ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2016. | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 74-3032373 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
6600 Wall Street, Mobile, Alabama | 36695 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ý | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. |
Item 1. | Financial Statements. |
June 30, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 3,824 | $ | 24,951 | |||
Investments | — | 10,824 | |||||
Accounts receivable, net of allowance for doubtful accounts of $1,944 and $1,216, respectively | 30,620 | 22,594 | |||||
Financing receivables, current portion, net | 10,741 | 10,576 | |||||
Inventories | 1,721 | 1,495 | |||||
Deferred tax assets | — | 2,335 | |||||
Prepaid income taxes | — | 427 | |||||
Prepaid expenses and other | 4,342 | 1,355 | |||||
Total current assets | 51,248 | 74,557 | |||||
Property and equipment, net | 13,911 | 14,351 | |||||
Financing receivables, net of current portion | 4,038 | 1,569 | |||||
Intangible assets, net | 112,321 | — | |||||
Goodwill | 166,109 | — | |||||
Deferred tax assets | 279 | 2,311 | |||||
Total assets | $ | 347,906 | $ | 92,788 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 8,169 | $ | 4,591 | |||
Current portion of long-term debt | 4,002 | — | |||||
Deferred revenue | 11,446 | 3,821 | |||||
Accrued vacation | 5,063 | 3,412 | |||||
Income taxes payable | 196 | — | |||||
Other accrued liabilities | 9,394 | 5,598 | |||||
Total current liabilities | 38,270 | 17,422 | |||||
Long-term debt, less current portion | 151,337 | — | |||||
Total liabilities | 189,607 | 17,422 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value; 30,000 shares authorized; 13,533 and 11,303 shares issued and outstanding | 13 | 11 | |||||
Additional paid-in capital | 143,991 | 44,187 | |||||
Accumulated other comprehensive loss | — | (38 | ) | ||||
Retained earnings | 14,295 | 31,206 | |||||
Total stockholders’ equity | 158,299 | 75,366 | |||||
Total liabilities and stockholders’ equity | $ | 347,906 | $ | 92,788 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Sales revenues: | |||||||||||||||
System sales and support | $ | 50,561 | $ | 30,810 | $ | 102,941 | $ | 61,927 | |||||||
Business management, consulting and managed IT services | 17,854 | 16,276 | 35,117 | 31,399 | |||||||||||
Total sales revenues | 68,415 | 47,086 | 138,058 | 93,326 | |||||||||||
Costs of sales: | |||||||||||||||
System sales and support | 23,367 | 13,913 | 47,229 | 27,301 | |||||||||||
Business management, consulting and managed IT services | 9,913 | 8,458 | 19,440 | 16,864 | |||||||||||
Total costs of sales | 33,280 | 22,371 | 66,669 | 44,165 | |||||||||||
Gross profit | 35,135 | 24,715 | 71,389 | 49,161 | |||||||||||
Operating expenses: | |||||||||||||||
Product development | 8,179 | 3,570 | 15,369 | 7,152 | |||||||||||
Sales and marketing | 6,717 | 4,740 | 13,447 | 9,331 | |||||||||||
General and administrative | 12,352 | 8,019 | 31,555 | 16,458 | |||||||||||
Amortization of acquisition-related intangibles | 2,624 | — | 4,979 | — | |||||||||||
Total operating expenses | 29,872 | 16,329 | 65,350 | 32,941 | |||||||||||
Operating income | 5,263 | 8,386 | 6,039 | 16,220 | |||||||||||
Other income (expense): | |||||||||||||||
Other income | 69 | 115 | 68 | 198 | |||||||||||
Interest expense | (1,642 | ) | — | (3,110 | ) | — | |||||||||
Total other income (expense) | (1,573 | ) | 115 | (3,042 | ) | 198 | |||||||||
Income before taxes | 3,690 | 8,501 | 2,997 | 16,418 | |||||||||||
Provision for income taxes | 1,694 | 2,598 | 2,664 | 5,007 | |||||||||||
Net income | $ | 1,996 | $ | 5,903 | $ | 333 | $ | 11,411 | |||||||
Net income per common share—basic | $ | 0.15 | $ | 0.52 | $ | 0.03 | $ | 1.01 | |||||||
Net income per common share—diluted | $ | 0.15 | $ | 0.52 | $ | 0.03 | $ | 1.01 | |||||||
Weighted average shares outstanding used in per common share computations: | |||||||||||||||
Basic | 13,317 | 11,079 | 13,171 | 11,066 | |||||||||||
Diluted | 13,365 | 11,079 | 13,227 | 11,066 | |||||||||||
Dividends declared per common share | $ | 0.64 | $ | 0.64 | $ | 1.28 | $ | 1.28 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 1,996 | $ | 5,903 | $ | 333 | $ | 11,411 | |||||||
Other comprehensive income, net of tax | |||||||||||||||
Change in unrealized income with realized income on the Statement of Operations | 6 | (61 | ) | 38 | 26 | ||||||||||
Total other comprehensive income (loss), net of tax | 6 | (61 | ) | 38 | 26 | ||||||||||
Comprehensive income | $ | 2,002 | $ | 5,842 | $ | 371 | $ | 11,437 |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Stockholders’ Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balance at December 31, 2015 | 11,303 | $ | 11 | $ | 44,187 | $ | (38 | ) | $ | 31,206 | $ | 75,366 | ||||||||||
Net income | — | — | — | — | 333 | 333 | ||||||||||||||||
Change in unrealized income with realized income on the Statement of Operations | — | — | — | 38 | — | 38 | ||||||||||||||||
Common stock issued as consideration for acquisition of HHI | 1,974 | 2 | 89,801 | — | — | 89,803 | ||||||||||||||||
Fair value of options issued as consideration for acquisition of HHI | — | — | 5,748 | — | — | 5,748 | ||||||||||||||||
Common stock issued upon exercise of stock options | 169 | — | 1,134 | — | — | 1,134 | ||||||||||||||||
Issuance of restricted stock | 87 | — | — | — | — | — | ||||||||||||||||
Stock-based compensation | — | — | 2,877 | — | — | 2,877 | ||||||||||||||||
Dividends | — | — | — | — | (17,244 | ) | (17,244 | ) | ||||||||||||||
Excess tax benefit from share-based compensation | — | — | 244 | — | — | 244 | ||||||||||||||||
Balance at June 30, 2016 | 13,533 | $ | 13 | $ | 143,991 | $ | — | $ | 14,295 | $ | 158,299 |
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Operating Activities: | |||||||
Net income | $ | 333 | $ | 11,411 | |||
Adjustments to net income: | |||||||
Provision for bad debt | 451 | (339 | ) | ||||
Deferred taxes | 1,748 | (494 | ) | ||||
Stock-based compensation | 2,877 | 2,615 | |||||
Excess tax benefit from stock-based compensation | (244 | ) | (8 | ) | |||
Depreciation | 1,740 | 1,827 | |||||
Amortization of acquisition-related intangibles | 4,979 | — | |||||
Amortization of deferred finance costs | 330 | — | |||||
Changes in operating assets and liabilities (net of acquired assets and liabilities): | |||||||
Accounts receivable | (2,564 | ) | 1,328 | ||||
Financing receivables | (574 | ) | 4,152 | ||||
Inventories | (10 | ) | 79 | ||||
Prepaid expenses and other | 242 | (1,079 | ) | ||||
Accounts payable | (4,260 | ) | 877 | ||||
Deferred revenue | (8,573 | ) | (1,203 | ) | |||
Other liabilities | (5,825 | ) | (350 | ) | |||
Prepaid income taxes/income taxes payable | 868 | (1,401 | ) | ||||
Net cash provided by (used in) operating activities | (8,482 | ) | 17,415 | ||||
Investing Activities: | |||||||
Purchases of property and equipment | (39 | ) | (447 | ) | |||
Purchases of investments | — | (43 | ) | ||||
Purchase of business, net of cash received | (162,611 | ) | — | ||||
Sale of investments | 10,861 | — | |||||
Net cash used in investing activities | (151,789 | ) | (490 | ) | |||
Financing Activities: | |||||||
Dividends paid | (17,244 | ) | (14,476 | ) | |||
Proceeds from long-term debt | 156,572 | — | |||||
Payments of long-term debt principal | (1,562 | ) | — | ||||
Proceeds from exercise of stock options | 1,134 | — | |||||
Excess tax benefit from stock-based compensation | 244 | 8 | |||||
Net cash provided by (used in) financing activities | 139,144 | (14,468 | ) | ||||
(Decrease) increase in cash and cash equivalents | (21,127 | ) | 2,457 | ||||
Cash and cash equivalents at beginning of period | 24,951 | 23,792 | |||||
Cash and cash equivalents at end of period | $ | 3,824 | $ | 26,249 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | $ | 2,780 | $ | — | |||
Cash paid for income taxes, net of refund | $ | — | $ | 6,927 | |||
Supplemental disclosure of non-cash information: | |||||||
Fair value of common stock and options issued as consideration for acquisition of HHI | $ | 95,551 | $ | — | |||
Write-off of fully depreciated assets | $ | 2,769 | $ | — |
• | The Company's sales revenues and costs of sales amounts formerly included within the captions "System sales" and "Support and maintenance" are now included within the caption "System sales and support" within the condensed consolidated statements of operations; |
• | The Company's product development costs formerly included within the captions of "System sales" and "Support and maintenance" within the "Costs of sales" section of the condensed consolidated statements of operations are now included within the caption "Product development" within the "Operating expenses" section of the condensed consolidated statements of operations; and |
• | The Company's sales-facilitative costs associated with business management, consulting and managed IT services formerly included within the caption "Business management, consulting and managed IT services" within the "Costs of sales" section of the condensed consolidated statements of income are now included within the caption "Sales and marketing" within the "Operating expenses" section of the condensed consolidated statements of operations. |
(In thousands) | As previously reported | Reclassifications | As reclassified | ||||||||
Sales revenues: | |||||||||||
System sales | $ | 12,268 | $ | (12,268 | ) | $ | — | ||||
Support and maintenance | 18,542 | (18,542 | ) | — | |||||||
System sales and support | — | 30,810 | 30,810 | ||||||||
Costs of sales: | |||||||||||
System sales | 10,641 | (10,641 | ) | — | |||||||
Support and maintenance | 6,842 | (6,842 | ) | — | |||||||
System sales and support | — | 13,913 | 13,913 | ||||||||
Business management, consulting and managed IT services | 9,927 | (1,469 | ) | 8,458 | |||||||
Operating expenses: | |||||||||||
Product development | — | 3,570 | 3,570 | ||||||||
Sales and marketing | 3,271 | 1,469 | 4,740 |
(In thousands) | As previously reported | Reclassifications | As reclassified | ||||||||
Sales revenues: | |||||||||||
System sales | $ | 24,853 | $ | (24,853 | ) | $ | — | ||||
Support and maintenance | 37,074 | (37,074 | ) | — | |||||||
System sales and support | — | 61,927 | 61,927 | ||||||||
Costs of sales: | |||||||||||
System sales | 20,451 | (20,451 | ) | — | |||||||
Support and maintenance | 14,002 | (14,002 | ) | — | |||||||
System sales and support | — | 27,301 | 27,301 | ||||||||
Business management, consulting and managed IT services | 19,891 | (3,027 | ) | 16,864 | |||||||
Operating expenses: | |||||||||||
Product development | — | 7,152 | 7,152 | ||||||||
Sales and marketing | 6,304 | 3,027 | 9,331 |
• | strengthens our position in providing healthcare information systems to community healthcare organizations with approximately 1,200 combined hospital customers; |
• | introduces CPSI to the post-acute care market; and |
• | expands the products offered by and capabilities of TruBridge with the addition of Rycan and its suite of revenue cycle management software products. |
(In thousands) | Purchase Price Allocation | ||
Acquired cash | $ | 5,371 | |
Accounts receivable | 5,789 | ||
Financing receivables | 2,184 | ||
Inventories | 216 | ||
Prepaid expenses | 3,228 | ||
Property and equipment | 1,263 | ||
Intangible assets | 117,300 | ||
Goodwill | 166,109 | ||
Accounts payable and accrued liabilities | (17,490 | ) | |
Deferred taxes, net | (2,618 | ) | |
Contingent consideration | (1,620 | ) | |
Deferred revenue | (16,199 | ) | |
Net assets acquired | $ | 263,533 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(In thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Pro forma revenues | $ | 66,647 | $ | 74,476 | $ | 138,489 | $ | 145,818 | |||||||
Pro forma net income (loss) | $ | 941 | $ | 1,678 | $ | 2,637 | $ | (340 | ) | ||||||
Pro forma diluted earnings (loss) per share | $ | 0.07 | $ | 0.13 | $ | 0.20 | $ | (0.03 | ) |
• | System Sales and Support - the sale of information systems and the provision of system support services. The sale of information systems includes perpetual software licenses, conversion, installation and training services, hardware and peripherals, "Software as a Service" (or "SaaS") services, and forms and supplies. System support services includes software application support, hardware maintenance, and continuing education. |
• | Business Management, Consulting and Managed IT Services - the provision of business management services, which includes electronic billing, statement processing, payroll processing, accounts receivable management, contract management and insurance services, as well as Internet service provider ("ISP") services and consulting and managed IT services (collectively, "other professional IT services"). |
• | Perpetual software licenses and conversion, installation and training services – The selling price of perpetual software licenses and conversion, installation and training services is based on management’s best estimate of selling price. In determining management’s best estimate of selling price, we consider the following: (1) competitor pricing, (2) supply and demand of installation staff, (3) overall economic conditions, and (4) our pricing practices as they relate to discounts. With the exception of certain arrangements with extended payment terms that were entered into in 2012 and that are not comparable to our historical or current arrangements (see Note 10), the method of recognizing revenue for the perpetual license of the associated modules included in the |
• | Hardware – We recognize revenue for hardware upon shipment. The selling price of hardware is based on management’s best estimate of selling price, which consists of cost plus a targeted margin. |
• | Software application support and hardware maintenance – We have established vendor-specific objective evidence ("VSOE") of the fair value of our software application support and hardware maintenance services by reference to the price our customers are required to pay for the services when sold separately via renewals. Support and maintenance revenue is recognized on a straight-line basis over the term of the maintenance contract, which is generally three to five years. |
• | SaaS services - The Company accounts for SaaS arrangements in accordance with the requirements of the Hosting Arrangement section under the Software topic and Revenue Recognition subtopic of the Codification. The Codification states that the software elements of SaaS services should not be accounted for as a hosting arrangement "if the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty and it is feasible for the customer to either run the software on its own hardware or contract with another party unrelated to the vendor to host the software." Each SaaS contract entered into by the Company includes a system purchase and buyout clause, and this clause specifies the total amount of the system buyout. In addition, a clause is included in the contract which states that should the system be bought out by the customer, the customer would be required to enter into a general support agreement (for post-contract support services) for the remainder of the original SaaS term. Accordingly, the Company has concluded that SaaS customers do not have the right to take possession of the system without significant penalty (i.e., the purchase price of the system), resulting in the determination that these contracts are service contracts for which revenue is recognized when the services are performed. |
(In thousands) | June 30, 2016 | December 31, 2015 | |||||
Land | $ | 2,848 | $ | 2,848 | |||
Buildings and improvements | 9,432 | 9,432 | |||||
Maintenance equipment | 802 | 1,231 | |||||
Computer equipment | 4,241 | 4,798 | |||||
Leasehold improvements | 5,007 | 4,753 | |||||
Office furniture and fixtures | 3,592 | 4,336 | |||||
Automobiles | 335 | 335 | |||||
26,257 | 27,733 | ||||||
Less: accumulated depreciation | (12,346 | ) | (13,382 | ) | |||
Property and equipment, net | $ | 13,911 | $ | 14,351 |
(In thousands) | June 30, 2016 | December 31, 2015 | |||||
Salaries and benefits | $ | 4,601 | $ | 2,292 | |||
Severance | 1,065 | 1,569 | |||||
Commissions | 1,171 | 435 | |||||
Self-insurance reserves | 875 | 883 | |||||
Contingent consideration | 1,120 | — | |||||
Other | 562 | 419 | |||||
$ | 9,394 | $ | 5,598 |
(In thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||
Short-term investments (money market funds and accrued income) | $ | 1,269 | $ | — | $ | — | $ | 1,269 | |||||||
Obligations of U.S. Treasury, U.S. government corporations and agencies | 1,562 | 1 | (6 | ) | 1,557 | ||||||||||
Mortgage-backed securities | 54 | 1 | — | 55 | |||||||||||
Certificates of deposit | 2,000 | — | (7 | ) | 1,993 | ||||||||||
Corporate debt securities | 6,000 | — | (50 | ) | 5,950 | ||||||||||
$ | 10,885 | $ | 2 | $ | (63 | ) | $ | 10,824 |
At December 31, 2015 | |||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||
(In thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
Obligations of U.S. Treasury, U.S. government corporations and agencies | $ | 768 | $ | (6 | ) | $ | 410 | $ | — | $ | 1,178 | $ | (6 | ) | |||||||||
Certificates of deposit | — | — | 1,743 | (7 | ) | 1,743 | (7 | ) | |||||||||||||||
Corporate debt securities | 2,566 | (26 | ) | 3,234 | (24 | ) | 5,800 | (50 | ) | ||||||||||||||
$ | 3,334 | $ | (32 | ) | $ | 5,387 | $ | (31 | ) | $ | 8,721 | $ | (63 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
(in thousands, except per share data) | June 30, 2016 | June 30, 2015 | June 30, 2016 | June 30, 2015 | |||||||||||
Net income | $ | 1,996 | $ | 5,903 | $ | 333 | $ | 11,411 | |||||||
Less: Net (income) loss attributable to participating securities | (32 | ) | (120 | ) | 15 | (254 | ) | ||||||||
Net income attributable to common stockholders | $ | 1,964 | $ | 5,783 | $ | 348 | $ | 11,157 | |||||||
Weighted average shares outstanding used in basic per common share computations | 13,317 | 11,079 | 13,171 | 11,066 | |||||||||||
Add: Dilutive potential common shares | 48 | — | 56 | — | |||||||||||
Weighted average shares outstanding used in diluted per common share computations | 13,365 | 11,079 | 13,227 | 11,066 | |||||||||||
Basic EPS | $ | 0.15 | $ | 0.52 | $ | 0.03 | $ | 1.01 | |||||||
Diluted EPS | $ | 0.15 | $ | 0.52 | $ | 0.03 | $ | 1.01 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | June 30, 2016 | June 30, 2015 | June 30, 2016 | June 30, 2015 | |||||||||||
Costs of sales | $ | 374 | $ | 356 | $ | 773 | $ | 953 | |||||||
Operating expenses | 1,120 | 822 | 2,104 | 1,662 | |||||||||||
Pre-tax stock-based compensation expense | 1,494 | 1,178 | 2,877 | 2,615 | |||||||||||
Less: income tax effect | (583 | ) | (459 | ) | (1,122 | ) | (1,020 | ) | |||||||
Net stock-based compensation expense | $ | 911 | $ | 719 | $ | 1,755 | $ | 1,595 |
Six Months Ended June 30, 2016 | Six Months Ended June 30, 2015 | ||||||||||||
Shares | Weighted-Average Grant Date Fair Value Per Share | Shares | Weighted-Average Grant Date Fair Value Per Share | ||||||||||
Nonvested restricted stock outstanding at beginning of period | 191,397 | $ | 57.12 | 160,216 | $ | 59.14 | |||||||
Granted | 86,984 | 52.21 | 60,850 | 51.85 | |||||||||
Performance share awards settled through the issuance of restricted stock | — | — | 45,844 | 60.28 | |||||||||
Vested | (72,393 | ) | 57.75 | (41,525 | ) | 60.71 | |||||||
Forfeited | — | — | (12,885 | ) | 58.06 | ||||||||
Nonvested restricted stock outstanding at end of period | 205,988 | $ | 54.82 | 212,500 | $ | 57.09 |
Six Months Ended June 30, 2016 | Six Months Ended June 30, 2015 | ||||||||||||
Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Performance share awards outstanding at beginning of period | 49,471 | $ | 49.29 | 46,541 | $ | 60.28 | |||||||
Granted | 77,594 | 49.64 | 52,364 | 49.29 | |||||||||
Forfeited or unearned | (49,471 | ) | 49.29 | (3,590 | ) | 51.42 | |||||||
Performance share awards settled through the issuance of restricted stock | — | — | (45,844 | ) | 60.28 | ||||||||
Performance share awards outstanding at end of period | 77,594 | $ | 49.64 | 49,471 | $ | 49.29 |
(In thousands) | June 30, 2016 | December 31, 2015 | |||||
Second Generation Meaningful Use Installment Plans, gross | $ | 6,434 | $ | 9,372 | |||
Fixed Periodic Payment Plans, gross | 2,822 | 454 | |||||
Short-term payment plans, gross | $ | 9,256 | $ | 9,826 | |||
Less: allowance for losses | (448 | ) | (491 | ) | |||
Less: unearned income | — | — | |||||
Short-term payment plans, net | $ | 8,808 | $ | 9,335 |
(In thousands) | June 30, 2016 | December 31, 2015 | |||||
Sales-type leases, gross | $ | 7,290 | $ | 3,239 | |||
Less: allowance for losses | (329 | ) | (163 | ) | |||
Less: unearned income | (990 | ) | (266 | ) | |||
Sales-type leases, net | $ | 5,971 | $ | 2,810 |
(In thousands) | |||
Years Ended December 31, | |||
2016 | $ | 1,210 | |
2017 | 2,223 | ||
2018 | 1,287 | ||
2019 | 926 | ||
2020 | 704 | ||
Thereafter | 940 | ||
Total minimum lease payments to be received | 7,290 | ||
Less: allowance for losses | (329 | ) | |
Less: unearned income | (990 | ) | |
Lease receivables, net | $ | 5,971 | |
(In thousands) | Balance at Beginning of Period | Provision | Charge-offs | Recoveries | Balance at End of Period | ||||||||||||||
June 30, 2016 | $ | 654 | $ | 123 | $ | — | $ | — | $ | 777 | |||||||||
December 31, 2015 | $ | 1,001 | $ | 236 | $ | (583 | ) | $ | — | $ | 654 |
(In thousands) | 1 to 90 Days Past Due | 91 to 180 Days Past Due | 181 + Days Past Due | Total Past Due | |||||||||||
June 30, 2016 | $ | 149 | $ | 30 | $ | 57 | $ | 236 | |||||||
December 31, 2015 | $ | 251 | $ | 66 | $ | 29 | $ | 346 |
(In thousands) | June 30, 2016 | December 31, 2015 | |||||
Customer balances with amounts reclassified to trade accounts receivable that are: | |||||||
1 to 90 Days Past Due | $ | 3,827 | $ | 515 | |||
91 to 180 Days Past Due | 228 | 230 | |||||
181 + Days Past Due | — | — | |||||
Total customer balances with past due amounts reclassified to trade accounts receivable | $ | 4,055 | $ | 745 | |||
Total customer balances with no past due amounts reclassified to trade accounts receivable | 2,245 | 2,228 | |||||
Total financing receivables with contractual maturities of one year or less | 9,256 | 9,826 | |||||
Less: allowance for losses | (777 | ) | (654 | ) | |||
Total financing receivables | $ | 14,779 | $ | 12,145 |
(In thousands) | Customer Relationships | Trademark | Developed Technology | Total | |||||||||||
Gross carrying amount | $ | 82,300 | $ | 10,900 | $ | 24,100 | $ | 117,300 | |||||||
Accumulated amortization | (3,129 | ) | (407 | ) | (1,443 | ) | (4,979 | ) | |||||||
Net intangible assets | $ | 79,171 | $ | 10,493 | $ | 22,657 | $ | 112,321 | |||||||
Weighted average remaining years of useful life | 12 | 15 | 8 | 12 |
(In thousands) | |||
For the year ended December 31, | |||
2016 | $ | 5,203 | |
2017 | 10,406 | ||
2018 | 10,406 | ||
2019 | 10,112 | ||
2020 | 10,105 | ||
Due thereafter | 66,089 | ||
Total | $ | 112,321 |
(In thousands) | Acute Care EHR | Post-acute Care EHR | Business Management, Consulting and Managed IT Services | Total | ||||||||
Balance as of December 31, 2015 | $ | — | $ | — | $ | — | $ | — | ||||
Goodwill acquired | 98,835 | 55,813 | 11,461 | 166,109 | ||||||||
Balance as of June 30, 2016 | $ | 98,835 | $ | 55,813 | $ | 11,461 | $ | 166,109 |
(In thousands) | June 30, 2016 | December 31, 2015 | |||||
Term loan facility | $ | 123,437 | $ | — | |||
Revolving credit facility | 35,000 | — | |||||
Debt obligations | 158,437 | — | |||||
Less: debt issuance costs | (3,098 | ) | — | ||||
Debt obligation, net | 155,339 | — | |||||
Less: current portion | (4,002 | ) | — | ||||
Long-term debt | $ | 151,337 | $ | — |
(In thousands) | |||
2016 | $ | 1,562 | |
2017 | 6,250 | ||
2018 | 9,375 | ||
2019 | 12,500 | ||
2020 | 15,625 | ||
Thereafter | 113,125 | ||
$ | 158,437 |
Fair Value at June 30, 2016 Using | |||||||||||||||
Carrying Amount at | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||
(In thousands) | 6/30/2016 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Description | |||||||||||||||
Contingent consideration | $ | 1,120 | $ | — | $ | — | $ | 1,120 | |||||||
Total | $ | 1,120 | $ | — | $ | — | $ | 1,120 |
Fair Value at December 31, 2015 Using | |||||||||||||||
Carrying Amount at | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||
(In thousands) | 12/31/2015 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Description | |||||||||||||||
Available-for-sale securities | |||||||||||||||
Short-term investments (money market funds and accrued income) | $ | 1,269 | $ | — | $ | 1,269 | $ | — | |||||||
Obligations of U.S. Treasury, U.S. government corporations and agencies | 55 | — | 55 | — | |||||||||||
Mortgage-backed securities | 1,993 | — | 1,993 | — | |||||||||||
Certificates of deposit | 1,558 | — | 1,558 | — | |||||||||||
Corporate debt securities | 5,949 | — | 5,949 | — | |||||||||||
Total available-for-sale securities | $ | 10,824 | $ | — | $ | 10,824 | $ | — |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(In thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Revenues: | |||||||||||||||
Acute Care EHR | $ | 41,125 | $ | 30,810 | $ | 84,250 | $ | 61,927 | |||||||
Post-acute Care EHR | 7,579 | — | 15,098 | — | |||||||||||
TruBridge, Rycan, and Other Outsourcing | 19,711 | 16,276 | 38,710 | 31,399 | |||||||||||
Total revenues | $ | 68,415 | $ | 47,086 | $ | 138,058 | $ | 93,326 | |||||||
Cost of sales: | |||||||||||||||
Acute Care EHR | $ | 19,744 | $ | 13,913 | 39,800 | 27,301 | |||||||||
Post-acute Care EHR | 2,919 | — | 5,661 | — | |||||||||||
TruBridge, Rycan, and Other Outsourcing | 10,617 | 8,458 | 21,208 | 16,864 | |||||||||||
Total cost of sales | $ | 33,280 | $ | 22,371 | $ | 66,669 | $ | 44,165 | |||||||
Gross profit: | |||||||||||||||
Acute Care EHR | $ | 21,381 | $ | 16,897 | 44,450 | 34,626 | |||||||||
Post-acute Care EHR | 4,660 | — | 9,437 | — | |||||||||||
TruBridge, Rycan, and Other Outsourcing | 9,094 | 7,818 | 17,502 | 14,535 | |||||||||||
Total gross profit | $ | 35,135 | $ | 24,715 | $ | 71,389 | $ | 49,161 | |||||||
Corporate operating expenses | $ | (29,872 | ) | (16,329 | ) | (65,350 | ) | (32,941 | ) | ||||||
Other income (loss) | 69 | 115 | 68 | 198 | |||||||||||
Interest expense | (1,642 | ) | — | (3,110 | ) | — | |||||||||
Income (loss) before taxes | $ | 3,690 | $ | 8,501 | $ | 2,997 | $ | 16,418 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | overall business and economic conditions affecting the healthcare industry, including the potential effects of the federal healthcare reform legislation enacted in 2010, and implementing regulations, on the businesses of our hospital customers; |
• | government regulation of our products and services and the healthcare and health insurance industries, including changes in healthcare policy affecting Medicare and Medicaid reimbursement rates and qualifying technological standards; |
• | changes in customer purchasing priorities, capital expenditures and demand for information technology systems; |
• | saturation of our target market and hospital consolidations; |
• | general economic conditions, including changes in the financial and credit markets that may affect the availability and cost of credit to us or our customers; |
• | our substantial indebtedness, and our ability to incur additional indebtedness in the future; |
• | our inability to generate sufficient cash in order to meet our debt service obligations; |
• | restrictions on our current and future operations because of the terms of our senior secured credit facilities; |
• | market risks related to interest rate changes; |
• | our ability to successfully integrate the businesses of Healthland Inc., American HealthTech, Inc., and Rycan Technologies, Inc. with our business and the inherent risks associated with any potential future acquisitions; |
• | competition with companies that have greater financial, technical and marketing resources than we have; |
• | failure to develop new or enhance current technology and products in response to market demands; |
• | failure of our products to function properly resulting in claims for losses; |
• | breaches of security and viruses in our systems resulting in customer claims against us and harm to our reputation; |
• | failure to maintain customer satisfaction through new product releases or enhancements free of undetected errors or problems; |
• | interruptions in our power supply and/or telecommunications capabilities, including those caused by natural disaster; |
• | our ability to attract and retain qualified customer service and support personnel; |
• | failure to properly manage growth in new markets we may enter; |
• | misappropriation of our intellectual property rights and potential intellectual property claims and litigation against us; |
• | changes in accounting principles generally accepted in the United States of America; and |
• | fluctuations in quarterly financial performance due to, among other factors, timing of customer installations. |
• | Evident, formed in April 2015, provides comprehensive electronic health record ("EHR") solutions and services for rural and community hospitals, including those solutions previously sold under the CPSI name as well as an expanded range of offerings targeted specifically at rural and community healthcare organizations. |
• | TruBridge focuses exclusively on providing business management, consulting and managed IT services to rural and community healthcare organizations, regardless of their IT vendor. |
• | Healthland, acquired in the acquisition of HHI, provides integrated technology solutions and services to small rural, community, and critical access hospitals. |
• | AHT, acquired in the acquisition of HHI, is one of the nation's largest providers of financial and clinical technology solutions and services for post-acute care facilities. |
• | Rycan, acquired in the acquisition of HHI, provides revenue cycle management workflow and automation software to rural and community hospitals, healthcare systems, and skilled nursing organizations. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
(In thousands) | Amount | % Sales | Amount | % Sales | Amount | % Sales | Amount | % Sales | |||||||||||||||||||
INCOME DATA: | |||||||||||||||||||||||||||
Sales revenues: | |||||||||||||||||||||||||||
System sales and support | $ | 50,561 | 73.9 | % | $ | 30,810 | 65.4 | % | $ | 102,941 | 74.6 | % | $ | 61,927 | 66.4 | % | |||||||||||
Business management, consulting and managed IT services | 17,854 | 26.1 | % | 16,276 | 34.6 | % | 35,117 | 25.4 | % | 31,399 | 33.6 | % | |||||||||||||||
Total sales revenues | 68,415 | 100.0 | % | 47,086 | 100.0 | % | 138,058 | 100.0 | % | 93,326 | 100.0 | % | |||||||||||||||
Costs of sales: | |||||||||||||||||||||||||||
System sales and support | 23,367 | 34.2 | % | 13,913 | 29.5 | % | 47,229 | 34.2 | % | 27,301 | 29.3 | % | |||||||||||||||
Business management, consulting and managed IT services | 9,913 | 14.5 | % | 8,458 | 18.0 | % | 19,440 | 14.1 | % | 16,864 | 18.1 | % | |||||||||||||||
Total costs of sales | 33,280 | 48.6 | % | 22,371 | 47.5 | % | 66,669 | 48.3 | % | 44,165 | 47.3 | % | |||||||||||||||
Gross profit | 35,135 | 51.4 | % | 24,715 | 52.5 | % | 71,389 | 51.7 | % | 49,161 | 52.7 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Product development | 8,179 | 12.0 | % | 3,570 | 7.6 | % | 15,369 | 11.1 | % | 7,152 | 7.7 | % | |||||||||||||||
Sales and marketing | 6,717 | 9.8 | % | 4,740 | 10.1 | % | 13,447 | 9.7 | % | 9,331 | 10.0 | % | |||||||||||||||
General and administrative | 12,352 | 18.1 | % | 8,019 | 17.0 | % | 31,555 | 22.9 | % | 16,458 | 17.6 | % | |||||||||||||||
Amortization of acquisition-related intangibles | 2,624 | 3.8 | % | — | — | % | 4,979 | 3.6 | % | — | — | % | |||||||||||||||
Total operating expenses | 29,872 | 43.7 | % | 16,329 | 34.7 | % | 65,350 | 47.3 | % | 32,941 | 35.3 | % | |||||||||||||||
Operating income | 5,263 | 7.7 | % | 8,386 | 17.8 | % | 6,039 | 4.4 | % | 16,220 | 17.4 | % | |||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||
Other income | 69 | 0.1 | % | 115 | 0.2 | % | 68 | — | % | 198 | 0.2 | % | |||||||||||||||
Interest expense | (1,642 | ) | (2.4 | )% | — | — | % | (3,110 | ) | (2.3 | )% | — | — | % | |||||||||||||
Total other income (expense) | (1,573 | ) | (2.3 | )% | 115 | 0.2 | % | (3,042 | ) | (2.2 | )% | 198 | 0.2 | % | |||||||||||||
Income before taxes | 3,690 | 5.4 | % | 8,501 | 18.1 | % | 2,997 | 2.2 | % | 16,418 | 17.6 | % | |||||||||||||||
Provision for income taxes | 1,694 | 2.5 | % | 2,598 | 5.5 | % | 2,664 | 1.9 | % | 5,007 | 5.4 | % | |||||||||||||||
Net income | $ | 1,996 | 2.9 | % | $ | 5,903 | 12.5 | % | $ | 333 | 0.2 | % | $ | 11,411 | 12.2 | % |
Three Months Ended | |||||||
(In thousands) | June 30, 2016 | June 30, 2015 | |||||
System sales(1) | $ | 21,617 | $ | 13,055 | |||
Support(1) | 28,944 | 17,755 | |||||
$ | 50,561 | $ | 30,810 | ||||
(1) Note these amounts differ from amounts previously reported as "System sales" and "Support and maintenance" under our prior revenue classifications as certain revenue categories (such as Saas/Cloud EHR) that were formerly included in "Support and maintenance" revenues are now classified as a component of "System sales." |
Three Months Ended | |||||||
(In thousands) | June 30, 2016 | June 30, 2015 | |||||
Sales revenues: | |||||||
Acute Care EHR | $ | 41,125 | $ | 30,810 | |||
Post-acute Care EHR | 7,579 | — | |||||
TruBridge, Rycan, and Other Outsourcing | 19,711 | 16,276 | |||||
Total revenues | $ | 68,415 | $ | 47,086 | |||
Costs of sales: | |||||||
Acute Care EHR | $ | 19,744 | $ | 13,913 | |||
Post-acute Care EHR | 2,919 | — | |||||
TruBridge, Rycan, and Other Outsourcing | 10,617 | 8,458 | |||||
Total costs of sales | $ | 33,280 | $ | 22,371 | |||
Gross profit: | |||||||
Acute Care EHR | $ | 21,381 | $ | 16,897 | |||
Post-acute Care EHR | 4,660 | — | |||||
TruBridge, Rycan, and Other Outsourcing s | 9,094 | 7,818 | |||||
Total gross profit | $ | 35,135 | $ | 24,715 |
Six Months Ended | |||||||
(In thousands) | June 30, 2016 | June 30, 2015 | |||||
System sales(1) | $ | 44,789 | $ | 26,433 | |||
Support(1) | 58,152 | 35,494 | |||||
$ | 102,941 | $ | 61,927 | ||||
(1) Note these amounts differ from amounts previously reported as "System sales" and "Support and maintenance" under our prior revenue classifications as certain revenue categories (such as Saas/Cloud EHR) that were formerly included in "Support and maintenance" revenues are now classified as a component of "System sales." |
Six Months Ended | |||||||
(In thousands) | June 30, 2016 | June 30, 2015 | |||||
Sales revenues: | |||||||
Acute Care EHR | $ | 84,250 | $ | 61,927 | |||
Post-acute Care EHR | 15,098 | — | |||||
TruBridge, Rycan, and Other Outsourcing | 38,710 | 31,399 | |||||
Total revenues | $ | 138,058 | $ | 93,326 | |||
Costs of sales: | |||||||
Acute Care EHR | $ | 39,800 | $ | 27,301 | |||
Post-acute Care EHR | 5,661 | — | |||||
TruBridge, Rycan, and Other Outsourcing | 21,208 | 16,864 | |||||
Total costs of sales | $ | 66,669 | $ | 44,165 | |||
Gross profit: | |||||||
Acute Care EHR | $ | 44,450 | $ | 34,626 | |||
Post-acute Care EHR | 9,437 | — | |||||
TruBridge, Rycan, and Other Outsourcing | 17,502 | 14,535 | |||||
Total gross profit | $ | 71,389 | $ | 49,161 |
Payment due by period | |||||||||||||||||||
(In thousands) | Total | Less than 1 year | 1-3 Years | 3-5 Years | More than 5 Years | ||||||||||||||
Operating lease obligations | $ | 6,839 | $ | 1,359 | $ | 3,249 | $ | 1,190 | $ | 1,041 | |||||||||
Debt obligations | 158,437 | 4,687 | 18,750 | 135,000 | — | ||||||||||||||
Interest on debt obligations | 24,473 | 5,991 | 11,176 | 7,306 | — | ||||||||||||||
$ | 189,749 | $ | 12,037 | $ | 33,175 | $ | 143,496 | $ | 1,041 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk. |
(In thousands) | Aggregate Fair Value | Weighted Average Interest Rate | ||||
Cash and Cash Equivalents: | ||||||
Cash and cash equivalents | $ | 3,824 | — | % |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Item 3. | Defaults Upon Senior Securities. |
Item 4. | Mine Safety Disclosures. |
Item 5. | Other Information. |
Item 6. | Exhibits. |
3.1 | Certificate of Incorporation (filed as Exhibit 3.4 to CPSI’s Registration Statement on Form S-1 (Registration No. 333-84726) and incorporated herein by reference) | |
3.2 | Amended and Restated Bylaws (filed as Exhibit 3 to CPSI’s Current Report on Form 8-K dated October 28, 2013 and incorporated herein by reference) | |
31.1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101 | Interactive Data Files for CPSI’s Form 10-Q for the period ended June 30, 2016 |
COMPUTER PROGRAMS AND SYSTEMS, INC. | ||||
Date: August 9, 2016 | By: | /s/ J. Boyd Douglas | ||
J. Boyd Douglas | ||||
President and Chief Executive Officer | ||||
Date: August 9, 2016 | By: | /S/ Matt J. Chambless | ||
Matt J. Chambless | ||||
Chief Financial Officer |
No. | Exhibit | |
3.1 | Certificate of Incorporation (filed as Exhibit 3.4 to CPSI’s Registration Statement on Form S-1 (Registration No. 333-84726) and incorporated herein by reference) | |
3.2 | Amended and Restated Bylaws (filed as Exhibit 3 to CPSI’s Current Report on Form 8-K dated October 28, 2013 and incorporated herein by reference) | |
31.1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101 | Interactive Data Files for CPSI’s Form 10-Q for the period ended June 30, 2016 |
1. | I have reviewed this Quarterly Report on Form 10-Q of Computer Programs and Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
/s/ J. Boyd Douglas |
J. Boyd Douglas |
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Computer Programs and Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
/s/ Matt J. Chambless |
Matt J. Chambless |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 9, 2016 | /s/ J. Boyd Douglas | |||
J. Boyd Douglas | ||||
President and Chief Executive Officer | ||||
/s/ Matt J. Chambless | ||||
Matt J. Chambless | ||||
Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Aug. 08, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | COMPUTER PROGRAMS & SYSTEMS INC | |
Entity Central Index Key | 0001169445 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Trading Symbol | CPSI | |
Entity Common Stock, Shares Outstanding | 13,533,097 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 1,944 | $ 1,216 |
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) | 13,533,000 | 11,303,000 |
Common stock, shares outstanding (in shares) | 13,533,000 | 11,303,000 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Sales revenues: | ||||
System sales and support | $ 50,561 | $ 30,810 | $ 102,941 | $ 61,927 |
Business management, consulting and managed IT services | 17,854 | 16,276 | 35,117 | 31,399 |
Total sales revenues | 68,415 | 47,086 | 138,058 | 93,326 |
Costs of sales: | ||||
System sales and support | 23,367 | 13,913 | 47,229 | 27,301 |
Business management, consulting and managed IT services | 9,913 | 8,458 | 19,440 | 16,864 |
Total costs of sales | 33,280 | 22,371 | 66,669 | 44,165 |
Gross profit | 35,135 | 24,715 | 71,389 | 49,161 |
Operating expenses: | ||||
Product development | 8,179 | 3,570 | 15,369 | 7,152 |
Sales and marketing | 6,717 | 4,740 | 13,447 | 9,331 |
General and administrative | 12,352 | 8,019 | 31,555 | 16,458 |
Amortization of acquisition-related intangibles | 2,624 | 0 | 4,979 | 0 |
Total operating expenses | 29,872 | 16,329 | 65,350 | 32,941 |
Operating income | 5,263 | 8,386 | 6,039 | 16,220 |
Other income (expense): | ||||
Other income | 69 | 115 | 68 | 198 |
Interest expense | (1,642) | 0 | (3,110) | 0 |
Total other income (expense) | (1,573) | 115 | (3,042) | 198 |
Income before taxes | 3,690 | 8,501 | 2,997 | 16,418 |
Provision for income taxes | 1,694 | 2,598 | 2,664 | 5,007 |
Net income | $ 1,996 | $ 5,903 | $ 333 | $ 11,411 |
Net income per common share-basic (in dollars per share) | $ 0.15 | $ 0.52 | $ 0.03 | $ 1.01 |
Net income per common share-diluted (in dollars per share) | $ 0.15 | $ 0.52 | $ 0.03 | $ 1.01 |
Weighted average shares outstanding used in per common share computations: | ||||
Basic (in shares) | 13,317 | 11,079 | 13,171 | 11,066 |
Diluted (in shares) | 13,365 | 11,079 | 13,227 | 11,066 |
Dividends declared per common share (in dollars per share) | $ 0.64 | $ 0.64 | $ 1.28 | $ 1.28 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,996 | $ 5,903 | $ 333 | $ 11,411 |
Other comprehensive income, net of tax | ||||
Change in unrealized income with realized income on the Statement of Operations | 6 | (61) | 38 | 26 |
Total other comprehensive income (loss), net of tax | 6 | (61) | 38 | 26 |
Comprehensive income | $ 2,002 | $ 5,842 | $ 371 | $ 11,437 |
BASIS OF PRESENTATION |
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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, 2015 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, 2015 and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. 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. Reclassifications Effective January 1, 2016, we adopted a revised presentation of sales revenues and the associated costs of sales in our condensed consolidated statements of operations, which we believe is better aligned with and representative of the amount and profitability of our revenue streams, as well as the way we manage our business, review our operating performance and market our products. Specifically:
These reclassifications 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, 2015 have been reclassified to conform to the current presentation. The following table provides the amounts reclassified for the three months ended June 30, 2015:
The following table provides the amounts reclassified for the six months ended June 30, 2015:
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BUSINESS COMBINATION |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS COMBINATION | BUSINESS COMBINATION Acquisition of HHI On January 8, 2016, we acquired all of the assets and liabilities of HHI, including its wholly-owned subsidiaries, Healthland, AHT and Rycan. Healthland provides electronic health records ("EHR") and clinical information management solutions to over 350 hospital customers. AHT is a provider of clinical and financial solutions in the post-acute care space, serving over 3,300 skilled nursing facilities. Rycan offers SaaS-based revenue cycle management workflow and automation software to over 290 hospital customers. We believe the acquisition of HHI:
These factors, combined with the synergies and economies of scale expected from combining the operations of CPSI and HHI, were the basis for the acquisition. Consideration for the acquisition included cash (net of cash of the acquired entities) of $162.6 million (inclusive of seller's transaction expenses), 1,973,880 shares of common stock of CPSI ("CPSI Common Stock"), and the assumption by CPSI of stock options that became exercisable for 174,972 shares of CPSI Common Stock. During 2015, we incurred approximately $3.0 million of pre-tax costs in connection with the acquisition of HHI. During the three and six months ended June 30, 2016, we incurred approximately $0.5 million and $8.0 million, respectively, of pre-tax acquisition costs in connection with the acquisition of HHI. Acquisition costs are included in general and administrative expenses in our condensed consolidated statements of operations. Our acquisition of HHI will be treated as a purchase in accordance with Accounting Standards Codification (the "Codification") 805, Business Combinations, of the Financial Accounting Standards Board ("FASB"), which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. Our allocation of the purchase price is based on management's judgment after evaluating several factors, including a preliminary valuation assessment. The allocation is preliminary and subject to changes, which could be significant, as additional information becomes available and appraisals of intangible assets and deferred tax positions are finalized. The preliminary allocation of the purchase price paid for HHI is as follows:
The intangible assets in the table above are being amortized on a straight-line basis over their estimated useful lives. The amortization is included in amortization of acquisition-related intangibles in our condensed consolidated statements of operations. The fair value measurements of tangible and intangible assets and liabilities were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy (see Note 14). Level 3 inputs included, among others, discount rates that we estimated would be used by a market participant in valuing these assets and liabilities, projections of revenues and cash flows, client attrition rates and market comparables. The gross contractual amount of accounts receivable of HHI at the date of acquisition was $8.5 million. Our condensed consolidated statement of operations for the three and six months ended June 30, 2016 includes revenues of approximately $22.5 million and $45.2 million, respectively, and pre-tax income of approximately $2.4 million and $7.8 million, respectively, attributed to the acquired business since the January 8, 2016 acquisition date. The following unaudited pro forma revenue, net income (loss) and earnings per share amounts for the three and six months ended June 30, 2016 and 2015 give effect to the HHI acquisition as if it had been completed on January 1, 2015. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been during the periods presented had the HHI acquisition been completed during the periods presented. In addition, the unaudited pro forma financial information does not purport to project future operating results. The pro forma information does not fully reflect: (1) any anticipated synergies (or costs to achieve synergies) or (2) the impact of non-recurring items directly related to the HHI acquisition.
Pro forma net income (loss) was calculated by adjusting the results for the applicable period to reflect (i) the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied on January 1, 2015 and (ii) adjustments to amortized revenue during fiscal 2016 and 2015 as a result of the acquisition date valuation of assumed deferred revenue. The pro forma results for each period also reflect the pro forma adjustment to interest expense as a result of the issuance of new debt to finance the acquisition and elimination of Healthland debt in conjunction with the acquisition. The Company incurred $0.4 million and $5.1 million, respectively, in acquisition-related costs, which are included in general and administrative expense in the Company’s statement of operations for the three and six months ended June 30, 2016 that are reflected in pro forma net income (loss) for the three and six months ended June 30, 2016. Severance costs of $2.5 million were not included in the acquisition costs for the purpose of calculating the pro forma results. |
REVENUE RECOGNITION |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION The Company recognizes revenue in accordance with U.S. GAAP, principally those required by the Software topic and Revenue Recognition subtopic of the FASB Codification and those prescribed by the SEC. The Company's revenue is generated from two sources:
System Sales and Support The Company enters into contractual obligations to sell perpetual software licenses, conversion, installation and training services, hardware and software application support and hardware maintenance services. On average, the Company is able to complete a system installation in three to four weeks. The methods employed by the Company to recognize revenue, which are discussed by element below, achieve results materially consistent with the provisions of Accounting Standards Update ("ASU") 2009-13, Multiple-Deliverable Revenue Arrangements, due to the relatively short period during which there are multiple undelivered elements, the relatively small amount of non-software related elements in the system sale arrangements, and the limited number of contracts in-process at the end of each reporting period. The Company recognizes revenue on the elements noted above as follows:
Business Management, Consulting and Managed IT Services Business management services consist of electronic billing, statement processing, payroll processing, accounts receivable management, contract management and insurance services. While business management service arrangements are contracts separate from the system sale and support contracts, these contracts are often executed within a short time frame of each other. The amount of the total arrangement consideration allocated to these services is based on VSOE of fair value by reference to the rate at which our customers renew as well as the rate at which the services are sold to customers when the business management services agreement is not executed within a short time frame of the system sale and support contracts. If VSOE of fair value does not exist for these services, we allocate arrangement consideration based on third-party evidence ("TPE") of selling price or, if neither VSOE nor TPE is available, estimated selling price. Because the pricing is transaction based (per unit pricing), customers are billed and revenue recognized as services are performed based on transaction levels. The Company will occasionally provide ISP and other professional IT services. Depending on the nature of the services provided, these services may be considered software elements or non-software elements. The selling price of services considered to be software elements is based on VSOE of the fair value of the services by reference to the price our customers are required to pay for the services when sold separately. The selling price of services considered to be non-software elements is based on third-party evidence of selling price of similar services. Revenue from these elements is recognized as the services are performed. |
PROPERTY AND EQUIPMENT |
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PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment were comprised of the following at June 30, 2016 and December 31, 2015:
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OTHER ACCRUED LIABILITIES |
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OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES Other accrued liabilities were comprised of the following at June 30, 2016 and December 31, 2015:
The accrued contingent consideration depicted above represents the potential earnout incentive for former Rycan shareholders. 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. |
INVESTMENTS |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | INVESTMENTS The Company accounts for investments in accordance with FASB Codification topic, Investments – Debt and Equity Securities. Accordingly, investments are classified as available-for-sale securities and are reported at fair value, with unrealized gains and losses excluded from earnings and reported in a separate component of stockholders’ equity. The Company’s management determines the appropriate classification of investments in fixed income securities at the time of acquisition and re-evaluates the classification at each balance sheet date. An average cost method is used for purposes of determining the cost of investments sold. The Company did not have investments at June 30, 2016. Investments were comprised of the following at December 31, 2015:
The following tables show the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities were in a continuous loss position at December 31, 2015.
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NET INCOME PER SHARE |
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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 CPSI 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 CPSI 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 9) 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 CPSI 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 CPSI Common Stock, including a reconciliation between net income and net income attributable to common stockholders:
During 2016, 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 77,594 shares, none of which have been included in the calculation of diluted EPS for the three and six months ended June 30, 2016 because the related threshold award performance level has not been achieved as of June 30, 2016. See Note 9. |
INCOME TAXES |
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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 and six months ended June 30, 2016 increased to 45.9% and 88.9% respectively, from 30.6% and 30.5% for the three and six months ended June 30, 2015, primarily due to permanent non-deductible acquisition transaction costs of $3.9 million and state income taxes. |
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STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation cost 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 shows total stock-based compensation expense for the three and six months ended June 30, 2016 and 2015, included in the condensed consolidated statements of operations:
The Company's stock-based compensation awards are in the form of restricted stock and performance share awards made pursuant to the Company's 2005 Restricted Stock Plan, 2012 Restricted Stock Plan for Non-Employee Directors, and 2014 Incentive Plan (the "Plans"). As of June 30, 2016, there was $10.0 million of unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plans expected to be recognized over the next three 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 CPSI 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 to five years. The Company records expenses for these grants on a straight-line basis over the applicable vesting periods. Shares of restricted stock may also be issued pursuant to the settlement of performance share awards, for which the Company records expenses in the manner described in the "Performance Share Awards" section below. 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, 2016 and 2015 is as follows:
Performance Share Awards In 2014, the Company began to grant performance share awards to executive officers and certain key employees under the 2014 Incentive Plan. The number of shares of CPSI Common Stock earned and issuable under the award is determined at the end of each 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. If certain levels of the performance objective are met, the award results in the issuance of shares of restricted stock corresponding to such level, which shares 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 three years for restricted stock issued pursuant to performance share awards. In the event that the Company's financial performance meets the predetermined target for the performance objective, the Company will issue each award recipient the number of restricted shares 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 recipients of performance share awards do not receive dividends or possess voting rights during the performance period and, accordingly, the fair value of the performance share awards is the quoted market value of CPSI Common Stock on the grant date less the present value of the expected dividends not received during the relevant period. Expense 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. 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, 2016 and 2015 is as follows, based on the target award amounts set forth in the performance share award agreements:
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FINANCING RECEIVABLES |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCING RECEIVABLES | FINANCING RECEIVABLES Short-Term Payment Plans The Company has sold information and patient care systems to certain healthcare providers under Second Generation Meaningful Use Installment Plans (see below) with maximum contractual terms of three years and expected terms of less than one year and other arrangements requiring fixed monthly payments over terms ranging from three to 12 months ("Fixed Periodic Payment Plans"). These receivables, collectively referred to as short-term payment plans and included in the current portion of financing receivables, were comprised of the following at June 30, 2016 and December 31, 2015:
Sales-Type Leases Additionally, the Company leases its information and patient care systems to certain healthcare providers under sales-type leases expiring in various years through 2022. These receivables typically have terms from two to seven years, bear interest at various rates, and are usually collateralized by a security interest in the underlying assets. Since the Company has a history of successfully collecting amounts due under the original payment terms of these extended payment arrangements without making any concessions to its customers, the Company satisfies the requirement for revenue recognition. The Company’s history with these types of extended payment term arrangements supports management’s assertion that revenues are fixed and determinable and collection is probable. The components of these lease receivables were as follows at June 30, 2016 and December 31, 2015:
Future minimum lease payments to be received subsequent to June 30, 2016 are as follows:
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, 2016 and year ended December 31, 2015:
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 sales-type leasing arrangements within our target market of rural and 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 rural and community hospitals, the most notable of which relate to enacted and potential changes in Medicare and Medicaid reimbursement rates as rural and 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, especially as the underlying assets act as collateral for the receivables. 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, 2016 and December 31, 2015:
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 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, according to the age of the oldest related payment outstanding that has been reclassified to trade accounts receivable:
First Generation Meaningful Use Installment Plans During 2012, the Company entered into multiple customer license agreements with payment terms requiring the customer to remit to the Company incentive payments (not to exceed the remaining balance of the contract price) received under the American Recovery and Reinvestment Act of 2009 (the "ARRA") for adoption of qualifying electronic health records ("EHRs"), with only nominal payment amounts required until the customer’s receipt of such incentive payments ("First Generation Meaningful Use Installment Plans"). If no such incentive payments are received by the customer or if such payments are not sufficient to pay the remaining balance under the arrangement, payments continue at contracted nominal amounts until the balance of the contract price is paid in full. Because of the significant difference in the underlying economics of these arrangements compared to our historical financing receivables, management has determined that these arrangements are not comparable to historical arrangements. In accordance with the Software topic and Revenue Recognition subtopic of the Codification, the Company recognizes revenue related to these arrangements as the amounts become due. Anticipated future cash flows from these First Generation Meaningful Use Installment Plans are excluded from the Company’s financing receivables and deferred revenue in the accompanying condensed consolidated balance sheets. Second Generation Meaningful Use Installment Plans Beginning in the fourth quarter of 2012, we ceased offering First Generation Meaningful Use Installment Plans to our customers, opting instead for license agreements with payment terms that provide us with greater visibility into and control over the customer’s meaningful use attestation process and significantly reducing the maximum timeframe over which customers must satisfy their full payment obligations in purchasing our system (“Second Generation Meaningful Use Installment Plans”). As the overall payment period durations of the Second Generation Meaningful Use Installment Plans are consistent with that of our historical system sale financing arrangements, revenues under the Second Generation Meaningful Use Installment Plans are recognized upon installation of our EHR solution. Although these arrangements provide for a maximum payment term of three years, management has determined the expected term for these arrangements to be less than one year due to (a) historical collection patterns of required EHR incentive payment amounts and (b) the estimated significance of those amounts, the receipt of which is expected to result in minimal or no remaining balance for the related arrangements. As a result, all related amounts are included as a component of financing receivables, current portion, net in the accompanying condensed consolidated balance sheets and as a component of short-term payment plans within this Note 10. |
INTANGIBLE ASSETS AND GOODWILL |
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INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Our purchased definite-lived intangible assets as of June 30, 2016 are summarized as follows:
The following table represents the remaining amortization of definite-lived intangible assets as of June 30, 2016:
The following table sets forth the change in the carrying amount of goodwill by segment for the six months ended June 30, 2016:
As of June 30, 2016, there was no impairment to goodwill. |
LONG-TERM DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt was comprised of the following at June 30, 2016 and December 31, 2015:
As of June 30, 2016, the carrying value of debt approximates the fair value. Credit Agreement In conjunction with our acquisition of HHI on January 8, 2016, we entered into a syndicated credit agreement on the same date (the "Credit Agreement"), with Regions Bank ("Regions") serving as administrative agent, which provided for a $125,000,000 term loan facility (the "Term Loan Facility") and a $50,000,000 revolving credit facility ("Revolving Credit Facility"). The cash portion of the purchase price for HHI was partially funded by the $125,000,000 Term Loan Facility and $25,000,000 borrowed under the Revolving Credit Facility. The Term Loan Facility bears interest at a rate per annum equal to an applicable margin plus (1) the Adjusted LIBOR rate for the relevant interest period, (2) an alternate base rate determined by reference to the greatest 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). Interest on the outstanding principal of the Term Loan Facility is payable on the last day of each month, in the case of each base rate loan, and on the last day of each interest period (but no less frequently than every three months), in the case of LIBOR loans. Principal payments are due on the last day of each fiscal quarter beginning March 31, 2016, with the remainder due at maturity on January 8, 2021 (the "Maturity Date"). Anticipated annual future maturities of the Term Loan Facility and Revolving Credit Facility are as follows as of June 30, 2016:
Borrowings under the Revolving Credit Facility bear interest at a rate similar to that of the Term Loan Facility, with interest payment dates similar to that of the Term Loan Facility. The Revolving Credit Facility includes a $5 million swingline sublimit, with swingline loans bearing interest at the alternate base rate plus the applicable margin. Any principal outstanding under the Revolving Credit Facility is due and payable on the Maturity Date. The Term Loan Facility and amounts borrowed under the Revolving Credit Facility 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 (the “Security Agreement”), 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 Credit Agreement are also guaranteed by the Subsidiary Guarantors. The Credit Agreement provides incremental facility capacity of $50 million, subject to certain conditions. The 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 its equity securities or payments to redeem, repurchase or retire its equity securities; enter into certain restrictive agreements; make investments, loans and acquisitions; merge or consolidate with any other entity; dispose of assets; enter into sale and leaseback transactions; engage in transactions with its affiliates; and materially alter the business it conducts. In addition, the Company is required to comply with a minimum fixed charge coverage ratio throughout the duration of the Credit Agreement and a maximum consolidated leverage ratio. The Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default. The Credit Agreement requires the Company to mandatorily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility with (i) 100% of net cash proceeds from certain sales and dispositions, subject to certain reinvestment rights, (ii) 100% of net cash proceeds from certain issuances or incurrences of additional debt, (iii) 50% of net cash proceeds from certain issuances or sales of equity securities, subject to a step down to 0% if the Company’s consolidated leverage ratio is no greater than 2.50:1.0, and (iv) beginning with the fiscal year ending December 31, 2016, 50% of excess cash flow (minus certain specified other payments), subject to a step down to 0% of excess cash flow if the Company’s consolidated leverage ratio is no greater than 2.50:1.0. The Company is permitted to voluntarily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility 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. As of June 30, 2016, we believe that we were in compliance with all debt covenants contained in the Credit Agreement. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES From 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 |
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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 Company did not have available-for-sale securities at June 30, 2016. 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.
The fair values of the Company’s available-for-sale securities are based on matrix pricing for the period ended December 31, 2015, which uses observable market-based inputs (such as benchmark yields) in addition to quoted prices in active markets to derive fair values. As a result, these inputs are classified as Level 2 within the fair value hierarchy. We generally apply fair value techniques on a non-recurring basis associated with (1) valuing potential impairment loss related to financing receivables accounted for pursuant to Codification topic, Leases, and (2) valuing potential impairment loss related to long-lived assets accounted for pursuant to Codification topic, Property, Plant and Equipment, when events or circumstances indicate a possible impairment. The Company did not have available-for-sale securities at June 30, 2016. The following table summarizes the carrying amounts and fair values of certain assets at December 31, 2015:
The carrying amounts of other financial instruments reported in the accompanying condensed consolidated balance sheets for current assets and current liabilities approximate their fair values because of the short-term nature of these instruments. |
SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING In connection with our acquisition of HHI, we re-evaluated our methodology for allocating revenues and cost of sales and chose to allocate these items to three operating segments which better align with the reporting structure utilized by our chief operating decision makers ("CODM") in the management of resource allocation and performance assessment. Our Chief Executive Officer and Chief Growth Officer are the Company's CODM. Effective for our first quarter of 2016, we revised our reportable segments. Prior to this change, we used one reportable segment. We now utilize three operating segments, "Acute Care EHR", "Post-acute Care EHR" and "TruBridge, Rycan, and Other Outsourcing", 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. Accounting policies for each of the reportable segments are the same as those used on a consolidated basis. The three operating segments disclosed above differ from those presented in our Form 10-Q for the period ended March 31, 2016. Revenues and cost of sales for Rycan are now included in the “TruBridge, Rycan, and Other Outsourcing” operating segment (formerly included in the “Acute Care EHR” segment), which replaces the previously captioned “Business Management, Consulting and Managed IT Services” operating 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, 2016 and 2015:
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RECENT ACCOUNTING PRONOUNCEMENTS |
6 Months Ended |
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Jun. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Standards Adopted in 2016 In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which changes the presentation of debt issuance costs in financial statements. Under this guidance, an entity will present such costs in the balance sheet as a reduction of the related debt liability rather than as an asset. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2016. Refer to Note 12 for further information regarding debt issuance costs. In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, that eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The new standard will be applied prospectively to measurement period adjustments that occur after the effective date. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2016. The adoption of ASU 2015-16 did not have a material effect on our financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes. The standard eliminates the current requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2016, with early adoption permitted. The Company has chosen to early adopt ASU 2015-17 as of the first quarter of our fiscal year ending December 31, 2016 by prospectively applying the update. The adoption of ASU 2015-17 did not have a material effect on our financial statements. New Accounting Standards Yet to be Adopted 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 the most current revenue recognition guidance. This guidance will be effective for fiscal years and interim periods within those years beginning after December 15, 2017, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2018. The Company is currently evaluating the impact that the implementation of this standard will have on its financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. The amended guidance requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The requirement would replace the current lower of cost or market evaluation. Accounting guidance is unchanged for inventory measured using last-in, first-out (“LIFO”) or the retail method. The amended guidance will be effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amended guidance should be applied prospectively with earlier application permitted. The Company is currently evaluating the impact that the implementation of this standard will have on its financial statements. 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 is effective for the Company as of the first quarter of our fiscal year ending December 31, 2019. The Company is currently evaluating the impact that the implementation of this standard will have on its financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and the classification of awards on the statement of cash flows. This guidance will be effective for fiscal years and interim periods within those years beginning after December 15, 2016, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2017. The Company is currently evaluating the impact that the implementation of this standard will have on its financial statements. |
SUBSEQUENT EVENTS |
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Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On August 4, 2016, the Company announced that our Board of Directors adopted a variable dividend policy for the payment of quarterly dividends. The policy provides for dividends on a trailing quarterly basis in an amount based on a pre-established financial formula. The declaration and payment of any dividends will remain subject to the discretion of the Board of Directors to pay dividends based on the Company’s current cash needs. Also on August 4, 2016, the Company announced a dividend for the second quarter of 2016 in the amount of $0.34 per share, payable on August 26, 2016, to stockholders of record as of the close of business on August 11, 2016. |
BASIS OF PRESENTATION (Policies) |
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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, 2015 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, 2015 and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. |
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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. |
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Reclassifications | Reclassifications Effective January 1, 2016, we adopted a revised presentation of sales revenues and the associated costs of sales in our condensed consolidated statements of operations, which we believe is better aligned with and representative of the amount and profitability of our revenue streams, as well as the way we manage our business, review our operating performance and market our products. Specifically:
These reclassifications 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, 2015 have been reclassified to conform to the current presentation. |
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Revenue Recognition | REVENUE RECOGNITION The Company recognizes revenue in accordance with U.S. GAAP, principally those required by the Software topic and Revenue Recognition subtopic of the FASB Codification and those prescribed by the SEC. The Company's revenue is generated from two sources:
System Sales and Support The Company enters into contractual obligations to sell perpetual software licenses, conversion, installation and training services, hardware and software application support and hardware maintenance services. On average, the Company is able to complete a system installation in three to four weeks. The methods employed by the Company to recognize revenue, which are discussed by element below, achieve results materially consistent with the provisions of Accounting Standards Update ("ASU") 2009-13, Multiple-Deliverable Revenue Arrangements, due to the relatively short period during which there are multiple undelivered elements, the relatively small amount of non-software related elements in the system sale arrangements, and the limited number of contracts in-process at the end of each reporting period. The Company recognizes revenue on the elements noted above as follows:
Business Management, Consulting and Managed IT Services Business management services consist of electronic billing, statement processing, payroll processing, accounts receivable management, contract management and insurance services. While business management service arrangements are contracts separate from the system sale and support contracts, these contracts are often executed within a short time frame of each other. The amount of the total arrangement consideration allocated to these services is based on VSOE of fair value by reference to the rate at which our customers renew as well as the rate at which the services are sold to customers when the business management services agreement is not executed within a short time frame of the system sale and support contracts. If VSOE of fair value does not exist for these services, we allocate arrangement consideration based on third-party evidence ("TPE") of selling price or, if neither VSOE nor TPE is available, estimated selling price. Because the pricing is transaction based (per unit pricing), customers are billed and revenue recognized as services are performed based on transaction levels. The Company will occasionally provide ISP and other professional IT services. Depending on the nature of the services provided, these services may be considered software elements or non-software elements. The selling price of services considered to be software elements is based on VSOE of the fair value of the services by reference to the price our customers are required to pay for the services when sold separately. The selling price of services considered to be non-software elements is based on third-party evidence of selling price of similar services. Revenue from these elements is recognized as the services are performed. |
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Investments | INVESTMENTS The Company accounts for investments in accordance with FASB Codification topic, Investments – Debt and Equity Securities. Accordingly, investments are classified as available-for-sale securities and are reported at fair value, with unrealized gains and losses excluded from earnings and reported in a separate component of stockholders’ equity. The Company’s management determines the appropriate classification of investments in fixed income securities at the time of acquisition and re-evaluates the classification at each balance sheet date. An average cost method is used for purposes of determining the cost of investments sold. |
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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 CPSI 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 CPSI 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 9) 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 CPSI Common Stock is computed using the more dilutive of the two-class method or the treasury stock method. |
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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. |
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Stock-Based Compensation | STOCK-BASED COMPENSATION Stock-based compensation cost 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. |
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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 Company did not have available-for-sale securities at June 30, 2016. 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.
The fair values of the Company’s available-for-sale securities are based on matrix pricing for the period ended December 31, 2015, which uses observable market-based inputs (such as benchmark yields) in addition to quoted prices in active markets to derive fair values. As a result, these inputs are classified as Level 2 within the fair value hierarchy. We generally apply fair value techniques on a non-recurring basis associated with (1) valuing potential impairment loss related to financing receivables accounted for pursuant to Codification topic, Leases, and (2) valuing potential impairment loss related to long-lived assets accounted for pursuant to Codification topic, Property, Plant and Equipment, when events or circumstances indicate a possible impairment. |
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Recent Account Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Standards Adopted in 2016 In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which changes the presentation of debt issuance costs in financial statements. Under this guidance, an entity will present such costs in the balance sheet as a reduction of the related debt liability rather than as an asset. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2016. Refer to Note 12 for further information regarding debt issuance costs. In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, that eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The new standard will be applied prospectively to measurement period adjustments that occur after the effective date. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2016. The adoption of ASU 2015-16 did not have a material effect on our financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes. The standard eliminates the current requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2016, with early adoption permitted. The Company has chosen to early adopt ASU 2015-17 as of the first quarter of our fiscal year ending December 31, 2016 by prospectively applying the update. The adoption of ASU 2015-17 did not have a material effect on our financial statements. New Accounting Standards Yet to be Adopted 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 the most current revenue recognition guidance. This guidance will be effective for fiscal years and interim periods within those years beginning after December 15, 2017, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2018. The Company is currently evaluating the impact that the implementation of this standard will have on its financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. The amended guidance requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The requirement would replace the current lower of cost or market evaluation. Accounting guidance is unchanged for inventory measured using last-in, first-out (“LIFO”) or the retail method. The amended guidance will be effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amended guidance should be applied prospectively with earlier application permitted. The Company is currently evaluating the impact that the implementation of this standard will have on its financial statements. 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 is effective for the Company as of the first quarter of our fiscal year ending December 31, 2019. The Company is currently evaluating the impact that the implementation of this standard will have on its financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and the classification of awards on the statement of cash flows. This guidance will be effective for fiscal years and interim periods within those years beginning after December 15, 2016, which is effective for the Company as of the first quarter of our fiscal year ending December 31, 2017. The Company is currently evaluating the impact that the implementation of this standard will have on its financial statements. |
BASIS OF PRESENTATION (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amounts Reclassified | Amounts presented for the three and six months ended June 30, 2015 have been reclassified to conform to the current presentation. The following table provides the amounts reclassified for the three months ended June 30, 2015:
The following table provides the amounts reclassified for the six months ended June 30, 2015:
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BUSINESS COMBINATION (Tables) |
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Allocation of Purchase Price | The preliminary allocation of the purchase price paid for HHI is as follows:
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Pro Forma Results on Income | The following unaudited pro forma revenue, net income (loss) and earnings per share amounts for the three and six months ended June 30, 2016 and 2015 give effect to the HHI acquisition as if it had been completed on January 1, 2015. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been during the periods presented had the HHI acquisition been completed during the periods presented. In addition, the unaudited pro forma financial information does not purport to project future operating results. The pro forma information does not fully reflect: (1) any anticipated synergies (or costs to achieve synergies) or (2) the impact of non-recurring items directly related to the HHI acquisition.
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PROPERTY AND EQUIPMENT (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment were comprised of the following at June 30, 2016 and December 31, 2015:
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OTHER ACCRUED LIABILITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Accrued Liabilities | Other accrued liabilities were comprised of the following at June 30, 2016 and December 31, 2015:
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INVESTMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investments | Investments were comprised of the following at December 31, 2015:
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Company's Investments' Gross Unrealized Losses and Fair Value | The following tables show the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities were in a continuous loss position at December 31, 2015.
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NET INCOME PER SHARE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following is a calculation of the basic and diluted EPS for CPSI Common Stock, including a reconciliation between net income and net income attributable to common stockholders:
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STOCK-BASED COMPENSATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Stock-Based Compensation Expense | The following table shows total stock-based compensation expense for the three and six months ended June 30, 2016 and 2015, included in the condensed consolidated statements of operations:
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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, 2016 and 2015 is as follows:
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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, 2016 and 2015 is as follows, based on the target award amounts set forth in the performance share award agreements:
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FINANCING RECEIVABLES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Short Term Payment Plans | These receivables, collectively referred to as short-term payment plans and included in the current portion of financing receivables, were comprised of the following at June 30, 2016 and December 31, 2015:
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Components of Lease Receivables | The components of these lease receivables were as follows at June 30, 2016 and December 31, 2015:
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Future Minimum Lease Payments to be Received | Future minimum lease payments to be received subsequent to June 30, 2016 are as follows:
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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, 2016 and year ended December 31, 2015:
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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, 2016 and December 31, 2015:
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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, according to the age of the oldest related payment outstanding that has been reclassified to trade accounts receivable:
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INTANGIBLE ASSETS AND GOODWILL (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Definite-lived Intangible Assets | Our purchased definite-lived intangible assets as of June 30, 2016 are summarized as follows:
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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, 2016:
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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, 2016:
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LONG-TERM DEBT (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt was comprised of the following at June 30, 2016 and December 31, 2015:
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Schedule of Annual Future Maturities of the Term Loan Facility and Revolving Credit Facility | Anticipated annual future maturities of the Term Loan Facility and Revolving Credit Facility are as follows as of June 30, 2016:
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FAIR VALUE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | 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.
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Carrying Amounts and Fair Values of Certain Assets and Liabilities | The following table summarizes the carrying amounts and fair values of certain assets at December 31, 2015:
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SEGMENT REPORTING (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2016 and 2015:
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BUSINESS COMBINATION - Allocation of Purchase Price (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Jan. 08, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 166,109 | $ 0 | |
Contingent consideration | $ (1,120) | $ 0 | |
Healthland Holding, Inc. | |||
Business Acquisition [Line Items] | |||
Acquired cash | $ 5,371 | ||
Accounts receivable | 5,789 | ||
Financing receivables | 2,184 | ||
Inventories | 216 | ||
Prepaid expenses | 3,228 | ||
Property and equipment | 1,263 | ||
Intangible assets | 117,300 | ||
Goodwill | 166,109 | ||
Accounts payable and accrued liabilities | (17,490) | ||
Deferred taxes, net | (2,618) | ||
Contingent consideration | (1,620) | ||
Deferred revenue | (16,199) | ||
Net assets acquired | $ 263,533 |
BUSINESS COMBINATION - Pro Forma Results of Income (Detail) - Healthland Holding, Inc. - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Business Acquisition [Line Items] | ||||
Pro forma revenues | $ 66,647 | $ 74,476 | $ 138,489 | $ 145,818 |
Pro forma net income (loss) | $ 941 | $ 1,678 | $ 2,637 | $ (340) |
Pro forma diluted earnings (loss) per share (in dollars per share) | $ 0.07 | $ 0.13 | $ 0.20 | $ (0.03) |
REVENUE RECOGNITION (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Minimum | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
System installation period | 21 days |
Maintenance contract term | 3 years |
Maximum | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
System installation period | 28 days |
Maintenance contract term | 5 years |
Property and Equipment (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 26,257 | $ 27,733 |
Less: accumulated depreciation | (12,346) | (13,382) |
Property and equipment, net | 13,911 | 14,351 |
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 | 9,432 | 9,432 |
Maintenance equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 802 | 1,231 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,241 | 4,798 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,007 | 4,753 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,592 | 4,336 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 335 | $ 335 |
OTHER ACCRUED LIABILITIES (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Payables and Accruals [Abstract] | ||
Salaries and benefits | $ 4,601 | $ 2,292 |
Severance | 1,065 | 1,569 |
Commissions | 1,171 | 435 |
Self-insurance reserves | 875 | 883 |
Contingent consideration | 1,120 | 0 |
Other | 562 | 419 |
Other accrued liabilities | $ 9,394 | $ 5,598 |
INCOME TAXES (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Income Tax Disclosure [Abstract] | ||||
Effective tax rate (percent) | 45.90% | 30.60% | 88.90% | 30.50% |
Nondeductible acquisition transactions costs | $ 3.9 | $ 3.9 |
FINANCING RECEIVABLES - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Financing Receivables [Line Items] | |
Expiration period of sales type lease | through 2022 |
Minimum | |
Financing Receivables [Line Items] | |
Financial receivable lease term | 2 years |
Maximum | |
Financing Receivables [Line Items] | |
Financial receivable lease term | 7 years |
Second Generation Meaningful Use Installment Plans | |
Financing Receivables [Line Items] | |
Maximum contractual term | 3 years |
Expected contractual term, less than | 1 year |
Fixed Periodic Payment Plans | Minimum | |
Financing Receivables [Line Items] | |
Current financing receivable terms | 3 months |
Fixed Periodic Payment Plans | Maximum | |
Financing Receivables [Line Items] | |
Current financing receivable terms | 12 months |
FINANCING RECEIVABLES - Short-Term Payment Plans (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Financing Receivables [Line Items] | ||
Short-term payment plans, net | $ 10,741 | $ 10,576 |
Short-term payment plans | ||
Financing Receivables [Line Items] | ||
Short-term payment plans, gross | 9,256 | 9,826 |
Less: allowance for losses | (448) | (491) |
Less: unearned income | 0 | 0 |
Short-term payment plans, net | 8,808 | 9,335 |
Second Generation Meaningful Use Installment Plans, gross | ||
Financing Receivables [Line Items] | ||
Short-term payment plans, gross | 6,434 | 9,372 |
Fixed Periodic Payment Plans, gross | ||
Financing Receivables [Line Items] | ||
Short-term payment plans, gross | $ 2,822 | $ 454 |
FINANCING RECEIVABLES - Sales-Type Leases (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Receivables [Abstract] | ||
Sales-type leases, gross | $ 7,290 | $ 3,239 |
Less: allowance for losses | (329) | (163) |
Less: unearned income | (990) | (266) |
Sales-type leases, net | $ 5,971 | $ 2,810 |
FINANCING RECEIVABLES - Future Minimum Lease Payments (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Receivables [Abstract] | ||
2016 | $ 1,210 | |
2017 | 2,223 | |
2018 | 1,287 | |
2019 | 926 | |
2020 | 704 | |
Thereafter | 940 | |
Total minimum lease payments to be received | 7,290 | $ 3,239 |
Less: allowance for losses | (329) | (163) |
Less: unearned income | (990) | $ (266) |
Lease receivables, net | $ 5,971 |
FINANCING RECEIVABLES - Allowance for Financing Credit Losses (Detail) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Allowance for Credit Losses on Financing Receivables [Roll Forward] | ||
Balance at Beginning of Period | $ 654 | $ 1,001 |
Provision | 123 | 236 |
Charge-offs | 0 | (583) |
Recoveries | 0 | 0 |
Balance at End of Period | $ 777 | $ 654 |
FINANCING RECEIVABLES - Analysis of Age of Financing Receivables Amounts (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Receivables [Abstract] | ||
1 to 90 Days Past Due | $ 149 | $ 251 |
91 to 180 Days Past Due | 30 | 66 |
181 Plus Days Past Due | 57 | 29 |
Total Past Due | $ 236 | $ 346 |
FINANCING RECEIVABLES - Summary of Financing Receivables (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|
Customer balances with amounts reclassified to trade accounts receivable that are: | |||
1 to 90 Days Past Due | $ 3,827 | $ 515 | |
91 to 180 Days Past Due | 228 | 230 | |
181 Plus Days Past Due | 0 | 0 | |
Total customer balances with past due amounts reclassified to trade accounts receivable | 4,055 | 745 | |
Total customer balances with no past due amounts reclassified to trade accounts receivable | 2,245 | 2,228 | |
Total financing receivables with contractual maturities of one year or less | 9,256 | 9,826 | |
Less: allowance for losses | (777) | (654) | $ (1,001) |
Total financing receivables | $ 14,779 | $ 12,145 |
INTANGIBLE ASSETS AND GOODWILL - Definited-lived Intangible Assets (Detail) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 117,300 | |
Accumulated amortization | (4,979) | |
Net intangible assets | $ 112,321 | $ 0 |
Weighted average remaining years of useful life | 12 years | |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 82,300 | |
Accumulated amortization | (3,129) | |
Net intangible assets | $ 79,171 | |
Weighted average remaining years of useful life | 12 years | |
Trademark | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 10,900 | |
Accumulated amortization | (407) | |
Net intangible assets | $ 10,493 | |
Weighted average remaining years of useful life | 15 years | |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 24,100 | |
Accumulated amortization | (1,443) | |
Net intangible assets | $ 22,657 | |
Weighted average remaining years of useful life | 8 years |
INTANGIBLE ASSETS AND GOODWILL (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2016 | $ 5,203 | |
2017 | 10,406 | |
2018 | 10,406 | |
2019 | 10,112 | |
2020 | 10,105 | |
Due thereafter | 66,089 | |
Net intangible assets | $ 112,321 | $ 0 |
INTANGIBLE ASSETS AND GOODWILL - Schedule of Goodwill (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 0 |
Goodwill acquired | 166,109,000 |
Goodwill, ending balance | 166,109,000 |
Goodwill impairment loss | 0 |
Operating Segments | Acute Care EHR | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 0 |
Goodwill acquired | 98,835,000 |
Goodwill, ending balance | 98,835,000 |
Operating Segments | Post-acute Care EHR | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 0 |
Goodwill acquired | 55,813,000 |
Goodwill, ending balance | 55,813,000 |
Operating Segments | Business Management, Consulting and Managed IT Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 0 |
Goodwill acquired | 11,461,000 |
Goodwill, ending balance | $ 11,461,000 |
LONG-TERM DEBT - Schedule of long-term debt (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt obligations | $ 158,437 | $ 0 |
Less: debt issuance costs | (3,098) | 0 |
Debt obligation, net | 155,339 | 0 |
Less: current portion | (4,002) | 0 |
Long-term debt | 151,337 | 0 |
Line of credit | ||
Debt Instrument [Line Items] | ||
Debt obligation, net | 158,437 | |
Line of credit | Term loan facility | ||
Debt Instrument [Line Items] | ||
Debt obligations | 123,437 | 0 |
Line of credit | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Debt obligations | $ 35,000 | $ 0 |
LONG-TERM DEBT - Annual Future Maturities (Detail) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt obligation, net | $ 155,339 | $ 0 |
Line of credit | ||
Debt Instrument [Line Items] | ||
2016 | 1,562 | |
2017 | 6,250 | |
2018 | 9,375 | |
2019 | 12,500 | |
2020 | 15,625 | |
Thereafter | 113,125 | |
Debt obligation, net | $ 158,437 |
FAIR VALUE FAIR VALUE CONTINGENT CONSIDERATION (Details) $ in Thousands |
Jun. 30, 2016
USD ($)
|
---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration | $ 1,120 |
(Level 1) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration | 0 |
(Level 2) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration | 0 |
(Level 3) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration | $ 1,120 |
SUBSEQUENT EVENTS (Detail) - $ / shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Aug. 04, 2016 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.64 | $ 0.64 | $ 1.28 | $ 1.28 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.34 |
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