CPSI 2017 Annual Report

COMPUTER PROGRAMS AND SYSTEMS, INC. Unaudited Reconciliation of Non-GAAP Financial Measures (In thousands, except per share data) Non-GAAP Net Income and Non-GAAP Earnings Per Share (“EPS”) Twelve Months Ended December 31, 2017 2016 Net income (loss), as reported $ (17,416) $ 3,933 Pre-tax adjustments for Non-GAAP EPS: Deferred revenue and other acquisition-related adjustments - 2,226 Amortization of acquisition-related intangible assets 10,406 10,182 Stock-based compensation 7,166 5,366 Transaction-related costs 27 8,164 Non-recurring severance 2,353 - Non-cash interest expense 645 673 Loss on extinguishment of debt 1,340 - Goodwill impairment charges 28,000 - After-tax adjustments for Non-GAAP EPS: Tax-effect of pre-tax adjustments, at 35% (7,678) (9,314) Tax-effect of non-deductible transaction- related costs - 1,410 Tax shortfall from stock-based compensation 1,155 - Tax reform effects (1,890) - Valuation allowance for state NOLs (304) Non-GAAP net income $ 23,804 $ 22,640 Weighted average shares outstanding, diluted 13,419 13,255 Non-GAAP EPS $ 1.77 $ 1.71