|
24,583 |
|
||||
| Other income (expense): | ||||||||||||||||
| Other income |
|
252 |
|
|
272 |
|
|
1,494 |
|
|
807 |
|
||||
| Gain on contingent consideration |
|
– |
|
|
5,000 |
|
|
– |
|
|
5,000 |
|
||||
| Loss on extinguishment of debt |
|
– |
|
|
– |
|
|
(202 |
) |
|
– |
|
||||
| Interest expense |
|
(730 |
) |
|
(1,425 |
) |
|
(3,562 |
) |
|
(6,694 |
) |
||||
| Total other income (expense) |
|
(478 |
) |
|
3,847 |
|
|
(2,270 |
) |
|
(887 |
) |
||||
| Income before taxes |
|
5,496 |
|
|
12,759 |
|
|
18,784 |
|
|
23,696 |
|
||||
| Provision for income taxes |
|
2,373 |
|
|
1,533 |
|
|
4,538 |
|
|
3,228 |
|
||||
| Net income |
$ |
3,123 |
|
$ |
11,226 |
|
$ |
14,246 |
|
$ |
20,468 |
|
||||
| Net income per common share—basic |
$ |
0.22 |
|
$ |
0.78 |
|
$ |
0.98 |
|
$ |
1.43 |
|
||||
| Net income per common share—diluted |
$ |
0.22 |
|
$ |
0.78 |
|
$ |
0.98 |
|
$ |
1.43 |
|
||||
| Weighted average shares outstanding | ||||||||||||||||
| used in per common share computations: | ||||||||||||||||
| Basic |
|
14,086 |
|
|
13,830 |
|
|
14,038 |
|
|
13,778 |
|
||||
| Diluted |
|
14,086 |
|
|
13,830 |
|
|
14,038 |
|
|
13,778 |
|
||||
| Computer Programs and Systems, Inc. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (In ‘000s, except per share data) | |||||||
| December 31, 2020 (unaudited) |
Dec. 31, 2019 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents |
$ |
12,671 |
|
$ |
7,357 |
||
| Accounts receivable, net of allowance for doubtful accounts of $1,701 and $2,078, respectively |
|
32,414 |
|
|
38,819 |
||
| Financing receivables, current portion, net |
|
10,821 |
|
|
12,032 |
||
| Inventories |
|
1,084 |
|
|
1,426 |
||
| Prepaid income taxes |
|
1,789 |
|
|
1,337 |
||
| Prepaid expenses and other |
|
8,365 |
|
|
5,861 |
||
| Total current assets |
|
67,144 |
|
|
66,832 |
||
| Property & equipment, net |
|
13,139 |
|
|
11,593 |
||
| Software development costs, net |
|
3,210 |
|
|
– |
||
| Operating lease assets |
|
6,610 |
|
|
7,800 |
||
| Financing receivables, net of current portion |
|
11,477 |
|
|
18,267 |
||
| Other assets, net of current portion |
|
2,787 |
|
|
1,771 |
||
| Intangible assets, net |
|
71,689 |
|
|
83,110 |
||
| Goodwill |
|
150,216 |
|
|
150,216 |
||
| Total assets |
$ |
326,272 |
|
$ |
339,589 |
||
| Liabilities & Stockholders’ Equity | |||||||
| Current liabilities | |||||||
| Accounts payable |
$ |
7,716 |
|
$ |
8,804 |
||
| Current portion of long-term debt |
|
3,457 |
|
|
8,430 |
||
| Deferred revenue |
|
8,130 |
|
|
8,628 |
||
| Accrued vacation |
|
5,353 |
|
|
4,301 |
||
| Other accrued liabilities |
|
12,786 |
|
|
11,767 |
||
| Total current liabilities |
|
37,442 |
|
|
41,930 |
||
| Long-term debt, less current portion |
|
73,360 |
|
|
99,433 |
||
| Operating lease liabilities, net of current portion |
|
5,092 |
|
|
6,256 |
||
| Deferred tax liabilities |
|
10,378 |
|
|
7,623 |
||
| Total liabilities |
|
126,272 |
|
|
155,242 |
||
| Stockholders’ Equity | |||||||
| Common stock, $0.001 par value; 30,000 shares authorized; 14,511 and 14,356 shares issued |
|
15 |
|
|
14 |
||
| Treasury stock, 46,900 and zero shares |
|
(1,261 |
) |
|
– |
||
| Additional paid-in capital |
|
181,622 |
|
|
174,618 |
||
| Retained earnings |
|
19,624 |
|
|
9,715 |
||
| Total stockholders’ equity |
|
200,000 |
|
|
184,347 |
||
| Total liabilities and stockholders’ equity |
$ |
326,272 |
|
$ |
339,589 |
||
| Computer Programs and Systems, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (In ‘000s) | ||||||||
| (Unaudited) | ||||||||
|
Twelve Months Ended December 31, |
||||||||
|
2020 |
2019 |
|||||||
| Operating activities: | ||||||||
| Net income |
$ |
14,246 |
|
$ |
20,468 |
|
||
| Adjustments to net income: | ||||||||
| Provision for bad debt |
|
4,370 |
|
|
2,348 |
|
||
| Deferred taxes |
|
2,755 |
|
|
1,011 |
|
||
| Stock-based compensation |
|
7,005 |
|
|
9,822 |
|
||
| Depreciation |
|
1,790 |
|
|
1,407 |
|
||
| Amortization of acquisition-related intangibles |
|
11,421 |
|
|
11,006 |
|
||
| Amortization of software development costs |
|
118 |
|
|
– |
|
||
| Amortization of deferred finance costs |
|
317 |
|
|
345 |
|
||
| Gain on contingent consideration |
|
– |
|
|
(5,000 |
) |
||
| Loss on extinguishment of debt |
|
202 |
|
|
– |
|
||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable |
|
3,667 |
|
|
641 |
|
||
| Financing receivables |
|
6,369 |
|
|
3,053 |
|
||
| Inventories |
|
342 |
|
|
72 |
|
||
| Prepaid expenses and other |
|
(3,519 |
) |
|
(1,474 |
) |
||
| Accounts payable |
|
(1,088 |
) |
|
2,542 |
|
||
| Deferred revenue |
|
(498 |
) |
|
(2,003 |
) |
||
| Other liabilities |
|
2,097 |
|
|
(1,418 |
) |
||
| Income taxes payable |
|
(452 |
) |
|
782 |
|
||
| Net cash provided by operating activities |
|
49,142 |
|
|
43,602 |
|
||
| Investing activities: | ||||||||
| Purchase of business, net of cash acquired |
|
– |
|
|
(10,733 |
) |
||
| Investment in software development |
|
(3,328 |
) |
|
– |
|
||
| Purchases of property and equipment |
|
(3,336 |
) |
|
(1,760 |
) |
||
| Net cash used in investing activities |
|
(6,664 |
) |
|
(12,493 |
) |
||
| Financing activities: | ||||||||
| Dividends paid |
|
(4,338 |
) |
|
(5,729 |
) |
||
| Treasury stock purchases |
|
(1,261 |
) |
|
– |
|
||
| Proceeds from long-term debt |
|
65 |
|
|
– |
|
||
| Payments of long-term debt principal |
|
(4,069 |
) |
|
(13,609 |
) |
||
| Payments of revolving line of credit |
|
(27,561 |
) |
|
(20,693 |
) |
||
| Proceeds from revolving line of credit |
|
– |
|
|
11,000 |
|
||
| Payments on capital lease |
|
– |
|
|
(250 |
) |
||
| Payments of contingent consideration |
|
– |
|
|
(206 |
) |
||
| Proceeds from the exercise of options |
|
– |
|
|
3 |
|
||
| Net cash used in financing activities |
|
(37,164 |
) |
|
(29,484 |
) |
||
| Net increase in cash and cash equivalents |
|
5,314 |
|
|
1,625 |
|
||
| Cash and cash equivalents, beginning of period |
|
7,357 |
|
|
5,732 |
|
||
| Cash and cash equivalents, end of period |
$ |
12,671 |
|
$ |
7,357 |
|
||
| Computer Programs and Systems, Inc. | ||||||||||||||
| Consolidated Bookings | ||||||||||||||
| (In ‘000s) | ||||||||||||||
|
Three Months Ended |
Twelve Months Ended |
|||||||||||||
| In ‘000s |
12/31/2020 |
12/31/2019 |
12/31/2020 |
12/31/2019 |
||||||||||
| System sales and support(1) |
$ |
11,144 |
$ |
17,638 |
$ |
48,790 |
$ |
52,306 |
||||||
| TruBridge(2) |
|
10,062 |
|
9,637 |
|
33,238 |
|
27,209 |
||||||
| Total |
$ |
21,206 |
$ |
27,275 |
$ |
82,028 |
$ |
79,515 |
||||||
|
(1) |
Generally calculated as the total contract price (for system sales) and annualized contract value (for support). | |||||||||||||
|
(2) |
Generally calculated as the total contract price (for non-recurring, project-related amounts) and annualized contract value (for recurring amounts). | |||||||||||||
| Computer Programs and Systems, Inc. | |||||||||||||
| Bookings Composition | |||||||||||||
| (In ‘000s, except per share data) | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||
| 12/31/2020 | 12/31/2019 | 12/31/2020 | 12/31/2019 | ||||||||||
| System sales and support | |||||||||||||
| Non-subscription sales(1) |
$ |
6,498 |
$ |
10,117 |
$ |
27,500 |
$ |
32,510 |
|||||
| Subscription revenue(2) |
|
3,243 |
|
5,972 |
|
16,899 |
|
14,974 |
|||||
| Other |
|
1,403 |
|
1,549 |
|
4,391 |
|
4,822 |
|||||
| TruBridge | |||||||||||||
| Net new(3) |
|
3,700 |
|
2,523 |
|
10,511 |
|
7,905 |
|||||
| Cross-sell(3) |
|
4,970 |
|
5,409 |
|
20,285 |
|
16,988 |
|||||
| Get Real Health |
|
1,392 |
|
1,705 |
|
2,442 |
|
2,316 |
|||||
| Total |
$ |
21,206 |
$ |
27,275 |
$ |
82,028 |
$ |
79,515 |
|||||
|
(1) |
Represents nonrecurring revenues that generally exhibit a timeframe for bookings-to-revenue conversion of five to six months following contract execution. | ||||||||||||
|
(2) |
Represents recurring revenues to be recognized on a monthly basis over a weighted-average contract period of five years, with a start date in the next 12 months and an average timeframe for commencement of bookings-to-revenue conversion of five to six months following contract execution. | ||||||||||||
|
(3) |
“Net new” represents bookings from outside the Company’s core EHR client base, and “Cross-sell” represents bookings from existing EHR customers. In each case, generally comprised of recurring revenues to be recognized ratably over a one-year period and an average timeframe for commencement of bookings-to-revenue conversion of four to six months following contract execution. | ||||||||||||
| Computer Programs and Systems, Inc. | |||||||||
| Acute Care EHR Net New License Mix | |||||||||
| Three Months Ended | Twelve Months Ended | ||||||||
|
12/31/2020 |
12/31/2019 |
12/31/2020 |
12/31/2019 |
||||||
| SaaS(1) |
3 |
7 |
17 |
12 |
|||||
| Perpetual license(2) |
– |
6 |
8 |
16 |
|||||
| Total |
3 |
13 |
25 |
28 |
|||||
|
(1) |
Exhibit revenue attribution that is recurring in nature. | ||||||||
|
(2) |
Exhibit revenue attribution that is nonrecurring in nature. | ||||||||
| Computer Programs and Systems, Inc. | ||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||
| (In ‘000s) | ||||||||||||||
| (Unaudited) | ||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
| Adjusted EBITDA: |
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||
| Net income, as reported |
$ |
3,123 |
$ |
11,226 |
|
$ |
14,246 |
$ |
20,468 |
|
||||
| Depreciation expense |
|
456 |
|
323 |
|
|
1,790 |
|
1,407 |
|
||||
| Amortization of software development costs |
|
39 |
|
– |
|
|
118 |
|
– |
|
||||
| Amortization of acquisition-related intangible assets |
|
2,822 |
|
2,866 |
|
|
11,421 |
|
11,006 |
|
||||
| Stock-based compensation |
|
1,831 |
|
2,524 |
|
|
7,005 |
|
9,822 |
|
||||
| Severance and other nonrecurring charges |
|
1,183 |
|
215 |
|
|
1,998 |
|
3,143 |
|
||||
| Interest expense and other, net |
|
478 |
|
1,153 |
|
|
2,270 |
|
5,887 |
|
||||
| Gain on contingent consideration |
|
– |
|
(5,000 |
) |
|
– |
|
(5,000 |
) |
||||
| Provision for income taxes |
|
2,373 |
|
1,533 |
|
|
4,538 |
|
3,228 |
|
||||
| Adjusted EBITDA |
$ |
12,305 |
$ |
14,840 |
|
$ |
43,386 |
$ |
49,961 |
|
||||
| Computer Programs and Systems, Inc. | ||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||
| (In ‘000s, except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||||
| Non-GAAP Net Income and Non-GAAP EPS: |
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
| Net income, as reported |
$ |
3,123 |
|
$ |
11,226 |
|
$ |
14,246 |
|
$ |
20,468 |
|
||||
| Pre-tax adjustments for Non-GAAP EPS: | ||||||||||||||||
| Amortization of acquisition-related intangible assets |
|
2,822 |
|
|
2,866 |
|
|
11,421 |
|
|
11,006 |
|
||||
| Stock-based compensation |
|
1,831 |
|
|
2,524 |
|
|
7,005 |
|
|
9,822 |
|
||||
| Severance and other nonrecurring charges |
|
1,183 |
|
|
215 |
|
|
1,998 |
|
|
3,143 |
|
||||
| Non-cash interest expense |
|
75 |
|
|
86 |
|
|
317 |
|
|
345 |
|
||||
| Loss on extinguishment of debt |
|
– |
|
|
– |
|
|
202 |
|
|
– |
|
||||
| After-tax adjustments for Non-GAAP EPS: | ||||||||||||||||
| Tax-effect of pre-tax adjustments, at 21% |
|
(1,241 |
) |
|
|
(1,195 |
) |
|
|
(4,398 |
) |
|
|
(5,106 |
) |
|
| Tax shortfall from stock-based compensation |
|
(2 |
) |
|
|
– |
|
|
|
297 |
|
|
|
186 |
|
|
| Gain on contingent consideration |
|
– |
|
|
|
(5,000 |
) |
|
|
– |
|
|
|
(5,000 |
) |
|
| Non-GAAP net income |
$ |
7,791 |
|
$ |
10,722 |
|
$ |
31,088 |
|
$ |
34,864 |
|
||||
| Weighted average shares outstanding, diluted |
|
14,086 |
|
|
13,830 |
|
|
14,038 |
|
|
13,778 |
|
||||
| Non-GAAP EPS |
$ |
0.55 |
|
$ |
0.78 |
|
$ |
2.21 |
|
$ |
2.53 |
|
||||
Explanation of Non-GAAP Financial Measures
We report our financial results in accordance with accounting principles generally accepted in the United States of America, or “GAAP.” However, management believes that, in order to properly understand our short-term and long-term financial and operational trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures that are prepared in accordance with GAAP. These items result from facts and circumstances that vary in frequency and impact on continuing operations. Management uses these non-GAAP financial measures in order to evaluate the operating performance of the Company and compare it against past periods, make operating decisions, and serve as a basis for strategic planning. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management’s ability to make useful forecasts. In addition, management understands that some investors and financial analysts find these non-GAAP financial measures helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors.
As such, to supplement the GAAP information provided, we present in this press release and during the live webcast discussing our financial results the following non-GAAP financial measures: Adjusted EBITDA, Non-GAAP net income, and Non-GAAP earnings per share (“EPS”).
We calculate each of these non-GAAP financial measures as follows:
- Adjusted EBITDA – Adjusted EBITDA consists of GAAP net income (loss) as reported and adjusts for (i) depreciation expense; (ii) amortization of software development costs; (iii) amortization of acquisition-related intangible assets; (iv) stock-based compensation; (v) severance and other non-recurring charges; (vi) interest expense and other, net; (vii) gain on contingent consideration; and (viii) the provision for income taxes.
Contacts
Tracey Schroeder
Chief Marketing Officer
Tracey.schroeder@cpsi.com
(251) 639-8100
