EXHIBIT 99.1
Computer Programs and Systems, Inc. Announces Fourth Quarter
and Year-End 2006 Results
Company Declares Quarterly Dividend of $0.36 Per Share
MOBILE, Ala.--(BUSINESS WIRE)--Feb. 1, 2007--Computer Programs and
Systems, Inc. (NASDAQ:CPSI):
Highlights:
-- Net income for the year increased 8.5% to a record $15.8
million;
-- Quarterly sales up 6.1% to a record $30.2 million;
-- 2006 sales up 6.6% to $116.0 million compared with 2005 sales;
-- Signed contracts for system installation at nine new client
hospitals during fourth quarter; and
-- 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 fourth quarter and year ended December 31, 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 February 28, 2007, to shareholders of record as
of the close of business on February 14, 2007.
Total revenues for the fourth quarter ended December 31, 2006,
increased 6.1% to a record $30.2 million, compared with total revenues
of $28.5 million for the prior-year period. Net income for the quarter
ended December 31, 2006, decreased 3.4% to $4.2 million, or $0.39 per
diluted share, which includes the impact of Statement of Financial
Accounting Standards (SFAS) No. 123R, Share-Based Payments. As a
result of the adoption of SFAS No. 123R, the Company's financial
results were lower than under its previous accounting method for
share-based compensation by the amounts presented in the attached
Other Supplemental Information. Cash flow from operations for the
fourth quarter of 2006 was $4.2 million, compared with $6.0 million
for the prior-year period.
Total revenues for the year ended December 31, 2006, increased
6.6% to $116.0 million, compared with total revenues of $108.8 million
for the prior-year period. Net income for the year ended December 31,
2006, increased 8.5% to $15.8 million, or $1.48 per diluted share,
which includes the impact of SFAS No. 123R. As a result of the
adoption of SFAS No. 123R, the Company's financial results were lower
than under its previous accounting method for share-based compensation
by the amounts presented in the attached Other Supplemental
Information. Cash provided from operations for the year ended December
31, 2006, was $14.5 million, compared with $17.8 million for the year
ended December 31, 2005.
Commenting on the results, Boyd Douglas, chief executive officer
and president of CPSI, stated, "We were pleased with our performance
in the fourth quarter, which resulted in record revenues and a return
to a more normal activity level in contract signings compared with the
third quarter. Overall, due to a solid pipeline, we remain optimistic
about our prospects for 2007.
"Throughout 2007, we will continue to focus on providing our
growing number of clients with superior service and support, while
developing and enhancing our portfolio of products and services.
Evidence of this commitment and focus is the opening of our
outsourcing facility in Lanett, Alabama, for our business office
outsourcing operation, which continues to be the fastest growing
division of our company. This new facility currently serves as
headquarters to 25 employees, but has capacity to house up to 100
employees as this sector of our business grows. We are excited about
this opportunity."
For the first quarter of 2007, the Company anticipates total
revenues of $26.0 million to $27.5 million and net income of
approximately $2.6 million to $2.8 million, or $0.24 to $0.26 per
diluted share. CPSI's 12-month backlog as of December 31, 2006, was
$84.1 million, consisting of $18.6 million in non-recurring system
purchases and $65.5 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 2006 conference call will be available on-line at
www.cpsinet.com and www.earnings.com on February 2, 2007, 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.
Condensed Statements of Operations
(in thousands, except per share data)
Three Months
Ended Year Ended
December 31, December 31,
----------------- -----------------
2006 2005 2006 2005
-------- -------- -------- --------
Sales revenues:
System sales $12,954 $13,392 $51,603 $51,170
Support and maintenance 12,364 11,362 46,724 43,051
Outsourcing 4,864 3,704 17,647 14,605
-------- -------- -------- --------
Total sales revenues 30,182 28,458 115,974 108,826
Cost of sales:
System sales 8,431 8,362 34,109 33,295
Support and maintenance 5,068 4,927 19,977 19,029
Outsourcing 2,934 2,127 10,183 8,383
-------- -------- -------- --------
Total cost of sales 16,433 15,416 64,269 60,707
-------- -------- -------- --------
Gross profit 13,749 13,042 51,705 48,119
Operating expenses:
Sales and marketing 2,362 2,257 8,868 7,778
General and administrative 4,559 3,979 18,172 17,049
-------- -------- -------- --------
Total operating
expenses 6,921 6,236 27,040 24,827
-------- -------- -------- --------
Operating income 6,828 6,806 24,665 23,292
Interest income, net 302 221 1,132 653
Other - 5
-------- -------- -------- --------
Income before taxes 7,130 7,027 25,797 23,950
Provision for income taxes 2,918 2,666 9,983 9,381
-------- -------- -------- --------
Net income $4,212 $4,361 $15,814 $14,569
======== ======== ======== ========
Basic earnings per share $0.40 $0.41 $1.49 $1.38
======== ======== ======== ========
Diluted earnings per share $0.39 $0.41 $1.48 $1.37
======== ======== ======== ========
Weighted average shares
outstanding:
Basic 10,645 10,615 10,638 10,560
Diluted 10,714 10,704 10,713 10,646
COMPUTER PROGRAMS AND SYSTEMS, INC.
Condensed Balance Sheets
(in thousands)
Dec. 31, Dec. 31,
2006 2005
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $8,760 $11,670
Investments 10,718 10,231
Accounts receivable, net of allowance for
doubtful accounts of $814 and $704, respectively 14,096 12,414
Financing receivables, current portion 2,611 1,169
Inventory 1,668 1,988
Deferred tax assets 1,406 1,201
Prepaid expenses 320 265
Prepaid income taxes 107 268
-------- --------
Total current assets 39,686 39,206
Financing receivables, long-term 1,963 1,605
Property and equipment 13,897 12,039
Accumulated depreciation (7,642) (5,866)
-------- --------
Total assets $47,904 $46,984
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,204 $2,051
Deferred revenue 2,275 3,286
Accrued vacation 2,053 1,876
Other accrued liabilities 3,158 2,685
-------- --------
Total current liabilities 8,690 9,898
Deferred tax liabilities 508 698
Stockholders' equity:
Common stock, par value $0.001 per share, 30,000
shares authorized, 10,756 and 10,625 shares
issued and outstanding 11 11
Additional paid-in capital 22,427 20,576
Deferred compensation - (72)
Accumulated other comprehensive income (7) (68)
Retained earnings 16,275 15,941
-------- --------
Total stockholders' equity 38,706 36,388
-------- --------
Total liabilities and stockholders'
equity $47,904 $46,984
======== ========
COMPUTER PROGRAMS AND SYSTEMS, INC.
Unaudited Other Supplemental Information
(In thousands)
The following table summarizes free cash flow for the Company:
- ----------------------------------------------------------------------
Three Months Year
Ended Ended
Dec. 31, 2006 Dec. 31, 2006
------------- -------------
Net cash provided by operating activities $4,197 $14,469
Purchases of property and equipment (597) (2,058)
------------- -------------
Free cash flow $3,600 $12,411
============= =============
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:
- ----------------------------------------------------------------------
As a result of the adoption of Statement 123R, our financial results
were lower than under our previous accounting method for share-based
compensation by the following amounts:
Three Months Year
Ended Ended
Dec. 31, 2006 Dec. 31, 2006
------------- -------------
Cost of sales $153 $588
SG&A 203 788
------------- -------------
Total Stock Compensation Expense 356 1,376
Tax Benefit (139) (536)
------------- -------------
Net Compensation Expense $217 $840
============= =============
Basic and Diluted Earnings Per Share $0.02 $0.08
============= =============
CONTACT: Computer Programs and Systems Inc., Mobile
M. Stephen Walker, 251-639-8100
Vice President-Finance and Chief Financial Officer