CPSI 2017 Annual Report

42 2017 Compared to 2016 Revenues. Total revenues for the year ended December 31, 2017 increased 3.6%, or $9.7 million, compared to the year ended December 31, 2016. System sales and support revenues, consisting of the Acute Care EHR and Post-acute Care EHR segments, increased by 1.4%, or $2.6 million, from the year ended December 31, 2016. System sales and support revenues were comprised of the following for the year ended December 31, 2017 and 2016: Year ended December 31, (In thousands) 2017 2016 Recurring system sales and support revenues (1) Acute Care EHR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 113,056 $ 117,482 Post-acute Care EHR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,122 20,082 Total recurring system sales and support revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133,178 137,564 Non-recurring system sales and support revenues (2) Acute Care EHR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,172 41,665 Post-acute Care EHR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,911 6,436 Total non-recurring system sales and support revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,083 48,101 Total system sales and support revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 188,261 $ 185,665 (1) Mostly comprised of support and maintenance, third-party subscriptions, and SaaS revenues. (2) Mostly comprised of installation revenues from the sale of our acute and post-acute care EHR solutions and related applications under a perpetual (non-subscription) licensing model. Nonrecurring Acute Care EHR system sales and support revenues increased $9.5 million, or 22.8%, primarily as Evident's new installations and add-on volumes increased by $10.5 million, or 33.6%, partially offset by a $1.0 million decrease in Healthland's nonrecurring revenue. Related to Evident's new system installation volumes, we went live with our Thrive EHR solution at 29 new hospital clients during 2017 (three of which were under a Cloud EHR arrangement, under which the related costs are all captured in the period of the installation with the resulting revenue recognized ratably over the contractual term as the services are provided) compared to 21 new hospital clients during 2016 (five of which were under a Cloud EHR arrangement), with a resulting revenue increase of $2.4 million. Evident's add-on sales increased $8.1 million due to installations related to meaningful use stage three compliance. These increases were partially offset by a decrease in nonrecurring Post-acute Care EHR revenues of $2.5 million, or 39.2%, compared with 2016, as a result of slowing new installation bookings due to aggressive competition and the need for technological improvement in the AHT products. Recurring Acute Care EHR system sales and support revenues decreased $4.4 million, or 3.8%. Our recently acquired Healthland customer base contains a heavy concentration of calendar year-end support and maintenance renewal terms. As a result, the majority of the revenue impact related to Healthland attrition through 2016 customer support terminations did not materialize until 2017. Post-acute Care EHR recurring revenues remained relatively flat compared to 2016. TruBridge revenues increased 8.6%, or $7.1 million, from 2016. Our hospital customers operate in an environment typified by rising costs and increased complexity and are increasingly seeking to alleviate themselves of the ever-increasing administrative burden of operating their own business office functions, resulting in an expanded customer base for our accounts receivable management services (increasing 11.1%, or $2.6 million). Our insurance services revenues increased 8.7%, or $1.6 million, as our 2016 acquisition of HHI exposed Rycan’s solutions to a broader and more robust sales channel. Our IT managed services revenues have increased 14.2%, or $1.3 million, as we continue to see increasing demand for remote hosting for our acute and post-acute care EHR solutions. Our medical coding services have increased 59.6%, or $2.3 million, as new key customers have been added. These increases were partially offset by a decrease in nonrecurring consulting services of $0.6 million, or 14.8%. Costs of Sales . Total costs of sales decreased by 3.4%, or $4.4 million, from 2016. As a percentage of total revenues, costs of sales decreased from 48.6% in 2016 to 45.4% in 2017.