CPSI (NASDAQ: CPSI), a community healthcare solutions company
(the “Company”), today announced that its Board of Directors (the
“Board”) approved a stock repurchase program under which the
Company may repurchase up to $30 million in aggregate amount of its
outstanding shares of common stock through open market purchases,
privately-negotiated transactions, or otherwise in compliance with
Rule 10b-18 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). These shares may be purchased from time to
time over a two-year period depending upon market conditions.
Concurrent with the authorization of the value-enhancing stock
repurchase program, the Board opted to indefinitely suspend all
quarterly dividends.
These decisions build on a multi-year evolution of the Company’s
capital allocation strategy that is now prioritizing flexibility to
allow for more opportunistic uses of capital. By successfully
reducing the Company’s leverage and refinancing its credit facility
to achieve more favorable terms, the targeted flexibility has now
been achieved. Coupled with operations that, even in the midst of
the COVID-19 pandemic, continue to generate significant levels of
cash flow, the Company is well-positioned to deploy capital in a
manner aimed at maximizing long-term stockholder value.
Commenting on the announcement, Boyd Douglas, president and
chief executive officer of CPSI, said, “As evidenced by our long
history of dividends, CPSI clearly views distributions to
stockholders as a worthy use of our capital. With our desired
flexibility secured, we’re now emboldened to pursue a multi-faceted
capital allocation strategy that employs value-based stock
repurchases while maintaining abundant capital to continue to
invest in our business and pursue attractive acquisitions that
strengthen our market position, allowing us to dynamically respond
to the needs of the communities we serve and further promote growth
in stockholder value.”
Douglas continued, “We are unwavering in our confidence in the
potential long-term growth for CPSI, a confidence rooted in the
continued progress towards converting our EHR revenue to a
subscription model, a greater than $1 billion total addressable
market for TruBridge, the robust market outside the U.S., and the
prior stated strong balance sheet and cash flows.”
To facilitate repurchases of the Company’s common stock pursuant
to the above mentioned stock repurchase program, the Board also
authorized management to enter into a trading plan with J.P. Morgan
Securities, LLC (“J.P. Morgan”) in accordance with Rule 10b5-1
under the Exchange Act (the “Rule 10b5‑1 Plan”). The Rule 10b5-1
Plan will allow the Company to repurchase shares at times when it
might otherwise be prevented from doing so by securities laws or
because of self-imposed trading blackout periods. Under the Rule
10b5-1 Plan, J.P. Morgan will have the authority, subject to the
prices, terms and limitations set forth in the Rule 10b5-1 Plan,
including compliance with Rule 10b-18 under the Exchange Act, to
repurchase shares on the Company’s behalf.
Repurchases not made pursuant to the Rule 10b5-1 Plan may be
made at management’s discretion, subject to the securities laws and
blackout periods imposed by the Company's insider trading policy,
at prices management considers to be attractive and in the best
interests of both the Company and its stockholders, subject to the
availability of shares of common stock, general market conditions,
the trading price of the common stock, alternative uses for
capital, the Company’s financial performance and other factors.
Open market purchases will be conducted in a manner intended to
satisfy the requirements of, and in accordance with the limitations
set forth in, Rule 10b-18 under the Exchange Act and other
applicable legal requirements.
The Company expects to finance any repurchases from a
combination of cash on hand and cash provided by operating
activities, with the Company’s remaining borrowing capacity under
its revolving credit facility providing ample opportunity to pursue
M&A activity to further enhance its product and service
offerings. The stock repurchase program does not obligate the
Company to acquire any specific number of shares in any period, and
may be expanded, extended, modified or discontinued at any time.
Information regarding stock repurchases will be available in the
Company’s periodic reports filed with the Securities and Exchange
Commission on Forms 10-K and 10-Q as required by the applicable
rules of the Exchange Act.
About CPSI
CPSI is a leading provider of healthcare solutions and services
for community hospitals, their clinics and post-acute care
facilities. Founded in 1979, CPSI is the parent of four companies –
Evident, LLC, American HealthTech, Inc., TruBridge, LLC, and
iNetXperts, Corp. d/b/a Get Real Health. Our combined companies are
focused on helping improve the health of the communities we serve,
connecting communities for a better patient care experience, and
improving the financial operations of our customers. Evident
provides comprehensive EHR solutions for community hospitals and
their affiliated clinics. American HealthTech is one of the
nation’s largest providers of EHR solutions and services for
post-acute care facilities. TruBridge focuses on providing
business, consulting and managed IT services, along with its
complete RCM solution, for all care settings. Get Real Health
focuses on solutions aimed at improving patient engagement for
individuals and healthcare providers. For more information, visit
www.cpsi.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified generally by the use of
forward-looking terminology and words such as “expects,”
“anticipates,” “estimates,” “believes,” “predicts,” “intends,”
“plans,” “potential,” “may,” “continue,” “should,” “will” and words
of comparable meaning. Without limiting the generality of the
preceding statement, all statements in this press release relating
to the Company’s strategy and outlook, including the number of
shares of common stock to be repurchased by the Company, if any,
and that the Company’s repurchase of its shares of common stock and
pursuit of more opportunistic uses of capital will benefit the
Company and its stockholders, are forward-looking statements. We
caution investors that any such forward-looking statements are only
predictions and are not guarantees of future performance. Certain
risks, uncertainties and other factors may cause actual results to
differ materially from those projected in the forward-looking
statements. Such factors may include: the Company’s ability to
successfully execute its stock repurchase program, including the
availability of financing for such repurchases; the Company’s
ability to successfully pursue mergers and acquisitions that
strengthen the Company’s market position and enhance the Company’s
product and service offerings, including the availability of
financing for such M&A activity; the impact of COVID-19 and
related economic disruptions which have materially affected the
Company’s revenue and could materially affect the Company’s gross
margin and income, as well as the Company’s financial position
and/or liquidity; actions to be taken by the Company in response to
the pandemic; the legal, regulatory and administrative developments
that occur at the federal, state and local levels; potential
disruptions, breaches, or other incidents affecting the proper
operation, availability, or security of the Company’s or its
partners’ information systems, including unauthorized access to or
theft of patient, business associate, or other sensitive
information or inability to provide patient care because of system
unavailability; changes in revenues due to declining hospital
demand and deteriorating macroeconomic conditions (including
increases in uninsured and underinsured patients); potential
increased expenses related to labor or other expenditures; and the
impact of our substantial indebtedness and the ability to refinance
such indebtedness on acceptable terms or at all, as well as risks
associated with disruptions in the financial markets and the
business of financial institutions as the result of the COVID-19
pandemic which could impact us from a financial perspective.
Numerous other risks, uncertainties and other factors may cause
actual results to differ materially from those expressed in any
forward-looking statements. Such factors include risk factors
described from time to time in CPSI’s public releases and reports
filed with the Securities and Exchange Commission, including but
not limited to, CPSI’s most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10‑Q. We also caution investors that the
forward-looking information described herein 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 press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200909005134/en/
Tracey Schroeder Chief Marketing Officer
Tracey.schroeder@cpsi.com (251) 639-8100
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