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Table of Contents

 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

 
FORM 10-Q
 
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    
 
THE SECURITIES EXCHANGE ACT OF 1934.
 
     For the quarterly period ended September 30, 2002.
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    
 
THE SECURITIES EXCHANGE ACT OF 1934.
 
     For the transition period from                      to                      .
 
Commission file number: 000-49796
 

 
COMPUTER PROGRAMS AND SYSTEMS, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
 
74-3032373
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
6600 Wall Street, Mobile, Alabama
 
36695
(Address of Principal Executive Offices)
 
(Zip Code)
 
(251) 639-8100
(Registrant’s Telephone Number, Including Area Code)
 
N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 

 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  ¨
 
As of October 31, 2002, there were 10,488,000 shares of the issuer’s common stock outstanding.
 


Table of Contents
 
COMPUTER PROGRAMS AND SYSTEMS, INC.
 
FORM 10-Q
(For the period ended September 30, 2002)
 
INDEX
 
 
         
Page

PART I.    FINANCIAL INFORMATION
    
Item 1.
     
3
       
3
       
4
       
5
       
6
Item 2.
     
10
Item 3.
     
14
Item 4.
     
14
PART II.     OTHER INFORMATION
  
15
Item 1.
     
15
Item 2.
     
15
Item 3.
     
15
Item 4.
     
15
Item 5.
     
15
Item 6.
     
16

2


Table of Contents
 
PART I    FINANCIAL INFORMATION
 
Item 1.    Financial Statements
 
 
COMPUTER PROGRAMS AND SYSTEMS, INC.
 
CONDENSED BALANCE SHEETS (Unaudited)
 
    
September 30, 2002

    
December 31, 2001

 
Assets
                 
Current assets:
                 
Cash and cash equivalents
  
$
6,969,813
 
  
$
2,018,643
 
Accounts receivable, net of allowance for doubtful accounts of $718,000 and $532,000, respectively
  
 
11,980,510
 
  
 
8,107,467
 
Financing receivables, current portion
  
 
633,343
 
  
 
769,423
 
Inventories
  
 
1,255,325
 
  
 
1,126,353
 
Deferred tax assets
  
 
1,027,106
 
  
 
—  
 
Prepaid expenses
  
 
367,437
 
  
 
196,276
 
    


  


Total current assets
  
 
22,233,534
 
  
 
12,218,162
 
Property and equipment
                 
Land
  
 
936,026
 
  
 
936,026
 
Maintenance equipment
  
 
2,388,450
 
  
 
2,114,224
 
Computer equipment
  
 
3,303,911
 
  
 
2,906,476
 
Office furniture and equipment
  
 
906,114
 
  
 
793,576
 
Automobiles
  
 
89,934
 
  
 
89,934
 
    


  


    
 
7,624,435
 
  
 
6,840,236
 
Less accumulated depreciation
  
 
(3,097,017
)
  
 
(2,805,709
)
    


  


Net property and equipment
  
 
4,527,418
 
  
 
4,034,527
 
Financing receivables
  
 
885,535
 
  
 
998,797
 
    


  


Total assets
  
$
27,646,487
 
  
$
17,251,486
 
    


  


Liabilities and Stockholders’ Equity
                 
Current liabilities:
                 
Current portion of note payable
  
$
—  
 
  
$
86,185
 
Accounts payable
  
 
1,067,226
 
  
 
1,033,349
 
Deferred revenue
  
 
1,865,171
 
  
 
1,601,130
 
Sales, income and use taxes payable
  
 
1,723,785
 
  
 
1,879,939
 
Accrued vacation
  
 
1,356,459
 
  
 
1,075,450
 
Accrued stockholders’ distribution
  
 
1,250,000
 
  
 
—  
 
Other accrued liabilities
  
 
1,048,670
 
  
 
875,339
 
Income taxes payable
  
 
721,390
 
  
 
—  
 
    


  


Total current liabilities
  
 
9,032,701
 
  
 
6,551,392
 
Note payable
  
 
—  
 
  
 
663,712
 
Stockholders’ equity:
                 
Common stock, par value $0.001 per share; 30,000,000 shares authorized; 10,488,000 and 9,288,000 shares issued and outstanding, respectively
  
 
10,488
 
  
 
9,288
 
Additional paid-in capital
  
 
17,259,403
 
  
 
109,811
 
Deferred compensation
  
 
(238,183
)
  
 
—  
 
Retained earnings
  
 
1,582,078
 
  
 
9,917,283
 
    


  


Total stockholders’ equity
  
 
18,613,786
 
  
 
10,036,382
 
    


  


Total liabilities and stockholders’ equity
  
$
27,646,487
 
  
$
17,251,486
 
    


  


 
 
See accompanying notes.

3


Table of Contents
 
COMPUTER PROGRAMS AND SYSTEMS, INC.
 
CONDENSED STATEMENTS OF INCOME (Unaudited)
 
    
Three months ended
September 30

    
Nine months ended
September 30

 
    
2002

  
2001

    
2002

    
2001

 
Sales revenues:
                                 
System sales
  
$
9,935,868
  
$
7,385,034
 
  
$
27,650,220
 
  
$
21,179,195
 
Support and maintenance
  
 
7,616,395
  
 
6,540,505
 
  
 
22,083,538
 
  
 
18,821,218
 
Outsourcing
  
 
1,344,329
  
 
923,871
 
  
 
3,594,985
 
  
 
2,511,256
 
    

  


  


  


Total sales revenue
  
 
18,896,592
  
 
14,849,410
 
  
 
53,328,743
 
  
 
42,511,669
 
Costs of sales:
                                 
System sales
  
 
6,544,503
  
 
5,625,230
 
  
 
18,904,917
 
  
 
16,113,266
 
Support and maintenance
  
 
3,578,257
  
 
2,944,399
 
  
 
10,084,417
 
  
 
8,481,042
 
Outsourcing
  
 
868,432
  
 
615,871
 
  
 
2,216,131
 
  
 
1,496,512
 
    

  


  


  


Total costs of sales
  
 
10,991,192
  
 
9,185,500
 
  
 
31,205,465
 
  
 
26,090,820
 
    

  


  


  


Gross profit
  
 
7,905,400
  
 
5,663,910
 
  
 
22,123,278
 
  
 
16,420,849
 
Operating expenses:
                                 
Sales and marketing
  
 
1,660,244
  
 
1,200,704
 
  
 
4,333,138
 
  
 
3,730,978
 
General and administrative
  
 
3,203,612
  
 
2,369,664
 
  
 
9,187,259
 
  
 
6,960,067
 
    

  


  


  


Total operating expenses
  
 
4,863,856
  
 
3,570,368
 
  
 
13,520,397
 
  
 
10,691,045
 
    

  


  


  


Operating income
  
 
3,041,544
  
 
2,093,542
 
  
 
8,602,881
 
  
 
5,729,804
 
Other income (expense):
                                 
Interest income
  
 
64,020
  
 
30,382
 
  
 
157,887
 
  
 
85,776
 
Miscellaneous income
  
 
117,238
  
 
77,642
 
  
 
225,726
 
  
 
105,955
 
Interest expense
  
 
—  
  
 
(15,460
)
  
 
(23,677
)
  
 
(60,841
)
    

  


  


  


Total other income
  
 
181,258
  
 
92,564
 
  
 
359,936
 
  
 
130,890
 
    

  


  


  


Income before taxes
  
 
3,222,802
  
 
2,186,106
 
  
 
8,962,817
 
  
 
5,860,694
 
Income taxes
  
 
1,146,139
  
 
—  
 
  
 
1,632,286
 
  
 
—  
 
    

  


  


  


Net income
  
$
2,076,663
  
$
2,186,106
 
  
$
7,330,531
 
  
$
5,860,694
 
    

  


  


  


Net income per share—basic
  
$
0.20
  
$
0.24
 
  
$
0.74
 
  
$
0.63
 
    

  


  


  


Net income per share—diluted
  
$
0.20
  
$
0.24
 
  
$
0.74
 
  
$
0.63
 
    

  


  


  


Weighted average shares outstanding
                                 
Basic
  
 
10,488,000
  
 
9,288,000
 
  
 
9,868,220
 
  
 
9,288,000
 
Diluted
  
 
10,589,226
  
 
9,288,000