Earnings Labs

TruBridge, Inc. (TBRG)

Q1 2018 Earnings Call· Fri, May 4, 2018

$25.73

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Transcript

Operator

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the CPSI First Quarter 2018 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, May 3, 2018. I'd now like to turn the call over to Mr. Boyd Douglas, President and Chief Executive Officer with CPSI. Please go ahead. John Boyd Douglas - Computer Programs & Systems, Inc.: Thank you, Aash. 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 Reform Act 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 risk, 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, Chief Financial Officer; Chris Fowler, Chief Operating Officer; and David Dye, our Chief Growth Officer. At the conclusion of our prepared comments, we will be available to take any questions you may have. Our first quarter of…

Operator

Operator

Certainly. And our first question comes from the line of Jeff Garro with William Blair & Company. Your line is open. Please proceed with your question. Jeff R. Garro - William Blair & Co. LLC: Hey, good afternoon guys. Thanks for taking the questions and congrats on the nice results, wanted to ask about TruBridge, maybe first on the revenue front, over 20% growth seem to outperform your mid-teens expectation. Was there anything from a new installation or clean volume perspective that helped drive those positive results? Christopher L. Fowler - Computer Programs & Systems, Inc.: Hey Jeff, this is Chris. Thanks for the nice comments. As Matt said in his prepared comments, this is mostly driven off of the large deals and the success we had from sales last year – in the middle of the year. We spoke to a big bookings that we had probably in the first quarter last year maybe, and trickling into the second quarter, and just seeing that come to fruition and getting that fully up and operational. Jeff R. Garro - William Blair & Co. LLC: Understood. Maybe we'll transition to the forward outlook for TruBridge and how the recent bookings are going to translate into future growth, the sales team was clearly outperforming for several quarters, a little bit slower the last two, and you referenced the lumpiness, but it seems like the value to clients is improving. So I don't know if there's anything more you can tell us about the pipeline or buyer activity that gives you confidence in a rebound from here? Christopher L. Fowler - Computer Programs & Systems, Inc.: To your point, it's hard for us to predict. The pipeline is still very strong. The Rycan or the now called TruBridge RCM is probably the most…

Operator

Operator

Our next question comes from the line of David Larsen with Leerink Partners. Your line is open. Please proceed with your question.

Jonathan McGraw Bentley - Leerink Partners LLC

Analyst · Leerink Partners. Your line is open. Please proceed with your question.

Hi. This is Jonathan McGraw Bentley on for Dave. I was just wondering, if you could give an update to the MU3 opportunity that's remaining. I think, earlier in the year you had sized it at about $26 million, so then it was the $4.4 million this quarter, I'm wondering, if there's sort of $21.6 million left or what size is left? Matt J. Chambless - Computer Programs & Systems, Inc.: Yeah. So to give you kind of the global picture of where we are in MU3 standpoint, first, we have to think about revenue, we have to think about bookings. So MU3-related bookings for the quarter were about $700,000 after $26.9 million in bookings during 2017, so that means life-to-date bookings are just south of $28 million. And the $4.4 million of MU3 revenue that we booked this quarter brings the life-to-date revenue number to $18.5 million, that means we have $9 million – little over $9 million left of booked deals, and we think the total opportunity still is somewhere between the $35 million to $40 million number, so there's still considerable go-get for us.

Jonathan McGraw Bentley - Leerink Partners LLC

Analyst · Leerink Partners. Your line is open. Please proceed with your question.

Okay. Sorry for mixing up there. And then, also I was just wondering if you could talk a bit more about the – you mentioned speeding the ROI realization, and one of your peers recently talked about the importance in demonstrating ROI in sales process. I was wondering how important that is in your process as you go-to-market? Christopher L. Fowler - Computer Programs & Systems, Inc.: This is Chris, Jonathan. On the TruBridge side, it's very valuable, especially when we're looking at the section that David spoke about as we're leaving outside of the CPSI customer base where we don't have that credibility already established. So we're working towards being able to deliver that ROI upfront, showing that opportunity for them, which is why I added the additional color around why we're going after programs versus just the software implementation, because we feel like we can with our staff and our services, we can deliver that ROI, and not just have them hope to use the software to be able to get it, but actually drive that for them.

Jonathan McGraw Bentley - Leerink Partners LLC

Analyst · Leerink Partners. Your line is open. Please proceed with your question.

Okay, great. Thank you.

Operator

Operator

Our next question comes from the line of Mike Ott with Oppenheimer. Your line is open. Please proceed with your question. Mike Ott - Oppenheimer & Co., Inc.: Good afternoon. Thanks for taking my question, and nice quarter. I noticed the percent bookings from system sales and support looks like it's at – may be at two-year high around 83%. Wondering is that just TruBridge bookings being a little light as you discussed or system sales strength or maybe a bit of both? David A. Dye - Computer Programs & Systems, Inc.: Yeah, it's definitely a bit of both. I mean you hit the nail on the head. Mike Ott - Oppenheimer & Co., Inc.: All right, easy enough. And then, wonder if you could update us on the BI Dashboard, I think, you had about 20 clients live, you said last call. I don't know if there is any uptick there? John Boyd Douglas - Computer Programs & Systems, Inc.: We're still continuing to develop additional panels to that, we've had a handful of webinars where we've seen picked up enthusiasm, and we've got our annual client conference coming up in the next few weeks, which we're excited about showcasing the BI Dashboard. So hopefully, we'll have better news report next quarter on that. Mike Ott - Oppenheimer & Co., Inc.: Okay. And lastly, if I could, I think last quarter you mentioned you were working on adding a telehealth service to the EMR, don't know if you have any update you can share on when that might be available? John Boyd Douglas - Computer Programs & Systems, Inc.: I would expect to see something in the second half of the year. Mike Ott - Oppenheimer & Co., Inc.: All right. Thanks very much, guys. John Boyd Douglas - Computer Programs & Systems, Inc.: Yeah.

Operator

Operator

Our next question comes from the line of Stephanie Demko with Citigroup. Your line is open. Please proceed with your question.

Stephanie J. Demko - Citigroup Global Markets, Inc.

Analyst · Citigroup. Your line is open. Please proceed with your question.

Hey, guys. Thank you for taking my question. Just on... Matt J. Chambless - Computer Programs & Systems, Inc.: Hey, Stephanie.

Stephanie J. Demko - Citigroup Global Markets, Inc.

Analyst · Citigroup. Your line is open. Please proceed with your question.

...given all of the revenue mix and license sale headwinds that some of your peers are seeing in the EHR space, what do you think is keeping you guys inflated in this trend? Is it too much flexibility in your sales model or is there anything else to call out that you're seeing as kind of an industry trend you're moving away from? Matt J. Chambless - Computer Programs & Systems, Inc.: Hey, Stephanie, we didn't quite hear the question, it was kind of cutting in, and out, you said, what do you think was doing what now? Sorry.

Stephanie J. Demko - Citigroup Global Markets, Inc.

Analyst · Citigroup. Your line is open. Please proceed with your question.

Oh, just – so we are seeing a lot of revenue mix and license sale headwinds at some of your peers in the EHR space. So it's basically just what's keeping you guys insulated from this trend? Is it flexibility in your sales model or is there anything else that's kind of kept you safe from it? Matt J. Chambless - Computer Programs & Systems, Inc.: I would describe the market right now is healthy, it's – we've been averaging between 20 and 30 new clients for the last couple of years. We think that can relatively easily continue. Obviously, we're very pleased with the start we got off to this quarter. We've mentioned before on a few calls in the past that, we have been surprised by the number of clients that still choose the license model over the cloud option. We offer for every single one of our sales, we present the customer with different options for how they can purchase our product, whether it'd be in the cloud, the traditional cloud, SaaS-based model or whether it'd be license model via financing with us or via third-party, and we continue to be surprised by the number that choose the licensing model. But that's, I think, the beauty of what we're offering, is that the customer gets to decide. John Boyd Douglas - Computer Programs & Systems, Inc.: And I think another important point is, I think it's just another factor that shows that we do operate in a little bit different market than what you consider most of our peers. The small rural market behaves differently a lot of times, and I think this is just another example of that, that maybe we're operating a little bit differently – the market operates little bit differently than some of the bigger hospitals.

Stephanie J. Demko - Citigroup Global Markets, Inc.

Analyst · Citigroup. Your line is open. Please proceed with your question.

Understood. You guys have your own little niche there. And then, just shifting gears over to the Rycan side, are you seeing any change in the competitive landscape given recent revenue cycle or M&A that's been going on? Christopher L. Fowler - Computer Programs & Systems, Inc.: From our standpoint, not so much, Stephanie. We're in a good position with our internal base that we still continue to transition from our legacy product and add-ons of the additional solutions that Rycan offers compared to our legacy offering. And also our – continue to be successful in converting our existing customers away from other clearing houses into Rycan due to the integration efforts that we continue to drive.

Stephanie J. Demko - Citigroup Global Markets, Inc.

Analyst · Citigroup. Your line is open. Please proceed with your question.

All right. Thank you so much. John Boyd Douglas - Computer Programs & Systems, Inc.: Thanks, Stephanie. Christopher L. Fowler - Computer Programs & Systems, Inc.: Thank you.

Operator

Operator

Our next question comes from the line of Gene Mannheimer with Dougherty & Company. Your line is open. Please go ahead. Eugene Mannheimer - Dougherty & Co. LLC: Hey, thanks. Good afternoon, Boyd, Matt, Chris, David. Congrats on a good start to the year. My question, first-off is just really a point of clarification. In your comments about the 14 net new wins in the quarter, is that inclusive of some former clients that may have dropped you, and then come back to you? John Boyd Douglas - Computer Programs & Systems, Inc.: No, it's not. Eugene Mannheimer - Dougherty & Co. LLC: Okay. Okay, great. So in a situation like that, that wouldn't be a new win in your view, right? David A. Dye - Computer Programs & Systems, Inc.: It depends, Gene. If they had actually left our system and come back, yes. If they were still support paying customer, no. Eugene Mannheimer - Dougherty & Co. LLC: Okay, okay. Fair enough. And with respect to some of the comments around the lumpiness in TruBridge bookings, is it still your view that you can grow the revenue mid-teens this year and just want to see if you feel that you can actually grow TruBridge bookings over last year's bookings? Thanks, guys. David A. Dye - Computer Programs & Systems, Inc.: Yes. First part of the question, yeah, it's definitely still our view that we can grow it mid-teens this year. With regard to the bookings compared to last year, that remains to be seen. As we've stated several times last year including a number of big deals. And as we've also said many times, we've got a number of big deals in the pipeline right now, and whether or not we win all of those and the timing…

Operator

Operator

And there are no further questions queued up over the phone lines at this time. I will now turn the call back over to you for any final remarks. John Boyd Douglas - Computer Programs & Systems, Inc.: Great, thank you all. Thanks everyone for being on the call today. We appreciate your time, and we didn't have a lot to cover today, and we look forward to talking to you next quarter, where I'm sure we'll have plenty to share with you after we will have posted more than 1,200 clients that are coming together to seek the benefits gained from being part of the CPSI family of companies at our National Conference. So thanks everyone for your time. We appreciate everything and we'll talk to you next quarter.

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.