CPSI Announces Second Quarter 2018 Results
MOBILE, Ala.--(BUSINESS WIRE)--Aug 2, 2018--CPSI (NASDAQ: CPSI):
Highlights for Second Quarter 2018:Revenues of $67.9 million; Recurring revenues up 1% sequentially, 7% year over year; 12-month backlog of $267 million; Quarterly bookings of $23.5 million; GAAP earnings per diluted share of $0.02 and non-GAAP earnings per diluted share of $0.34; GAAP net income of $0.3 million and non-GAAP net income of $4.7 million; Adjusted EBITDA of $8.1 million; Cash provided by operations of $4.7 million; and Quarterly dividend of $0.10 per share.
CPSI (NASDAQ: CPSI), a community healthcare solutions company, today announced results for the second quarter and six months ended June 30, 2018.
The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.10 per share, payable on August 31, 2018, to stockholders of record as of the close of business on August 16, 2018.
Total revenues for the second quarter ended June 30, 2018, were $67.9 million, compared with total revenues of $67.7 million for the prior-year period. Net income for the quarter ended June 30, 2018, was $0.3 million, or $0.02 per diluted share, compared with net income of $1.6 million, or $0.11 per diluted share, for the quarter ended June 30, 2017. Cash provided by operations for the second quarter was $4.7 million, compared with cash provided by operations of $6.2 million for the prior-year period.
Total revenues for the six months ended June 30, 2018, were $138.8 million, compared with total revenues of $131.8 million for the prior-year period. Net income for the six months ended June 30, 2018, was $4.3 million, or $0.31 per diluted share, compared with $1.8 million, or $0.13 per diluted share, for the six months ended June 30, 2017. Cash provided by operations for the first six months of 2018 was $7.8 million, compared with cash provided by operations of $15.9 million for the prior-year period.
“Our second quarter of 2018 was led again by nice growth from our services, business consulting and IT business, TruBridge,” said Boyd Douglas, president and chief executive officer of CPSI. “These results include a 13% increase in TruBridge services revenue compared with the second quarter last year and record quarterly bookings for our Revenue Cycle Management solution. This top line growth for CPSI was accompanied by the addition of 15 new clients, which included 11 community hospitals and four skilled nursing facilities, bringing the total number of new clients to 29 for the year. While total revenue this quarter was weaker than expected, we expect to recapture it before year end.”
Commenting on the Company’s financial performance for the quarter, Matt Chambless, chief financial officer of CPSI, stated, “As we shared during our first quarter conference call, the proposed ruling from CMS allows for a 90-day stage 3 meaningful use (MU3) attestation period in 2019 instead of the full year. This ruling effectively delayed the need for hospitals to be prepared for MU3 attestation from the end of 2018 to October 2019, at the latest. With this relief in timing, it is clear our clients feel less urgency to install applications purchased before the end of 2018. As a result, much of the remaining revenue associated with MU3 will extend into 2019. This shift in MU3 revenue recognition and a delayed new system implementation, along with a period of naturally higher general and administrative costs, affected both our top and bottom line results this quarter. However, we view these as typical dynamics that are not uncommon in an industry bound by heavy government regulations.”
Douglas added, “Closing out the first half of 2018, we already have 18 implementations scheduled in the second half of the year, which has created a very healthy pipeline of revenue and an expected strong finish for the year. In addition, our continued efforts of closely managing our combined company operations and leveraging synergies that enhance our business and support our clients will help drive efficiencies. Based on the 2018 expense exit run rate, we expect an estimated $10 million incremental benefit to our bottom line in 2019, supporting our goal of returning to 20% EBITDA margins in 2020.”
CPSI will hold a live webcast to discuss second quarter 2018 results today, Thursday, August 2, 2018, 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.
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 three companies – Evident, LLC, TruBridge, LLC and American HealthTech, Inc. 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. For more information, visit www.cpsi.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, leverage ratio, margins, costs, expenditures, cash flows, growth rates, the Company’s level of recurring and non-recurring revenue and backlog, the Company’s shareholder returns 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, including the potential 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; our ability to successfully integrate the businesses of Healthland, American HealthTech and Rycan with our business and the inherent risks associated with any potential future acquisitions; 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; interruptions in our power supply and/or telecommunications capabilities, including those caused by natural disaster; our ability to attract and retain qualified customer 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 of America; significant charge 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. 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.
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