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TruBridge, Inc. (TBRG)

Q3 2016 Earnings Call· Thu, Nov 3, 2016

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Transcript

Operator

Operator

Ladies and gentlemen, thank you for standing by and welcome to the CPSI Third Quarter 2016 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this call is being recorded Thursday, November 3, 2016. I would now like to turn the call over to Boyd Douglas, President and Chief Executive Officer of CPSI. Please go ahead, sir. John Boyd Douglas - Computer Programs & Systems, Inc.: Thank you, Ash. Good afternoon, 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 Reformat of 1995. We caution you that any such forward-looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance. Actual results might differ materially from those expressed or implied by such forward-looking statements as a result of known and unknown 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 most 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 the call today will be Matt Chambless, our Chief Financial Officer; Chris Fowler, our Chief Operating Officer; and David Dye, Chief Growth Officer. At the conclusion of our prepared comments, we will be available to take any questions that you may have. As stated…

Operator

Operator

Certainly. Our first question comes from the line of Mohan Naidu with Oppenheimer. You may proceed with your question. Mohan Naidu - Oppenheimer & Co., Inc. (Broker): Thanks for taking my questions. David, did you tell us what number of new sales that went in quarter came in under subscription? David A. Dye - Computer Programs & Systems, Inc.: I did not. I believe that number is four of the six, though, are under subscription. Mohan Naidu - Oppenheimer & Co., Inc. (Broker): Okay. Four of the six. And when we look at the bookings number for the subscription deals, what actually goes into the bookings? I guess with the license deals, it's pretty straightforward, but for the subscription deals, can you walk us through what goes into the bookings number? Matt J. Chambless - Computer Programs & Systems, Inc.: Yeah. This is Matt, Mohan. The bookings number on a subscription or cloud-based deal is really the value of the system. So it's not an annualized number, but it's essentially – if we had sold that item as a perpetual license deal, what would it have been, to try to make it to where the sales mix, cloud versus standard license sale, doesn't really throw too much noise into the bookings. So it's a true value number. Mohan Naidu - Oppenheimer & Co., Inc. (Broker): Okay. Got it. But when you think about the revenue potential from a subscription deal versus a license deal, how many quarters or years does it take on a subscription deal to recover a similar amount of revenue compared to your license deal? Upon implementation, of course. Matt J. Chambless - Computer Programs & Systems, Inc.: You know, Mohan, that varies. But I would say that on average that number tends to breakeven in the – anywhere from three years to five years. Mohan Naidu - Oppenheimer & Co., Inc. (Broker): Okay. Okay. One last question around Healthland. Are you guys still selling Centriq separately? Or is that just the pipeline that you had that you're converting? Or are you guys actually looking at trying to direct customers to Thrive? David A. Dye - Computer Programs & Systems, Inc.: Our lead product is definitely Thrive. We are still selling Centriq separately, especially for customers, in particular that are coming off Classic and that have been comfortable with the Healthland platform, and had previously taken a good look at Centriq prior to the acquisition. And a lot of the folks there were excited about the conversion to Centriq. That's typically the case where we're selling the Centriq upgrade. And we'll continue to do so. Mohan Naidu - Oppenheimer & Co., Inc. (Broker): Okay. Thank you so much for taking my questions. David A. Dye - Computer Programs & Systems, Inc.: Thanks, Mohan.

Operator

Operator

Our next question comes from the line of Rob Munnings with William Blair. You may proceed with your question. Robert Munnings - William Blair & Co. LLC: Hey, guys. Thanks for taking the questions. I was hoping you guys could talk about demand activity by customer size, is there any difference from the smallest hospitals you serve to the larger hospitals? David A. Dye - Computer Programs & Systems, Inc.: Great question. I would say obviously we all talk about the demand being high right now from a new customer sales standpoint, and it's, I would say, mostly in the under 75 bed category for us. However, in the last one to two quarters, and I know some other vendors have talked about this, but we're seeing some activity sort of more in that 75 to 200 bed range, mostly because of the – what's going on with McKesson. Robert Munnings - William Blair & Co. LLC: Okay. Great. Great. That's helpful. And then I guess what has been the response to the entrust financing option? Do you guys have any deals signed? Or can you quantify the level of interest from prospects so far? David A. Dye - Computer Programs & Systems, Inc.: Yeah. We have a – we have several deals signed. I don't have an exact number, but I'd say somewhere near a dozen or so. And yeah, we've got – there's a lot of – a lot of excitement and a lot of activity there. I would guess that a third to 40% of the deals going forward will be under the entrust model. You know I think what differentiates us competitively, just to compare to a couple others that are out there is that it's an option with – and we truly present it as where you can run your own business office and we'll license you a system, or you can run it under a cloud-based environment or we'll do the entrust model, whatever you think best fits your needs. Robert Munnings - William Blair & Co. LLC: Okay. Great. Thanks. That's very helpful. That's all for me, guys. David A. Dye - Computer Programs & Systems, Inc.: Thanks, Rob.

Operator

Operator

Our next question comes from the line of Sean McBride with Robert W. Baird. You may proceed with your question. Sean P. McBride - Robert W. Baird & Co., Inc. (Broker): Hi. Thanks for taking the questions. Just a quick follow-up on subscription versus license. Looking forward to 2017, can you give us a projection on the mix and what the trend is towards between those two? David A. Dye - Computer Programs & Systems, Inc.: Right now we're guesstimating that it will be somewhere between 50/50 or to 60% license, 40% subscription. Sean P. McBride - Robert W. Baird & Co., Inc. (Broker): Okay. Great. Thanks. And then just one more. Since the 2Q call, it seems like you guys have been – had more press releases. And I was wondering if this is part of a broader advertising strategy. And you also mentioned a little bit of extra advertising during the call today. Could you talk about advertising in general and how that approach has changed in recent months? Christopher L. Fowler - Computer Programs & Systems, Inc.: Yeah. Sean, this is Chris. Absolutely we're taking a bigger presence and trying to get a message out there. Obviously, with the integration we have consolidated a corporate marketing department and are trying to take advantage of the wins that we have. Going forward, I think we want to have a bigger presence in the market as we see fit to either be speaking towards from a knowledge standpoint as it relates to community healthcare, to also making sure that people know what we have out there. So as we talk about the telepharmacy and our business analytics, it's a great avenue for us to be able to make sure everybody knows what we've got going on. David A. Dye - Computer Programs & Systems, Inc.: I think to expand on that it's just an effort to increase market awareness that we've got something unique and that we have a solution for the acute care market, the long-term care market, the revenue cycle management market, home health, ambulatory, et cetera that no one really else – no one else out there has, especially in the smaller community hospital market space. Sean P. McBride - Robert W. Baird & Co., Inc. (Broker): Great. John Boyd Douglas - Computer Programs & Systems, Inc.: Hello. Ash, are you there?

Operator

Operator

Yes, I am. We appear to have no further questions over the telephone lines at this time. I will now turn the call back to you. John Boyd Douglas - Computer Programs & Systems, Inc.: I want to thank everyone for being on the call today. Thanks for your interest in CPSI. And I hope you have a great rest of the day and a great weekend. Thank you.

Operator

Operator

Ladies and gentlemen, that does conclude the call for today. We thank you for your participation and ask that you please disconnect your lines.