EXHIBIT 99.1
Computer Programs and Systems, Inc. Announces Second Quarter 2006 Results;
Company Declares Regular Quarterly Dividend of $0.36 Per Share
MOBILE, Ala.--(BUSINESS WIRE)--July 20, 2006--Computer Programs and
Systems, Inc. (NASDAQ: CPSI):
Highlights:
-- Second quarter net income increased 19.8%;
-- Quarterly sales of $29.0 million;
-- Signed contracts for system installation at 12 new client hospitals;
and
-- Declared regular quarterly dividend of $0.36 per share.
Computer Programs and Systems, Inc. (NASDAQ: CPSI), a leading provider of
healthcare information solutions, today announced results for the second quarter
and six months ended June 30, 2006.
The Company also announced that its Board of Directors has declared a
regular quarterly cash dividend of $0.36 (thirty-six cents) per share, payable
on August 25, 2006, to shareholders of record as of the close of business on
August 4, 2006.
Total revenues for the second quarter ended June 30, 2006, increased 7.5%
to $29.0 million, compared with total revenues of $27.0 million for the prior
year period. Net income for the quarter ended June 30, 2006, increased 19.8% to
$4.1 million, or $0.38 per diluted share, which includes the impact of Statement
of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payments, of $0.2
million, or $0.02 per diluted share (see table in attached Other Supplemental
Information). For comparative purposes, excluding the impact of SFAS No.123R
from both periods, net income for the quarter ended June 30, 2006, increased
26.5% to $4.3 million, or $0.40 per diluted share, compared with $3.4 million,
or $0.32 per diluted share, for the quarter ended June 30, 2005. Cash flow from
operations for the second quarter of 2006 was $3.7 million, compared with a
breakeven point for the same period last year.
Commenting on the results, Boyd Douglas, chief executive officer and
president of CPSI, stated, "We are pleased that the momentum we established in
the first quarter of this year has continued into the second quarter. Our
business office outsourcing operation continues to be robust, and we believe
this segment of our revenue base will continue to be an important contributor to
our revenue growth. This growth in the service side of our business, coupled
with our continued growth in system sales and customer support and maintenance,
gives us confidence that the Company's current growth trend will continue in the
second half of 2006."
Total revenues for the six months ended June 30, 2006, increased 9.7% to
$58.5 million, compared with total revenues of $53.4 million for the prior year
period. Net income for the six months ended June 30, 2006, increased 23.1% to
$8.2 million, or $0.76 per diluted share, which includes the impact of SFAS No.
123R of $0.4 million, or $0.03 per diluted share (see table in attached Other
Supplemental Information). For comparative purposes, excluding the impact of
SFAS No.123R from both periods, net income for the six months ended June 30,
2006, increased 29.0% to $8.6 million, or $0.79 per diluted share, compared with
$6.6 million, or $0.63 per diluted share, for the six months ended June 30,
2005. Cash provided from operations for the first half of 2006 was $7.0 million,
compared with $6.4 million for the same period last year.
For the third quarter of 2006, the Company anticipates total revenues of
$27.5 to $29.0 million and net income of approximately $3.5 to $3.7 million, or
$0.32 to $0.34 per diluted share, which includes the impact of SFAS No. 123R of
$0.2 million, or $0.02 per diluted share. CPSI's 12-month backlog as of June 30,
2006, was $84.2 million, consisting of $22.1 million in non-recurring system
purchases and $62.1 million in recurring payments for support, outsourcing, ASP
and ISP contracts.
A listen-only simulcast and replay of CPSI's second quarter 2006 conference
call will be available on-line at www.cpsinet.com and www.earnings.com on July
21, 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 600 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 ,including changes in healthcare policy
affecting Medicare reimbursement rates; 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 share and per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
Sales revenues:
System sales $13,212 $12,656 $27,731 $25,299
Support and maintenance 11,427 10,514 22,597 20,706
Outsourcing 4,346 3,800 8,194 7,362
-------- -------- -------- --------
Total sales revenues 28,985 26,970 58,522 53,367
Cost of sales:
System sales 8,521 8,467 17,277 16,422
Support and maintenance 5,041 4,673 9,948 9,238
Outsourcing 2,459 2,125 4,683 4,086
-------- -------- -------- --------
Total cost of sales 16,021 15,265 31,908 29,746
-------- -------- -------- --------
Gross profit 12,964 11,705 26,614 23,621
Operating expenses:
Sales and marketing 2,133 1,774 4,342 3,609
General and administrative 4,410 4,364 9,392 9,232
-------- -------- -------- --------
Total operating expenses 6,543 6,138 13,734 12,841
-------- -------- -------- --------
Operating income 6,421 5,567 12,880 10,780
Interest income, net 264 145 521 254
Other -- (60) -- 5
-------- -------- -------- --------
Income before taxes 6,685 5,652 13,401 11,039
Provision for income taxes 2,600 2,243 5,223 4,396
-------- -------- -------- --------
Net income $4,085 $3,409 $8,178 $6,643
======== ======== ======== ========
Basic earnings per share $0.38 $0.32 $0.76 $0.63
======== ======== ======== ========
Diluted earnings per share $0.38 $0.32 $0.76 $0.63
======== ======== ======== ========
Weighted average
shares outstanding:
Basic 10,751 10,528 10,729 10,509
Diluted 10,838 10,613 10,818 10,594
COMPUTER PROGRAMS AND SYSTEMS, INC.
Condensed Balance Sheets
(in thousands)
June 30, Dec. 31,
2006 2005
-------- --------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $10,163 $11,670
Investments 10,399 10,231
Accounts receivable, net of allowance
for doubtful accounts of $862 and
$704, respectively 13,504 12,414
Financing receivables, current portion 1,629 1,169
Inventory 1,823 1,988
Deferred tax assets 1,330 1,201
Prepaid expenses 354 265
Prepaid income taxes 36 268
-------- --------
Total current assets 39,238 39,206
Financing receivables, long-term 1,703 1,605
Property and equipment 12,785 12,039
Accumulated depreciation (6,658) (5,866)
-------- --------
Total assets $47,068 $46,984
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,437 $2,051
Deferred revenue 2,671 3,286
Accrued vacation 2,042 1,876
Other accrued liabilities 2,640 2,685
Income taxes payable -- --
-------- --------
Total current liabilities 8,790 9,898
Deferred tax liabilities 395 698
Stockholders' equity:
Common stock, par value $0.001 per share,
30,000,000 shares authorized, 10,750,437 and
10,624,901 shares issued and outstanding 11 11
Additional paid-in capital 21,573 20,576
Deferred compensation -- (72)
Accumulated other comprehensive income (81) (68)
Retained earnings 16,380 15,941
-------- --------
Total stockholders' equity 37,883 36,388
-------- --------
Total liabilities and stockholders' equity $47,068 $46,984
======== ========
COMPUTER PROGRAMS AND SYSTEMS, INC.
Unaudited Other Supplemental Information
(In thousands)
The following table summarizes free cash flow for the Company:
Three Six
Months Months
Ended Ended
June 30, June 30,
2006 2006
-------- --------
Net cash provided by operating activities $3,672 $6,963
Purchases of property and equipment (560) (947)
-------- --------
Free cash flow $3,112 $6,016
======== ========
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.
Stock Compensation Expense per SFAS No. 123R:
Three Six
Months Months
Ended Ended
June 30, June 30,
2006 2006
-------- --------
2002 Employee Option Plan Expense $185 $275
2005 Restricted Stock Plan Expense 192 364
-------- --------
Total Stock Compensation Expense 377 639
Tax Benefit (148) (250)
-------- --------
Net Compensation Expense $229 $389
======== ========
Diluted Earnings Per Share Impact $0.02 $0.03
======== ========
Diluted shares outstanding 10,838 10,818
CONTACT: Computer Programs and Systems, Inc., Mobile
M. Stephen Walker, 251-639-8100