Computer Programs and Systems, Inc. Announces Third Quarter 2012 Results Company Announces Regular Quarterly Dividend of $0.46 Per Share Business Wire MOBILE, Ala. -- October 25, 2012 Computer Programs and Systems, Inc. (NASDAQ: CPSI): Highlights: *Revenues of $45.2 million; *12-month backlog of $148.4 million; *Earnings per diluted share of $0.63; *Cash provided by operations of $6.4 million; and *Quarterly dividend of $0.46 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, 2012. The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.46 (forty-six cents) per share, payable on November 23, 2012, to stockholders of record as of the close of business on November 8, 2012. Total revenues for the third quarter ended September 30, 2012, were $45.2 million, compared with total revenues of $42.0 million for the prior-year third quarter. Net income for the quarter ended September 30, 2012, increased 15.6% to $6.9 million, or $0.63 per diluted share, compared with $6.0 million, or $0.54 per diluted share, for the quarter ended September 30, 2011. Cash provided by operations for the third quarter of 2012 was $6.4 million, compared with $7.1million for the prior-year third quarter. Total revenues for the nine months ended September 30, 2012, were $135.4 million, compared with total revenues of $131.3 million for the prior-year period. Net income for the nine months ended September 30, 2012, increased 8.1% to $20.8 million, or $1.88 per diluted share, compared with $19.3 million, or $1.75 per diluted share, for the nine months ended September30, 2011. Cash provided by operations for the first nine months of 2012 was $18.0 million, compared with $24.2million for the prior-year period. During the quarter, the Company continued to install systems under contracts for which a substantial majority of the consideration will be received and revenue recognized in subsequent periods upon hospitals successfully achieving Meaningful Use designation. The total accumulated unrecognized revenue related to such contracts as of September 30, 2012, was approximately $9.4 million, with approximately $2.5 million of that amount related to installations occurring during the three months ended September 30, 2012. CPSI’s 12-month backlog as of September 30, 2012, was $148.4 million, consisting of $42.0million in non-recurring system purchases and $106.4 million in recurring payments for support, Business Management Services and SAAS contracts. These 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 third quarter 2012 conference call will be available on-line at www.cpsinet.com and www.earnings.com on October 26, 2012, beginning at 9:00 a.m. Eastern Time. About Computer Programs and Systems, Inc. CPSI is a leading provider of healthcare information solutions for community hospitals with over 650 client hospitals in 45 states and the District of Columbia. Founded in 1979, the Company is a single-source vendor providing comprehensive software and hardware products, complemented by complete installation services and extensive support. Its fully integrated, enterprise-wide system automates clinical and financial data management in each of the primary functional areas of a hospital. CPSI’s staff of over 1,400 technical, healthcare, medical and business professionals provides system implementation and continuing support services as part of a comprehensive program designed to respond to clients’ information needs in a constantly changing healthcare environment. For more information, visit www.cpsinet.com. 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; 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; government regulation of our products and customers, including changes in healthcare policy affecting Medicare and Medicaid reimbursement rates; government regulation of the healthcare and health insurance industries; 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 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 Statements of Operations (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Sales revenues: System sales $ 17,561 $ 15,999 $ 52,464 $ 55,199 Support and maintenance 18,172 17,195 54,705 49,563 Business management 9,441 8,851 28,225 26,502 services Total sales revenues 45,174 42,045 135,394 131,264 Cost of sales: System sales 11,528 10,845 36,106 36,496 Support and maintenance 7,902 6,811 23,084 19,750 Business management 5,729 4,912 16,783 14,249 services Total cost of sales 25,159 22,568 75,973 70,495 Gross profit 20,015 19,477 59,421 60,769 Operating expenses: Sales and marketing 3,379 3,581 10,661 10,372 General and 6,645 6,258 19,845 19,629 administrative Total operating expenses 10,024 9,839 30,506 30,001 Operating income 9,991 9,638 28,915 30,768 Interest income, net 262 181 611 493 Income before taxes 10,253 9,819 29,526 31,261 Provision for income 3,328 3,830 8,691 11,982 taxes Net income $ 6,925 $ 5,989 $ 20,835 $ 19,279 Basic earnings per share $ 0.63 $ 0.54 $ 1.88 $ 1.75 Diluted earnings per $ 0.63 $ 0.54 $ 1.88 $ 1.75 share Weighted average shares outstanding: Basic 11,065 11,063 11,064 11,024 Diluted 11,065 11,063 11,064 11,024 COMPUTER PROGRAMS AND SYSTEMS, INC. Condensed Balance Sheets (in thousands) Sept. 30, Dec. 31, 2012 2011 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 5,831 $ 6,664 Investments 17,666 16,487 Accounts receivable, net of allowance for doubtful accounts of $1,355 and $1,276, 23,952 21,521 respectively Financing receivables, current portion (net) 5,559 3,781 Inventory 2,288 1,839 Deferred tax assets 2,912 2,544 Prepaid income taxes 972 835 Prepaid expenses and other 1,297 498 Total current assets 60,477 54,169 Financing receivables, long-term (net) 7,004 4,057 Property and equipment 24,499 30,745 Accumulated depreciation (6,726 ) (13,326 ) Total assets $ 85,254 $ 75,645 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 3,176 $ 2,469 Deferred revenue 7,120 5,590 Accrued vacation 3,794 3,212 Other accrued liabilities 5,359 5,400 Total current liabilities 19,449 16,671 Deferred tax liabilities 1,952 1,590 Stockholders’ equity: Common stock, par value $0.001 per share, 30,000 shares authorized, 11,065 and 11,063 11 11 shares issued and outstanding Additional paid-in capital 32,462 31,582 Accumulated other comprehensive income 30 7 Retained earnings 31,350 25,784 Total stockholders’ equity 63,853 57,384 Total liabilities and stockholders’ equity $ 85,254 $ 75,645 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 Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Cash Flow Information Net cash provided by $ 6,413 $ 7,059 $ 17,955 $ 24,199 operating activities Net cash used in investing (726 ) (404 ) (3,470 ) (4,158 ) activities Net cash used in financing (5,075 ) (3,968 ) (15,318 ) (11,821 ) activities Free Cash Flow Net cash provided by $ 6,413 $ 7,059 $ 17,955 $ 24,199 operating activities Less: Purchases of property and (652 ) (337 ) (2,324 ) (1,007 ) equipment Free cash flow $ 5,761 $ 6,722 $ 15,631 $ 23,192 Free cash flow is a non-GAAP financial measure which CPSI defines as net cash provided by operating activities less purchases of property and equipment. 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. Contact: Computer Programs and Systems, Inc. Boyd Douglas, 251-639-8100 President and Chief Executive Officer
Computer Programs and Systems, Inc. Announces Third Quarter 2012 Results
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