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Corporate Headquarters
Computer Programs and Systems, Inc.
6600 Wall Street
Mobile, AL 36695
(251) 639-8100
www.cpsi.com
Common Stock
Computer Programs and Systems, Inc.’s common stock
is traded on The NASDAQ Stock Market’s Global Select
Market under the symbol “CPSI.”
6600 Wall Street | Mobile, Alabama 36695
2018 ANNUAL REPORT
COMPANY PROFILE
CPSI is a leading provider of healthcare solutions and services for community hospitals, their clinics and
post-acute care facilities. Founded in 1979, CPSI is the parent of three companies – Evident, LLC, American
HealthTech, Inc. and TruBridge, LLC. Our combined companies are focused on helping improve the health
of the communities we serve, connecting communities for a better patient care experience, and improving
the financial operations of our customers. Evident provides comprehensive EHR solutions for community
hospitals and their affiliated clinics. American HealthTech is one of the nation’s largest providers of EHR
solutions and services for post-acute care facilities. TruBridge focuses on providing business, consulting and
managed IT services, along with its complete RCM solution for all care settings. For more information, visit
www.cpsi.com.
ANNUAL MEETING
The annual meeting of stockholders will be held April 29, 2019, at 8:00 a.m. Central Time, at The Battle
House Renaissance Mobile Hotel & Spa, 26 North Royal Street, Mobile, Alabama.
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
Total sales revenue
Total cost of sales
Gross profit
Total operating expenses
Operating income (loss)
Total other income (expense)
Income (loss) before income taxes
Provision for income taxes
Net income (loss)
Net income (loss) per share – basic and diluted
Weighted average shares outstanding:
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$ 276,927
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DIRECTORS AND OFFICERS
Board of Directors
David A. Dye
Chairman and Chief
Growth Officer
Computer Programs
and Systems, Inc.
J. Boyd Douglas, Jr.
President and Chief
Executive Officer
Computer Programs
and Systems, Inc.
Officers
Charles P. Huffman
Retired Executive Vice
President and Chief
Jeffrey A. Strong
Managing Partner
Gilead Capital LP
J. Boyd Douglas, Jr.
President and
Chief Executive Officer
Financial Officer
EnergySouth, Inc.
Glenn P. Tobin, Ph.D.
Retired Executive Vice
David A. Dye
Chief Growth Officer
W. Austin Mulherin, III
President
Attorney
The Advisory Board
Frazer, Greene, Upchurch
Company
& Baker, LLC
Matt J. Chambless
Chief Financial Officer
A. Robert Outlaw, Jr.
Executive Vice President
Chief Operating Officer
Denise W. Warren
Chris L. Fowler
Regina M. Benjamin, MD
Chief Executive Officer
and Chief Operating
Chief Executive Officer
Bayou La Batre Rural
Health Clinic
China Doll Rice and
Officer
Beans, Inc.
WakeMed Health &
Hospitals
Stock Performance Graph
The following graph sets forth the cumulative total return (assuming reinvestment of dividends) to our
stockholders during the period beginning December 31, 2013, and ending on December 31, 2018, compared
to an overall stock market index (S&P 500 Index), and the NASDAQ Computer and Data Processing Group.
$250
$225
$200
$175
$150
$125
$100
$75
$50
$25
$0
12/13
12/14
12/15
12/16
12/17
12/18
Computer Programs and Systems, Inc.
S&P 500
NASDAQ Computer and Data Processing
Computer Programs and Systems, Inc.
S&P 500
NASDAQ Computer and Data Processing
$ 100.00
$ 100.00
$ 100.00
$ 101.87
$ 113.69
$ 113.68
$ 88.04
$ 115.26
$ 140.03
$ 43.77
$ 129.05
$ 150.12
$ 57.38
$ 157.22
$ 209.72
$ 48.61
$ 150.33
$ 212.97
12/13
12/14
12/15
12/16
12/17
12/18
TO OUR SHAREHOLDERS:
We are proud to report a solid performance in 2018, as we continued our drive to transition CPSI from a
market leader for healthcare software to a leading provider of a broad range of software products and services
for the communities we serve. Across our family of companies, we have a shared objective of helping our
clients improve the health of their communities through vision, innovation and collaboration. Our results for
the year reflect this pursuit, as we continued to execute our strategy against a continually changing healthcare
environment.
Since inception, CPSI has been a visionary leader in shaping the future of community healthcare, providing
innovative technology and solutions to connect providers, patients and communities. To remain competitive,
community healthcare facilities must use technology to maximize the efficiency of their business practice,
improve their financial performance, enhance the quality of patient care, and maintain the privacy and security
of patient information. And, with the paradigm shift to value-based reimbursement, it is even more imperative
today that providers have the right technology solutions and services for clinical decision support, patient
engagement and treatment of patients outside the clinical setting. With our relentless focus on responding
to these opportunities, we have built our business by providing the right solutions that address the unique
infrastructure and technology support required by community healthcare organizations. Importantly, we have
earned a favorable reputation as a trusted partner, and we are proud of our success in the marketplace. In 2018,
our client base remained strong with over 4,300 acute and post-acute care facilities that employ solutions and
services from the CPSI family of companies.
We reported total revenues of $280.4 million for 2018, up 1.3 percent compared with 2017. As expected, the
replacement market for electronic health record (EHR) system sales, continued execution around Meaningful
Use Stage 3 (MU3) initiatives, and impressive momentum with the TruBridge solutions for revenue cycle
management (RCM), business management, consulting, and managed information technology (IT) services
were the key drivers of our revenue growth. Notably, slightly more than 81 percent of our revenues in 2018
were recurring in nature, providing greater financial stability and visibility going forward. Consolidated annual
bookings were $88.0 million compared with $108.9 million in 2017. In spite of this annual decline, we are
encouraged by the strong bookings growth we achieved in the fourth quarter with an impressive pipeline that
confirms our optimism for the year ahead.
For 2018, cash provided by operations was $23.9 million compared with $23.6 million in 2017. The strength in
operating cash flows, especially in the second half of the year, resulted in net repayments of bank debt of over
$11.0 million in 2018, including a $5.0 million advanced payment against our revolving credit facility during the
fourth quarter. These actions are commensurate with our commitment to reducing our overall leverage on an
expedited basis, and we were pleased to effectively reach our target leverage ratio by the end of the year. At
the same time, we continued to return funds to shareholders through cash dividend payments of $5.6 million in
2018. With a healthy recurring revenue base, we expect to achieve another year of solid cash flow in 2019. We
will continue to pursue opportunistic uses of capital, including strategic investments in solutions and services
across our family of companies, as we focus on creating long-term value for our company and our shareholders.
Our acute care EHR platform, Thrive, sold under our wholly owned subsidiary, Evident, provides a seamless
user experience, allowing providers to coordinate care across the major settings where healthcare services are
being delivered. Maintaining the strength of our EHR foundation remains a priority, as we continue to pursue
both competitive and replacement opportunities as well as build upon the demand and growth of our TruBridge
services in our client base. Our fully integrated solutions address the unique needs of community healthcare
providers, and, with our 40 years of experience, we have established a strong competitive advantage that has
earned us a favorable reputation in the marketplace. In 2018, we had 32 community hospitals join our family
and completed 29 net new community hospital EHR installations, with an encouraging pipeline for 2019.
Importantly, we have continued to leverage our core EHR client base with significant opportunities for cross-
selling TruBridge solutions, delivering added value and further supporting client retention. In 2018, we built on
this momentum with impressive growth for TruBridge, reaching over $100 million in revenue for the year, a
new record. This growth included a meaningful contribution from new bookings for nTrust, our software as
a service (SaaS) offering. Reflecting our commitment to drive innovation through our shared set of solutions,
nTrust is a combined offering of our acute or post-acute care EHR with the RCM solutions from TruBridge. By
moving away from the traditional license and maintenance fee structure to a subscription model, our clients
can benefit from the “pay-as-you-go” access to both current and future solutions from CPSI, allowing more
visibility for their long-term planning and budgeting. At the same time, this model supports our objective to
grow recurring revenue.
In addition to TruBridge sales to our EHR clients, in 2018 we expanded our sales and marketing efforts to increase
TruBridge’s market share outside the CPSI client base. These efforts led to a contract with the University of
Louisville physicians’ group to overhaul their collections process, and we are excited about the potential to
offer scalable solutions and services for larger healthcare organizations. We believe the addressable market
for TruBridge is sizable, with significant revenue growth opportunities for the popular RCM suite of services,
including accounts receivable management, private pay and medical coding, as well as our business consulting
and managed IT services.
In 2018, the Healthcare Financial Management Association (HFMA) reviewed the TruBridge RCM product,
awarding the prestigious “Peer Reviewed by HFMA” designation. In addition, in February 2019, the TruBridge
RCM consulting and solutions received top rankings by Black Book Research. We are proud of these
independent third-party endorsements, which confirm the strength of our RCM products and the strong value
proposition we bring to our clients. We note that Evident was also recognized by Black Book Research as the top
EHR vendor for hospitals under 100 beds for the 9th consecutive year, utilizing validated responses regarding
18 performance areas of operational excellence. These accolades reflect the shared commitment throughout
the CPSI family of companies to ensure our clients have the right solutions to improve the health of their
respective communities, create a better patient experience and improve their financial operations.
Over the past year, we continued to gain traction with our shared solutions strategy of designing and developing
applications that can be leveraged across all of our EHR platforms. CPSI is a proven leader in driving innovation,
and our latest applications reflect an intuitive user interface, require minimal end-user training, and are
integrated with key workflows. Importantly, we have continued to seek client input throughout the development
process, confirming our commitment to collaboration in our development efforts. In 2018 our product updates
addressed critical areas such as enhanced business intelligence, expanded interoperability, quality reporting,
patient engagement and population health management tools for today’s value-based reimbursement world.
We are building applications with an architecture that depends upon a suite of containerized micro services,
which accelerates the process of building increased functionality, expands future scalability, and allows us to
deliver new solutions to our clients in a more efficient manner. These development efforts enhance our strong
value proposition and support our ability to drive incremental sales. As always, we are focused on improving
the provider experience across the inpatient, ambulatory and skilled nursing care settings.
During 2018, we remained focused on the important product development initiative related to our post-acute
care business, American HealthTech (AHT). In the third quarter of 2018, we completed the first phase of
our 24-month product development plan, with approximately 300 customer sites going live on the enhanced
system, and we remain on schedule with our final roll-out strategy. Importantly, we have received positive
feedback regarding these innovative solutions, as we have worked closely with our clients throughout the
development process to ensure we are meeting their needs to improve clinical workflows and support post-
acute caregivers in the delivery of quality patient care. We are optimistic about the favorable impact that
this development effort will have on our client base with expected organic growth opportunities for offering
additional applications.
We are proud of our progress in 2018 in positioning CPSI as a leading healthcare solutions company. Through
our family of companies, we are uniquely qualified to connect communities, patients and providers in our shared
objective to improve the quality of their healthcare. With our focus on vision, innovation and collaboration, we
believe we have the right strategy in place to ensure the best outcome for CPSI, the communities we serve
and our shareholders. Our key strategic initiatives for 2019 will center around the following areas – build on
the momentum with TruBridge and expand market share, continue to aggressively pursue competitive and
vulnerable EHR replacement opportunities, and differentiate on the clients’ experience as a foundation for
selling our expanded suite of CPSI solutions.
The past year was an important period of transition for CPSI, and we have worked hard to execute against both
the challenges and opportunities in today’s healthcare environment. Throughout our family of companies, we
are committed to improving the health of more communities. With our complement of integrated solutions and
services and expanded market presence, we are optimistic about the opportunities ahead for CPSI in 2019. We
are proud of the hard work and dedication of our team of employees across the CPSI family of companies, who
continued to move our company forward in 2018 and instill confidence in our future. Together, we will pursue
a strategy that delivers long-term value to CPSI, our shareholders and the communities we serve.
Thank you for the support your investment provides.
J. Boyd Douglas
President and Chief Executive Officer
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