CPSI - Earnings call transcript Q3 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon and welcome to the CPSI Third Quarter 2020 Earnings Conference Call.

During this conference call, we may make statements regarding future operating plans, expectations and performance that constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution you that any such forward-looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance Actual results may differ materially from those expressed or implied by such forward-looking statements as a result of known and unknown risks, uncertainties and other factors, including those described in our public releases and reports filed with the Securities and Exchange Commission, including, but not limited to, our most recent annual report on Form 10-K.

We also caution investors that the forward-looking information provided in this call 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 call. At this time, I will turn the call over to Mr. Chief and President Douglas, Executive Officer. Boyd ahead, go sir. Please

Boyd Douglas

Matt our thank Thanks our Fowler, comments, take our comments us. heart Chris across clients support, joining the and provide along afternoon, additional they Operating over on may Officer, who us, our the Financial We the to and Officer innovation Growth At and the At Drew. everyone, of you David services results the available be Chief to performance call Chief two After as the is continue quarter quarter, color will with determination of any for our have. will prepared to the Dye, will I quarter’s the Chief expect. our board. Officer, solid you of provide Good the hand questions the employees Chambless, third third my numbers. our regarding brief with opening closed out quarter of conclusion dedicated

While clients collective to our There us tap allowed our this have to share operational of and us that that support we to from brought forward. challenges certainly moving us been honored experience is much that a everyone year no this safe all, manner into kept have and fair flexibility. doubt we creative in its has learned will benefit

are our toward quarter third with financial we the growth. pleased of our goal signal discuss, trends long-term and will they Matt recurring As metrics revenue

procedures with an in due COVID, from to to quarter. While increase health volumes care care health TruBridge providers unpredictable fluctuations patient deal in continue elective benefited this

in our in system healthy The XX% same pleased to million of of with new for put share a engagement sales we up am adoption EHR of XXXX, in Real U.S. the net of pickup included of the for the the second months new Maryland Get sales, quarter. executed and has Health schedule, the previous Highlighting the Evident the addition, quarter bookings over net in over bookings exchange new statewide X solution Get the COVID performance quarter in platform Real solid bookings last year. this Evident as on Canada. $XX.X both for I health our consecutive an EHR results. patient the Evident period along selected deals net first information products, strong signed, the quarter also In acute third TruBridge state patient engagement reporting increase the which EHR XX% the post-acute, were for sales that X their saw we the particularly Health implementation

to from the the be Health secure providers surpassed the are health East, impact Asia-Pacific Get adoption EU addition, opportunities to on Real have attributed for pace provinces impressive use this to Middle throughout the positive help exchange expanding residents the of Rhode Canada, help In facilitate international on the engaging confidence in and and by Get positive testing those by of throughout Health track results of state milestone patient portal portal the to momentum, and continue residents end also their and using regions. their organizations this a and Saskatchewan is Real the With of to Canadian more patient accelerated in disparate for an in over data that and expect users X.X relationship exchange test to and with symptoms system by the million Island than efforts. we Alberta gain is COVID-XX XXX,XXX the The of patient year.

year in well has mind, a that combination with months. anticipate full our the we deeper year, With tightly managed on XXXX quarter in as served us to I provide stated release into to we X conservative dive long-term Finally, previous for like quarter. results. over over turn being the in results when At call Matt this would a the finances, this time, next guidance third past to metrics position calls nature, we

Matt Chambless

of good some share a Boyd I third will overview performance, for of and call, through the high afternoon for of of X% continued post-acute brief total of add-on quarter sequential on less Starting robust System from versus X% comparative our On about activity a everyone. environment to detail quarter the program. up with quarter, our applications commentary additional provide third third making the $XX.X with demand the segment, and bookings slightly down Acute sales results level million compared Care EHR walk XXXX. a marked tough of support the resurgence a recently within were today’s up improvement, Thanks, financial quarter were quarter our for bookings, XXXX bookings our and third but including bookings in announced base. some repurchase a

recent continue SaaS offerings net growth Specific over to in subscription quarter’s bookings, increase sales SaaS. by the segment quarter’s this of third by new EHR Our EHR XX% for new of the to in arrangements quarter that of the contracts our XX The with nearly million, total already $X.X the market the in throughout on booking Including encouraging and long-term signed amount execute all post-acute third period in for revenues drive investments the amounts, the the process. an the segment bookings, highest X we XX% calendar being in emphasizing as related seeing Care were appreciated made strength Acute revenue are bookings year-to-date bookings post-acute last sales, posted their recognized narrowly product our we’ve recurring sign sequential XXXX’s quarters. made to suite in add-on surpassing years. which related are first recurring of up surpassed strategy

XXXX facilities the for the and highest rebound customer level would like outside composition quarter the go for in cloud expected metric, Moving for the in in to bookings for bookings year, this fourth or you historical $X.X volumes three net bookings timeframes mix as we client third million to TruBridge XXXX, TruBridge this quarterly license prior back live to the marked to quarter new Thrive XX% XX% and new EHR second were conversion bookings solution the or all in quarter our second over difficult history, million environment. With tables in Compared for the care our comp to anticipate earnings TruBridge, bookings near-term a outlook refer currently the million down bookings with to quarter. net and were $X three a of regards posing a our up amount. the of XXX% We new live release with Thrive SaaS with of acute or the from or going implementations. the from increasing sequentially of base, behind related $X.X

led Turning during or strongly customers, in the third schedule, revenues, as increasing recover revenues volumes, period, and patient X% with the robust TruBridge our XX% million fully which flat effectively financial XXXX, continued revenues margins of on improved a total nearly to recovery quarter, to XX% quarter adjusted for a sequential implementation with EBITDA. TruBridge’s XX.X% coupled margins for volumes increase on adjusted increase in but pre-pandemic still XX.X%. have made compression Recurring correlates from a related a of drove and X% in X% $X.X revenues decreasing hospital EBITDA results heels patient up levels. sequentially year-over-year million revenues to the the were volumes the the decrease in down patient Compared – EBITDA or from $X to XX% of roughly yet to with gross to of the

volumes Looking deeper TruBridge TruBridge increased wins have quarter segments, on with our margins contributions mostly the over the from from improved on related XX.X%. the hospitals patient improving relatively offset at were pandemic’s patient new from Revenues volumes. of lingering flat been sequentially XX% heels client our months trailing as the third at the impact of by revenues XX.X% revenue gross to client XXXX XX the

volumes have proving any volumes further pre-COVID currently overall patient the we XX% below levels roughly still improvement Although from stubborn. with are experiencing second quarter, improved

to pre-pandemic flat and structure While year-over-year, scaled revenues capacity were had with volumes. our align cost

that the earnings to our previous As recover. as improve markets opportunities we’ve strategic customer security, much provide decision us team, satisfaction view made with capture better would our needed we to long-term calls, our this and mentioned job taking position the on employees strengthen

containment growth, gross future we of result, XXXX. XX% of our pulled a haven’t for to from in quarter decreasing XX% any cost at disposal, levers to sacrificing the As margins capacity short-term protect third the margin

$XXX,XXX Next, X.X% revenues SaaS or pandemic’s sequentially experienced strong cloud is for post-acute Acute system third revenues regulatory decreased Care quarter the nonrecurring drove come that million impacted patient where revenues TruBridge as during segment arrangements Over volumes. sales negatively nTrust our from with or $X.X increased schedule. the our of be SaaS and support of EHR XXXX mostly implementation Revenues continue services. XXXX, behind half our segment catalysts and XX% revenues to impact on from offering paired our by EHR the

billings months. still were we to to previous top Our license in the cash from XX% third sequentially while of XX decreased decline percentage the up XXXX’s to million the contracts expand experienced for drove year XX% hospital cost the understandably a revenues which the shift slight dramatic on allows line revenues over customers’ gross a from $X are sequential that XX% margin of These collections, and the standpoint, under or margins based increase the still from mix margins travel pressure. nTrust in From to past revenues. are XX%, quarter improvement despite due

quarter development flat $XXX,XXX sequentially. decrease software development year-over-year. or third the of operating the to $XXX,XXX development on of in cost contributor product were a costs product expenses, leading during XXXX was Moving costs of relatively capitalization to The X%

new quarter the requirements decreased XXXX calls. investment uptick quarter the million Costs of and nonrecurring compared software employee a mostly development top as of the benefits all in for of of development XX% we or quarter third $X.X costs increased in direct charges costs. platform marketing to income offset capitalization travel by for out a due Sales increased our million that settings, the third bad costs X% rate $X.X the endeavor As $XXX,XXX and drove General statement, the GAAP due during XXXX commission last during was previous expense third tax decreased making higher. of to improved solution sequentially an as XX% year. XXXX slightly expenses the Closing CPSI and from on our care effective the is line sequentially improved and primarily to result quarter single discussed costs. capitalization the increased increased from was the is we’re multiyear to administrative debt of cost for reminder,

million $X.X don’t for at receivables. year XX-month expansion of with $XX EBITDA adjusted a XXXX benefit stand heavy flow to EBITDA tax a to in over resulting quarter the nearly some XX-month related necessarily of operating third this million with in increasing timeframe. XX of cash in flows operating flat allowed $X.X million the million rate. at cash months, DSOs quarter a flows sequentially, correlate standpoint, despite saw with the of an extra second adjusted of Trailing same $XX XX from a were strength credits, which past XX% had cash R&D the of bank This the flows during benefit a or million XXX% cash to over payroll effectively XX outsized the compared mostly XX the million third at effective $XX or the trailing a of were the cash improved The million sheet debt to ago. quarter end of as pretax ago. down and income, quarter timeframe in end same From net XXXX at year $X DSOs reduction continued quarter third balance $X run. has

share X-year decisions opportunistic flexibility Board of more same time, uses quarterly be the you a maximum as likely indefinitely. evolution a September, our announced prioritizes million for that timeframe. have executed a of Board $XX share are our repurchase to providing multiyear Directors to our build allocation for capital. of At over strategy allow in Finally, authorized of aware, that program, These we early on suspended our dividend of a repurchases capital

targeted have first, capital to pursue years, capital to our maintaining the of facility credit strategically We we’re pursue that to to well capital our to market the repurchases leverage reduce to flexibility couple stock towards our Specific allocation and moment tool the a past With a program, been factor, prudent. to when and now enhance working flexible broaden and employs the repurchase be achieved, more undervalued of for is achieve that primary capital including the and of to and this value favorable then positioned as continue value-based business shareholder strengthen availability, will a M&A, working by our allocation may value refinancing volume cost our rationale in abundant multifaceted cadence while acquisitions and invest capture attractive alternatives strategy other share position. terms. purchases return from alternatives. shares, as factors, With evolve primary influenced potential capital using program value valuation, capital number and time. Capital priorities our needs of replacement allocation over

a activity line Specific value the to with that, our our as intrinsic So would given opted quarter, we quarter not next our a until we program like views window. lack to for questions. implementing repurchase on the trading stock. reflect conservatively up in the share we executed And no open repurchases of the of to open delay third may

Operator

our question Hooker go Donald KeyBanc. will And first to with

may You proceed.

Donald Hooker

question. the for you Thank afternoon. good Yes,

Rhode Health Get you how long Can how for? sources in, potential recurring? these scope to help affects these revenue forward? that the you I and size us had Can us that going you help one-time sort and was or new Are model Maryland those had in some last think of are Real won about I of be could sort deals going you revenues of think yes, terms maybe So, Island. commented curious,

David Dye

Yes, both extensions with recurring on model, on SaaS a it’s Don. years think and utilization. I based based of are period they a for are And X contracts

and initially that case patient push as well. with mentioned that’s that’s it’s everything in So, it Get the portal Real engagement as obviously having access for easy the testing revolved COVID to and platform you two virtually your the around that with happening quarter results from here last the Health

now, of but – in the well, Rhode and in obviously, the in and just we expand course, additional that in in as hope and So having to are places forward, Maryland these right we particular but Island, of platforms use upon applications Canada general going engagement success. where other

these more, add up substantially as immaterial grow on the of are but add to have they an the basis, essentially So, with each we cumulatively, annual potential around $XXX,XXX annually range potential to the more. generally

Donald Hooker

more where other Real in or your with portals whatnot? then have sort helping environment broadly, terms are of guess and Okay, consumer clients super. maybe COVID maybe provider Health of whatnot Get of this I and sort system you technologies new patients And strategy, work sort of you using health in health digitally of

Boyd Douglas

Yes, Donald.

now engagement where than – cases see of working portal, and we what pilot a can we bring got out is have is disparate again, couple systems in portal. to there we that So really the we where we are have get patient a And of the platform, this together. patient more it’s it’s

the the couple a hospital community, in have can see with or from all may X providers and have the and they And portion that is disparate CHBase, providers so portal. And which that or has again X different a one underlying consolidated, to a PHR, patient of patient of instant X be only stays. the data

really different that is and getting communities are And providers or X your extremely so those. confusing can portals from X positive have consolidate different feedback from our to the we because it’s

the So we see that’s biggest where benefit.

Donald Hooker

one, as quick, Is the investment one not or area – pole? am that really And you where I thinking an going you that are to is forward? of on that this high going focus totem be for putting is capital last about

Boyd Douglas

as domestically, well. in Well, investing general, No. we in internationally not only GRH, but certainly are

one definitely we So, growth the engines see the of of that as company.

David Dye

certainly, population and mentioned call, and these answer mentioned on nationalized and in domestically, expect to Boyd’s seeing go we’re systems recently into health it in products, a the that Canada Pacific mean, on continue type the to million I X.X on basis. we we the of obviously, I how the the the in around to to And strategy, an there increased on question of Middle Asia increase of demand your regarding the – – on Canada, care I East. more mean, speak increase we we focused provinces to western think it XXXX. specifically last success the our to And for continue projecting Yes. XXX,XXX continues was up already in volumes are regular Don, he question, and previous the focused but

So ability as opportunities our in other to are certainly, those well. investing to international we increasing sell

Donald Hooker

Thank you.

Operator

Our Bank. with go from Hill George question of Deutsche Please next is line ahead. the

George Hill

question. and afternoon good guys for Hey, thanks taking the

process transactions what the versus out figure So of you think for Business I and Boyd versus the be David, good the question transactions geographic A. dispersion. guess, you of maybe process about volumes B, number I for of that margin how value guys I call some be – the as can of serve? guess, to much, number markets trying rural much pretty clients we the kind versus and how are that guess, could that And about of us segment, those guys your I you guess, to in work markets – transactions you suburban procedures guys you the of those seeing your of Management you is that both it kind some tied you of have revenue guys the I some remind would talk the the and performance-based? question elective clients would would the

Chris Flower

XX% is and have to this accounts also standpoint it’s of inside management do a they’re at a related. from first while is our some transaction an Chris. of TruBridge’s performance-based, revenue services the our little convoluted about point because I’ll based, answer one overlap Hey, or George, because there’s your that, early-out transaction take there. still stab receivable but About performance-based, we

half maybe that, in side. would the probably that quick somewhere is would that I than a XX% about just swag. be that XX% on be going that’s a included performance to little taking of That’s of number. So more half say

the more could one first question the that’s So that’s ask the – time? you first second Well, question. answering

George Hill

I the have geographic that guys Yes. are was kind given that you question do. It’s footprint. segments rebound focused find the different of in hard the of procedures. guess touch second elective to market your the people lot of of on vendors the A

I that’s you billing by a seeing guys markets perspective that was going number different I it from baseline. more a commenting to about documentation of see couple say, a could think talked minutes suburban? guys something what perspective. guess rurals both XX% David say maybe like are well if below You you just in running still of versus kind as I by I’d on as – about spend maybe

Chris Flower

increase would we’re pretty line related elective it’s George, say and seen point, across services, I – that the on I What has our the boom by is through negatively specifically surgical Yes. facilities, to across been ER. we’ve the say, would more has large, seeing, impact where a service the seen been your consistent there. so map, we’ve in to where But biggest nice the and board

your to care off So that use high it’s up actually XX% is – – the those as level thing which static that of volume the pre-COVID not of good utilization, kind and at – be that’s point, may while proper that a end of not levels, reimbursement to space. the of XX% long-term it’s remained being may always

were geographically, is may services But be a the from So the elective of performed. I to where regardless X think where we are not would actually say, outcome. we’re it long-term, of I months those being X which up, catch-up positive seeing a

ask, we show I come down continue And think utilization. to to back bit. going that going that is think in little removal the is off of do to the up business? it’s on the ER question, back I that don’t that a well So

George Hill

That’s you. helpful. Okay. very Thank

Chris Flower

Yes.

Operator

Jeff Please line Co. question with our the William from is go And ahead. & next of Blair Garro

Jeff Garro

I quarter. bit there but would successes thanks want TruBridge. bookings afternoon about ask higher a been TruBridge this booking been I the taking I’ll to the Good In for little more the And past, a with in questions. than floor start improvement have and the previous has year years. and say lumpy,

or call would factors you in go-to-market change market that guys of combination strategies out? any So

Chris Flower

the great in So, off two base and XXXX were into the – of momentum would to the start a just carrying at say interest, the that, from Jeff, the that really are seeing XXXX. different parts I end of we we

better off would would And year, But here So obviously, a a we’re breakneck we’re service. value sales we customer towards of at up little the that some have with kind were slow the I that that. with say a the bit. of from to pace the the seen end just positioning I standpoint credit for picking And give momentum. to that getting we

SaaS, which seeing availability continuing the then innovation is it’s get we’re side, the bring with mind honestly, on with and the having can of now, bump opportunity nice to on converting their delivering, services the net the a our the those we bookings, base. starting that adding efficiencies new to transparency. to opens price customer what the success resonate our the on be to while combined to coupling we’re the little So it’s – to And on we’re convert their right generating new there top plus And software would really also up that in logos together and license in out up-sell into. the side, name

Jeff Garro

with other competitive wallet higher helpful. or words, displacements curious from And spend just a another this a market time those it better or facilities? is if is That’s on the or there, prioritization post-acute share IT share? In it – – the in on of is market, momentum simply better question bookings-related it the Great. follow-up

David Dye

into lot time as project with And development efforts Jeff, we’re now. at that put end the almost that firmly our frame a – the and to Yes, about a talked we’ve post-acute seeing we’re some of in last direct of was sales that software. we product the it we X-year now over is regard wins customers, and the X our years new believe the bookings it includes of current also is that result our on in to it a software majority The add us improved from telling clinical are but increased that there net that – well. customers

Jeff Garro

for Got the taking questions. it. Thanks

David Dye

Thanks, Jeff.

Operator

Sandler. Please go the from Piper with Our of ahead. Sean Wieland next is question line

Sean Wieland

Hi, thanks.

bookings of $XX much that follow-on billion continue do how how rural want The hospitals, any? So on more that, think a impact you the tail trends? has I was your bookings much to to of do targeted on an have on we left had just if conversation. that And to

David Dye

a you the press definitely them I a hospitals just it’s have in you difficult I from to It’s services a that, and order and attention all helped – helped terms to standpoint. been that a know, stand easy specific the Obviously, up don’t to support confidence It’s the great financially, that’s think feel. COVID answer. a very be question. that an of maybe bipartisan in mentioned received in a), give That’s spend as with to spend result need confidence. out given to it’s but there from has they give competitive the – keep what and IT has

does I order that’s to the in that viable be as part and your order competitive. Price in mean, and question going I to they’re to that don’t long is to think to reimbursed but as order I they mean second that great dry they’re think really in – if have example. and happens. competitive, transparency So to continue of remain something up? continue. when that’s – a is be I have

again, feel don’t if we they to now like, spend though at we have because do not are it it get ability to better don’t So going this the looking as we money hey, we’re so. and

Sean Wieland

U.S. international? business and us of percentage this for Thanks today Alright. is can you what business And that. for versus GRH, size the on

Matt Chambless

Yes.

an we months of from comparison, $X.X loss $XXX,XXX loss and a year-over-year last revenues year-to-date, $X.X to year. this third this last trailing under million. million. at year. EBITDA million $X.X over in contribution year-to-date they EBITDA That brings $X.X So, compared quarter of and about flat quarter. $XXX,XXX around XX were P&L last quarter, basically same the and EBITDA of And them trailing million standpoint, From were million this versus brings the months. Bookings both quarter an to quarter EBITDA GRH’s to just to quarter came That $X.X revenue had $XXX,XXX million $X.X to XX

Sean Wieland

U.S. refreshing That a mix you. of versus is amount thank the of How international? transparency, about

Matt Chambless

overwhelming majority the now the between that to that point say revenue I’d where to at I’d the is XX% somewhere right to peg there international XX%. Yes. confidently of

Sean Wieland

Okay, a Appreciate great. it. lot. Thanks

Operator

[Operator Instructions] Davis is you question. Leerink. ahead Stephanie from go Our question next SVB Please with from

Joy Zhang

is the Joy quarter. on for Congrats this Hey, Zhang Stephanie. on

Boyd Douglas

Thank you.

Joy Zhang

want the revenues. focus SaaS question my to I on towards move

yours And obviously, it’s you is what where the what kind a the Now cloud you on remind it strategic pandemic. update Maybe mix focus but made COVID easy, of transition ultimately to. revenue things can go can us now been and us of hasn’t before front? since on progress SaaS made the

Boyd Douglas

mix, fourth those it’s there SaaS question the the XX, right for thanks about the three somewhere expecting are were XX implementations coming around think we looking on at year, we’re split. net – we going new a in about is environment. Well, year scheduled We SaaS the looking into the the acute XX-XX right those of of in, the care to scheduled round and XX with excited. that now, coming implementations for like our in And Thrive quarter, to now, the application. And out

SaaS kind is for only transition from out mix SaaS. in mix going as the to turn going to like what goals and And going we’ve surpassed our of as to forward, year. to this looks on perpetual towards far that SaaS So continue is it increase

Joy Zhang

trends end-to-end cycle spoke their Thanks. TruBridge? traction rates. rev your Have color. follow-up, my been seeing collection helpful for to the to similar maximize hospitals are competitors for side as That’s trying and you on some And growing of

Boyd Douglas

Yes.

as we a there sales the X where to think well. was there COVID period team the and lull do for I from starting of see are beginning the a that to think at right same I But was that X-month optimism period.

Joy Zhang

Got it. Thank you.

Boyd Douglas

you. Thank

Operator

the And Please of go our Cantor. line with ahead. next question Steve is from Halper

Steve Halper

Hi.

of that procedure If understanding you’ll see you pickup in that some Is that fourth to below sounds like about on safe pre-COVID lag? probably billing, because sequential lot you still saw it are quarter it and revenue customers a at obviously the your think TruBridge you’re sequential XX% basis, Well assume of a volume levels. lag increase stuck booked. a between like

Matt Chambless

Yes.

quarter, So looking recovery we way good Steve, early volumes QX patient a little they’ve do to more think at the think fourth for bit of stabilized at And the kind right that revenues this while. are that the we’re XX%, flattish. have pretty a QX going and now, be into where to was stabilized we there enough

the wouldn’t here big expecting sitting X that on for expect that I months revenues So were we bounce the TruBridge. ago QX

Boyd Douglas

on Yes. standpoint. might deductibles be an Steve, where I from add there only cram year would are their elective of end is the the the And thing a based there at people with

might be additional I standpoint. some right relatively So Matt But flat pop is think that there there. from that

Steve Halper

– yes. Because Right.

mean, you back going that’s see little year, seasonality. did I normal So a sequential to and of assuming a increase, I’m last bit just the

Boyd Douglas

Correct.

Steve Halper

Okay. Thank so you much.

Boyd Douglas

you. Thank

Operator

further we Mr. this to have back to call. out you questions And I’ll the close call the at time. Boyd, turn no

Boyd Douglas

being I for want on the to just thank everyone today. call

We working are are and be just the we hard obviously pleased with as our quarter. to successful fourth quarter in

and time, hope your enjoys for I everyone Thank thanks weekend. So their you.

TruBridge (TBRG) 7 Nov 202020 Q3 Earnings call transcript