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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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74-3032373
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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6600 Wall Street, Mobile, Alabama
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36695
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $.001 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if smaller reporting company)
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Item No.
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Page No.
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PART I
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1
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1A.
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1B.
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2
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3
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4
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PART II
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5
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6
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7
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7A.
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8
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9
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9A.
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9B.
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PART III
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11
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12
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13
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14
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PART IV
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15
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*
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Portions of the definitive Proxy Statement for the 2017 Annual Meeting of Stockholders are incorporated by reference into Part III of this report to the extent described herein.
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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;
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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;
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changes in customer purchasing priorities, capital expenditures and demand for information technology systems;
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saturation of our target market and hospital consolidations;
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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;
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our substantial indebtedness, and our ability to incur additional indebtedness in the future;
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our potential inability to generate sufficient cash in order to meet our debt service obligations;
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restrictions on our current and future operations because of the terms of our senior secured credit facilities;
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market risks related to interest rate changes;
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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;
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competition with companies that have greater financial, technical and marketing resources than we have;
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failure to develop new technology and products in response to market demands;
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failure of our products to function properly resulting in claims for medical losses;
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breaches of security and viruses in our systems resulting in customer claims against us and harm to our reputation;
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failure to maintain customer satisfaction through new product releases free of undetected errors or problems;
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interruptions in our power supply and/or telecommunications capabilities, including those caused by natural disaster;
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our ability to attract and retain qualified and key personnel;
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failure to properly manage growth in new markets we may enter;
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misappropriation of our intellectual property rights and potential intellectual property claims and litigation against us;
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changes in accounting principles generally accepted in the United States of America;
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significant charge to earnings if our goodwill or intangible assets become impaired; and
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fluctuations in quarterly financial performance due to, among other factors, timing of customer installations.
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ITEM 1.
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BUSINESS
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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 specifically targeting rural and community healthcare organizations.
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TruBridge focuses exclusively on providing business management, consulting and managed IT services to rural and community healthcare organizations, regardless of their primary healthcare information solutions provider.
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Healthland, acquired in the acquisition of HHI, provides integrated technology solutions and services to small rural and critical access hospitals.
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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.
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Rycan, acquired in the acquisition of HHI, provides revenue cycle management workflow and automation software to hospitals, healthcare systems, and skilled nursing organizations.
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strengthens our position in providing healthcare information systems to rural and community healthcare organizations through the addition of Healthland;
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introduces CPSI to the post-acute market through the addition of AHT; and
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expands the products and capabilities of TruBridge through the addition of Rycan and its suite of revenue cycle management products.
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provide automated processes that improve clinical workflow and support clinical decision-making;
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allow healthcare providers to efficiently input and easily access the most current patient medical data in order to improve quality of care and patient safety;
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integrate clinical, financial and patient information to promote efficient use of time and resources, while eliminating dependence on paper medical records;
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provide tools that permit healthcare organizations to analyze past performance, model new plans for the future and measure and monitor the effectiveness of those plans;
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provide for rapid and cost-effective implementation, whether through the installation of an in-house system or through our Software as a Service ("SaaS") services; and
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increase the flow of information by replacing centralized data over which there is limited control with broad-based, secure access by clinical and administrative personnel to data relevant to their functional areas.
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Patient Management
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Financial Accounting
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Clinical
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Patient Care
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Enterprise Applications
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Patient Management
. Our patient management software enables a hospital to identify a patient at any point in the healthcare delivery system and to collect and maintain patient information throughout the entire process of patient care on an enterprise-wide basis. Thrive's single database structure permits authorized hospital personnel to simultaneously access appropriate portions of a patient’s record from any point on the system. Our patient management software applications include:
Registration, Patient Accounting, Health Information Management, Patient Index, Enterprise Wide Scheduling, Contract Management, and Quality Improvement.
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Financial Accounting
. Our financial accounting software provides a variety of business office applications designed to efficiently track and coordinate information needed for managerial decision-making. Our financial accounting software applications include:
Executive Information System, General Ledger, Accounts Payable, Payroll/Personnel, Time and Attendance, Electronic Direct Deposits, Human Resources, Budgeting, Fixed Assets, and Materials Management.
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Clinical
. Our clinical software automates record keeping and reporting for many clinical functions including laboratory, radiology, physical therapy, respiratory care and pharmacy. These products eliminate tedious paperwork, calculations and written documentation while allowing for easy retrieval of patient data and statistics. Our clinical software applications include:
Laboratory Information Systems, Laboratory Instrument Interfaces, Radiology Information Systems, ImageLink® Picture Archiving and Communication System (PACS), Physical Therapy and Respiratory Care, and Pharmacy.
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Patient Care
. Our patient care applications allow hospitals to create computerized "patient files" in place of the traditional paper file systems. This software enables physicians, nurses and other hospital staff to improve the quality of patient care through increased access to patient information, assistance with projected care requirements and feedback regarding patient needs. Our software also addresses current safety initiatives in the healthcare industry such as the transition from written prescriptions and physician orders to computerized physician order entry. Our patient care software applications include:
Order Entry/Results Reporting, Point-of-Care System, Patient Acuity, ChartLink®, Computerized Physician Order Entry (CPOE), Medication Verification, Resident Assessment Instruments, Thrive Provider EHR, Outreach Client Access, Electronic Forms, Physician Documentation, and Emergency Department System.
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Enterprise Applications
. We provide software applications that support the products described above and are useful to all areas of the hospital. These applications include: ad hoc reporting, automatic batch and real-time
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Computerized Practitioner Order Entry ("CPOE")
. The cornerstone of inpatient EHR systems, CPOE promotes user adoption by including medication interaction alerts, access to relevant laboratory results, duplicate order checking, customizable order sets and protocols, and order templates containing pre-populated screens.
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Clinical Documentation
. This system securely enables a patient’s caregivers to view the vital signs, intake-output values, progress notes, and nursing tasks that are entered into the patient’s EHR.
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Emergency Department
. This system expedites and simplifies registration, patient tracking, order management, assessments, and other activities in a fast-paced environment.
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Laboratory
. This system automates routine tasks such as lab order processing and tracking, enabling the practitioner to focus on the results and ultimately better patient care.
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Radiology
. This application delivers faster turnaround times and enhanced communications among caregivers by automatically processing radiology orders, managing and tracking images, and generating reports.
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Pharmacy
. This application helps pharmacies manage all aspects of medication verification and dispensing, including order coordination, interaction checks, administration, and charging.
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Financial Accounting
. A hospital financial accounting management solution that helps rural and community hospitals gain better insight and perspective on their costs.
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Patient Management
. An accounting system to better manage patient information and automate the hospital billing process.
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Ambulatory Software Solutions
. Enables clinicians to focus on providing high-quality patient care by streamlining the management of patient data. Each offers a broad set of features and functionalities that can help clinics reduce costs, increase revenue, and improve administrative and clinical staff efficiency, all while enhancing patient care and safety.
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Care Management
. This integrated offering helps manage the delivery of quality care, collect and report on resident information, and manage compliance risk. Core modules include:
Work Center, Clinical, Smart Charting Order Administration (Point of Care), Quality Assurance, Therapy Tracking, Supplies Tracking, and Disease State Management
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Financial and Enterprise Management
. This comprehensive set of financial solutions enables customers to improve cash flow and better manage costs. Core modules include:
Accounts Payable, General Ledger, Payroll, Financial Management, Trust Funds, and Enterprise Management.
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Total System Support
. We believe the quality of continuing customer support is one of the most critical considerations in the selection of an information system provider. We provide hardware, technical and software support for all aspects of our system, which gives us the flexibility to take the necessary course of action to resolve any issue. Unlike our competitors who use third-party services for hardware and software support, we provide a single, convenient and efficient resource for all of our customers’ system support needs. In order to minimize the impact of a system problem, we train our customer service personnel to be technically proficient, courteous and prompt. Because a properly functioning information system is crucial to a hospital’s operations, our support teams are available 24 hours per day to assist customers with any problem that may arise. Customers can also use the Internet to directly access our support system. This allows customers to communicate electronically with our support teams at any time.
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User Group
. All of our Thrive customers have the opportunity to be members of our user group from which we solicit feedback regarding our products. We host a national user group meeting annually. This group meets to discuss and recommend product modifications and improvements, which it then evaluates and prioritizes. Upon confirming that the desired improvements are technically feasible, we agree to allocate a significant amount of programming time each year to undertake the requested modification or improvement. The majority of our product enhancements originate from suggestions from our customers that we receive through the user group structure.
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Software Releases
. We are committed to providing our customers with software and technology solutions that will continue to meet their information system needs. To accomplish this purpose, we continually work to enhance and improve our application programs. As part of this effort, for each customer covered under our general support agreement, we provide software updates as they become available at no additional cost. We design these enhancements to be seamlessly integrated into each customer’s existing Thrive system. The benefit of these enhancements is that each customer, regardless of its original installation date, uses the most advanced Thrive software available. Through this process, we can keep our customers up-to-date with the latest operational innovations in the healthcare industry as well as with changing governmental regulatory requirements. Another benefit of this "one system" concept is that our customer service teams can be more effective in responding to customer needs because they maintain a complete understanding of and familiarity with the one system that all customers use.
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Hardware Replacement
. As part of our general support agreements, we are also committed to promptly replacing malfunctioning system hardware in order to minimize the effect of operational interruptions. By offering all hardware used in our system, we believe we are better able to meet and address all of the information technology needs of our customers.
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Cloud Electronic Health Record (Cloud EHR)
. In some circumstances, we offer Cloud EHR services to customers via remote access telecommunications. Cloud EHR is a "Software as a Service" (or "SaaS") configuration and is in essence a subscription to access and use application software maintained by CPSI in a cloud environment for a monthly fee. Under this configuration, a customer is able to obtain access to an advanced EHR without a significant initial capital outlay. We store and maintain all Cloud EHR customers’ critical patient and administrative data using TruBridge Cloud Computing Services. These customers access this information remotely through direct telecommunications connections.
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Forms and Supplies
. We offer our customers the forms that they need for their patient and financial records, as well as their general office supplies. Furnishing these forms and supplies helps us to achieve our objective of being a one-source solution for a hospital’s complete healthcare information system requirements.
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eLearning
. Engaging content that can be accessed anytime, anywhere with built-in assessments to measure content retention and comprehension.
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Virtual Classrooms
. Live, on-line training to promote interaction and collaboration with a team of product experts. Plus, a set quarterly training schedule to help providers balance training needs with their core job responsibilities.
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Campus Classrooms
. Live, instructor-led classes at the Healthland corporate office promoting hands-on training and interaction with peers from other client facilities.
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Online Learning Tools
. Easy access to a comprehensive set of training tools including product release notes and documentation, software guides, and key reference material related to all supported products.
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User Forum and Expert Exchange
. Annual user conference plus regional user group forums that allow clients to interact with peers and leverage Healthland experts to learn more about key industry issues and get their specific product questions answered.
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Experienced and Dedicated Support Representatives
. Seasoned experts assigned to each client site that not only understand the challenges in the post-acute care industry, but know how to best address them. This includes proactive education on the key regulatory changes and requirements before they impact business operations.
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Client Portal and Training
. Instant, on-line access to the most up-to-date industry information impacting long-term care, plus a vast array of product training opportunities.
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Customer Enhancement Council
. Access to a community of peers along with a robust set of resources and knowledge to help clients get the most out of their AHT investment.
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Annual Customer Symposium
. An opportunity for clients to share best practices, gain industry insight on key topics impacting post-acute care providers, network with peers, and learn more about current and future AHT product and service offerings.
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Business Management Services
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Consulting Services
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Managed Information Technology Services
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Business Management Services
. Our business management services span a healthcare enterprise’s revenue cycle and provide customers with a strong alternative to in-house operations. These services leverage our deep service and technology experience and are designed to allow customers to streamline their administrative staffing while improving operational efficiencies. Our business management services include the following service offerings:
Electronic Billing, Insurance Services, Statement Processing, Accounts Receivable Management, Payroll Processing, and Contract Management.
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Consulting Services
. Our consulting services are designed to help healthcare organizations by assessing their needs, setting goals, and creating an action plan to achieve those goals, and, if needed, implementing the action plan. Many of our professional consultants possess decades of experience and all are skilled in adopting new technologies, redesigning processes, educating staff, and providing interim or on-going management services. Our consulting services include the following service offerings:
Revenue Cycle Consulting, Clinical Consulting, Medical Coding, and Information Technology Consulting.
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Managed Information Technology ("IT") Services
. Our managed IT services provide a range of services designed to meet the IT needs of community healthcare enterprises. The pace of technological change can be overwhelming. Our services allow customers to affordably maintain an advanced IT infrastructure, meet regulatory requirements, and reduce risk. Our managed IT services include the following service offerings:
Cloud Computing, Internet Service Provider, Managed Network Services, Server and Storage Management, Desktop Support, Communications Solutions, Connectivity Solutions, Security Services, and Data Center Services.
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Patient Liability Estimates
. Improve patient satisfaction, maximize point-of-service collections, and equip staff with the ability to provide transparent pricing with the PLE module.
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Eligibility Verification
. Reduce claim denials and carrier rejections by performing on-demand eligibility look-ups, assuring the care provided is covered.
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Claim Scrubbing and Submission
. A powerful claim management solution for submitting, validating, and processing a healthcare facility’s claims with ease with a high quality of edits.
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Remittance Management
. Remittance advice can be effortlessly gathered and managed with the Electronic Remittance Advice ("ERA") Retrieval and Remittance Management modules, simplifying workflow and involvement.
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Denial/Audit Management
. Equips healthcare facilities with the tools necessary to combat denied and audited claims, assisting organizations in recovering lost revenue.
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Contract Management
. Allows healthcare facilities to take control over complex healthcare contracts by prospectively pricing every claim submitted to payers, retrospectively pricing every remittance to ensure proper payment was received, and modeling proposed contract terms during payer negotiations.
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Reporting and Data Mining
. Brings together a facility’s revenue cycle data to gain a better understanding of the facility's financial health by analyzing reports and utilizing interactive, drill-in graphs.
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Integration of the AHT post-acute EHR platform with both the Evident Thrive EHR and Healthland Centriq EHR;
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Integration of the Rycan product into the TruBridge services platform;
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Integration of the Evident Interface Management System into the Healthland Centriq EHR; and
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Integration of the newly developed Evident Laboratory Instrument Interface solution into the Centriq EHR.
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Development of an Evident Laboratory Instrument Interface solution to replace a third party product previously used;
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A complete re-write of the Patient Portal application;
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An on-going, focused effort on improving physician usability and workflow across the ambulatory and emergency; departments and inpatient care settings;
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Localizing the product for entry into the Canadian market; and
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Meeting a variety of regulatory requirements including:
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Meaningful Use Stage 2 2015 Edition Certification;
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Meaningful Use Stage 3 Certification; and
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Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
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Development of next iteration of the Notes product;
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Development of updated laboratory functionality; and
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Meeting a variety of regulatory requirements including:
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Meaningful Use Stage 2 2015 Edition Certification;
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Meaningful Use Stage 3 Certification; and
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Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
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Continued development of the new “Work Center” platform, TruBridge; and
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On-going development of the Business Intelligence phase of our Analytics development project.
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Physician Adoption
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Continuum of Care
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Financial Efficiencies
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Population Health
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Global Market Expansion
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product features, functionality and performance;
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range of services offered;
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level of customer service and satisfaction;
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ease of integration and speed of implementation;
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product price;
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cost of services offered;
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results of services engagements;
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knowledge of the healthcare industry;
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training provided;
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sales and marketing efforts; and
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company reputation.
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ITEM 1A.
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RISK FACTORS
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make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in an event of default under such instruments;
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make us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
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require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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place us at a competitive disadvantage compared to our competitors that are less highly leveraged and therefore able to take advantage of opportunities that our indebtedness prevents us from exploiting; and
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limit our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other purposes.
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managing a larger company;
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the possibility of faulty assumptions underlying expectations regarding the integration process, including known and unknown liabilities in the HHI business or arising out of the integration, or assumptions around client retention;
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integrating two business cultures;
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creating uniform standards, controls, procedures, policies and information systems and minimizing the costs associated with such matters;
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integrating information systems, purchasing, accounting, finance, legal, sales, billing, payroll, and regulatory compliance functions;
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preserving client, supplier, product development, distribution, marketing, promotion and other important relationships;
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commercializing "go forward" solutions under development and increasing revenues from existing marketed solutions;
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combining the sales force territories and competencies associated with the sale of solutions and services presently sold or provided by legacy CPSI or HHI;
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integrating personnel from different businesses while maintaining focus on providing consistent, high quality solutions and client support and attracting prospective clients;
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integrating complex technologies and solutions from different businesses in a manner that is seamless to clients, and
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performance shortfalls as a result of the diversion of management's attention to the integration of HHI.
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significant acquisition and integration costs;
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failure to achieve projected synergies and performance targets;
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potentially dilutive issuances of our securities, the incurrence of debt and contingent liabilities and amortization expenses related to intangible assets with indefinite useful lives, which could adversely affect our results of operations and financial condition;
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using cash as acquisition currency may adversely affect interest or investment income, which may in turn adversely affect our earnings and/or earnings per share;
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difficulty in fully or effectively integrating the acquired technologies, software products, services, business practices or personnel, which would prevent us from realizing the intended benefits of the acquisition;
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failure to maintain uniform standard controls, policies and procedures across acquired businesses;
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difficulty in predicting and responding to issues related to product transition such as development, distribution and customer support;
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the possible adverse effect of such acquisitions on existing relationships with third party partners and suppliers of technologies and services;
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the possibility that staff or customers of the acquired companies might not accept new ownership and may transition to different technologies or attempt to renegotiate contract terms or relationships, including maintenance or support agreements;
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the assumption of known and unknown liabilities;
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the possibility that the due diligence process in any such acquisition may not completely identify material issues associated with product quality, product architecture, product development, intellectual property issues, key personnel issues or legal and financial contingencies, including any deficiencies in internal controls and procedures and the costs associated with remedying such deficiencies;
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difficulty in entering geographic and/or business markets in which we have no or limited prior experience;
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diversion of management’s attention from other business concerns; and
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the possibility that acquired assets become impaired, requiring us to take a charge to earnings which could be significant.
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changes in customer budgets and purchasing priorities;
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the ability of our customers to obtain financing for the purchase of our products;
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the financial stability of our customers;
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the specific mix of software, hardware and services in orders from customers;
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the timing of new product announcements and product introductions by us and our competitors;
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market acceptance of new products, product enhancements and services from us and our competitors;
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product and price competition;
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our success in expanding our sales and marketing programs;
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the availability and cost of system components;
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delay of revenue recognition to future quarters due to an increase in the sales of our remote access SaaS services;
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the length of sales cycles and installation processes;
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changes in revenue recognition or other accounting guidelines employed by us and/or established by the Financial Accounting Standards Board or other rulemaking bodies;
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accounting policies concerning the timing of recognition of revenue;
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personnel changes; and
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general market and economic factors.
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actual or anticipated quarterly variations in operating results;
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rumors about our performance, software solutions, or merger and acquisition activity;
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changes in expectations of future financial performance or changes in estimates of securities analysts;
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governmental regulatory action;
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healthcare reform measures;
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customer relationship developments;
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purchases or sales of Company stock;
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changes occurring in the markets in general;
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macroeconomic conditions, both nationally and internationally; and
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other factors, many of which are beyond our control.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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High
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Low
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Dividends
Declared
Per Share
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||||||
2016
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First Quarter
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$
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59.16
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$
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47.14
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$
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0.64
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Second Quarter
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54.09
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37.10
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0.64
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Third Quarter
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42.02
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24.18
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0.34
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Fourth Quarter
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26.71
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18.25
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0.24
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2015
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||||||
First Quarter
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$
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62.98
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$
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47.40
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$
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0.64
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Second Quarter
|
57.49
|
|
|
51.78
|
|
|
0.64
|
|
|
|||
Third Quarter
|
56.86
|
|
|
41.64
|
|
|
0.64
|
|
|
|||
Fourth Quarter
|
54.99
|
|
|
36.04
|
|
|
0.64
|
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended December 31,
|
||||||||||||||||||
(In thousands, except for per share data)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
INCOME DATA:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total sales revenues
|
$
|
267,272
|
|
|
$
|
182,174
|
|
|
$
|
204,742
|
|
|
$
|
200,863
|
|
|
$
|
183,309
|
|
Total costs of sales
|
129,258
|
|
|
87,716
|
|
|
90,795
|
|
|
89,534
|
|
|
90,086
|
|
|||||
Gross profit
|
138,014
|
|
|
94,458
|
|
|
113,947
|
|
|
111,329
|
|
|
93,223
|
|
|||||
Total operating expenses
|
123,639
|
|
|
69,372
|
|
|
64,360
|
|
|
61,085
|
|
|
51,946
|
|
|||||
Operating income
|
14,375
|
|
|
25,086
|
|
|
49,587
|
|
|
50,244
|
|
|
41,277
|
|
|||||
Total other income
|
(6,389
|
)
|
|
405
|
|
|
152
|
|
|
466
|
|
|
721
|
|
|||||
Income before taxes
|
7,986
|
|
|
25,491
|
|
|
49,739
|
|
|
50,710
|
|
|
41,998
|
|
|||||
Provision for income taxes
|
4,053
|
|
|
7,148
|
|
|
16,819
|
|
|
17,967
|
|
|
12,025
|
|
|||||
Net Income
|
$
|
3,933
|
|
|
$
|
18,343
|
|
|
$
|
32,920
|
|
|
$
|
32,743
|
|
|
$
|
29,973
|
|
Net income per share - basic
|
$
|
0.29
|
|
|
$
|
1.62
|
|
|
$
|
2.94
|
|
|
$
|
2.95
|
|
|
$
|
2.71
|
|
Net income per share - diluted
|
$
|
0.29
|
|
|
$
|
1.62
|
|
|
$
|
2.94
|
|
|
$
|
2.95
|
|
|
$
|
2.71
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
13,255
|
|
|
11,083
|
|
|
11,026
|
|
|
10,998
|
|
|
10,977
|
|
|||||
Diluted
|
13,255
|
|
|
11,083
|
|
|
11,026
|
|
|
10,998
|
|
|
10,977
|
|
|||||
Cash dividends declared per common share
|
$
|
1.86
|
|
|
$
|
2.56
|
|
|
$
|
2.28
|
|
|
$
|
2.04
|
|
|
$
|
2.84
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
2,220
|
|
|
$
|
24,951
|
|
|
$
|
23,792
|
|
|
$
|
11,729
|
|
|
$
|
8,912
|
|
Working capital
|
13,604
|
|
|
57,136
|
|
|
63,355
|
|
|
51,301
|
|
|
32,486
|
|
|||||
Total assets
|
339,150
|
|
|
92,788
|
|
|
99,325
|
|
|
92,535
|
|
|
77,839
|
|
|||||
Total current liabilities
|
30,945
|
|
|
17,421
|
|
|
18,161
|
|
|
21,451
|
|
|
18,461
|
|
|||||
Total stockholders’ equity
|
157,970
|
|
|
75,366
|
|
|
80,781
|
|
|
69,083
|
|
|
57,202
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
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.
|
|
Year ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(In thousands)
|
Amount
|
|
% Sales
|
|
Amount
|
|
% Sales
|
|
Amount
|
|
% Sales
|
|||||||||
INCOME DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
System sales and support
|
$
|
197,874
|
|
|
74.0
|
%
|
|
$
|
118,385
|
|
|
65.0
|
%
|
|
$
|
148,652
|
|
|
72.6
|
%
|
Business management, consulting and managed IT services
|
69,398
|
|
|
26.0
|
%
|
|
63,789
|
|
|
35.0
|
%
|
|
56,090
|
|
|
27.4
|
%
|
|||
Total sales revenues
|
267,272
|
|
|
100.0
|
%
|
|
182,174
|
|
|
100.0
|
%
|
|
204,742
|
|
|
100.0
|
%
|
|||
Costs of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
System sales and support
|
89,543
|
|
|
33.5
|
%
|
|
52,500
|
|
|
28.8
|
%
|
|
59,079
|
|
|
28.9
|
%
|
|||
Business management, consulting and managed IT services
|
39,715
|
|
|
14.9
|
%
|
|
35,216
|
|
|
19.3
|
%
|
|
31,716
|
|
|
15.5
|
%
|
|||
Total costs of sales
|
129,258
|
|
|
48.4
|
%
|
|
87,716
|
|
|
48.1
|
%
|
|
90,795
|
|
|
44.3
|
%
|
|||
Gross profit
|
138,014
|
|
|
51.6
|
%
|
|
94,458
|
|
|
51.9
|
%
|
|
113,947
|
|
|
55.7
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product development
|
32,621
|
|
|
12.2
|
%
|
|
14,229
|
|
|
7.8
|
%
|
|
14,622
|
|
|
7.1
|
%
|
|||
Sales and marketing
|
27,194
|
|
|
10.2
|
%
|
|
18,333
|
|
|
10.1
|
%
|
|
19,720
|
|
|
9.6
|
%
|
|||
General and administrative
|
53,642
|
|
|
20.1
|
%
|
|
36,810
|
|
|
20.2
|
%
|
|
30,018
|
|
|
14.7
|
%
|
|||
Amortization of acquisition-related intangibles
|
10,182
|
|
|
3.8
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total operating expenses
|
123,639
|
|
|
46.3
|
%
|
|
69,372
|
|
|
38.1
|
%
|
|
64,360
|
|
|
31.4
|
%
|
|||
Operating income
|
14,375
|
|
|
5.4
|
%
|
|
25,086
|
|
|
13.8
|
%
|
|
49,587
|
|
|
24.2
|
%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other income
|
220
|
|
|
0.1
|
%
|
|
405
|
|
|
0.2
|
%
|
|
152
|
|
|
0.1
|
%
|
|||
Interest expense
|
(6,609
|
)
|
|
(2.5
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total other income (expense)
|
(6,389
|
)
|
|
(2.4
|
)%
|
|
405
|
|
|
0.2
|
%
|
|
152
|
|
|
0.1
|
%
|
|||
Income before taxes
|
7,986
|
|
|
3.0
|
%
|
|
25,491
|
|
|
14.0
|
%
|
|
49,739
|
|
|
24.3
|
%
|
|||
Provision for income taxes
|
4,053
|
|
|
1.5
|
%
|
|
7,148
|
|
|
3.9
|
%
|
|
16,819
|
|
|
8.2
|
%
|
|||
Net income
|
$
|
3,933
|
|
|
1.5
|
%
|
|
$
|
18,343
|
|
|
10.1
|
%
|
|
$
|
32,920
|
|
|
16.1
|
%
|
|
Year Ended December 31,
|
||||||
(In thousands)
|
2016
|
|
2015
|
||||
Sales revenues:
|
|
|
|
||||
Acute Care EHR
|
$
|
160,836
|
|
|
$
|
118,385
|
|
Post-acute Care EHR
|
29,058
|
|
|
—
|
|
||
TruBridge, Rycan, and Other Outsourcing
|
77,378
|
|
|
63,789
|
|
||
Total revenues
|
267,272
|
|
|
182,174
|
|
||
|
|
|
|
||||
Costs of sales:
|
|
|
|
||||
Acute Care EHR
|
75,225
|
|
|
52,500
|
|
||
Post-acute Care EHR
|
11,362
|
|
|
—
|
|
||
TruBridge, Rycan, and Other Outsourcing
|
42,671
|
|
|
35,216
|
|
||
Total cost of sales
|
129,258
|
|
|
87,716
|
|
||
|
|
|
|
||||
Gross profit:
|
|
|
|
||||
Acute Care EHR
|
85,611
|
|
|
65,885
|
|
||
Post-acute Care EHR
|
17,696
|
|
|
—
|
|
||
TruBridge, Rycan, and Other Outsourcing
|
34,707
|
|
|
28,573
|
|
||
Total gross profit
|
$
|
138,014
|
|
|
$
|
94,458
|
|
|
Years Ended
|
||||||
(In thousands)
|
December 31, 2015
|
|
December 31, 2014
|
||||
Sales revenues:
|
|
|
|
||||
Acute Care EHR
|
$
|
118,385
|
|
|
$
|
148,652
|
|
Post-acute Care EHR
|
—
|
|
|
—
|
|
||
TruBridge, Rycan, and Other Outsourcing
|
63,789
|
|
|
56,090
|
|
||
Total revenues
|
182,174
|
|
|
204,742
|
|
||
|
|
|
|
||||
Costs of sales:
|
|
|
|
||||
Acute Care EHR
|
52,500
|
|
|
59,079
|
|
||
Post-acute Care EHR
|
—
|
|
|
—
|
|
||
TruBridge, Rycan, and Other Outsourcing
|
35,216
|
|
|
31,716
|
|
||
Total cost of sales
|
87,716
|
|
|
90,795
|
|
||
|
|
|
|
||||
Gross profit:
|
|
|
|
||||
Acute Care EHR
|
65,885
|
|
|
89,573
|
|
||
Post-acute Care EHR
|
—
|
|
|
—
|
|
||
TruBridge, Rycan, and Other Outsourcing
|
28,573
|
|
|
24,374
|
|
||
Total gross profit
|
$
|
94,458
|
|
|
$
|
113,947
|
|
|
Payment due by period
|
||||||||||||||||||
(In thousands)
|
Total
|
|
Less than 1 year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
Operating lease obligations
|
$
|
6,351
|
|
|
$
|
1,988
|
|
|
$
|
2,740
|
|
|
$
|
862
|
|
|
$
|
761
|
|
Capital lease obligations
|
861
|
|
|
296
|
|
|
565
|
|
|
—
|
|
|
—
|
|
|||||
Debt obligations
|
154,875
|
|
|
6,250
|
|
|
21,875
|
|
|
126,750
|
|
|
—
|
|
|||||
Interest on debt obligations
|
21,156
|
|
|
5,816
|
|
|
10,650
|
|
|
4,690
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
183,243
|
|
|
$
|
14,350
|
|
|
$
|
35,830
|
|
|
$
|
132,302
|
|
|
$
|
761
|
|
•
|
The sale of information systems and the provision of related support services, including perpetual software licenses, conversion, installation and training services, hardware and peripherals, SaaS services, forms and supplies, software application support, hardware maintenance, and continuing education.
|
•
|
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").
|
1)
|
The allocation of total arrangement consideration to the various elements of our multiple-element arrangements, including, for certain elements, estimates and judgments regarding vendor-specific objective evidence ("VSOE") of fair value, which we base on either the price charged when the same element is sold separately or the price established by management having the relevant authority to do so, for an element not yet sold separately. VSOE calculations are updated and reviewed regularly depending on the nature of the product or service. We base VSOE for the related undelivered elements on either renewals or stand-alone sales as appropriate.
|
2)
|
Our determination that total fees for our products and services are fixed or determinable, which we base on signed contracts and orders.
|
3)
|
Our assessment that collection of amounts due is reasonably assured, which we base on our standard payment terms and collection history.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index to Financial Statement Schedules
|
|
|
|
|
|
All other schedules to the financial statements required by Article 9 of Regulation S-X are not applicable and therefore have been omitted.
|
|
/s/ GRANT THORNTON LLP
|
|
Atlanta, Georgia
|
March 15, 2017
|
/s/ GRANT THORNTON LLP
|
|
Atlanta, Georgia
|
March 15, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,220
|
|
|
$
|
24,951
|
|
Investments
|
—
|
|
|
10,824
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $2,370 and $1,216, respectively
|
31,812
|
|
|
22,594
|
|
||
Financing receivables, current portion, net
|
5,459
|
|
|
10,576
|
|
||
Inventories
|
1,697
|
|
|
1,495
|
|
||
Deferred tax assets
|
—
|
|
|
2,335
|
|
||
Prepaid income taxes
|
567
|
|
|
427
|
|
||
Prepaid expenses and other
|
2,794
|
|
|
1,355
|
|
||
Total current assets
|
44,549
|
|
|
74,557
|
|
||
Property and equipment, net
|
13,439
|
|
|
14,351
|
|
||
Financing receivables, net of current portion
|
5,595
|
|
|
1,569
|
|
||
Intangible assets, net
|
107,118
|
|
|
—
|
|
||
Goodwill
|
168,449
|
|
|
—
|
|
||
Deferred tax assets
|
—
|
|
|
2,311
|
|
||
Total assets
|
$
|
339,150
|
|
|
$
|
92,788
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
6,841
|
|
|
$
|
4,591
|
|
Current portion of long-term debt
|
5,817
|
|
|
—
|
|
||
Deferred revenue
|
5,840
|
|
|
3,821
|
|
||
Accrued vacation
|
3,650
|
|
|
3,412
|
|
||
Other accrued liabilities
|
8,797
|
|
|
5,598
|
|
||
Total current liabilities
|
30,945
|
|
|
17,422
|
|
||
Long-term debt, less current portion
|
146,989
|
|
|
—
|
|
||
Deferred tax liabilities
|
3,246
|
|
|
—
|
|
||
Total liabilities
|
181,180
|
|
|
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
|
147,911
|
|
|
44,187
|
|
||
Accumulated other comprehensive loss
|
—
|
|
|
(38
|
)
|
||
Retained earnings
|
10,046
|
|
|
31,206
|
|
||
Total stockholders’ equity
|
157,970
|
|
|
75,366
|
|
||
Total liabilities and stockholders’ equity
|
$
|
339,150
|
|
|
$
|
92,788
|
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Sales revenues:
|
|
|
|
|
|
||||||
System sales and support
|
$
|
197,874
|
|
|
$
|
118,385
|
|
|
$
|
148,652
|
|
Business management, consulting and managed IT services
|
69,398
|
|
|
63,789
|
|
|
56,090
|
|
|||
Total sales revenues
|
267,272
|
|
|
182,174
|
|
|
204,742
|
|
|||
Costs of sales (exclusive of amortization shown separately below):
|
|
|
|
|
|
||||||
System sales and support
|
89,543
|
|
|
52,500
|
|
|
59,079
|
|
|||
Business management, consulting and managed IT services
|
39,715
|
|
|
35,216
|
|
|
31,716
|
|
|||
Total costs of sales
|
129,258
|
|
|
87,716
|
|
|
90,795
|
|
|||
Gross profit
|
138,014
|
|
|
94,458
|
|
|
113,947
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Product development
|
32,621
|
|
|
14,229
|
|
|
14,622
|
|
|||
Sales and marketing
|
27,194
|
|
|
18,333
|
|
|
19,720
|
|
|||
General and administrative
|
53,642
|
|
|
36,810
|
|
|
30,018
|
|
|||
Amortization of acquisition-related intangibles
|
10,182
|
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
123,639
|
|
|
69,372
|
|
|
64,360
|
|
|||
Operating income
|
14,375
|
|
|
25,086
|
|
|
49,587
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Other income
|
220
|
|
|
405
|
|
|
152
|
|
|||
Interest expense
|
(6,609
|
)
|
|
—
|
|
|
—
|
|
|||
Total other income (expense)
|
(6,389
|
)
|
|
405
|
|
|
152
|
|
|||
Income before taxes
|
7,986
|
|
|
25,491
|
|
|
49,739
|
|
|||
Provision for income taxes
|
4,053
|
|
|
7,148
|
|
|
16,819
|
|
|||
Net income
|
$
|
3,933
|
|
|
$
|
18,343
|
|
|
$
|
32,920
|
|
Net income per share - basic
|
$
|
0.29
|
|
|
$
|
1.62
|
|
|
$
|
2.94
|
|
Net income per share - diluted
|
$
|
0.29
|
|
|
$
|
1.62
|
|
|
$
|
2.94
|
|
Weighted average shares outstanding used in per common share computations:
|
|
|
|
|
|
||||||
Basic
|
13,255
|
|
|
11,083
|
|
|
11,026
|
|
|||
Diluted
|
13,255
|
|
|
11,083
|
|
|
11,026
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
3,933
|
|
|
$
|
18,343
|
|
|
$
|
32,920
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
||||||
Change in unrealized income with realized income on the Statement of Income
|
38
|
|
|
(18
|
)
|
|
(31
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
38
|
|
|
(18
|
)
|
|
(31
|
)
|
|||
Comprehensive income
|
$
|
3,971
|
|
|
$
|
18,325
|
|
|
$
|
32,889
|
|
|
Common
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income(Loss)
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
|||||||||||
Balance at December 31, 2013
|
11,159
|
|
|
$
|
11
|
|
|
$
|
34,644
|
|
|
$
|
11
|
|
|
$
|
34,416
|
|
|
$
|
69,082
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,920
|
|
|
32,920
|
|
|||||
Unrealized loss on investments held for sale, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
|||||
Issuance of restricted stock
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4,172
|
|
|
—
|
|
|
—
|
|
|
4,172
|
|
|||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,530
|
)
|
|
(25,530
|
)
|
|||||
Excess (deficit) tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
167
|
|
|
—
|
|
|
—
|
|
|
167
|
|
|||||
Balance at December 31, 2014
|
11,209
|
|
|
$
|
11
|
|
|
$
|
38,983
|
|
|
$
|
(20
|
)
|
|
$
|
41,806
|
|
|
$
|
80,780
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,343
|
|
|
18,343
|
|
|||||
Unrealized loss on investments held for sale, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Issuance of restricted stock
|
107
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Forfeiture of common stock
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
5,380
|
|
|
—
|
|
|
—
|
|
|
5,380
|
|
|||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,943
|
)
|
|
(28,943
|
)
|
|||||
Excess (deficit) tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
(176
|
)
|
|
—
|
|
|
—
|
|
|
(176
|
)
|
|||||
Balance at December 31, 2015
|
11,303
|
|
|
$
|
11
|
|
|
$
|
44,187
|
|
|
$
|
(38
|
)
|
|
$
|
31,206
|
|
|
$
|
75,366
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,933
|
|
|
3,933
|
|
|||||
Change in unrealized income with realized income on the Statement of Income
|
—
|
|
|
—
|
|
|
—
|
|
|
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
|
—
|
|
|
—
|
|
|
7,213
|
|
|
—
|
|
|
—
|
|
|
7,213
|
|
|||||
Common stock issued upon exercise of stock options
|
169
|
|
|
—
|
|
|
1,134
|
|
|
—
|
|
|
—
|
|
|
1,134
|
|
|||||
Issuance of restricted stock
|
87
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
5,366
|
|
|
—
|
|
|
—
|
|
|
5,366
|
|
|||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,093
|
)
|
|
(25,093
|
)
|
|||||
Excess (deficit) tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
210
|
|
|
—
|
|
|
—
|
|
|
210
|
|
|||||
Balance at December 31, 2016
|
13,533
|
|
|
$
|
13
|
|
|
$
|
147,911
|
|
|
$
|
—
|
|
|
$
|
10,046
|
|
|
$
|
157,970
|
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
3,933
|
|
|
$
|
18,343
|
|
|
$
|
32,920
|
|
Adjustments to net income:
|
|
|
|
|
|
||||||
Provision for bad debt
|
2,259
|
|
|
910
|
|
|
582
|
|
|||
Deferred taxes
|
3,672
|
|
|
(2,698
|
)
|
|
(1,552
|
)
|
|||
Stock based compensation
|
5,366
|
|
|
5,380
|
|
|
4,172
|
|
|||
(Excess) deficit tax benefit from shared-based compensation
|
(210
|
)
|
|
176
|
|
|
(167
|
)
|
|||
Depreciation
|
3,062
|
|
|
3,174
|
|
|
3,665
|
|
|||
Amortization of acquisition-related intangibles
|
10,182
|
|
|
—
|
|
|
—
|
|
|||
Amortization of deferred finance costs
|
673
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities (net of acquired assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(3,927
|
)
|
|
(166
|
)
|
|
(3,956
|
)
|
|||
Financing receivables
|
1,514
|
|
|
6,500
|
|
|
7,406
|
|
|||
Inventories
|
14
|
|
|
(102
|
)
|
|
158
|
|
|||
Prepaid expenses and other
|
1,787
|
|
|
(419
|
)
|
|
(35
|
)
|
|||
Accounts payable
|
(5,588
|
)
|
|
600
|
|
|
777
|
|
|||
Deferred revenue
|
(13,662
|
)
|
|
(2,070
|
)
|
|
(3,691
|
)
|
|||
Other liabilities
|
(7,250
|
)
|
|
730
|
|
|
421
|
|
|||
Prepaid income taxes/income taxes payable
|
280
|
|
|
518
|
|
|
(1,750
|
)
|
|||
Net cash provided by operating activities
|
2,105
|
|
|
30,876
|
|
|
38,950
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(39
|
)
|
|
(448
|
)
|
|
(1,473
|
)
|
|||
Purchase of business, net of cash received
|
(162,611
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of investments
|
—
|
|
|
(150
|
)
|
|
(50
|
)
|
|||
Sale of investments
|
10,861
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(151,789
|
)
|
|
(598
|
)
|
|
(1,523
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Dividends paid
|
(25,092
|
)
|
|
(28,943
|
)
|
|
(25,531
|
)
|
|||
Proceeds from long-term debt
|
156,397
|
|
|
—
|
|
|
—
|
|
|||
Payments of long-term debt principal
|
(5,196
|
)
|
|
—
|
|
|
—
|
|
|||
Payments of contingent consideration
|
(500
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
1,134
|
|
|
—
|
|
|
—
|
|
|||
Excess (deficit) tax benefit from stock-based compensation
|
210
|
|
|
(176
|
)
|
|
167
|
|
|||
Net cash provided by (used in) financing activities
|
126,953
|
|
|
(29,119
|
)
|
|
(25,364
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
(22,731
|
)
|
|
1,159
|
|
|
12,063
|
|
|||
Cash and cash equivalents at beginning of year
|
24,951
|
|
|
23,792
|
|
|
11,729
|
|
|||
Cash and cash equivalents at end of year
|
$
|
2,220
|
|
|
$
|
24,951
|
|
|
$
|
23,792
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
5,876
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid for income taxes, net of refund
|
$
|
110
|
|
|
$
|
9,231
|
|
|
$
|
20,069
|
|
Supplemental disclosure of non-cash flow information:
|
|
|
|
|
|
||||||
Fair value of common stock and options issued as consideration for acquisition of HHI
|
$
|
97,017
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Reclassification of inventory to property and equipment
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
Write-off of fully depreciated assets
|
$
|
2,769
|
|
|
$
|
—
|
|
|
$
|
1,974
|
|
Capital lease obligation
|
$
|
933
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
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 consolidated statements of income;
|
•
|
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 consolidated statements of income are now included within the caption "Product development" within the "Operating expenses" section of the consolidated statements of income; 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 consolidated statements of income are now included within the caption "Sales and marketing" within the "Operating expenses" section of the consolidated statements of income.
|
(In thousands)
|
As previously reported
|
|
Reclassifications
|
|
As reclassified
|
||||||
Sales revenues:
|
|
|
|
|
|
||||||
System sales
|
$
|
42,994
|
|
|
$
|
(42,994
|
)
|
|
$
|
—
|
|
Support and maintenance
|
75,391
|
|
|
(75,391
|
)
|
|
—
|
|
|||
System sales and support
|
—
|
|
|
118,385
|
|
|
118,385
|
|
|||
Costs of sales:
|
|
|
|
|
|
||||||
System sales
|
39,515
|
|
|
(39,515
|
)
|
|
—
|
|
|||
Support and maintenance
|
27,214
|
|
|
(27,214
|
)
|
|
—
|
|
|||
System sales and support
|
—
|
|
|
52,500
|
|
|
52,500
|
|
|||
Business management, consulting and managed IT services
|
41,337
|
|
|
(6,121
|
)
|
|
35,216
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Product development
|
—
|
|
|
14,229
|
|
|
14,229
|
|
|||
Sales and marketing
|
12,212
|
|
|
6,121
|
|
|
18,333
|
|
(In thousands)
|
As previously reported
|
|
Reclassifications
|
|
As reclassified
|
||||||
Sales revenues:
|
|
|
|
|
|
||||||
System sales
|
$
|
75,099
|
|
|
$
|
(75,099
|
)
|
|
$
|
—
|
|
Support and maintenance
|
73,553
|
|
|
(73,553
|
)
|
|
—
|
|
|||
System sales and support
|
—
|
|
|
148,652
|
|
|
148,652
|
|
|||
Costs of sales:
|
|
|
|
|
|
||||||
System sales
|
44,620
|
|
|
(44,620
|
)
|
|
—
|
|
|||
Support and maintenance
|
29,081
|
|
|
(29,081
|
)
|
|
—
|
|
|||
System sales and support
|
—
|
|
|
59,079
|
|
|
59,079
|
|
|||
Business management, consulting and managed IT services
|
37,066
|
|
|
(5,350
|
)
|
|
31,716
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Product development
|
—
|
|
|
14,622
|
|
|
14,622
|
|
|||
Sales and marketing
|
14,370
|
|
|
5,350
|
|
|
19,720
|
|
•
|
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,
|
•
|
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 11), the method of recognizing revenue for the perpetual license of the associated modules included in the arrangement, and the related conversion, installation and training services over the term the services are performed, is on a module by module basis as the related perpetual licenses are delivered and the respective conversion, installation and training for each specific module is completed, as this is representative of the pattern of provision of these services.
|
•
|
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 Arrangemen
t 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.
|
•
|
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
|
||
Cash consideration, net of acquired cash received
|
$
|
162,611
|
|
Fair value of common stock and options issued as consideration
|
97,017
|
|
|
Total consideration
|
$
|
259,628
|
|
(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
|
168,449
|
|
|
Accounts payable and accrued liabilities
|
(17,490
|
)
|
|
Deferred taxes, net
|
(4,010
|
)
|
|
Contingent consideration
|
(1,620
|
)
|
|
Deferred revenue
|
(15,681
|
)
|
|
Net assets acquired
|
$
|
264,999
|
|
|
Years Ended December 31,
|
||||||
(In thousands, except per share data, unaudited)
|
2016
|
|
2015
|
||||
Pro forma revenues
|
$
|
270,974
|
|
|
$
|
290,071
|
|
Pro forma net income
|
$
|
8,538
|
|
|
$
|
3,484
|
|
Pro forma diluted earnings per share
|
$
|
0.64
|
|
|
$
|
0.26
|
|
(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
|
|
||||
Mortgaged-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
|
)
|
(In thousands)
|
2016
|
|
2015
|
||||
Land
|
$
|
2,848
|
|
|
$
|
2,848
|
|
Buildings and improvements
|
9,432
|
|
|
9,432
|
|
||
Maintenance equipment
|
802
|
|
|
1,231
|
|
||
Computer equipment
|
5,174
|
|
|
4,798
|
|
||
Leasehold improvements
|
5,007
|
|
|
4,753
|
|
||
Office furniture and fixtures
|
3,591
|
|
|
4,336
|
|
||
Automobiles
|
335
|
|
|
335
|
|
||
|
27,189
|
|
|
27,733
|
|
||
Less: accumulated depreciation
|
(13,750
|
)
|
|
(13,382
|
)
|
||
Property and equipment, net
|
$
|
13,439
|
|
|
$
|
14,351
|
|
(In thousands)
|
2016
|
|
2015
|
||||
Salaries and benefits
|
$
|
5,397
|
|
|
$
|
2,292
|
|
Severance
|
337
|
|
|
1,569
|
|
||
Commissions
|
518
|
|
|
434
|
|
||
Self-insurance reserves
|
887
|
|
|
883
|
|
||
Contingent consideration
|
1,120
|
|
|
—
|
|
||
Other
|
538
|
|
|
420
|
|
||
|
$
|
8,797
|
|
|
$
|
5,598
|
|
(In thousands, except for per share data)
|
2016
|
|
2015
|
|
2014
|
||||||
Basic EPS
|
|
|
|
|
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net income
|
$
|
3,933
|
|
|
$
|
18,343
|
|
|
$
|
32,920
|
|
Less: Net income attributable to participating securities
|
(38
|
)
|
|
(373
|
)
|
|
(499
|
)
|
|||
Net income attributable to common stockholders
|
$
|
3,895
|
|
|
$
|
17,970
|
|
|
$
|
32,421
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Weighted average shares outstanding used in basic per common share computations
|
13,255
|
|
|
11,083
|
|
|
11,026
|
|
|||
|
|
|
|
|
|
||||||
Basic EPS
|
$
|
0.29
|
|
|
$
|
1.62
|
|
|
$
|
2.94
|
|
|
|
|
|
|
|
||||||
Diluted EPS
|
|
|
|
|
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net income attributable to common stockholders
|
$
|
3,895
|
|
|
$
|
17,970
|
|
|
$
|
32,421
|
|
Reallocation of net income attributable to participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to common stockholders for diluted EPS
|
$
|
3,895
|
|
|
$
|
17,970
|
|
|
$
|
32,421
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Weighted average shares outstanding used in basic per common share computations
|
13,255
|
|
|
11,083
|
|
|
11,026
|
|
|||
Weighted average effect of dilutive securities:
|
|
|
|
|
|
||||||
Performance share awards
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average shares outstanding used in diluted per common share computations
|
13,255
|
|
|
11,083
|
|
|
11,026
|
|
|||
|
|
|
|
|
|
||||||
Diluted EPS
|
$
|
0.29
|
|
|
$
|
1.62
|
|
|
$
|
2.94
|
|
(In thousands)
|
2016
|
|
2015
|
||||
Beginning balance
|
$
|
—
|
|
|
$
|
1,456
|
|
Additions based on tax positions related to the current year
|
—
|
|
|
—
|
|
||
Additions for tax positions of prior years
|
—
|
|
|
—
|
|
||
Reductions for tax positions of prior years
|
—
|
|
|
(1,456
|
)
|
||
Ending balance
|
$
|
—
|
|
|
$
|
—
|
|
(In thousands)
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Accounts receivable and financing receivables
|
$
|
1,392
|
|
|
$
|
729
|
|
Accrued vacation
|
1,022
|
|
|
726
|
|
||
Stock-based compensation
|
1,678
|
|
|
1,784
|
|
||
Deferred revenue
|
894
|
|
|
25
|
|
||
Accrued severance
|
75
|
|
|
612
|
|
||
Accrued liabilities and other
|
1,002
|
|
|
243
|
|
||
Transaction costs
|
—
|
|
|
1,166
|
|
||
Other comprehensive income
|
23
|
|
|
23
|
|
||
Credits
|
349
|
|
|
—
|
|
||
Net operating loss
|
26,689
|
|
|
—
|
|
||
Deferred tax assets
|
33,124
|
|
|
5,308
|
|
||
Less: Valuation allowance
|
1,624
|
|
|
—
|
|
||
Total deferred tax assets
|
$
|
31,500
|
|
|
$
|
5,308
|
|
Deferred tax liabilities:
|
|
|
|
||||
Intangibles
|
34,696
|
|
|
$
|
—
|
|
|
Depreciation
|
50
|
|
|
662
|
|
||
Total deferred tax liabilities
|
$
|
34,746
|
|
|
$
|
662
|
|
Total deferred tax asset/(liability)
|
$
|
(3,246
|
)
|
|
$
|
4,646
|
|
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Current provision:
|
|
|
|
|
|
||||||
Federal
|
$
|
(72
|
)
|
|
$
|
8,576
|
|
|
$
|
15,546
|
|
State
|
453
|
|
|
1,270
|
|
|
2,825
|
|
|||
Deferred provision:
|
|
|
|
|
|
||||||
Federal
|
4,144
|
|
|
(2,421
|
)
|
|
(1,393
|
)
|
|||
State
|
(472
|
)
|
|
(277
|
)
|
|
(159
|
)
|
|||
Total income tax provision
|
$
|
4,053
|
|
|
$
|
7,148
|
|
|
$
|
16,819
|
|
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Income taxes at U.S. federal statutory rate
|
$
|
2,795
|
|
|
$
|
8,922
|
|
|
$
|
17,409
|
|
Provision-to-return adjustments
|
325
|
|
|
(293
|
)
|
|
(464
|
)
|
|||
State income tax, net of federal tax effect
|
5
|
|
|
944
|
|
|
1,773
|
|
|||
Domestic production activities deduction
|
—
|
|
|
(670
|
)
|
|
(1,606
|
)
|
|||
Tax credits
|
(349
|
)
|
|
(414
|
)
|
|
(597
|
)
|
|||
Uncertain tax positions
|
—
|
|
|
(1,219
|
)
|
|
138
|
|
|||
Transaction costs
|
1,312
|
|
|
—
|
|
|
—
|
|
|||
Other
|
(35
|
)
|
|
(122
|
)
|
|
166
|
|
|||
Total income tax provision
|
$
|
4,053
|
|
|
$
|
7,148
|
|
|
$
|
16,819
|
|
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Costs of sales
|
$
|
1,396
|
|
|
$
|
1,447
|
|
|
$
|
1,264
|
|
Operating expenses
|
3,970
|
|
|
3,933
|
|
|
2,908
|
|
|||
Pre-tax stock-based compensation expense
|
5,366
|
|
|
5,380
|
|
|
4,172
|
|
|||
Less: income tax effect
|
(2,093
|
)
|
|
(2,098
|
)
|
|
(1,627
|
)
|
|||
Net (after tax) stock-based compensation expense
|
$
|
3,273
|
|
|
$
|
3,282
|
|
|
$
|
2,545
|
|
|
Shares
|
|
Weighted-Average
Grant-Date
Fair Value
|
|||
Nonvested stock outstanding at January 1, 2014
|
153,674
|
|
|
$
|
58.15
|
|
Granted
|
49,737
|
|
|
61.63
|
|
|
Vested
|
(43,195
|
)
|
|
58.48
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Nonvested stock outstanding at December 31, 2014
|
160,216
|
|
|
$
|
59.14
|
|
Granted
|
60,850
|
|
|
51.85
|
|
|
Performance share awards converted to restricted stock
|
45,844
|
|
|
60.28
|
|
|
Vested
|
(62,628
|
)
|
|
59.30
|
|
|
Forfeited
|
(12,885
|
)
|
|
58.06
|
|
|
Nonvested stock outstanding at December 31, 2015
|
191,397
|
|
|
$
|
57.12
|
|
Granted
|
86,984
|
|
|
52.21
|
|
|
Vested
|
(93,496
|
)
|
|
57.48
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Nonvested stock outstanding at December 31, 2016
|
184,885
|
|
|
$
|
54.63
|
|
|
Shares
|
|
Weighted-Average
Grant-Date
Fair Value
|
|||
Performance share awards outstanding at January 1, 2014
|
—
|
|
|
$
|
—
|
|
Granted
|
46,541
|
|
|
60.28
|
|
|
Performance share awards converted to restricted stock
|
—
|
|
|
—
|
|
|
Performance share awards outstanding at December 31, 2014
|
46,541
|
|
|
$
|
60.28
|
|
Granted
|
52,364
|
|
|
49.29
|
|
|
Forfeited or unearned
|
(3,590
|
)
|
|
51.42
|
|
|
Performance share awards converted to restricted stock
|
(45,844
|
)
|
|
60.28
|
|
|
Performance share awards outstanding at December 31, 2015
|
49,471
|
|
|
$
|
49.29
|
|
Granted
|
77,594
|
|
|
49.64
|
|
|
Forfeited or unearned
|
(49,471
|
)
|
|
49.29
|
|
|
Performance share awards outstanding at December 31, 2016
|
77,594
|
|
|
$
|
49.64
|
|
(In thousands)
|
2016
|
|
2015
|
||||
Second Generation Meaningful Use Installment Plans, gross
|
$
|
3,080
|
|
|
$
|
9,372
|
|
Fixed Periodic Payment Plans, gross
|
1,988
|
|
|
454
|
|
||
Short-term payment plans, gross
|
5,068
|
|
|
9,826
|
|
||
|
|
|
|
||||
Less: allowance for losses
|
(1,796
|
)
|
|
(491
|
)
|
||
Less: unearned income
|
—
|
|
|
—
|
|
||
Short-term payment plans, net
|
$
|
3,272
|
|
|
$
|
9,335
|
|
(In thousands)
|
2016
|
|
2015
|
||||
Sales-type leases, gross
|
$
|
8,981
|
|
|
$
|
3,239
|
|
Less: allowance for losses
|
(402
|
)
|
|
(163
|
)
|
||
Less: unearned income
|
(797
|
)
|
|
(266
|
)
|
||
Sales-type leases, net
|
$
|
7,782
|
|
|
$
|
2,810
|
|
(In thousands)
|
Beginning
Balance
|
|
Provision
|
|
Charge-offs
|
|
Recoveries
|
|
Ending
Balance
|
||||||||||
December 31, 2016
|
$
|
654
|
|
|
$
|
1,762
|
|
|
$
|
(218
|
)
|
|
$
|
—
|
|
|
$
|
2,198
|
|
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
|
||||||||
December 31, 2016
|
$
|
228
|
|
|
$
|
31
|
|
|
$
|
34
|
|
|
$
|
293
|
|
December 31, 2015
|
$
|
251
|
|
|
$
|
66
|
|
|
$
|
29
|
|
|
$
|
346
|
|
(In thousands)
|
December 31, 2016
|
|
December 31, 2015
|
||||
Customer balances with amounts reclassified to trade accounts receivable that are:
|
|
|
|
||||
1 to 90 Days Past Due
|
$
|
6,167
|
|
|
$
|
515
|
|
91 to 180 Days Past Due
|
550
|
|
|
230
|
|
||
181+ Days Past Due
|
273
|
|
|
—
|
|
||
Total customer balances with past due amounts reclassified to trade accounts receivable
|
$
|
6,990
|
|
|
$
|
745
|
|
Total customer balances with no past due amounts reclassified to trade accounts receivable
|
1,194
|
|
|
2,228
|
|
||
Total financing receivables with contractual maturities of one year or less
|
5,068
|
|
|
9,826
|
|
||
Less allowance for losses
|
(2,198
|
)
|
|
(654
|
)
|
||
Total financing receivables
|
$
|
11,054
|
|
|
$
|
12,145
|
|
(In thousands)
|
Customer Relationships
|
|
Trademark
|
|
Developed Technology
|
|
Total
|
||||||||
Gross carrying amount
|
$
|
82,300
|
|
|
$
|
10,900
|
|
|
$
|
24,100
|
|
|
$
|
117,300
|
|
Accumulated amortization
|
(6,398
|
)
|
|
(832
|
)
|
|
(2,952
|
)
|
|
(10,182
|
)
|
||||
Net intangible assets
|
$
|
75,902
|
|
|
$
|
10,068
|
|
|
$
|
21,148
|
|
|
$
|
107,118
|
|
Weighted average remaining years of useful life
|
12
|
|
14
|
|
7
|
|
11
|
(In thousands)
|
Acute Care EHR
|
Post-acute Care EHR
|
TruBridge, Rycan, and Other Outsourcing
|
Total
|
||||||||
Balance as of December 31, 2015
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Goodwill acquired
|
97,095
|
|
57,570
|
|
13,784
|
|
168,449
|
|
||||
Balance as of December 31, 2016
|
$
|
97,095
|
|
$
|
57,570
|
|
$
|
13,784
|
|
$
|
168,449
|
|
(In thousands)
|
December 31, 2016
|
||
Term loan facility
|
$
|
121,875
|
|
Revolving credit facility
|
33,000
|
|
|
Capital lease obligation
|
861
|
|
|
Debt obligations
|
155,736
|
|
|
Less: debt issuance costs
|
(2,930
|
)
|
|
Debt obligation, net
|
152,806
|
|
|
Less: current portion
|
(5,817
|
)
|
|
Long-term debt
|
$
|
146,989
|
|
|
|
|
Fair Value at December 31, 2016 Using
|
||||||||||||
|
|
|
Quoted Prices in
|
|
|
|
|
||||||||
|
Carrying
|
|
Active Markets for
|
|
Significant Other
|
|
Significant
|
||||||||
|
Amount at
|
|
Identical Assets
|
|
Observable Inputs
|
|
Unobservable Inputs
|
||||||||
(In thousands)
|
12/31/2016
|
|
(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
|
||||||||||||
|
|
|
Quoted Prices in
|
|
|
|
|
||||||||
|
Carrying
|
|
Active Markets for
|
|
Significant Other
|
|
Significant
|
||||||||
|
Amount at
|
|
Identical Assets
|
|
Observable Inputs
|
|
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
|
|
|
$
|
—
|
|
Mortgage backed securities
|
55
|
|
|
—
|
|
|
55
|
|
|
—
|
|
||||
Certificates of deposit
|
1,993
|
|
|
—
|
|
|
1,993
|
|
|
—
|
|
||||
Obligations of U.S. Treasury, U.S. government corporations and agencies
|
1,557
|
|
|
—
|
|
|
1,557
|
|
|
—
|
|
||||
Corporate debt securities
|
5,950
|
|
|
—
|
|
|
5,950
|
|
|
—
|
|
||||
Total available-for-sale securities
|
$
|
10,824
|
|
|
$
|
—
|
|
|
$
|
10,824
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Acute Care EHR
|
$
|
160,836
|
|
|
$
|
118,385
|
|
|
$
|
148,652
|
|
Post-acute Care EHR
|
29,058
|
|
|
—
|
|
|
—
|
|
|||
TruBridge, Rycan, and Other Outsourcing
|
77,378
|
|
|
63,789
|
|
|
56,090
|
|
|||
Total revenues
|
267,272
|
|
|
182,174
|
|
|
204,742
|
|
|||
|
|
|
|
|
|
||||||
Cost of sales:
|
|
|
|
|
|
||||||
Acute Care EHR
|
75,225
|
|
|
52,500
|
|
|
59,079
|
|
|||
Post-acute Care EHR
|
11,362
|
|
|
—
|
|
|
—
|
|
|||
TruBridge, Rycan, and Other Outsourcing
|
42,671
|
|
|
35,216
|
|
|
31,716
|
|
|||
Total cost of sales
|
129,258
|
|
|
87,716
|
|
|
90,795
|
|
|||
|
|
|
|
|
|
||||||
Gross profit:
|
|
|
|
|
|
||||||
Acute Care EHR
|
85,611
|
|
|
65,885
|
|
|
89,573
|
|
|||
Post-acute Care EHR
|
17,696
|
|
|
—
|
|
|
—
|
|
|||
TruBridge, Rycan, and Other Outsourcing
|
34,707
|
|
|
28,573
|
|
|
24,374
|
|
|||
Total gross profit
|
138,014
|
|
|
94,458
|
|
|
113,947
|
|
|||
|
|
|
|
|
|
||||||
Corporate operating expenses
|
(123,639
|
)
|
|
(69,372
|
)
|
|
(64,360
|
)
|
|||
Other income (loss)
|
220
|
|
|
405
|
|
|
152
|
|
|||
Interest expense
|
(6,609
|
)
|
|
—
|
|
|
—
|
|
|||
Income (loss) before taxes
|
$
|
7,986
|
|
|
$
|
25,491
|
|
|
$
|
49,739
|
|
(In thousands, except for per share data)
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Sales revenues
|
$
|
69,643
|
|
|
$
|
68,415
|
|
|
$
|
64,663
|
|
|
$
|
64,551
|
|
Gross profit
|
36,253
|
|
|
35,135
|
|
|
32,951
|
|
|
33,675
|
|
||||
Operating income
|
766
|
|
|
5,263
|
|
|
4,244
|
|
|
4,102
|
|
||||
Net income
|
(1,663
|
)
|
|
1,996
|
|
|
1,599
|
|
|
2,001
|
|
||||
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.13
|
)
|
|
$
|
0.15
|
|
|
$
|
0.12
|
|
|
$
|
0.15
|
|
Diluted
|
(0.13
|
)
|
|
0.15
|
|
|
0.12
|
|
|
0.15
|
|
||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Sales revenues
|
$
|
46,240
|
|
|
$
|
47,086
|
|
|
$
|
44,617
|
|
|
$
|
44,231
|
|
Gross profit
|
24,446
|
|
|
24,715
|
|
|
22,727
|
|
|
22,570
|
|
||||
Operating income
|
7,834
|
|
|
8,386
|
|
|
4,261
|
|
|
4,605
|
|
||||
Net income
|
5,508
|
|
|
5,903
|
|
|
3,539
|
|
|
3,393
|
|
||||
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.49
|
|
|
$
|
0.52
|
|
|
$
|
0.31
|
|
|
$
|
0.30
|
|
Diluted
|
0.49
|
|
|
0.52
|
|
|
0.31
|
|
|
0.30
|
|
Description
|
|
|
Balance at
beginning of
period
|
|
Additions
charged to cost
and expenses (1)
|
|
Deductions (2)
|
|
Balance at end
of period
|
||||||||
Allowance for doubtful accounts deducted from accounts receivable in the balance sheet
|
2014
|
|
$
|
1,125
|
|
|
$
|
931
|
|
|
$
|
(803
|
)
|
|
$
|
1,253
|
|
|
2015
|
|
$
|
1,253
|
|
|
$
|
674
|
|
|
$
|
(711
|
)
|
|
$
|
1,216
|
|
|
2016
|
|
$
|
1,216
|
|
|
$
|
497
|
|
|
$
|
657
|
|
|
$
|
2,370
|
|
(1)
|
Adjustments to allowance for change in estimates.
|
(2)
|
Uncollectible accounts written off, net of recoveries.
|
Description
|
|
|
Balance at
beginning of
period
|
|
Additions
charged to cost
and expenses (1)
|
|
Deductions (2)
|
|
Balance at end
of period
|
||||||||
Allowance for credit losses deducted from financing receivables in the balance sheet
|
2014
|
|
$
|
1,365
|
|
|
$
|
(349
|
)
|
|
$
|
(15
|
)
|
|
$
|
1,001
|
|
|
2015
|
|
$
|
1,001
|
|
|
$
|
236
|
|
|
$
|
(583
|
)
|
|
$
|
654
|
|
|
2016
|
|
$
|
654
|
|
|
$
|
1,762
|
|
|
$
|
(218
|
)
|
|
$
|
2,198
|
|
(1)
|
Adjustments to allowance for change in estimates.
|
(2)
|
Uncollectible accounts written off, net of recoveries.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
•
|
Converting the billing processes and systems for the affected HHI revenue streams to CPSI-legacy billing processes and systems to provide transaction-level controls enforcing revenue recognition upon delivery (as required by U.S. GAAP) as opposed to billing;
|
•
|
Implementing monitoring controls over the affected HHI revenue streams, similar to those already implemented for CPSI-legacy revenue streams, as an additional proof of the effectiveness of the aforementioned transaction-level controls; and
|
•
|
Improving our control environment by enforcing to our accounting and financial reporting personnel and select members of management the necessity for sound revenue recognition practices, beginning at the transaction-level, and ensure that the appropriate individuals within management with the appropriate knowledge and experience are involved in any decisions related to billing practices that deviate from our standard billing processes and systems.
|
ITEM 9B.
|
OTHER INFORMATION.
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
COMPUTER PROGRAMS AND SYSTEMS, INC.
|
||
|
|
|
By:
|
|
/s/ J. Boyd Douglas
|
|
|
J. Boyd Douglas
|
|
|
President and Chief Executive Officer
|
Name
|
|
Title
|
|
Date
|
|
|
|
||
/s/ J. Boyd Douglas
|
|
President, Chief Executive Officer and Director (principal executive officer)
|
|
March 15, 2017
|
J. Boyd Douglas
|
|
|
|
|
|
|
|
||
/s/ Matt J. Chambless
|
|
Chief Financial Officer
(principal financial officer) |
|
March 15, 2017
|
Matt J. Chambless
|
|
|
|
|
|
|
|
||
/s/ David A. Dye
|
|
Chairman of the Board and Director,
Chief Growth Officer |
|
March 15, 2017
|
David A. Dye
|
|
|
|
|
|
|
|
||
/s/ James B. Britain
|
|
Vice President – Finance and Controller (principal accounting officer)
|
|
March 15, 2017
|
James B. Britain
|
|
|
|
|
|
|
|
||
/s/ W. Austin Mulherin, III
|
|
Director
|
|
March 15, 2017
|
W. Austin Mulherin, III
|
|
|
|
|
|
|
|
||
/s/ William R. Seifert, II
|
|
Director
|
|
March 15, 2017
|
William R. Seifert, II
|
|
|
|
|
|
|
|
||
/s/ John C. Johnson
|
|
Director
|
|
March 15, 2017
|
John C. Johnson
|
|
|
|
|
|
|
|
||
/s/ Charles P. Huffman
|
|
Director
|
|
March 15, 2017
|
Charles P. Huffman
|
|
|
|
|
|
|
|
||
/s/ A. Robert Outlaw, Jr.
|
|
Director
|
|
March 15, 2017
|
A. Robert Outlaw, Jr.
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
Agreement and Plan of Merger and Reorganization, dated as of November 25, 2015, by and among Computer Programs and Systems, Inc., HHI Merger Sub I, Inc., HHI Merger Sub II, Inc., Healthland Holding Inc. and AHR Holdings, LLC (filed as Exhibit 2.1 to the CPSI’s Current Report on Form 8-K dated December 1, 2015 and incorporated herein by reference)
|
|
|
|
2.2
|
|
Amendment to Agreement and Plan of Merger and Reorganization, dated as of January 8, 2016, by and among Computer Programs and Systems, Inc., Healthland Holding, Inc. and AHR Holdings, LLC (filed as Exhibit 2.2 to the CPSI’s Current Report on Form 8-K dated January 8, 2016 and incorporated herein by reference)
|
|
|
|
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)
|
|
|
|
10.1
|
|
Form of Indemnity Agreement entered into by CPSI and each of its non-employee directors (filed as Exhibit 10.1 to CPSI’s Quarterly Report on Form 10-Q for the period ended September 30, 2002 and incorporated herein by reference)
|
|
|
|
10.2
|
|
Real Property Lease Agreement, dated September 14, 2009 between CPSI and 3725 Airport Boulevard, LP (filed as Exhibit 10.1 to CPSI’s Quarterly Report on Form 10-Q for the period ended September 30, 2009 and incorporated herein by reference)
|
|
|
|
10.3
|
|
First Amendment to Real Property Lease Agreement, dated October 9, 2009, between CPSI and 3725 Airport Boulevard, LP (filed as Exhibit 10.2 to CPSI’s Quarterly Report on Form 10-Q for the period ended September 30, 2009 and incorporated herein by reference)
|
|
|
|
10.4
|
|
Real Property Lease Agreement, dated March 19, 2012, between CPSI and Fairhope Group, LLC (filed as Exhibit 10.6 to CPSI's Annual Report on Form 10-K for the period ended December 31, 2012 and incorporated herein by reference)
|
|
|
|
10.5*
|
|
Amendment and Restatement of the Computer Programs and Systems, Inc. 2005 Restricted Stock Plan (filed as Exhibit 10.6 to CPSI's Annual Report on Form 10-K for the period ended December 31, 2005 and incorporated herein by reference)
|
|
|
|
10.6*
|
|
Form of Five-Year Restricted Stock Award Agreement under the Amended and Restated 2005 Restricted Stock Plan (filed as Exhibit 10.1 to CPSI's Current Report on Form 8-K dated January 30, 2006 and incorporated herein by reference)
|
|
|
|
10.7*
|
|
Form of Four-Year Restricted Stock Award Agreement under the Amended and Restated 2005 Restricted Stock Plan (filed as Exhibit 10.1 to CPSI's Current Report on Form 8-K dated September 25, 2013 and incorporated herein by reference)
|
|
|
|
10.8*
|
|
Computer Programs and Systems, Inc. Amended and Restated 2012 Restricted Stock Plan for Non-Employee Directors (filed as Exhibit 10.16 to CPSI's Annual Report on Form 10-K for the period ended December 31, 2013 and incorporated herein by reference)
|
|
|
|
10.9*
|
|
Form of Restricted Stock Award Agreement under the Amended and Restated 2012 Restricted Stock Plan for Non-Employee Directors (filed as Exhibit 10.2 to CPSI's Quarterly Report on Form 10-Q for the period ended June 30, 2012 and incorporated herein by reference)
|
|
|
|
10.10*
|
|
Computer Programs and Systems, Inc. 2014 Incentive Plan (filed as Exhibit 10.1 to CPSI’s Current Report on Form 8-K dated May 16, 2014 and incorporated herein by reference)
|
|
|
|
10.11*
|
|
Form of Performance Share Award Agreement under the 2014 Incentive Plan (filed as Exhibit 10.2 to CPSI’s Current Report on Form 8-K dated May 16, 2014 and incorporated herein by reference)
|
|
|
|
10.12*
|
|
Form of Performance-Based Cash Bonus Award Agreement under the 2014 Incentive Plan (filed as Exhibit 10.3 to CPSI’s Current Report on Form 8-K dated May 16, 2014 and incorporated herein by reference)
|
|
|
|
10.13*
|
|
Form of Restricted Stock Award Agreement under the 2014 Incentive Plan (filed as Exhibit 10.4 to CPSI’s Current Report on Form 8-K dated May 16, 2014 and incorporated herein by reference)
|
|
|
|
10.14*
|
|
Healthland Holding Inc. (f/k/a Dairyland Healthcare Solutions Holding Corp) Stock Incentive Plan (filed as Exhibit 99.1 to CPSI’s Registration Statement on Form S-8 (Registration No. 333-208915) and incorporated herein by reference)
|
|
|
|
10.15
|
|
Commission Program for Troy D. Rosser
|
|
|
|
10.16
|
|
Employment Agreement, dated as of July 8, 2013, by and between Healthland Holdings Inc. and Chris Bauleke (filed as exhibit 10.17 to CPSI's Annual Report on Form 10-K for the period ending December 31, 2015 and incorporated herein by reference)
|
|
|
|
10.17
|
|
Credit Agreement, dated as of January 8, 2016, by and among Computer Programs and Systems, Inc., certain of its subsidiaries, as guarantors, certain lenders named therein, and Regions Bank, as administrative agent and collateral agent (filed as Exhibit 10.1 to CPSI’s Current Report on Form 8-K dated January 8, 2016 and incorporated herein by reference)
|
|
|
|
10.18
|
|
Pledge and Security Agreement, dated as of January 8, 2016, by and among the parties identified as Obligors therein and Regions Bank, as collateral agent (filed as Exhibit 10.2 to CPSI’s Current Report on Form 8-K dated January 8, 2016 and incorporated herein by reference)
|
|
|
|
10.19
|
|
Investor Agreement, dated as of January 8, 2016, by and among Computer Programs and Systems, Inc., Francisco Partners II, L.P., Francisco Partners Parallel Fund II, L.P., and AHR Holdings, LLC. (filed as Exhibit 10.3 to CPSI’s Current Report on Form 8-K dated January 8, 2016 and incorporated herein by reference)
|
|
|
|
10.20
|
|
Support Agreement, dated as of November 25, 2015, by and among Computer Programs and Systems, Inc., HHI Merger Sub I, Inc., HHI Merger Sub II, Inc., AHR Holdings, LLC, Francisco Partners II, L.P., and Francisco Partners Parallel Fund II, L.P. (filed as Exhibit 10.1 to CPSI’s Current Report on Form 8-K dated December 1, 2015 and incorporated herein by reference)
|
|
|
|
10.21
|
|
Escrow Agreement, dated as of January 8, 2016, by and among Computer Programs and Systems, Inc., AHR Holdings, LLC and U.S. Bank National Association (filed as Exhibit 99.4 to CPSI's Registration Statement on Form S-8 (Registration No. 333-208915) and incorporated herein by reference)
|
|
|
|
10.22
|
|
First Amendment, dated as of December 20, 2016, by and among Computer Programs and Systems, Inc., certain of its subsidiaries, as guarantors, certain lenders named therein, and Regions Bank, as administrative agent and collateral agent (filed as Exhibit 10.1 to CPSI's Current Report on Form 8-K dated December 20, 2016 and incorporated herein by reference)
|
|
|
|
21.1
|
|
Subsidiaries of the registrant
|
|
|
|
23.1
|
|
Consent of Grant Thornton LLP, Independent Registered Public Accounting Firm
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-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)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1
|
|
Certifications of 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 Annual Report on Form 10-K for the period ended December 31, 2016
|
*
|
Management compensation plan or arrangement
|
•
|
EHR after 12
th
month from initial installation
|
•
|
TruBridge/Rycan commission and goal credit only applies to the first year of the initial term of the agreement.
|
•
|
License Adds do not count towards goal
|
•
|
EHR after 13
th
month from initial installation
|
•
|
TruBridge/Rycan commission and goal credit only applies to the first year of the initial term of the agreement.
|
1.
|
Items on order and invoiced within three months of the employee’s passing.
|
2.
|
Items invoiced within three months of the initial installation date for new sites that are under contract but not yet installed at the time of the employee’s passing.
|
Subsidiary Name
|
State of Organization
|
TruBridge, LLC
|
Delaware
|
Evident, LLC
|
Delaware
|
Healthland Holding Inc.
|
Delaware
|
Healthland Inc.
|
Minnesota
|
American HealthTech, Inc.
|
Mississippi
|
Rycan Technologies, Inc.
|
Minnesota
|
/s/ GRANT THORNTON LLP
|
||
Atlanta, Georgia
|
||
March 15, 2017
|
1.
|
I have reviewed this annual report on Form 10-K 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 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:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer 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):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 15, 2017
|
|
|
|
/s/ J. Boyd Douglas
|
||
|
|
|
|
J. Boyd Douglas
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K 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 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:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer 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):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 15, 2017
|
|
|
|
/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.
|
|
|
|
/s/ J. Boyd Douglas
|
||
J. Boyd Douglas
|
||
Chief Executive Officer
|
||
|
||
/s/ Matt J. Chambless
|
||
Matt J. Chambless
|
||
Chief Financial Officer
|