CPSI(US:CPSI)2024-11-12 20:34Financial Performance - Total revenues for the first nine months of 2024 were $251.8 million, a decrease of 1% from $253.6 million in the same period of 2023[170]. - Financial Health segment revenues increased by $18.4 million, or 13%, compared to the first nine months of 2023, primarily due to the acquisition of Viewgol[192]. - Net loss for the first nine months of 2024 increased to $17.4 million from $3.3 million in the prior-year period[170]. - Recurring Financial Health revenues were $53.1 million, representing 98% of total Financial Health revenues[174]. - Patient Care segment revenues decreased by $20.2 million, or 19%, compared to the third quarter of 2023, primarily due to customer attrition and the sale of AHT[178]. - Total Patient Care revenue for the first nine months of 2024 was $90.4 million, down from $110.6 million in the same period of 2023, representing a decrease of $20.2 million, or 18%[212]. - Net loss for the third quarter of 2024 was $9.8 million, or $(0.66) per share, compared to a net loss of $3.6 million, or $(0.24) per share, for the third quarter of 2023[191]. - Net loss for the first nine months of 2024 increased by $14.1 million to $17.4 million, or $(1.17) per basic and diluted share, compared to a net loss of $3.3 million, or $(0.23) per share, for the same period in 2023[208]. Revenue Sources - Financial Health revenues comprised 57% of the consolidated revenue for 2023[149]. - SaaS license models accounted for 100% of annual new acute Patient Care installations in 2023, up from 12% in 2018[162]. - The company achieved a retention rate of 92.1% in 2023, with annualized retention at 96.0% for the first nine months of 2024[156]. - Recurring Patient Care revenues decreased by $18.3 million, or 18%, compared to the first nine months of 2023, primarily due to the sale of AHT in January 2024[196]. - Non-recurring Patient Care revenues decreased by $1.9 million, or 17%, compared to the first nine months of 2023, also driven by the sale of AHT[197]. Cost Management - Total costs of revenue (exclusive of amortization and depreciation) decreased to 51% of revenues during the third quarter of 2024, down from 53% in the third quarter of 2023[180]. - Product development expenses decreased by $2.0 million, or 21%, compared to the third quarter of 2023, primarily due to labor force optimization[183]. - General and administrative expenses decreased by $1.6 million, or 8%, compared to the third quarter of 2023[186]. - Total costs of revenue decreased by $4.7 million compared to the first nine months of 2023, with costs of revenue as a percentage of total revenues decreasing to 51% from 52%[198]. - General and administrative expenses increased by $3.2 million, or 6%, compared to the first nine months of 2023, mainly due to increased stock compensation and the acquisition of Viewgol[203]. Strategic Initiatives - The company aims to achieve long-term revenue growth by cross-selling Financial Health services into the existing Patient Care customer base[154]. - The company plans to grow through acquisitions of businesses, technologies, or products that align with strategic goals[154]. - Margin optimization efforts include organizational realignment and expanded use of offshore resources, with expectations of improved cost efficiencies[167]. - The company anticipates additional pressure on margins due to the integration and ramp-up of Viewgol, acquired in October 2023[167]. - Financial Health's gross margins are under pressure from wage inflation and inflation-indexed price adjustments in contracts with suppliers[169]. Cash Flow and Debt - As of September 30, 2024, the company had $177.7 million in principal amount of indebtedness outstanding under credit facilities, with cash and cash equivalents of $8.6 million[219]. - Total other expense increased to $11.2 million during the first nine months of 2024, compared to $7.8 million during the same period in 2023, primarily due to increased interest expense[205]. - The company drew $41.0 million from its revolving credit facility for the Viewgol acquisition, leaving $40.6 million available as of October 16, 2023[220]. - Net cash provided by operating activities increased by $8.5 million to $21.8 million for the nine months ended September 30, 2024, compared to $13.3 million for the same period in 2023[221]. - Net cash provided by investing activities increased by $24.1 million to $5.8 million during the nine months ended September 30, 2024, primarily due to the sale of AHT, which resulted in a net cash inflow of $21.4 million[222]. - Financing activities resulted in a net cash use of $22.9 million during the nine months ended September 30, 2024, compared to a net cash use of $0.5 million in the same period of 2023[223]. - As of September 30, 2024, the company had $57.3 million in principal amount outstanding under the term loan facility and $120.4 million under the revolving credit facility, with an average interest rate of 8.40%[225]. Bookings and Backlog - The company reported a twelve-month backlog of approximately $8 million for non-recurring system purchases and approximately $320 million for recurring payments as of September 30, 2024[232]. - Total bookings for the third quarter of 2024 increased by $5.973 million, or 40%, compared to the third quarter of 2023, reaching $20.95 million[234]. - Financial Health bookings increased by $3.4 million, or 38%, in the third quarter of 2024, driven by a 39% increase in net-new bookings[235]. - Patient Care bookings increased by $2.6 million, or 43%, in the third quarter of 2024, with acute Patient Care bookings rising by 59%[237]. Interest Rate Sensitivity - A one hundred basis point change in interest rates on borrowings outstanding as of September 30, 2024, would result in a change in interest expense of approximately $1.8 million annually[241].