Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 09, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 | 54 St. Emanuel Street | |
Entity Address, City or Town | Mobile | |
Entity Address, State or Province | AL | |
Entity Address, Postal Zip Code | 36602 | |
City Area Code | 251 | |
Local Phone Number | 639-8100 | |
Title of 12(b) Security | Common Stock, par value $.001 per share | |
Trading Symbol | CPSI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,548,776 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Central Index Key | 0001169445 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 1,473 | $ 6,951 |
Accounts receivable (net of allowance for expected credit losses of $3,323 and $2,854, respectively) | 59,024 | 51,311 |
Financing receivables, current portion, net (net of allowance for expected credit losses of $319 and $223, respectively) | 4,251 | 4,474 |
Inventories | 941 | 784 |
Prepaid income taxes | 0 | 701 |
Prepaid expenses and other | 13,111 | 10,338 |
Total current assets | 78,800 | 74,559 |
Property and equipment, net | 8,707 | 9,884 |
Software development costs, net | 39,732 | 27,257 |
Operating lease assets | 5,138 | 7,567 |
Financing receivables, net of current portion (net of allowance for expected credit losses of $121 and $326, respectively) | 1,615 | 3,312 |
Other assets, net of current portion | 7,330 | 8,131 |
Intangible assets, net | 89,956 | 102,000 |
Goodwill | 198,253 | 198,253 |
Total assets | 429,531 | 430,963 |
Current liabilities: | ||
Accounts payable | 13,368 | 7,035 |
Current portion of long-term debt | 3,141 | 3,141 |
Deferred revenue | 8,806 | 11,590 |
Accrued vacation | 6,040 | 6,214 |
Income taxes payable | 316 | 0 |
Other accrued liabilities | 23,121 | 16,475 |
Total current liabilities | 54,792 | 44,455 |
Long-term debt, net of current portion | 138,748 | 136,388 |
Operating lease liabilities, net of current portion | 3,421 | 5,651 |
Deferred tax liabilities | 4,587 | 12,758 |
Total liabilities | 201,548 | 199,252 |
Stockholders’ equity: | ||
Common stock, $0.001 par value; 30,000 shares authorized; 15,121 and 14,913 shares issued, respectively | 15 | 15 |
Additional paid-in capital | 194,437 | 192,275 |
Retained earnings | 50,606 | 53,921 |
Treasury stock, 572 shares and 483 shares, respectively | (17,075) | (14,500) |
Total stockholders’ equity | 227,983 | 231,711 |
Total liabilities and stockholders’ equity | $ 429,531 | $ 430,963 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 3,323 | $ 2,854 |
Financing receivable, allowance for credit loss, current | 319 | 223 |
Financing receivable, allowance for credit loss, noncurrent | $ 121 | $ 326 |
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) | 15,121,000 | 14,913,000 |
Treasury stock (in shares) | 572,000 | 483,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Total revenues | $ 82,712 | $ 82,827 | $ 253,567 | $ 243,424 |
Costs of revenue (exclusive of amortization and depreciation) | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 43,863 | 43,293 | 132,173 | 122,027 |
Operating Expenses [Abstract] | ||||
Product development | 9,778 | 7,987 | 26,899 | 22,897 |
Sales and marketing | 6,818 | 7,309 | 21,906 | 22,578 |
General and administrative | 20,961 | 13,163 | 54,471 | 40,315 |
Amortization | 6,208 | 5,510 | 17,549 | 15,200 |
Depreciation | 297 | 622 | 1,392 | 1,890 |
Total expenses | 87,925 | 77,884 | 254,390 | 224,907 |
Operating income (loss) | (5,213) | 4,943 | (823) | 18,517 |
Other income (expense): | ||||
Other income | 224 | 355 | 569 | 914 |
Gain (loss) on contingent consideration | 0 | (589) | 0 | 992 |
Loss on extinguishment of debt | 0 | 0 | 0 | (125) |
Interest expense | (3,071) | (1,771) | (8,405) | (4,044) |
Total other income (expense) | (2,847) | (2,005) | (7,836) | (2,263) |
Income (loss) before taxes | (8,060) | 2,938 | (8,659) | 16,254 |
Provision (benefit) for income taxes | (4,498) | 777 | (5,344) | 2,904 |
Net income (loss) | $ (3,562) | $ 2,161 | $ (3,315) | $ 13,350 |
Net income per common share-basic (in dollars per share) | $ (0.24) | $ 0.15 | $ (0.23) | $ 0.91 |
Net income per common share-diluted (in dollars per share) | $ (0.24) | $ 0.15 | $ (0.23) | $ 0.91 |
Weighted average shares outstanding used in per common share computations: | ||||
Basic (in shares) | 14,205 | 14,365 | 14,181 | 14,405 |
Diluted (in shares) | 14,205 | 14,365 | 14,181 | 14,405 |
RCM | ||||
Revenues | ||||
Total revenues | $ 46,582 | $ 46,875 | $ 142,973 | $ 134,200 |
Costs of revenue (exclusive of amortization and depreciation) | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 27,159 | 25,289 | 81,461 | 71,068 |
EHR | ||||
Revenues | ||||
Total revenues | 34,493 | 34,949 | 104,651 | 103,855 |
Costs of revenue (exclusive of amortization and depreciation) | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 15,655 | 17,103 | 47,894 | 48,164 |
Patient Engagement | ||||
Revenues | ||||
Total revenues | 1,637 | 1,003 | 5,943 | 5,369 |
Costs of revenue (exclusive of amortization and depreciation) | ||||
Total costs of revenue (exclusive of amortization and depreciation) | $ 1,049 | $ 901 | $ 2,818 | $ 2,795 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in-Capital | Retained Earnings | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2021 | 14,734 | ||||
Beginning balance at Dec. 31, 2021 | $ 222,572 | $ 15 | $ 187,079 | $ 38,054 | $ (2,576) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 13,350 | 13,350 | |||
Stock-based compensation | 5,284 | 5,284 | |||
Issuance of restricted stock (in shares) | 189 | ||||
Treasury stock acquired | (8,248) | (8,248) | |||
Forfeiture of common stock (in shares) | (9) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 14,914 | ||||
Ending balance at Sep. 30, 2022 | 232,958 | $ 15 | 192,363 | 51,404 | (10,824) |
Beginning balance (in shares) at Jun. 30, 2022 | 14,897 | ||||
Beginning balance at Jun. 30, 2022 | 232,933 | $ 15 | 190,499 | 49,243 | (6,824) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 2,161 | 2,161 | |||
Stock-based compensation | 1,864 | 1,864 | |||
Issuance of restricted stock (in shares) | 17 | ||||
Treasury stock acquired | (4,000) | (4,000) | |||
Ending balance (in shares) at Sep. 30, 2022 | 14,914 | ||||
Ending balance at Sep. 30, 2022 | 232,958 | $ 15 | 192,363 | 51,404 | (10,824) |
Beginning balance (in shares) at Dec. 31, 2022 | 14,913 | ||||
Beginning balance at Dec. 31, 2022 | 231,711 | $ 15 | 192,275 | 53,921 | (14,500) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (3,315) | (3,315) | |||
Stock-based compensation | 2,162 | 2,162 | |||
Issuance of restricted stock (in shares) | 210 | ||||
Treasury stock acquired | (2,575) | (2,575) | |||
Forfeiture of common stock (in shares) | (2) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 15,121 | ||||
Ending balance at Sep. 30, 2023 | 227,983 | $ 15 | 194,437 | 50,606 | (17,075) |
Beginning balance (in shares) at Jun. 30, 2023 | 15,099 | ||||
Beginning balance at Jun. 30, 2023 | 230,550 | $ 15 | 193,399 | 54,168 | (17,032) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (3,562) | (3,562) | |||
Stock-based compensation | 1,038 | 1,038 | |||
Issuance of restricted stock (in shares) | 24 | ||||
Treasury stock acquired | (43) | (43) | |||
Forfeiture of common stock (in shares) | (2) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 15,121 | ||||
Ending balance at Sep. 30, 2023 | $ 227,983 | $ 15 | $ 194,437 | $ 50,606 | $ (17,075) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Activities: | ||
Net income (loss) | $ (3,315) | $ 13,350 |
Adjustments to net income (loss): | ||
Provision for credit losses | 810 | 1,202 |
Deferred taxes | (8,171) | (3,073) |
Stock-based compensation | 2,162 | 5,284 |
Depreciation | 1,392 | 1,890 |
Loss on extinguishment of debt | 0 | 125 |
Amortization of acquisition-related intangibles | 12,043 | 12,917 |
Amortization of software development costs | 5,506 | 2,283 |
Amortization of deferred finance costs | 269 | 242 |
Gain on contingent consideration | 0 | (992) |
Non-cash operating lease costs | 1,478 | 0 |
Loss on disposal of PP&E | 117 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (8,632) | (6,877) |
Financing receivables | 2,029 | 4,598 |
Inventories | (157) | (899) |
Prepaid expenses and other | (1,972) | (1,982) |
Accounts payable | 6,333 | (988) |
Deferred revenue | (2,784) | 726 |
Operating lease liabilities | (1,462) | 0 |
Other liabilities | 6,656 | (1,239) |
Prepaid income taxes | 1,017 | 3,644 |
Net cash provided by operating activities | 13,319 | 30,211 |
Investing Activities: | ||
Purchase of business, net of cash acquired | 0 | (43,696) |
Investment in software development | (17,981) | (14,594) |
Purchase of property and equipment | (332) | (134) |
Net cash used in investing activities | (18,313) | (58,424) |
Financing Activities: | ||
Proceeds from long-term debt | 0 | 575 |
Payments of long-term debt principal | (2,625) | (2,687) |
Proceeds from revolving line of credit | 9,716 | 48,000 |
Payments of revolving line of credit | (5,000) | (5,300) |
Treasury stock purchases | (2,575) | (8,248) |
Net cash provided by (used in) financing activities | (484) | 32,340 |
Increase (decrease) in cash and cash equivalents | (5,478) | 4,127 |
Cash and cash equivalents at beginning of period | 6,951 | 11,431 |
Cash and cash equivalents at end of period | 1,473 | 15,558 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 6,217 | 3,677 |
Cash paid for income taxes, net of refund | $ 1,796 | $ 2,656 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022 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, 2022 and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Commencing with the fourth quarter of 2022, the Company realigned its reporting structure due to certain organizational changes. As a result, the Company changed its three reportable segments from (i) TruBridge, (ii) Acute Care Electronic Health Record ("EHR"), and (iii) Post-acute Care EHR to (i) Revenue Cycle Management ("RCM"), (ii) EHR, and (iii) Patient Engagement. All prior segment information has been recast to reflect the Company's new segment structure and current period presentation. Refer to Note 17 - Segment Reporting for more information. Additional changes to the presentation of amounts within our condensed consolidated statements of income are as follows: • During the first quarter of 2023, we identified certain costs related to the implementation of our cloud strategy and our security operations center that were recorded within the caption "Costs of revenue (exclusive of amortization and depreciation) - EHR" on our condensed consolidated statements of income, that we determined do not solely contribute to the production of EHR products and services, but support the overall business. Consequently, effective January 1, 2023, certain costs related to the implementation of our cloud strategy, which were formerly included within the caption "Costs of revenue (exclusive of amortization and depreciation) - EHR," have been recorded as components of "Product development" expenses. In addition, certain costs related to the Company's security operations center, which were formerly included within the caption "Costs of revenue (exclusive of amortization and depreciation) - EHR," have been recorded as components of "General and administrative" expenses. Additionally, immaterial travel costs were reclassified from within the caption "Costs of revenue (exclusive of amortization and depreciation) - RCM" to "Product development" expenses. Amounts presented for the three and nine months ended September 30, 2022 have been reclassified to conform to the current presentation. • In addition, during the first quarter of 2023, we refined our operating expense allocation methodology to more accurately distribute the appropriate share of costs among operating segments. Amounts presented for the three and nine months ended September 30, 2022 have been reclassified and are reflective of the current operating expense methodology in order to conform to the current presentation. • During the third quarter of 2023, we changed the presentation of certain costs previously recorded within the expense captions of "Product development" and "General and administrative" to better comply with the disclosure requirements of Staff Accounting Bulletin Topic 11.B., Miscellaneous Disclosure: Depreciation and Depletion Excluded from Cost of Sales. These changes are summarized as follows: ◦ Amortization expense associated with capitalized software development costs, previously recorded within the expense caption of "Product development," have been combined with amounts previously recorded within the expense caption "Amortization of acquisition-related intangibles" and reflected in a newly-presented expense caption of "Amortization." ◦ Depreciation expense previously recorded within the expense caption of "General and administrative" have been reclassified within the newly-presented expense caption of "Depreciation." ◦ The expense caption previously labelled as "Costs of sales" has been renamed "Costs of revenue (exclusive of amortization and depreciation)," with the previously reported reference to "Gross profit" removed from the current presentation. The following table provides the amounts reclassified and the impact of applying the current operating expense allocation methodology for the three and nine months ended September 30, 2022. Three Months Ended September 30, 2022 (in thousands) As previously reported Re-classifications As reclassified Impact of operating expense allocations As currently reported Costs of revenue (exclusive of amortization and depreciation) RCM $ 25,289 $ — $ 25,289 $ — $ 25,289 EHR 18,619 (874) 17,745 (642) 17,103 Other expenses Product development 7,822 (477) 7,345 642 7,987 General and administrative 13,458 (295) 13,163 — 13,163 Amortization of acquisition-related intangibles 4,486 (4,486) — — — Amortization — 5,510 5,510 — 5,510 Depreciation — 622 622 — 622 Nine Months Ended September 30, 2022 (in thousands) As previously reported Re-classifications As reclassified Impact of operating expense allocations As currently reported Costs of revenue (exclusive of amortization and depreciation) RCM $ 71,068 $ — $ 71,068 $ — $ 71,068 EHR 52,278 (2,169) 50,109 (1,945) 48,164 Other expenses Product development 22,036 (1,084) 20,952 1,945 22,897 General and administrative 41,235 (920) 40,315 — 40,315 Amortization of acquisition-related intangibles 12,917 (12,917) — — — Amortization — 15,200 15,200 — 15,200 Depreciation — 1,890 1,890 — 1,890 Principles of Consolidation The condensed consolidated financial statements of CPSI include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Standards Adopted in 2023 There were no new accounting standards required to be adopted in 2023 that would have a material impact on our consolidated financial statements. New Accounting Standards Yet to be Adopted 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, 2023 | |
Accounting Policies [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Revenue 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 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. • Revenue Cycle Management Our RCM business unit 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 stand-alone selling price ("SSP"), net of discounts. SSP for BPS services is determined based on observable stand-alone selling prices. 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. Our RCM business unit also provides professional IT services. Revenue from professional IT services is recognized as the services are performed based on SSP, which is determined by observable stand-alone selling prices. Payment is due monthly as services are performed. Lastly, our RCM business unit also provides certain software solutions and related support under Software as a Service ("SaaS") arrangements and time-based software licenses. Revenue from SaaS arrangements is recognized in a manner consistent with SaaS arrangements for EHR software, as discussed below. Revenue from time-based software licenses is recognized upon delivery to the client (“point in time”) and revenue from non-license components (i.e., support) is recognized ratably over the respective contract term (“over time”). SSP for time-based licenses is determined using the residual approach, while the non-license component is based on cost plus reasonable margin. • Electronic Health Records The Company enters into contractual obligations to sell perpetual software licenses, installation, conversion, and related training services, software application support, hardware, and hardware maintenance services to acute care community hospitals and post-acute providers. • Non-recurring Revenues • Perpetual software licenses and installation, conversion, and related training services 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 SSP, net of discounts. We determine each module's SSP using the residual method. Fees for licenses and installation, conversion, and related training services 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 11 - Financing Receivables for further information. EHR implementations include a system warranty that terminates thirty days from the software go-live date, the date 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 and revenue is recognized on a gross basis. 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 • 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, and revenue is recognized on a gross basis. Payment is due monthly for subscriptions to third party content. • 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 17 of the consolidated financial statements for further information, including revenue by client base (acute care or post-acute care) bifurcated by recurring and non-recurring revenue. • Patient Engagement The Company enters into contractual obligations to sell perpetual and term-based software licenses, implementation and customization professional services, and software application support services to a variety of healthcare organizations including hospital systems, health ministries, and government and non-profit organizations. • Non-recurring Revenues • Perpetual software licenses are sold only to one re-seller client and are considered a separate and distinct performance obligation. Revenue is recognized at the point in time perpetual licenses are delivered to the client, which occurs at the time of sale. The SSP of perpetual licenses is directly observable. Payment is generally due upon delivery of licenses. • Implementation and customization services are considered a separate and distinct performance obligation. Revenue is recognized over time based on SSP, which is generally directly observable. Payment for professional services is typically due in two installments: (1) upon signature of the agreement and (2) upon customer acceptance of the delivered services. • Recurring Revenues • Term-based software licenses are considered a separate and distinct performance obligation. Revenue is recognized based on SSP, which is directly observable, at the point in time the term-based licenses are delivered to the client or upon annual renewal. Payment is generally due upon delivery of licenses or upon annual renewal. • Software application support services sold with software licenses are separate and distinct performance obligations. The related revenues are recognized based on SSP, which is the renewal price, ratably over the life of the contract, which is generally three Refer to Note 17 of the condensed consolidated financial statements for further information. 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, 2023 and 2022, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Beginning balance $ 11,590 $ 11,529 Deferred revenue recorded 13,417 19,474 Less deferred revenue recognized as revenue (16,201) (18,748) Ending balance $ 8,806 $ 12,255 The deferred revenue recorded during the nine months ended September 30, 2023 and 2022 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, 2023 and 2022 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 and RCM arrangements, 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. Costs to obtain a contract are expensed within the caption "Expenses - Sales and marketing" 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, conversions, and installation that is necessary for the software to be utilized. Contract fulfillment costs are expensed within the caption "Costs of revenue (exclusive of amortiztion and depreciation) - EHR" in the accompanying condensed consolidated statements of income. Costs to obtain and fulfill contracts related to SaaS and RCM 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, 2023 and 2022, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Beginning balance $ 11,577 $ 7,312 Costs to obtain and fulfill contracts capitalized 5,221 7,460 Less costs to obtain and fulfill contracts recognized as expense (4,214) (5,440) Ending balance $ 12,584 $ 9,332 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, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION Acquisition of Healthcare Resource Group On March 1, 2022, we acquired all of the assets and liabilities of Healthcare Resource Group, Inc., a Washington corporation ("HRG"), pursuant to a Stock Purchase Agreement dated March 1, 2022. Based in Spokane, Washington, HRG is a leading provider of customized RCM solutions and consulting services that enable hospitals and clinics to improve efficiency, profitability, and patient satisfaction. Consideration for the acquisition included cash (net of cash of the acquired entity) of $43.6 million (inclusive of seller's transaction expenses). During 2022, we incurred approximately $1.2 million of pre-tax acquisition costs in connection with the acquisition of HRG. Acquisition costs are included in general and administrative expenses in our consolidated statements of income. Our acquisition of HRG was 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 was based on management's judgment after evaluating several factors, including a valuation assessment. The allocation of the purchase price paid for HRG was as follows: (In thousands) Purchase Price Allocation Acquired cash $ 3,989 Accounts receivable 5,655 Prepaid expenses 398 Property and equipment 467 Other assets 73 Intangible assets 24,200 Operating lease assets 1,315 Goodwill 20,750 Accounts payable and accrued liabilities (2,403) Deferred taxes, net (5,565) Operating lease liability (1,315) Net assets acquired $ 47,564 The intangible assets in the table above are being amortized on a straight-line basis over their estimated useful lives, which range from four 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 16 - 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. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment, net was comprised of the following at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Land $ 2,848 $ 2,848 Buildings and improvements 8,481 8,320 Computer equipment 8,383 8,228 Leasehold improvements 606 783 Office furniture and fixtures 1,025 1,008 Automobiles 18 18 Property and equipment, gross 21,361 21,205 Less: accumulated depreciation (12,654) (11,321) Property and equipment, net $ 8,707 $ 9,884 |
SOFTWARE DEVELOPMENT
SOFTWARE DEVELOPMENT | 9 Months Ended |
Sep. 30, 2023 | |
Research and Development [Abstract] | |
SOFTWARE DEVELOPMENT | SOFTWARE DEVELOPMENT Software development costs are accounted for in accordance with ASC 350-40, Internal-Use Software. We capitalize incurred labor costs for software development from the time the preliminary project phase is completed until the software is available for general release. Research and development costs and other computer software maintenance costs related to software development are expensed as incurred. We estimate the useful life of our capitalized software and amortize its value on a straight-line basis over that estimated life, which is estimated to be five years. If the actual useful life of the asset is determined to be shorter than our estimated useful life, we will amortize the remaining book value over the remaining actual useful life, or the asset may be deemed to be impaired and, accordingly, a write-down of the value of the asset may be recorded as a charge to earnings. Amortization begins when the related software features are placed in service. Software development costs, net was comprised of the following at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Software development costs $ 49,770 $ 31,789 Less: accumulated amortization (10,038) (4,532) Software development costs, net $ 39,732 $ 27,257 |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES Other accrued liabilities was comprised of the following at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Salaries and benefits $ 7,253 $ 8,430 Severance 7,783 2,504 Commissions 740 1,280 Self-insurance reserves — 1,358 Interest 1,919 — Operating lease liabilities, current portion 1,880 2,063 Other 3,546 840 Other accrued liabilities $ 23,121 $ 16,475 Prior to 2023, our employee health benefits plan was administered as a self-insured plan, with the Company bearing the risk of claims (partially limited by related stop-loss insurance, as is industry norm). Under a self-insured plan, we maintained reserves for an estimate of the liability from claims that have been incurred but were not yet reported at the end of the period. Effective January 1, 2023, our employee health benefits plan is now administered as a fully-insured plan, with full risk of claims exposure transferred to the health insurance carrier, thus ceasing the need for self-insurance reserves. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) 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 10) are considered participating securities under ASC 260, 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) 2023 2022 2023 2022 Net income (loss) $ (3,562) $ 2,161 $ (3,315) $ 13,350 Less: Net (income) loss attributable to participating securities 82 (42) 73 (261) Net income (loss) attributable to common stockholders $ (3,480) $ 2,119 $ (3,242) $ 13,089 Weighted average shares outstanding used in basic per common share computations 14,205 14,365 14,181 14,405 Add: Dilutive potential common shares — — — — Weighted average shares outstanding used in diluted per common share computations 14,205 14,365 14,181 14,405 Basic EPS $ (0.24) $ 0.15 $ (0.23) $ 0.91 Diluted EPS $ (0.24) $ 0.15 $ (0.23) $ 0.91 During 2021, 2022, and 2023, performance share awards were granted to certain executive officers and key employees of the Company that will result in the issuance of common stock if the predefined performance criteria are met. The awards provide for an aggregate target of 273,791 shares, of which none have been included in the calculation of diluted EPS for the three or nine months ended September 30, 2023 because the related threshold award performance levels have not been achieved as of September 30, 2023. See Note 10 - Stock-Based Compensation and Equity for more information. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
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 ("ETR"), adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual ETR, and if our estimated tax rate changes, we make a cumulative adjustment. If a reliable estimate of the annual ETR cannot be made, the actual ETR for the year to date may be the best estimate of the annual ETR. Our effective tax rate for the three months ended September 30, 2023 increased to 55.8% from 26.4% for the three months ended September 30, 2022, with the largest contributing factor being the impact of the research and development ("R&D") tax credit. This credit, which is not correlated with taxable income, resulted in an incremental benefit of 24.2% over the corresponding benefit during the third quarter of 2022. In periods with taxable income, the benefit from the R&D tax credit serves to reduce income tax expense, thereby lowering the effective tax rate. However, in periods with taxable loss, the benefit from the R&D tax credit serves to increase the income tax benefit, thereby increasing the effective tax rate. |
STOCK-BASED COMPENSATION AND EQ
STOCK-BASED COMPENSATION AND EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION AND EQUITY | STOCK-BASED COMPENSATION AND EQUITY 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, 2023 and 2022, included in the condensed consolidated statements of income: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Costs of revenue (exclusive of amortization and depreciation) $ 237 $ 274 $ 558 $ 851 Other expenses 801 1,590 1,604 4,433 Pre-tax stock-based compensation expense 1,038 1,864 2,162 5,284 Less: income tax effect (228) (410) (476) (1,162) Net stock-based compensation expense $ 810 $ 1,454 $ 1,686 $ 4,122 The Company's stock-based compensation awards are in the form of restricted stock and performance share awards granted pursuant to the Company's Amended and Restated 2019 Incentive Plan (the "Plan"). As of September 30, 2023, th ere was $7.6 million of unrecognized compensation expense related to unvested and unearned, as applicable, stock-based compensation arrangements granted under the Plan, which is expected to be recognized over a weighted-average period of 2.0 years. Restricted Stock The Company grants restricted stock to executive officers, certain key employees and non-employee directors under the Plan with the fair value of the awards representing the fair value of the common stock on the date the restricted stock is granted. During the vesting period, recipients of restricted stock are entitled to dividends and possess voting rights. Shares of restricted stock generally vest in equal annual installments over the applicable vesting period, which ranges from one A summary of restricted stock activity under the Plan during the nine months ended September 30, 2023 and 2022 is as follows: Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Shares Weighted-Average Shares Weighted-Average Unvested restricted stock outstanding at beginning of period 281,161 $ 32.24 314,883 $ 29.79 Granted 210,351 26.44 161,375 34.22 Vested (145,529) 31.35 (181,405) 29.79 Forfeited (2,668) 29.23 (8,936) 31.60 Unvested restricted stock outstanding at end of period 343,315 $ 29.08 285,917 $ 32.23 Performance Share Awards The Company grants performance share awards to executive officers and certain key employees under the Plan, with the number of shares of common stock earned and issuable under each award determined at the end of a three-year performance period, based on the Company's achievement of performance goals predetermined by the Compensation Committee of the Board of Directors at the time of grant. These performance share awards include a modifier to the total number of shares earned based on the Company's total shareholder return ("TSR") compared to a small-cap stock market index. If certain levels of the performance objective are met, the award results in the issuance of shares of common stock corresponding to such level. Performance share awards that result in the issuance of shares of common stock are not subject to time-based vesting at the conclusion of the three-year performance period. In the event that the Company's financial performance meets the predetermined targets for the performance objectives of the performance share awards, the Company will issue each award recipient the number of shares of common stock 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 may be issued. The total number of shares issued for the 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 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 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 related to 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 Plan during the nine months ended September 30, 2023 and 2022 is as follows, based on the target award amounts set forth in the performance share award agreements: Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Shares Weighted-Average Shares Weighted-Average Performance share awards outstanding at beginning of period 252,375 $ 31.84 249,952 $ 29.59 Granted 122,071 31.21 101,799 37.98 Forfeited or unearned (100,655) 27.46 (45,060) 31.70 Earned and issued — — (27,317) 31.75 Performance share awards outstanding at end of period 273,791 $ 33.17 279,374 $ 32.09 Stock Repurchases On September 4, 2020, our Board of Directors approved a stock repurchase program under which we were authorized to repurchase up to $30.0 million of our common stock through September 3, 2022. On July 27, 2022, the Board of Directors extended the expiration date of the stock repurchase program to September 4, 2024. We repurchased 49,789 shares during the nine months ended September 30, 2023 and 212,299 shares during the nine months ended September 30, 2022. The approximate dollar value of shares that may yet be repurchased under the stock repurchase program was $16.5 million as of September 30, 2023. Any future stock repurchase transactions may be made through open market purchases, privately-negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Any repurchase activity will depend on many factors, such as the availability of shares of our common stock, general market conditions, the trading price of our common stock, alternative uses for capital, the Company’s financial performance, compliance with the terms of our Amended and Restated Credit Agreement and other factors. Concurrent with the authorization of this stock repurchase program in September 2020, the Board of Directors opted to indefinitely suspend all quarterly dividends. In addition to shares repurchased under the approved stock repurchase program, we purchased 39,716 shares during the nine months ended September 30, 2023 and 52,905 shares during the nine months ended September 30, 2022 to fund required tax withholdings related to the vesting of restricted stock. Shares withheld to cover required tax withholdings related to the vesting of restricted stock do not reduce our total share repurchase authority. |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 9 Months Ended |
Sep. 30, 2023 | |
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 (In thousands) September 30, December 31, 2022 Short-term payment plans, gross $ 1,107 $ 330 Less: allowance for losses (55) (16) Short-term payment plans, net $ 1,052 $ 314 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 2029. 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 decrease in long-term financing arrangement balances during the nine months ended September 30, 2023 is primarily a result of the continued evolution of customer licensing preferences. Although the overwhelming majority of our historical EHR installations prior to 2019 were made under a perpetual license model, the dramatic shift in customer preferences to a SaaS license model began during 2019 with 49% of the year's new acute care EHR installations being performed in a SaaS model, compared to only 12% in 2018. The shift in customer preference toward a SaaS model has since continued, with SaaS installations representing approximately 68% of new acute care EHR installations in 2020, 63% in 2021, and 100% in 2022 and the nine months ended September 30, 2023. Due to the nature of the revenue recognition requirements for SaaS arrangements coupled with recurring monthly payments, these arrangements do not give rise to long-term financing arrangements. The components of these receivables were as follows at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Long-term financing arrangements, gross $ 5,575 $ 8,683 Less: allowance for expected credit losses (385) (533) Less: unearned income (376) (678) Long-term financing arrangements, net $ 4,814 $ 7,472 Future minimum payments to be received subsequent to September 30, 2023 are as follows: (In thousands) Years Ending December 31, 2023 $ 1,142 2024 2,859 2025 1,391 2026 153 2027 15 Thereafter 15 Total minimum payments to be received 5,575 Less: allowance for expected credit losses (385) Less: unearned income (376) Receivables, net $ 4,814 Credit Quality of Financing Receivables and Allowance for Expected Credit Losses The following table is a roll-forward of the allowance for expected credit losses for the nine months ended September 30, 2023 and year ended December 31, 2022: (In thousands) Balance at Beginning of Period Provision Charge-offs Recoveries Balance at End of Period September 30, 2023 $ 549 $ (109) $ — $ — $ 440 December 31, 2022 $ 722 $ (211) $ — $ 38 $ 549 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, current and future 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 expected 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, 2023 and December 31, 2022: (In thousands) 1 to 90 Days Past Due 91 to 180 Days Past Due 181 + Days Past Due Total Past Due September 30, 2023 $ 576 $ 153 $ 264 $ 993 December 31, 2022 $ 1,086 $ 278 $ 283 $ 1,647 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, net 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, December 31, 2022 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 $ 1,720 $ 3,876 Uninvoiced client financing receivables related to trade accounts receivable that are 91 to 180 Days Past Due 1,564 1,369 Uninvoiced client financing receivables related to trade accounts receivable that are 181 + Days Past Due 1,107 1,894 Total uninvoiced client financing receivables balances of clients with a trade accounts receivable $ 4,391 $ 7,139 Total uninvoiced client financing receivables of clients with no related trade accounts receivable 808 866 Total financing receivables with contractual maturities of one year or less 1,107 330 Less: allowance for expected credit losses (440) (549) Total financing receivables $ 5,866 $ 7,786 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Our purchased definite-lived intangible assets as of September 30, 2023 and December 31, 2022 are summarized as follows: September 30, 2023 (In thousands) Customer Relationships Trademark Developed Technology Non-Compete Agreements Total Gross carrying amount, beginning of period $ 132,170 $ 12,320 $ 40,800 $ 1,400 $ 186,690 Accumulated amortization (60,619) (6,750) (28,922) (443) (96,734) Net intangible assets as of September 30, 2023 $ 71,551 $ 5,570 $ 11,878 $ 957 $ 89,956 Weighted average remaining years of useful life 7.6 12.5 8.3 3.4 9.5 December 31, 2022 (In thousands) Customer Relationships Trademark Developed Technology Non-Compete Agreements Total Gross carrying amount, beginning of period $ 112,570 $ 12,320 $ 37,600 $ — $ 162,490 Intangible assets acquired 19,600 — 3,200 1,400 24,200 Accumulated amortization (52,371) (6,076) (26,010) (233) (84,690) Net intangible assets as of December 31, 2022 $ 79,799 $ 6,244 $ 14,790 $ 1,167 $ 102,000 The following table represents the remaining amortization of definite-lived intangible assets as of September 30, 2023: (In thousands) For the year ended December 31, 2023 $ 4,014 2024 14,523 2025 14,208 2026 12,919 2027 9,047 Thereafter 35,245 Total $ 89,956 The following table sets forth the change in the carrying amount of goodwill by segment for the nine months ended September 30, 2023: (In thousands) RCM EHR Patient Engagement Total Balance as of December 31, 2022 $ 61,821 $ 126,665 $ 9,767 $ 198,253 Goodwill impairment — — — — Balance as of September 30, 2023 $ 61,821 $ 126,665 $ 9,767 $ 198,253 |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt was comprised of the following at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Term loan facility $ 64,750 $ 67,375 Revolving credit facility 78,416 73,700 Debt obligations 143,166 141,075 Less: unamortized debt issuance costs (1,277) (1,546) Debt obligation, net 141,889 139,529 Less: current portion (3,141) (3,141) Long-term debt $ 138,748 $ 136,388 As of September 30, 2023, 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 Healthland Holding Inc. ("HHI") in January 2016, we entered into a syndicated credit agreement with Regions Bank ("Regions") serving as administrative agent, which provided for a $125 million term loan facility and a $50 million revolving credit facility. On June 16, 2020, we entered into an Amended and Restated Credit Agreement that increased the aggregate principal amount of our credit facilities to $185 million, including a $75 million term loan facility and a $110 million revolving credit facility. On May 2, 2022, we entered into a First Amendment (the "First Amendment") to the Amended and Restated Credit Agreement, that increased the aggregate principal amount of our credit facilities to $230 million, which includes a $70 million term loan facility and a $160 million revolving credit facility. In addition, the interest rate provisions of the First Amendment reflect the transition from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") as the new benchmark interest rate for each loan. Each of our credit facilities continues to bear interest at a rate per annum equal to an applicable margin plus, at our option, either (1) the Adjusted SOFR rate for the relevant interest period, subject to a floor of 0.50%, (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 SOFR rate, subject to the aforementioned floor, plus one percent per annum, or (3) a combination of (1) and (2). The applicable margin range for SOFR loans and the letter of credit fee ranges from 1.8% to 3.0%. The applicable margin range for base rate loans ranges from 0.8% to 2.0%, in each case based on the Company's consolidated net leverage ratio. Principal payments with respect to the term loan facility are due on the last day of each fiscal quarter beginning June 30, 2022, with quarterly principal payments of approximately $0.9 million through March 31, 2027, with maturity on May 2, 2027 or such earlier date as the obligations under the Amended and Restated Credit Agreement, as amended by the First Amendment, become due and payable pursuant to the terms of such agreement. Any principal outstanding under the revolving credit facility is due and payable on the maturity date. Anticipated annual future maturities of the term loan facility and revolving credit facility are as follows as of September 30, 2023: (In thousands) 2023 $ 875 2024 3,500 2025 3,500 2026 3,500 2027 131,791 Thereafter — $ 143,166 Our credit facilities are secured pursuant to the Amended and Restated Credit Agreement, dated as of June 16, 2020, 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 and Restated Credit Agreement are also guaranteed by the Subsidiary Guarantors. The First Amendment provides incremental facility capacity of $75 million, subject to certain conditions. The Amended and Restated Credit Agreement, as amended by the First Amendment, 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 net leverage ratio described below); enter into certain restrictive agreements; make investments, loans and acquisitions; merge or consolidate with any other person; dispose of assets; enter into sale and leaseback transactions; engage in transactions with affiliates; and materially alter the business we conduct. The First Amendment requires the Company to maintain a minimum fixed charge coverage ratio of 1.25:1.00 throughout the duration of such agreement. Under the First Amendment, the Company is required to comply with a maximum consolidated net leverage ratio of 3.50:1.00. Further, under the First Amendment, in connection with any acquisition by the Company exceeding $25 million, the Company may elect to increase the maximum permitted consolidated net leverage ratio for the fiscal quarter in which the acquisition occurs and each of the following three fiscal quarters by 0.50:1.00 above the otherwise permitted maximum. If the consolidated net leverage ratio is less than 2.50:1.00, there is no limit on the amount of incremental facilities. The Amended and Restated Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default. On March 9, 2023, the calculation of the fixed charge coverage ratio was amended to specifically exclude from the definition of fixed charges the Company's share repurchases conducted during the third and fourth quarters of 2022. As of September 30, 2023, we were not in compliance with the fixed charge coverage ratio required by the Amended and Restated Credit Agreement. On November 8, 2023, the Company and the subsidiary guarantors entered into a Waiver with Regions Bank, as administrative agent, and various other lenders, which provided for a one-time waiver of this failure as an event of default. |
OPERATING LEASES
OPERATING LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
OPERATING LEASES | OPERATING LEASES The Company leases office space in various locations in Alabama, Pennsylvania, Minnesota, Maryland, Mississippi, and Washington. These leases have terms expiring from 2023 through 2029 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. On April 30, 2023, the company terminated its lease agreement for approximately 12,500 square feet of office space in Plymouth, Minnesota. Pursuant to a Termination of Lease Agreement dated April 18, 2023, the Company paid $1.1 million to the landlord as consideration for the early termination. In connection with the lease termination, the Company derecognized the assets and liabilities associated with the operating lease and recorded a $0.1 million loss on the disposal of leasehold improvement. Supplemental balance sheet information related to operating leases was as follows: (In thousands) September 30, December 31, Operating lease assets Operating lease assets $ 5,138 $ 7,567 Operating lease liabilities Other accrued liabilities 1,880 2,063 Operating lease liabilities, net of current portion 3,421 5,651 Total operating lease liabilities $ 5,301 $ 7,714 Weighted average remaining lease term in years 4.2 5 Weighted average discount rate 4.2% 4.4% 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, 2023 are as follows: (In thousands) 2023 $ 476 2024 1,804 2025 1,063 2026 1,025 2027 706 Thereafter 693 Total lease payments 5,767 Less imputed interest (466) Total $ 5,301 Total lease expense for the nine months ended September 30, 2023 and 2022 was $1.5 million and $1.6 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, 2023 and 2022 was $1.5 million and $1.6 million, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. In March 2022, the Company was served with a qui tam |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023, we did not have any instruments that require fair value measurement. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Our chief operating decision makers ("CODM") previously utilized the following three operating segments, "Acute Care EHR", "Post-acute Care EHR" and "TruBridge". However, in the fourth quarter of 2022, the Company made a number of changes to its organizational structure and management system to better align the Company's operating model to its strategic initiatives. As a result of these changes, the Company revised its operating segments. The new operating and reportable segments, based on our three distinct business units with unique market dynamics and opportunities, are "RCM", "EHR", and "Patient Engagement". These segments represent the components of the Company for which separate financial information is available that is utilized on a regular basis by the CODM in assessing segment performance and in allocating the Company's resources. Management evaluates the performance of the segments based on revenues and adjusted EBITDA. The Company previously evaluated the performance of the segments based on segment gross profit. Management believes adjusted EBITDA is a useful measure to assess the performance and liquidity of the Company as it provides meaningful operating results by excluding the effects of expenses that are not reflective of its operating business performance. Our CODM group is comprised of the Chief Executive 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 segment disclosures below for the three and nine months ended Septemberr 30, 2022 have been recast to conform to the current year presentation. Adjusted EBITDA consists of GAAP net income as reported and adjusts for (i) deferred revenue purchase accounting adjustments arising from purchase allocation adjustments related to business acquisitions; (ii) depreciation expense; (iii) amortization of software development costs; (iv) amortization of acquisition-related intangible assets; (v) stock-based compensation; (vi) severance and other non-recurring charges; (vii) interest expense and other, net; (viii) (gain) loss on contingent consideration; and (ix) the provision (benefit) for income taxes. There are no intersegment revenues to be eliminated in computing segment revenue. The CODM do not evaluate operating segments nor make decisions regarding operating segments based on assets. Consequently, we do not disclose total assets by reportable segment. The following table presents a summary of the revenues and adjusted EBITDA of our three operating segments for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Revenues by segment: RCM $ 46,582 $ 46,875 $ 142,973 $ 134,200 EHR Recurring revenue Acute EHR 27,925 27,237 83,886 81,333 Post-acute EHR 3,594 3,817 11,230 11,504 Total recurring EHR revenue 31,519 31,054 95,116 92,837 Non-recurring revenue Acute EHR 2,624 3,500 8,460 9,467 Post-acute EHR 350 395 1,075 1,551 Total non-recurring EHR revenue 2,974 3,895 9,535 11,018 Total EHR revenue $ 34,493 $ 34,949 $ 104,651 $ 103,855 Patient Engagement 1,637 1,003 5,943 5,369 Total revenues $ 82,712 $ 82,827 $ 253,567 $ 243,424 Adjusted EBITDA by segment: RCM $ 4,623 $ 8,750 $ 18,205 26,395 EHR 5,669 5,751 17,394 17,621 Patient Engagement (570) (1,152) (6) (1,345) Total adjusted EBITDA $ 9,722 $ 13,349 $ 35,593 $ 42,671 The following table reconciles net income to adjusted EBITDA: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Net income (loss), as reported $ (3,562) $ 2,161 (3,315) 13,350 Deferred revenue and other purchase accounting adjustments — — — 109 Depreciation expense 297 622 1,392 1,890 Amortization of software development costs 2,194 1,024 5,506 2,283 Amortization of acquisition-related intangibles 4,014 4,486 12,043 12,917 Stock-based compensation 1,038 1,864 2,162 5,284 Severance and other non-recurring charges 7,392 410 15,313 1,671 Interest expense and other, net 2,847 1,416 7,836 3,255 (Gain) loss on contingent consideration — 589 — (992) Provision (benefit) for income taxes (4,498) 777 (5,344) 2,904 Total adjusted EBITDA $ 9,722 $ 13,349 $ 35,593 $ 42,671 Certain of the items excluded or adjusted to arrive at adjusted EBITDA are described below: • Deferred revenue and other purchase accounting adjustments - Deferred revenue purchase accounting adjustments includes acquisition-related deferred revenue adjustments, which reflect the fair value adjustments to deferred revenues acquired in business acquisitions. The fair value of deferred revenue represents an amount equivalent to the estimated cost plus an appropriate profit margin, to perform services related to the acquiree's software and product support, which assumes a legal obligation to do so, based on the deferred revenue balance as of the acquisition date. We add back deferred revenue and other adjustments for adjusted EBITDA because we believe the inclusion of this amount directly correlates to the underlying performance of our operations. • Amortization of acquisition-related intangibles - Acquisition-related amortization expense is a non-cash expense arising primarily from the acquisition of intangibles in connection with acquisitions or investments. We exclude acquisition-related amortization expense from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets. • Stock-based compensation - Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards. We exclude stock-based compensation expense from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of the timing and valuation of grants of new stock-based awards, including grants in connection with acquisitions. • Severance and other non-recurring charges - Non-recurring charges relate to certain severance and other charges incurred in connection with activities that are considered non-recurring. We exclude non-recurring expenses (primarily related to costs associated with our recent business transformation initiative and non-recurring lease termination costs) and transaction-related costs from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods. • (Gain) loss on contingent consideration - The purchase agreement for our acquisition of TruCode in 2021 contained contingent consideration, or "earnout," provisions whereby the previous shareholders of TruCode would receive additional consideration at the conclusion of a one-year period beginning on the acquisition date and ending on the first anniversary of the acquisition date, depending on the achievement of certain profitability targets. After the initial measurement period, U.S. GAAP requires that any adjustments to the estimated fair value of this contingent liability, including upon final determination of amounts due, should be recorded in the relevant period's earnings. We exclude gains on contingent consideration from adjusted EBITDA because we believe (i) the amount of such gains in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such gains can vary between periods. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 16, 2023, the Company acquired all of the assets and liabilities of Viewgol, LLC, a Delaware limited liability Company ("Viewgol"), pursuant to a Securities Purchase Agreement, dated October 16, 2023. Headquartered in Frisco, Texas, Viewgol is a full suite RCM service provider for the ambulatory healthcare market, providing analytics software paired with outsourcing capabilities through its Indian offshore resource center. The Securities Purchase Agreement provides for an aggregate purchase price of $36.0 million, with an additional earnout of up to approximately $31.5 million based on a combination of achieving profitability metrics for 2024 and the creation of additional offshore resources supporting TruBridge, CPSI's existing RCM subsidiary. The Company expects to account for the acquisition as a business combination in accordance with ASC 805, Business Combinations (“ASC 805”). Due to the proximity of the acquisition date to the Company’s filing of its Quarterly Report on Form 10-Q for the period ended September 30, 2023, the initial accounting for the Viewgol business combination is incomplete, and therefore the Company is unable to disclose certain information required by ASC 805, including the provisional amounts recognized as of the acquisition date for fair value of consideration transferred, each major class of assets acquired and liabilities assumed, and goodwill. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income (loss) | $ (3,562) | $ 2,161 | $ (3,315) | $ 13,350 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022 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, 2022 and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Commencing with the fourth quarter of 2022, the Company realigned its reporting structure due to certain organizational changes. As a result, the Company changed its three reportable segments from (i) TruBridge, (ii) Acute Care Electronic Health Record ("EHR"), and (iii) Post-acute Care EHR to (i) Revenue Cycle Management ("RCM"), (ii) EHR, and (iii) Patient Engagement. All prior segment information has been recast to reflect the Company's new segment structure and current period presentation. Refer to Note 17 - Segment Reporting for more information. Additional changes to the presentation of amounts within our condensed consolidated statements of income are as follows: • During the first quarter of 2023, we identified certain costs related to the implementation of our cloud strategy and our security operations center that were recorded within the caption "Costs of revenue (exclusive of amortization and depreciation) - EHR" on our condensed consolidated statements of income, that we determined do not solely contribute to the production of EHR products and services, but support the overall business. Consequently, effective January 1, 2023, certain costs related to the implementation of our cloud strategy, which were formerly included within the caption "Costs of revenue (exclusive of amortization and depreciation) - EHR," have been recorded as components of "Product development" expenses. In addition, certain costs related to the Company's security operations center, which were formerly included within the caption "Costs of revenue (exclusive of amortization and depreciation) - EHR," have been recorded as components of "General and administrative" expenses. Additionally, immaterial travel costs were reclassified from within the caption "Costs of revenue (exclusive of amortization and depreciation) - RCM" to "Product development" expenses. Amounts presented for the three and nine months ended September 30, 2022 have been reclassified to conform to the current presentation. • In addition, during the first quarter of 2023, we refined our operating expense allocation methodology to more accurately distribute the appropriate share of costs among operating segments. Amounts presented for the three and nine months ended September 30, 2022 have been reclassified and are reflective of the current operating expense methodology in order to conform to the current presentation. • During the third quarter of 2023, we changed the presentation of certain costs previously recorded within the expense captions of "Product development" and "General and administrative" to better comply with the disclosure requirements of Staff Accounting Bulletin Topic 11.B., Miscellaneous Disclosure: Depreciation and Depletion Excluded from Cost of Sales. These changes are summarized as follows: ◦ Amortization expense associated with capitalized software development costs, previously recorded within the expense caption of "Product development," have been combined with amounts previously recorded within the expense caption "Amortization of acquisition-related intangibles" and reflected in a newly-presented expense caption of "Amortization." ◦ Depreciation expense previously recorded within the expense caption of "General and administrative" have been reclassified within the newly-presented expense caption of "Depreciation." ◦ The expense caption previously labelled as "Costs of sales" has been renamed "Costs of revenue (exclusive of amortization and depreciation)," with the previously reported reference to "Gross profit" removed from the current presentation. The following table provides the amounts reclassified and the impact of applying the current operating expense allocation methodology for the three and nine months ended September 30, 2022. Three Months Ended September 30, 2022 (in thousands) As previously reported Re-classifications As reclassified Impact of operating expense allocations As currently reported Costs of revenue (exclusive of amortization and depreciation) RCM $ 25,289 $ — $ 25,289 $ — $ 25,289 EHR 18,619 (874) 17,745 (642) 17,103 Other expenses Product development 7,822 (477) 7,345 642 7,987 General and administrative 13,458 (295) 13,163 — 13,163 Amortization of acquisition-related intangibles 4,486 (4,486) — — — Amortization — 5,510 5,510 — 5,510 Depreciation — 622 622 — 622 Nine Months Ended September 30, 2022 (in thousands) As previously reported Re-classifications As reclassified Impact of operating expense allocations As currently reported Costs of revenue (exclusive of amortization and depreciation) RCM $ 71,068 $ — $ 71,068 $ — $ 71,068 EHR 52,278 (2,169) 50,109 (1,945) 48,164 Other expenses Product development 22,036 (1,084) 20,952 1,945 22,897 General and administrative 41,235 (920) 40,315 — 40,315 Amortization of acquisition-related intangibles 12,917 (12,917) — — — Amortization — 15,200 15,200 — 15,200 Depreciation — 1,890 1,890 — 1,890 |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements of CPSI include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. |
Recent Account Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Standards Adopted in 2023 There were no new accounting standards required to be adopted in 2023 that would have a material impact on our consolidated financial statements. New Accounting Standards Yet to be Adopted 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 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 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. • Revenue Cycle Management Our RCM business unit 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 stand-alone selling price ("SSP"), net of discounts. SSP for BPS services is determined based on observable stand-alone selling prices. 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. Our RCM business unit also provides professional IT services. Revenue from professional IT services is recognized as the services are performed based on SSP, which is determined by observable stand-alone selling prices. Payment is due monthly as services are performed. Lastly, our RCM business unit also provides certain software solutions and related support under Software as a Service ("SaaS") arrangements and time-based software licenses. Revenue from SaaS arrangements is recognized in a manner consistent with SaaS arrangements for EHR software, as discussed below. Revenue from time-based software licenses is recognized upon delivery to the client (“point in time”) and revenue from non-license components (i.e., support) is recognized ratably over the respective contract term (“over time”). SSP for time-based licenses is determined using the residual approach, while the non-license component is based on cost plus reasonable margin. • Electronic Health Records The Company enters into contractual obligations to sell perpetual software licenses, installation, conversion, and related training services, software application support, hardware, and hardware maintenance services to acute care community hospitals and post-acute providers. • Non-recurring Revenues • Perpetual software licenses and installation, conversion, and related training services 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 SSP, net of discounts. We determine each module's SSP using the residual method. Fees for licenses and installation, conversion, and related training services 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 11 - Financing Receivables for further information. EHR implementations include a system warranty that terminates thirty days from the software go-live date, the date 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 and revenue is recognized on a gross basis. 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 • 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, and revenue is recognized on a gross basis. Payment is due monthly for subscriptions to third party content. • 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 17 of the consolidated financial statements for further information, including revenue by client base (acute care or post-acute care) bifurcated by recurring and non-recurring revenue. • Patient Engagement The Company enters into contractual obligations to sell perpetual and term-based software licenses, implementation and customization professional services, and software application support services to a variety of healthcare organizations including hospital systems, health ministries, and government and non-profit organizations. • Non-recurring Revenues • Perpetual software licenses are sold only to one re-seller client and are considered a separate and distinct performance obligation. Revenue is recognized at the point in time perpetual licenses are delivered to the client, which occurs at the time of sale. The SSP of perpetual licenses is directly observable. Payment is generally due upon delivery of licenses. • Implementation and customization services are considered a separate and distinct performance obligation. Revenue is recognized over time based on SSP, which is generally directly observable. Payment for professional services is typically due in two installments: (1) upon signature of the agreement and (2) upon customer acceptance of the delivered services. • Recurring Revenues • Term-based software licenses are considered a separate and distinct performance obligation. Revenue is recognized based on SSP, which is directly observable, at the point in time the term-based licenses are delivered to the client or upon annual renewal. Payment is generally due upon delivery of licenses or upon annual renewal. • Software application support services sold with software licenses are separate and distinct performance obligations. The related revenues are recognized based on SSP, which is the renewal price, ratably over the life of the contract, which is generally three Refer to Note 17 of the condensed consolidated financial statements for further information. 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 deferred revenue recorded during the nine months ended September 30, 2023 and 2022 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, 2023 and 2022 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 and RCM arrangements, 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. Costs to obtain a contract are expensed within the caption "Expenses - Sales and marketing" 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, conversions, and installation that is necessary for the software to be utilized. Contract fulfillment costs are expensed within the caption "Costs of revenue (exclusive of amortiztion and depreciation) - EHR" in the accompanying condensed consolidated statements of income. |
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 10) are considered participating securities under ASC 260, 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 | The Company determines the tax provision for interim periods using an estimate of our annual effective tax rate ("ETR"), adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual ETR, and if our estimated tax rate changes, we make a cumulative adjustment. If a reliable estimate of the annual ETR cannot be made, the actual ETR for the year to date may be the best estimate of the annual ETR. |
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. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Amounts Reclassified | The following table provides the amounts reclassified and the impact of applying the current operating expense allocation methodology for the three and nine months ended September 30, 2022. Three Months Ended September 30, 2022 (in thousands) As previously reported Re-classifications As reclassified Impact of operating expense allocations As currently reported Costs of revenue (exclusive of amortization and depreciation) RCM $ 25,289 $ — $ 25,289 $ — $ 25,289 EHR 18,619 (874) 17,745 (642) 17,103 Other expenses Product development 7,822 (477) 7,345 642 7,987 General and administrative 13,458 (295) 13,163 — 13,163 Amortization of acquisition-related intangibles 4,486 (4,486) — — — Amortization — 5,510 5,510 — 5,510 Depreciation — 622 622 — 622 Nine Months Ended September 30, 2022 (in thousands) As previously reported Re-classifications As reclassified Impact of operating expense allocations As currently reported Costs of revenue (exclusive of amortization and depreciation) RCM $ 71,068 $ — $ 71,068 $ — $ 71,068 EHR 52,278 (2,169) 50,109 (1,945) 48,164 Other expenses Product development 22,036 (1,084) 20,952 1,945 22,897 General and administrative 41,235 (920) 40,315 — 40,315 Amortization of acquisition-related intangibles 12,917 (12,917) — — — Amortization — 15,200 15,200 — 15,200 Depreciation — 1,890 1,890 — 1,890 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Contract with Customer, Asset and Liability | The following table details deferred revenue for the nine months ended September 30, 2023 and 2022, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Beginning balance $ 11,590 $ 11,529 Deferred revenue recorded 13,417 19,474 Less deferred revenue recognized as revenue (16,201) (18,748) Ending balance $ 8,806 $ 12,255 |
Schedule of Capitalized Contract Cost | The following table details costs to obtain and fulfill contracts with customers for the nine months ended September 30, 2023 and 2022, included in the condensed consolidated balance sheets: (In thousands) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Beginning balance $ 11,577 $ 7,312 Costs to obtain and fulfill contracts capitalized 5,221 7,460 Less costs to obtain and fulfill contracts recognized as expense (4,214) (5,440) Ending balance $ 12,584 $ 9,332 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The allocation of the purchase price paid for HRG was as follows: (In thousands) Purchase Price Allocation Acquired cash $ 3,989 Accounts receivable 5,655 Prepaid expenses 398 Property and equipment 467 Other assets 73 Intangible assets 24,200 Operating lease assets 1,315 Goodwill 20,750 Accounts payable and accrued liabilities (2,403) Deferred taxes, net (5,565) Operating lease liability (1,315) Net assets acquired $ 47,564 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net was comprised of the following at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Land $ 2,848 $ 2,848 Buildings and improvements 8,481 8,320 Computer equipment 8,383 8,228 Leasehold improvements 606 783 Office furniture and fixtures 1,025 1,008 Automobiles 18 18 Property and equipment, gross 21,361 21,205 Less: accumulated depreciation (12,654) (11,321) Property and equipment, net $ 8,707 $ 9,884 |
SOFTWARE DEVELOPMENT (Tables)
SOFTWARE DEVELOPMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Research and Development [Abstract] | |
Schedule of Software Development, Net | Software development costs, net was comprised of the following at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Software development costs $ 49,770 $ 31,789 Less: accumulated amortization (10,038) (4,532) Software development costs, net $ 39,732 $ 27,257 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities was comprised of the following at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Salaries and benefits $ 7,253 $ 8,430 Severance 7,783 2,504 Commissions 740 1,280 Self-insurance reserves — 1,358 Interest 1,919 — Operating lease liabilities, current portion 1,880 2,063 Other 3,546 840 Other accrued liabilities $ 23,121 $ 16,475 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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) 2023 2022 2023 2022 Net income (loss) $ (3,562) $ 2,161 $ (3,315) $ 13,350 Less: Net (income) loss attributable to participating securities 82 (42) 73 (261) Net income (loss) attributable to common stockholders $ (3,480) $ 2,119 $ (3,242) $ 13,089 Weighted average shares outstanding used in basic per common share computations 14,205 14,365 14,181 14,405 Add: Dilutive potential common shares — — — — Weighted average shares outstanding used in diluted per common share computations 14,205 14,365 14,181 14,405 Basic EPS $ (0.24) $ 0.15 $ (0.23) $ 0.91 Diluted EPS $ (0.24) $ 0.15 $ (0.23) $ 0.91 |
STOCK-BASED COMPENSATION AND _2
STOCK-BASED COMPENSATION AND EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Total Stock-based Compensation Expense | The following table details total stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022, included in the condensed consolidated statements of income: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Costs of revenue (exclusive of amortization and depreciation) $ 237 $ 274 $ 558 $ 851 Other expenses 801 1,590 1,604 4,433 Pre-tax stock-based compensation expense 1,038 1,864 2,162 5,284 Less: income tax effect (228) (410) (476) (1,162) Net stock-based compensation expense $ 810 $ 1,454 $ 1,686 $ 4,122 |
Schedule of Restricted Stock Activity | A summary of restricted stock activity under the Plan during the nine months ended September 30, 2023 and 2022 is as follows: Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Shares Weighted-Average Shares Weighted-Average Unvested restricted stock outstanding at beginning of period 281,161 $ 32.24 314,883 $ 29.79 Granted 210,351 26.44 161,375 34.22 Vested (145,529) 31.35 (181,405) 29.79 Forfeited (2,668) 29.23 (8,936) 31.60 Unvested restricted stock outstanding at end of period 343,315 $ 29.08 285,917 $ 32.23 |
Schedule of Performance Share Award Activity | A summary of performance share award activity under the Plan during the nine months ended September 30, 2023 and 2022 is as follows, based on the target award amounts set forth in the performance share award agreements: Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Shares Weighted-Average Shares Weighted-Average Performance share awards outstanding at beginning of period 252,375 $ 31.84 249,952 $ 29.59 Granted 122,071 31.21 101,799 37.98 Forfeited or unearned (100,655) 27.46 (45,060) 31.70 Earned and issued — — (27,317) 31.75 Performance share awards outstanding at end of period 273,791 $ 33.17 279,374 $ 32.09 |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Short-term payment plans, gross $ 1,107 $ 330 Less: allowance for losses (55) (16) Short-term payment plans, net $ 1,052 $ 314 |
Schedule of Components of Lease Receivables | The components of these receivables were as follows at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Long-term financing arrangements, gross $ 5,575 $ 8,683 Less: allowance for expected credit losses (385) (533) Less: unearned income (376) (678) Long-term financing arrangements, net $ 4,814 $ 7,472 |
Schedule of Future Minimum Lease Payments to be Received | Future minimum payments to be received subsequent to September 30, 2023 are as follows: (In thousands) Years Ending December 31, 2023 $ 1,142 2024 2,859 2025 1,391 2026 153 2027 15 Thereafter 15 Total minimum payments to be received 5,575 Less: allowance for expected credit losses (385) Less: unearned income (376) Receivables, net $ 4,814 |
Schedule of Allowance for Financing Credit Losses | The following table is a roll-forward of the allowance for expected credit losses for the nine months ended September 30, 2023 and year ended December 31, 2022: (In thousands) Balance at Beginning of Period Provision Charge-offs Recoveries Balance at End of Period September 30, 2023 $ 549 $ (109) $ — $ — $ 440 December 31, 2022 $ 722 $ (211) $ — $ 38 $ 549 |
Schedule of 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, 2023 and December 31, 2022: (In thousands) 1 to 90 Days Past Due 91 to 180 Days Past Due 181 + Days Past Due Total Past Due September 30, 2023 $ 576 $ 153 $ 264 $ 993 December 31, 2022 $ 1,086 $ 278 $ 283 $ 1,647 |
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, December 31, 2022 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 $ 1,720 $ 3,876 Uninvoiced client financing receivables related to trade accounts receivable that are 91 to 180 Days Past Due 1,564 1,369 Uninvoiced client financing receivables related to trade accounts receivable that are 181 + Days Past Due 1,107 1,894 Total uninvoiced client financing receivables balances of clients with a trade accounts receivable $ 4,391 $ 7,139 Total uninvoiced client financing receivables of clients with no related trade accounts receivable 808 866 Total financing receivables with contractual maturities of one year or less 1,107 330 Less: allowance for expected credit losses (440) (549) Total financing receivables $ 5,866 $ 7,786 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Definite-lived Intangible Assets | Our purchased definite-lived intangible assets as of September 30, 2023 and December 31, 2022 are summarized as follows: September 30, 2023 (In thousands) Customer Relationships Trademark Developed Technology Non-Compete Agreements Total Gross carrying amount, beginning of period $ 132,170 $ 12,320 $ 40,800 $ 1,400 $ 186,690 Accumulated amortization (60,619) (6,750) (28,922) (443) (96,734) Net intangible assets as of September 30, 2023 $ 71,551 $ 5,570 $ 11,878 $ 957 $ 89,956 Weighted average remaining years of useful life 7.6 12.5 8.3 3.4 9.5 December 31, 2022 (In thousands) Customer Relationships Trademark Developed Technology Non-Compete Agreements Total Gross carrying amount, beginning of period $ 112,570 $ 12,320 $ 37,600 $ — $ 162,490 Intangible assets acquired 19,600 — 3,200 1,400 24,200 Accumulated amortization (52,371) (6,076) (26,010) (233) (84,690) Net intangible assets as of December 31, 2022 $ 79,799 $ 6,244 $ 14,790 $ 1,167 $ 102,000 |
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, 2023: (In thousands) For the year ended December 31, 2023 $ 4,014 2024 14,523 2025 14,208 2026 12,919 2027 9,047 Thereafter 35,245 Total $ 89,956 |
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, 2023: (In thousands) RCM EHR Patient Engagement Total Balance as of December 31, 2022 $ 61,821 $ 126,665 $ 9,767 $ 198,253 Goodwill impairment — — — — Balance as of September 30, 2023 $ 61,821 $ 126,665 $ 9,767 $ 198,253 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt was comprised of the following at September 30, 2023 and December 31, 2022: (In thousands) September 30, December 31, 2022 Term loan facility $ 64,750 $ 67,375 Revolving credit facility 78,416 73,700 Debt obligations 143,166 141,075 Less: unamortized debt issuance costs (1,277) (1,546) Debt obligation, net 141,889 139,529 Less: current portion (3,141) (3,141) Long-term debt $ 138,748 $ 136,388 |
Schedule of Annual Future Maturities of the Term Loan Facility and Revolving Credit Facility | Anticipated annual future maturities of the term loan facility and revolving credit facility are as follows as of September 30, 2023: (In thousands) 2023 $ 875 2024 3,500 2025 3,500 2026 3,500 2027 131,791 Thereafter — $ 143,166 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Lease, Supplemental Balance Sheet Information | Supplemental balance sheet information related to operating leases was as follows: (In thousands) September 30, December 31, Operating lease assets Operating lease assets $ 5,138 $ 7,567 Operating lease liabilities Other accrued liabilities 1,880 2,063 Operating lease liabilities, net of current portion 3,421 5,651 Total operating lease liabilities $ 5,301 $ 7,714 Weighted average remaining lease term in years 4.2 5 Weighted average discount rate 4.2% 4.4% |
Schedule of Operating Lease, Liability, Maturity | The future minimum lease payments payable under these operating leases subsequent to September 30, 2023 are as follows: (In thousands) 2023 $ 476 2024 1,804 2025 1,063 2026 1,025 2027 706 Thereafter 693 Total lease payments 5,767 Less imputed interest (466) Total $ 5,301 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents a summary of the revenues and adjusted EBITDA of our three operating segments for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Revenues by segment: RCM $ 46,582 $ 46,875 $ 142,973 $ 134,200 EHR Recurring revenue Acute EHR 27,925 27,237 83,886 81,333 Post-acute EHR 3,594 3,817 11,230 11,504 Total recurring EHR revenue 31,519 31,054 95,116 92,837 Non-recurring revenue Acute EHR 2,624 3,500 8,460 9,467 Post-acute EHR 350 395 1,075 1,551 Total non-recurring EHR revenue 2,974 3,895 9,535 11,018 Total EHR revenue $ 34,493 $ 34,949 $ 104,651 $ 103,855 Patient Engagement 1,637 1,003 5,943 5,369 Total revenues $ 82,712 $ 82,827 $ 253,567 $ 243,424 Adjusted EBITDA by segment: RCM $ 4,623 $ 8,750 $ 18,205 26,395 EHR 5,669 5,751 17,394 17,621 Patient Engagement (570) (1,152) (6) (1,345) Total adjusted EBITDA $ 9,722 $ 13,349 $ 35,593 $ 42,671 |
Schedule of Reconciliation Of Net Income From Continuing Operations To Adjusted Income (Loss) From Before Interest, Taxes, Depreciation And Amortization | The following table reconciles net income to adjusted EBITDA: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Net income (loss), as reported $ (3,562) $ 2,161 (3,315) 13,350 Deferred revenue and other purchase accounting adjustments — — — 109 Depreciation expense 297 622 1,392 1,890 Amortization of software development costs 2,194 1,024 5,506 2,283 Amortization of acquisition-related intangibles 4,014 4,486 12,043 12,917 Stock-based compensation 1,038 1,864 2,162 5,284 Severance and other non-recurring charges 7,392 410 15,313 1,671 Interest expense and other, net 2,847 1,416 7,836 3,255 (Gain) loss on contingent consideration — 589 — (992) Provision (benefit) for income taxes (4,498) 777 (5,344) 2,904 Total adjusted EBITDA $ 9,722 $ 13,349 $ 35,593 $ 42,671 |
BASIS OF PRESENTATION - Summary
BASIS OF PRESENTATION - Summary of Reclassifications (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of reportable segments | segment | 3 | |||
Total costs of revenue (exclusive of amortization and depreciation) | $ 43,863 | $ 43,293 | $ 132,173 | $ 122,027 |
Product development | 9,778 | 7,987 | 26,899 | 22,897 |
General and administrative | 20,961 | 13,163 | 54,471 | 40,315 |
Amortization of acquisition-related intangibles | 0 | 0 | ||
Amortization | 5,510 | 15,200 | ||
Depreciation | 297 | 622 | 1,392 | 1,890 |
Previously Reported | ||||
Product development | 7,822 | 22,036 | ||
General and administrative | 13,458 | 41,235 | ||
Amortization of acquisition-related intangibles | 4,486 | 12,917 | ||
Amortization | 0 | 0 | ||
Depreciation | 0 | 0 | ||
Restatement Adjustment | ||||
Product development | (477) | (1,084) | ||
General and administrative | (295) | (920) | ||
Amortization of acquisition-related intangibles | (4,486) | (12,917) | ||
Amortization | 5,510 | 15,200 | ||
Depreciation | 622 | 1,890 | ||
As reclassified | ||||
Product development | 7,345 | 20,952 | ||
General and administrative | 13,163 | 40,315 | ||
Amortization of acquisition-related intangibles | 0 | 0 | ||
Amortization | 5,510 | 15,200 | ||
Depreciation | 622 | 1,890 | ||
Impact of operating expense allocations | ||||
Product development | 642 | 1,945 | ||
General and administrative | 0 | 0 | ||
Amortization of acquisition-related intangibles | 0 | 0 | ||
Amortization | 0 | 0 | ||
Depreciation | 0 | 0 | ||
RCM | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 27,159 | 25,289 | 81,461 | 71,068 |
RCM | Previously Reported | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 25,289 | 71,068 | ||
RCM | Restatement Adjustment | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 0 | 0 | ||
RCM | As reclassified | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 25,289 | 71,068 | ||
RCM | Impact of operating expense allocations | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 0 | 0 | ||
EHR | ||||
Total costs of revenue (exclusive of amortization and depreciation) | $ 15,655 | 17,103 | $ 47,894 | 48,164 |
EHR | Previously Reported | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 18,619 | 52,278 | ||
EHR | Restatement Adjustment | ||||
Total costs of revenue (exclusive of amortization and depreciation) | (874) | (2,169) | ||
EHR | As reclassified | ||||
Total costs of revenue (exclusive of amortization and depreciation) | 17,745 | 50,109 | ||
EHR | Impact of operating expense allocations | ||||
Total costs of revenue (exclusive of amortization and depreciation) | $ (642) | $ (1,945) |
REVENUE RECOGNITION (Detail)
REVENUE RECOGNITION (Detail) | 9 Months Ended |
Sep. 30, 2023 installment | |
Minimum | |
Revenue from External Customer [Line Items] | |
Revenue performance obligation, description of timing | 3 years |
Maximum | |
Revenue from External Customer [Line Items] | |
Revenue performance obligation, description of timing | 5 years |
EHR | |
Revenue from External Customer [Line Items] | |
Revenue from contract with customer, payment, number of installments | 3 |
Revenue from contract with customer, warranty, term | 30 days |
Patient Engagement | |
Revenue from External Customer [Line Items] | |
Revenue from contract with customer, payment, number of installments | 2 |
REVENUE RECOGNITION - Deferred
REVENUE RECOGNITION - Deferred Revenue (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 11,590 | $ 11,529 |
Deferred revenue recorded | 13,417 | 19,474 |
Less deferred revenue recognized as revenue | (16,201) | (18,748) |
Ending balance | $ 8,806 | $ 12,255 |
REVENUE RECOGNITION - Costs to
REVENUE RECOGNITION - Costs to Obtain and Fulfill Contracts (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Capitalized Contract Cost [Roll Forward] | ||
Beginning balance | $ 11,577 | $ 7,312 |
Costs to obtain and fulfill contracts capitalized | 5,221 | 7,460 |
Less costs to obtain and fulfill contracts recognized as expense | (4,214) | (5,440) |
Ending balance | $ 12,584 | $ 9,332 |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Mar. 01, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Weighted average remaining years of useful life | 9 years 6 months | ||
Healthcare Resource Group, Inc. | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 43.6 | ||
Acquisition related costs | $ 1.2 | ||
Healthcare Resource Group, Inc. | Minimum | |||
Business Acquisition [Line Items] | |||
Weighted average remaining years of useful life | 4 years | ||
Healthcare Resource Group, Inc. | Maximum | |||
Business Acquisition [Line Items] | |||
Weighted average remaining years of useful life | 9 years |
BUSINESS COMBINATION - Prelimin
BUSINESS COMBINATION - Preliminary Allocation of the Purchase Price Paid (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Mar. 01, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 198,253 | $ 198,253 | |
Healthcare Resource Group, Inc. | |||
Business Acquisition [Line Items] | |||
Acquired cash | $ 3,989 | ||
Accounts receivable | 5,655 | ||
Prepaid expenses | 398 | ||
Property and equipment | 467 | ||
Other assets | 73 | ||
Intangible assets | 24,200 | ||
Operating lease assets | 1,315 | ||
Goodwill | 20,750 | ||
Accounts payable and accrued liabilities | (2,403) | ||
Deferred taxes, net | (5,565) | ||
Operating lease liability | (1,315) | ||
Net assets acquired | $ 47,564 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 21,361 | $ 21,205 |
Less: accumulated depreciation | (12,654) | (11,321) |
Property and equipment, net | 8,707 | 9,884 |
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 | 8,481 | 8,320 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,383 | 8,228 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 606 | 783 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,025 | 1,008 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 18 | $ 18 |
SOFTWARE DEVELOPMENT - Narrativ
SOFTWARE DEVELOPMENT - Narrative (Details) | Sep. 30, 2023 |
Software Development | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
SOFTWARE DEVELOPMENT - Schedule
SOFTWARE DEVELOPMENT - Schedule of Software Development Costs, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Research and Development [Abstract] | ||
Software development costs | $ 49,770 | $ 31,789 |
Less: accumulated amortization | (10,038) | (4,532) |
Software development costs, net | $ 39,732 | $ 27,257 |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Salaries and benefits | $ 7,253 | $ 8,430 |
Severance | 7,783 | 2,504 |
Commissions | 740 | 1,280 |
Self-insurance reserves | 0 | 1,358 |
Interest | 1,919 | 0 |
Operating lease liabilities, current portion | 1,880 | 2,063 |
Other | 3,546 | 840 |
Other accrued liabilities | $ 23,121 | $ 16,475 |
NET INCOME (LOSS) PER SHARE - C
NET INCOME (LOSS) PER SHARE - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ (3,562) | $ 2,161 | $ (3,315) | $ 13,350 |
Less: Net (income) loss attributable to participating securities | 82 | (42) | 73 | (261) |
Net income (loss) attributable to common stockholders | $ (3,480) | $ 2,119 | $ (3,242) | $ 13,089 |
Weighted average shares outstanding used in basic per common share computations (in shares) | 14,205 | 14,365 | 14,181 | 14,405 |
Add: Dilutive potential common shares (in shares) | 0 | 0 | 0 | 0 |
Weighted average shares outstanding used in diluted per common share computations (in shares) | 14,205 | 14,365 | 14,181 | 14,405 |
Basic EPS (in dollars per share) | $ (0.24) | $ 0.15 | $ (0.23) | $ 0.91 |
Diluted EPS (in dollars per share) | $ (0.24) | $ 0.15 | $ (0.23) | $ 0.91 |
NET INCOME (LOSS) PER SHARE - N
NET INCOME (LOSS) PER SHARE - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Aggregate target (in shares) | 273,791 | 273,791 | ||
Dilutive potential common shares included in the calculation of diluted earnings per share (in shares) | 0 | 0 | 0 | 0 |
Performance Shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive potential common shares included in the calculation of diluted earnings per share (in shares) | 0 | 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate percentage ( as a percent) | 55.80% | 26.40% | 61.70% | 17.90% |
R&D tax credits ( as a percent) | 24.20% | 26.50% | ||
Effective state income tax rate (as a percent) | 12.30% | 1.70% | ||
Impact of provision-to-return adjustments on our effective tax rate (as a percent) | 11.30% | 1.30% |
STOCK-BASED COMPENSATION AND _3
STOCK-BASED COMPENSATION AND EQUITY - Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 1,038 | $ 1,864 | $ 2,162 | $ 5,284 |
Less: income tax effect | (228) | (410) | (476) | (1,162) |
Net stock-based compensation expense | 810 | 1,454 | 1,686 | 4,122 |
Unrecognized compensation cost related to non-vested stock-based compensation arrangements | 7,600 | $ 7,600 | ||
Period for recognition for which unrecognized compensation costs are expected to be recognized | 2 years | |||
Costs of revenue (exclusive of amortization and depreciation) | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax stock-based compensation expense | 237 | 274 | $ 558 | 851 |
Other expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 801 | $ 1,590 | $ 1,604 | $ 4,433 |
STOCK-BASED COMPENSATION AND _4
STOCK-BASED COMPENSATION AND EQUITY - Schedule of Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Shares | ||
Stock outstanding at beginning of period (in shares) | 281,161 | 314,883 |
Granted (in shares) | 210,351 | 161,375 |
Vested (in shares) | (145,529) | (181,405) |
Forfeited (in shares) | (2,668) | (8,936) |
Stock outstanding at end of period (in shares) | 343,315 | 285,917 |
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) | $ 32.24 | $ 29.79 |
Granted, weighted-average grant-date fair value (in dollars per share) | 26.44 | 34.22 |
Vested, weighted-average grant-date fair value (in dollars per share) | 31.35 | 29.79 |
Forfeited or unearned, weighted-average grant-date fair value (in dollars per share) | 29.23 | 31.60 |
Nonvested stock outstanding at end of period, weighted-average grant-date fair value (in dollars per share) | $ 29.08 | $ 32.23 |
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 AND _5
STOCK-BASED COMPENSATION AND EQUITY - Schedule of Performance Share Awards (Details) - Performance Shares - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Shares | ||
Stock outstanding at beginning of period (in shares) | 252,375 | 249,952 |
Granted (in shares) | 122,071 | 101,799 |
Forfeited or unearned (in shares) | (100,655) | (45,060) |
Earned and issued (in shares) | 0 | (27,317) |
Stock outstanding at end of period (in shares) | 273,791 | 279,374 |
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) | $ 31.84 | $ 29.59 |
Granted, weighted-average grant-date fair value (in dollars per share) | 31.21 | 37.98 |
Forfeited or unearned, weighted-average grant-date fair value (in dollars per share) | 27.46 | 31.70 |
Earned and issued, weighted-average grant-date fair value (in dollars per share) | 0 | 31.75 |
Nonvested stock outstanding at end of period, weighted-average grant-date fair value (in dollars per share) | $ 33.17 | $ 32.09 |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
STOCK-BASED COMPENSATION AND _6
STOCK-BASED COMPENSATION AND EQUITY - Stock Repurchases (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 04, 2020 | |
Share-Based Payment Arrangement [Abstract] | |||
Stock repurchase program, authorized amount | $ 30,000,000 | ||
Stock repurchased during period (in shares) | 49,789 | 212,299 | |
Stock repurchase program, remaining authorized repurchase amount | $ 16,500,000 | ||
Shares purchased for award (in shares) | 39,716 | 52,905 |
FINANCING RECEIVABLES - Narrati
FINANCING RECEIVABLES - Narrative (Details) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Percentage of acute care EHR installations performed in a SaaS model | 100% | 100% | 63% | 68% | 49% | 12% |
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, 2023 | Dec. 31, 2022 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Less: allowance for losses | $ (319) | $ (223) |
Short-term payment plans, net | 4,251 | 4,474 |
Short-Term Payment Plans | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Short-term payment plans, gross | 1,107 | 330 |
Less: allowance for losses | (55) | (16) |
Short-term payment plans, net | $ 1,052 | $ 314 |
FINANCING RECEIVABLES - Compone
FINANCING RECEIVABLES - Components of Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Less: allowance for expected credit losses | $ (440) | $ (549) | $ (722) |
Total financing receivables | 5,866 | 7,786 | |
Long-Term Financing Arrangement | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Long-term financing arrangements, gross | 5,575 | 8,683 | |
Less: allowance for expected credit losses | (385) | (533) | |
Less: unearned income | (376) | (678) | |
Total financing receivables | $ 4,814 | $ 7,472 |
FINANCING RECEIVABLES - Future
FINANCING RECEIVABLES - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Less: allowance for expected credit losses | $ (440) | $ (549) | $ (722) |
Total financing receivables | 5,866 | 7,786 | |
Long-Term Financing Arrangement | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
2023 | 1,142 | ||
2024 | 2,859 | ||
2025 | 1,391 | ||
2026 | 153 | ||
2027 | 15 | ||
Thereafter | 15 | ||
Total minimum payments to be received | 5,575 | ||
Less: allowance for expected credit losses | (385) | (533) | |
Less: unearned income | (376) | (678) | |
Total financing receivables | $ 4,814 | $ 7,472 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for Financing Credit Losses (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Allowance for Credit Losses on Financing Receivables [Roll Forward] | ||
Balance at Beginning of Period | $ 549 | $ 722 |
Provision | (109) | (211) |
Charge-offs | 0 | 0 |
Recoveries | 0 | 38 |
Balance at End of Period | $ 440 | $ 549 |
FINANCING RECEIVABLES - Analysi
FINANCING RECEIVABLES - Analysis of Age of Financing Receivables Amounts (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Long-term financing arrangements, gross | $ 993 | $ 1,647 |
1 to 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Long-term financing arrangements, gross | 576 | 1,086 |
91 to 180 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Long-term financing arrangements, gross | 153 | 278 |
181 + Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Long-term financing arrangements, gross | $ 264 | $ 283 |
FINANCING RECEIVABLES - Schedul
FINANCING RECEIVABLES - Schedule of Financing Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total financing receivables with contractual maturities of one year or less | $ 1,107 | $ 330 | |
Less: allowance for expected credit losses | (440) | (549) | $ (722) |
Total financing receivables | 5,866 | 7,786 | |
Total Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables of clients with no related trade accounts receivable | 993 | 1,647 | |
Total Past Due | Trade Accounts Receivable | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables of clients with no related trade accounts receivable | 4,391 | 7,139 | |
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 of clients with no related trade accounts receivable | 576 | 1,086 | |
Uninvoiced client financing receivables related to trade accounts receivable that are 1 to 90 Days Past Due | Trade Accounts Receivable | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables of clients with no related trade accounts receivable | 1,720 | 3,876 | |
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 of clients with no related trade accounts receivable | 153 | 278 | |
Uninvoiced client financing receivables related to trade accounts receivable that are 91 to 180 Days Past Due | Trade Accounts Receivable | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables of clients with no related trade accounts receivable | 1,564 | 1,369 | |
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 of clients with no related trade accounts receivable | 264 | 283 | |
Uninvoiced client financing receivables related to trade accounts receivable that are 181 + Days Past Due | Trade Accounts Receivable | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables of clients with no related trade accounts receivable | 1,107 | 1,894 | |
Total Not Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables of clients with no related trade accounts receivable | $ 808 | $ 866 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Definite-lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount, beginning of period | $ 186,690 | $ 162,490 | |
Intangible assets acquired | 24,200 | ||
Accumulated amortization | $ (96,734) | (84,690) | |
Intangible assets, net | $ 89,956 | 102,000 | |
Weighted average remaining years of useful life | 9 years 6 months | ||
Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount, beginning of period | 132,170 | 112,570 | |
Intangible assets acquired | 19,600 | ||
Accumulated amortization | $ (60,619) | (52,371) | |
Intangible assets, net | $ 71,551 | 79,799 | |
Weighted average remaining years of useful life | 7 years 7 months 6 days | ||
Trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount, beginning of period | 12,320 | 12,320 | |
Intangible assets acquired | 0 | ||
Accumulated amortization | $ (6,750) | (6,076) | |
Intangible assets, net | $ 5,570 | 6,244 | |
Weighted average remaining years of useful life | 12 years 6 months | ||
Developed Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount, beginning of period | 40,800 | 37,600 | |
Intangible assets acquired | 3,200 | ||
Accumulated amortization | $ (28,922) | (26,010) | |
Intangible assets, net | $ 11,878 | 14,790 | |
Weighted average remaining years of useful life | 8 years 3 months 18 days | ||
Non-Compete Agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount, beginning of period | 1,400 | $ 0 | |
Intangible assets acquired | 1,400 | ||
Accumulated amortization | $ (443) | (233) | |
Intangible assets, net | $ 957 | $ 1,167 | |
Weighted average remaining years of useful life | 3 years 4 months 24 days |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Remaining Amortization of Definite-lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 4,014 | |
2024 | 14,523 | |
2025 | 14,208 | |
2026 | 12,919 | |
2027 | 9,047 | |
Thereafter | 35,245 | |
Intangible assets, net | $ 89,956 | $ 102,000 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 198,253 |
Goodwill impairment | 0 |
Goodwill, ending balance | 198,253 |
Operating Segments | RCM | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 61,821 |
Goodwill impairment | 0 |
Goodwill, ending balance | 61,821 |
Operating Segments | EHR | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 126,665 |
Goodwill impairment | 0 |
Goodwill, ending balance | 126,665 |
Operating Segments | Patient Engagement | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 9,767 |
Goodwill impairment | 0 |
Goodwill, ending balance | $ 9,767 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Debt obligations | $ 143,166 | $ 141,075 |
Less: unamortized debt issuance costs | (1,277) | (1,546) |
Debt obligation, net | 141,889 | 139,529 |
Less: current portion | (3,141) | (3,141) |
Long-term debt | 138,748 | 136,388 |
Line of Credit | Term loan facility | ||
Debt Instrument [Line Items] | ||
Debt obligations | 64,750 | 67,375 |
Line of Credit | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Debt obligations | $ 78,416 | $ 73,700 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - Line of Credit - USD ($) | 1 Months Ended | ||
May 02, 2022 | Jan. 31, 2016 | Jun. 16, 2020 | |
Debt Instrument [Line Items] | |||
Line of credit facility, incremental facility capacity | $ 75,000,000 | ||
Fixed charge coverage ratio, minimum | 1.25 | ||
Consolidated leverage ratio, maximum | 3.5 | ||
Line of credit facility, acquisition connection incremental facility capacity | $ 25,000,000 | ||
Quarterly increase in consolidated leverage ratio after acquisition | 0.5 | ||
Minimum consolidated leverage ratio | 2.5 | ||
Secured Overnight Financing Rate (SOFR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Term loan facility | |||
Debt Instrument [Line Items] | |||
Amount of credit facility | $ 70,000,000 | $ 125,000,000 | $ 75,000,000 |
Periodic payment, principal | 900,000 | ||
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Amount of credit facility | $ 160,000,000 | $ 50,000,000 | 110,000,000 |
Revolving credit facility | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.80% | ||
Revolving credit facility | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2% | ||
Revolving credit facility | Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Revolving credit facility | Secured Overnight Financing Rate (SOFR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1% | ||
Revolving credit facility | Secured Overnight Financing Rate (SOFR) | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.80% | ||
Revolving credit facility | Secured Overnight Financing Rate (SOFR) | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3% | ||
Amended and Restated Credit Agreement | |||
Debt Instrument [Line Items] | |||
Amount of credit facility | $ 185,000,000 | ||
First Amended and Restated Credit Agreement | |||
Debt Instrument [Line Items] | |||
Amount of credit facility | $ 230,000,000 |
LONG-TERM DEBT - Annual Future
LONG-TERM DEBT - Annual Future Maturities (Details) - Line of Credit $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Instrument [Line Items] | |
2023 | $ 875 |
2024 | 3,500 |
2025 | 3,500 |
2026 | 3,500 |
2027 | 131,791 |
Thereafter | 0 |
Total debt | $ 143,166 |
OPERATING LEASES - Supplemental
OPERATING LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease assets | $ 5,138 | $ 7,567 |
Operating lease liabilities | ||
Other accrued liabilities | $ 1,880 | $ 2,063 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other accrued liabilities | Other accrued liabilities |
Operating lease liabilities, net of current portion | $ 3,421 | $ 5,651 |
Total operating lease liabilities | $ 5,301 | $ 7,714 |
Weighted average remaining lease term in years | 4 years 2 months 12 days | 5 years |
Weighted average discount rate | 4.20% | 4.40% |
OPERATING LEASES - Future Minim
OPERATING LEASES - Future Minimum Lease Payments Payable Under these Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2023 | $ 476 | |
2024 | 1,804 | |
2025 | 1,063 | |
2026 | 1,025 | |
2027 | 706 | |
Thereafter | 693 | |
Total lease payments | 5,767 | |
Less imputed interest | (466) | |
Total | $ 5,301 | $ 7,714 |
OPERATING LEASES - Narrative (D
OPERATING LEASES - Narrative (Details) $ in Millions | 9 Months Ended | |||
Apr. 30, 2023 USD ($) ft² | Apr. 18, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Leases [Abstract] | ||||
Leased square footage | ft² | 12,500 | |||
Operating lease, termination fee | $ 1.1 | |||
Loss on termination of lease | $ 0.1 | |||
Lease expense | $ 1.5 | $ 1.6 | ||
Operating lease, payments | $ 1.5 | $ 1.6 |
SEGMENT REPORTING - Schedule of
SEGMENT REPORTING - Schedule of Revenues and EBITDA by Segment (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Total revenues | $ 82,712 | $ 82,827 | $ 253,567 | $ 243,424 |
Total adjusted EBITDA | 9,722 | 13,349 | 35,593 | 42,671 |
RCM | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 46,582 | 46,875 | 142,973 | 134,200 |
EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 34,493 | 34,949 | 104,651 | 103,855 |
Patient Engagement | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 1,637 | 1,003 | 5,943 | 5,369 |
Operating Segments | RCM | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 46,582 | 46,875 | 142,973 | 134,200 |
Total adjusted EBITDA | 4,623 | 8,750 | 18,205 | 26,395 |
Operating Segments | EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 34,493 | 34,949 | 104,651 | 103,855 |
Total adjusted EBITDA | 5,669 | 5,751 | 17,394 | 17,621 |
Operating Segments | Patient Engagement | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 1,637 | 1,003 | 5,943 | 5,369 |
Total adjusted EBITDA | (570) | (1,152) | (6) | (1,345) |
Recurring revenue | Operating Segments | EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 31,519 | 31,054 | 95,116 | 92,837 |
Recurring revenue | Operating Segments | Acute EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 27,925 | 27,237 | 83,886 | 81,333 |
Recurring revenue | Operating Segments | Post-acute EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 3,594 | 3,817 | 11,230 | 11,504 |
Non-recurring revenue | Operating Segments | EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 2,974 | 3,895 | 9,535 | 11,018 |
Non-recurring revenue | Operating Segments | Acute EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 2,624 | 3,500 | 8,460 | 9,467 |
Non-recurring revenue | Operating Segments | Post-acute EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 350 | $ 395 | $ 1,075 | $ 1,551 |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Adjusted Income (Loss) From Before Interest, Taxes, Depreciation And Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting [Abstract] | ||||
Net income (loss) | $ (3,562) | $ 2,161 | $ (3,315) | $ 13,350 |
Deferred revenue and other purchase accounting adjustments | 0 | 0 | 0 | 109 |
Depreciation expense | 297 | 622 | 1,392 | 1,890 |
Amortization of software development costs | 2,194 | 1,024 | 5,506 | 2,283 |
Amortization of acquisition-related intangibles | 4,014 | 4,486 | 12,043 | 12,917 |
Stock-based compensation | 1,038 | 1,864 | 2,162 | 5,284 |
Severance and other non-recurring charges | 7,392 | 410 | 15,313 | 1,671 |
Interest expense and other, net | 2,847 | 1,416 | 7,836 | 3,255 |
(Gain) loss on contingent consideration | 0 | 589 | 0 | (992) |
Provision (benefit) for income taxes | (4,498) | 777 | (5,344) | 2,904 |
Total adjusted EBITDA | $ 9,722 | $ 13,349 | $ 35,593 | $ 42,671 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - Viewgol, LLC $ in Millions | Oct. 16, 2023 USD ($) |
Subsequent Event [Line Items] | |
Payments to Acquire Businesses, Gross | $ 36 |
Contingent consideration earnout payment (up to) | $ 31.5 |