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Computer Programs & Systems Inc. (CPSI)
Q1 2008 Earnings Call
April 25, 2008 9:00 am ET
Boyd Douglas - President and CEO
Darrell West - CFO
Richard Close - Jefferies
Jeremy - William Blair & Company
Del Warmington - Delaware Capital Management
Jeff Schmidt of Sidoti & Co
Leo Carpio - Caris & Company
Tom Carpenter - Hilliard Lyons
Bret Jones - Leerink Swann
Previous Statements by CPSI
» Computer Programs & Systems Inc. Q4 2008 Earnings Call Transcript
» Computer Programs & Systems Inc. Q3 2008 Earnings Call Transcript
» Computer Programs and Systems, Inc. Q2 2008 Earnings Call Transcript
As a reminder, this conference is recorded on Friday, April 25, 2008. It's my pleasure to turn the conference over to Mr. Boyd Douglas, President and Chief Executive Officer at Computer Programs and Systems Incorporated. Please go ahead, sir.
Thank you, Pama. Good morning, everyone and thank you for joining us. During this conference call, we may make statements regarding future operating plans, expectations and performance that constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution you that any such forward-looking statements are only predictions and are not guarantees of future performance.
Actual results might differ materially from those projected in the forward-looking statements as a result of risks, uncertainties and other factors, including those described in our public releases and reports filed with the Securities and Exchange Commission, including but not limited to our recent annual report on Form 10-K. We also caution investors that the forward-looking information provided in this call represents our outlook only as of this date, and we undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call.
Joining me on this morning is Darrell West, our Chief Financial Officer. Darrell and I have a few minutes of prepared comments, and then we will be glad to take your questions.
In the first quarter, we installed our financial and patient accounting system in six hospitals, our core clinical departmental applications at seven facilities. Six hospitals implemented nursing Point of Care, and four customers went live with ImageLink PACS. Add-on sales to existing clients made up 20% of total revenue.
At this time, we expect to install our financial and patient accounting system at five facilities in the second quarter. We anticipate four new installations of our core clinical departmental modules, eight nursing Point of Care implementations, and three ImageLink installs.
In Business Management solutions during the first quarter we executed eight new accounts receivable management contracts, one of which were for full accounts receivable services, six for private pay collections one for contract management services. During the first quarter revenue from this segment of our business grew 13.5% year-over-year. We anticipated 10% year-over-year growth rate for the second quarter of 2008.
Demand for our Business Management solutions remain strong as hospitals continually looking for ways to improve processes and run their facilities in the most efficient manager possible. On the sales front there has been no significant change in the competitive landscape. Our move to the Linux operating system CCHIT approval and our full suite of business management services currently give us a distinct advantage over our competition.
Speaking of Linux, we now have completed 31 installations of Linux operating system at our client sites. We anticipate installing an additional 18 by the end of the second quarter. This comparison is gone very smoothly and as you can tell by the number it has been a huge success with our customer base and with potential clients. This is yet another example of our ability to some leading edge of technology, while proving our clients with a robust, but stable platform with which they can run their business most efficiently.
At this time I would like to turn it over to Darrell for a few comments on the financials.
Thanks, Boyd. Our DSOs were 45 days for the first quarter, down two days from the fourth quarter and within our range of 45 to 60 days. Cash provided from operations for the quarter was $4.3 million, compared with $3.4 million first quarter of last year. Free cash flow was $4 million for the quarter compared with $3.1 million for the prior year quarter. We defined free cash flow as net cash provided by operating activities, less capital expenditure. CapEx for the quarter was $311,000 compared with $348,000 for the prior year quarter.
Depreciation for the quarter was $478,000, compared with $517,000 last year. Cash collections were $29 million for the first quarter, compared with $27.8 million for 2007. We have recognized stock compensation expense of $224,000 in the first quarter of 2008 and anticipate a charge of $230,000 in the second quarter of 2008.
Our effective tax rate is expected to be around 39.5% for the year of 2008. Our headcount at quarter end was 887, a decrease of 34 over from year end.
Operator, we would like to open the call to questions at this time.
Question -And-Answer session
Absolutely, sir. (Operator Instructions). Our first question comes from the line of Richard Close of Jefferies. Please go ahead, sir. Your line is open.
Richard Close - Jefferies
Yes. Congratulations on the good quarter. I wanted to touch base on the first quarter, the strengths there and then as that sort of falls into the second quarter guidance, which was below of what we were forecasting. Was there anything that you can point to that maybe led to the over achievement in the first quarter, was there something that you expected in 2Q that actually got or was completed in 1Q and allowed you to book higher revenue than originally anticipated?