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Computer Programs and Systems, Inc. Announces Third Quarter 2012 Results



  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 $7.1 million 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 September 30,
2011. Cash provided by operations for the first nine months of 2012 was $18.0
million, compared with $24.2 million 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 $42.0 million 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
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