CPSI 2017 Annual Report

We took important steps in 2017 to revise our capital allocation strategy to support our future growth. In furtherance of this goal, we amended our credit agreement in October, an important milestone that created greater flexibility in the deployment of capital through covenant relief and more favorable terms and pricing. We believe the ability to execute this amendment reflects the confidence that our banking partners have in the stability and future of CPSI. In addition, after careful consideration, we made the strategic decision to adjust the quarterly cash dividend to $0.10 per share. Returning a dividend to our shareholders remains an important part of our overall capital allocation strategy. However, this adjustment will allow us to still meet our dividend commitment, while providing additional flexibility to invest in solutions and services across our family of companies, and create greater long-term value for our company and our shareholders. For 2017, we returned $11.6 million in dividends to our shareholders. Our acute care EHR platform, Thrive, sold under our wholly owned subsidiary, Evident, addresses the entire continuum of patient care, allowing providers to coordinate care across the major settings where healthcare services are being delivered. Our Thrive implementations for 2017 included a significant number of clients who elected to stay on schedule with the meaningful use program, as well as new system sales. With our fully integrated solution, we have established a strong competitive advantage that continues to resonate in the marketplace. Importantly, our new sales for 2017 were to a mix of hospitals choosing CPSI for the first time, as well as to hospitals that have returned to CPSI after working with another vendor that simply does not have the same value proposition and track record created by our nearly 40 years of experience. Additionally, we continue to support our clients with a high-touch level of support, service and ongoing communication, resulting in a strong 96 percent retention rate for our Thrive clients and 93 percent for our Centriq clients that joined our family following the acquisition of Healthland. In 2017, TruBridge continued to serve as a strong growth vehicle for CPSI with annual bookings of $31.4 million, an impressive 41 percent increase compared with the previous year, including two of our largest contracts in history for our TruBridge RCM solution. A significant portion of this bookings growth was derived from cross-selling efforts into our client base across the CPSI family of companies. We view cross sales of TruBridge solutions within our existing EHR client base as our leading performance indicator. Our TruBridge offerings deliver added value to our acute and post-acute EHR platforms and further support client retention for our entire family of companies. However, we also realized a 37 percent increase in TruBridge revenue associated with clients from outside the CPSI client base, another promising trend. As we continue to expand our footprint, we expect to see this percentage grow, fueled by strong demand for our RCM product, as well as accounts receivable management services, private pay services, medical coding and cloud hosting. We are especially proud that The Healthcare Financial Management Association (HFMA) recently reviewed the TruBridge RCM product using the Peer Review process, awarding the “Peer Reviewed by HFMA ® ” designation in January 2018. HFMA's Peer Review process provides healthcare financial managers with an objective, third-party evaluation of business solutions used in the healthcare workplace. The rigorous, 11-step process includes a panel review comprising current customers, prospects who have not made a purchase, and industry experts, and its performance claims are based on effectiveness, quality and usability, price, value, and customer and technical support. This designation is a testament to the strength of our RCM product and an important milestone for TruBridge, as only a small percentage of RCM providers have been awarded this designation.