Computer Programs and Systems, Inc. Announces Record Third Quarter Results; Company Declares Regular Quarterly Dividend of $0.22 Per Share.MOBILE, Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- Computer Programs and Systems, Inc. (NASDAQ/NM:CPSI CPSI Computer Programs & Systems, Inc. (Mobile, Alabama) CPSI Creative Problem Solving Institute CPSI Certified Playground Safety Inspector CPSI cells per square inch CPSI Configurable PostScript Interpreter ): Highlights: --Established new high marks for quarterly net income, revenue and cash collections; --Generated free cash flow of $4.8 million; --Signed contracts for system installation at 11 new client hospitals, averaging $625,000 per facility; and --Declared regular quarterly dividend of $0.22 per share. Computer Programs and Systems, Inc., a leading provider of healthcare information solutions, today announced results for the third quarter and nine months ended September September: see month. 30, 2005. The Company also announced that its Board of Directors has declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a regular quarterly cash dividend of $0.22 (twenty-two cents) per share, payable on November November: see month. 25, 2005, to shareholders of record as of the close of business on November 4, 2005. Total revenues for the third quarter ended September 30, 2005, increased 27.8% to $27.0 million, compared with total revenues of $21.1 million for the prior year period. Net income for the quarter ended September 30, 2005, increased 70.9% to $3.6 million, or $0.33 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with $2.1 million, or $0.20 per diluted share, for the quarter ended September 30, 2004. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the third quarter of 2005 was $5.4 million, compared with $3.3 million for the same period last year. Total revenues for the nine months ended September 30, 2005, increased 37.7% to $80.4 million, compared with total revenues of $58.4 million for the prior year period. Net income for the nine months ended September 30, 2005, increased 137.9% to $10.2 million, or $0.96 per diluted share, compared with $4.3 million, or $0.41 per diluted share, for the nine months ended September 30, 2004. Cash provided from operations for the nine months ended September 30, 2005, was $11.8 million, compared with $8.0 million for the same period last year. Commenting on the results, David Dye, chief executive officer and president of CPSI, stated, "Our year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. performance is indicative of both a strong marketplace among community hospitals for information technology and our competitive success within that marketplace. Based on the continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. increasing emphasis on the use of technology to improve financial and clinical efficiency and to provide caregivers with a secure electronic medical record for their patients, we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about CPSI's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth prospects." For the fourth quarter of 2005, the Company anticipates total revenues of $26.5 to $28.0 million and net income of approximately $3.5 to $3.8 million, or $0.33 to $0.35 per diluted share. CPSI's 12-month backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. as of September 30, 2005, was $77.3 million, consisting of $22.1 million in non-recurring system purchases and $55.2 million in recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. payments for support, outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. , ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). and ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. contracts. A listen-only simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. and replay of CPSI's third quarter conference call will be available on-line at www.cpsinet.com and www.earnings.com on October October: see month. 21, 2005, 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 550 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 800 technical, healthcare and medical professionals provides system implementation and continuing support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements can be identified generally by the use of forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. 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 gen·er·al·i·ty n. pl. gen·er·al·i·ties 1. The state or quality of being general. 2. An observation or principle having general application; a generalization. 3. of the preceding statement, all statements in this press release relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. 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 saturation, of an organic compound saturation, of an organic compound, condition occurring when its molecules contain no double or triple bonds and thus cannot undergo addition reactions. 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 and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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,
----------------- -----------------
2005 2004 2005 2004
------- ------- ------- -------
Sales revenues:
System sales $12,480 $9,055 $37,779 $23,845
Support and maintenance 10,982 9,454 31,688 28,018
Outsourcing 3,538 2,623 10,900 6,495
------- ------- ------- -------
Total sales revenues 27,000 21,132 80,367 58,358
Cost of sales:
System sales 8,511 7,048 24,932 19,627
Support and maintenance 4,864 4,180 14,102 12,438
Outsourcing 2,168 1,482 6,255 3,833
------- ------- ------- -------
Total cost of sales 15,543 12,710 45,289 35,898
------- ------- ------- -------
Gross profit 11,457 8,422 35,078 22,460
Operating expenses:
Sales and marketing 1,911 1,405 5,520 4,134
General and administrative 3,839 3,680 13,071 11,497
------- ------- ------- -------
Total operating expenses 5,750 5,085 18,591 15,631
------- ------- ------- -------
Operating income 5,707 3,337 16,487 6,829
Interest income, net 177 62 431 181
Other -- 50 5 128
------- ------- ------- -------
Income before taxes 5,884 3,449 16,923 7,138
Provision for income taxes 2,319 1,363 6,715 2,848
------- ------- ------- -------
Net income $3,565 $2,086 $10,208 $4,290
======= ======= ======= =======
Basic earnings per share $0.34 $0.20 $0.97 $0.41
======= ======= ======= =======
Diluted earnings per share $0.33 $0.20 $0.96 $0.41
======= ======= ======= =======
Weighted average
shares outstanding:
Basic 10,604 10,490 10,541 10,490
Diluted 10,696 10,533 10,628 10,531
COMPUTER PROGRAMS AND SYSTEMS, INC.
Condensed Balance Sheets
(in thousands)
Sept. 30, Dec. 31,
2005 2004
------- -------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $10,588 $13,785
Investments 8,174 --
Accounts receivable, net of allowance for doubtful
accounts of $1,560 and $1,636 respectively 12,972 11,765
Financing receivables, current portion 1,504 974
Inventory 1,807 1,475
Deferred tax assets 1,559 1,397
Prepaid expenses 441 438
Prepaid income taxes -- 172
------- -------
Total current assets 37,045 30,006
Financing receivables, long-term 668 618
Property and equipment 11,291 10,659
Accumulated depreciation (5,358) (5,205)
------- -------
Total assets $43,646 $36,078
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,705 $970
Deferred revenue 3,419 2,602
Accrued vacation 1,953 1,631
Other accrued liabilities 1,829 2,323
Income taxes payable 141 --
------- -------
Total current liabilities 9,047 7,526
Deferred tax liabilities 686 718
Stockholders' equity:
Common stock, par value $0.001 per share,
30,000,000 shares authorized, 10,608,083 and
10,489,849 shares issued and outstanding 11 10
Additional paid-in capital 20,125 17,292
Deferred compensation (85) (123)
Accumulated other comprehensive income (53) --
Retained earnings 13,915 10,655
------- -------
Total stockholders' equity 33,913 27,834
------- -------
Total liabilities and stockholders' equity $43,646 $36,078
======= =======
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,
2005 2005
------- -------
Net cash provided by operating activities $5,385 $11,829
Purchases of property and equipment (554) (1,767)
------- -------
Free cash flow $4,831 $10,062
======= =======
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.
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