Computer Programs and Systems, Inc. Announces Third Quarter Results; Company Declares Regular Quarterly Dividend of $0.12 Per Share
MOBILE, Ala. (October 21, 2004) - Computer Programs and Systems, Inc. (NASDAQ/NM:CPSI), a leading provider of healthcare information solutions, today announced results for the third quarter and nine months ended September 30, 2004.
Highlights:
--Third quarter net income increased 42.8%;
--Signed 14 new system installation contracts;
--Recorded positive free cash flow of $2.9 million (excluding dividend); and
--Declared regular quarterly dividend of $0.12 per share.
The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.12 (twelve cents) per share, payable November 26, 2004, to shareholders of record as of the close of business on November 5, 2004.
David Dye, chief executive officer and president of CPSI, stated, "Our financial performance continues to steadily improve. In particular, we are pleased that as a result of new business office outsourcing clients, our recurring revenues increased seven percent over the most recent quarter. Additionally, our free cash flow remains strong, reaching $2.9 million for the quarter and $6.9 million for the year."
Total revenues for the third quarter ended September 30, 2004, increased 7.9% to $21.1 million compared with total revenues of $19.6 million for the prior year period. Net income for the quarter ended September 30, 2004, increased 42.8% to $2.1 million, or $0.20 per diluted share, compared with $1.5 million, or $0.14 per diluted share, for the quarter ended September 30, 2003. Cash provided from operations for the third quarter was $3.3 million compared with $3.0 million for the same period last year.
Total revenues for the nine months ended September 30, 2004, decreased 2.0% to $58.4 million compared with total revenues of $59.6 million for the prior year period. Net income for the nine months ended September 30, 2004, decreased 24.0% to $4.3 million, or $0.41 per diluted share, compared with $5.6 million, or $0.54 per diluted share, for the same nine months period in 2003. Cash provided from operations for the nine months ended September 30, 2004, was $8.0 million compared with $7.2 million for the same period last year.
For the fourth quarter of 2004, the Company anticipates total revenues of $22.0 to $23.0 million and net income of approximately $2.4 to $2.6 million, or $0.23 to $0.25 per diluted share. CPSI's 12-month backlog as of September 30, 2004, was $67.1 million, consisting of $17.4 million in non-recurring system purchases and $49.7 million in recurring payments for support, outsourcing, ASP and ISP contracts.
Mr. Dye continued, "In the third quarter, we executed system sales contracts with 14 new client hospitals. The average contract size was down 22% over the previous quarter; however, the 14 contracts represent the highest number of new sales contracts signed in one quarter in over a year."
In closing, Mr. Dye added, "As our guidance suggests, we are anticipating record revenues and earnings for the fourth quarter. We continue to see increasing demand for our products and services among community hospitals, particularly as more facilities realize the benefits of providing their caregivers with an electronic medical record as a byproduct of an integrated information system."
A listen-only simulcast and replay of CPSI's third quarter conference call will be available on-line at www.cpsinet.com and www.fulldisclosure.com on October 22, 2004, 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 500 client hospitals in 45 states. 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 650 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 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; 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 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,
---------------- ----------------
2004 2003 2004 2003
------- ------- ------- -------
Sales revenues:
System sales $9,055 $9,082 $23,845 $28,822
Support and maintenance 9,454 8,718 28,018 25,467
Outsourcing 2,623 1,791 6,495 5,285
------- ------- ------- -------
Total sales revenues 21,132 19,591 58,358 59,574
Cost of sales:
System sales 7,048 7,171 19,627 20,804
Support and maintenance 4,180 4,010 12,438 11,939
Outsourcing 1,482 1,091 3,833 3,155
------- ------- ------- -------
Total cost of sales 12,710 12,272 35,898 35,898
------- ------- ------- -------
Gross profit 8,422 7,319 22,460 23,676
Operating expenses:
Sales and marketing 1,405 1,480 4,134 4,516
General and administrative 3,680 3,561 11,497 10,349
------- ------- ------- -------
Total operating expenses 5,085 5,041 15,631 14,865
------- ------- ------- -------
Operating income 3,337 2,278 6,829 8,811
Interest income, net 62 60 181 153
Other 50 3 128 60
------- ------- ------- -------
Income before taxes 3,449 2,341 7,138 9,024
Provision for income taxes 1,363 880 2,848 3,380
------- ------- ------- -------
Net income $2,086 $1,461 $4,290 $5,644
======= ======= ======= =======
Basic earnings per share $0.20 $0.14 $0.41 $0.54
======= ======= ======= =======
Diluted earnings per share $0.20 $0.14 $0.41 $0.54
======= ======= ======= =======
Weighted average
shares outstanding:
Basic 10,490 10,488 10,490 10,488
Diluted 10,533 10,525 10,531 10,546
COMPUTER PROGRAMS AND SYSTEMS, INC.
Unaudited Condensed Balance Sheets
(in thousands)
Sept. 30, Dec. 31,
2004 2003
------- -------
ASSETS
Current assets:
Cash and cash equivalents $12,618 $9,473
Accounts receivable, net of
allowance for doubtful accounts
of $1,243 and $904 respectively 11,180 11,917
Financing receivables,
current portion 1,169 1,113
Inventory 1,365 1,102
Deferred tax assets 1,341 1,039
Prepaid expenses 548 364
Prepaid income taxes -- 120
------- -------
Total current assets 28,221 25,128
Financing receivables, long-term 652 794
Property and equipment 9,996 9,909
Accumulated depreciation (4,764) (4,561)
------- -------
Total assets $34,105 $31,270
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $830 $1,126
Deferred revenue 1,784 1,634
Accrued vacation 1,705 1,562
Other accrued liabilities 2,374 1,130
Income taxes payable 616 --
------- -------
Total current liabilities 7,309 5,452
Deferred tax liabilities 490 66
Stockholders' equity:
Common stock, par value $0.001
per share, 30,000,000 shares
authorized, 10,489,849 shares
issued and outstanding 10 10
Additional paid-in capital 17,292 17,290
Deferred compensation (136) (174)
Retained earnings 9,140 8,626
------- -------
Total stockholders' equity 26,306 25,752
------- -------
Total liabilities and
stockholders' equity $34,105 $31,270
======= =======
COMPUTER PROGRAMS AND SYSTEMS, INC.
Other Supplemental Information
(In thousands)
The following table summarizes free cash flow for the Company:
Three Nine
Months Months
Ended Ended
Sept. 30, Sept. 30,
2004 2004
------- -------
Net cash provided by operating activities $3,337 $7,985
Purchases of property and equipment (432) (1,063)
------- -------
Free cash flow $2,905 $6,922
======= =======
Free cash flow is a non-GAAP financial measure which CPSI defines as net cash provided by operating activities less capital expenditures. 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 strength of the Company and its ability to generate cash.
Contact:
M. Stephen Walker
Vice President-Finance and Chief Financial Officer
251/639-8100
Source:
Computer Programs and Systems, Inc.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Computer Programs and Systems, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year. |
