Nine Months Ended September 30, 2022 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. information. 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. Deferred Revenue Acquisition of Healthcare Resource Group Software development costs are accounted for in a ...

Computer Programs and Systems, Inc. (NASDAQ:CPSI) Q2 2023 Earnings Conference Call August 9, 2023 4:30 PM ET Company Participants Chris Fowler – President and Chief Executive Officer Matt Chambless – Chief Financial Officer Conference Call Participants Jeff Garro – Stephens George Hill – Deutsche Bank Operator Good afternoon, and welcome to the CPSI Second Quarter 2023 Earnings Conference Call. Leading today’s call are Chris Fowler, President and Chief Executive Officer; and Matt Chambless, Chief Financial ...

Costs to obtain and fulfill contracts related to SaaS and RCM arrangements are included within the "Prepaid expenses and other" and "Other assets, net of current portion" line items on our condensed consolidated balance sheets. The allocation of the purchase price paid for HRG was as follows: | --- | --- | --- | --- | --- | |------------------------------------------------------|-------|-------------------------|-------|-----------------------------| | (In thousands) \nSalaries and benefits | $ | June 30, 2 ...

Computer Programs and Systems, Inc. (NASDAQ:CPSI) Q1 2023 Earnings Conference Call May 9, 2023 8:30 AM ET Company Participants Dru Anderson - Corporate Communications Christopher Fowler - President and CEO Matt Chambless - CFO Conference Call Participants Stephanie Davis - SVB Jeffrey Garro - Stephens George Hill - Deutsche Bank Dru Anderson Good morning and welcome to the CPSI First Quarter 2023 Earnings Conference Call. Leading today's call are Chris Fowler, President and Chief Executive Officer and Matt ...

FORM 10-Q ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to (251) 639-8100 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing ...

Part I [Business Overview](index=7&type=section&id=Item%201.%20Business) CPSI provides healthcare solutions and services to community hospitals, operating through RCM, EHR, and Patient Engagement segments with a focus on cross-selling and market expansion - CPSI is the parent company of six entities: Evident, American HealthTech (AHT), TruBridge, Get Real Health, TruCode, and Healthcare Resource Group (HRG)[503](index=503&type=chunk) - The company operates in three reportable segments as of Q4 2022: RCM, EHR, and Patient Engagement, representing a change from the previous structure[481](index=481&type=chunk)[504](index=504&type=chunk)[450](index=450&type=chunk) - The primary target market includes community hospitals with fewer than 400 beds, with approximately **98%** of its acute care hospital EHR customer base having fewer than 100 beds[505](index=505&type=chunk)[8](index=8&type=chunk) - The core growth strategy involves cross-selling RCM solutions into its EHR client base and expanding RCM market share with new hospital sales[491](index=491&type=chunk)[514](index=514&type=chunk) [Products and Services](index=10&type=section&id=Our%20Products%20and%20Services) CPSI offers comprehensive healthcare solutions across Revenue Cycle Management, Electronic Health Records, and Patient Engagement segments - **Revenue Cycle Management (RCM):** Offered through TruBridge, HRG, and TruCode, this segment provides business management, consulting, managed IT services, and a complete RCM solution, including claim scrubbing, denial management, accounts receivable management, and medical coding software[494](index=494&type=chunk)[521](index=521&type=chunk)[498](index=498&type=chunk) - **Electronic Health Records (EHR):** Offered through Evident (acute care) and AHT (post-acute care), with acute care solutions (Thrive and Centriq) providing integrated systems for patient management, clinical functions, and financial accounting, while post-acute solutions focus on care and financial management for long-term care facilities[528](index=528&type=chunk)[560](index=560&type=chunk)[504](index=504&type=chunk) - **Patient Engagement:** Offered through Get Real Health, this segment provides a digital platform (InstantPHR and CHBase) to improve patient outcomes and engagement by integrating data from various sources into a single view for patients and clinicians[604](index=604&type=chunk)[566](index=566&type=chunk)[493](index=493&type=chunk) [Software Development](index=16&type=section&id=Software%20Development) The company capitalizes software development labor costs from the preliminary project phase until general release, with a five-year estimated useful life Software Development Costs (in millions) | Year | Total Expense | Capitalized Costs | | :--- | :--- | :--- | | 2022 | $30.9 | $19.1 | | 2021 | $30.4 | $9.4 | | 2020 | $33.5 | $3.3 | - The company capitalizes labor costs for software development from the preliminary project phase until general release, with an estimated useful life of five years for capitalized software[4](index=4&type=chunk) [Competition](index=19&type=section&id=Competition) CPSI faces intense competition across its Acute Care EHR, RCM, Post-Acute Care EHR, and Patient Engagement segments from various industry players - **Acute Care EHR:** Primary competitors include Cerner Corporation, Meditech, and MEDHOST, Inc., with secondary competitors such as N. Harris Computer Corporation and Epic Systems Corporation[617](index=617&type=chunk)[96](index=96&type=chunk) - **RCM Solutions:** Principal competitors include RelayHealth, SSI Group, Quadax, Change Healthcare, Availity, and Navicure[15](index=15&type=chunk) - **Post-Acute Care EHR:** Main competitors are PointClickCare Corporation and MatrixCare, Inc[16](index=16&type=chunk)[646](index=646&type=chunk) - **Patient Engagement:** Competitors include Relay Health, Get Well Network/Healthloop, and eClinicalWorks Patient Portal[75](index=75&type=chunk)[618](index=618&type=chunk) [Human Capital](index=23&type=section&id=Human%20Capital) CPSI employs approximately 2,500 individuals, primarily remote, focusing on internal talent development, external hires, and diversity initiatives - As of December 31, 2022, the company had approximately **2,500 employees**, most of whom work remotely, with none covered by a collective bargaining agreement[654](index=654&type=chunk) - The company focuses on diversity and inclusion through its employee-led council, "Team IDEA," launched in 2020, which conducted over 20 employee engagement events in 2022[598](index=598&type=chunk) - CPSI's talent strategy involves developing talent internally and supplementing with external hires, leveraging remote work to expand its talent pool geographically and enhance diversity[626](index=626&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company identifies several risks across its industry, business operations, products, and financial structure, including public health crises, market saturation, regulatory changes, competition, technology development, security breaches, talent retention, substantial indebtedness, and restrictive debt covenants [Industry Risks](index=26&type=section&id=Risks%20Related%20to%20Our%20Industry) The healthcare industry presents risks such as public health crises, market saturation, evolving regulations, and intense competition - Public health crises, like the COVID-19 pandemic, can disrupt operations, decrease patient volumes for customers, and impact the financial health of the company and its clients[60](index=60&type=chunk)[30](index=30&type=chunk) - The target market of hospitals with fewer than 200 beds is limited, and industry consolidation could reduce the potential client base and increase pricing pressure[61](index=61&type=chunk)[62](index=62&type=chunk) - The healthcare industry is subject to significant and evolving regulation (e.g., HIPAA, HITECH, 21st Century Cures Act), and failure to comply could result in liability, adverse publicity, and increased costs[36](index=36&type=chunk)[66](index=66&type=chunk)[39](index=39&type=chunk) - The company faces intense competition from firms with greater financial, technical, and marketing resources, which could lead to loss of clients and lower prices[43](index=43&type=chunk)[97](index=97&type=chunk) [Business Risks](index=31&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks include the impact of transitioning to a SaaS model, challenges with future acquisitions, difficulties in talent retention, and complexities of international operations - The transition to a subscription-based recurring revenue model (SaaS) may adversely affect near-term revenue growth and results of operations due to changes in revenue recognition timing[73](index=73&type=chunk)[95](index=95&type=chunk) - Future acquisitions carry inherent risks, including failure to achieve synergies, significant integration costs, and potential dilution or incurrence of debt[76](index=76&type=chunk)[98](index=98&type=chunk)[647](index=647&type=chunk) - The inability to attract and retain qualified personnel, particularly for client service and support, could negatively impact client satisfaction and growth[77](index=77&type=chunk)[99](index=99&type=chunk) - International business activities expose the company to conflicting laws, data residency requirements, and other risks inherent in global operations[81](index=81&type=chunk)[101](index=101&type=chunk)[119](index=119&type=chunk) [Product and Service Risks](index=34&type=section&id=Risks%20Related%20to%20Our%20Products%20and%20Services) Product and service risks encompass the need for continuous innovation, potential for product failures, cybersecurity threats, and reliance on third-party technology - Failure to develop new products or enhance existing ones in response to rapid technological change and market demands could harm the company's competitive position[85](index=85&type=chunk)[105](index=105&type=chunk)[122](index=122&type=chunk) - Product failures or inaccurate data from clinical decision-support products could lead to client claims, substantial costs, and reputational damage[87](index=87&type=chunk)[106](index=106&type=chunk) - Security breaches, viruses, or cyber-attacks (e.g., ransomware, DDoS) could jeopardize confidential patient data, leading to client claims, loss of market perception, and business disruption[88](index=88&type=chunk)[107](index=107&type=chunk)[124](index=124&type=chunk) - The company is dependent on technology licensed from third parties, and disruptions or infringement claims related to this technology could force discontinuation or delay of product shipments[145](index=145&type=chunk)[131](index=131&type=chunk) [Indebtedness Risks](index=38&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) The company's substantial indebtedness and restrictive debt covenants pose significant financial risks, limiting operational flexibility and increasing default potential - As of December 31, 2022, the company had approximately **$141.1 million** in principal amount of indebtedness, which could make it vulnerable to adverse economic conditions and limit operational flexibility[156](index=156&type=chunk)[141](index=141&type=chunk) - The credit agreement contains restrictive covenants that limit the company's ability to, among other things, incur additional debt, pay dividends, make acquisitions, and dispose of assets[162](index=162&type=chunk)[181](index=181&type=chunk)[183](index=183&type=chunk) - A breach of covenants could result in default, causing lenders to declare all outstanding borrowings immediately due and payable and to foreclose on pledged assets[165](index=165&type=chunk) [Legal Proceedings](index=46&type=section&id=Item%203.%20Legal%20Proceedings) The company is cooperating with an SEC subpoena received on November 2, 2022, regarding accounting matters, including revenue recognition and goodwill impairment testing, with an unpredictable outcome - On November 2, 2022, the company received a subpoena from the SEC concerning accounting matters such as revenue recognition and goodwill impairment testing for the period starting May 1, 2019[222](index=222&type=chunk) - The company is cooperating with the SEC investigation and cannot predict its timing or outcome[222](index=222&type=chunk) Part II [Market for Common Equity and Related Matters](index=47&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) CPSI's common stock trades on NASDAQ, and the company has a stock repurchase program authorized for up to **$30.0 million**, while quarterly dividends were indefinitely suspended in September 2020 - The Board of Directors indefinitely suspended all quarterly dividends on September 4, 2020, concurrent with authorizing a stock repurchase program[225](index=225&type=chunk) - A stock repurchase program of up to **$30.0 million** was approved and later extended to September 4, 2024, with approximately **$17.9 million** remaining available for repurchase as of December 31, 2022[201](index=201&type=chunk)[226](index=226&type=chunk)[747](index=747&type=chunk) Share Repurchases in Q4 2022 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 2022 | 42,000 | $29.27 | | Nov 2022 | 42,345 | $28.79 | | Dec 2022 | 44,037 | $27.83 | | **Total** | **128,382** | **$28.62** | [Management's Discussion and Analysis (MD&A)](index=48&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, total revenues increased **16%** to **$326.6 million**, driven by acquisitions and RCM segment growth, though net income decreased due to higher costs and interest expense, while liquidity is supported by cash, operating cash flow, and an expanded revolving credit facility [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Total sales revenues increased in 2022, primarily driven by RCM segment growth from acquisitions and organic expansion, while net income decreased due to higher operating costs and interest expense Financial Performance Summary (in thousands) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Sales Revenues | $326,648 | $280,629 | $264,488 | | Gross Profit | $154,435 | $140,882 | $136,246 | | Operating Income | $22,783 | $24,707 | $21,054 | | Net Income | $15,867 | $18,430 | $14,246 | | Diluted EPS | $1.08 | $1.26 | $0.98 | - **2022 vs. 2021:** - **RCM revenues** increased by **$48.6 million (37%)**, primarily due to the acquisitions of TruCode (**$13.8 million** revenue in 2022) and HRG (**$34.1 million** revenue in 2022), plus **$8.1 million** in organic growth[242](index=242&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk) - **EHR revenues** decreased by **$3.3 million (2%)**, as a decline in non-recurring perpetual license installations offset a slight increase in recurring SaaS revenue[280](index=280&type=chunk) - **Net income** decreased by **$2.6 million**, impacted by higher costs of sales from the lower-margin HRG acquisition, increased sales & marketing expenses, and a **$3.2 million** rise in interest expense[242](index=242&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk)[280](index=280&type=chunk) - **2021 vs. 2020:** - **RCM revenues** grew by **$23.8 million (22%)**, driven by the TruCode acquisition (**$7.4 million**) and organic growth from increased demand for services[284](index=284&type=chunk)[311](index=311&type=chunk) - **EHR revenues** decreased by **$9.8 million (6%)**, mainly due to a **$12.9 million** drop in non-recurring revenues as customer preference shifted from perpetual licenses to SaaS arrangements[257](index=257&type=chunk)[320](index=320&type=chunk) - **Net income** increased by **$4.2 million**, benefiting from higher RCM gross margins and lower operating expenses, partly due to a change in capitalizing product development labor[284](index=284&type=chunk)[311](index=311&type=chunk)[257](index=257&type=chunk)[320](index=320&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2022, liquidity was supported by **$7.0 million** in cash and **$86.3 million** available under the revolving credit facility, which was amended and increased to **$230 million** in May 2022 - As of Dec 31, 2022, principal sources of liquidity were **$7.0 million** in cash and **$86.3 million** available under the revolving credit facility[299](index=299&type=chunk) - Net cash from operating activities decreased to **$32.4 million** in 2022 from **$47.7 million** in 2021, primarily due to a **$16.9 million** expansion in accounts receivable and changes in deferred tax treatment for R&D expenses[300](index=300&type=chunk) - Net cash used in investing activities was **$62.7 million** in 2022, mainly for the **$43.4 million** acquisition of HRG and **$19.1 million** in capitalized software development[326](index=326&type=chunk) - In May 2022, the company amended its credit agreement, increasing total facilities to **$230 million** (**$70 million** term loan, **$160 million** revolver) and transitioning the benchmark interest rate from LIBOR to SOFR[299](index=299&type=chunk)[711](index=711&type=chunk) [Bookings](index=61&type=section&id=Bookings) RCM bookings increased **136%** in 2022 due to strong demand and the HRG acquisition, while EHR bookings decreased **7%** due to a challenging sales environment Bookings by Segment (in thousands) | Segment | 2022 | 2021 | | :--- | :--- | :--- | | RCM | $48,065 | $20,333 | | EHR | $38,152 | $40,873 | | Patient Engagement | $3,188 | $9,007 | | **Total Bookings** | **$89,405** | **$70,213** | - RCM bookings increased **136%** in 2022, driven by strong demand for outsourced RCM services both within the existing EHR customer base and from new clients, enhanced by the HRG acquisition[331](index=331&type=chunk) - EHR bookings decreased **7%** in 2022 due to a challenging sales environment for new Acute Care EHR systems[360](index=360&type=chunk) [Critical Accounting Policies and Estimates](index=62&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting policies involve revenue recognition under ASC 606, annual goodwill impairment testing, and changes in software development cost capitalization - **Revenue Recognition:** The company uses the 5-step model under ASC 606, requiring significant judgment in determining standalone selling prices (SSP) and identifying distinct performance obligations[363](index=363&type=chunk)[820](index=820&type=chunk) - **Goodwill Impairment:** Goodwill is tested annually on October 1, with the fair value of Acute Care EHR and Post-acute EHR reporting units exceeding carrying values by **13%** and **24%** respectively, indicating a heightened risk of future impairment if operating results decline[369](index=369&type=chunk)[372](index=372&type=chunk) - **Software Development Costs:** In Q2 2021, the company changed its estimation method for capitalizing labor costs, resulting in an increase of approximately **$4.6 million** in capitalized amounts for 2021, treated as a change in accounting estimate[213](index=213&type=chunk)[672](index=672&type=chunk) [Financial Statements and Supplementary Data](index=65&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements provide the company's financial position, results of operations, and cash flows, with notes detailing business combinations, segment reporting changes, intangible assets, goodwill, and long-term debt, supported by an unqualified auditor's opinion [Consolidated Financial Statements](index=71&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position, results of operations, and cash flows for the three years ended December 31, 2022 Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $6,951 | $11,431 | | Total current assets | $74,559 | $68,998 | | Goodwill | $198,253 | $177,713 | | **Total assets** | **$430,963** | **$383,350** | | **Liabilities & Equity** | | | | Total current liabilities | $44,455 | $46,427 | | Long-term debt, net | $136,388 | $94,966 | | **Total liabilities** | **$199,252** | **$160,778** | | **Total stockholders' equity** | **$231,711** | **$222,572** | Consolidated Statement of Cash Flows Data (in thousands) | Activity | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $32,375 | $47,744 | $49,142 | | Net cash used in investing activities | ($62,731) | ($69,919) | ($6,664) | | Net cash provided by (used in) financing activities | $25,876 | $20,935 | ($37,164) | | **Net (decrease) in cash** | **($4,480)** | **($1,240)** | **$5,314** | [Notes to Consolidated Financial Statements](index=76&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes to the financial statements detail business combinations, intangible assets, goodwill, long-term debt, and the realignment of segment reporting - **Business Combinations (Note 3):** The company acquired Healthcare Resource Group (HRG) on March 1, 2022, for net cash of **$43.9 million**, adding **$20.8 million** in goodwill, and TruCode on May 12, 2021, for net cash of **$59.9 million** plus a contingent earnout, adding **$27.3 million** in goodwill[860](index=860&type=chunk)[851](index=851&type=chunk)[864](index=864&type=chunk) - **Intangible Assets and Goodwill (Note 12):** As of Dec 31, 2022, net intangible assets were **$102.0 million** and goodwill was **$198.3 million**, with no impairment recorded in 2022, 2021, or 2020[707](index=707&type=chunk)[693](index=693&type=chunk) - **Long-Term Debt (Note 13):** As of Dec 31, 2022, total debt obligations were **$141.1 million**, consisting of a **$67.4 million** term loan and **$73.7 million** on the revolving credit facility, with an interest rate of **6.39%**[710](index=710&type=chunk) - **Segment Reporting (Note 18):** In Q4 2022, the company realigned its segments to RCM, EHR, and Patient Engagement, with management now evaluating performance based on revenues and adjusted EBITDA, and prior period data recast accordingly[402](index=402&type=chunk)[755](index=755&type=chunk)

Computer Programs and Systems, Inc. (NASDAQ:CPSI) Q4 2022 Earnings Conference Call February 14, 2023 4:30 PM ET Company Participants Dru Anderson - Corporate Communications Christopher Fowler - CEO and President Matt Chambless - CFO Conference Call Participants George Hill - Deutsche Bank Stephanie Davis - SVB Securities Operator Greetings and welcome to CPSI Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 000-49796 Delaware 74-3032373 (State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.) 54 St. Emanue ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 000-49796 COMPUTER PROGRAMS AND SYSTEMS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 74-3032373 (State or Other Jurisdicti ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) In Q1 2022, the company reported total revenues of $77.9 million, a 15% increase year-over-year, with net income rising to $8.1 million, primarily driven by TruBridge segment growth and strategic acquisitions Condensed Consolidated Statements of Income (Unaudited) | Indicator (In thousands, except per share data) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Total sales revenues** | **$77,871** | **$68,005** | | Gross profit | $39,815 | $34,850 | | Operating income | $8,986 | $4,914 | | **Net income** | **$8,113** | **$4,144** | | Net income per common share—diluted | $0.55 | $0.28 | Condensed Consolidated Balance Sheets (Unaudited) | Indicator (In thousands) | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $15,981 | $11,431 | | **Total assets** | **$440,330** | **$383,350** | | Long-term debt, net of current portion | $136,633 | $94,966 | | **Total liabilities** | **$209,578** | **$160,778** | | **Total stockholders' equity** | **$230,752** | **$222,572** | Condensed Consolidated Statements of Cash Flows (Unaudited) | Indicator (In thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$11,817** | **$13,710** | | Net cash used in investing activities | ($47,680) | ($1,365) | | Net cash provided by (used in) financing activities | $40,413 | ($7,000) | | **Increase in cash and cash equivalents** | **$4,550** | **$5,345** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes detail financial statement presentation, including a Q2 2021 accounting estimate change, the **$43.4 million** HRG acquisition, and a May 2022 credit facility amendment - In Q2 2021, the company changed its method for estimating labor costs for software development capitalization, moving to a methodology based on the distribution of agile workload metrics, considered a change in accounting estimate applied prospectively[21](index=21&type=chunk)[64](index=64&type=chunk) - On March 1, 2022, the company acquired Healthcare Resource Group, Inc. (HRG) for a net cash consideration of **$43.4 million**, with preliminary purchase price allocation including **$20.4 million** to goodwill and **$24.2 million** to intangible assets[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) - The company's revenue recognition is based on ASC 606, with TruBridge revenue recognized as services are performed, and System Sales revenue recognized upon implementation for perpetual licenses or monthly for SaaS over the contract term[25](index=25&type=chunk)[28](index=28&type=chunk)[31](index=31&type=chunk)[35](index=35&type=chunk) Segment Revenues and Adjusted EBITDA (Q1 2022 vs Q1 2021) | Segment (In thousands) | Revenues Q1 2022 | Revenues Q1 2021 | Adjusted EBITDA Q1 2022 | Adjusted EBITDA Q1 2021 | | :--- | :--- | :--- | :--- | :--- | | TruBridge | $43,108 | $31,639 | $10,789 | $6,520 | | Acute Care EHR | $30,392 | $31,890 | $5,032 | $4,684 | | Post-acute Care EHR | $4,371 | $4,476 | $332 | $620 | | **Total** | **$77,871** | **$68,005** | **$16,153** | **$11,824** | - On May 2, 2022, the company amended its credit agreement, increasing the revolving credit facility from **$110 million to $160 million**, extending the maturity date to May 2, 2027, and transitioning the benchmark interest rate from LIBOR to SOFR[136](index=136&type=chunk)[137](index=137&type=chunk)[140](index=140&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2022's **15%** revenue growth to acquisitions and TruBridge's organic expansion, noting a strategic shift to SaaS models and strong liquidity - The company's core strategy is to drive long-term revenue growth by cross-selling TruBridge services into its EHR customer base, expanding TruBridge's market share, and pursuing competitive EHR takeaway opportunities[160](index=160&type=chunk) - There is a dramatic shift in customer preference from perpetual license models to SaaS arrangements, with SaaS installations for new acute care EHRs growing from **12% in 2018 to 63% in 2021 and 100% in Q1 2022**, which reduces upfront revenue but increases long-term recurring revenue[169](index=169&type=chunk) Revenue Breakdown (Q1 2022 vs Q1 2021) | Revenue Source (In thousands) | Q1 2022 | Q1 2021 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | TruBridge | $43,108 | $31,639 | +$11,469 | +36% | | System sales and support | $34,763 | $36,366 | -$1,603 | -4% | | **Total sales revenues** | **$77,871** | **$68,005** | **+$9,866** | **+15%** | - TruBridge revenue increased by **36% YoY**, driven by organic growth in accounts receivable management, insurance, and medical coding services, as well as **$3.4 million** from the TruCode acquisition and **$3.8 million** from the HRG acquisition[192](index=192&type=chunk) Bookings (Q1 2022 vs Q1 2021) | Segment (In thousands) | Q1 2022 | Q1 2021 | Change % | | :--- | :--- | :--- | :--- | | TruBridge | $10,151 | $2,687 | +278% | | System sales and support | $10,246 | $6,090 | +68% | | **Total bookings** | **$20,397** | **$8,777** | **+132%** | - As of March 31, 2022, the company had a twelve-month backlog of approximately **$330 million**, consisting of **$6 million** from non-recurring system purchases and **$324 million** from recurring services, a significant increase from the **$258 million** total backlog a year prior[236](index=236&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its **$142.4 million** variable-rate debt, with a **100-basis-point change** impacting annual interest expense by **$1.4 million** - The primary market risk is from interest rate changes on the **$142.4 million of outstanding variable-rate borrowings** under its credit facilities as of March 31, 2022[245](index=245&type=chunk) - A hypothetical **100 basis point (1%) change** in the interest rate would result in an approximate **$1.4 million change** in annual interest expense[245](index=245&type=chunk) - The company acknowledges the upcoming cessation of LIBOR publication after June 30, 2023, and the uncertainty regarding the transition to alternative reference rates, which could impact borrowing costs[246](index=246&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of March 31, 2022, with ongoing integration of newly acquired HRG policies and no other material internal control changes - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures are effective at the reasonable assurance level[249](index=249&type=chunk) - Following the acquisition of HRG on March 1, 2022, the company is in the process of integrating its policies and controls, with no other changes materially affecting, or reasonably likely to materially affect, the company's internal control over financial reporting[250](index=250&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation arising in the ordinary course of business but is not currently involved in any claims considered material to its financial condition or results of operations - The company is not currently involved in any legal proceedings outside the ordinary course of business that are material to its financial condition or results of operations[254](index=254&type=chunk) [Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes have been made to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021[255](index=255&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2022, the company repurchased **50,720 shares** for tax withholdings, with approximately **$28.1 million** remaining available under the stock repurchase program Equity Repurchases in Q1 2022 | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2022 | 0 | N/A | | Feb 2022 | 19,448 | $29.83 | | Mar 2022 | 31,272 | $34.22 | | **Total** | **50,720** | **$32.54** | - The **50,720 shares** repurchased were to fund required tax withholdings for vested restricted stock and did not reduce the authority under the publicly announced stock repurchase program[256](index=256&type=chunk) - As of March 31, 2022, approximately **$28.1 million** remained available for repurchase under the stock repurchase program authorized through September 3, 2022[88](index=88&type=chunk)[256](index=256&type=chunk) [Defaults Upon Senior Securities](index=66&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable [Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=68&type=section&id=Item%205.%20Other%20Information) None [Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Stock Purchase Agreement for the HRG acquisition and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act - Key exhibits filed include the Stock Purchase Agreement for the Healthcare Resource Group, Inc. acquisition and CEO/CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[264](index=264&type=chunk)