CPSI - Earnings call 4 2023

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Operator

Greetings, and welcome to the CPSI Fourth Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dru Anderson. Thank you.

You may begin.

Dru Anderson

you. Thank welcome Fourth and Earnings and the Call. Conference to afternoon, Quarter CPSI XXXX Good are President Chris Officer; call today's Leading Fowler, Bassi, Financial and and Chief Officer. Vinay Executive Chief expectations made pursuant the include future statements Securities This the provisions to that of Litigation call statements operating Reform safe may Act plans, forward-looking constitute and of regarding Private harbor performance XXXX.

future any upon including, results statements including reflect management not not most the and predictions annual those as based unknown currently The might limited reports report information from only guarantees known performance. differ company public forward-looking expectations recent those factors, implied or on in statements Commission, other of and cautions Actual releases and Securities but results expressed a such described the of filed forward-looking to, you by are risks, available that XX-K. result and Form with uncertainties materially and such Exchange or and

provided Chris the or revise date, The and turn update no to company statements this also reflect obligation represents information they call of At this that now cautions this events over undertake forward-looking the any outlook call. Please developments I Chief will to sir. or of time, Executive and after in date as call Fowler, investors Mr. only to their Officer. ahead, forward-looking this President the go

Christopher Fowler

to start our call you thank about and rebranding. today's to everyone I for off Dru, want this saying Thanks, I announced us how joining by recently am excited afternoon.

and our comprehensive serve. the and together the our brand simplify we way do suite clinical commitment our clients for delivering reinforce they TruBridge and to coming are solutions communities a behind of financial We business to

under ticker we as and company that the will mind, service clients officially brand what TBRG. the to opportunity the new our will our CPSI more X, high-quality Monday, the delivering On committed they market company transition we today. believe and ahead we to today common to are accurately the TruBridge, solutions call on the our regardless all stock reflects With We closely on symbol, of our us. of remain defines trading this stock We who begin more March are using. refer of to will evolution new in of NASDAQ

Taking full a outlook and look numbers and downs the footing with initiatives finished ups to introduce financial bookings strong year, back, our of share but highlights, some Vinay initial throughout our XXXX ongoing solid Today, and CFO, the results. new saw fourth provide updates for our on course into deeper first touch and the quarter on meaningful I'll quarter on the Bassi, dive and XXXX. year we

start quick XXXX overview of Let's a results. with

in For $XXX million the full $XX at year, revenue EBITDA at and million. in came came adjusted

represents driven bookings, million bookings, increases XXXX RCM in a which of quarter which quarter X.X% $XX quarter the XXXX, were fourth driven quarter up fourth was and million, in both increase bookings X.X%. and by Fourth from signed $XX.X by from we previous For sequential increased by RCM meaningful EHR.

factors. several believe We by bookings was RCM pickup in driven the

meet labor our their is hospitals local to for market of expansive the enough First, community all seldom needs.

cash on Second, community complex efforts receivables by the billing is And diminishing very outsourcing more accounts day. third, of stigma problems the weigh to getting RCM continue so is the of poor as and and hospitals. collections increasing

updates made numbers, we strategic the like I'd on a moves over shift months. a taking Now step few the past few the to to back from

EHR service while the to are This to given good on believe to divestiture First, market. customers PointClickCare. more high also in allows known hands focus announced small in We and of solutions as level our ensuring for market AHT, of delivering the American core for we of our us best decision with their was our AHT this post-acute PointClickCare, divestiture exclusive both customers on midsized acutely that to HealthTech, care hospitals, January, AHT focus existing CPSI. and

the of part agreement, exclusive for PCC's be will As office partner we services. complete business

We as post-acute in behind care the lagging in terms is forecast are of converting the anything this the acute at our market model. time not materially to outsourced market including

Second, our is integration as Viewgol expected. of progressing

rely Viewgol existing to As split the in new fourth and X tracks: outsourcing. getting customers. in-house quarter, two, customers; we our the than bringing a reminder, early bringing continuing We the workforce plan rather integration into initial our offshore scale the resources acquired for aim of with globalized third-party on one, to on

global our planning For existing mix for that for go customers, XXXX, to staff the the are new from went progresses. with important up we our of reverse account ramp. expect we plan margin likely appropriate note pressure the initial on, to we them live. capacity but year by to experience as as we map a And we course ramp early over the that a customers, little It's out will to account the

of goal a offshore and comprised Longer achieve employees. XX% to U.S.-based term, is workforce our XX%

work through top it remain this quality our maintain all service same -- for priority we While customers. to remains of of transition, the a to

organization As to can and returning global XXXX, the growth committed we forward look realizing into operational achieve. leverage our workforce is our entire that to

best-in-class capabilities our to deliver key we to is improve This that ability infrastructure to believe our automate our to to consistently process continue the possible services. the customers. and technology We to to dedication enhance is AI embracing solutions cloud and our utilize RCM why wherever modernizing use exactly and our

be leveraging This organization. will to technology top priority and commitment to our continue within has a

and will advantage of our invest this on was be we've year beyond. and in As in transformation. the while we place focus our growth still the to we'll midst XXXX, allocation. focused the people, are right In in primarily have take on to acknowledged our team past, XXXX the people we opportunities for continue ensuring a capital of in

aims. technology For investments example, focus sharp sure our our align have to investments on our with making ensure a ROI in closely strategic

operations that to be hand to it asset to Vinay a huge experience board in over has team will extremely us this to you organization. the offshore can he take continued but through our has our during our the and across extensive is Vinay, be and new experience very skill proving Bassi. to numbers? the Vinay transformational I'm With excited to His beneficial extensive -- already time. CFO, across particularly a that, set been board, brings be

Vinay Bassi

the Thank you, Chris, for introduction.

care of services, my to in and I media communications about journey and results Before where want Avaya Most at an CPSI you on telecom join years and I all technology excited joined quarter technology services. share CPSI. fourth and why is primarily been company a initial our review focused with XXXX outlook, operating extension health that of our I'm at have bit to Nielsen. the working I

the with During I in RCM growth within focused confidence and coupled the reinforce the company. and was the base, of team with the commitment missteps divestitures, transforming to I company. his Chris process, performance, customer interview transform fully mode XXXX on EHR but the strategic aware was is my company's of impressed the strong acquisitions that

in CPSI its the own and with discipline approach experience building join forefront part next were fiscal be decision team, a enforcing to of chapter. at my strong to My leading of data-driven a

and service serve agreements; thorough of principle for approach the on strong for first, including linked finance indicator conversion understanding Some and level as team of that second, bookings forecasting, building increasing focus near business a built a a of trajectory with meeting of drivers areas of getting leading include: fact-based, the while key my customer the offshore forward-looking closely a resources business. term

forward. believe discipline fiscal help in going improving this I will forecasting and

a CapEx fresh on Third, with capital return at look and mindset. taking allocation a investment

to We the integration in And that the and Viewgol. benefit prioritize projects efforts we successful us ones date, those cost that will have of near Fourth, invested the term. optimization be initiatives last, many reviewing continuing impact EBITDA. ensuring to directly will

XXXX. for crossed the Now time. a the total in the the comprised and $XX.X the $XX of bookings came quarter ago. into RCM million. million $XX.X X.X% about threshold XX% year the total, which from increase $XX.X revenue RCM XX% an $XX of made Total jump let's at represents in numbers. quarter first compares the of at of million million million, up bookings revenue Total to fourth for

Let platform. yielded growth a which to due excluding sunsetting X.X Further, in quarter, EHR revenue. provide to 'XX. QX the on million to approximately QX. impact XX.X% about ago. $X.X showed compared in gross revenue million, the decline, RCM, contributed of Centric color X.X% me we XX.X% a the In additional of showed margin compared year Viewgol, reported Viewgol primarily $XX.X of cost of of a months

severance primarily savings M&A compared expense other performance. to expenses, reported employment and came quarter, voluntary and of for with excluding lower from associated total fees the trademark The ago. revenue The impairment, year from percent a the increase in XXXX due items, a incurred accruals onetime operating our was -- XX.X% was primarily reporting XX.X% to as fourth and margins activities. bonus retirement In goodwill improvement program including

apples-to-apples aging basis, these by including the an expense been revenue migration a as Viewgol items, increased percent On excluding would marketing receivables. investments operating technology, well and primarily sales driven have cloud XX.X%, of and in as onetime as

voluntary EBITDA quarter benefit and marketing, to technology from XX% points ago. cloud, million margin licenses growth million future increased taken and a by some $XX.X compared due Adjusted with offset our and sales from that impact investments all With year to accrual employment EBITDA bonus basis retirement savings out for into over lower in program consideration, XXX quarter in the of Microsoft decreased the the adjusted associated and our came the for in resources $XX to year partially was XXXX.

balance of other lower $XX.X result higher for flow cash the $XXX.X acquisition, Operating items. year XXXX. Viewgol severance year We reason of with million adjusted million million. of The net $X a in ended a and for primarily million EBITDA, debt a expense was funding interest the decline and cash the onetime from $X.X versus was

goodwill XX-K XXXX in connection primarily company's line in management included finalizing to the of numbers January factors, in filing. the final statements, the and financial certain EHT in items will Lastly, other disposition impairment the related and our be amount with is of

to Moving our on guidance.

upcoming in transparency, for will improve effort to an our starting First, today. providing we guidance begin the quarter

range quarter, to to Adjusted we between Difficulty] be in be to the first [Technical $X.X $XX $XX of million the $X.X EBITDA million. expect For to revenue million

Dru Anderson

you some that technical difficulties. and It just second. please resume your conference gentlemen, patience. will are we The experiencing thank Ladies One standby. momentarily. We for appears

patience. for you Ladies thank and we gentlemen,

Our resume. event now will

Christopher Fowler

Yes. of We're back going This beginning go to guidance. to starting at Vinay is Chris. the

straight So the and wanted that fire. sure went we to we into just ahead make put

So here go. we

Vinay Bassi

you. Thank

guidance. Moving to our

we First, an transparency, our begin starting today. to effort the providing in guidance for improve will quarter upcoming

$XX in the expect $XXX we million XXXX, to year range expect $X.X quarter, $XX be EBITDA For to to million. million to $XX million revenue $X.X of the to million. be revenue million, of full adjusted first adjusted $XX and the between be for we million EBITDA And million, to $XXX

want I insight to this you assumptions give process our went into and thought guidance. little that into a year's

the we of of other days XX assumed only in have ASC impact the in In guidance Firstly, assumes ASC words, QX. guidance.

reference, of point in ASC approximately $X a XXXX accounted $XX for to As revenue million approximately adjusted EBITDA. with million of contribution in

these a in included year of numbers. is full Secondly, Viewgol

of For assume XXXX, conservative an adjusted to ASC approach we compared EBITDA. contribution with a took revenue million relatively year, and last $X.X year and approximately be $XX Viewgol. We for to excluding expect million less XXXX than will bookings. flat with Starting full the

and of as in and year X.X% ranges progresses. the in lowest that growth, of year to organic The mind our then the first the ASC are terms cadence, contribution keep In quarterly excluding that midpoint XXXX, will build That please implies RCM said, and Viewgol. be bookings by be expect we from from quarter growth full year business primarily of our revenue lumpy. driven the the annual

QX total for in we revenue, total our of X/X year, Last revenue. could Viewgol, accounted including year, think of and XX% about this RCM, be

Centric forecasting want We the progress also the business impact provide on how detail over to relatively our sunsetting platform. of we anticipate further EBITDA flat, be are year. to EHR excluding to from margins I our

our global the transition first will quarterly because based This during just be initial guidance The have have our XXXX the customers. is to our our quarter on existing ensure workforce XX% range. costs duplicated begun and midpoint for in some therefore, of at we approximately lowest margin continuity ramping EBITDA

to benefits from We to the expected offshore first bookings workforce vendor converting second savings revenue. from expect half negotiated EBITDA reflect the have half higher and ramping already savings, to margins the

cost along been book are in a half, I allocation second guidance initiatives rationalization to spend. it have conservative transition, savings our contribution the the that CapEx for the of capital from cost in review vendor them and estate as other future include strategy. other in moving could the factors to G&A, see of initiated have count any not as to -- part benefits we there are stages, in initiatives to but offshore preliminary real parts cost financials but spend, many overall We relating with including relates These structure include now. and the too

my I'd by ahead our help the and team CPSI look like to the thanking of first progress year call that on lie to a many keeping warm coming of unfolds. and months. of the to CPSI to close getting many opportunities you you Chris welcome rest the of us, capitalize forward company first out successfully and to excited for months the and in I great I'm a the as on updated know weeks and couple

up call questions. the to open will I that, With

Operator

Our first from Instructions] question Stephens Jeff [Operator Garro with Inc. comes

Jeffrey Garro

to any in Viewgol those further some about to Wanted flat reduced be following margins R&D accretive leverage Vinay. margins more heavy also the the offshore at Welcome post-acute the guidance potential some and those in and at EBITDA of essentially could as So to XXXX. the Would year-over-year? divestiture roughly you expect call, offsets to the well landing detail as discuss margins? ask midpoint

Vinay Bassi

Jeff. you, Thank

of building you. of forward looking all all, this with First relationship excited and to I'm

You're you 'XX big budget a It of the like One highlight. looks offsets and a flat are reasons our at bonus. for -- big absolutely a full would is, couple But based are be in. margin factored also right. I will all that there outlined

most merit gains bonus and now. of right That So this is as adds well compensation-related these a as offsets expense increase. significant portion, compensation accrual

barring And from in hiring second we of that then, we the impact the had year impacts 'XX of the had that increases in smaller full-time 'XX. done obviously, half full felt

investments marketing. technology and in are support, sales these and So

Jeffrey Garro

Got And step there helps. it. Chris. throw bit for a out That back and it

if to want to the Viewgol moves for do we divested grow think business. acquisition, and about now leverage you drive platform come? you've post-acute Curious Or have done the additional you potential You've should across? the strategic that

Christopher Fowler

a I looking we're right and say, a And super plate to would question. execute. think fair XXXX, got for we've I it's now, full

right this for year. of so And divestiture, transformation there. getting done end to about, Viewgol about the is the sales year, we Viewgol focus and revenue of really continuing the And course the were now, additional the growth creating the at drive deal last workforce top over excited mind excited us obviously, value AHC and the capturing of of

you But through to looking margin steady -- continuing fact of visibility allows that execute as And the going grows the offshore this also back the I'm year, for you the quarterly can can the providing we the march excited at to tell look that just we're as about margin a guidance, continue transformation. from course that question, we're look ahead which to you ramp more a guys pretty QX at over workforce. bridge there's on of bit as

Jeffrey Garro

hit for from expectations think one One sure the to back us XXXX? want we nice about And the where I and here? year. help I bookings me jump But be that. make before queue. to appreciate the the bookings you pipeline finish Could in should our in for last Excellent. I saw

Christopher Fowler

definitely see were the rebound QX. we We QX to that had Yes. in over thrilled

We continue optimistic. to cautiously remain

this talked market think the I a to we've was of skis into fell we and with know our the how unlock. was year, I over throughout track year this quickly last getting about Jeff, little going --

think measured So approach how if that over of our bookings guidance, contribution has year. very we've at the at the course you the I look taken impact a

of in EHR. customer same We're with continues continuing to said, be our have with seeing base With and up, the and the great existing those our conversations the both to customers pipeline outside strong. pick that

Operator

Our next from Cantor Sarah with comes Fitzgerald. James question

Sarah James

you unpack hoping the a more. seasonality bit was little could I

we So year EBITDA Is like, looks loaded. in there little there any that? should rebranding one-timers the especially the on think how 'XX Are a more back-end about? cost of the side, and is bit XQ sizable in

Vinay Bassi

Yes.

you out. again. and and Sarah. to adjusted taken items question, give rebranding Nice the onetime a I that all margins our margins great EBITDA that's meet So us Sarah, are

EBITDA have in year, We it's this but adjusted rebranding for the margin. included not cost

two margin month-to-month the is is back-end loaded that basis. a have right, The on we will ramping You're for reasons.

all first had the the if last something So month, quarter I in the in get benefits. I

it's the -- that quarter be So so month, one. up by might fourth ramping a maximum That's month will of benefit.

that Secondly, it we negotiated, savings have my vendor QX in kicks onwards. from

the that's loaded. also back the So second expect revenue bookings benefits we that is that aspect it. obviously, And the will and of the end you

good the The all first part color second half mix revenues. the great a a of savings And will already of it's it So of for negotiated. half has give is been of bookings X. advantage us vendor

Sarah James

Great. us into guidance the you've insight or of bit philosophy, little how process think And it's about optimistic? whether you there, a review been maybe your of business the how you units could give conservative through and going

Vinay Bassi

question That's tell been whether thought me that a was or I conservative, I have told great these. through tell you always optimistic we how I'll I've but say. future will

you Sarah, sure be pieces, change, the As is a a lot at pieces our moving looking are looking then past two -- parts, but and of of future of through 'XX. Chris in my a lot optimism that there of could know, thought at like to little one, 'XX looking breaking baked is and on to what we how history said, at not being what learned conservative making into

despite a on was good So EHT a QX, number, was coming the bookings that and good, flat excluding especially one. Viewgol

margins. aspect Second on

that -- controllable is like expenses we mentioned rigor my fight more putting to saving. an making my history on to have on that on ROI these my say, is started need, But other I in the that work Has and and of stay on that it background, fully everyone and and of the it, trying captured to near-term the and have sure focused. focus already Some laser-focused the baked, vendor prepared P&L. we some do remarks, the I'm would I are which --

development are having that that project by spending, project I near long have we and ROI the the at term term and product CapEx expenses started. cadence looking too not So of from a it is just

It's mindset a I question. cautiously and looks days best have But understanding. coming there's your budget you... of XX still more done in. what the the balanced my to It be work I would early, I feel a to in the least what Chris, I like months. would but of at more say lot like ability feel that's optimistic answer to

Christopher Fowler

you would think And between and second conservative, I is again, again, XX the love that fact know go guidance, would No, that I it. appreciate of this the that on optimistic nailed over I for and this definitely, Also, I Sarah, the say the as days transformation. realistic of going I kind way line I not say, straight categorize a keep do that quite the giving I'm approach. time. would track name the first say, progress helps the it's think which is as quarterly our everybody we we to -- we're

Operator

comes Our Barclays. next from question with Davis Jesse

Stephanie Davis

have it's can Barclays, because new name new from but Davis guys name on a rebranding. okay the Stephanie a I as have Congrats to. you

hoping week was customer just came I Now Chris, on brand. to from a you hear, conference

big of for? what's demand And the folks that feedback? So tell me, looking about? are area was everyone talk what What the

Dru Anderson

from Hello, now speaker [Technical you Difficulty] We're Davis there? welcoming our Jesse Barclays. Chris, Please answer are to back Okay. standby.

Christopher Fowler

Stephanie. Correct. We'll her call

thrilled the while. bugging thanks the you've on it this to with a Like early your you quite all saying, been for And have days. e-mail. we for us response granted, obviously, shared I So rebrand about fronts. the Stephanie, been obviously, is And question. But was

finally I tell it to been from the think make sentiment story. the easier has Street the

all we are. employees consolidation to our appreciate seem well ease and how we and who the and as customers talk of about get it the Our

than really Going soft with more for on there out. platform to lined launch that I to saw nicely analytics that say for which up would -- the we improve opportunities them efficiencies, anything that are little conference is are what people Insights we're kind driving for had an insights. to a of looking we where

X areas side. RCM that is for that's And improvement Step technology the find the so thought on available the is our to

obviously, with what that mind top about them. us that as think come of much to is the you've customers then the what you with as services And back to those identifying opportunity it's which a identified, solve problems for up some are, how then in, do I

Stephanie Davis

in of think lot industry from When that Vinay legacy of a work, you there. where learnings past? Nielsen, kind get think your some is we've about I I and got coming Vinay, anything there does that in a seeing from can opportunity insights you're

Vinay Bassi

has private lot that's is past, my from me. it which Stephanie, structure here. I learnings, say, through CapEx those experiences And but cost focus on to make. not Nielsen I would say there Avaya helps, amazing just key learning and one everything teachers a have and having controllable, and utilizing I because equity would is been And an can influence X the lived

that So of lot, ROI cadence bringing mindset me has one. a helped

that truth that Secondly, the in share accountability I a not into my where the only building -- Cash in after. and second it's am. which Avaya, going the from just And not the with I'm revenue having Nielsen is one. revenue all, focused and bookings is the who of ownership an on is third, Nielsen, forecasting is on partnership right translation business

to. I'm has flow cash free my improving been committed the that mantra So

So day, make looking it's difference. a where month every but journey every longer, a might that is I'm I know to be

Stephanie Davis

that.

the the Or on cycle a few quick color for one. this? Is looks I dig disclosed? in housekeeping there to bit going It an on any quarters. little a be you metric. share can NPR anything that? that is one see is Is And then last didn't want a past On little to I rev motion softer cross-sales bit. there side, your like

Christopher Fowler

and there. little approach let a of NPR talk Vinay I'll bit first the about kind the and take Yes, then the

and kind as macro bookings still I confident very a to cross-sell opportunity. of say would relates we're it just view, from As it the relates the to

market the have of momentum. continue end that see to continue to We some

while have we're an little them down extent think bit. seeing a the it's -- still still turn same challenges to we I

outsourcing jobs XX% and general. economic the a community. that it it concept of impact model. in to in-house, market done still not talking in about the of of the XX%, being drive we're still And there's regulatory is to a Remember, push the It's this is

provider of we're TruBridge And idea so as before still for outsourcing service. selling that we're selling the the

has a year. And been for full so intact force making sales we're now great strides. That

they feet definitely customers. we're have the One is their relationship our that what that them. and proposition under So on of value two, building selling, it with

And so progress unfolds, the expecting to we're as continue to see make there. year that,

talk little And bit I'll let Vinay a about the NPR. Yes.

I metric I feel wanted a and reward bookings is NPR out of Stephanie, inputs. data relied that on homework the own everyone portion else, effort reflecting. a So our is is are our great to because third-party more of because to little understanding and of it a the we ins like just time NPR, do take

and just what And knowing make control, come I longer I homework in, sure little is and me. to the not the for that a when bit understand to just indicator our out do that leading how what's in out are inputs it's how cadence, want a the ins

So a being. that's deals which us this, it for indicator is you see bookings, in obviously reason the the but time didn't closed great for why is

Operator

question Bank. Deutsche next George from with comes Our Hill

Unknown Analyst

recent macro just George. conversations what Can the bit changed a little given lightly has prospective talk for with clients in It's environment? you about outsourcing

Christopher Fowler

your I'm I Yes. didn't sorry, name. catch

And -- on we're we're definitely, and skills remarks, continuing increased the and go prepared to the that the Blue based pretty -- specific reimbursed -- payments pressure top serving. these Cross model vast up. the of traditional getting backs days. as of need also was were as majority the in hear on and said that, of did complex, reimbursements and were X their I'll a for complex to the the continues I a years to to vast that And payment it secondly, that market the hospitals more get their payments So if an paid labor continue majority question. up make ago, to is, going back I stay getting the seeing specialized of they on Medicaid that. XX were XX within straightforward the interest, most ratchet say example you the and of would on to to but Medicare, What communities is the probably give answer of I on to that,

the -- get. they it While want What's be to is of quite not they that They get, they proliferation knew making -- to care money the this getting of that money it's would seen they or knew that budget a complexity you've more model, and could in going Advantage Medicare it created to straightforward and that. in. move may the they get happened for were value-based the were time kind the the dollars they not so little in that

and that on the then sure that they're So it's bodies is. secondly, just they're again, one, about, and chairs of of that top resources, having the that available, able how changing are the reimbursement the landscape bodies and making

the is and And of business. than majority have has more what really our specifically we -- shifted So to. by live this that's with where vast this half as again, the we We conversation of do. breathe

sell those to to able had that we're and success the our XX-plus years able with be bring so opportunities. of the experience into consistency we've that And success delivery to for

Operator

It appears floor comments. back closing time. turn further that at I there are to for like no questions Fowler now to Chris would over this the

Christopher Fowler

new progress good has again here of you company. thanks, us. seeing weekend. Thank But Hope your at Monday. looking CPSI, for that onetime the soon the we've thank and obviously, this us. you that only. everybody and started to And TruBridge for the transformation thank we've our your a Also, forward and for technical everybody, and will you to support Vinay with wonderful finish joining patience in our on in continuing Bassi rest got Well, with And be you. be difficulties. that Hopefully, copilot a to the go thank to Bye-bye. day

Operator

This concludes today's teleconference.

You may disconnect you participation. your for time. lines your Thank at this

TruBridge (TBRG) 29 Feb 242023 Q4 Earnings call transcript