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Computer Programs and Systems, Inc. Announces Record Third Quarter Results; Recurring Revenues and New Customer Installations Continue to Drive Strong Earnings Growth
MOBILE, Ala., Oct 23, 2002 (Business Wire) – Computer Programs and Systems, Inc. (Nasdaq/NM:CPSI):
- Third Quarter Highlights:
- Third Quarter Net Income Increased 51.3%; Revenues Increased 27.3%
- Signed 11 New Contracts
- Release of Medication Administration Verification System
Computer Programs and Systems, Inc. (Nasdaq/NM:CPSI), a leading provider of healthcare information solutions, today announced record results for the third quarter and nine months ended September 30, 2002.
According to David Dye, chief executive officer and president of CPSI, "We are very excited about our strong performance in the third quarter. Our intense focus on creating long-term partnerships with client hospitals and our continuing emphasis on fiscal discipline and conservative accounting are producing outstanding results. We are expanding the total number of hospital clients and achieving solid organic growth with our growing base of retained clients."
Total revenues for the third quarter ended September 30, 2002, increased 27.3% to $18.9 million compared with total revenues of $14.8 million in the prior-year period. Net income for the quarter totaled $2.1 million, or $0.20 per diluted share, versus pro forma net income of $1.4 million, or $0.15 per diluted share, in the prior-year period, representing increases of 51.3% and 33.3%, respectively.
Total revenues for the nine months ended September 30, 2002, increased 25.4% to $53.3 million compared with total revenues of $42.5 million in the prior-year period. Pro forma net income for the nine-month period totaled $5.7 million, or $0.57 per diluted share, versus pro forma net income of $3.7 million, or $0.40 per diluted share, in the prior-year period, representing increases of 53.8% and 42.5%, respectively.
Pro forma adjustments reflect the provision for income taxes as if the Company had been a C corporation for all periods presented. Excluding pro forma adjustments, net income before taxes for the third quarter ended September 30, 2002, was $3.2 million compared with net income before taxes of $2.2 million in the prior-year period. For the nine months ended September 30, 2002, net income before taxes was $9.0 million compared with net income before taxes of $5.9 million for the nine-month period in the prior year.
During the quarter, the Company expanded the scope of services offered to clients through the release of its Medication Administration Verification system, which utilizes a combination of bar coding, handheld devices operating on a wireless network and application software to confirm the accurate administration of medications to hospital patients. To date, CPSI has implemented the Medication Administration Verification system in four hospitals and has six more installations scheduled before the end of the year.
Mr. Dye added, "Based on our results to date, we anticipate reporting total revenues in the range of $18.5 to $19.5 million and net income of approximately $2.1 to $2.3 million, or $0.20 to $0.22 per diluted share, in the fourth quarter. These fourth quarter projections translate into revenues for the year in the range of $71.8 to $72.8 million and net income of approximately $7.8 to $8.0 million, or $0.77 to $0.79 per diluted share."
In closing, Mr. Dye said, "As evidenced by the 11 new contracts we signed during the third quarter, demand for an integrated HIT solution is increasing, driven by HIPAA requirements, growing interest in reducing medical errors and an availability of capital at the community hospital level as the industry continues to benefit from an improving reimbursement environment. In addition, as of September 30, 2002, we had a twelve-month backlog of approximately $16.9 million relating to non-recurring system purchases and approximately $38.3 million related to recurring payments under support, outsourcing, ASP and ISP contracts."
A listen-only simulcast and replay of CPSI's third quarter conference call will be available on-line at www.cpsinet.com and www.companyboardroom.com on October 24, 2002, beginning at 11:00 a.m. Eastern Time.
About Computer Programs and Systems, Inc.
CPSI is a leading provider of healthcare information solutions for community hospitals and has more than 430 hospital clients 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. The Company's 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 600 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 recent Registration Statement on Form S-1. 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,
----------------- -----------------
2002 2001 2002 2001
------- ------- ------- -------
Sales revenues:
Systems sales $9,936 $7,385 $27,650 $21,179
Support and maintenance 7,617 6,541 22,084 18,821
Outsourcing 1,344 923 3,595 2,512
------- ------- ------- -------
Total sales revenues 18,897 14,849 53,329 42,512
------- ------- ------- -------
Cost of sales:
Systems sales 6,545 5,625 18,905 16,113
Support and maintenance 3,578 2,944 10,085 8,481
Outsourcing 868 616 2,216 1,497
------- ------- ------- -------
Total cost of sales 10,991 9,185 31,206 26,091
------- ------- ------- -------
Gross profit 7,906 5,664 22,123 16,421
Operating expenses:
Sales and marketing 1,660 1,201 4,333 3,731
General and administrative
expenses 3,204 2,369 9,187 6,960
------- ------- ------- -------
Total operating expenses 4,864 3,570 13,520 10,691
Operating income 3,042 2,094 8,603 5,730
Interest income, net 64 15 134 25
Other 117 77 226 106
------- ------- ------- -------
Net income before taxes 3,223 2,186 8,963 5,861
Provision for income taxes 1,146 -- 1,632 --
------- ------- ------- -------
Net Income $2,077 $2,186 $7,331 $5,861
======= ======= ======= =======
Basic and diluted earnings
per share $0.20
=======
Pro Forma Income Data:
Net income before taxes
as reported $2,186 $8,963 $5,861
Pro forma provision
for income taxes 814 3,304 2,182
------- ------- -------
Pro forma net income $1,372 $5,659 $3,679
======= ======= =======
Pro forma basic and diluted
earnings per share $0.15 $0.57 $0.40
======= ======= =======
Weighted average shares outstanding:
Basic 10,488 9,288 9,868 9,288
Diluted 10,589 9,288 9,907 9,288
COMPUTER PROGRAMS AND SYSTEMS, INC.
Unaudited Condensed Balance Sheets
(in thousands)
Sept. 30, Dec. 31,
2002 2001
------- -------
ASSETS
Current assets:
Cash and cash equivalents $6,970 $2,019
Accounts receivable, net of allowance for doubtful
accounts of $718 and $532 respectively 11,981 8,108
Financing receivables 633 769
Prepaid expenses 368 196
Inventory 1,255 1,126
Deferred tax asset 1,027 --
------- -------
Total current assets 22,234 12,218
Financing receivables, long-term 885 999
Property and equipment 7,624 6,840
Accumulated depreciation (3,097) (2,806)
------- -------
Total assets $27,646 $17,251
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,067 $1,033
Shareholder distribution payable 1,250 --
Other accrued liabilities 408 212
Income taxes payable 721 --
Accrued retirement 338 375
Deferred revenue 1,865 1,601
Sales and use tax 1,724 1,880
Accrued vacation 1,357 1,076
Health insurance reserves 303 288
------- -------
Total current liabilities 9,033 6,465
Note payable -- 750
Total liabilities 9,033 7,215
Stockholders' equity:
Common stock, par value $0.001 per share, 30,000,000 shares
authorized, 10,488,000 and 9,288,000 shares issued and outstanding,
respectively 10 9
Paid-in capital 17,021 110
Retained earnings 1,582 9,917
------- -------
Total stockholders' equity 18,613 10,036
------- -------
Total liabilities and stockholders' equity $27,646 $17,251
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CONTACT:
Computer Programs and Systems, Inc., Mobile
M. Stephen Walker, 251/639-8100
Vice President-Finance and Chief Financial Officer
www.cpsinet.com
251/639-8100
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"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 |
