TechDogs-"CPSI Announces Fourth Quarter And Full Year 2023 Results"

Health Care Technology

CPSI Announces Fourth Quarter And Full Year 2023 Results

By Business Wire

Business Wire
Overall Rating

MOBILE, Ala.--(BUSINESS WIRE)--CPSI (NASDAQ: CPSI), a healthcare solutions company, today announced results for the fourth quarter and year ended December 31, 2023.

Fourth Quarter 2023 Financial Overview
All comparisons are to the fourth quarter ended December 31, 2022, unless otherwise noted.

  • Bookings of $26.0 million compared to $24.7 million
  • Total revenue of $85.9 million compared to $83.2 million
  • Revenue Cycle Management (RCM) revenue of $51.0 million compared to $45.7 million
    • RCM revenue represented 60.7% of CPSI’s total recurring revenue and 59.3% of CPSI’s total revenue
  • GAAP loss per diluted share of $(2.92) and non-GAAP earnings per diluted share of $0.36
  • Adjusted EBITDA of $12.0 million compared to $13.2 million

Full Year 2023 Financial Overview
All comparisons are to the year ended December 31, 2022, unless otherwise noted.

  • Bookings of $85.1 million compared to $89.4 million
  • Total revenue of $339.4 million compared to $326.6 million
  • Revenue Cycle Management (RCM) revenue of $193.9 million compared to $179.9 million
    • RCM revenue represented 58.9% of CPSI’s total recurring revenue and 57.1% of CPSI’s total revenue
  • GAAP loss per diluted share of $(3.15) and non-GAAP earnings per diluted share of $1.79
  • Adjusted EBITDA of $47.6 million compared to $55.9 million

“Despite the challenges we faced in 2023, we were able to finish out the year with a strong fourth quarter in terms of revenue performance, and we kicked off 2024 with the exciting news announcing our imminent rebrand to TruBridge,” said Chris Fowler, chief executive officer of CPSI. “Unifying our identity under this brand reflects our transformation as an organization that is leveraging its strengths and expertise to deliver a more cohesive and comprehensive suite of solutions to our customers.

“We believe that the investments we made to enhance our business over the past few quarters will provide us with a strong foundation from which to grow. We see a significant opportunity ahead to improve the financial health of our community hospital partners, and we are confident that our recent acquisition of Viewgol has only strengthened our position in the market. We look forward to seizing this opportunity and making further progress throughout 2024.”

First Quarter 2024 Financial Outlook1
For the first quarter 2024, the Company is providing an initial outlook of:

  • Revenue in the range of $82 million to $84 million
  • Adjusted EBITDA of $8.5 million to $9.5 million

2024 Financial Outlook1
For the full year 2024, the Company is providing an initial outlook of:

  • Revenue in the range of $340 million to $350 million
  • Adjusted EBITDA of $45 million to $50 million

Conference Call Information
CPSI will hold a live webcast to discuss fourth quarter and full year 2023 results today, Thursday, February 29, 2024, 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 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. 

1

Excluding revenues, the Company does not provide guidance on a GAAP basis as certain items that impact Adjusted EBITDA or non-GAAP net income 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.

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 September 30, 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 December 31,

Twelve Months Ended December 31,

2023

2022

2023

2022

Revenues
RCM

 $

                 50,956

 $

                 45,670

 $

               193,929

 $

               179,870

EHR

                     33,412

                     35,968

                  138,063

139,823

Patient engagement

                       1,500

                       1,586

                       7,443

                       6,955

Total revenues

                     85,868

                     83,224

                  339,435

                  326,648

Expenses 
Costs of revenue (exclusive of amortization and depreciation)
RCM

                     28,731

                     25,956

                  110,192

                     97,024

EHR

                     14,153

                     17,497

                     62,048

                     65,661

Patient engagement

                           810

                       1,061

                       3,628

                       3,856

Total costs of revenue (exclusive of amortization and depreciation)

                     43,694

                     44,514

                  175,868

                  166,541

Product development

                     10,347

                       9,001

                     37,246

                     31,898

Sales and marketing

                       6,143

                       4,553

                     28,049

                     27,131

General and administrative

                     21,682

                     14,650

                     76,153

                     54,965

Amortization

                       6,974

                       5,687

                     24,522

                     20,887

Depreciation

                           554

                           553

                       1,946

                       2,443

Impairment of goodwill

                     35,913

                              -

                     35,913

                              -

Impairment of trademark intangibles

                       2,342

                              -

                       2,342

                              -

Total expenses

                  127,649

                     78,958

                  382,039

                  303,865

Operating income (loss)

                  (41,781

)

 

                       4,266

                  (42,604

)

                     22,783

Other income (expense):
Other income 

                           176

                           264

                           745

                       1,178

Gain (loss) on contingent consideration

                              -

                        (427

)

                              -

                           565

Loss on extinguishment of debt

                              -

                              -

                              -

                        (125

)

Interest expense

                     (4,116

)

                     (2,276

)

                  (12,521

)

                     (6,320

)

Total other income (expense)

                     (3,940

)

                     (2,439

)

                  (11,776

)

                     (4,702

)

Income (loss) before taxes

                  (45,721

)

                       1,827

                  (54,380

)

                     18,081

Provision (benefit) for income taxes

                     (3,247

)

                        (690

)

                     (8,591

)

                       2,214

Net income (loss) (1)

 $

               (42,474

)

 $

                    2,517

 $

               (45,789

)

 $

                 15,867

Net income (loss) per common share—basic

 $

                    (2.92

)

 $

                      0.17

 $

                    (3.15

)

 $

                      1.08

Net income (loss) per common share—diluted

 $

                    (2.92

)

 $

                      0.17

 $

                    (3.15

)

 $

                      1.08

Weighted average shares outstanding used in per common share computations:
Basic

                     14,205

                     14,210

                     14,187

                     14,356

Diluted

                     14,205

                     14,210

                     14,187

                     14,356

(1) In connection with the Company’s disposition of AHT in January 2024 and other factors, management is finalizing certain line items in the financial statements included herein, primarily related to the amount of goodwill impairment. Any change to the amount of goodwill impairment set forth in this earnings release (and the corresponding impact on related line items) is not expected to be material. The final amount of goodwill impairment and the amounts of impacted line items for fiscal year 2023 will be reflected in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Any change to the amounts for the fourth quarter of 2023 will be provided on the Investor Relations portion of the Company’s website.

Computer Programs and Systems, Inc.

Condensed Consolidated Balance Sheets

(In '000s, except per share data)

December 31, 2023

(unaudited)

December 31, 2022

Assets
Current assets
Cash and cash equivalents

 $

                    3,848

 $

                    6,951

Accounts receivable, net of allowance for expected credit losses of $3,631 and $2,854, respectively

                     59,723

                     51,311

Financing receivables, current portion (net of allowance for expected credit losses of $319 and $223, respectively)

                       3,997

                       4,474

Inventories

                           475

                           784

Prepaid income taxes

                       1,628

                           701

Prepaid expenses and other

                     15,807

                     10,338

Assets of held for sale disposal group

                     25,754

                              -

Total current assets

                  111,232

                     74,559

Property & equipment, net

                       8,974

                       9,884

Software development costs, net

                     39,139

                     27,257

Operating lease assets

                       5,192

                       7,567

Financing receivables, net of current portion (net of allowance for expected credit losses of $97 and $326, respectively)

                       1,226

                       3,312

Other assets, net of current portion

                       7,314

                       8,131

Intangible assets, net

                     89,213

                  102,000

Goodwill

                  171,909

                  198,253

Total assets

 $

               434,199

 $

               430,963

Liabilities & Stockholders' Equity
Current liabilities
Accounts payable

 $

                 10,133

 $

                    7,035

Current portion of long-term debt

                       3,141

                       3,141

Deferred revenue

                       8,677

                     11,590

Accrued vacation

                       5,410

                       6,214

Liabilities of held for sale disposal group

                           754

                              -

Other accrued liabilities

                     19,892

                     16,475

Total current liabilities

                     48,007

                     44,455

Long-term debt, net of current portion

                  195,270

                  136,388

Operating lease liabilities, net of current portion

                       3,074

                       5,651

Deferred tax liabilities

                       1,230

                     12,758

Total liabilities

                  247,581

                  199,252

Stockholders' Equity
Common stock, $0.001 par value; 30,000 shares authorized; 15,121 and 14,913 shares issued, respectively

                             15

                             15

Treasury stock, 572 and 483 shares, respectively

                  (17,075

)

                  (14,500

)

Additional paid-in capital

                  195,546

                  192,275

Retained earnings

                       8,132

                     53,921

Total stockholders' equity

                  186,618

                  231,711

Total liabilities and stockholders' equity

 $

               434,199

 $

               430,963

Computer Programs and Systems, Inc.

Condensed Consolidated Statements of Cash Flows

(In '000s)

(Unaudited)

Twelve Months Ended December 31,

2023

2022

Operating activities:
Net income (loss)

 $

               (45,789

)

 $

                 15,867

Adjustments to net income:
Provision for credit losses

                       1,920

                           992

Deferred taxes

                  (11,305

)

                     (6,688

)

Stock-based compensation

                       3,271

                       5,173

Depreciation

                       1,946

                       2,443

Loss on extinguishment of debt

                              -

                           125

Amortization of acquisition-related intangibles

                     16,426

                     17,403

Amortization of software development costs

                       8,096

                       3,484

Amortization of deferred finance costs

                           359

                           332

Impairment of goodwill

                     35,913

                              -

Impairment of trademark intangibles

                       2,342

                              -

Gain on contingent consideration

                              -

                        (565

)

Non-cash operating lease costs

                       1,602

                              -

Loss on disposal of PP&E

                           117

                              -

Changes in operating assets and liabilities:
Accounts receivable

                  (11,319

)

                  (12,428

)

Financing receivables

                       2,659

                       6,144

Inventories

                           309

                             71

Prepaid expenses and other

                     (4,554

)

                     (2,930

)

Accounts payable

                       3,075

                     (1,429

)

Deferred revenue

                     (2,913

)

                             61

Operating lease liabilities

                     (2,063

)

                              -

Other liabilities

                       1,894

                           422

Prepaid income taxes

                        (927

)

                       3,898

Net cash provided by operating activities

                       1,059

                     32,375

Investing activities:
Purchase of business, net of cash acquired

                  (36,705

)

                  (43,364

)

Investment in software development

                  (23,059

)

                  (19,097

)

Purchases of property and equipment

                        (346

)

                        (270

)

Net cash used in investing activities

                  (60,110

)

                  (62,731

)

Financing activities:
Treasury stock purchases

                     (2,575

)

                  (11,924

)

Proceeds from long-term debt

                              -

                           575

Payments of long-term debt principal

                     (3,500

)

                     (3,563

)

Proceeds from revolving line of credit

                     67,023

                     48,000

Payments of revolving line of credit

                     (5,000

)

                     (5,300

)

Payments of contingent consideration

                              -

                     (1,935

)

Proceeds from exercise of stock options

                              -

                             23

Net cash provided by (used in) financing activities

                     55,948

                     25,876

Decrease in cash and cash equivalents

                     (3,103

)

                     (4,480

)

Cash and cash equivalents, beginning of period

                       6,951

                     11,431

Cash and cash equivalents, end of period

 $

                    3,848

 $

                    6,951

Computer Programs and Systems, Inc.

Consolidated Bookings

(In '000s)

Three Months Ended December 31,

Twelve Months Ended December 31,

In '000s

2023

2022

2023

2022

RCM(1)

 $

                 14,158

 $

                 13,373

 $

                 48,986

 $

                 48,065

EHR(2)

                     10,888

                     10,678

                     33,143

                     38,152

Patient engagement(1)

                           969

                           620

                       2,973

                       3,188

Total

 $

                 26,015

 $

                 24,671

 $

                 85,102

 $

                 89,405

(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.


Contacts

Tracey Schroeder
Chief Marketing Officer
Tracey.schroeder@cpsi.com
(251) 639-8100

Read full story here

First published on Fri, Mar 1, 2024

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CPSI Healthcare Solutions Information Technology Revenue Cycle Management Patient Engagement Solutions Electronic Health Record (EHR)

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