Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 05, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-49796 | |
Entity Registrant Name | COMPUTER PROGRAMS AND SYSTEMS, INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 74-3032373 | |
Entity Address, Address Line One | 6600 Wall Street | |
Entity Address, City or Town | Mobile | |
Entity Address, State or Province | AL | |
Entity Address, Postal Zip Code | 36695 | |
City Area Code | 251 | |
Local Phone Number | 639-8100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $.001 per share | |
Trading Symbol | CPSI | |
Security Exchange Name | NASDAQ | |
Entity Central Index Key | 0001169445 | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 14,355,656 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,988 | $ 5,732 |
Accounts receivable, net of allowance for doubtful accounts of $2,121 and $2,124, respectively | 39,350 | 40,474 |
Financing receivables, current portion, net | 12,295 | 15,059 |
Inventories | 1,472 | 1,498 |
Prepaid income taxes | 2,130 | 2,120 |
Prepaid expenses and other | 6,444 | 5,055 |
Total current assets | 65,679 | 69,938 |
Property and equipment, net | 11,826 | 10,875 |
Operating lease assets | 8,061 | |
Financing receivables, net of current portion | 18,214 | 19,263 |
Other assets, net of current portion | 1,139 | 995 |
Intangible assets, net | 85,977 | 86,226 |
Goodwill | 149,960 | 140,449 |
Total assets | 340,856 | 327,746 |
Current liabilities: | ||
Accounts payable | 7,580 | 5,668 |
Current portion of long-term debt | 8,430 | 6,486 |
Deferred revenue | 8,656 | 10,201 |
Accrued vacation | 4,324 | 3,929 |
Other accrued liabilities | 13,984 | 12,219 |
Total current liabilities | 42,974 | 38,503 |
Long-term debt, net of current portion | 112,540 | 124,583 |
Operating lease liabilities, net of current portion | 6,578 | |
Deferred tax liabilities | 6,733 | 4,877 |
Total liabilities | 168,825 | 167,963 |
Stockholders’ equity: | ||
Common stock, $0.001 par value; 30,000 shares authorized; 14,356 and 14,083 shares issued and outstanding, respectively | 14 | 14 |
Additional paid-in capital | 172,093 | 164,793 |
Accumulated deficit | (76) | (5,024) |
Total stockholders’ equity | 172,031 | 159,783 |
Total liabilities and stockholders’ equity | $ 340,856 | $ 327,746 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 2,121 | $ 2,124 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 14,356,000 | 14,083,000 |
Common stock, shares outstanding (in shares) | 14,356,000 | 14,083,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Sales revenues: | ||||
Total sales revenues | $ 68,699 | $ 69,297 | $ 203,996 | $ 208,085 |
Costs of sales: | ||||
Total costs of sales | 32,784 | 33,173 | 96,436 | 98,029 |
Gross profit | 35,915 | 36,124 | 107,560 | 110,056 |
Operating expenses: | ||||
Product development | 9,158 | 9,305 | 27,684 | 27,375 |
Sales and marketing | 6,654 | 7,546 | 21,158 | 22,778 |
General and administrative | 10,996 | 11,220 | 34,909 | 36,772 |
Amortization of acquisition-related intangibles | 3,100 | 2,692 | 8,139 | 7,895 |
Total operating expenses | 29,908 | 30,763 | 91,890 | 94,820 |
Operating income | 6,007 | 5,361 | 15,670 | 15,236 |
Other income (expense): | ||||
Other income | 4 | 201 | 535 | 593 |
Interest expense | (1,702) | (1,829) | (5,269) | (5,615) |
Total other income (expense) | (1,698) | (1,628) | (4,734) | (5,022) |
Income before taxes | 4,309 | 3,733 | 10,936 | 10,214 |
Provision (benefit) for income taxes | 174 | (2,016) | 1,695 | 170 |
Net income | $ 4,135 | $ 5,749 | $ 9,241 | $ 10,044 |
Net income (loss) per common share-basic (in dollars per share) | $ 0.29 | $ 0.41 | $ 0.65 | $ 0.72 |
Net income (loss) per common share-diluted (in dollars per share) | $ 0.29 | $ 0.41 | $ 0.65 | $ 0.72 |
Weighted average shares outstanding used in per common share computations: | ||||
Basic (in shares) | 13,829 | 13,604 | 13,760 | 13,547 |
Diluted (in shares) | 13,829 | 13,604 | 13,760 | 13,547 |
Dividends declared per common share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 |
System sales and support | ||||
Sales revenues: | ||||
Total sales revenues | $ 40,990 | $ 44,425 | $ 123,877 | $ 132,923 |
Costs of sales: | ||||
Total costs of sales | 18,761 | 19,583 | 54,776 | 57,528 |
TruBridge | ||||
Sales revenues: | ||||
Total sales revenues | 27,709 | 24,872 | 80,119 | 75,162 |
Costs of sales: | ||||
Total costs of sales | $ 14,023 | $ 13,590 | $ 41,660 | $ 40,501 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) |
Beginning Balance (in shares) at Dec. 31, 2017 | 13,760 | |||
Beginning Balance at Dec. 31, 2017 | $ 136,086 | $ 14 | $ 155,078 | $ (19,006) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 10,044 | 10,044 | ||
Stock-based compensation | 7,303 | 7,303 | ||
Dividends | (4,211) | (4,211) | ||
Issuance of restricted stock (in shares) | 326 | |||
Issuance of restricted stock | 0 | |||
Ending Balance (in shares) at Sep. 30, 2018 | 14,086 | |||
Ending Balance at Sep. 30, 2018 | 151,192 | $ 14 | 162,381 | (11,203) |
Beginning Balance (in shares) at Jun. 30, 2018 | 14,086 | |||
Beginning Balance at Jun. 30, 2018 | 144,241 | $ 14 | 159,770 | (15,543) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 5,749 | 5,749 | ||
Stock-based compensation | 2,611 | 2,611 | ||
Dividends | (1,409) | (1,409) | ||
Ending Balance (in shares) at Sep. 30, 2018 | 14,086 | |||
Ending Balance at Sep. 30, 2018 | 151,192 | $ 14 | 162,381 | (11,203) |
Beginning Balance (in shares) at Dec. 31, 2018 | 14,083 | |||
Beginning Balance at Dec. 31, 2018 | 159,783 | $ 14 | 164,793 | (5,024) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 9,241 | 9,241 | ||
Common stock issued upon exercise of stock options (in shares) | 1 | |||
Common stock issued upon exercise of stock options | 3 | 3 | ||
Stock-based compensation | 7,297 | 7,297 | ||
Dividends | (4,293) | (4,293) | ||
Issuance of restricted stock (in shares) | 272 | |||
Issuance of restricted stock | 0 | |||
Ending Balance (in shares) at Sep. 30, 2019 | 14,356 | |||
Ending Balance at Sep. 30, 2019 | 172,031 | $ 14 | 172,093 | (76) |
Beginning Balance (in shares) at Jun. 30, 2019 | 14,355 | |||
Beginning Balance at Jun. 30, 2019 | 167,159 | $ 14 | 169,920 | (2,775) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 4,135 | 4,135 | ||
Common stock issued upon exercise of stock options (in shares) | 1 | |||
Common stock issued upon exercise of stock options | 3 | 3 | ||
Stock-based compensation | 2,170 | 2,170 | ||
Dividends | (1,436) | (1,436) | ||
Ending Balance (in shares) at Sep. 30, 2019 | 14,356 | |||
Ending Balance at Sep. 30, 2019 | $ 172,031 | $ 14 | $ 172,093 | $ (76) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating Activities: | ||
Net income | $ 9,241 | $ 10,044 |
Adjustments to net income: | ||
Provision for bad debt | 1,975 | 2,366 |
Deferred taxes | 376 | (231) |
Stock-based compensation | 7,297 | 7,303 |
Depreciation | 1,084 | 1,416 |
Amortization of acquisition-related intangibles | 8,139 | 7,895 |
Amortization of deferred finance costs | 259 | 259 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (157) | (4,174) |
Financing receivables | 3,483 | (5,975) |
Inventories | 26 | 219 |
Prepaid expenses and other | (1,426) | (47) |
Accounts payable | 1,318 | (1,641) |
Deferred revenue | (1,975) | 1,178 |
Other liabilities | (4,116) | (1,821) |
Prepaid income taxes/income taxes payable | (11) | (1,939) |
Net cash provided by operating activities | 25,513 | 14,852 |
Investing Activities: | ||
Purchase of business, net of cash received | (10,733) | 0 |
Purchase of property and equipment | (1,670) | (818) |
Net cash used in investing activities | (12,403) | (818) |
Financing Activities: | ||
Dividends paid | (4,293) | (4,211) |
Payments of long-term debt principal | (11,665) | (11,877) |
Payments of contingent consideration | (206) | 0 |
Proceeds from revolving line of credit | 11,000 | 7,300 |
Payments of revolving line of credit | (9,693) | (591) |
Proceeds from exercise of stock options | 3 | 0 |
Net cash used in financing activities | (14,854) | (9,379) |
(Decrease) Increase in cash and cash equivalents | (1,744) | 4,655 |
Cash and cash equivalents at beginning of period | 5,732 | 520 |
Cash and cash equivalents at end of period | 3,988 | 5,175 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 5,003 | 5,276 |
Cash paid for income taxes, net of refund | $ 1,330 | $ 2,340 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of the periods presented. All such adjustments are considered of a normal recurring nature. Quarterly results of operations are not necessarily indicative of annual results. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted. The condensed consolidated balance sheet as of December 31, 2018 was derived from the audited consolidated balance sheet at that date. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of Computer Programs and Systems, Inc. ("CPSI" or the "Company") for the year ended December 31, 2018 and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Principles of Consolidation The condensed consolidated financial statements of CPSI include the accounts of TruBridge, LLC ("TruBridge"), Evident, LLC ("Evident"), Healthland Holding Inc. ("HHI"), and iNetXperts, Corp. d/b/a Get Real Health ("Get Real Health"), all of which are wholly-owned subsidiaries of CPSI. The accounts of HHI include those of its wholly-owned subsidiaries, Healthland Inc. ("Healthland"), Rycan Technologies, Inc. ("Rycan"), and American HealthTech, Inc. ("AHT"). All significant intercompany balances and transactions have been eliminated. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Standards Adopted in 2019 In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases , to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. We adopted this guidance as of January 1, 2019 using the current period adjustment method. The impact on the financial statements of implementation of this standard was an increase in lease assets and lease liabilities of $4.9 million as of the adoption date, January 1, 2019. Adoption of the standard did not significantly impact our consolidated net earnings or cash flows. New Accounting Standards Yet to be Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses , which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance will be effective for fiscal years and interim periods within those years beginning after December 15, 2019, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2020. The Company is currently evaluating the impact that the implementation of this standard will have on its consolidated financial statements. We do not believe that any other recently issued but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITIONRevenue is recognized upon transfer of control of promised products or services to clients in an amount that reflects the consideration we expect to receive in exchange for those products and services. We enter into contracts that can include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations. The Company employs the 5-step revenue recognition model under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers , to: (1) identify the contract with the client, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized net of shipping charges and any taxes collected from clients, which are subsequently remitted to governmental authorities. System Sales and Support The Company enters into contractual obligations to sell perpetual software licenses, installation, conversion, training, hardware and software application support and hardware maintenance services to acute care and post-acute care community hospitals. Non-recurring Revenues • Perpetual software licenses, installation, conversion, and related training are not considered separate and distinct performance obligations due to the proprietary nature of our software and are, therefore, accounted for as a single performance obligation on a module-by-module basis. Revenue is recognized as each module's implementation is completed based on the module's stand-alone selling price ("SSP"), net of discounts. Fees for licenses, installation, conversion, and related training are typically due in three installments: (1) at placement of order, (2) upon installation of software and commencement of training, and (3) upon satisfactory completion of monthly accounting cycle or end-of-month operation by application and as applicable for each application. Often, short-term and/or long-term financing arrangements are provided for software implementations; refer to Note 10 - Financing Receivables for further information. Electronic health records ("EHR") implementations include a system warranty that terminates thirty days from the software go-live date, the date on which the client begins using the system in a live environment. • Hardware revenue is recognized separately from software licenses at the point in time it is delivered to the client. The SSP of hardware is cost plus a reasonable margin. Payment is generally due upon delivery of the hardware to the client. Standard manufacturer warranties apply to hardware. Recurring Revenues • Software application support and hardware maintenance services sold with software licenses and hardware are separate and distinct performance obligations. Revenue for support and maintenance services is recognized based on SSP, which is the renewal price, ratably over the life of the contract, which is generally three five • Subscriptions to third party content revenue is recognized as a separate performance obligation ratably over the subscription term based on SSP, which is cost plus a reasonable margin. Payment is due monthly for subscriptions to third party content. • Software as a Service ("SaaS") arrangements for EHR software and related conversion and training services are considered a single performance obligation. Revenue is recognized on a monthly basis as the SaaS service is provided to the client over the contract term. Payment is due monthly for SaaS services provided. Refer to Note 16 - Segment Reporting, for further information, including revenue by client base (acute care or post-acute care) bifurcated by recurring and non-recurring revenue. TruBridge TruBridge provides an array of business processing services ("BPS") consisting of accounts receivable management, private pay services, insurance services, medical coding, electronic billing, statement processing, payroll processing, and contract management. Fees are recognized over the period of the client contractual relationship as the services are performed based on the SSP, net of discounts. Fees for many of these services are invoiced, and revenue recognized accordingly, based on the volume of transactions or a percentage of client accounts receivable collections. Payment is due monthly for BPS with certain amounts varying based on utilization and/or volumes. TruBridge also provides professional IT services. Revenue from professional IT services is recognized as the services are performed based on SSP. Payment is due monthly as services are performed. Deferred Revenue Deferred revenue represents amounts invoiced to clients for which the services under contract have not been completed and revenue has not been recognized, including annual renewals of certain software subscriptions and customer deposits for implementations to be performed at a later date. Revenue is recognized ratably over the life of the software subscriptions as services are provided and at the point-in-time when implementations have been completed. The following table details deferred revenue for the nine months ended September 30, 2019 and 2018, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Beginning balance $ 10,201 $ 9,937 Deferred revenue recorded 13,888 15,847 Deferred revenue acquired 430 — Less deferred revenue recognized as revenue (15,863) (14,669) Ending balance $ 8,656 $ 11,115 The deferred revenue recorded during the nine months ended September 30, 2019 is comprised primarily of the annual renewals of certain software subscriptions billed during the first quarter of each year and deposits collected for future EHR installations. The deferred revenue recognized as revenue during the nine months ended September 30, 2019 and 2018 is comprised primarily of the periodic recognition of annual renewals that were deferred until earned and deposits for future EHR installations that were deferred until earned. Costs to Obtain and Fulfill a Contract with a Customer Costs to obtain a contract include the commission costs related to SaaS licensing agreements, which are capitalized and amortized ratably over the expected life of the customer. As a practical expedient, we generally recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset would have been one year or less, with the exception of commissions generated from TruBridge sales. TruBridge commissions, which are paid up to twelve months in advance of services performed, are capitalized and amortized over the prepayment period. Costs to obtain a contract are expensed within sales and marketing expenses in the accompanying condensed consolidated statements of income. Contract fulfillment costs related to the implementation of SaaS arrangements are capitalized and amortized ratably over the expected life of the customer. Costs to fulfill contracts consist of the payroll costs for the implementation of SaaS arrangements, including time for training, conversion, and installation that is necessary for the software to be utilized. Contract fulfillment costs are expensed within the caption "System sales and support - Cost of sales." Costs to obtain and fulfill contracts related to SaaS arrangements are included within the "Prepaid expenses and other" and "Other assets, net of current portion" line items on our condensed consolidated balance sheets. The following table details costs to obtain and fulfill contracts with customers for the nine months ended September 30, 2019 and 2018, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Beginning balance $ 3,017 $ 3,775 Costs to obtain and fulfill contracts capitalized 4,130 2,356 Less costs to obtain and fulfill contracts recognized as expense (3,509) (3,129) Ending balance $ 3,638 $ 3,002 Remaining Performance Obligations Disclosures regarding remaining performance obligations are not considered material as the overwhelming majority of the Company's remaining performance obligations either (a) are related to contracts with an expected duration of one year or less, or (b) exhibit revenue recognition in the amount to which the Company has the right to invoice. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combination | BUSINESS COMBINATION Acquisition of Get Real Health On May 3, 2019, we acquired all of the assets and liabilities of iNetXperts, Corp., a Maryland corporation doing business as Get Real Health (“Get Real Health”), pursuant to a Stock Purchase Agreement dated April 23, 2019, as amended on May 2, 2019. Based in Rockville, Maryland, Get Real Health delivers technology solutions to improve patient outcomes and engagement strategies with care providers. Consideration for the acquisition included cash (net of cash of the acquired entity) of $10.8 million (inclusive of seller's transaction expenses), plus a contingent earnout payment of up to $14.0 million tied to Get Real Health's earnings before interest, tax, depreciation, and amortization ("EBITDA") (subject to certain pro-forma adjustments) for 2019. During 2019, we have incurred approximately $0.5 million of pre-tax acquisition costs in connection with the acquisition of Get Real Health. Acquisition costs are included in general and administrative expenses in our consolidated statements of income. Our acquisition of Get Real Health will be treated as a purchase in accordance with ASC 805, Business Combinations , which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. Our allocation of the purchase price is based on management's judgment after evaluating several factors, including a preliminary valuation assessment. The allocation is preliminary and subject to changes, which could be significant, as additional information becomes available and appraisals of intangible assets and deferred tax positions are finalized. The preliminary allocation of the purchase price paid for Get Real Health as of September 30, 2019 was as follows: (In thousands) Purchase Price Allocation Acquired cash $ 159 Accounts receivable 364 Prepaid expenses 107 Property and equipment 365 Operating lease asset 1,285 Intangible assets 7,890 Goodwill 9,511 Accounts payable and accrued liabilities (594) Deferred taxes, net (1,480) Operating lease liability (1,285) Contingent consideration (5,000) Deferred revenue (430) Net assets acquired $ 10,892 The intangible assets in the table above are being amortized on a straight-line basis over their estimated useful lives. The amortization is included in amortization of acquisition-related intangibles in our condensed consolidated statements of income. The fair value measurements of tangible and intangible assets and liabilities were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy (see Note 15 - Fair Value). Level 3 inputs included, among others, discount rates that we estimated would be used by a market participant in valuing these assets and liabilities, projections of revenues and cash flows, client attrition rates and market comparables. Our condensed consolidated statement of operations for the three and nine months ended September 30, 2019 includes revenues of approximately $0.5 million and $0.7 million, respectively, and pre-tax loss of approximately $0.7 million and $1.4 million, respectively, attributed to the acquired business since the May 3, 2019 acquisition date. The following unaudited pro forma revenue, net loss and earnings per share amounts for the three and nine months ended September 30, 2019 and 2018 give effect to the Get Real Health acquisition as if it had been completed on January 1, 2018. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been during the periods presented had the Get Real Health acquisition been completed during the periods presented. In addition, the unaudited pro forma financial information does not purport to project future operating results. The pro forma information does not fully reflect: (1) any anticipated synergies (or costs to achieve synergies) or (2) the impact of non-recurring items directly related to the Get Real Health acquisition. Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2019 2018 2019 2018 Pro forma revenues $ 68,699 $ 70,365 $ 205,459 $ 210,622 Pro forma net income $ 3,486 $ 5,208 $ 7,519 $ 7,516 Pro forma diluted earnings per share $ 0.25 $ 0.38 $ 0.55 $ 0.55 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment, net was comprised of the following at September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Land $ 2,848 $ 2,848 Buildings and improvements 8,038 7,752 Computer equipment 3,964 2,766 Leasehold improvements 1,712 1,198 Office furniture and fixtures 1,954 1,938 Automobiles 18 18 Property and equipment, gross 18,534 16,520 Less: accumulated depreciation (6,708) (5,645) Property and equipment, net $ 11,826 $ 10,875 |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES Other accrued liabilities was comprised of the following at September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Salaries and benefits $ 4,103 $ 8,722 Severance 647 992 Commissions 794 830 Self-insurance reserves 1,382 1,017 Contingent consideration 5,000 206 Other 575 452 Operating lease liabilities, current portion 1,483 — Other accrued liabilities $ 13,984 $ 12,219 |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The Company presents basic and diluted earnings per share ("EPS") data for its common stock. Basic EPS is calculated by dividing the net income attributable to stockholders of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is determined by adjusting the net income attributable to stockholders of the Company and the weighted average number of shares of common stock outstanding during the period for the effects of all dilutive potential common shares, including awards under stock-based compensation arrangements. The Company's unvested restricted stock awards (see Note 9) are considered participating securities under FASB Codification topic, Earnings Per Share , because they entitle holders to non-forfeitable rights to dividends until the awards vest or are forfeited. When a company has a security that qualifies as a "participating security," the Codification requires the use of the two-class method when computing basic EPS. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. In determining the amount of net income to allocate to common stockholders, income is allocated to both common stock and participating securities based on their respective weighted average shares outstanding for the period, with net income attributable to common stockholders ultimately equaling net income less net income attributable to participating securities. Diluted EPS for the Company's common stock is computed using the more dilutive of the two-class method or the treasury stock method. The following is a calculation of the basic and diluted EPS for the Company's common stock, including a reconciliation between net income and net income attributable to common stockholders: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2019 2018 2019 2018 Net income $ 4,135 $ 5,749 $ 9,241 $ 10,044 Less: Net income attributable to participating securities (151) (197) (347) (338) Net income attributable to common stockholders $ 3,984 $ 5,552 $ 8,894 $ 9,706 Weighted average shares outstanding used in basic per common share computations 13,829 13,604 13,760 13,547 Add: Dilutive potential common shares — — — — Weighted average shares outstanding used in diluted per common share computations 13,829 13,604 13,760 13,547 Basic EPS $ 0.29 $ 0.41 $ 0.65 $ 0.72 Diluted EPS $ 0.29 $ 0.41 $ 0.65 $ 0.72 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company determines the tax provision for interim periods using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our effective tax rate for the three months ended September 30, 2019, was a tax expense of 4% compared to a tax benefit of 54% for the three months ended September 30, 2018. During the third quarter of 2018, we implemented the Internal Revenue Service’s “Guidance for Allowance of the Credit for Increasing Research Activities Under IRC Section 41 for Taxpayers that Expense Research and Development Costs on their Financial Statements pursuant to ASC 730,” commonly referred to as the "ASC 730 Safe Harbor Directive". This Directive provides guidance regarding the examination of certain research and development ("R&D") expenses under ASC 730, Research and Development , and indicates that the IRS will not challenge certain qualified research expenses (QREs) that are characterized as a taxpayer’s adjusted ASC 730 financial statement R&D costs. Under this guidance, taxpayers now have the option to reconcile ASC 730 with the QREs claimed on their tax return by adjusting ASC 730 financial statement R&D costs to arrive at the amount the IRS considers as qualifying for the safe harbor. The implementation of this guidance, including corresponding 2017 provision-to-return and 2018 year-to-date adjustments, resulted in an overall benefit to our effective tax rate of 81% related to R&D credits for the three months ended September 31, 2018. R&D credits (inclusive of 2018 provision-to-return adjustments) for the three months ended September 30, 2019 benefited our effective tax rate by 20% for the related period. Our effective tax rate for the nine months ended September 30, 2019 increased to 15% from 2% for the nine months ended September 30, 2018. This significant increase in our effective tax rate was primarily due to the implementation of the ASC 730 Safe Harbor Directive during the first nine months of 2018, resulting in an overall benefit to our effective tax rate of 31% related to R&D credits for the first nine months of 2018, inclusive of 2017 provision-to-return adjustments. R&D credits (inclusive of 2018 provision-to-return adjustments) for the nine months ended September 30, 2019 benefited our effective tax rate by 13% for the related period. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense is measured at the grant date based on the fair value of the award, and is recognized as an expense over the employee's or non-employee director's requisite service period. The following table details total stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018, included in the condensed consolidated statements of income: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Costs of sales $ 467 $ 566 $ 1,514 $ 1,590 Operating expenses 1,703 2,044 5,783 5,713 Pre-tax stock-based compensation expense 2,170 2,610 7,297 7,303 Less: income tax effect (477) (574) (1,605) (1,607) Net stock-based compensation expense $ 1,693 $ 2,036 $ 5,692 $ 5,696 The Company's stock-based compensation awards are in the form of restricted stock and performance share awards granted pursuant to the Company's 2012 Restricted Stock Plan for Non-Employee Directors, Amended and Restated 2014 Incentive Plan and 2019 Incentive Plan (the "Plans"). As of September 30, 2019, there was $11.2 million of unrecognized compensation expense related to unvested stock-based compensation arrangements granted under the Plans, which is expected to be recognized over a weighted-average period of 1.7 years. Restricted Stock The Company grants restricted stock to executive officers, certain key employees and non-employee directors under the Plans with the fair value of the awards representing the fair value of the common stock on the date the restricted stock is granted. Shares of restricted stock generally vest in equal annual installments over the applicable vesting period, which ranges from one three A summary of restricted stock activity (including shares of restricted stock issued pursuant to the settlement of performance share awards) under the Plans during the nine months ended September 30, 2019 and 2018 is as follows: Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Shares Weighted-Average Shares Weighted-Average Unvested restricted stock outstanding at beginning of period 475,132 $ 32.00 309,195 $ 38.36 Granted 133,936 30.89 148,841 30.20 Performance share awards settled through the issuance of restricted stock 138,566 29.80 177,395 29.94 Vested (221,775) 33.48 (153,424) 40.81 Unvested restricted stock outstanding at end of period 525,859 $ 30.51 482,007 $ 31.96 Performance Share Awards The Company granted performance share awards to executive officers and certain key employees under the Amended and Restated 2014 Incentive Plan prior to 2019 and under the 2019 Incentive Plan beginning in 2019. The number of shares of common stock earned and issuable under each award is determined at the end of a one-year or three-year performance period, as applicable, based on the Company's achievement of performance goals predetermined by the Compensation Committee of the Board of Directors at the time of grant. The three-year performance share awards include a modifier to the total number of shares earned based on the Company's total shareholder return ("TSR") compared to an industry index. If certain levels of the performance objective are met, the award results in the issuance of shares of restricted stock or common stock corresponding to such level. One-year performance share awards are then subject to time-based vesting pursuant to which the shares of restricted stock vest in equal annual installments over the applicable vesting period, which is generally three In the event that the Company's financial performance meets the predetermined targets for the performance objectives of the one-year and three-year performance share awards, the Company will issue each award recipient the number of shares of restricted stock or common stock, as applicable, equal to the target award specified in the individual's underlying performance share award agreement. In the event the financial results of the Company exceed the predetermined targets, additional shares up to the maximum award may be issued. In the event the financial results of the Company fall below the predetermined targets, a reduced number of shares may be issued. If the financial results of the Company fall below the threshold performance levels, no shares will be issued. The total number of shares issued for the three-year performance share award may be increased, decreased, or unchanged based on the TSR modifier described above. The recipients of performance share awards do not receive dividends or possess voting rights during the performance period and, accordingly, the fair value of the one-year and three-year performance share awards is the quoted market value of CPSI's common stock on the grant date less the present value of the expected dividends not received during the relevant period. The TSR modifier applicable to the three-year performance share awards is considered a market condition and therefore is reflected in the grant date fair value of the award. A Monte Carlo simulation has been used to account for this market condition in the grant date fair value of the award. Expense of one-year performance share awards is recognized using the accelerated attribution (graded vesting) method over the period beginning on the date the Company determines that it is probable that the performance criteria will be achieved and ending on the last day of the vesting period for the restricted stock issued in satisfaction of such awards. Expense of three-year performance share awards is recognized using ratable straight-line amortization over the three-year performance period. In the event the Company determines it is no longer probable that the minimum performance level will be achieved, all previously recognized compensation expense related to the applicable awards is reversed in the period such a determination is made. A summary of performance share award activity under the Plans during the nine months ended September 30, 2019 and 2018 is as follows, based on the target award amounts set forth in the performance share award agreements: Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Shares Weighted-Average Shares Weighted-Average Performance share awards outstanding at beginning of period 184,776 $ 30.15 189,325 $ 29.94 Granted 110,310 30.95 184,776 30.15 Adjusted for actual performance, net of forfeitures 44,189 29.77 (11,930) 29.94 Performance share awards settled through the issuance of restricted stock (138,566) 29.80 (177,395) 29.94 Performance share awards outstanding at end of period 200,709 $ 30.75 184,776 $ 30.15 |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
FINANCING RECEIVABLES | FINANCING RECEIVABLES Short-Term Payment Plans The Company provides fixed monthly payment arrangements ("short-term payment plans") over terms ranging from three twelve (In thousands) September 30, 2019 December 31, 2018 Short-term payment plans, gross $ 3,593 $ 5,773 Less: allowance for losses (252) (404) Short-term payment plans, net $ 3,341 $ 5,369 Long-Term Financing Arrangements Additionally, the Company provides financing for purchases of its information and patient care systems to certain healthcare providers under long-term financing arrangements expiring in various years through 2026. Under long-term financing arrangements, the transaction price is adjusted by a discount rate that reflects market conditions that would be used for a separate financing transaction between the Company and licensee at contract inception, and takes into account the credit characteristics of the licensee and market interest rates as of the date of the agreement. As such, the amount of fixed fee revenue recognized at the beginning of the license term will be reduced by the calculated financing component. As payments are received from the licensee, the Company recognizes a portion of the financing component as interest income, reported as other income in the condensed consolidated statements of income. These receivables typically have terms from two The components of these receivables were as follows at September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Long-term financing arrangements, gross $ 32,947 $ 34,841 Less: allowance for losses (2,044) (2,163) Less: unearned income (3,735) (3,725) Long-term financing arrangements, net $ 27,168 $ 28,953 Future minimum payments to be received subsequent to September 30, 2019 are as follows: (In thousands) Years Ending December 31, 2019 $ 3,213 2020 10,641 2021 8,404 2022 5,803 2023 2,857 Thereafter 2,029 Total minimum payments to be received 32,947 Less: allowance for losses (2,044) Less: unearned income (3,735) Receivables, net $ 27,168 Credit Quality of Financing Receivables and Allowance for Credit Losses The following table is a roll-forward of the allowance for financing credit losses for the nine months ended September 30, 2019 and year ended December 31, 2018: (In thousands) Balance at Beginning of Period Provision Charge-offs Recoveries Balance at End of Period September 30, 2019 $ 2,567 $ 329 $ (600) $ — $ 2,296 December 31, 2018 $ 3,244 $ 1,691 $ (2,368) $ — $ 2,567 The Company’s financing receivables are comprised of a single portfolio segment, as the balances are all derived from short-term payment plan arrangements and long-term financing arrangements within our target market of community hospitals. The Company evaluates the credit quality of its financing receivables based on a combination of factors, including, but not limited to, customer collection experience, economic conditions, the customer’s financial condition, and known risk characteristics impacting the respective customer base of community hospitals, the most notable of which relate to enacted and potential changes in Medicare and Medicaid reimbursement rates as community hospitals typically generate a significant portion of their revenues and related cash flows from beneficiaries of these programs. In addition to specific account identification, the Company utilizes historical collection experience to establish the allowance for credit losses. Financing receivables are written off only after the Company has exhausted all collection efforts. Customer payments are considered past due if a scheduled payment is not received within contractually agreed upon terms. To facilitate customer collection and credit monitoring efforts, financing receivable amounts are invoiced and reclassified to trade accounts receivable when they become due, with all invoiced amounts placed on nonaccrual status. As a result, all past due amounts related to the Company’s financing receivables are included in trade accounts receivable in the accompanying condensed consolidated balance sheets. The following is an analysis of the age of financing receivables amounts (excluding short-term payment plans) that have been reclassified to trade accounts receivable and were past due as of September 30, 2019 and December 31, 2018: (In thousands) 1 to 90 Days Past Due 91 to 180 Days Past Due 181 + Days Past Due Total Past Due September 30, 2019 $ 1,265 $ 168 $ 191 $ 1,624 December 31, 2018 $ 1,302 $ 210 $ 245 $ 1,757 From time to time, the Company may agree to alternative payment terms outside of the terms of the original financing receivable agreement due to customer difficulties in achieving the original terms. In general, such alternative payment arrangements do not result in a re-aging of the related receivables. Rather, payments pursuant to any alternative payment arrangements are applied to the already outstanding invoices beginning with the oldest outstanding invoices as the payments are received. Because amounts are reclassified to trade accounts receivable when they become due, there are no past due amounts included within financing receivables current portion or financing receivables, net of current portion, in the accompanying condensed consolidated balance sheets. The Company utilizes an aging of trade accounts receivable as the primary credit quality indicator for its financing receivables, which is facilitated by the reclassification of customer payment amounts to trade accounts receivable when they become due. The table below categorizes customer financing receivable balances (excluding short-term payment plans), based on the age of the oldest payment outstanding that has been reclassified to trade accounts receivable: (In thousands) September 30, 2019 December 31, 2018 Stratification of uninvoiced client financing receivables based on aging of related trade accounts receivable: Uninvoiced client financing receivables related to trade accounts receivable that are 1 to 90 Days Past Due $ 16,023 $ 17,290 Uninvoiced client financing receivables related to trade accounts receivable that are 91 to 180 Days Past Due 2,136 2,247 Uninvoiced client financing receivables related to trade accounts receivable that are 181 + Days Past Due 2,714 885 Total uninvoiced client financing receivables balances of clients with a trade accounts receivable $ 20,873 $ 20,422 Total uninvoiced client financing receivables of clients with no related trade accounts receivable 8,339 10,694 Total financing receivables with contractual maturities of one year or less 3,593 5,773 Less: allowance for losses (2,296) (2,567) Total financing receivables $ 30,509 $ 34,322 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Our purchased definite-lived intangible assets as of September 30, 2019 and December 31, 2018 are summarized as follows: (In thousands) Customer Relationships Trademark Developed Technology Total Gross carrying amount as of December 31, 2017 $ 82,300 $ 10,900 $ 24,100 $ 117,300 Accumulated amortization as of December 31, 2018 (19,476) (2,613) (8,985) (31,074) Net intangible assets as of December 31, 2018 $ 62,824 $ 8,287 $ 15,115 $ 86,226 Gross carrying amount as of December 31, 2018 $ 82,300 $ 10,900 $ 24,100 $ 117,300 Intangible assets acquired 2,070 220 5,600 7,890 Accumulated amortization as of September 30, 2019 (24,656) (3,236) (11,321) (39,213) Net intangible assets as of September 30, 2019 $ 59,714 $ 7,884 $ 18,379 $ 85,977 Weighted average remaining years of useful life 9 13 6 9 The following table represents the remaining amortization of definite-lived intangible assets as of September 30, 2019: (In thousands) For the year ended December 31, 2019 $ 2,866 2020 11,421 2021 11,003 2022 10,904 2023 10,904 Thereafter 38,879 Total $ 85,977 The following table sets forth the change in the carrying amount of goodwill by segment for the nine months ended September 30, 2019: (In thousands) Acute Care EHR Post-acute Care EHR TruBridge Total Balance as of December 31, 2018 $ 97,095 $ 29,570 $ 13,784 $ 140,449 Goodwill acquired — — 9,511 9,511 Balance as of September 30, 2019 $ 97,095 $ 29,570 $ 23,295 $ 149,960 |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt was comprised of the following at September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Term loan facility $ 91,017 $ 102,432 Revolving credit facility 31,000 29,693 Finance lease obligation — 250 Debt obligations 122,017 132,375 Less: unamortized debt issuance costs (1,047) (1,306) Debt obligation, net 120,970 131,069 Less: current portion (8,430) (6,486) Long-term debt $ 112,540 $ 124,583 As of September 30, 2019, the carrying value of debt approximated the fair value due to the variable interest rate, which reflected the market rate. Credit Agreement In conjunction with our acquisition of HHI in January 2016, we entered into a syndicated credit agreement (the "Previous Credit Agreement") with Regions Bank ("Regions") serving as administrative agent, which provided for a $125 million term loan facility (the "Previous Term Loan Facility") and a $50 million revolving credit facility (the "Previous Revolving Credit Facility"). On October 13, 2017, we entered into a Second Amendment (the "Second Amendment") to refinance and decrease the aggregate principal amount of the credit facilities from $175 million to $162 million, which included a $117 million term loan facility (the "Amended Term Loan Facility") and a $45 million revolving credit facility (the "Amended Revolving Credit Facility" and, together with the Amended Term Loan Facility, the "Amended Credit Facilities"). On February 8, 2018, we entered into a Third Amendment (the "Third Amendment") to the credit agreement (as amended, the "Amended Credit Agreement") to increase the aggregate principal amount of the Amended Credit Facilities from $162 million to $167 million, which includes the $117 million Amended Term Loan Facility and a $50 million Amended Revolving Credit Facility. Each of the Amended Credit Facilities continues to bear interest at a rate per annum equal to an applicable margin plus, at our option, either (1) the Adjusted LIBOR rate for the relevant interest period, (2) an alternate base rate determined by reference to the greater of (a) the prime lending rate of Regions, (b) the federal funds rate for the relevant interest period plus one half of one percent per annum and (c) the one month LIBOR rate plus one percent per annum, or (3) a combination of (1) and (2). The applicable margin range for LIBOR loans and the letter of credit fee ranges from 2.0% to 3.5%. The applicable margin range for base rate loans ranges from 1.0% to 2.5%, in each case based on the Company's consolidated leverage ratio. Principal payments with respect to the Amended Term Loan Facility are due on the last day of each fiscal quarter beginning December 31, 2017, with quarterly principal payments of approximately $1.46 million through September 30, 2019, approximately $2.19 million through September 30, 2021 and approximately $2.93 million through September 30, 2022, with maturity on October 13, 2022 or such earlier date as the obligations under the Amended Credit Agreement become due and payable pursuant to the terms of the Amended Credit Agreement (the "Amended Maturity Date"). Any principal outstanding under the Amended Revolving Credit Facility is due and payable on the Amended Maturity Date. Anticipated annual future maturities of the Amended Term Loan Facility, Amended Revolving Credit Facility, and capital lease obligation are as follows as of September 30, 2019: (In thousands) 2019 $ 2,194 2020 8,775 2021 9,506 2022 101,542 2023 — Thereafter — $ 122,017 The Amended Credit Facilities are secured pursuant to a Pledge and Security Agreement, dated January 8, 2016, among the parties identified as obligors therein and Regions, as collateral agent, on a first priority basis by a security interest in substantially all of the tangible and intangible assets (subject to certain exceptions) of the Company and certain subsidiaries of the Company, as guarantors (collectively, the “Subsidiary Guarantors”), including certain registered intellectual property and the capital stock of certain of the Company’s direct and indirect subsidiaries. Our obligations under the Amended Credit Agreement are also guaranteed by the Subsidiary Guarantors. The Amended Credit Agreement, as amended by the Third Amendment, provides incremental facility capacity of $50 million, subject to certain conditions. The Amended Credit Agreement includes a number of restrictive covenants that, among other things and in each case subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and the Subsidiary Guarantors, including the ability to incur additional debt; incur liens and encumbrances; make certain restricted payments, including paying dividends on the Company's equity securities or payments to redeem, repurchase or retire the Company's equity securities (which are subject to our compliance, on a pro forma basis to give effect to the restricted payment, with the fixed charge coverage ratio and consolidated leverage ratio |
OPERATING LEASES
OPERATING LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
OPERATING LEASES | OPERATING LEASES The Company leases office space in various locations in Alabama, Louisiana, Pennsylvania, Minnesota, Colorado, Maryland, and Mississippi. These leases have terms expiring from 2019 through 2030 but do contain optional extension terms. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Supplemental balance sheet information related to operating leases was as follows: (In thousands) September 30, 2019 Operating lease assets: Operating lease assets $ 8,061 Operating lease liabilities: Other accrued liabilities $ 1,483 Operating lease liabilities, net of current portion 6,578 Total operating lease liabilities $ 8,061 Weighted average remaining lease term in years 7 Weighted average discount rate 5.1% Because our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. We used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date. The future minimum lease payments payable under these operating leases subsequent to September 30, 2019 are as follows: (In thousands) 2019 $ 332 2020 1,544 2021 1,518 2022 1,436 2023 1,363 Thereafter 3,381 Total lease payments 9,574 Less imputed interest (1,513) Total $ 8,061 Total rent expense for the nine months ended September 30, 2019 and 2018 was $1.6 million and $1.9 million, respectively. Total cash paid for amounts included in the measurement of lease liabilities within operating cash flows from operating leases for the nine months ended September 30, 2019 was $1.3 million. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESFrom time to time, the Company is involved in routine litigation that arises in the ordinary course of business. Management does not believe it is reasonably possible that such matters will have a material adverse effect on the Company’s financial statements. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE FASB Codification topic, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and expands financial statement disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Codification does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. The Codification requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. As of September 30, 2019, we measured the fair value of contingent consideration that represents the potential earnout incentive for Get Real Health's former equity holders. We estimated the fair value of the contingent consideration based on the probability of Get Real Health meeting EBITDA (subject to certain pro-forma adjustments) targets. We did not have any other instruments that require fair value measurement as of September 30, 2019. The following table summarizes the carrying amounts and fair value of the contingent consideration at September 30, 2019: Fair Value at September 30, 2019 Using Carrying Amount at Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) 9/30/2019 (Level 1) (Level 2) (Level 3) Description Contingent consideration $ 5,000 $ — $ — $ 5,000 Total $ 5,000 $ — $ — $ 5,000 The accrued contingent consideration depicted below represents the potential earnout incentive for former Rycan shareholders, relating to the purchase of Rycan by HHI in 2015. We estimated the fair value of the contingent consideration based on the amount of revenue we expected to be earned by Rycan through the year ending December 31, 2018 in accordance with the purchase agreement between the parties. The following table summarizes the carrying amounts and fair value of the contingent consideration at December 31, 2018: Fair Value at December 31, 2018 Using Carrying Amount at Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) 12/31/2018 (Level 1) (Level 2) (Level 3) Description Contingent consideration $ 206 $ — $ — $ 206 Total $ 206 $ — $ — $ 206 The carrying amounts of other financial instruments reported in the consolidated balance sheets for current assets and current liabilities approximate their fair values because of the short-term nature of these instruments. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Our chief operating decision makers ("CODM") utilize three operating segments, "Acute Care EHR," "Post-acute Care EHR" and "TruBridge," based on our three distinct business units with unique market dynamics and opportunities. Revenues and cost of sales are primarily derived from the provision of services and sales of our proprietary software, and our CODM assess the performance of these three segments at the gross profit level. Operating expenses and items such as interest, income tax, capital expenditures and total assets are managed at a consolidated level and thus are not included in our operating segment disclosures. Our CODM group is comprised of the Chief Executive Officer, Chief Growth Officer, Chief Operating Officer, and Chief Financial Officer. Accounting policies for each of the reportable segments are the same as those used on a consolidated basis. The following table presents a summary of the revenues and gross profits of our three operating segments for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Revenues: Acute Care EHR Recurring revenue $ 26,982 $ 27,393 $ 81,462 $ 83,633 Non-recurring revenue 8,983 11,514 25,999 32,664 Total Acute Care EHR revenue 35,965 38,907 107,461 116,297 Post-acute Care EHR Recurring revenue 4,312 4,515 13,214 14,002 Non-recurring revenue 713 1,003 3,202 2,624 Total Post-acute Care EHR revenue 5,025 5,518 16,416 16,626 TruBridge 27,709 24,872 80,119 75,162 Total revenues $ 68,699 $ 69,297 $ 203,996 $ 208,085 Cost of sales: Acute Care EHR $ 17,382 $ 18,086 $ 50,798 $ 52,812 Post-acute Care EHR 1,379 1,497 3,978 4,716 TruBridge 14,023 13,590 41,660 40,501 Total cost of sales $ 32,784 $ 33,173 $ 96,436 $ 98,029 Gross profit: Acute Care EHR $ 18,583 $ 20,821 $ 56,663 $ 63,485 Post-acute Care EHR 3,646 4,021 12,438 11,910 TruBridge 13,686 11,282 38,459 34,661 Total gross profit $ 35,915 $ 36,124 $ 107,560 $ 110,056 Corporate operating expenses $ (29,908) $ (30,763) $ (91,890) $ (94,820) Other income 4 201 535 593 Interest expense (1,702) (1,829) (5,269) (5,615) Income before taxes $ 4,309 $ 3,733 $ 10,936 $ 10,214 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn November 5, 2019, the Company announced a dividend for the fourth quarter of 2019 in the amount of $0.10 per share, payable on November 29, 2019, to stockholders of record as of the close of business on November 15, 2019. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of the periods presented. All such adjustments are considered of a normal recurring nature. Quarterly results of operations are not necessarily indicative of annual results. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted. The condensed consolidated balance sheet as of December 31, 2018 was derived from the audited consolidated balance sheet at that date. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of Computer Programs and Systems, Inc. ("CPSI" or the "Company") for the year ended December 31, 2018 and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements of CPSI include the accounts of TruBridge, LLC ("TruBridge"), Evident, LLC ("Evident"), Healthland Holding Inc. ("HHI"), and iNetXperts, Corp. d/b/a Get Real Health ("Get Real Health"), all of which are wholly-owned subsidiaries of CPSI. The accounts of HHI include those of its wholly-owned subsidiaries, Healthland Inc. ("Healthland"), Rycan Technologies, Inc. ("Rycan"), and American HealthTech, Inc. ("AHT"). All significant intercompany balances and transactions have been eliminated. |
Revenue Recognition | REVENUE RECOGNITIONRevenue is recognized upon transfer of control of promised products or services to clients in an amount that reflects the consideration we expect to receive in exchange for those products and services. We enter into contracts that can include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations. The Company employs the 5-step revenue recognition model under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers , to: (1) identify the contract with the client, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized net of shipping charges and any taxes collected from clients, which are subsequently remitted to governmental authorities. System Sales and Support The Company enters into contractual obligations to sell perpetual software licenses, installation, conversion, training, hardware and software application support and hardware maintenance services to acute care and post-acute care community hospitals. Non-recurring Revenues • Perpetual software licenses, installation, conversion, and related training are not considered separate and distinct performance obligations due to the proprietary nature of our software and are, therefore, accounted for as a single performance obligation on a module-by-module basis. Revenue is recognized as each module's implementation is completed based on the module's stand-alone selling price ("SSP"), net of discounts. Fees for licenses, installation, conversion, and related training are typically due in three installments: (1) at placement of order, (2) upon installation of software and commencement of training, and (3) upon satisfactory completion of monthly accounting cycle or end-of-month operation by application and as applicable for each application. Often, short-term and/or long-term financing arrangements are provided for software implementations; refer to Note 10 - Financing Receivables for further information. Electronic health records ("EHR") implementations include a system warranty that terminates thirty days from the software go-live date, the date on which the client begins using the system in a live environment. • Hardware revenue is recognized separately from software licenses at the point in time it is delivered to the client. The SSP of hardware is cost plus a reasonable margin. Payment is generally due upon delivery of the hardware to the client. Standard manufacturer warranties apply to hardware. Recurring Revenues • Software application support and hardware maintenance services sold with software licenses and hardware are separate and distinct performance obligations. Revenue for support and maintenance services is recognized based on SSP, which is the renewal price, ratably over the life of the contract, which is generally three five • Subscriptions to third party content revenue is recognized as a separate performance obligation ratably over the subscription term based on SSP, which is cost plus a reasonable margin. Payment is due monthly for subscriptions to third party content. • Software as a Service ("SaaS") arrangements for EHR software and related conversion and training services are considered a single performance obligation. Revenue is recognized on a monthly basis as the SaaS service is provided to the client over the contract term. Payment is due monthly for SaaS services provided. Refer to Note 16 - Segment Reporting, for further information, including revenue by client base (acute care or post-acute care) bifurcated by recurring and non-recurring revenue. TruBridge TruBridge provides an array of business processing services ("BPS") consisting of accounts receivable management, private pay services, insurance services, medical coding, electronic billing, statement processing, payroll processing, and contract management. Fees are recognized over the period of the client contractual relationship as the services are performed based on the SSP, net of discounts. Fees for many of these services are invoiced, and revenue recognized accordingly, based on the volume of transactions or a percentage of client accounts receivable collections. Payment is due monthly for BPS with certain amounts varying based on utilization and/or volumes. TruBridge also provides professional IT services. Revenue from professional IT services is recognized as the services are performed based on SSP. Payment is due monthly as services are performed. Deferred Revenue Deferred revenue represents amounts invoiced to clients for which the services under contract have not been completed and revenue has not been recognized, including annual renewals of certain software subscriptions and customer deposits for implementations to be performed at a later date. Revenue is recognized ratably over the life of the software subscriptions as services are provided and at the point-in-time when implementations have been completed. The following table details deferred revenue for the nine months ended September 30, 2019 and 2018, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Beginning balance $ 10,201 $ 9,937 Deferred revenue recorded 13,888 15,847 Deferred revenue acquired 430 — Less deferred revenue recognized as revenue (15,863) (14,669) Ending balance $ 8,656 $ 11,115 The deferred revenue recorded during the nine months ended September 30, 2019 is comprised primarily of the annual renewals of certain software subscriptions billed during the first quarter of each year and deposits collected for future EHR installations. The deferred revenue recognized as revenue during the nine months ended September 30, 2019 and 2018 is comprised primarily of the periodic recognition of annual renewals that were deferred until earned and deposits for future EHR installations that were deferred until earned. Costs to Obtain and Fulfill a Contract with a Customer Costs to obtain a contract include the commission costs related to SaaS licensing agreements, which are capitalized and amortized ratably over the expected life of the customer. As a practical expedient, we generally recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset would have been one year or less, with the exception of commissions generated from TruBridge sales. TruBridge commissions, which are paid up to twelve months in advance of services performed, are capitalized and amortized over the prepayment period. Costs to obtain a contract are expensed within sales and marketing expenses in the accompanying condensed consolidated statements of income. Contract fulfillment costs related to the implementation of SaaS arrangements are capitalized and amortized ratably over the expected life of the customer. Costs to fulfill contracts consist of the payroll costs for the implementation of SaaS arrangements, including time for training, conversion, and installation that is necessary for the software to be utilized. Contract fulfillment costs are expensed within the caption "System sales and support - Cost of sales." Costs to obtain and fulfill contracts related to SaaS arrangements are included within the "Prepaid expenses and other" and "Other assets, net of current portion" line items on our condensed consolidated balance sheets. The following table details costs to obtain and fulfill contracts with customers for the nine months ended September 30, 2019 and 2018, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Beginning balance $ 3,017 $ 3,775 Costs to obtain and fulfill contracts capitalized 4,130 2,356 Less costs to obtain and fulfill contracts recognized as expense (3,509) (3,129) Ending balance $ 3,638 $ 3,002 Remaining Performance Obligations Disclosures regarding remaining performance obligations are not considered material as the overwhelming majority of the Company's remaining performance obligations either (a) are related to contracts with an expected duration of one year or less, or (b) exhibit revenue recognition in the amount to which the Company has the right to invoice. |
Net Income Per Share | NET INCOME PER SHARE The Company presents basic and diluted earnings per share ("EPS") data for its common stock. Basic EPS is calculated by dividing the net income attributable to stockholders of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is determined by adjusting the net income attributable to stockholders of the Company and the weighted average number of shares of common stock outstanding during the period for the effects of all dilutive potential common shares, including awards under stock-based compensation arrangements. The Company's unvested restricted stock awards (see Note 9) are considered participating securities under FASB Codification topic, Earnings Per Share , because they entitle holders to non-forfeitable rights to dividends until the awards vest or are forfeited. When a company has a security that qualifies as a "participating security," the Codification requires the use of the two-class method when computing basic EPS. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. In determining the amount of net income to allocate to common stockholders, income is allocated to both common stock and participating securities based on their respective weighted average shares outstanding for the period, with net income attributable to common stockholders ultimately equaling net income less net income attributable to participating securities. Diluted EPS for the Company's common stock is computed using the more dilutive of the two-class method or the treasury stock method. |
Income Taxes | INCOME TAXESThe Company determines the tax provision for interim periods using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. |
Stock-Based Compensation | STOCK-BASED COMPENSATIONStock-based compensation expense is measured at the grant date based on the fair value of the award, and is recognized as an expense over the employee's or non-employee director's requisite service period. |
Fair Value | FASB Codification topic, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and expands financial statement disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Codification does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. The Codification requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. |
Recent Account Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Standards Adopted in 2019 In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases , to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. We adopted this guidance as of January 1, 2019 using the current period adjustment method. The impact on the financial statements of implementation of this standard was an increase in lease assets and lease liabilities of $4.9 million as of the adoption date, January 1, 2019. Adoption of the standard did not significantly impact our consolidated net earnings or cash flows. New Accounting Standards Yet to be Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses , which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance will be effective for fiscal years and interim periods within those years beginning after December 15, 2019, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2020. The Company is currently evaluating the impact that the implementation of this standard will have on its consolidated financial statements. We do not believe that any other recently issued but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Contract with Customer, Asset and Liability | The following table details deferred revenue for the nine months ended September 30, 2019 and 2018, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Beginning balance $ 10,201 $ 9,937 Deferred revenue recorded 13,888 15,847 Deferred revenue acquired 430 — Less deferred revenue recognized as revenue (15,863) (14,669) Ending balance $ 8,656 $ 11,115 |
Schedule of Capitalized Contract Cost | Costs to obtain and fulfill contracts related to SaaS arrangements are included within the "Prepaid expenses and other" and "Other assets, net of current portion" line items on our condensed consolidated balance sheets. The following table details costs to obtain and fulfill contracts with customers for the nine months ended September 30, 2019 and 2018, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Beginning balance $ 3,017 $ 3,775 Costs to obtain and fulfill contracts capitalized 4,130 2,356 Less costs to obtain and fulfill contracts recognized as expense (3,509) (3,129) Ending balance $ 3,638 $ 3,002 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary allocation of the purchase price paid for Get Real Health as of September 30, 2019 was as follows: (In thousands) Purchase Price Allocation Acquired cash $ 159 Accounts receivable 364 Prepaid expenses 107 Property and equipment 365 Operating lease asset 1,285 Intangible assets 7,890 Goodwill 9,511 Accounts payable and accrued liabilities (594) Deferred taxes, net (1,480) Operating lease liability (1,285) Contingent consideration (5,000) Deferred revenue (430) Net assets acquired $ 10,892 |
Schedule of Business Acquisition, Pro Forma Information | Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2019 2018 2019 2018 Pro forma revenues $ 68,699 $ 70,365 $ 205,459 $ 210,622 Pro forma net income $ 3,486 $ 5,208 $ 7,519 $ 7,516 Pro forma diluted earnings per share $ 0.25 $ 0.38 $ 0.55 $ 0.55 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net was comprised of the following at September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Land $ 2,848 $ 2,848 Buildings and improvements 8,038 7,752 Computer equipment 3,964 2,766 Leasehold improvements 1,712 1,198 Office furniture and fixtures 1,954 1,938 Automobiles 18 18 Property and equipment, gross 18,534 16,520 Less: accumulated depreciation (6,708) (5,645) Property and equipment, net $ 11,826 $ 10,875 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities was comprised of the following at September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Salaries and benefits $ 4,103 $ 8,722 Severance 647 992 Commissions 794 830 Self-insurance reserves 1,382 1,017 Contingent consideration 5,000 206 Other 575 452 Operating lease liabilities, current portion 1,483 — Other accrued liabilities $ 13,984 $ 12,219 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a calculation of the basic and diluted EPS for the Company's common stock, including a reconciliation between net income and net income attributable to common stockholders: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2019 2018 2019 2018 Net income $ 4,135 $ 5,749 $ 9,241 $ 10,044 Less: Net income attributable to participating securities (151) (197) (347) (338) Net income attributable to common stockholders $ 3,984 $ 5,552 $ 8,894 $ 9,706 Weighted average shares outstanding used in basic per common share computations 13,829 13,604 13,760 13,547 Add: Dilutive potential common shares — — — — Weighted average shares outstanding used in diluted per common share computations 13,829 13,604 13,760 13,547 Basic EPS $ 0.29 $ 0.41 $ 0.65 $ 0.72 Diluted EPS $ 0.29 $ 0.41 $ 0.65 $ 0.72 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Total Stock-Based Compensation Expense | The following table details total stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018, included in the condensed consolidated statements of income: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Costs of sales $ 467 $ 566 $ 1,514 $ 1,590 Operating expenses 1,703 2,044 5,783 5,713 Pre-tax stock-based compensation expense 2,170 2,610 7,297 7,303 Less: income tax effect (477) (574) (1,605) (1,607) Net stock-based compensation expense $ 1,693 $ 2,036 $ 5,692 $ 5,696 |
Summary of Restricted Stock Activity | A summary of restricted stock activity (including shares of restricted stock issued pursuant to the settlement of performance share awards) under the Plans during the nine months ended September 30, 2019 and 2018 is as follows: Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Shares Weighted-Average Shares Weighted-Average Unvested restricted stock outstanding at beginning of period 475,132 $ 32.00 309,195 $ 38.36 Granted 133,936 30.89 148,841 30.20 Performance share awards settled through the issuance of restricted stock 138,566 29.80 177,395 29.94 Vested (221,775) 33.48 (153,424) 40.81 Unvested restricted stock outstanding at end of period 525,859 $ 30.51 482,007 $ 31.96 |
Summary of Performance Share Award Activity | A summary of performance share award activity under the Plans during the nine months ended September 30, 2019 and 2018 is as follows, based on the target award amounts set forth in the performance share award agreements: Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Shares Weighted-Average Shares Weighted-Average Performance share awards outstanding at beginning of period 184,776 $ 30.15 189,325 $ 29.94 Granted 110,310 30.95 184,776 30.15 Adjusted for actual performance, net of forfeitures 44,189 29.77 (11,930) 29.94 Performance share awards settled through the issuance of restricted stock (138,566) 29.80 (177,395) 29.94 Performance share awards outstanding at end of period 200,709 $ 30.75 184,776 $ 30.15 |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Schedule of Components of Short Term Payment Plans | These receivables, included in the current portion of financing receivables, were comprised of the following at September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Short-term payment plans, gross $ 3,593 $ 5,773 Less: allowance for losses (252) (404) Short-term payment plans, net $ 3,341 $ 5,369 |
Components of Lease Receivables | The components of these receivables were as follows at September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Long-term financing arrangements, gross $ 32,947 $ 34,841 Less: allowance for losses (2,044) (2,163) Less: unearned income (3,735) (3,725) Long-term financing arrangements, net $ 27,168 $ 28,953 |
Future Minimum Lease Payments to be Received | Future minimum payments to be received subsequent to September 30, 2019 are as follows: (In thousands) Years Ending December 31, 2019 $ 3,213 2020 10,641 2021 8,404 2022 5,803 2023 2,857 Thereafter 2,029 Total minimum payments to be received 32,947 Less: allowance for losses (2,044) Less: unearned income (3,735) Receivables, net $ 27,168 |
Allowance for Financing Credit Losses | The following table is a roll-forward of the allowance for financing credit losses for the nine months ended September 30, 2019 and year ended December 31, 2018: (In thousands) Balance at Beginning of Period Provision Charge-offs Recoveries Balance at End of Period September 30, 2019 $ 2,567 $ 329 $ (600) $ — $ 2,296 December 31, 2018 $ 3,244 $ 1,691 $ (2,368) $ — $ 2,567 |
Analysis of Age of Financing Receivables Amounts | The following is an analysis of the age of financing receivables amounts (excluding short-term payment plans) that have been reclassified to trade accounts receivable and were past due as of September 30, 2019 and December 31, 2018: (In thousands) 1 to 90 Days Past Due 91 to 180 Days Past Due 181 + Days Past Due Total Past Due September 30, 2019 $ 1,265 $ 168 $ 191 $ 1,624 December 31, 2018 $ 1,302 $ 210 $ 245 $ 1,757 |
Schedule of Financing Receivable Credit Quality Indicators | The table below categorizes customer financing receivable balances (excluding short-term payment plans), based on the age of the oldest payment outstanding that has been reclassified to trade accounts receivable: (In thousands) September 30, 2019 December 31, 2018 Stratification of uninvoiced client financing receivables based on aging of related trade accounts receivable: Uninvoiced client financing receivables related to trade accounts receivable that are 1 to 90 Days Past Due $ 16,023 $ 17,290 Uninvoiced client financing receivables related to trade accounts receivable that are 91 to 180 Days Past Due 2,136 2,247 Uninvoiced client financing receivables related to trade accounts receivable that are 181 + Days Past Due 2,714 885 Total uninvoiced client financing receivables balances of clients with a trade accounts receivable $ 20,873 $ 20,422 Total uninvoiced client financing receivables of clients with no related trade accounts receivable 8,339 10,694 Total financing receivables with contractual maturities of one year or less 3,593 5,773 Less: allowance for losses (2,296) (2,567) Total financing receivables $ 30,509 $ 34,322 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Definite-lived Intangible Assets | Our purchased definite-lived intangible assets as of September 30, 2019 and December 31, 2018 are summarized as follows: (In thousands) Customer Relationships Trademark Developed Technology Total Gross carrying amount as of December 31, 2017 $ 82,300 $ 10,900 $ 24,100 $ 117,300 Accumulated amortization as of December 31, 2018 (19,476) (2,613) (8,985) (31,074) Net intangible assets as of December 31, 2018 $ 62,824 $ 8,287 $ 15,115 $ 86,226 Gross carrying amount as of December 31, 2018 $ 82,300 $ 10,900 $ 24,100 $ 117,300 Intangible assets acquired 2,070 220 5,600 7,890 Accumulated amortization as of September 30, 2019 (24,656) (3,236) (11,321) (39,213) Net intangible assets as of September 30, 2019 $ 59,714 $ 7,884 $ 18,379 $ 85,977 Weighted average remaining years of useful life 9 13 6 9 |
Schedule of Remaining Amortization of Definite-lived Intangible Assets | The following table represents the remaining amortization of definite-lived intangible assets as of September 30, 2019: (In thousands) For the year ended December 31, 2019 $ 2,866 2020 11,421 2021 11,003 2022 10,904 2023 10,904 Thereafter 38,879 Total $ 85,977 |
Schedule of Changes in the Carrying Amount of Goodwill | The following table sets forth the change in the carrying amount of goodwill by segment for the nine months ended September 30, 2019: (In thousands) Acute Care EHR Post-acute Care EHR TruBridge Total Balance as of December 31, 2018 $ 97,095 $ 29,570 $ 13,784 $ 140,449 Goodwill acquired — — 9,511 9,511 Balance as of September 30, 2019 $ 97,095 $ 29,570 $ 23,295 $ 149,960 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt was comprised of the following at September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Term loan facility $ 91,017 $ 102,432 Revolving credit facility 31,000 29,693 Finance lease obligation — 250 Debt obligations 122,017 132,375 Less: unamortized debt issuance costs (1,047) (1,306) Debt obligation, net 120,970 131,069 Less: current portion (8,430) (6,486) Long-term debt $ 112,540 $ 124,583 |
Schedule of Annual Future Maturities of the Term Loan Facility and Revolving Credit Facility | Anticipated annual future maturities of the Amended Term Loan Facility, Amended Revolving Credit Facility, and capital lease obligation are as follows as of September 30, 2019: (In thousands) 2019 $ 2,194 2020 8,775 2021 9,506 2022 101,542 2023 — Thereafter — $ 122,017 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Lease, Supplemental Balance Sheet Information | Supplemental balance sheet information related to operating leases was as follows: (In thousands) September 30, 2019 Operating lease assets: Operating lease assets $ 8,061 Operating lease liabilities: Other accrued liabilities $ 1,483 Operating lease liabilities, net of current portion 6,578 Total operating lease liabilities $ 8,061 Weighted average remaining lease term in years 7 Weighted average discount rate 5.1% |
Schedule of Operating Lease, Liability, Maturity | The future minimum lease payments payable under these operating leases subsequent to September 30, 2019 are as follows: (In thousands) 2019 $ 332 2020 1,544 2021 1,518 2022 1,436 2023 1,363 Thereafter 3,381 Total lease payments 9,574 Less imputed interest (1,513) Total $ 8,061 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Carrying Amounts and Fair Values of Certain Assets and Liabilities | The following table summarizes the carrying amounts and fair value of the contingent consideration at December 31, 2018: Fair Value at December 31, 2018 Using Carrying Amount at Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) 12/31/2018 (Level 1) (Level 2) (Level 3) Description Contingent consideration $ 206 $ — $ — $ 206 Total $ 206 $ — $ — $ 206 |
iNetXperts, Corp. | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Carrying Amounts and Fair Values of Certain Assets and Liabilities | The following table summarizes the carrying amounts and fair value of the contingent consideration at September 30, 2019: Fair Value at September 30, 2019 Using Carrying Amount at Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) 9/30/2019 (Level 1) (Level 2) (Level 3) Description Contingent consideration $ 5,000 $ — $ — $ 5,000 Total $ 5,000 $ — $ — $ 5,000 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents a summary of the revenues and gross profits of our three operating segments for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Revenues: Acute Care EHR Recurring revenue $ 26,982 $ 27,393 $ 81,462 $ 83,633 Non-recurring revenue 8,983 11,514 25,999 32,664 Total Acute Care EHR revenue 35,965 38,907 107,461 116,297 Post-acute Care EHR Recurring revenue 4,312 4,515 13,214 14,002 Non-recurring revenue 713 1,003 3,202 2,624 Total Post-acute Care EHR revenue 5,025 5,518 16,416 16,626 TruBridge 27,709 24,872 80,119 75,162 Total revenues $ 68,699 $ 69,297 $ 203,996 $ 208,085 Cost of sales: Acute Care EHR $ 17,382 $ 18,086 $ 50,798 $ 52,812 Post-acute Care EHR 1,379 1,497 3,978 4,716 TruBridge 14,023 13,590 41,660 40,501 Total cost of sales $ 32,784 $ 33,173 $ 96,436 $ 98,029 Gross profit: Acute Care EHR $ 18,583 $ 20,821 $ 56,663 $ 63,485 Post-acute Care EHR 3,646 4,021 12,438 11,910 TruBridge 13,686 11,282 38,459 34,661 Total gross profit $ 35,915 $ 36,124 $ 107,560 $ 110,056 Corporate operating expenses $ (29,908) $ (30,763) $ (91,890) $ (94,820) Other income 4 201 535 593 Interest expense (1,702) (1,829) (5,269) (5,615) Income before taxes $ 4,309 $ 3,733 $ 10,936 $ 10,214 |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease assets | $ 8,061 | |
Operating lease liabilities | $ 8,061 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease assets | $ 4,900 | |
Operating lease liabilities | $ 4,900 |
REVENUE RECOGNITION (Detail)
REVENUE RECOGNITION (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Deferred revenue recorded | $ 13,888 | $ 15,847 |
Minimum | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Maintenance contract term | 3 years | |
Maximum | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Maintenance contract term | 5 years |
REVENUE RECOGNITION Deferred Re
REVENUE RECOGNITION Deferred Revenue (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 10,201 | $ 9,937 |
Deferred revenue recorded | 13,888 | 15,847 |
Deferred revenue acquired | 430 | 0 |
Less deferred revenue recognized as revenue | (15,863) | (14,669) |
Ending balance | $ 8,656 | $ 11,115 |
REVENUE RECOGNITION Costs to ob
REVENUE RECOGNITION Costs to obtain and fulfill contracts (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Capitalized Contract Cost [Roll Forward] | ||
Beginning balance | $ 3,017 | $ 3,775 |
Costs to obtain and fulfill contracts capitalized | 4,130 | 2,356 |
Capitalized Contract Cost, Amortization | (3,509) | (3,129) |
Ending balance | $ 3,638 | $ 3,002 |
BUSINESS COMBINATION - Prelimin
BUSINESS COMBINATION - Preliminary allocation of the purchase price paid (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | May 03, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 149,960 | $ 140,449 | |
iNetXperts, Corp. | |||
Business Acquisition [Line Items] | |||
Acquired cash | $ 159 | ||
Accounts receivable | 364 | ||
Prepaid expenses | 107 | ||
Property and equipment | 365 | ||
Operating lease asset | 1,285 | ||
Intangible assets | 7,890 | ||
Goodwill | 9,511 | ||
Accounts payable and accrued liabilities | (594) | ||
Deferred taxes, net | (1,480) | ||
Operating lease liability | (1,285) | ||
Contingent consideration | (5,000) | ||
Deferred revenue | (430) | ||
Net assets acquired | $ 10,892 |
BUSINESS COMBINATION - Pro form
BUSINESS COMBINATION - Pro forma information (Details) - iNetXperts, Corp. - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | ||||
Pro forma revenues | $ 68,699 | $ 70,365 | $ 205,459 | $ 210,622 |
Pro forma net income | $ 3,486 | $ 5,208 | $ 7,519 | $ 7,516 |
Pro forma diluted earnings (loss) per share (in dollars per share) | $ 0.25 | $ 0.38 | $ 0.55 | $ 0.55 |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narrative (Details) - iNetXperts, Corp. - USD ($) $ in Millions | May 03, 2019 | Sep. 30, 2019 | Sep. 30, 2019 |
Business Acquisition [Line Items] | |||
Consideration transferred | $ 10.8 | ||
Contingent consideration earnout payment | $ 14 | ||
Acquisition related costs | $ 0.5 | ||
Pro forma information, revenue | $ 0.5 | 0.7 | |
Pro forma information, pre-tax loss | $ 0.7 | $ 1.4 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 18,534 | $ 16,520 |
Less: accumulated depreciation | (6,708) | (5,645) |
Property and equipment, net | 11,826 | 10,875 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,848 | 2,848 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,038 | 7,752 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,964 | 2,766 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,712 | 1,198 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,954 | 1,938 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 18 | $ 18 |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Salaries and benefits | $ 4,103 | $ 8,722 |
Severance | 647 | 992 |
Commissions | 794 | 830 |
Self-insurance reserves | 1,382 | 1,017 |
Contingent consideration | 5,000 | 206 |
Other | 575 | 452 |
Operating lease liabilities, current portion | 1,483 | |
Other accrued liabilities | $ 13,984 | $ 12,219 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Net income | $ 4,135 | $ 5,749 | $ 9,241 | $ 10,044 |
Less: Net income attributable to participating securities | (151) | (197) | (347) | (338) |
Net income attributable to common stockholders | $ 3,984 | $ 5,552 | $ 8,894 | $ 9,706 |
Weighted average shares outstanding used in basic per common share computations (in shares) | 13,829 | 13,604 | 13,760 | 13,547 |
Add: Dilutive potential common shares (in shares) | 0 | 0 | 0 | 0 |
Weighted average shares outstanding used in diluted per common share computations (in shares) | 13,829 | 13,604 | 13,760 | 13,547 |
Basic EPS (in dollars per share) | $ 0.29 | $ 0.41 | $ 0.65 | $ 0.72 |
Diluted EPS (in dollars per share) | $ 0.29 | $ 0.41 | $ 0.65 | $ 0.72 |
NET INCOME PER SHARE Narrative
NET INCOME PER SHARE Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |||
Aggregate target (in shares) | 200,709 | 184,776 | 200,709 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate percentage | 4.00% | (54.00%) | 15.00% | 2.00% |
Increase (decrease) in income tax rate due to tax credit, research, percent | 20.00% | 81.00% | 13.00% | 31.00% |
STOCK-BASED COMPENSATION - Tota
STOCK-BASED COMPENSATION - Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 2,170 | $ 2,610 | $ 7,297 | $ 7,303 |
Less: income tax effect | (477) | (574) | (1,605) | (1,607) |
Net stock-based compensation expense | 1,693 | 2,036 | 5,692 | 5,696 |
Unrecognized compensation cost related to non-vested stock-based compensation arrangements | 11,200 | $ 11,200 | ||
Period for recognition for which unrecognized compensation costs are expected to be recognized | 1 year 8 months 12 days | |||
Costs of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax stock-based compensation expense | 467 | 566 | $ 1,514 | 1,590 |
Operating expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 1,703 | $ 2,044 | $ 5,783 | $ 5,713 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Shares | ||
Nonvested stock outstanding at beginning of period, shares | 475,132 | 309,195 |
Granted, shares | 133,936 | 148,841 |
Performance share awards settled through issuance of restricted stock, shares | 138,566 | 177,395 |
Vested, shares | (221,775) | (153,424) |
Nonvested stock outstanding at end of period, shares | 525,859 | 482,007 |
Weighted-Average Grant Date Fair Value Per Share | ||
Nonvested stock outstanding at beginning of period, Weighted-Average Grant-Date Fair Value (in dollars per share) | $ 32 | $ 38.36 |
Granted, Weighted-Average Grant-Date Fair Value (in dollars per share) | 30.89 | 30.20 |
Settled, Weighted-Average Grant-Date Fair Value (in dollars per share) | 29.80 | 29.94 |
Vested, Weighted-Average Grant-Date Fair Value (in dollars per share) | 33.48 | 40.81 |
Nonvested stock outstanding at end of period, Weighted-Average Grant-Date Fair Value (in dollars per share) | $ 30.51 | $ 31.96 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Performance Share Awards (Details) - Performance Shares - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Shares | ||
Nonvested stock outstanding at beginning of period, shares | 184,776 | 189,325 |
Granted, shares | 110,310 | 184,776 |
Adjusted for actual performance, net of forfeitures | 44,189 | 11,930 |
Performance share awards settled through issuance of restricted stock, shares | (138,566) | (177,395) |
Nonvested stock outstanding at end of period, shares | 200,709 | 184,776 |
Weighted-Average Grant Date Fair Value Per Share | ||
Nonvested stock outstanding at beginning of period, Weighted-Average Grant-Date Fair Value (in dollars per share) | $ 30.15 | $ 29.94 |
Granted, Weighted-Average Grant-Date Fair Value (in dollars per share) | 30.95 | 30.15 |
Forfeited or unearned, Weighted-Average Grant-Date Fair Value (in dollars per share) | 29.77 | 29.94 |
Settled, Weighted-Average Grant-Date Fair Value (in dollars per share) | 29.80 | 29.94 |
Nonvested stock outstanding at end of period, Weighted-Average Grant-Date Fair Value (in dollars per share) | $ 30.75 | $ 30.15 |
FINANCING RECEIVABLES - Additio
FINANCING RECEIVABLES - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Minimum | |
Loans and Leases Receivable Disclosure [Line Items] | |
Financial receivable lease term | 2 years |
Maximum | |
Loans and Leases Receivable Disclosure [Line Items] | |
Financial receivable lease term | 7 years |
Fixed Periodic Payment Plans | Minimum | |
Loans and Leases Receivable Disclosure [Line Items] | |
Current financing receivable terms | 3 months |
Fixed Periodic Payment Plans | Maximum | |
Loans and Leases Receivable Disclosure [Line Items] | |
Current financing receivable terms | 12 months |
FINANCING RECEIVABLES - Short-T
FINANCING RECEIVABLES - Short-Term Payment Plans (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Short-term payment plans, net | $ 12,295 | $ 15,059 |
Short-Term Payment Plans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Short-term payment plans, gross | 3,593 | 5,773 |
Less: allowance for losses | (252) | (404) |
Short-term payment plans, net | $ 3,341 | $ 5,369 |
FINANCING RECEIVABLES - Sales-T
FINANCING RECEIVABLES - Sales-Type Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Long-term financing arrangements, gross | $ 32,947 | $ 34,841 |
Less: allowance for losses | (2,044) | (2,163) |
Less: unearned income | (3,735) | (3,725) |
Long-term financing arrangements, net | $ 27,168 | $ 28,953 |
FINANCING RECEIVABLES - Future
FINANCING RECEIVABLES - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
2019 | $ 3,213 | |
2020 | 10,641 | |
2021 | 8,404 | |
2022 | 5,803 | |
2023 | 2,857 | |
Thereafter | 2,029 | |
Total minimum payments to be received | 32,947 | |
Less: allowance for losses | (2,044) | $ (2,163) |
Less: unearned income | (3,735) | (3,725) |
Long-term financing arrangements, net | $ 27,168 | $ 28,953 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for Financing Credit Losses (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Allowance for Credit Losses on Financing Receivables [Roll Forward] | ||
Balance at Beginning of Period | $ 2,567 | $ 3,244 |
Provision | 329 | 1,691 |
Charge-offs | (600) | (2,368) |
Recoveries | 0 | 0 |
Balance at End of Period | $ 2,296 | $ 2,567 |
FINANCING RECEIVABLES - Analysi
FINANCING RECEIVABLES - Analysis of Age of Financing Receivables Amounts (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | $ 1,624 | $ 1,757 |
1 to 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 1,265 | 1,302 |
91 to 180 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 168 | 210 |
181 + Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | $ 191 | $ 245 |
FINANCING RECEIVABLES - Summary
FINANCING RECEIVABLES - Summary of Financing Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables balances of clients with a trade accounts receivable | $ 20,873 | $ 20,422 | |
Total uninvoiced client financing receivables of clients with no related trade accounts receivable | 8,339 | 10,694 | |
Total financing receivables with contractual maturities of one year or less | 3,593 | 5,773 | |
Less: allowance for losses | (2,296) | (2,567) | $ (3,244) |
Total financing receivables | 30,509 | 34,322 | |
Uninvoiced client financing receivables related to trade accounts receivable that are 1 to 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables balances of clients with a trade accounts receivable | 16,023 | 17,290 | |
Uninvoiced client financing receivables related to trade accounts receivable that are 91 to 180 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables balances of clients with a trade accounts receivable | 2,136 | 2,247 | |
Uninvoiced client financing receivables related to trade accounts receivable that are 181 + Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables balances of clients with a trade accounts receivable | $ 2,714 | $ 885 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Definited-lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount as of December 31, 2017 | $ 117,300 | $ 117,300 | |
Intangible assets acquired | $ 7,890 | ||
Accumulated amortization as of December 31, 2018 and for the six months ended June 30, 2019 | (39,213) | (31,074) | |
Net intangible assets as of December 31, 2018 and June 30, 2019 | $ 85,977 | 86,226 | |
Weighted average remaining years of useful life | 9 years | ||
Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount as of December 31, 2017 | 82,300 | 82,300 | |
Intangible assets acquired | $ 2,070 | ||
Accumulated amortization as of December 31, 2018 and for the six months ended June 30, 2019 | (24,656) | (19,476) | |
Net intangible assets as of December 31, 2018 and June 30, 2019 | $ 59,714 | 62,824 | |
Weighted average remaining years of useful life | 9 years | ||
Trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount as of December 31, 2017 | 10,900 | 10,900 | |
Intangible assets acquired | $ 220 | ||
Accumulated amortization as of December 31, 2018 and for the six months ended June 30, 2019 | (3,236) | (2,613) | |
Net intangible assets as of December 31, 2018 and June 30, 2019 | $ 7,884 | 8,287 | |
Weighted average remaining years of useful life | 13 years | ||
Developed Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount as of December 31, 2017 | 24,100 | $ 24,100 | |
Intangible assets acquired | $ 5,600 | ||
Accumulated amortization as of December 31, 2018 and for the six months ended June 30, 2019 | (11,321) | (8,985) | |
Net intangible assets as of December 31, 2018 and June 30, 2019 | $ 18,379 | $ 15,115 | |
Weighted average remaining years of useful life | 6 years |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 2,866 | |
2020 | 11,421 | |
2021 | 11,003 | |
2022 | 10,904 | |
2023 | 10,904 | |
Thereafter | 38,879 | |
Net intangible assets as of December 31, 2018 and June 30, 2019 | $ 85,977 | $ 86,226 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 140,449 |
Goodwill acquired | 9,511 |
Goodwill, ending balance | 149,960 |
Operating Segments | Acute Care EHR | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 97,095 |
Goodwill acquired | 0 |
Goodwill, ending balance | 97,095 |
Operating Segments | Post-acute Care EHR | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 29,570 |
Goodwill acquired | 0 |
Goodwill, ending balance | 29,570 |
Operating Segments | TruBridge | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 13,784 |
Goodwill acquired | 9,511 |
Goodwill, ending balance | $ 23,295 |
LONG-TERM DEBT - Schedule of lo
LONG-TERM DEBT - Schedule of long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Finance lease obligation | $ 0 | |
Finance lease obligation | $ 250 | |
Debt obligations | 122,017 | 132,375 |
Less: unamortized debt issuance costs | (1,047) | (1,306) |
Debt obligation, net | 120,970 | 131,069 |
Less: current portion | (8,430) | (6,486) |
Long-term debt | 112,540 | 124,583 |
Line of credit | Term loan facility | ||
Debt Instrument [Line Items] | ||
Debt obligations | 91,017 | 102,432 |
Line of credit | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Debt obligations | $ 31,000 | $ 29,693 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 21 Months Ended | 24 Months Ended | 57 Months Ended | |||||
Jan. 31, 2016USD ($) | Mar. 31, 2019 | Dec. 31, 2017 | Sep. 30, 2019USD ($) | Sep. 30, 2022USD ($) | Dec. 31, 2017 | Sep. 30, 2019USD ($) | Sep. 30, 2021USD ($) | Oct. 13, 2022 | Feb. 08, 2018USD ($) | Feb. 07, 2018USD ($) | Oct. 13, 2017USD ($) | |
Debt Instrument [Line Items] | ||||||||||||
Amount of credit facility | $ 167,000,000 | $ 162,000,000 | ||||||||||
Current borrowing capacity | $ 162,000,000 | 175,000,000 | ||||||||||
Prepayment of debt | $ 7,000,000 | |||||||||||
Line of credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility, incremental facility capacity | 50,000,000 | |||||||||||
Fixed charge coverage ratio, minimum | 1.25 | |||||||||||
Consolidated leverage ratio, maximum | 3.95 | |||||||||||
Prepayment amount from excess cash flow, current year and next twelve months, percentage | 75.00% | 75.00% | ||||||||||
Prepayment amount from excess cash flow, year two and thereafter, percentage | 50.00% | |||||||||||
Line of credit | Revolving credit facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Amount of credit facility | $ 50,000,000 | 50,000,000 | 45,000,000 | |||||||||
Line of credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 1.00% | |||||||||||
Line of credit | Revolving credit facility | Federal funds rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 50.00% | |||||||||||
Line of credit | Term loan facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Amount of credit facility | $ 125,000,000 | $ 117,000,000 | $ 117,000,000 | |||||||||
Periodic payment, principal | $ 1,460,000 | |||||||||||
Minimum | Line of credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 2.00% | |||||||||||
Minimum | Line of credit | Revolving credit facility | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 1.00% | |||||||||||
Maximum | Line of credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.50% | |||||||||||
Maximum | Line of credit | Revolving credit facility | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 2.50% | |||||||||||
Scenario, Forecast | Line of credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Consolidated leverage ratio, maximum | 3.50 | |||||||||||
Scenario, Forecast | Line of credit | Term loan facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Periodic payment, principal | $ 2,930,000 | $ 2,190,000 |
LONG-TERM DEBT - Annual Future
LONG-TERM DEBT - Annual Future Maturities (Details) - Line of credit $ in Thousands | Sep. 30, 2019USD ($) |
Debt Instrument [Line Items] | |
2019 | $ 2,194 |
2020 | 8,775 |
2021 | 9,506 |
2022 | 101,542 |
2023 | 0 |
Thereafter | 0 |
Long-term Debt, Total | $ 122,017 |
OPERATING LEASES - Narrative (D
OPERATING LEASES - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Lessee, Lease, Description [Line Items] | ||
Rent expense | $ 1.6 | |
Rent expense | $ 1.9 | |
Operating lease, payments | $ 1.3 | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 12 months |
OPERATING LEASES - Supplemental
OPERATING LEASES - Supplemental Balance Sheet Information (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Operating lease assets | $ 8,061 |
Operating lease liabilities, current portion | 1,483 |
Operating lease liabilities, net of current portion | 6,578 |
Total operating lease liabilities | $ 8,061 |
Weighted average remaining lease term in years | 7 years |
Weighted average discount rate | 5.10% |
OPERATING LEASES - Future Minim
OPERATING LEASES - Future Minimum Lease Payments Payable Under these Operating Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 332 |
2020 | 1,544 |
2021 | 1,518 |
2022 | 1,436 |
2023 | 1,363 |
Thereafter | 3,381 |
Total lease payments | 9,574 |
Less imputed interest | (1,513) |
Total | $ 8,061 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 5,000 | $ 206 |
Total financial liabilities | 5,000 | 206 |
(Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Total financial liabilities | 0 | 0 |
(Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Total financial liabilities | 0 | 0 |
(Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 5,000 | 206 |
Total financial liabilities | $ 5,000 | $ 206 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Total sales revenues | $ 68,699 | $ 69,297 | $ 203,996 | $ 208,085 |
Costs to obtain and fulfill contracts capitalized | 32,784 | 33,173 | 96,436 | 98,029 |
Total gross profit | 35,915 | 36,124 | 107,560 | 110,056 |
Corporate operating expenses | (29,908) | (30,763) | (91,890) | (94,820) |
Other income | 4 | 201 | 535 | 593 |
Interest expense | (1,702) | (1,829) | (5,269) | (5,615) |
Income before taxes | 4,309 | 3,733 | 10,936 | 10,214 |
Operating Segments | Acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total sales revenues | 35,965 | 38,907 | 107,461 | 116,297 |
Costs to obtain and fulfill contracts capitalized | 17,382 | 18,086 | 50,798 | 52,812 |
Total gross profit | 18,583 | 20,821 | 56,663 | 63,485 |
Operating Segments | Post-acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total sales revenues | 5,025 | 5,518 | 16,416 | 16,626 |
Costs to obtain and fulfill contracts capitalized | 1,379 | 1,497 | 3,978 | 4,716 |
Total gross profit | 3,646 | 4,021 | 12,438 | 11,910 |
Operating Segments | TruBridge | ||||
Segment Reporting Information [Line Items] | ||||
Total sales revenues | 27,709 | 24,872 | 80,119 | 75,162 |
Costs to obtain and fulfill contracts capitalized | 14,023 | 13,590 | 41,660 | 40,501 |
Total gross profit | 13,686 | 11,282 | 38,459 | 34,661 |
Corporate operating expenses | ||||
Segment Reporting Information [Line Items] | ||||
Corporate operating expenses | (29,908) | (30,763) | (91,890) | (94,820) |
Recurring revenue | Operating Segments | Acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total sales revenues | 26,982 | 27,393 | 81,462 | 83,633 |
Recurring revenue | Operating Segments | Post-acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total sales revenues | 4,312 | 4,515 | 13,214 | 14,002 |
Non-recurring revenue | Operating Segments | Acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total sales revenues | 8,983 | 11,514 | 25,999 | 32,664 |
Non-recurring revenue | Operating Segments | Post-acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total sales revenues | $ 713 | $ 1,003 | $ 3,202 | $ 2,624 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Nov. 05, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.10 |
Uncategorized Items - cpsi-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,970,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,970,000 |