Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 06, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | COMPUTER PROGRAMS & SYSTEMS INC | |
Entity Central Index Key | 1,169,445 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Trading Symbol | CPSI | |
Entity Common Stock, Shares Outstanding | 14,085,989 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,492 | $ 520 |
Accounts receivable, net of allowance for doubtful accounts of $3,213 and $2,654, respectively | 41,216 | 38,061 |
Financing receivables, current portion, net | 14,788 | 15,055 |
Inventories | 1,478 | 1,417 |
Prepaid income taxes | 651 | 0 |
Prepaid expenses and other | 6,038 | 2,824 |
Total current assets | 65,663 | 57,877 |
Property and equipment, net | 11,042 | 11,692 |
Financing receivables, net of current portion | 13,025 | 11,485 |
Other assets, net of current portion | 1,155 | 0 |
Intangible assets, net | 91,510 | 96,713 |
Goodwill | 140,449 | 140,449 |
Total assets | 322,844 | 318,216 |
Current liabilities: | ||
Accounts payable | 5,814 | 7,620 |
Current portion of long-term debt | 5,830 | 5,820 |
Deferred revenue | 12,300 | 8,707 |
Accrued vacation | 4,702 | 3,794 |
Income taxes payable | 0 | 810 |
Other accrued liabilities | 10,160 | 14,098 |
Total current liabilities | 38,806 | 40,849 |
Long-term debt, net of current portion | 133,151 | 136,614 |
Deferred tax liabilities | 6,646 | 4,667 |
Total liabilities | 178,603 | 182,130 |
Stockholders’ equity: | ||
Common stock, $0.001 par value; 30,000 shares authorized; 14,086 and 13,760 shares issued and outstanding, respectively | 14 | 14 |
Additional paid-in capital | 159,770 | 155,078 |
Accumulated deficit | (15,543) | (19,006) |
Total stockholders’ equity | 144,241 | 136,086 |
Total liabilities and stockholders’ equity | $ 322,844 | $ 318,216 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 3,213 | $ 2,654 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 14,086,000 | 14,086,000 |
Common stock, shares outstanding (in shares) | 13,760,000 | 13,760,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Sales revenues: | ||||
System sales and support | $ 42,746 | $ 45,474 | $ 88,498 | $ 88,897 |
TruBridge | 25,159 | 22,203 | 50,290 | 42,854 |
Total sales revenues | 67,905 | 67,677 | 138,788 | 131,751 |
Costs of sales: | ||||
System sales and support | 19,528 | 19,753 | 37,946 | 39,540 |
TruBridge | 13,531 | 11,933 | 26,910 | 23,520 |
Total costs of sales | 33,059 | 31,686 | 64,856 | 63,060 |
Gross profit | 34,846 | 35,991 | 73,932 | 68,691 |
Operating expenses: | ||||
Product development | 9,314 | 8,414 | 18,071 | 16,492 |
Sales and marketing | 7,518 | 7,607 | 15,232 | 14,734 |
General and administrative | 13,188 | 12,921 | 25,552 | 24,581 |
Amortization of acquisition-related intangibles | 2,601 | 2,601 | 5,203 | 5,203 |
Total operating expenses | 32,621 | 31,543 | 64,058 | 61,010 |
Operating income | 2,225 | 4,448 | 9,874 | 7,681 |
Other income (expense): | ||||
Other income | 194 | 70 | 392 | 140 |
Interest expense | (1,807) | (1,938) | (3,785) | (3,745) |
Total other income (expense) | (1,613) | (1,868) | (3,393) | (3,605) |
Income before taxes | 612 | 2,580 | 6,481 | 4,076 |
Provision for income taxes | 284 | 993 | 2,185 | 2,243 |
Net income | $ 328 | $ 1,587 | $ 4,296 | $ 1,833 |
Net income (loss) per common share-basic (in dollars per share) | $ 0.02 | $ 0.11 | $ 0.31 | $ 0.13 |
Net income (loss) per common share-diluted (in dollars per share) | $ 0.02 | $ 0.11 | $ 0.31 | $ 0.13 |
Weighted average shares outstanding used in per common share computations: | ||||
Basic (in shares) | 13,561 | 13,420 | 13,518 | 13,397 |
Diluted (in shares) | 13,561 | 13,420 | 13,518 | 13,397 |
Dividends declared per common share (in dollars per share) | $ 0.10 | $ 0.20 | $ 0.20 | $ 0.45 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Adoption of accounting standards (Note 2) | $ 1,970 | $ 1,970 | ||
Beginning Balance (in shares) at Dec. 31, 2017 | 13,760 | |||
Beginning Balance at Dec. 31, 2017 | 136,086 | $ 14 | $ 155,078 | (19,006) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 4,296 | 4,296 | ||
Issuance of restricted stock (in shares) | 326 | |||
Issuance of restricted stock | 0 | |||
Stock-based compensation | 4,692 | 4,692 | ||
Dividends | (2,803) | (2,803) | ||
Ending Balance (in shares) at Jun. 30, 2018 | 14,086 | |||
Ending Balance at Jun. 30, 2018 | $ 144,241 | $ 14 | $ 159,770 | $ (15,543) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities: | ||
Net income (loss) | $ 4,296 | $ 1,833 |
Adjustments to net income: | ||
Provision for bad debt | 1,695 | 473 |
Deferred taxes | 1,404 | 1,920 |
Stock-based compensation | 4,692 | 2,967 |
Depreciation | 1,067 | 1,419 |
Amortization of acquisition-related intangibles | 5,203 | 5,203 |
Amortization of deferred finance costs | 173 | 365 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,453) | (3,013) |
Financing receivables | (1,669) | (4,241) |
Inventories | (62) | 622 |
Prepaid expenses and other | (594) | (1,014) |
Accounts payable | (1,806) | 4,588 |
Deferred revenue | 2,363 | 2,724 |
Other liabilities | (3,030) | 2,236 |
Prepaid income taxes/income taxes payable | (1,461) | (191) |
Net cash provided by operating activities | 7,818 | 15,891 |
Investing Activities: | ||
Purchases of property and equipment | (417) | (465) |
Net cash used in investing activities | (417) | (465) |
Financing Activities: | ||
Dividends paid | (2,803) | (6,135) |
Payments of long-term debt principal | (10,335) | (3,271) |
Proceeds from revolving line of credit | 7,300 | 0 |
Payments of revolving line of credit | (591) | (6,500) |
Proceeds from exercise of stock options | 0 | 1 |
Net cash provided by (used in) financing activities | (6,429) | (15,905) |
Increase (decrease) in cash and cash equivalents | 972 | (479) |
Cash and cash equivalents at beginning of period | 520 | 2,220 |
Cash and cash equivalents at end of period | 1,492 | 1,741 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 3,539 | 3,355 |
Cash paid for income taxes, net of refund | $ 2,242 | $ 514 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of the periods presented. All such adjustments are considered of a normal recurring nature. Quarterly results of operations are not necessarily indicative of annual results. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted. The condensed consolidated balance sheet as of December 31, 2017 was derived from the audited consolidated balance sheet at that date. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of Computer Programs and Systems, Inc. ("CPSI" or the "Company") for the year ended December 31, 2017 and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Principles of Consolidation The condensed consolidated financial statements of CPSI include the accounts of TruBridge, LLC ("TruBridge"), Evident, LLC ("Evident"), and Healthland Holding Inc. ("HHI"), all of which are wholly-owned subsidiaries of CPSI. The accounts of HHI include those of its wholly-owned subsidiaries, Healthland Inc. ("Healthland"), Rycan Technologies, Inc. ("Rycan"), and American HealthTech, Inc. ("AHT"). All significant intercompany balances and transactions have been eliminated. Presentation Effective January 1, 2018, our interface services team, which provides the design, development, implementation, and support services for all interfaces for data exchange from the CPSI applications, was previously considered a part of our product development division and has been integrated with our acute care client service team. This transition will work to create a consistent, personal, and convenient service experience for our clients characterized by transparent communication with prompt resolution. With this change, the payroll and related costs of this group of employees that were formerly included within the caption "Product development" on our condensed consolidated statements of income are now included within the caption "System sales and support - Cost of sales." This reclassification had no effect on previously reported total sales revenues, operating income, income before taxes or net income. Amounts presented for the three and six months ended June 30, 2017 have been reclassified to conform to the current presentation. The following table provides the amounts reclassified for the three months ended June 30, 2017: (In thousands) As previously reported Reclassification As reclassified Costs of sales: System sales and support $ 18,859 $ 894 $ 19,753 Operating expenses: Product development $ 9,308 $ (894) $ 8,414 The following table provides the amounts reclassified for the six months ended June 30, 2017: (In thousands) As previously reported Reclassification As reclassified Costs of sales: System sales and support $ 37,789 $ 1,751 $ 39,540 Operating expenses: Product development $ 18,243 $ (1,751) $ 16,492 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Standards Adopted in 2018 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes prior revenue recognition guidance. This guidance was effective for fiscal years and interim periods within those years beginning after December 15, 2017, which was effective for the Company as of the first quarter of our fiscal year ending December 31, 2018. We adopted this new accounting standard codified as Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers , and the related amendments ("new revenue standard") during the first quarter of 2018 and have applied it to all contracts using the modified retrospective method, pursuant to which the cumulative effect of initially applying the new revenue standard is recognized as an adjustment to retained earnings and impacted balance sheet line items as of January 1, 2018, the date of adoption. The comparative previous period information continues to be reported under the accounting standards in effect for that period. We completed an assessment of our systems, data, and processes that are affected by the implementation of this new revenue standard and have concluded that this standard does not significantly alter revenue recognition practices for our system sales and support and TruBridge revenue streams. The impact on our revenue recognition is limited to deferring and amortizing implementation fees over the contract life related to our Rycan revenue cycle management product, in which we previously recognized revenue as implementation was completed. Rycan implementation fees totaled $1.6 million in 2017, less than 1% of our 2017 revenues. The balance sheet impact of the deferred revenue related to these fees was an increase of $1.8 million as of the date of adoption. Also impacting deferred revenue was a decrease of $0.6 million related to previous billings which no longer required deferred recognition as of the date of adoption. In addition to revenue recognition, the new revenue standard impacts our consolidated financial statements with respect to the capitalization of certain commissions and contract fulfillment costs which were previously expensed as incurred. Commissions and contract fulfillment costs related to the implementation of software as a service arrangements are now capitalized and amortized over the expected life of the customer. TruBridge commissions, which are paid up to twelve months in advance, are now capitalized and amortized over the prepayment period. The balance sheet impact of the prepaid assets was an increase of $3.8 million as of the date of adoption. Due to the aforementioned changes in assets and liabilities related to the adoption of the new revenue standard, our deferred tax liability increased $0.6 million as of the date of adoption. In total, the adoption of ASU 2014-09 resulted in a net increase in retained earnings of $2.0 million as of the date of adoption. In accordance with the new revenue standard requirements, the disclosures of the impact of adoption on our condensed consolidated income statements and balance sheet were as follows: Three Months Ended June 30, 2018 (In thousands) As reported Balances without adoption of ASC 606 Effect of adoption increase/(decrease) Condensed Consolidated Statements of Income Revenue: TruBridge $ 25,159 $ 25,057 $ 102 Cost of sales: System sales and support 19,528 19,529 (1) Gross profit 34,846 34,743 103 Sales and marketing 7,518 7,121 397 Operating income 2,225 2,519 (294) Provision for income taxes 284 346 (62) Net income $ 328 $ 560 $ (232) Six Months Ended June 30, 2018 (In thousands) As reported Balances without adoption of ASC 606 Effect of adoption increase/(decrease) Condensed Consolidated Statements of Income Revenue: TruBridge $ 50,290 $ 50,129 $ 161 Cost of sales: System sales and support 37,946 37,880 66 Gross profit 73,932 73,837 95 Sales and marketing 15,232 14,735 497 Operating income 9,874 10,276 (402) Provision for income taxes 2,185 2,269 (84) Net income $ 4,296 $ 4,614 $ (318) June 30, 2018 (In thousands) As reported Balances without adoption of ASC 606 Effect of adoption increase/(decrease) Condensed Consolidated Balance Sheet Prepaid assets and other $ 6,038 $ 3,981 $ 2,057 Other assets, net of current 1,155 — 1,155 Total assets 322,844 319,632 3,212 Deferred revenue 12,300 11,230 1,070 Deferred tax liability 6,646 6,156 490 Total liabilities 178,603 177,043 1,560 Retained earnings $ (15,543) $ (17,195) $ 1,652 The effects of the changes in balance sheet accounts resulting from the adoption of the new revenue standard are primarily due to the beginning adjustments for adoption mentioned above, accompanied by incremental changes resulting from activity during the period ending June 30, 2018. Refer to Note 3 - Revenue Recognition for more information on period activity. The new revenue standard requirements did not impact our net cash provided by or used in operating, investing, or financing cash flows on our condensed consolidated statements of cash flows, although components within changes in operating assets and liabilities were immaterially impacted by adoption. In August 2016, the FASB issued ASU 2016-15, Classifications of Certain Cash Receipts and Cash Payments, which clarifies cash flow classification for eight specific issues, including debt prepayment or extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and proceeds from settlement of corporate-owned life insurance policies. This guidance was effective for fiscal years and interim periods within those years beginning after December 15, 2017, which was effective for the Company as of the first quarter of our fiscal year ending December 31, 2018. The adoption of ASU 2016-15 did not have a material effect on our financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, to assist an entity in evaluating when a set of transferred assets and activities is a business. The guidance was effective for fiscal years and interim periods within those years beginning after December 15, 2017, and will be applied prospectively to any transactions occurring following adoption. The adoption of ASU 2017-01 did not have a material effect on our financial statements. New Accounting Standards Yet to be Adopted In February 2016, the FASB issued ASU 2016-02, Leases , to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance will require the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. This guidance will be effective for fiscal years and interim periods within those years beginning after December 15, 2018, which will be effective for the Company as of the first quarter of our fiscal year ending December 31, 2019. The Company is currently evaluating the method of adoption and potential utilization of practical expedients. The estimated impact on the financial statements of implementation of this standard is increased lease assets and lease liabilities in the range of $4 to $6 million as of the anticipated adoption date, January 1, 2019. We do not believe that any other recently issued but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Revenue is recognized upon transfer of control of promised products or services to clients in an amount that reflects the consideration we expect to receive in exchange for those products and services. We enter into contracts that can include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations. The Company employs the 5-step revenue recognition model under ASC 606 to: (1) identify the contract with the client, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized net of shipping charges and any taxes collected from clients, which are subsequently remitted to governmental authorities. System Sales and Support The Company enters into contractual obligations to sell perpetual software licenses, installation, conversion, training, hardware and software application support and hardware maintenance services to acute care and post-acute care community hospitals. Non-recurring Revenues • Perpetual software licenses, installation, conversion, and related training are not considered separate and distinct performance obligations due to the proprietary nature of our software and are, therefore, accounted for as a single performance obligation on a module-by-module basis. Revenue is recognized as each module's implementation is completed based on the module's stand-alone selling price ("SSP"), net of discounts. Fees for licenses, installation, conversion, and related training are typically due in three installments: (1) at placement of order, (2) upon installation of software and commencement of training, and (3) upon satisfactory completion of monthly accounting cycle or end-of-month operation by application and as applicable for each application. Often, short-term and/or long-term financing arrangements are provided for software implementations; refer to Note 9 - Financing Receivables for further information. Electronic health records ("EHR") implementations include a system warranty that terminates thirty days from the software go-live date, the date which the client begins using the system in a live environment. • Hardware revenue is recognized separately from software licenses at the point in time it is delivered to the client. The SSP of hardware is cost plus a reasonable margin. Payment is generally due upon delivery of the hardware to the client. Standard manufacturer warranties apply to hardware. Recurring Revenues • Software application support and hardware maintenance services sold with software licenses and hardware are separate and distinct performance obligations. Revenue for support and maintenance services is recognized based on SSP, which is the renewal price, ratably over the life of the contact, which is generally three five • Subscriptions to third party content revenue is recognized as a separate performance obligation ratably over the subscription term based on SSP, which is cost plus a reasonable margin. Payment is due monthly for subscriptions to third party content. • Software as a Service ("SaaS") arrangements for EHR software and related conversion and training services are considered a single performance obligation. Revenue is recognized on a monthly basis as the SaaS service is provided to the client over the contract term. Payment is due monthly for SaaS services provided. Refer to Note 14 - Segment Reporting, for further information, including revenue by client base (acute care or post-acute care) bifurcated by recurring and non-recurring revenue. TruBridge TruBridge provides an array of business processing services ("BPS") consisting of accounts receivable management, private pay services, insurance services, medical coding, electronic billing, statement processing, payroll processing, and contract management. Fees are recognized over the period of the client contractual relationship as the services are performed based on the SSP, net of discounts. Fees for many of these services are invoiced, and revenue recognized accordingly, based on the volume of transactions or a percentage of client accounts receivable collections. Payment is due monthly for BPS with certain amounts varying based on utilization and/or volumes. TruBridge also provides professional IT services. Revenue from professional services is recognized as the services are performed based on SSP. Payment is due monthly as services are performed. Deferred Revenue Deferred revenue represents amounts invoiced to clients for which the services under contract have not been completed and revenue has not been recognized, including annual renewals of certain software subscriptions and customer deposits for implementations to be performed at a later date. Revenue is recognized ratably over the life of the software subscriptions as services are provided and at the point-in-time when implementations have been completed. (In thousands) Six Months Ended June 30, 2018 Balance as of January 1, 2018 $ 9,937 Deferred revenue recorded 11,700 Less deferred revenue recognized as revenue (9,337) Balance as of June 30, 2018 $ 12,300 The $11.7 million of deferred revenue recorded during the six months ended June 30, 2018 is comprised primarily of the annual renewals of certain software subscriptions billed during the first quarter of each year and deposits collected for future EHR installations. The deferred revenue recognized as revenue during the six months ended June 30, 2018 is comprised primarily of the periodic recognition of annual renewals that were deferred until earned and deposits for future EHR installations that were deferred until earned. Costs to Obtain and Fulfill a Contract with a Customer Costs to obtain a contract include the commission costs related to SaaS licensing agreements, which are capitalized and amortized ratably over the expected life of the customer. As a practical expedient, we generally recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset would have been one year or less, with the exception of commissions generated from TruBridge sales. TruBridge commissions, which are paid up to twelve months in advance, are capitalized and amortized over the prepayment period. Costs to obtain a contract are expensed within sales and marketing expenses in the accompanying condensed consolidated statements of income. Contract fulfillment costs related to the implementation of SaaS arrangements are capitalized and amortized ratably over the expected life of the customer. Costs to fulfill contracts consist of the payroll costs for the implementation of SaaS arrangements, including time for training, conversion, and installation that is necessary for the software to be utilized. Contract fulfillment costs are expensed within the caption "System sales and support - Cost of sales." Costs to obtain and fulfill contracts related to SaaS arrangements are included within the "Prepaid expenses and other" and "Other assets, net of current portion" line items on our condensed consolidated balance sheets. (In thousands) Six Months Ended June 30, 2018 Balance as of January 1, 2018 $ 3,775 Costs to obtain and fulfill contracts recorded 1,562 Less costs to obtain and fulfill contracts recognized as expense (2,125) Balance as of June 30, 2018 $ 3,212 Significant Judgments Our contracts with clients often include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is required to determine SSP for each distinct performance obligation. We use observable SSP for items that are sold on a stand-alone basis to similarly situated clients at unit prices within a sufficiently narrow range. For performance obligations that are sold to different clients for a broad range of amounts, or for performance obligations that are never sold on a stand-alone basis, the residual method in determining SSP is applied and requires significant judgment. Allocating the transaction price, including estimating SSP of promised goods and services for contracts with discounts or variable consideration, may require significant judgment. Due to the short time frame of the implementation cycle, discount allocation is immaterial as revenue is recognized net of discounts within the same reporting period. In scenarios where the Company enters into a contract that includes both a software license and BPS or other services that are charged based on volume of services rendered, the Company allocates variable amounts entirely to a distinct good or service. The terms of the variable payment relate specifically to the entity’s efforts to satisfy that performance obligation. Significant judgment is required in determining the expected life of a customer, which is the amortization period for costs to obtain and fulfill a contract that have been capitalized. The Company determined that the expected life of the customer is not materially different from the initial contract term based on the characteristics of the SaaS offering. Remaining Performance Obligations Disclosures regarding remaining performance obligations are not considered material as the overwhelming majority of the Company's remaining performance obligations either (a) are related to contracts with an expected duration of one year or less, or (b) exhibit revenue recognition in the amount to which the Company has the right to invoice. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment was comprised of the following at June 30, 2018 and December 31, 2017: (In thousands) June 30, 2018 December 31, 2017 Land $ 2,848 $ 2,848 Buildings and improvements 8,247 8,240 Computer equipment 3,679 3,269 Leasehold improvements 5,001 5,001 Office furniture and fixtures 2,865 2,865 Automobiles 70 70 22,710 22,293 Less: accumulated depreciation (11,668) (10,601) Property and equipment, net $ 11,042 $ 11,692 |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES Other accrued liabilities was comprised of the following at June 30, 2018 and December 31, 2017: (In thousands) June 30, 2018 December 31, 2017 Salaries and benefits $ 6,706 $ 8,432 Severance 507 1,139 Commissions 713 2,416 Self-insurance reserves 1,037 1,024 Contingent consideration 615 586 Other 582 501 Other Accrued Liabilities $ 10,160 $ 14,098 The accrued contingent consideration depicted above represents the potential earnout incentive for former Rycan shareholders, relating to the purchase of Rycan by HHI in 2015. We have estimated the fair value of the contingent consideration based on the amount of revenue we expect to be earned by Rycan through the year ending December 31, 2018 in accordance with the purchase agreement between the parties. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The Company presents basic and diluted earnings per share ("EPS") data for its common stock. Basic EPS is calculated by dividing the net income attributable to stockholders of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is determined by adjusting the net income attributable to stockholders of the Company and the weighted average number of shares of common stock outstanding during the period for the effects of all dilutive potential common shares, including awards under stock-based compensation arrangements. The Company's unvested restricted stock awards (see Note 8) are considered participating securities under FASB Codification topic, Earnings Per Share , because they entitle holders to non-forfeitable rights to dividends until the awards vest or are forfeited. When a company has a security that qualifies as a "participating security," the Codification requires the use of the two-class method when computing basic EPS. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. In determining the amount of net income to allocate to common stockholders, income is allocated to both common stock and participating securities based on their respective weighted average shares outstanding for the period, with net income attributable to common stockholders ultimately equaling net income less net income attributable to participating securities. Diluted EPS for the Company's common stock is computed using the more dilutive of the two-class method or the treasury stock method. The following is a calculation of the basic and diluted EPS for the Company's common stock, including a reconciliation between net income and net income attributable to common stockholders: Three Months Ended Six Months Ended (In thousands, except per share data) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Net income $ 328 $ 1,587 $ 4,296 $ 1,833 Less: Net income attributable to participating securities (8) (45) (144) (41) Net income attributable to common stockholders $ 320 $ 1,542 $ 4,152 $ 1,792 Weighted average shares outstanding used in basic per common share computations 13,561 13,420 13,518 13,397 Add: Dilutive potential common shares — — — — Weighted average shares outstanding used in diluted per common share computations 13,561 13,420 13,518 13,397 Basic EPS $ 0.02 $ 0.11 $ 0.31 $ 0.13 Diluted EPS $ 0.02 $ 0.11 $ 0.31 $ 0.13 During 2018, performance share awards were granted to certain executive officers and key employees of the Company that will result in the issuance of time-vesting restricted stock if the predefined performance criteria are met. The awards provide for an aggregate target of 184,776 shares, none of which have been included in the calculation of diluted EPS for the three and six months ended June 30, 2018 because the related threshold award performance level has not been achieved as of June 30, 2018. See Note 8 - Stock-based Compensation for more information. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company determines the tax provision for interim periods using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our effective tax rate for the three months ended June 30, 2018 increased to 46% from 38% for the three months ended June 30, 2017. Our effective tax rate for the three months ended June 30, 2018 was heavily impacted by the year-to-date impact of changing state income allocation determinations among our various subsidiaries from entities with lower effective state rates to entities with higher effective state rates. The year-to-date adjustment, when recorded in a three-month period of significantly lower net income before taxes compared to the immediately preceding period, had an outsized impact on our effective tax rate, resulting in a 25% increase in the effective tax rate. This increase was partially offset by the tax benefits of the Tax Cuts and Jobs Act, which reduced our corporate federal rate from 35% to 21% effective at the beginning of 2018. Our effective tax rate for the six months ended June 30, 2018 decreased to 34% from 55% for the six months ended June 30, 2017. Our effective tax rate for the six months ended June 30, 2018 was impacted by the Tax Cuts and Jobs Act, which reduced our corporate federal rate from 35% to 21% effective at the beginning of 2018. The six months ended June 30, 2018 also included a $0.4 million shortfall tax expense related to stock-based compensation that increased the effective rate by 6%. During the six months ended June 30, 2017 we experienced a shortfall tax expense related to stock-based compensation of $0.9 million that increased the effective rate by 23%. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense is measured at the grant date based on the fair value of the award, and is recognized as an expense over the employee's or non-employee director's requisite service period. The following table details total stock-based compensation expense for the three and six months ended June 30, 2018 and 2017, included in the condensed consolidated statements of income: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Costs of sales $ 585 $ 425 $ 1,024 $ 743 Operating expenses 2,168 1,261 3,668 2,224 Pre-tax stock-based compensation expense 2,753 1,686 4,692 2,967 Less: income tax effect (606) (658) (1,032) (1,157) Net stock-based compensation expense $ 2,147 $ 1,028 $ 3,660 $ 1,810 The Company's stock-based compensation awards are in the form of restricted stock and performance share awards granted pursuant to the Company's 2012 Restricted Stock Plan for Non-Employee Directors and Amended and Restated 2014 Incentive Plan (the "Plans"). As of June 30, 2018, there was $17.6 million of unrecognized compensation expense related to unvested stock-based compensation arrangements granted under the Plans, which is expected to be recognized over a weighted-average period of 2.2 years. Restricted Stock The Company grants restricted stock to executive officers, certain key employees and non-employee directors under the Plans with the fair value of the awards representing the fair value of the common stock on the date the restricted stock is granted. Shares of restricted stock generally vest in equal annual installments over the applicable vesting period, which ranges from one three A summary of restricted stock activity (including shares of restricted stock issued pursuant to the settlement of performance share awards) under the Plans during the six months ended June 30, 2018 and 2017 is as follows: Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Shares Weighted-Average Grant Date Fair Value Per Share Shares Weighted-Average Grant Date Fair Value Per Share Unvested restricted stock outstanding at beginning of period 309,195 $ 38.36 184,885 $ 54.63 Granted 148,841 30.20 222,390 32.87 Performance share awards settled through the issuance of restricted stock 177,395 29.94 — — Vested (153,424) 40.81 (80,558) 55.34 Unvested restricted stock outstanding at end of period 482,007 $ 31.96 326,717 $ 39.64 Performance Share Awards The Company grants performance share awards to executive officers and certain key employees under the Amended and Restated 2014 Incentive Plan. The number of shares of common stock earned and issuable under each award is determined at the end of each one-year or three-year performance period, based on the Company's achievement of performance goals predetermined by the Compensation Committee of the Board of Directors at the time of grant. The three-year performance share awards include a modifier to the total number of shares earned based on the Company's total shareholder return ("TSR") compared to an industry index. If certain levels of the performance objective are met, the award results in the issuance of shares of restricted stock or common stock corresponding to such level. One-year performance share awards are then subject to time-based vesting pursuant to which the shares of restricted stock vest in equal annual installments over the applicable vesting period, which is generally three In the event that the Company's financial performance meets the predetermined target for the performance objective of the one-year and three-year performance share awards, the Company will issue each award recipient the number of shares of restricted stock or common stock, as applicable, equal to the target award specified in the individual's underlying performance share award agreement. In the event the financial results of the Company exceed the predetermined target, additional shares up to the maximum award may be issued. In the event the financial results of the Company fall below the predetermined target, a reduced number of shares may be issued. If the financial results of the Company fall below the threshold performance level, no shares will be issued. The total number of shares issued for the three-year performance share award may be increased, decreased, or unchanged based on the TSR modifier described above. The recipients of performance share awards do not receive dividends or possess voting rights during the performance period and, accordingly, the fair value of the one-year performance share awards is the quoted market value of CPSI's common stock on the grant date less the present value of the expected dividends not received during the relevant period. The TSR modifier applicable to the three-year performance share awards is considered a market condition and therefore is reflected in the grant date fair value of the award. A Monte Carlo simulation has been used to account for this market condition in the grant date fair value of the award. Expense of one-year performance share awards is recognized using the accelerated attribution (graded vesting) method over the period beginning on the date the Company determines that it is probable that the performance criteria will be achieved and ending on the last day of the vesting period for the restricted stock issued in satisfaction of such awards. Expense of three-year performance share awards is recognized using ratable straight-line amortization over the three-year performance period. In the event the Company determines it is no longer probable that the minimum performance level will be achieved, all previously recognized compensation expense related to the applicable awards is reversed in the period such a determination is made. A summary of performance share award activity under the 2014 Incentive Plan during the six months ended June 30, 2018 and 2017 is as follows, based on the target award amounts set forth in the performance share award agreements: Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Shares Weighted-Average Grant Date Fair Value Per Share Shares Weighted-Average Grant Date Fair Value Per Share Performance share awards outstanding at beginning of period 189,325 $ 29.94 77,594 $ 49.64 Granted 184,776 30.15 189,325 29.94 Forfeited or unearned (11,930) 29.94 (77,594) 49.64 Performance share awards settled through the issuance of restricted stock (177,395) 29.94 — — Performance share awards outstanding at end of period 184,776 $ 30.15 189,325 $ 29.94 |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
FINANCING RECEIVABLES | FINANCING RECEIVABLES Short-Term Payment Plans The Company provides fixed monthly payment arrangements ("short-term payment plans") over terms ranging from three twelve (In thousands) June 30, 2018 December 31, 2017 Short-term payment plans, gross $ 7,407 $ 9,081 Less: allowance for losses (523) (638) Short-term payment plans, net $ 6,884 $ 8,443 Long-Term Financing Arrangements Additionally, the Company provides financing for purchases of its information and patient care systems to certain healthcare providers under long-term financing arrangements expiring in various years through 2025. Under long-term financing arrangements, the transaction price is adjusted by a discount rate that reflects market conditions that would be used for a separate financing transaction between the Company and licensee at contract conception, and takes into account the credit characteristics of the licensee and market interest rates as of the date of the agreement. As such, the amount of fixed fee revenue recognized at the beginning of the license term will be reduced by the calculated financing component. As payments are received from the licensee, the Company recognizes a portion of the financing component as interest income, reported as other income in the condensed consolidated statements of income. These receivables typically have terms from two seven The components of these receivables were as follows at June 30, 2018 and December 31, 2017: (In thousands) June 30, 2018 December 31, 2017 Long-term financing arrangements, gross $ 25,604 $ 22,968 Less: allowance for losses (1,922) (2,606) Less: unearned income (2,753) (2,265) Long-term financing arrangements, net $ 20,929 $ 18,097 Future minimum payments to be received subsequent to June 30, 2018 are as follows: (In thousands) Years Ended December 31, 2018 $ 4,778 2019 7,874 2020 5,080 2021 4,042 2022 2,656 Thereafter 1,174 Total minimum payments to be received 25,604 Less: allowance for losses (1,922) Less: unearned income (2,753) Receivables, net $ 20,929 Credit Quality of Financing Receivables and Allowance for Credit Losses The following table is a roll-forward of the allowance for financing credit losses for the six months ended June 30, 2018 and year ended December 31, 2017: (In thousands) Balance at Beginning of Period Provision Charge-offs Recoveries Balance at End of Period June 30, 2018 $ 3,244 $ 397 $ (1,196) $ — $ 2,445 December 31, 2017 $ 2,198 $ 1,823 $ (777) $ — $ 3,244 The Company’s financing receivables are comprised of a single portfolio segment, as the balances are all derived from short-term payment plan arrangements and long-term financing arrangements within our target market of community hospitals. The Company evaluates the credit quality of its financing receivables based on a combination of factors, including, but not limited to, customer collection experience, economic conditions, the customer’s financial condition, and known risk characteristics impacting the respective customer base of community hospitals, the most notable of which relate to enacted and potential changes in Medicare and Medicaid reimbursement rates as community hospitals typically generate a significant portion of their revenues and related cash flows from beneficiaries of these programs. In addition to specific account identification, the Company utilizes historical collection experience to establish the allowance for credit losses. Financing receivables are written off only after the Company has exhausted all collection efforts. The Company has been successful in collecting its financing receivables and considers the credit quality of such arrangements to be good. Customer payments are considered past due if a scheduled payment is not received within contractually agreed upon terms. To facilitate customer collection and credit monitoring efforts, financing receivable amounts are invoiced and reclassified to trade accounts receivable when they become due, with all invoiced amounts placed on nonaccrual status. As a result, all past due amounts related to the Company’s financing receivables are included in trade accounts receivable in the accompanying condensed consolidated balance sheets. The following is an analysis of the age of financing receivables amounts (excluding short-term payment plans) that have been reclassified to trade accounts receivable and were past due as of June 30, 2018 and December 31, 2017: (In thousands) 1 to 90 Days Past Due 91 to 180 Days Past Due 181 + Days Past Due Total Past Due June 30, 2018 $ 1,322 $ 332 $ 291 $ 1,945 December 31, 2017 $ 980 $ 171 $ — $ 1,151 From time to time, the Company may agree to alternative payment terms outside of the terms of the original financing receivable agreement due to customer difficulties in achieving the original terms. In general, such alternative payment arrangements do not result in a re-aging of the related receivables. Rather, payments pursuant to any alternative payment arrangements are applied to the already outstanding invoices beginning with the oldest outstanding invoices as the payments are received. Because amounts are reclassified to trade accounts receivable when they become due, there are no past due amounts included within financing receivables or financing receivables, net of current portion, in the accompanying condensed consolidated balance sheets. The Company utilizes an aging of trade accounts receivable as the primary credit quality indicator for its financing receivables, which is facilitated by the reclassification of customer payment amounts to trade accounts receivable when they become due. The table below categorizes customer financing receivable balances (excluding short-term payment plans), none of which are considered past due, based on the age of the oldest payment outstanding that has been reclassified to trade accounts receivable: (In thousands) June 30, 2018 December 31, 2017 Stratification of uninvoiced client financing receivables based on aging of related trade accounts receivable: 1 to 90 Days Past Due $ 13,797 $ 11,300 91 to 180 Days Past Due 3,579 3,727 181 + Days Past Due 1,890 967 Total uninvoiced client financing receivables balances of clients with a trade accounts receivable $ 19,266 $ 15,994 Total uninvoiced client financing receivables of clients with no related trade accounts receivable 3,585 4,709 Total financing receivables with contractual maturities of one year or less 7,407 9,081 Less: allowance for losses (2,445) (3,244) Total financing receivables $ 27,813 $ 26,540 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Our purchased definite-lived intangible assets as of June 30, 2018 and December 31, 2017 are summarized as follows: (In thousands) Customer Relationships Trademark Developed Technology Total Gross carrying amount as of December 31, 2017 and June 30, 2018 $ 82,300 $ 10,900 $ 24,100 $ 117,300 Accumulated amortization as of December 31, 2017 (12,937) (1,682) (5,968) (20,587) Net intangible assets as of December 31, 2017 69,363 9,218 18,132 96,713 Accumulated amortization for the six months ended June 30, 2018 (3,270) (424) (1,509) (5,203) Net intangible assets as of June 30, 2018 $ 66,093 $ 8,794 $ 16,623 $ 91,510 Weighted average remaining years of useful life 10 13 6 10 The following table represents the remaining amortization of definite-lived intangible assets as of June 30, 2018: (In thousands) For the year ended December 31, 2018 $ 5,203 2019 10,112 2020 10,106 2021 10,066 2022 10,066 Thereafter 45,957 Total $ 91,510 The following table sets forth the change in the carrying amount of goodwill by segment for the six months ended June 30, 2018: (In thousands) Acute Care EHR Post-acute Care EHR TruBridge Total Balance as of December 31, 2017 $ 97,095 29,570 13,784 $ 140,449 Goodwill impairment $ — — — — Balance as of June 30, 2018 $ 97,095 $ 29,570 $ 13,784 $ 140,449 |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt was comprised of the following at June 30, 2018 and December 31, 2017: (In thousands) June 30, 2018 December 31, 2017 Term loan facility $ 105,357 $ 115,538 Revolving credit facility 34,693 27,983 Capital lease obligation 410 565 Debt obligations 140,460 144,086 Less: unamortized debt issuance costs (1,479) (1,652) Debt obligation, net 138,981 142,434 Less: current portion (5,830) (5,820) Long-term debt $ 133,151 $ 136,614 As of June 30, 2018, the carrying value of debt approximates the fair value due to the variable interest rate, which reflects the market rate. Credit Agreement In conjunction with our acquisition of HHI in January 2016, we entered into a syndicated credit agreement (the "Previous Credit Agreement") with Regions Bank ("Regions") serving as administrative agent, which provided for a $125 million term loan facility (the "Previous Term Loan Facility") and a $50 million revolving credit facility (the "Previous Revolving Credit Facility"). On October 13, 2017, we entered into a Second Amendment (the "Second Amendment") to refinance and decrease the aggregate committed size of the credit facilities from $175 million to $162 million, which included a $117 million term loan facility (the "Amended Term Loan Facility") and a $45 million revolving credit facility (the "Amended Revolving Credit Facility" and, together with the Amended Term Loan Facility, the "Amended Credit Facilities"). On February 8, 2018, we entered into a Third Amendment (the "Third Amendment") to the Amended Credit Agreement to increase the aggregate principle amount of the Amended Credit Facilities from $162 million to $167 million which includes the $117 million Amended Term Loan Facility and a $50 million Amended Revolving Credit Facility. Each of the Amended Credit Facilities continues to bear interest at a rate per annum equal to an applicable margin plus, at our option, either (1) the Adjusted LIBOR rate for the relevant interest period, (2) an alternate base rate determined by reference to the greater of (a) the prime lending rate of Regions, (b) the federal funds rate for the relevant interest period plus one half of one percent per annum and (c) the one month LIBOR rate plus one percent per annum, or (3) a combination of (1) and (2). The applicable margin range for LIBOR loans and the letter of credit fee ranges from 2.00% to 3.50%. The applicable margin range for base rate loans ranges from 1.00% to 2.50%, in each case based on the Company's consolidated leverage ratio. Principal payments with respect to the Amended Term Loan Facility are due on the last day of each fiscal quarter beginning December 31, 2017, with quarterly principal payments of approximately $1.46 million through September 30, 2019, approximately $2.19 million through September 30, 2021 and approximately $2.93 million through September 30, 2022, with the maturity on October 13, 2022 or such earlier date as the obligations under the Amended Credit Agreement become due and payable pursuant to the terms of the Amended Credit Agreement (the "Amended Maturity Date"). Any principal outstanding under the Amended Revolving Credit Facility is due and payable on the Amended Maturity Date. Anticipated annual future maturities of the Amended Term Loan Facility, Amended Revolving Credit Facility, and capital lease obligation are as follows as of June 30, 2018: (In thousands) 2018 $ 3,085 2019 6,831 2020 8,775 2021 9,506 2022 112,263 Thereafter — $ 140,460 The Amended Credit Facilities are secured pursuant to a Pledge and Security Agreement, dated January 8, 2016, among the parties identified as obligors therein and Regions, as collateral agent, on a first priority basis by a security interest in substantially all of the tangible and intangible assets (subject to certain exceptions) of the Company and certain subsidiaries of the Company, as guarantors (collectively, the “Subsidiary Guarantors”), including certain registered intellectual property and the capital stock of certain of the Company’s direct and indirect subsidiaries. Our obligations under the Amended Credit Agreement are also guaranteed by the Subsidiary Guarantors. The Amended Credit Agreement, as amended by the Third Amendment, provides incremental facility capacity of $50 million, subject to certain conditions. The Amended Credit Agreement includes a number of restrictive covenants that, among other things and in each case subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and the Subsidiary Guarantors, including the ability to incur additional debt; incur liens and encumbrances; make certain restricted payments, including paying dividends on the Company's equity securities or payments to redeem, repurchase or retire the Company's equity securities (which are subject to our compliance, on a pro forma basis to give effect to the restricted payment, with the fixed charge coverage ratio and consolidated leverage ratio described below); enter into certain restrictive agreements; make investments, loans and acquisitions; merge or consolidate with any other person; dispose of assets; enter into sale and leaseback transactions; engage in transactions with affiliates; and materially alter the business we conduct. The Amended Credit Agreement requires the Company to maintain a minimum fixed charge coverage ratio of 1.25:1.00 throughout the duration of such agreement. Under the Amended Credit Agreement, the Company is required to comply with a maximum consolidated leverage ratio of 3.95:1.00 through December 31, 2017 and 3.50:1.00 from January 1, 2018 and thereafter. The Amended Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default. We believe that we were in compliance with the covenants contained in the Amended Credit Agreement as of June 30, 2018. The Amended Credit Agreement requires the Company to mandatorily prepay the Amended Credit Facilities with (i) 75% of excess cash flow (minus certain specified other payments) during each of the fiscal years ending December 31, 2017 and December 31, 2018 and (ii) 50% of excess cash flow (minus certain specified other payments) during the fiscal year ending December 31, 2019 and thereafter. The Company is permitted to voluntarily prepay the Amended Credit Facilities at any time without penalty, subject to customary “breakage” costs with respect to prepayments of LIBOR rate loans made on a day other than the last day of any applicable interest period. The excess cash flow mandatory prepayment requirement under the Amended Credit Agreement resulted in a $7.3 million prepayment on the Amended Term Loan Facility during the first quarter of 2018 related to excess cash flow generated by the Company during 2017. This mandatory prepayment was funded by drawing down on the Amended Revolving Credit Facility, as excess cash flow generated by the Company during 2017 was primarily used to voluntarily prepay amounts due under the Amended Revolving Credit Facility. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESFrom time to time, the Company is involved in routine litigation that arises in the ordinary course of business. Management does not believe it is reasonably possible that such matters will have a material adverse effect on the Company’s financial statements. |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE FASB Codification topic, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and expands financial statement disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Codification does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. The Codification requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The accrued contingent consideration depicted below represents the potential earnout incentive for former Rycan shareholders, relating to the purchase of Rycan by HHI in 2015. We have estimated the fair value of the contingent consideration based on the amount of revenue we expect to be earned by Rycan through the year ending December 31, 2018 in accordance with the purchase agreement between the parties. The following table summarizes the carrying amounts and fair value of the contingent consideration at June 30, 2018: Fair Value at June 30, 2018 Using Carrying Amount at Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) 6/30/2018 (Level 1) (Level 2) (Level 3) Description Contingent consideration $ 615 $ — $ — $ 615 Total $ 615 $ — $ — $ 615 The following table summarizes the carrying amounts and fair value of the contingent consideration at December 31, 2017: Fair Value at December 31, 2017 Using Carrying Amount at Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) 12/31/2017 (Level 1) (Level 2) (Level 3) Description Contingent consideration $ 586 $ — $ — $ 586 Total $ 586 $ — $ — $ 586 The carrying amounts of other financial instruments reported in the consolidated balance sheets for current assets and current liabilities approximate their fair values because of the short-term nature of these instruments. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Our chief operating decision makers ("CODM") utilize three operating segments, "Acute Care EHR," "Post-acute Care EHR" and "TruBridge," based on our three distinct business units with unique market dynamics and opportunities. Revenues and cost of sales are primarily derived from the provision of services and sales of our proprietary software, and our CODM assess the performance of these three segments at the gross profit level. Operating expenses and items such as interest, income tax, capital expenditures and total assets are managed at a consolidated level and thus are not included in our operating segment disclosures. Our CODM group is comprised of the Chief Executive Officer, Chief Growth Officer, Chief Operating Officer, and Chief Financial Officer. Accounting policies for each of the reportable segments are the same as those used on a consolidated basis. The following table presents a summary of the revenues and gross profits of our three operating segments for the three and six months ended June 30, 2018 and 2017: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Revenues: Acute Care EHR Recurring revenue $ 28,342 $ 28,001 $ 56,477 $ 56,539 Non-recurring revenue 8,865 11,393 20,913 19,985 Total Acute Care EHR revenue 37,207 39,394 77,390 76,524 Post-acute Care EHR Recurring revenue 4,656 5,108 9,487 10,186 Non-recurring revenue 883 972 1,621 2,187 Total Post-acute Care EHR revenue 5,539 6,080 11,108 12,373 TruBridge 25,159 22,203 50,290 42,854 Total revenues $ 67,905 $ 67,677 $ 138,788 $ 131,751 Cost of sales: Acute Care EHR $ 17,970 $ 17,730 $ 34,727 $ 35,504 Post-acute Care EHR 1,558 2,023 3,219 4,036 TruBridge 13,531 11,933 26,910 23,520 Total cost of sales $ 33,059 $ 31,686 $ 64,856 $ 63,060 Gross profit: Acute Care EHR $ 19,237 $ 21,664 $ 42,663 $ 41,020 Post-acute Care EHR 3,981 4,057 7,889 8,337 TruBridge 11,628 10,270 23,380 19,334 Total gross profit $ 34,846 $ 35,991 $ 73,932 $ 68,691 Corporate operating expenses $ (32,621) $ (31,543) $ (64,058) $ (61,010) Other income 194 70 392 140 Interest expense (1,807) (1,938) (3,785) (3,745) Income before taxes $ 612 $ 2,580 $ 6,481 $ 4,076 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn August 2, 2018, the Company announced a dividend for the third quarter of 2018 in the amount of $0.10 per share, payable on August 31, 2018, to stockholders of record as of the close of business on August 16, 2018. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of the periods presented. All such adjustments are considered of a normal recurring nature. Quarterly results of operations are not necessarily indicative of annual results. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted. The condensed consolidated balance sheet as of December 31, 2017 was derived from the audited consolidated balance sheet at that date. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of Computer Programs and Systems, Inc. ("CPSI" or the "Company") for the year ended December 31, 2017 and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements of CPSI include the accounts of TruBridge, LLC ("TruBridge"), Evident, LLC ("Evident"), and Healthland Holding Inc. ("HHI"), all of which are wholly-owned subsidiaries of CPSI. The accounts of HHI include those of its wholly-owned subsidiaries, Healthland Inc. ("Healthland"), Rycan Technologies, Inc. ("Rycan"), and American HealthTech, Inc. ("AHT"). All significant intercompany balances and transactions have been eliminated. |
Presentation | Presentation Effective January 1, 2018, our interface services team, which provides the design, development, implementation, and support services for all interfaces for data exchange from the CPSI applications, was previously considered a part of our product development division and has been integrated with our acute care client service team. This transition will work to create a consistent, personal, and convenient service experience for our clients characterized by transparent communication with prompt resolution. With this change, the payroll and related costs of this group of employees that were formerly included within the caption "Product development" on our condensed consolidated statements of income are now included within the caption "System sales and support - Cost of sales." This reclassification had no effect on previously reported total sales revenues, operating income, income before taxes or net income. |
Revenue Recognition | REVENUE RECOGNITION Revenue is recognized upon transfer of control of promised products or services to clients in an amount that reflects the consideration we expect to receive in exchange for those products and services. We enter into contracts that can include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations. The Company employs the 5-step revenue recognition model under ASC 606 to: (1) identify the contract with the client, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized net of shipping charges and any taxes collected from clients, which are subsequently remitted to governmental authorities. System Sales and Support The Company enters into contractual obligations to sell perpetual software licenses, installation, conversion, training, hardware and software application support and hardware maintenance services to acute care and post-acute care community hospitals. Non-recurring Revenues • Perpetual software licenses, installation, conversion, and related training are not considered separate and distinct performance obligations due to the proprietary nature of our software and are, therefore, accounted for as a single performance obligation on a module-by-module basis. Revenue is recognized as each module's implementation is completed based on the module's stand-alone selling price ("SSP"), net of discounts. Fees for licenses, installation, conversion, and related training are typically due in three installments: (1) at placement of order, (2) upon installation of software and commencement of training, and (3) upon satisfactory completion of monthly accounting cycle or end-of-month operation by application and as applicable for each application. Often, short-term and/or long-term financing arrangements are provided for software implementations; refer to Note 9 - Financing Receivables for further information. Electronic health records ("EHR") implementations include a system warranty that terminates thirty days from the software go-live date, the date which the client begins using the system in a live environment. • Hardware revenue is recognized separately from software licenses at the point in time it is delivered to the client. The SSP of hardware is cost plus a reasonable margin. Payment is generally due upon delivery of the hardware to the client. Standard manufacturer warranties apply to hardware. Recurring Revenues • Software application support and hardware maintenance services sold with software licenses and hardware are separate and distinct performance obligations. Revenue for support and maintenance services is recognized based on SSP, which is the renewal price, ratably over the life of the contact, which is generally three five • Subscriptions to third party content revenue is recognized as a separate performance obligation ratably over the subscription term based on SSP, which is cost plus a reasonable margin. Payment is due monthly for subscriptions to third party content. • Software as a Service ("SaaS") arrangements for EHR software and related conversion and training services are considered a single performance obligation. Revenue is recognized on a monthly basis as the SaaS service is provided to the client over the contract term. Payment is due monthly for SaaS services provided. Refer to Note 14 - Segment Reporting, for further information, including revenue by client base (acute care or post-acute care) bifurcated by recurring and non-recurring revenue. TruBridge TruBridge provides an array of business processing services ("BPS") consisting of accounts receivable management, private pay services, insurance services, medical coding, electronic billing, statement processing, payroll processing, and contract management. Fees are recognized over the period of the client contractual relationship as the services are performed based on the SSP, net of discounts. Fees for many of these services are invoiced, and revenue recognized accordingly, based on the volume of transactions or a percentage of client accounts receivable collections. Payment is due monthly for BPS with certain amounts varying based on utilization and/or volumes. TruBridge also provides professional IT services. Revenue from professional services is recognized as the services are performed based on SSP. Payment is due monthly as services are performed. |
Net Income Per Share | NET INCOME PER SHARE The Company presents basic and diluted earnings per share ("EPS") data for its common stock. Basic EPS is calculated by dividing the net income attributable to stockholders of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is determined by adjusting the net income attributable to stockholders of the Company and the weighted average number of shares of common stock outstanding during the period for the effects of all dilutive potential common shares, including awards under stock-based compensation arrangements. The Company's unvested restricted stock awards (see Note 8) are considered participating securities under FASB Codification topic, Earnings Per Share , because they entitle holders to non-forfeitable rights to dividends until the awards vest or are forfeited. When a company has a security that qualifies as a "participating security," the Codification requires the use of the two-class method when computing basic EPS. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. In determining the amount of net income to allocate to common stockholders, income is allocated to both common stock and participating securities based on their respective weighted average shares outstanding for the period, with net income attributable to common stockholders ultimately equaling net income less net income attributable to participating securities. Diluted EPS for the Company's common stock is computed using the more dilutive of the two-class method or the treasury stock method. |
Income Taxes | INCOME TAXESThe Company determines the tax provision for interim periods using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. |
Stock-Based Compensation | STOCK-BASED COMPENSATIONStock-based compensation expense is measured at the grant date based on the fair value of the award, and is recognized as an expense over the employee's or non-employee director's requisite service period. |
Fair Value | FAIR VALUE FASB Codification topic, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and expands financial statement disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Codification does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. The Codification requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. |
Recent Account Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Standards Adopted in 2018 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes prior revenue recognition guidance. This guidance was effective for fiscal years and interim periods within those years beginning after December 15, 2017, which was effective for the Company as of the first quarter of our fiscal year ending December 31, 2018. We adopted this new accounting standard codified as Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers , and the related amendments ("new revenue standard") during the first quarter of 2018 and have applied it to all contracts using the modified retrospective method, pursuant to which the cumulative effect of initially applying the new revenue standard is recognized as an adjustment to retained earnings and impacted balance sheet line items as of January 1, 2018, the date of adoption. The comparative previous period information continues to be reported under the accounting standards in effect for that period. We completed an assessment of our systems, data, and processes that are affected by the implementation of this new revenue standard and have concluded that this standard does not significantly alter revenue recognition practices for our system sales and support and TruBridge revenue streams. The impact on our revenue recognition is limited to deferring and amortizing implementation fees over the contract life related to our Rycan revenue cycle management product, in which we previously recognized revenue as implementation was completed. Rycan implementation fees totaled $1.6 million in 2017, less than 1% of our 2017 revenues. The balance sheet impact of the deferred revenue related to these fees was an increase of $1.8 million as of the date of adoption. Also impacting deferred revenue was a decrease of $0.6 million related to previous billings which no longer required deferred recognition as of the date of adoption. In addition to revenue recognition, the new revenue standard impacts our consolidated financial statements with respect to the capitalization of certain commissions and contract fulfillment costs which were previously expensed as incurred. Commissions and contract fulfillment costs related to the implementation of software as a service arrangements are now capitalized and amortized over the expected life of the customer. TruBridge commissions, which are paid up to twelve months in advance, are now capitalized and amortized over the prepayment period. The balance sheet impact of the prepaid assets was an increase of $3.8 million as of the date of adoption. Due to the aforementioned changes in assets and liabilities related to the adoption of the new revenue standard, our deferred tax liability increased $0.6 million as of the date of adoption. In total, the adoption of ASU 2014-09 resulted in a net increase in retained earnings of $2.0 million as of the date of adoption. In accordance with the new revenue standard requirements, the disclosures of the impact of adoption on our condensed consolidated income statements and balance sheet were as follows: Three Months Ended June 30, 2018 (In thousands) As reported Balances without adoption of ASC 606 Effect of adoption increase/(decrease) Condensed Consolidated Statements of Income Revenue: TruBridge $ 25,159 $ 25,057 $ 102 Cost of sales: System sales and support 19,528 19,529 (1) Gross profit 34,846 34,743 103 Sales and marketing 7,518 7,121 397 Operating income 2,225 2,519 (294) Provision for income taxes 284 346 (62) Net income $ 328 $ 560 $ (232) Six Months Ended June 30, 2018 (In thousands) As reported Balances without adoption of ASC 606 Effect of adoption increase/(decrease) Condensed Consolidated Statements of Income Revenue: TruBridge $ 50,290 $ 50,129 $ 161 Cost of sales: System sales and support 37,946 37,880 66 Gross profit 73,932 73,837 95 Sales and marketing 15,232 14,735 497 Operating income 9,874 10,276 (402) Provision for income taxes 2,185 2,269 (84) Net income $ 4,296 $ 4,614 $ (318) June 30, 2018 (In thousands) As reported Balances without adoption of ASC 606 Effect of adoption increase/(decrease) Condensed Consolidated Balance Sheet Prepaid assets and other $ 6,038 $ 3,981 $ 2,057 Other assets, net of current 1,155 — 1,155 Total assets 322,844 319,632 3,212 Deferred revenue 12,300 11,230 1,070 Deferred tax liability 6,646 6,156 490 Total liabilities 178,603 177,043 1,560 Retained earnings $ (15,543) $ (17,195) $ 1,652 The effects of the changes in balance sheet accounts resulting from the adoption of the new revenue standard are primarily due to the beginning adjustments for adoption mentioned above, accompanied by incremental changes resulting from activity during the period ending June 30, 2018. Refer to Note 3 - Revenue Recognition for more information on period activity. The new revenue standard requirements did not impact our net cash provided by or used in operating, investing, or financing cash flows on our condensed consolidated statements of cash flows, although components within changes in operating assets and liabilities were immaterially impacted by adoption. In August 2016, the FASB issued ASU 2016-15, Classifications of Certain Cash Receipts and Cash Payments, which clarifies cash flow classification for eight specific issues, including debt prepayment or extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and proceeds from settlement of corporate-owned life insurance policies. This guidance was effective for fiscal years and interim periods within those years beginning after December 15, 2017, which was effective for the Company as of the first quarter of our fiscal year ending December 31, 2018. The adoption of ASU 2016-15 did not have a material effect on our financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, to assist an entity in evaluating when a set of transferred assets and activities is a business. The guidance was effective for fiscal years and interim periods within those years beginning after December 15, 2017, and will be applied prospectively to any transactions occurring following adoption. The adoption of ASU 2017-01 did not have a material effect on our financial statements. New Accounting Standards Yet to be Adopted In February 2016, the FASB issued ASU 2016-02, Leases , to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance will require the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. This guidance will be effective for fiscal years and interim periods within those years beginning after December 15, 2018, which will be effective for the Company as of the first quarter of our fiscal year ending December 31, 2019. The Company is currently evaluating the method of adoption and potential utilization of practical expedients. The estimated impact on the financial statements of implementation of this standard is increased lease assets and lease liabilities in the range of $4 to $6 million as of the anticipated adoption date, January 1, 2019. We do not believe that any other recently issued but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Amounts Reclassified | The following table provides the amounts reclassified for the three months ended June 30, 2017: (In thousands) As previously reported Reclassification As reclassified Costs of sales: System sales and support $ 18,859 $ 894 $ 19,753 Operating expenses: Product development $ 9,308 $ (894) $ 8,414 The following table provides the amounts reclassified for the six months ended June 30, 2017: (In thousands) As previously reported Reclassification As reclassified Costs of sales: System sales and support $ 37,789 $ 1,751 $ 39,540 Operating expenses: Product development $ 18,243 $ (1,751) $ 16,492 |
RECENT ACCOUNTING PRONOUNCEME24
RECENT ACCOUNTING PRONOUNCEMENTS - (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | In accordance with the new revenue standard requirements, the disclosures of the impact of adoption on our condensed consolidated income statements and balance sheet were as follows: Three Months Ended June 30, 2018 (In thousands) As reported Balances without adoption of ASC 606 Effect of adoption increase/(decrease) Condensed Consolidated Statements of Income Revenue: TruBridge $ 25,159 $ 25,057 $ 102 Cost of sales: System sales and support 19,528 19,529 (1) Gross profit 34,846 34,743 103 Sales and marketing 7,518 7,121 397 Operating income 2,225 2,519 (294) Provision for income taxes 284 346 (62) Net income $ 328 $ 560 $ (232) Six Months Ended June 30, 2018 (In thousands) As reported Balances without adoption of ASC 606 Effect of adoption increase/(decrease) Condensed Consolidated Statements of Income Revenue: TruBridge $ 50,290 $ 50,129 $ 161 Cost of sales: System sales and support 37,946 37,880 66 Gross profit 73,932 73,837 95 Sales and marketing 15,232 14,735 497 Operating income 9,874 10,276 (402) Provision for income taxes 2,185 2,269 (84) Net income $ 4,296 $ 4,614 $ (318) June 30, 2018 (In thousands) As reported Balances without adoption of ASC 606 Effect of adoption increase/(decrease) Condensed Consolidated Balance Sheet Prepaid assets and other $ 6,038 $ 3,981 $ 2,057 Other assets, net of current 1,155 — 1,155 Total assets 322,844 319,632 3,212 Deferred revenue 12,300 11,230 1,070 Deferred tax liability 6,646 6,156 490 Total liabilities 178,603 177,043 1,560 Retained earnings $ (15,543) $ (17,195) $ 1,652 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Contract with Customer, Asset and Liability | Deferred revenue represents amounts invoiced to clients for which the services under contract have not been completed and revenue has not been recognized, including annual renewals of certain software subscriptions and customer deposits for implementations to be performed at a later date. Revenue is recognized ratably over the life of the software subscriptions as services are provided and at the point-in-time when implementations have been completed. (In thousands) Six Months Ended June 30, 2018 Balance as of January 1, 2018 $ 9,937 Deferred revenue recorded 11,700 Less deferred revenue recognized as revenue (9,337) Balance as of June 30, 2018 $ 12,300 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment was comprised of the following at June 30, 2018 and December 31, 2017: (In thousands) June 30, 2018 December 31, 2017 Land $ 2,848 $ 2,848 Buildings and improvements 8,247 8,240 Computer equipment 3,679 3,269 Leasehold improvements 5,001 5,001 Office furniture and fixtures 2,865 2,865 Automobiles 70 70 22,710 22,293 Less: accumulated depreciation (11,668) (10,601) Property and equipment, net $ 11,042 $ 11,692 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities was comprised of the following at June 30, 2018 and December 31, 2017: (In thousands) June 30, 2018 December 31, 2017 Salaries and benefits $ 6,706 $ 8,432 Severance 507 1,139 Commissions 713 2,416 Self-insurance reserves 1,037 1,024 Contingent consideration 615 586 Other 582 501 Other Accrued Liabilities $ 10,160 $ 14,098 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a calculation of the basic and diluted EPS for the Company's common stock, including a reconciliation between net income and net income attributable to common stockholders: Three Months Ended Six Months Ended (In thousands, except per share data) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Net income $ 328 $ 1,587 $ 4,296 $ 1,833 Less: Net income attributable to participating securities (8) (45) (144) (41) Net income attributable to common stockholders $ 320 $ 1,542 $ 4,152 $ 1,792 Weighted average shares outstanding used in basic per common share computations 13,561 13,420 13,518 13,397 Add: Dilutive potential common shares — — — — Weighted average shares outstanding used in diluted per common share computations 13,561 13,420 13,518 13,397 Basic EPS $ 0.02 $ 0.11 $ 0.31 $ 0.13 Diluted EPS $ 0.02 $ 0.11 $ 0.31 $ 0.13 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Total Stock-Based Compensation Expense | The following table details total stock-based compensation expense for the three and six months ended June 30, 2018 and 2017, included in the condensed consolidated statements of income: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Costs of sales $ 585 $ 425 $ 1,024 $ 743 Operating expenses 2,168 1,261 3,668 2,224 Pre-tax stock-based compensation expense 2,753 1,686 4,692 2,967 Less: income tax effect (606) (658) (1,032) (1,157) Net stock-based compensation expense $ 2,147 $ 1,028 $ 3,660 $ 1,810 |
Summary of Restricted Stock Activity | A summary of restricted stock activity (including shares of restricted stock issued pursuant to the settlement of performance share awards) under the Plans during the six months ended June 30, 2018 and 2017 is as follows: Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Shares Weighted-Average Grant Date Fair Value Per Share Shares Weighted-Average Grant Date Fair Value Per Share Unvested restricted stock outstanding at beginning of period 309,195 $ 38.36 184,885 $ 54.63 Granted 148,841 30.20 222,390 32.87 Performance share awards settled through the issuance of restricted stock 177,395 29.94 — — Vested (153,424) 40.81 (80,558) 55.34 Unvested restricted stock outstanding at end of period 482,007 $ 31.96 326,717 $ 39.64 |
Summary of Performance Share Award Activity | A summary of performance share award activity under the 2014 Incentive Plan during the six months ended June 30, 2018 and 2017 is as follows, based on the target award amounts set forth in the performance share award agreements: Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Shares Weighted-Average Grant Date Fair Value Per Share Shares Weighted-Average Grant Date Fair Value Per Share Performance share awards outstanding at beginning of period 189,325 $ 29.94 77,594 $ 49.64 Granted 184,776 30.15 189,325 29.94 Forfeited or unearned (11,930) 29.94 (77,594) 49.64 Performance share awards settled through the issuance of restricted stock (177,395) 29.94 — — Performance share awards outstanding at end of period 184,776 $ 30.15 189,325 $ 29.94 |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Components of Short Term Payment Plans | These receivables, included in the current portion of financing receivables, were comprised of the following at June 30, 2018 and December 31, 2017: (In thousands) June 30, 2018 December 31, 2017 Short-term payment plans, gross $ 7,407 $ 9,081 Less: allowance for losses (523) (638) Short-term payment plans, net $ 6,884 $ 8,443 |
Components of Lease Receivables | The components of these receivables were as follows at June 30, 2018 and December 31, 2017: (In thousands) June 30, 2018 December 31, 2017 Long-term financing arrangements, gross $ 25,604 $ 22,968 Less: allowance for losses (1,922) (2,606) Less: unearned income (2,753) (2,265) Long-term financing arrangements, net $ 20,929 $ 18,097 |
Future Minimum Lease Payments to be Received | Future minimum payments to be received subsequent to June 30, 2018 are as follows: (In thousands) Years Ended December 31, 2018 $ 4,778 2019 7,874 2020 5,080 2021 4,042 2022 2,656 Thereafter 1,174 Total minimum payments to be received 25,604 Less: allowance for losses (1,922) Less: unearned income (2,753) Receivables, net $ 20,929 |
Allowance for Financing Credit Losses | The following table is a roll-forward of the allowance for financing credit losses for the six months ended June 30, 2018 and year ended December 31, 2017: (In thousands) Balance at Beginning of Period Provision Charge-offs Recoveries Balance at End of Period June 30, 2018 $ 3,244 $ 397 $ (1,196) $ — $ 2,445 December 31, 2017 $ 2,198 $ 1,823 $ (777) $ — $ 3,244 |
Analysis of Age of Financing Receivables Amounts | The following is an analysis of the age of financing receivables amounts (excluding short-term payment plans) that have been reclassified to trade accounts receivable and were past due as of June 30, 2018 and December 31, 2017: (In thousands) 1 to 90 Days Past Due 91 to 180 Days Past Due 181 + Days Past Due Total Past Due June 30, 2018 $ 1,322 $ 332 $ 291 $ 1,945 December 31, 2017 $ 980 $ 171 $ — $ 1,151 |
Schedule of Financing Receivable Credit Quality Indicators | The table below categorizes customer financing receivable balances (excluding short-term payment plans), none of which are considered past due, based on the age of the oldest payment outstanding that has been reclassified to trade accounts receivable: (In thousands) June 30, 2018 December 31, 2017 Stratification of uninvoiced client financing receivables based on aging of related trade accounts receivable: 1 to 90 Days Past Due $ 13,797 $ 11,300 91 to 180 Days Past Due 3,579 3,727 181 + Days Past Due 1,890 967 Total uninvoiced client financing receivables balances of clients with a trade accounts receivable $ 19,266 $ 15,994 Total uninvoiced client financing receivables of clients with no related trade accounts receivable 3,585 4,709 Total financing receivables with contractual maturities of one year or less 7,407 9,081 Less: allowance for losses (2,445) (3,244) Total financing receivables $ 27,813 $ 26,540 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Definite-lived Intangible Assets | Our purchased definite-lived intangible assets as of June 30, 2018 and December 31, 2017 are summarized as follows: (In thousands) Customer Relationships Trademark Developed Technology Total Gross carrying amount as of December 31, 2017 and June 30, 2018 $ 82,300 $ 10,900 $ 24,100 $ 117,300 Accumulated amortization as of December 31, 2017 (12,937) (1,682) (5,968) (20,587) Net intangible assets as of December 31, 2017 69,363 9,218 18,132 96,713 Accumulated amortization for the six months ended June 30, 2018 (3,270) (424) (1,509) (5,203) Net intangible assets as of June 30, 2018 $ 66,093 $ 8,794 $ 16,623 $ 91,510 Weighted average remaining years of useful life 10 13 6 10 |
Schedule of Remaining Amortization of Definite-lived Intangible Assets | The following table represents the remaining amortization of definite-lived intangible assets as of June 30, 2018: (In thousands) For the year ended December 31, 2018 $ 5,203 2019 10,112 2020 10,106 2021 10,066 2022 10,066 Thereafter 45,957 Total $ 91,510 |
Schedule of Changes in the Carrying Amount of Goodwill | The following table sets forth the change in the carrying amount of goodwill by segment for the six months ended June 30, 2018: (In thousands) Acute Care EHR Post-acute Care EHR TruBridge Total Balance as of December 31, 2017 $ 97,095 29,570 13,784 $ 140,449 Goodwill impairment $ — — — — Balance as of June 30, 2018 $ 97,095 $ 29,570 $ 13,784 $ 140,449 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt was comprised of the following at June 30, 2018 and December 31, 2017: (In thousands) June 30, 2018 December 31, 2017 Term loan facility $ 105,357 $ 115,538 Revolving credit facility 34,693 27,983 Capital lease obligation 410 565 Debt obligations 140,460 144,086 Less: unamortized debt issuance costs (1,479) (1,652) Debt obligation, net 138,981 142,434 Less: current portion (5,830) (5,820) Long-term debt $ 133,151 $ 136,614 |
Schedule of Annual Future Maturities of the Term Loan Facility and Revolving Credit Facility | Anticipated annual future maturities of the Amended Term Loan Facility, Amended Revolving Credit Facility, and capital lease obligation are as follows as of June 30, 2018: (In thousands) 2018 $ 3,085 2019 6,831 2020 8,775 2021 9,506 2022 112,263 Thereafter — $ 140,460 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | The following table summarizes the carrying amounts and fair value of the contingent consideration at June 30, 2018: Fair Value at June 30, 2018 Using Carrying Amount at Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) 6/30/2018 (Level 1) (Level 2) (Level 3) Description Contingent consideration $ 615 $ — $ — $ 615 Total $ 615 $ — $ — $ 615 |
Carrying Amounts and Fair Values of Certain Assets and Liabilities | The following table summarizes the carrying amounts and fair value of the contingent consideration at December 31, 2017: Fair Value at December 31, 2017 Using Carrying Amount at Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) 12/31/2017 (Level 1) (Level 2) (Level 3) Description Contingent consideration $ 586 $ — $ — $ 586 Total $ 586 $ — $ — $ 586 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents a summary of the revenues and gross profits of our three operating segments for the three and six months ended June 30, 2018 and 2017: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Revenues: Acute Care EHR Recurring revenue $ 28,342 $ 28,001 $ 56,477 $ 56,539 Non-recurring revenue 8,865 11,393 20,913 19,985 Total Acute Care EHR revenue 37,207 39,394 77,390 76,524 Post-acute Care EHR Recurring revenue 4,656 5,108 9,487 10,186 Non-recurring revenue 883 972 1,621 2,187 Total Post-acute Care EHR revenue 5,539 6,080 11,108 12,373 TruBridge 25,159 22,203 50,290 42,854 Total revenues $ 67,905 $ 67,677 $ 138,788 $ 131,751 Cost of sales: Acute Care EHR $ 17,970 $ 17,730 $ 34,727 $ 35,504 Post-acute Care EHR 1,558 2,023 3,219 4,036 TruBridge 13,531 11,933 26,910 23,520 Total cost of sales $ 33,059 $ 31,686 $ 64,856 $ 63,060 Gross profit: Acute Care EHR $ 19,237 $ 21,664 $ 42,663 $ 41,020 Post-acute Care EHR 3,981 4,057 7,889 8,337 TruBridge 11,628 10,270 23,380 19,334 Total gross profit $ 34,846 $ 35,991 $ 73,932 $ 68,691 Corporate operating expenses $ (32,621) $ (31,543) $ (64,058) $ (61,010) Other income 194 70 392 140 Interest expense (1,807) (1,938) (3,785) (3,745) Income before taxes $ 612 $ 2,580 $ 6,481 $ 4,076 |
BASIS OF PRESENTATION - Reclass
BASIS OF PRESENTATION - Reclassification (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Costs of sales: | ||||
System sales and support | $ 19,528 | $ 19,753 | $ 37,946 | $ 39,540 |
Operating expenses: | ||||
Product development | $ 9,314 | 8,414 | $ 18,071 | 16,492 |
As previously reported | ||||
Costs of sales: | ||||
System sales and support | 18,859 | 37,789 | ||
Operating expenses: | ||||
Product development | 9,308 | 18,243 | ||
Reclassifications | Revised Presentation | ||||
Costs of sales: | ||||
System sales and support | 894 | 1,751 | ||
Operating expenses: | ||||
Product development | $ (894) | $ (1,751) |
RECENT ACCOUNTING PRONOUNCEME36
RECENT ACCOUNTING PRONOUNCEMENTS - (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Jun. 30, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred tax liability | $ 4,667 | $ 6,646 | ||
Accumulated deficit | (19,006) | (15,543) | ||
Capital lease obligation | 565 | 410 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Implementation fee revenue | $ 1,600 | |||
Implementation fee revenue as a percentage of total revenue (less than) | 1.00% | |||
Deferred revenue recognized as revenue | $ 600 | |||
Prepaid assets | $ 3,800 | |||
Deferred tax liability | $ 600 | 490 | ||
Accumulated deficit | $ 2,000 | $ 1,652 | ||
Minimum | Accounting Standards Update 2016-02 [Member] | Scenario, Forecast | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Capital leases, assets by major class, net | $ 4,000 | |||
Capital lease obligation | 4,000 | |||
Maximum | Accounting Standards Update 2016-02 [Member] | Scenario, Forecast | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Capital leases, assets by major class, net | 6,000 | |||
Capital lease obligation | $ 6,000 |
RECENT ACCOUNTING PRONOUNCEME37
RECENT ACCOUNTING PRONOUNCEMENTS - Disclosure of the Impact of Adoption of Topic 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Condensed Consolidated Statements of Income | ||||||
Revenue: TruBridge | $ 25,159 | $ 22,203 | $ 50,290 | $ 42,854 | ||
System sales and support | 19,528 | 19,753 | 37,946 | 39,540 | ||
Gross profit | 34,846 | 35,991 | 73,932 | 68,691 | ||
Sales and marketing | 7,518 | 7,607 | 15,232 | 14,734 | ||
Operating income | 2,225 | 4,448 | 9,874 | 7,681 | ||
Provision for income taxes | 284 | 993 | 2,185 | 2,243 | ||
Net income | 328 | $ 1,587 | 4,296 | $ 1,833 | ||
Condensed Consolidated Balance Sheet | ||||||
Prepaid expenses and other | 6,038 | 6,038 | $ 2,824 | |||
Other assets, net of current portion | 1,155 | 1,155 | 0 | |||
Total assets | 322,844 | 322,844 | 318,216 | |||
Deferred revenue | 12,300 | 12,300 | $ 9,937 | 8,707 | ||
Deferred tax liability | 6,646 | 6,646 | 4,667 | |||
Total liabilities | 178,603 | 178,603 | 182,130 | |||
Accumulated deficit | (15,543) | (15,543) | (19,006) | |||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||||
Condensed Consolidated Statements of Income | ||||||
Revenue: TruBridge | 25,057 | 50,129 | ||||
System sales and support | 19,529 | 37,880 | ||||
Gross profit | 34,743 | 73,837 | ||||
Sales and marketing | 7,121 | 14,735 | ||||
Operating income | 2,519 | 10,276 | ||||
Provision for income taxes | 346 | 2,269 | ||||
Net income | 560 | 4,614 | ||||
Condensed Consolidated Balance Sheet | ||||||
Prepaid expenses and other | 3,981 | 3,981 | ||||
Other assets, net of current portion | 0 | 0 | ||||
Total assets | 319,632 | 319,632 | ||||
Deferred revenue | 11,230 | 11,230 | ||||
Deferred tax liability | 6,156 | 6,156 | ||||
Total liabilities | 177,043 | 177,043 | ||||
Accumulated deficit | (17,195) | (17,195) | ||||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||
Condensed Consolidated Statements of Income | ||||||
Revenue: TruBridge | 102 | 161 | ||||
System sales and support | (1) | 66 | ||||
Gross profit | 103 | 95 | ||||
Sales and marketing | 397 | 497 | ||||
Operating income | (294) | (402) | ||||
Provision for income taxes | (62) | (84) | ||||
Net income | (232) | (318) | ||||
Condensed Consolidated Balance Sheet | ||||||
Prepaid expenses and other | 2,057 | 2,057 | ||||
Other assets, net of current portion | 1,155 | 1,155 | ||||
Total assets | 3,212 | 3,212 | ||||
Deferred revenue | 1,070 | 1,070 | 1,800 | |||
Deferred tax liability | 490 | 490 | $ 600 | |||
Total liabilities | 1,560 | 1,560 | ||||
Accumulated deficit | $ 1,652 | 1,652 | $ 2,000 | |||
Accumulated Deficit | ||||||
Condensed Consolidated Statements of Income | ||||||
Net income | $ 4,296 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Deferred revenue recorded | $ 11,700 |
Minimum | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Maintenance contract term | 3 years |
Maximum | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Maintenance contract term | 5 years |
REVENUE RECOGNITION Deferred Re
REVENUE RECOGNITION Deferred Revenue (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Change in Contract with Customer, Liability | |
Beginning balance | $ 8,707 |
Deferred revenue recorded | 11,700 |
Less deferred revenue recognized as revenue | (9,337) |
Balance as of June 30, 2018 | $ 12,300 |
REVENUE RECOGNITION Costs to ob
REVENUE RECOGNITION Costs to obtain and fulfill contracts (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Capitalized Contract Cost Roll Forward | |
Balance as of January 1, 2018 | $ 3,775 |
Costs to obtain and fulfill contracts recorded | 1,562 |
Less costs to obtain and fulfill contracts recognized as expense | (2,125) |
Balance as of June 30, 2018 | $ 3,212 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 22,710 | $ 22,293 |
Less: accumulated depreciation | (11,668) | (10,601) |
Property and equipment, net | 11,042 | 11,692 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,848 | 2,848 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,247 | 8,240 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,679 | 3,269 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,001 | 5,001 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,865 | 2,865 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 70 | $ 70 |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Salaries and benefits | $ 6,706 | $ 8,432 |
Severance | 507 | 1,139 |
Commissions | 713 | 2,416 |
Self-insurance reserves | 1,037 | 1,024 |
Contingent consideration | 615 | 586 |
Other | 582 | 501 |
Other accrued liabilities | $ 10,160 | $ 14,098 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Net income (loss) | $ 328 | $ 1,587 | $ 4,296 | $ 1,833 |
Less: Net income attributable to participating securities | (8) | (45) | (144) | (41) |
Net income attributable to common stockholders | $ 320 | $ 1,542 | $ 4,152 | $ 1,792 |
Weighted average shares outstanding used in basic per common share computations (in shares) | 13,561 | 13,420 | 13,518 | 13,397 |
Add: Dilutive potential common shares (in shares) | 0 | 0 | 0 | 0 |
Weighted average shares outstanding used in diluted per common share computations (in shares) | 13,561 | 13,420 | 13,518 | 13,397 |
Basic EPS (in dollars per share) | $ 0.02 | $ 0.11 | $ 0.31 | $ 0.13 |
Diluted EPS (in dollars per share) | $ 0.02 | $ 0.11 | $ 0.31 | $ 0.13 |
NET INCOME PER SHARE Narrative
NET INCOME PER SHARE Narrative (Details) - shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||
Aggregate target (in shares) | 184,776 | 184,776 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate percentage | 46.00% | 38.00% | 34.00% | 55.00% |
Excess tax benefit | $ 0.4 | $ 0.9 | ||
Increase in effective tax rate percentage | 6.00% | 23.00% |
STOCK-BASED COMPENSATION - Tota
STOCK-BASED COMPENSATION - Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 2,753 | $ 1,686 | $ 4,692 | $ 2,967 |
Less: income tax effect | (606) | (658) | (1,032) | (1,157) |
Net stock-based compensation expense | 2,147 | 1,028 | 3,660 | 1,810 |
Unrecognized compensation cost related to non-vested stock-based compensation arrangements | 17,600 | $ 17,600 | ||
Period for recognition for which unrecognized compensation costs are expected to be recognized | 2 years 2 months 12 days | |||
Costs of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax stock-based compensation expense | 585 | 425 | $ 1,024 | 743 |
Operating expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 2,168 | $ 1,261 | $ 3,668 | $ 2,224 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Shares | ||
Nonvested stock outstanding at beginning of period, shares | 309,195 | 184,885 |
Granted, shares | 148,841 | 222,390 |
Performance share awards settled through the issuance of restricted stock, shares | 177,395 | 0 |
Vested, shares | (153,424) | (80,558) |
Nonvested stock outstanding at end of period, shares | 482,007 | 326,717 |
Weighted-Average Grant Date Fair Value Per Share | ||
Nonvested stock outstanding at beginning of period, Weighted-Average Grant-Date Fair Value (in dollars per share) | $ 38.36 | $ 54.63 |
Granted, Weighted-Average Grant-Date Fair Value (in dollars per share) | 30.20 | 32.87 |
Performance share awards settled through the issuance of restricted stock (in dollars per share) | 29.94 | 0 |
Vested, Weighted-Average Grant-Date Fair Value (in dollars per share) | 40.81 | 55.34 |
Nonvested stock outstanding at end of period, Weighted-Average Grant-Date Fair Value (in dollars per share) | $ 31.96 | $ 39.64 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
STOCK-BASED COMPENSATION - Su48
STOCK-BASED COMPENSATION - Summary of Performance Share Awards (Details) - Performance Shares - $ / shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Shares | ||
Nonvested stock outstanding at beginning of period, shares | 189,325 | 77,594 |
Granted, shares | 184,776 | 189,325 |
Forfeited or unearned, shares | (11,930) | (77,594) |
Performance share awards settled through the issuance of restricted stock, shares | (177,395) | 0 |
Nonvested stock outstanding at end of period, shares | 184,776 | 189,325 |
Weighted-Average Grant Date Fair Value Per Share | ||
Nonvested stock outstanding at beginning of period, Weighted-Average Grant-Date Fair Value (in dollars per share) | $ 29.94 | $ 49.64 |
Granted, Weighted-Average Grant-Date Fair Value (in dollars per share) | 30.15 | 29.94 |
Forfeited or unearned, Weighted-Average Grant-Date Fair Value (in dollars per share) | 29.94 | 49.64 |
Performance share awards settled through the issuance of restricted stock (in dollars per share) | 29.94 | 0 |
Nonvested stock outstanding at end of period, Weighted-Average Grant-Date Fair Value (in dollars per share) | $ 30.15 | $ 29.94 |
FINANCING RECEIVABLES - Additio
FINANCING RECEIVABLES - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Loans and Leases Receivable Disclosure [Line Items] | |
Expiration period of sales type lease | through 2,025 |
Minimum | |
Loans and Leases Receivable Disclosure [Line Items] | |
Financial receivable lease term | 2 years |
Maximum | |
Loans and Leases Receivable Disclosure [Line Items] | |
Financial receivable lease term | 7 years |
Fixed Periodic Payment Plans | Minimum | |
Loans and Leases Receivable Disclosure [Line Items] | |
Current financing receivable terms | 3 months |
Fixed Periodic Payment Plans | Maximum | |
Loans and Leases Receivable Disclosure [Line Items] | |
Current financing receivable terms | 12 months |
FINANCING RECEIVABLES - Short-T
FINANCING RECEIVABLES - Short-Term Payment Plans (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Short-term payment plans, net | $ 14,788 | $ 15,055 |
Short-Term Payment Plans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Short-term payment plans, gross | 7,407 | 9,081 |
Less: allowance for losses | (523) | (638) |
Short-term payment plans, net | $ 6,884 | $ 8,443 |
FINANCING RECEIVABLES - Sales-T
FINANCING RECEIVABLES - Sales-Type Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Long-term financing arrangements, gross | $ 25,604 | $ 22,968 |
Less: allowance for losses | (1,922) | (2,606) |
Less: unearned income | (2,753) | (2,265) |
Long-term financing arrangements, net | $ 20,929 | $ 18,097 |
FINANCING RECEIVABLES - Future
FINANCING RECEIVABLES - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
2,018 | $ 4,778 | |
2,019 | 7,874 | |
2,020 | 5,080 | |
2,021 | 4,042 | |
2,022 | 2,656 | |
Thereafter | 1,174 | |
Total minimum payments to be received | 25,604 | $ 22,968 |
Less: allowance for losses | (1,922) | (2,606) |
Less: unearned income | (2,753) | $ (2,265) |
Receivables, net | $ 20,929 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for Financing Credit Losses (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Allowance for Credit Losses on Financing Receivables Roll Forward | ||
Balance at Beginning of Period | $ 3,244 | $ 2,198 |
Provision | 397 | 1,823 |
Charge-offs | (1,196) | (777) |
Recoveries | 0 | 0 |
Balance at End of Period | $ 2,445 | $ 3,244 |
FINANCING RECEIVABLES - Analysi
FINANCING RECEIVABLES - Analysis of Age of Financing Receivables Amounts (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 1,945 | $ 1,151 |
1 to 90 DaysPast Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1,322 | 980 |
91 to 180 DaysPast Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 332 | 171 |
181 + DaysPast Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 291 | $ 0 |
FINANCING RECEIVABLES - Summary
FINANCING RECEIVABLES - Summary of Financing Receivables (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables balances of clients with a trade accounts receivable | $ 19,266 | $ 15,994 | |
Total uninvoiced client financing receivables of clients with no related trade accounts receivable | 3,585 | 4,709 | |
Total financing receivables with contractual maturities of one year or less | 7,407 | 9,081 | |
Less: allowance for losses | (2,445) | (3,244) | $ (2,198) |
Total financing receivables | 27,813 | 26,540 | |
1 to 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables balances of clients with a trade accounts receivable | 13,797 | 11,300 | |
91 to 180 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables balances of clients with a trade accounts receivable | 3,579 | 3,727 | |
181 + Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total uninvoiced client financing receivables balances of clients with a trade accounts receivable | $ 1,890 | $ 967 |
INTANGIBLE ASSETS AND GOODWIL56
INTANGIBLE ASSETS AND GOODWILL - Definited-lived Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount as of December 31, 2017 and June 30, 2018 | $ 117,300 | |
Accumulated amortization | $ (5,203) | (20,587) |
Intangible assets, net | $ 91,510 | 96,713 |
Weighted average remaining years of useful life | 10 years | |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount as of December 31, 2017 and June 30, 2018 | $ 117,300 | 82,300 |
Accumulated amortization | (3,270) | (12,937) |
Intangible assets, net | $ 66,093 | 69,363 |
Weighted average remaining years of useful life | 10 years | |
Trademark | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount as of December 31, 2017 and June 30, 2018 | 10,900 | |
Accumulated amortization | $ (424) | (1,682) |
Intangible assets, net | $ 8,794 | 9,218 |
Weighted average remaining years of useful life | 13 years | |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount as of December 31, 2017 and June 30, 2018 | 24,100 | |
Accumulated amortization | $ (1,509) | (5,968) |
Intangible assets, net | $ 16,623 | $ 18,132 |
Weighted average remaining years of useful life | 6 years |
INTANGIBLE ASSETS AND GOODWIL57
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 5,203 | |
2,019 | 10,112 | |
2,020 | 10,106 | |
2,021 | 10,066 | |
2,022 | 10,066 | |
Thereafter | 45,957 | |
Intangible assets, net | $ 91,510 | $ 96,713 |
INTANGIBLE ASSETS AND GOODWIL58
INTANGIBLE ASSETS AND GOODWILL - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 140,449 |
Goodwill impairment | 0 |
Goodwill, ending balance | 140,449 |
Operating Segments | Acute Care EHR | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 97,095 |
Goodwill impairment | 0 |
Goodwill, ending balance | 97,095 |
Operating Segments | Post-acute Care EHR | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 29,570 |
Goodwill impairment | 0 |
Goodwill, ending balance | 29,570 |
Operating Segments | TruBridge | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 13,784 |
Goodwill impairment | 0 |
Goodwill, ending balance | $ 13,784 |
LONG-TERM DEBT - Schedule of lo
LONG-TERM DEBT - Schedule of long-term debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Debt obligations | $ 140,460 | $ 144,086 |
Capital lease obligation | 410 | 565 |
Less: unamortized debt issuance costs | (1,479) | (1,652) |
Debt obligation, net | 138,981 | 142,434 |
Less: current portion | (5,830) | (5,820) |
Long-term debt | 133,151 | 136,614 |
Line of credit | ||
Debt Instrument [Line Items] | ||
Debt obligation, net | 140,460 | |
Line of credit | Term loan facility | ||
Debt Instrument [Line Items] | ||
Debt obligations | 105,357 | 115,538 |
Line of credit | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Debt obligations | $ 34,693 | $ 27,983 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 21 Months Ended | 24 Months Ended | 57 Months Ended | ||||
Jan. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2022 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2021 | Oct. 13, 2022 | Feb. 08, 2018 | Feb. 07, 2018 | Oct. 13, 2017 | |
Debt Instrument [Line Items] | |||||||||||
Amount of credit facility | $ 167,000,000 | $ 162,000,000 | |||||||||
Current borrowing capacity | $ 162,000,000 | 175,000,000 | |||||||||
Prepayment of debt | $ 7,300,000 | ||||||||||
Line of credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, incremental facility capacity | 50,000,000 | ||||||||||
Fixed charge coverage ratio, minimum | 125.00% | ||||||||||
Consolidated leverage ratio, maximum | 395.00% | ||||||||||
Prepayment amount from excess cash flow, current year and next twelve months, percentage | 75.00% | ||||||||||
Prepayment amount from excess cash flow, year two and thereafter, percentage | 50.00% | ||||||||||
Line of credit | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amount of credit facility | $ 50,000,000 | 50,000,000 | 45,000,000 | ||||||||
Line of credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.00% | ||||||||||
Line of credit | Revolving credit facility | Federal funds rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.50% | ||||||||||
Line of credit | Term loan facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amount of credit facility | $ 125,000,000 | $ 117,000,000 | $ 117,000,000 | ||||||||
Minimum | Line of credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.00% | ||||||||||
Minimum | Line of credit | Revolving credit facility | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.00% | ||||||||||
Maximum | Line of credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.50% | ||||||||||
Maximum | Line of credit | Revolving credit facility | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.50% | ||||||||||
Scenario, Forecast | Line of credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio, maximum | 350.00% | ||||||||||
Scenario, Forecast | Line of credit | Term loan facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Periodic payment, principal | $ 2,930,000 | $ 1,460,000 | $ 2,190,000 |
LONG-TERM DEBT - Annual Future
LONG-TERM DEBT - Annual Future Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Debt obligation, net | $ 138,981 | $ 142,434 |
Line of credit | ||
Debt Instrument [Line Items] | ||
2,018 | 3,085 | |
2,019 | 6,831 | |
2,020 | 8,775 | |
2,021 | 9,506 | |
2,022 | 112,263 | |
Thereafter | 0 | |
Debt obligation, net | $ 140,460 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 615 | $ 586 |
Total financial liabilities | 615 | 586 |
(Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Total financial liabilities | 0 | 0 |
(Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Total financial liabilities | 0 | 0 |
(Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 615 | 586 |
Total financial liabilities | $ 615 | $ 586 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Total revenues | $ 67,905 | $ 67,677 | $ 138,788 | $ 131,751 |
Total cost of sales | 33,059 | 31,686 | 64,856 | 63,060 |
Gross profit | 34,846 | 35,991 | 73,932 | 68,691 |
Corporate operating expenses | (32,621) | (31,543) | (64,058) | (61,010) |
Other income | 194 | 70 | 392 | 140 |
Interest expense | (1,807) | (1,938) | (3,785) | (3,745) |
Income before taxes | 612 | 2,580 | 6,481 | 4,076 |
Operating Segments | Acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 37,207 | 39,394 | 77,390 | 76,524 |
Total cost of sales | 17,970 | 17,730 | 34,727 | 35,504 |
Gross profit | 19,237 | 21,664 | 42,663 | 41,020 |
Operating Segments | Post-acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 5,539 | 6,080 | 11,108 | 12,373 |
Total cost of sales | 1,558 | 2,023 | 3,219 | 4,036 |
Gross profit | 3,981 | 4,057 | 7,889 | 8,337 |
Operating Segments | TruBridge | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 25,159 | 22,203 | 50,290 | 42,854 |
Total cost of sales | 13,531 | 11,933 | 26,910 | 23,520 |
Gross profit | 11,628 | 10,270 | 23,380 | 19,334 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Corporate operating expenses | 32,621 | 31,543 | 64,058 | 61,010 |
Recurring revenue | Operating Segments | Acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 28,342 | 28,001 | 56,477 | 56,539 |
Recurring revenue | Operating Segments | Post-acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 4,656 | 5,108 | 9,487 | 10,186 |
Non-recurring revenue | Operating Segments | Acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 8,865 | 11,393 | 20,913 | 19,985 |
Non-recurring revenue | Operating Segments | Post-acute Care EHR | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 883 | $ 972 | $ 1,621 | $ 2,187 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Aug. 02, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.10 | $ 0.20 | $ 0.20 | $ 0.45 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.10 |