CPSI - Earnings call transcript Q2 2021

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

Operator

Greetings, and welcome to CPSI Second Quarter 2021 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Dru Anderson. Thank you.

begin. may You

Dru Anderson

welcome Conference and CPSI Quarter Second Good to Earnings Call. XXXX afternoon, the

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

this or will At developments events Mr. go sir. statements date and caution the to our date. forward-looking represents Please in call ahead, of of after this the Chief the time, as any President only reflect I call Douglas, this call. outlook turn we that Boyd also revise to forward-looking or undertake over no And investors Executive update information obligation provided We to this Officer.

John Douglas

of along provide of comments, call David that regarding my Chris Chief has of your At share Dye, Growth to afternoon, be prepared second delivered extremely focus, to our everyone, for additional X results work I Matt the Good Officer; Dru. our you across midpoint available will with the the us, the Officer, and family results. XXXX. commitment joining companies second take At our Officer, today. and you, thank over quarter who color Financial CPSI will pleased conclusion quarter hard comments, Thank the of our for us to questions. I'm the will and of hand Fowler, and After our XXXX, our Operating Chief impressive Chief Chambless,

Our and second our through create nicely in a and by to The guide are optimization today I to innovation. the contribution. TruCode long-term execution to quarter, foundation margin margin value. a upside laying the in continues revenue to tangible results sizable the continue transformation at highlighting of newly confidence growth our expectations. and achieve generated core shareholder digital optimization TruBridge through growth we In and growth, $XX.X recurring X-year initiative TruBridge our from being gives surpassed us sustained acquired start will has that recover ability margin volumes with our million core optimization. pace revenue efforts

bookings our over relationships, quarter, cross-sales rebound and while pace base improvement established customer quarter. in for there leveraging post-acute by not addition, we TruBridge did of services sizable quarter. in In EHR And nicely hoped improved the EHR a our our acute the into system had of sales EHR over the first was as second decisions last

recently off us decisions year. have that start to second to We encouraged a and booking services the were key of the are by made EHR sales favor some also the both kicked our in solid that half in

increase successful savings. Another of modernize our cost to and execution initiatives the is strategy long-term that important business, deliver our efficiency element our

critical stated we giving competitive million least last element nicely. across at care progressing the achieve and cost our ambulatory, initiative in accounts medical rate services covers to solution and advancement of in multiple necessary efforts this is TruBridge of client single TruBridge increase scalability savings, a including EHR ED targets. preservation exit cross-sale our base visibility across coding in the to us quarter, order a receivable our this growth nursing. plan A retention as and to contributing with is And pricing, factors settings, progress healthy improve as $X.X inpatient, achieving confidence base is greater offshoring of as margins, our combined The management are EHR Continued our XXXX. skilled and we

Our single center from the offerings communication patient solution data latest include console. and

modules, information further In to gives with a care. care their their greater identify to communications modern client, point even growth clinical combination action margin other at recently to our coordination engine, access efficiently take our announced care problem and will with is will allow with health, with providers integrate determine to previous Wes with that inform and the a and data meaningful web insights, and alert will addition, core pursuing These the patient This the that encouraging. releases they of Chief members ability and picture of partnership Officer, team about family. patients. tools finally, acceptance And we efficiency as we The clinical Innovation decision-making on deliver along us status deliver ahead Medicomp these Cronkite, clinical board, for through which uplift the manual new rapidly interest In I with have have we proud with cash of and workflow empower and they inefficiencies allow our ease clinical revenue notes to that, users direct improve to want call over communicate care which these or identified specific patient same optimization on friends are how a seen of the the the additional clients' and benefit our value-add efforts I customers. for value is contribute months. focus to posting, is that, journey stress we instead we on of and support to of Matt customers. strong our will to empowering transformation to enhancing X-year underway I'll employee at start also to work core interests am CPSI automated, once shareholder relentless. to us From initiatives, in the see cycle only services. automation our made as will decision from of services processes our the employees communities There that and deeper and TruBridge summary, continue a advancing still have financial dive activities robotic teams solutions real commitment results. on our our increase of turn with to innovation. much while unnecessary X TruBridge focus into process the patient's CPSI's With determined

Matt Chambless

second the the stands volumes results. resumption quarter the made everyone. driving second the quarter out relatively in brief Obviously, impact easy severe a some financial On the call, the volumes and strong and strong provide including results. comp near-normal absolute walk a terms overview second quarter, aside, Thanks, XXXX, of quarter detail against today's high-level on quarter additional of bookings Boyd, pandemic's of nice with a in performance good our afternoon, coupled through headline of issue The during key XXXX, on patient second for the quarter as with financial a a themes comps. few I'll

revenue retention our Healthland their hospital base has tandem outperform our with in driving surprise with growth. of our since again our us resiliency exceeding hospital once XXXX. for volumes line levels quarter. in in continues First, patient of This their resiliency customer the expectations rates EHR at improved EHR through to worked Midway our recurring to internal acquisition to drive expectations, customers XXXX, top highest retention are TruBridge

incremental single worked adopt quarter, we've and practices software a experts environment, features past we functionality Second, in labor reflects an with for rate bring best resulting higher investments external development solution. we making feel capitalization to our during products, subject including been in better towards capitalization our to EHR matter agile to progress the that the

Third, $XXX,XXX the revenues were in of incremental quarter's TruCode's adjustments occurring X.X $X with activity EBITDA inclusion the of roughly acquisition TruCode's million. second of of incremental the represent the with of million for was quarter revenue growth EBITDA full with quarter full absent in million purchase revenue $X.X TruBridge $X.X quarter for adding EBITDA. an These million. the million year-to-date and to numbers brought $X.X revenues TruCode inorganic year-to-date our accounting line, amounts $X.X mid-May.

Moving on bookings. to

bookings call impact disappointing rural community over bookings first marking during quarter. $XX.X increase. mentioned particularly the the bookings showed with last continuing first total hospitals that sequential quarter second improvement on stingy XX% a We The and our environment on million, a significant created earnings quarter's pandemic's of the an

bookings that of sales during environment sales quarter, sequentially to more EHR the quarter and the of Including the quarter over cash enhanced our bookings among second net second bookings XXXX revenues better line revenue business, our quarter as short resulting up causing the behind new slower EHR became pace a during EHR of with XX% particularly compared subscription and amounts XX% as towards for fared our showing net towards add-on increase of suffer offerings bookings offerings, quarter predictability SaaS we're Compared up norms, pace. the bookings, XXXX. on first to historical recurring sales favorable second continue total System steering continue greater process. XX% new the sales, bookings were and more of noticeably within new X% to strength the arrangements than modest made lagging down While growth the revenues cross-sell increasing through for our for and decision XX% below of we in By that the TruBridge is to second decisions, the second our but add-on quarter's throughout improved bookings mix, were still support of our business emphasis from decision SaaS driving more the EHR flows. expectations prevalence success quarter quarter's the double recurring efforts the leading in top to XXXX.

second revenue XX% financial of of patient revenues quarter Turning last year, period. volumes of a in the inclusion second over drove while increase, placing The XXXX of slight intense first for pressure quarter plummeted the results to X% recurring XX% XX% roughly to sequential the hospital of quarter Overall, on revenues. the at increased TruCode as quarter another total revenues increased XXXX arriving second yet over high and all-time of XX% XXXX. the of second compared to TruBridge the in XXXX, and quarter of both revenues sequentially

behind increased results. of adjusted net was net increase in front, and sequential the main EBITDA million driver profitability XX% nearly quarter or increase XX% income pandemic-weakened the non-GAAP Both adjusted $X.X non-GAAP XXXX's a million from income. the a EBITDA in sequential and doubled labor On or second capitalization $X.X

a of net set by nearly The setting XX.X% margin record XX% while margin EBITDA second period's quarter the points. XX CPSI record, only adjusted basis another XXXX's of missed new non-GAAP

revenues XX% $X.X gross increased margins at pace, TruBridge areas compressed off their deeper revenue revenue other in top Unsurprisingly, due XX% TruCode quarter quarter balanced while first increased backed gross over XXXX, as temporary hosting as XX% cloud point margin. significantly declines improvement segments. first of expectedly the to a incremental patient Looking a line volumes the X% the our grew in sequentially compared quarter in to revenues expenses. improvement of to out and showing second basis million XXX TruBridge

expected $X.X increase from with XXXX sequentially quarter and anticipate combined gross a system second the as cost projects brought revenues Despite Thrive costs the of or a third down new our support We pre-revenue $X.X to sales going facilities decrease go quarter. system gross million environment. that, slight revenues in overall support sales cloud Next, X gains. decreased in acute quarter increased or were up solution of the quarter in revenues of million second slightly SaaS as saw in quarter XX%. currently in SaaS the with X% the sales, of with Compared from the outpaced in live XXXX, related live care revenue XXXX's XX% revenues client margins XX.X% flat X to to first margins second and XX% to or revenues,

Product costs XX%, Moving on labor expenses. decreased due aforementioned to and and sequentially development capitalization. $X to both the operating million year-over-year increased roughly

as the the resulting labor travel nearly spend administrative Excluding and were General and sequentially development from commissions cash Sales transformation XXXX. initiatives acquisition force severance and increased and debt health experience the as year-over-year costs while costs by were we flat million the were debt and balanced of announced for efficiencies balanced product flat our in Year-over-year flat increased from offset cost period's experience. XXXX was of the reduction decreased acquisition. claims X-K second by associated of from in decreased quarter bad were quarter TruCode and our GAAP costs bad $X.X first sequentially relatively costs health were $XXX,XXX X filing marketing $X.X the claims of TruCode costs costs. and capitalization, the improved for associated with million, improved February with as X% business

of over benefit plans. normalize third share health despite and purchase $XX uncharacteristically to EBITDA to standpoint, less as XX% from free $XX.X flow operating the increase in a million to on now for our We year to the was statement, operating purchase normalized second event self-insured outsized headwinds repurchases. R&D of a tax second notable than during our debt bank in marked ago. to capital debt CPSI history. bad investment capital a deploy during the perspective, XX% strength over set cash the second combination in initial conservatively we for incremental allowed to the another low quarter cash $XX using of out this quarter those X% quarter's was of of value-based second for proceeds. a expect of trailing company CPSI a credits driving price On quarter the And price positioned XXXX, in full opportunistically quarter million, prioritizes and a The and benefit record benefit improvement flows both some million cash CPSI quarter in impact of The a XX-month income have operating growth. flow year-over-year acquisition the to amounts funding effective of claims internal has saw XX%. effective quarter, TruCode capital to levels our an of $XX.X limit a This From strategy trailing Closing most operating the rate an CPSI flows the record quarter M&A, cash XXXX of from year our XXXX From cash allocation, highest having XX% the flow XXXX. flow flows creating TruCode tax $XX cash through the to after second increase revolver XX% quarter health related to of cash XX-month marked million. expect $XX cash second million the rate entire allocation million a flexibility optimally compared second

are As during ideal our rates May over TruCode's we X%. of revenues a recurring which of checks the has with recurring, impressive emphasis on deal, of call M&A of profile. history in all nicely of target few excess and predictability. growth the responsible historical XX past the X-year Nearly pairs driving of TruCode customer visibility renewed the with boxes revenue mentioned announce CAGR growth, revenue reaping years retention are benefits our XX%. to company all the enhanced The an the

EBITDA EBITDA. success has leverage ratio value of of well of our sticky. So $X.X driven by to by XXXX's CPSI is other works X.Xx an the if may to arise. robust. the margins at million purchase The which of prepared the X.Xx. of valuation to my that our a incremental revenue with quickly opportunities and Leverage are XX.Xx to year EBITDA TruCode is was the fold. To This acquisition multiple target at fully excited after both recurring the around $XX of CPSI, X.Xx EBITDA sits to respond the the leverage total price And wrap an transaction, initial opportunistic achieved, and out And position second up proved X.Xx. currently around for million conservative positioned debt versus to remarks, Xx. XX%, potential holds for the be earnout earnout initial with quarter in now what TruCode we're overall rest EBITDA historical decreases maximum $XX forward the aided multiple The at all-around million

increased the XX addition and and May call and TruCode, $XXX revenue between between the million EBITDA XX% million to we our $XXX XX%. margins annual announce adjusted guidance of On to

the year confident while capitalization remain with our guidance, up around in expectations labor we that, the margin And expectations top open line to us, XX%. EBITDA behind quarter line full revised questions. adjusted between and second the like raise With to XX% for we'd

Operator

[Operator Instructions].

question first comes Garro Jeff Piper from with Our Sandler.

Jeffrey Garro

towards recurring about shift noticing the the recurring year-to-date then Congrats I specific the total? want to bit what the revenue. of more for out pipeline quarter. again, for the mix and, on the in installs implementations. the percentage leaning on in was know heavily quarter what is terms guess pipeline, license commentary further and the of of was ask rest a new prospective hoping starters, could decision? some in And SaaS year the the what's we revenue I get of would towards of I installs little the like to sales

John Douglas

Yes.

-- So for that the Jeff, or a thanks versus second of for think I the as total, recurring question. quarter. it's comments about revenue recurring XX% we percentage revenue in the mentioned the of prepared And mix

talk license over So the kind it that's the of sitting to to now. all-time turn pipeline in CPSI. for David right I'll an that's high mix about

David Dye

Jeff, it's see addition looking to client about into that, pipeline XX% for In license. versus we in continue increase XX-XX to number to here. net base, as to that nTrust the well. David XX% as then And endeavor existing for hope we new SaaS EHR, sell the

Jeffrey Garro

the bit pipeline end Excellent. bookings expectation the year there also comments second pick and And the the in in and of second release, also the targets the some a half to the will That more about half. the market. X-year start little and that reference positive a In on up helps. to the

comments the or the achieve that performance to the maybe you type prospects in offer So success of upmarket new and outside expecting you to outsized second base? net TruBridge going could strength, where with X-year both you're need stay any And those more on targets? it's half on any whether that track areas EHR

David Dye

start good up to quarter. Sure, sequentially have our work pipeline year, to XX we of a to for lot get we Jeff. of up the David left pipeline June year was do of -- XX%. just this the second, a rest the X-month but as our for a Backing of -- I certainly off again. did third

So In takeaway business. up got release, management also did positive a services. signed that large from of it's segment for we was have TruBridge in certainly to EHR X hospital new the alluded accounts in deals, the And July. we a a then particular, and competitive net press sign. receivable we We good the as net EHR new non-EHR TruBridge a

So as very was positive that well.

Operator

with from Halper question Fitzgerald. is next Cantor Our Steve

Steven Halper

the through go because I again just missed you Could guidance it. revised

John Douglas

Yes.

we and we on $XXX between the XX we EBITDA we top the call, at our and expectations to range. comfortable are So TruCode million. $XXX feel where And upward the adjusted deal, with time for that million But Steven, revising announced line margin guidance May that the XX% XX% between still year. to

Steven Halper

Is that rate now? software capitalization because of the higher

John Douglas

That's right.

Steven Halper

Okay. Yes.

On deferred the the of from said TruCode, deferred million. you was net revenue Is the contribution it $X.X item? -- revenue that

John Douglas

Yes.

So adjustments. that purchasing accounting -- any purchase before there is any -- price purchase --

So haircut revenue there the quarter. first $XXX,XXX deferred about was for impact

minus X.X XXX. So

So showing up the would number about GAAP that's quarter. in financials X.XX the be this

Steven Halper

it. Got

point, one Okay. That's And is, then is that the recall correctly, thing forward? what hold? I to at I share going were you if repurchase. that Is contemplated -- need talking other about will on know. that Or

Matt Chambless

Yes.

past like necessarily the what M&A what like on to repurchases option of arbitrary maximizing be And we necessarily capital as annual some to mentioned look definitely to that know flexibility are want don't think don't of side. goal our the tie allocation look set as sort share we strategy. on calls, value that multifaceted to deploy we we've on the because ourselves opportunistic going So going we're not we is -- we want obviously to to means going

lean of going dictate probably and using the lot. a capital maturity is to that fund growth. to And a M&A towards pipeline say I'd somewhat So our there's quality

share the side. stay there So on repurchase tuned

M&A on So goes what hand-in-hand it's with happens -- it the pipeline.

Operator

Instructions]. [Operator

with Leerink. question Our Joy next SVB comes Zhang from

Yueli Zhang

Congrats the quarter. on

John Douglas

Thanks, Joy.

Yueli Zhang

provide And on more they offering? has I'll any more cross-sell TruCode. the of of stand-alone with pipeline Or TruBridge towards guess it sort cross-sell with geared start color how trending? is the early of been you sort bundled outside? I Can sort the other are

David Dye

got Joy, or that your of end May, the EHR closed and base somewhere XX the the into We of in I question, deals the X middle for on the quarter. of the and really first deal close think between part we happy. cross-sell were May

didn't that the get So part your of Chris question. have. may very was I second certainly positive.

Christopher Fowler

Yes.

I think is -- Joy, Chris. this

question services. I is that whether TruCode with it's relates correct? other the we're it think it to as whether Is bundling base into or stand-alone the

Yueli Zhang

Exactly, yes.

Christopher Fowler

the obviously, fact Okay. would the right to want obviously, point is sales to X deals many is But the we that that move to the as force And as part nTrust Yes. I strategy. it's just goal, obviously, to customers continue say overall we another to now, stand-alone. to of continue which leverage this enable possible. as

Yueli Zhang

housekeeping that level your assumptions Is guidance. That's are year? Got helpful. volume this of have what for earlier has still prior as on more it. above expectations baked given pre-COVID me XX% very it Or that one question And at in guidance? in the sort of the volumes trended increased,

Matt Chambless

Yes.

our So increased from kind Joy, we've of the I'd patients based we've it information customers. new off our say that gotten hospital from of that or

say I'd elevated right range we've we're seeing So reflective what it the now. of somewhat and XX% above more

Operator

Boyd end call of like I'd over reached back comments. for Douglas turn question-and-answer We've to to the the session. now closing the

John Douglas

Great. I time everyone for thank call our and that. in we're in to the -- and Thank and being our today months first certainly want X the Clearly, execution strategic interest about your on excited their direction CPSI. the on for you.

to to for a time, your forward and your good you more And week. look has rest come. But thank hope certainly so of everyone I

Operator

concludes This today's conference.

lines at your your disconnect thank this may participation. time, you for and You we

TruBridge (TBRG) 7 Aug 212021 Q2 Earnings call transcript