Computer Programs and Systems, Inc. Announces Third Quarter 2009 Results
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Company Declares Regular Quarterly Dividend of $0.36 Per Share
MOBILE, Ala.--(BUSINESS WIRE)-- Computer Programs and Systems, Inc. (NASDAQ: CPSI):
Third Quarter Highlights:
-- Revenues of $33.0 million;
-- Earnings per diluted share of $0.37;
-- Cash used in operations of $1.2 million; and
-- Quarterly dividend of $0.36 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, 2009.
The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.36 (thirty-six cents) per share, payable on November 24, 2009, to stockholders of record as of the close of business on November 9, 2009.
Total revenues for the third quarter ended September 30, 2009, increased 8.7% to $33.0 million, compared with total revenues of $30.4 million for the prior-year period. Net income for the quarter ended September 30, 2009, decreased 1.8% to $4.0 million, or $0.37 per diluted share, compared with $4.1 million, or $0.38 per diluted share, for the quarter ended September 30, 2008. Cash used in operations for the third quarter of 2009 was $1.2 million, compared with $2.8 million of cash provided by operations for the prior-year period.
Commenting on the results, Boyd Douglas, chief executive officer and president of CPSI, stated, "We are pleased with our performance in the third quarter, which strongly positions us for the remainder of the year. As we had anticipated when we increased our capacity in installation and support personnel earlier this year, we expect installations to increase in the fourth quarter. The value of our products and services is being confirmed by increased recognition of the benefits of information technology in the healthcare sector and positive sentiment in Washington. Healthcare reform legislation currently under consideration clearly envisions information technology as a key component in improving quality and containing costs. As we look ahead to 2010, we remain optimistic that the economic and political environment will translate into opportunities for new business. We have the products and services as well as an expanded and highly trained workforce to not only meet but exceed customer expectations."
Total revenues for the nine months ended September 30, 2009, increased 7.3% to $94.0 million, compared with total revenues of $87.6 million for the prior-year period. Net income for the nine months ended September 30, 2009, increased 9.4% to $11.6 million, or $1.06 per diluted share, compared with $10.6 million, or $0.98 per diluted share, for the nine months ended September 30, 2008. Cash provided by operations for the first nine months of 2009 was $6.1 million, compared with $12.3 million for the prior-year period.
For the fourth quarter of 2009, the Company anticipates total revenues of $33.0 million to $34.5 million and net income of approximately $4.0 million to $4.2 million, or $0.37 to $0.39 per diluted share. CPSI's 12-month backlog as of September 30, 2009, was $107.6 million, consisting of $22.9 million in non-recurring system purchases and $84.7 million in recurring payments for support, Business Management Services, ASP and ISP contracts.
A listen-only simulcast and replay of CPSI's third quarter 2009 conference call will be available on-line at www.cpsinet.com and www.earnings.com on October 23, 2009, 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 47 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 800 technical, healthcare and medical 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; 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 reimbursement rates; changes in accounting principles generally accepted in the United States; 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,
2009 2008 2009 2008
Sales revenues:
System sales $ 11,578 $ 10,742 $ 30,916 $ 29,856
Support and maintenance 13,957 13,398 41,610 39,617
Business management services 7,473 6,213 21,465 18,149
Total sales revenues 33,008 30,353 93,991 87,622
Cost of sales:
System sales 9,428 8,675 25,716 23,792
Support and maintenance 5,595 4,862 15,916 14,432
Business management services 4,372 3,522 12,612 10,747
Total cost of sales 19,395 17,059 54,244 48,971
Gross profit 13,613 13,294 39,747 38,651
Operating expenses:
Sales and marketing 2,298 2,175 6,626 6,564
General and administrative 5,210 4,986 15,393 15,747
Total operating expenses 7,508 7,161 22,019 22,311
Operating income 6,105 6,133 17,728 16,340
Interest income, net 219 244 691 740
Income before taxes 6,324 6,377 18,419 17,080
Provision for income taxes 2,303 2,284 6,832 6,489
Net income $ 4,021 $ 4,093 $ 11,587 $ 10,591
Basic earnings per share $ 0.37 $ 0.38 $ 1.06 $ 0.98
Diluted earnings per share $ 0.37 $ 0.38 $ 1.06 $ 0.98
Weighted average shares outstanding:
Basic 10,973 10,853 10,947 10,836
Diluted 10,973 10,872 10,949 10,854
COMPUTER PROGRAMS AND SYSTEMS, INC.
Condensed Balance Sheets
(in thousands, except per share data)
Sept. 30, Dec. 31,
2009 2008
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,990 $ 11,744
Investments 13,208 11,846
Accounts receivable, net of allowance for doubtful 19,159 15,601
accounts of $1,167 and $628, respectively
Financing receivables, current portion 2,557 2,357
Inventory 1,697 1,374
Deferred tax assets 1,745 1,332
Prepaid income taxes 613 319
Prepaid expenses 762 501
Total current assets 44,731 45,074
Financing receivables, long-term 3,499 2,980
Property and equipment 13,466 12,080
Accumulated depreciation (8,561 ) (7,267 )
Total assets $ 53,135 $ 52,867
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 924 $ 1,830
Deferred revenue 3,337 3,728
Accrued vacation 2,672 2,297
Other accrued liabilities 3,126 3,997
Total current liabilities 10,059 11,852
Deferred tax liabilities 356 456
Stockholders' equity:
Common stock, par value $0.001 per share, 30,000 shares
authorized, 10,973 and 10,894 shares issued and 11 11
outstanding
Additional paid-in capital 29,419 27,007
Accumulated other comprehensive income 35 56
Retained earnings 13,255 13,485
Total stockholders' equity 42,720 40,559
Total liabilities and stockholders' equity $ 53,135 $ 52,867
COMPUTER PROGRAMS AND SYSTEMS, INC.
Unaudited Other Supplemental Information
(In thousands)
The following table summarizes free cash flow for the Company:
Three Months Ended Nine Months Ended
Sept. 30, 2009 Sept. 30, 2009
Net cash (used in) provided by operating $ (1,226 ) $ 6,124
activities
Purchases of property and equipment (464 ) (1,386 )
Free cash flow $ (1,690 ) $ 4,738
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.
Source: Computer Programs and Systems, Inc.
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