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CPSI Announces First Quarter 2016 Results

Highlights:

  • Revenues of $69.6 million;
  • Quarterly bookings of $22.9 million;
  • GAAP loss per diluted share of $0.07 and non-GAAP earnings per diluted share of $0.54;
  • GAAP net loss of $0.9 million and Adjusted EBITDA of $13.2 million;
  • Cash provided by operations of $0.8 million; and
  • Quarterly dividend of $0.64 per share.

CPSI CPSI, +4.20% a leading provider of healthcare information solutions, today announced results for the first quarter ended March 31, 2016.

The Company also announced a quarterly cash dividend of $0.64 per share, payable on May 27, 2016, to stockholders of record as of the close of business on May 12, 2016.

Total revenues for the first quarter ended March 31, 2016, were $69.6 million, compared with total revenues of $46.2 million for the prior-year first quarter. The Company experienced a net loss for the quarter ended March 31, 2016 of $0.9 million, or $0.07 per diluted share, compared with net income of $5.5 million, or $0.49 per diluted share, for the quarter ended March 31, 2015. Cash provided by operations for the first quarter of 2016 was $0.8 million, compared with $13.6 million for the prior-year first quarter. Included in the first quarter results are $7.6 million of transaction costs associated with the Company's acquisition of Healthland.

"As the market leader for community healthcare IT with more than 35 percent market share, we are energized about our future," said Boyd Douglas, president and chief executive officer of CPSI. "In the short time since we acquired Healthland and its subsidiaries, we have already seen a positive response from the market. Community healthcare organizations have made it clear that they are looking for a technology partner with the experience, understanding and scalability to meet their unique needs with proven IT solutions.

"The momentum around our company integration efforts has already led to some positive and key outcomes in the first quarter of 2016. Cost synergies are actually ahead of schedule, and we expect revenue synergies to progressively increase throughout the remainder of the year, as planned. In addition to being ahead of schedule with these integration efforts, we are also pleased with the level of sales activity we are experiencing with both existing and new clients. Again, we are confident that our results will reflect improvement for the year."

Commenting further on the Company's financial performance for the quarter, Matt Chambless, chief financial officer of CPSI, stated, "Revenues for the quarter came in slightly less than expected, primarily due to the timing of the closing of the Healthland transaction, which resulted in a week's worth of lost revenue, estimated at approximately $1.5 million. After some consideration, we elected to forego any 'convenience method' potentially available to us that would have allowed us to align the date of acquisition for accounting purposes to an accounting close date, thereby capturing that week's worth of revenue in our consolidated results. Even with the loss of this revenue, cost efficiencies for the quarter, resulting from our integration plan, were realized at a higher rate than anticipated. As a result, adjusted EBITDA was in line with our projections."

In addressing 2016 guidance, Chambless said, "One of the significant challenges we faced in forming our 2016 revenue forecast was quantifying the deal attrition attributable to the acquisition within Healthland's revenue opportunities. With the benefit of one quarter's worth of hindsight, we now have better visibility into that impact and, as a result, have decided to adjust our 2016 annual revenue guidance. We are adjusting our guidance from its original range of $307 million to $322 million to an anticipated range of $297 million to $312 million.

"However, the continued execution of our integration plan has identified far more cost efficiencies that we expect to be able to achieve, resulting in projected cost synergies exceeding $14 million for 2016 with an exit run rate in excess of $17 million. This compares to our previous estimates of $10 million for 2016 with an exit run rate in excess of $13 million. These additional synergies, coupled with margin-related cost savings resulting from the reduced annual revenue guidance and increased NOL utilization for the remainder of 2016 as we return to a taxable income position, have us on target to achieve our original guidance on adjusted EBITDA and non-GAAP EPS."

CPSI will hold a live webcast to discuss first quarter 2016 results today, Wednesday, May 4, 2016, 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.

About CPSI

CPSI is a leading provider of healthcare IT solutions and services for rural and community hospitals and post-acute care facilities. Founded in 1979, CPSI is the parent of five companies – Evident, LLC, TruBridge, LLC, Healthland Inc., American HealthTech, Inc., and Rycan Technologies, Inc. Our combined company is 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 and services for rural and community hospitals. TruBridge focuses exclusively on providing business management, consulting and managed IT services to rural and community healthcare organizations, regardless of their IT vendor. Healthland provides integrated technology solutions and services to small rural and critical access hospitals. American HealthTech is one of the nation's largest providers of financial and clinical technology solutions and services for post-acute care facilities. Rycan provides revenue cycle management workflow and automation software to hospitals, healthcare systems, and skilled nursing organizations. For more information, visit www.cpsi.com, www.evident.com, www.trubridge.com, www.healthland.com, www.healthtech.net, or www.rycan.com.

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 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, 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 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 or enhance current technology and products in response to market demands; failure of our products to function properly resulting in claims for 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 or enhancements 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...


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