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Computer Programs and Systems Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 9, 2011 03:25PM

Computer Programs and Systems Inc. (CPSI) filed Quarterly Report for the period ended 2011-09-30. Computer Programs And Systems Inc. has a market cap of $576.5 million; its shares were traded at around $52.11 with a P/E ratio of 22.1 and P/S ratio of 3.8. The dividend yield of Computer Programs And Systems Inc. stocks is 2.7%. Computer Programs And Systems Inc. had an annual average earning growth of 11% over the past 10 years.



Highlight of Business Operations:

Costs of system sales decreased by 13.9%, or $1.7 million, for the comparative three month periods. The decrease in costs of system sales was due to a $1.6 million decrease in cost of equipment and a $0.6 million decrease in travel and related costs due to decreased system installations during the three months ended September 30, 2011 compared to the three month period ended September 30, 2010. This decrease was partially offset by a $0.5 million increase in payroll and related costs. The gross margin on system sales increased to 32.2% for the three month period ended September 30, 2011 from 28.0% in the three month period ended September 30, 2010. As a percentage of system sales, cost of equipment decreased to 9.8% in the three month period ended September 30, 2011 from 18.4% in the three month period ended September 30, 2010. Payroll and related expenses increased to 37.7% in the three month period ended September 30, 2011 from 31.5% in the three month period ended September 30, 2010 due to the fixed nature of payroll costs, travel expense decreased to 15.5% from 18.08% for the comparative three month periods due to increased company utilization of frequent flier programs. Cost of software increased to 3.8% from 3.4% for the comparative three month periods due to additional third-party licenses in the three month period ended September 30, 2011 to add functionality to our customers’ operating system environments.

Net Income. Net income for the three months ended September 30, 2011 increased by 22.5%, or $1.1 million, to $6.0 million, or $0.54 per diluted share, as compared with net income of $4.9 million, or $0.45 per diluted share, for the three months ended September 30, 2010. Net income represented 14.2% of revenue for the three months ended September 30, 2011, as compared to 11.9% of revenue for the three months ended September 30, 2010.

System sales revenues increased by 31.3%, or $13.2 million, for the comparative nine month periods. This was comprised of a 44.0%, or $8.9 million, increase in software sales, a 6.0%, or $0.7 million, increase in equipment sales, and a 41.2%, or $3.7 million, increase in installation and training related fees, for the comparative nine month periods. Sales to existing customers accounted for 71.8% of system sales revenue for the first nine months of 2011 as compared to 62.2% for the first nine months of 2010. Sales increases were largely attributable to incentives offered under the ARRA.

Cost of system sales increased by 8.0%, or $2.7 million, for the comparative nine month periods. Payroll and related costs increased by 14.8%, or $2.4 million, due to the addition of new personnel. Travel and related costs increased by 12.1%, or $0.9 million, due to the increased number of add-on system installations. Gross margin on system sales increased to 33.9% in the first nine months of 2011 compared to 19.7% in the first nine months of 2010 due to high margin of EHR applications being sold. We believe that the margins on system sales should remain stable through the remainder of 2011. As a percentage of system sales, cost of equipment decreased to 12.7% for the nine month period ended September 30, 2011 from 20.4% for the nine month period ended September 30, 2010. Payroll and related expenses decreased to 33.0% in the nine month period ended September 30, 2011 from 37.7% for the nine month period ended September 30, 2010 as a result of higher utilization of employees. Travel expenses decreased to 14.9% from 17.5% for the comparative nine month periods, and cost of software increased to 4.6% from 3.4% for the comparative nine month periods due to additional third-party software license fees to add functionality to our customers’ operating system environments.

Net Income. Net income for the nine months ended September 30, 2011 increased by 59.7%, or $7.2 million, to $19.3 million, or $1.75 per diluted share, as compared with net income of $12.1 million, or $1.10 per diluted share, for the nine months ended September 30, 2010. Net income represented 14.7% of revenue for the nine months ended September 30, 2011, as compared to 11.0% of revenue for the nine months ended September 30, 2010.

Read the The complete Report



Stocks Discussed: CPSI,
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