CPSI Announces Second Quarter 2023 Results
MOBILE, Ala.–(BUSINESS WIRE)–CPSI (NASDAQ: CPSI), a healthcare solutions company, today announced results for the second quarter ended June 30, 2023.
Second Quarter 2023 Financial Overview
All comparisons are to the quarter ended June 30, 2022, unless otherwise noted.
- Bookings of $21.9 million compared to $23.8 million
- Total revenue of $84.6 million compared to $82.7 million
-
RCM revenue of $47.8 million compared to $46.8 million
- RCM revenue represented 58.2% of CPSI’s total recurring revenue and 56.4% of CPSI’s total revenue
- GAAP net loss of $(2.8) million and non-GAAP net income of $5.7 million
- GAAP loss per diluted share of $(0.20) and non-GAAP earnings per diluted share of $0.40
- Adjusted EBITDA of $11.2 million compared to $13.2 million
- Cash provided by operations of $717,000 during the three months ended June 30, 2023
Chris Fowler, chief executive officer of CPSI, said, “This was a challenging quarter for CPSI. We are undergoing a significant and transformative change as an organization. The results we expect to ultimately come from the meaningful initiatives we have put in place over the past several quarters have not come to fruition just yet.
“Despite the headwinds we faced in the second quarter, we continued to grow our pipeline, saw further stabilization of our electronic health record (EHR) customer base, and underwent necessary measures to best position CPSI for the future. Our topline guidance for the year remains unchanged, but we have updated our expectations for adjusted EBITDA to reflect the impact from outsized expenses in 2023. I know we are in a stronger position today than when I stepped into this role, and I remain confident that this year will be an important one as we establish a foothold for the future of CPSI,” added Fowler.
Financial Outlook1
For the full year 2023, the Company expects:
- Revenue of $340 million to $350 million, unchanged from prior guidance
- Adjusted EBITDA of $52.5 million to $54.5 million, a decrease from the prior guidance of $59 million to $63 million
- Non-GAAP net income of $25.6 million to $27.6 million (no prior guidance)
| ______________________________________ | |
|
1 |
Excluding revenues, the Company does not reconcile Adjusted EBITDA or non-GAAP net income to the corresponding GAAP financial measures, as certain items that impact such GAAP financial measures such as severance and other nonrecurring charges, which may be significant, are outside the Company’s control and/or cannot be reasonably predicted. Please see the “Explanation of Non-GAAP Financial Measures” at the end of this press release for detailed information on calculating non-GAAP measures. For a reconciliation of other non-GAAP financial measures, see the non-GAAP financial reconciliation tables in this release. |
Conference Call Information
CPSI will hold a live webcast to discuss second quarter 2023 results today, Wednesday, August 9, 2023, at 3:30 p.m. Central time/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 has over four decades of experience in connecting providers, patients and communities with innovative solutions that support both the clinical and financial side of healthcare delivery. We provide business, consulting, and managed information technology (IT) services, including our industry leading HFMA Peer Reviewed® suite of revenue cycle management (RCM) offerings, to help streamline day-to-day revenue functions, enhance productivity, and support the financial health of healthcare organizations. Our patient engagement solutions provide patients and providers with the critical information and tools they need to share existing clinical data and analytics that support value-based care, improve outcomes, and increase patient satisfaction. We support efficient patient care across an expansive base of community hospitals and post-acute care facilities with electronic health record (EHR) product offerings that successfully integrate data between care settings. We make healthcare accessible through data-driven insights that support informed decisions and deliver workflow efficiencies, while keeping patients at the center of care. We are a healthcare solutions company. We clear the way for care. For more information, please 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: a public health crisis, such as the COVID-19 pandemic, and related economic disruptions; saturation of our target market and hospital consolidations; unfavorable economic or market conditions that may cause a decline in spending for information technology and services; significant legislative and regulatory uncertainty in the healthcare industry; exposure to liability for failure to comply with regulatory requirements; transition to a subscription-based recurring revenue model and modernization of our technology; competition with companies that have greater financial, technical and marketing resources than we have; potential future acquisitions that may be expensive, time consuming, and subject to other inherent risks; our ability to attract and retain qualified client service and support personnel; disruption from periodic restructuring of our sales force; potential inability to properly manage growth in new markets we may enter; exposure to numerous and often conflicting laws, regulations, policies, standards or other requirements through our international business activities; potential litigation against us; our reliance on an international workforce which exposes us to various business disruptions; potential failure to develop new products or enhance current products that keep pace with 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; failure to maintain our margins and service rates; increase in the percentage of total revenues represented by service revenues, which have lower gross margins; exposure to liability in the event we provide inaccurate claims data to payors; exposure to liability claims arising out of the licensing of our software and provision of services; dependence on licenses of rights, products and services from third parties; misappropriation of our intellectual property rights and potential intellectual property claims and litigation against us; interruptions in our power supply and/or telecommunications capabilities, including those caused by natural disaster; potential inability to secure additional financing on favorable terms to meet our future capital needs; our substantial indebtedness, and our ability to incur additional indebtedness in the future; pressures on cash flow to service our outstanding debt; restrictive terms of our credit agreement on our current and future operations; changes in and interpretations of financial accounting matters that govern the measurement of our performance; 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; volatility in our stock price; failure to maintain effective internal control over financial reporting; lack of employment or non-competition agreement with most of our key personnel; inherent limitations in our internal control over financial reporting; vulnerability to significant damage from natural disasters; market risks related to interest rate changes; potential material adverse effects due to macroeconomic conditions, including bank failures or changes in related regulation; 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 our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023. 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 June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Sales revenues: | |||||||||||||||
| RCM |
$ |
47,760 |
|
$ |
46,814 |
|
$ |
96,391 |
|
$ |
87,325 |
|
|||
| EHR |
|
34,967 |
|
|
34,143 |
|
|
70,158 |
|
|
68,905 |
|
|||
| Patient engagement |
|
1,895 |
|
|
1,769 |
|
|
4,306 |
|
|
4,367 |
|
|||
| Total sales revenues |
|
84,622 |
|
|
82,726 |
|
|
170,855 |
|
|
160,597 |
|
|||
|
|
56.4 |
% |
|
56.6 |
% |
||||||||||
| Costs of sales: | |||||||||||||||
| RCM |
|
27,119 |
|
|
25,382 |
|
|
54,302 |
|
|
45,780 |
|
|||
| EHR |
|
15,891 |
|
|
15,721 |
|
|
32,239 |
|
|
31,061 |
|
|||
| Patient engagement |
|
1,123 |
|
|
950 |
|
|
1,769 |
|
|
1,893 |
|
|||
| Total costs of sales |
|
44,133 |
|
|
42,053 |
|
|
88,310 |
|
|
78,734 |
|
|||
| Gross profit |
|
40,489 |
|
|
40,673 |
|
|
82,545 |
|
|
81,863 |
|
|||
| Operating expenses: | |||||||||||||||
| Product development |
|
10,595 |
|
|
8,107 |
|
|
20,434 |
|
|
16,169 |
|
|||
| Sales and marketing |
|
8,132 |
|
|
8,226 |
|
|
15,089 |
|
|
15,269 |
|
|||
| General and administrative |
|
19,654 |
|
|
14,994 |
|
|
34,604 |
|
|
28,421 |
|
|||
| Amortization of acquisition-related intangibles |
|
4,014 |
|
|
4,758 |
|
|
8,029 |
|
|
8,430 |
|
|||
| Total operating expenses |
|
42,395 |
|
|
36,085 |
|
|
78,156 |
|
|
68,289 |
|
|||
| Operating income (loss) |
|
(1,906 |
) |
|
4,588 |
|
|
4,389 |
|
|
13,574 |
|
|||
| Other income (expense): | |||||||||||||||
| Other income |
|
78 |
|
|
278 |
|
|
346 |
|
|
435 |
|
|||
| Gain on contingent consideration |
|
– |
|
|
330 |
|
|
– |
|
|
1,580 |
|
|||
| Loss on extinguishment of debt |
|
– |
|
|
(125 |
) |
|
– |
|
|
(125 |
) |
|||
| Interest expense |
|
(2,664 |
) |
|
(1,232 |
) |
|
(5,334 |
) |
|
(2,149 |
) |
|||
| Total other income (expense) |
|
(2,586 |
) |
|
(749 |
) |
|
(4,988 |
) |
|
(259 |
) |
|||
| Income (loss) before taxes |
|
(4,492 |
) |
|
3,839 |
|
|
(599 |
) |
|
13,315 |
|
|||
| Provision (benefit) for income taxes |
|
(1,655 |
) |
|
763 |
|
|
(846 |
) |
|
2,126 |
|
|||
| Net income (loss) |
$ |
(2,837 |
) |
$ |
3,076 |
|
$ |
247 |
|
$ |
11,189 |
|
|||
| Net income (loss) per common share—basic |
$ |
(0.20 |
) |
$ |
0.21 |
|
$ |
0.02 |
|
$ |
0.76 |
|
|||
| Net income (loss) per common share—diluted |
$ |
(0.20 |
) |
$ |
0.21 |
|
$ |
0.02 |
|
$ |
0.76 |
|
|||
|
Computer Programs and Systems, Inc. |
|||||||
|
Condensed Consolidated Balance Sheets |
|||||||
|
(In ‘000s, except per share data) |
|||||||
|
|
|
|
|
||||
|
|
June 30, 2023 (unaudited) |
|
Dec. 31, 2022 |
||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents |
$ |
7,246 |
|
$ |
6,951 |
|
|
| Accounts receivable, net of allowance for expected credit losses of $2,796 and $2,854, respectively |
|
54,889 |
|
|
51,311 |
|
|
| Financing receivables, current portion (net of allowance for expected credit losses of $111 and $223, respectively) |
|
4,670 |
|
|
4,474 |
|
|
| Inventories |
|
962 |
|
|
784 |
|
|
| Prepaid income taxes |
|
1,811 |
|
|
701 |
|
|
| Prepaid expenses and other |
|
12,891 |
|
|
10,338 |
|
|
| Total current assets |
|
82,469 |
|
|
74,559 |
|
|
| Property & equipment, net |
|
8,744 |
|
|
9,884 |
|
|
| Software development costs, net |
|
36,088 |
|
|
27,257 |
|
|
| Operating lease assets |
|
5,421 |
|
|
7,567 |
|
|
| Financing receivables, net of current portion (net of allowance for expected credit losses of $392 and $326, respectively) |
|
2,223 |
|
|
3,312 |
|
|
| Other assets, net of current portion |
|
7,595 |
|
|
8,131 |
|
|
| Intangible assets, net |
|
93,971 |
|
|
102,000 |
|
|
| Goodwill |
|
198,253 |
|
|
198,253 |
|
|
| Total assets |
$ |
434,764 |
|
$ |
430,963 |
|
|
| Liabilities & Stockholders’ Equity | |||||||
| Current liabilities | |||||||
| Accounts payable |
$ |
14,483 |
|
$ |
7,035 |
|
|
| Current portion of long-term debt |
|
3,141 |
|
|
3,141 |
|
|
| Deferred revenue |
|
9,885 |
|
|
11,590 |
|
|
| Accrued vacation |
|
6,581 |
|
|
6,214 |
|
|
| Other accrued liabilities |
|
13,667 |
|
|
16,475 |
|
|
| Total current liabilities |
|
47,757 |
|
|
44,455 |
|
|
| Long-term debt, net of current portion |
|
141,420 |
|
|
136,388 |
|
|
| Operating lease liabilities, net of current portion |
|
3,812 |
|
|
5,651 |
|
|
| Deferred tax liabilities |
|
11,225 |
|
|
12,758 |
|
|
| Total liabilities |
|
204,214 |
|
|
199,252 |
|
|
| Stockholders’ Equity | |||||||
| Common stock, $0.001 par value; 30,000 shares authorized; 15,099 and 14,913 shares issued, respectively |
|
15 |
|
|
15 |
|
|
| Treasury stock, 570 and 483 shares, respectively |
|
(17,032 |
) |
|
(14,500 |
) |
|
| Additional paid-in capital |
|
193,399 |
|
|
192,275 |
|
|
| Retained earnings |
|
54,168 |
|
|
53,921 |
|
|
| Total stockholders’ equity |
|
230,550 |
|
|
231,711 |
|
|
| Total liabilities and stockholders’ equity |
$ |
434,764 |
|
$ |
430,963 |
|
|
|
Computer Programs and Systems, Inc. |
|||||||
|
Condensed Consolidated Statements of Cash Flows |
|||||||
|
(In ‘000s) |
|||||||
|
(Unaudited) |
|||||||
|
|
|
|
|
||||
|
|
Six Months Ended June 30, |
||||||
|
|
|
2023 |
|
|
|
2022 |
|
| Operating activities: | |||||||
| Net income |
$ |
247 |
|
$ |
11,189 |
|
|
| Adjustments to net income: | |||||||
| Provision for credit losses |
|
181 |
|
|
1,202 |
|
|
| Deferred taxes |
|
(1,533 |
) |
|
(724 |
) |
|
| Stock-based compensation |
|
1,124 |
|
|
3,420 |
|
|
| Depreciation |
|
1,095 |
|
|
1,269 |
|
|
| Loss on extinguishment of debt |
|
– |
|
|
125 |
|
|
| Amortization of acquisition-related intangibles |
|
8,029 |
|
|
8,430 |
|
|
| Amortization of software development costs |
|
3,312 |
|
|
1,259 |
|
|
| Amortization of deferred finance costs |
|
180 |
|
|
152 |
|
|
| Gain on contingent consideration |
|
– |
|
|
(1,580 |
) |
|
| Non-cash operating lease costs |
|
1,211 |
|
|
940 |
|
|
| Loss on disposal of PP&E |
|
117 |
|
|
– |
|
|
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable |
|
(3,806 |
) |
|
(9,934 |
) |
|
| Financing receivables |
|
940 |
|
|
3,376 |
|
|
| Inventories |
|
(178 |
) |
|
(273 |
) |
|
| Prepaid expenses and other |
|
(2,017 |
) |
|
(4,547 |
) |
|
| Accounts payable |
|
7,448 |
|
|
(469 |
) |
|
| Deferred revenue |
|
(1,705 |
) |
|
2,625 |
|
|
| Operating lease liabilities |
|
(1,067 |
) |
|
(940 |
) |
|
| Other liabilities |
|
(2,278 |
) |
|
1,126 |
|
|
| Prepaid income taxes |
|
(1,110 |
) |
|
2,457 |
|
|
| Net cash provided by operating activities |
|
10,190 |
|
|
19,103 |
|
|
| Investing activities: | |||||||
| Purchase of business, net of cash acquired |
|
– |
|
|
(43,814 |
) |
|
| Investment in software development |
|
(12,143 |
) |
|
(8,739 |
) |
|
| Purchases of property and equipment |
|
(72 |
) |
|
(88 |
) |
|
| Net cash used in investing activities |
|
(12,215 |
) |
|
(52,641 |
) |
|
| Financing activities: | |||||||
| Treasury stock purchases |
|
(2,532 |
) |
|
(4,248 |
) |
|
| Proceeds from long-term debt |
|
– |
|
|
575 |
|
|
| Payments of long-term debt principal |
|
(1,750 |
) |
|
(1,813 |
) |
|
| Proceeds from revolving line of credit |
|
11,602 |
|
|
48,000 |
|
|
| Payments of revolving line of credit |
|
(5,000 |
) |
|
(5,300 |
) |
|
| Net cash provided by (used in) financing activities |
|
2,320 |
|
|
37,214 |
|
|
| Net increase in cash and cash equivalents |
|
295 |
|
|
3,676 |
|
|
| Cash and cash equivalents, beginning of period |
|
6,951 |
|
|
11,431 |
|
|
| Cash and cash equivalents, end of period |
$ |
7,246 |
|
$ |
15,107 |
|
|
|
Computer Programs and Systems, Inc. |
||||||||||||
|
Consolidated Bookings |
||||||||||||
|
(In ‘000s) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||
| In ‘000s |
6/30/2023 |
|
6/30/2022 |
|
6/30/2023 |
|
6/30/2022 |
|||||
| RCM(1) |
$ |
13,648 |
$ |
14,847 |
$ |
25,748 |
$ |
23,414 |
||||
| EHR(2) |
|
7,433 |
|
8,222 |
|
15,751 |
|
18,468 |
||||
| Patient engagement(1) |
|
867 |
|
730 |
|
1,343 |
|
2,314 |
||||
| Total |
$ |
21,948 |
$ |
23,799 |
$ |
42,842 |
$ |
44,196 |
||||
|
(1) |
Generally calculated as the total contract price (for non-recurring, project-related amounts) and annualized contract value (for recurring amounts). | |||||||||||
|
(2) |
Generally calculated as the total contract price (for system sales) and annualized contract value (for support) for perpetual license system sales and total contract price for SaaS sales. | |||||||||||
|
Computer Programs and Systems, Inc. |
||||||||||||
|
Bookings Composition |
||||||||||||
|
(In ‘000s, except per share data) |
||||||||||||
|
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
6/30/2023 |
|
6/30/2022 |
|
6/30/2023 |
|
6/30/2022 |
||||||
| RCM | ||||||||||||
| Net new(1) |
$ |
3,196 |
$ |
4,404 |
$ |
7,616 |
$ |
8,760 |
||||
| Cross-sell(1) |
|
10,122 |
|
7,734 |
|
15,868 |
|
11,807 |
||||
| TruCode |
|
330 |
|
2,709 |
|
2,264 |
|
2,847 |
||||
| EHR | ||||||||||||
| Non-subscription sales(2) |
|
4,047 |
|
4,873 |
|
8,111 |
|
8,139 |
||||
| Subscription revenue(3) |
|
2,408 |
|
2,383 |
|
5,615 |
|
8,454 |
||||
| Other |
|
978 |
|
966 |
|
2,025 |
|
1,875 |
||||
| Patient engagement |
|
867 |
|
730 |
|
1,343 |
|
2,314 |
||||
| Total |
$ |
21,948 |
$ |
23,799 |
$ |
42,842 |
$ |
44,196 |
||||
|
(1) |
“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, such bookings are 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. | |||||||||||
|
(2) |
Represents nonrecurring revenues that generally exhibit a timeframe for bookings-to-revenue conversion of five to six months following contract execution. | |||||||||||
|
(3) |
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. | |||||||||||
Contacts
Tracey Schroeder
Chief Marketing Officer
Tracey.schroeder@cpsi.com
(251) 639-8100
