Exhibit 99.1
Computer Programs and Systems, Inc. Announces Record Fourth
Quarter and Year-End 2005 Results; Company Announces Increase in
Quarterly Dividend to $0.36 Per Share
MOBILE, Ala.--(BUSINESS WIRE)--Feb. 2, 2006--Computer Programs and Systems,
Inc. (NASDAQ/NM:CPSI):
Highlights:
-- Fourth quarter net income increased 57.2%;
-- Generated free cash flow of $5.2 million;
-- Signed contracts for system installation at 10 new client hospitals,
averaging $510,000 per facility; and
-- Increased quarterly dividend to $0.36 per share.
Computer Programs and Systems, Inc. (NASDAQ/NM:CPSI), a leading provider of
healthcare information solutions, today announced results for the fourth quarter
and year ended December 31, 2005.
The Company also announced that its Board of Directors has declared a 63.6%
increase in its regular quarterly cash dividend to $0.36 (thirty-six cents) per
share. The dividend, which equates to an annual rate of $1.44 per share,
compared with the previous annual rate of $0.88 per share, is payable on
February 28, 2006, to shareholders of record as of the close of business on
February 14, 2006.
Total revenues for the fourth quarter ended December 31, 2005, increased
17.1% to $28.5 million, compared with total revenues of $24.3 million for the
prior year period. Net income for the quarter ended December 31, 2005, increased
57.2% to $4.4 million, or $0.41 per diluted share, compared with $2.8 million,
or $0.26 per diluted share, for the quarter ended December 31, 2004. Cash flow
from operations for the fourth quarter of 2005 was $6.0 million, compared with
$3.1 million for the same period last year.
Total revenues for the year ended December 31, 2005, increased 31.6% to
$108.8 million, compared with total revenues of $82.7 million for the prior year
period. Net income for the year ended December 31, 2005, increased 106.3% to
$14.6 million, or $1.37 per diluted share, compared with $7.1 million, or $0.67
per diluted share, for the year ended December 31, 2004. Cash provided from
operations for the year ended December 31, 2005, was $17.8 million, compared
with $11.1 million for the year ended December 31, 2004.
Commenting on the results, David Dye, chief executive officer and president
of CPSI, stated, "Our company enjoyed an excellent year in 2005 with new records
for gross revenue, net income, cash collections and free cash flow. We remain
debt free, and we are pleased to be able to increase our dividend for the third
consecutive year. As we move into 2006 and beyond, our primary focus will
continue to be a combination of quality support to our existing client hospitals
along with aggressive development of our products and services, ensuring that
CPSI remains the long-term leader in the community healthcare information
systems marketplace."
For the first quarter of 2006, the Company anticipates total revenues of
$27.0 to $28.5 million and net income of approximately $3.5 to $3.8 million, or
$0.33 to $0.35 per diluted share, which includes the impact of Statement of
Financial Accountings Standards (SFAS) No. 123R, Share-Based Payments of $0.2
million, or $0.02 per diluted share (see table in attached Other Supplemental
Information). CPSI's 12-month backlog as of December 31, 2005, was $79.0
million, consisting of $22.0 million in non-recurring system purchases and $57.0
million in recurring payments for support, outsourcing, ASP and ISP contracts.
A listen-only simulcast and replay of CPSI's fourth quarter and year-end
2005 conference call will be available on-line at www.cpsinet.com and
www.earnings.com on February 3, 2006, beginning at 9:00 a.m. Eastern Time.
About Computer Programs and Systems, Inc.
CPSI is a leading provider of healthcare information solutions for
community hospitals with over 575 client hospitals in 46 states. Founded in
1979, the Company is a single-source vendor providing comprehensive software and
hardware products, complemented by complete installation services and extensive
support. Its fully integrated, enterprise-wide system automates clinical and
financial data management in each of the primary functional areas of a hospital.
CPSI's staff of over 800 technical, healthcare and medical professionals
provides system implementation and continuing support services as part of a
comprehensive program designed to respond to clients' information needs in a
constantly changing healthcare environment. For more information, visit
www.cpsinet.com.
This press release contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements can be identified generally by the use
of forward-looking terminology and words such as "expects," "anticipates,"
"estimates," "believes," "predicts," "intends," "plans," "potential," "may,"
"continue," "should," "will" and words of comparable meaning. Without limiting
the generality of the preceding statement, all statements in this press release
relating to estimated and projected earnings, margins, costs, expenditures, cash
flows, growth rates and future financial results are forward-looking statements.
We caution investors that any such forward-looking statements are only
predictions and are not guarantees of future performance. Certain risks,
uncertainties and other factors may cause actual results to differ materially
from those projected in the forward-looking statements. Such factors may
include: overall business and economic conditions affecting the healthcare
industry; saturation of our target market and hospital consolidations; changes
in customer purchasing priorities and demand for information technology systems;
competition with companies that have greater financial, technical and marketing
resources than we have; failure to develop new technology and products in
response to market demands; fluctuations in quarterly financial performance due
to, among other factors, timing of customer installations; failure of our
products to function properly resulting in claims for medical losses; government
regulation of our products and customers; interruptions in our power supply
and/or telecommunications capabilities and other risk factors described from
time to time in our public releases and reports filed with the Securities and
Exchange Commission, including, but not limited to, our Annual Report on Form
10-K. We also caution investors that the forward-looking information described
herein represents our outlook only as of this date, and we undertake no
obligation to update or revise any forward-looking statements to reflect events
or developments after the date of this press release.
COMPUTER PROGRAMS AND SYSTEMS, INC.
Unaudited Condensed Statements of Operations
(in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
2005 2004 2005 2004
-------- -------- -------- --------
Sales revenues:
System sales $13,392 $11,408 $51,170 $35,252
Support and maintenance 11,362 9,992 43,051 38,010
Outsourcing 3,704 2,906 14,605 9,402
-------- -------- -------- --------
Total sales revenues 28,458 24,306 108,826 82,664
Cost of sales:
System sales 8,362 7,437 33,295 27,064
Support and maintenance 4,927 4,478 19,029 16,916
Outsourcing 2,127 1,762 8,383 5,596
-------- -------- -------- --------
Total cost of sales 15,416 13,677 60,707 49,576
-------- -------- -------- --------
Gross profit 13,042 10,629 48,119 33,088
Operating expenses:
Sales and marketing 2,257 1,921 7,778 6,055
General and administrative 3,979 4,334 17,049 15,831
-------- -------- -------- --------
Total operating expenses 6,236 6,255 24,827 21,886
-------- -------- -------- --------
Operating income 6,806 4,374 23,292 11,202
Interest income, net 221 77 653 258
Other -- 115 5 243
-------- -------- -------- --------
Income before taxes 7,027 4,566 23,950 11,703
Provision for income taxes 2,666 1,792 9,381 4,639
-------- -------- -------- --------
Net income $4,361 $2,774 $14,569 $7,064
======== ======== ======== ========
Basic earnings per share $0.41 $0.26 $1.38 $0.67
======== ======== ======== ========
Diluted earnings per share $0.41 $0.26 $1.37 $0.67
======== ======== ======== ========
Weighted average
shares outstanding:
Basic 10,615 10,490 10,560 10,490
Diluted 10,704 10,550 10,646 10,536
COMPUTER PROGRAMS AND SYSTEMS, INC.
Condensed Balance Sheets
(in thousands)
Dec. 31, Dec. 31,
2005 2004
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $11,670 $13,785
Investments 10,231 --
Accounts receivable, net of allowance
for doubtful accounts of $704 and
$1,636 respectively 12,414 11,765
Financing receivables, current portion 1,169 974
Inventory 1,988 1,475
Deferred tax assets 1,201 1,397
Prepaid expenses 265 438
Prepaid income taxes 268 172
-------- --------
Total current assets 39,206 30,006
Financing receivables, long-term 1,605 618
Property and equipment 12,039 10,659
Accumulated depreciation (5,866) (5,205)
-------- --------
Total assets $46,984 $36,078
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,051 $970
Deferred revenue 3,286 2,602
Accrued vacation 1,876 1,631
Other accrued liabilities 2,685 2,323
-------- --------
Total current liabilities 9,898 7,526
Deferred tax liabilities 698 718
Stockholders' equity:
Common stock, par value $0.001 per share,
30,000,000 shares authorized, 10,624,901
and 10,489,849 shares issued and outstanding 11 10
Additional paid-in capital 20,576 17,292
Deferred compensation (72) (123)
Accumulated other comprehensive income (68) --
Retained earnings 15,941 10,655
-------- --------
Total stockholders' equity 36,388 27,834
-------- --------
Total liabilities and stockholders' equity $46,984 $36,078
======== ========
COMPUTER PROGRAMS AND SYSTEMS, INC.
Other Supplemental Information
(In thousands)
The following table summarizes free cash flow for the Company:
Three Months Year
Ended Ended
Dec. 31, Dec. 31,
2005 2005
-------- --------
Net cash provided by operating activities $5,968 $17,796
Purchases of property and equipment (748) (2,515)
-------- --------
Free cash flow $5,220 $15,281
======== ========
Free cash flow is a non-GAAP financial measure which CPSI defines as net cash
provided by operating activities less purchases of property and equipment. The
most directly comparable GAAP financial measure is net cash provided by
operating activities. The Company believes free cash flow is a useful measure of
performance and uses this measure as an indication of the financial resources of
the Company and its ability to generate cash.
Projected Stock Compensation Expense per SFAS No. 123R:
Three Months Year
Ended Ended
Mar. 31, Dec. 31,
2006 2006
-------- --------
2002 Employee Option Plan (5/22/02 grant) $90 $361
2005 Restricted Stock Plan (1/30/06 grant) 169 919
-------- --------
Total Projected Stock Compensation Expense 259 1,280
Tax Benefit (102) (502)
-------- --------
Net Compensation Expense $157 $778
======== ========
Projected Earnings Per Share Impact $0.015 $0.072
======== ========
Projected Diluted shares outstanding 10,820 10,850
CONTACT: Computer Programs and Systems, Inc.
M. Stephen Walker, 251-639-8100