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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 June 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
(State or Other Jurisdiction of
Incorporation or Organization)
  
74-3032373
(I.R.S. Employer Identification No.)
      
6600 Wall Street, Mobile, Alabama
(Address of Principal Executive Offices)
  
36695
(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  ¨        No  x
 
As of August 12, 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 June 30, 2002)
 
INDEX
 
PART I.    FINANCIAL INFORMATION
   
Item 1.
  
Financial Statements
   
      
3
      
4
      
5
      
6
Item 2.
    
10
Item 3.
    
14
PART II.    OTHER INFORMATION
   
Item 1.
    
15
Item 2.
    
15
Item 3.
    
15
Item 4.
    
15
Item 5.
    
16
Item 6.
    
16


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

    
December 31, 2001

 
Assets
                 
Current assets:
                 
Cash and cash equivalents
  
$
6,370,444
 
  
$
2,018,643
 
Accounts receivable, net of allowance for doubtful accounts of $631,000 and $532,000, respectively
  
 
10,111,305
 
  
 
8,107,467
 
Financing receivables, current portion
  
 
908,638
 
  
 
769,423
 
Inventories
  
 
1,446,375
 
  
 
1,126,353
 
Deferred tax assets
  
 
950,129
 
  
 
—  
 
Prepaid expenses
  
 
428,573
 
  
 
196,276
 
    


  


Total current assets
  
 
20,215,464
 
  
 
12,218,162
 
Property and equipment
                 
Land
  
 
936,026
 
  
 
936,026
 
Maintenance equipment
  
 
2,352,516
 
  
 
2,114,224
 
Computer equipment
  
 
3,372,693
 
  
 
2,906,476
 
Office furniture and equipment
  
 
843,266
 
  
 
793,576
 
Automobiles
  
 
89,934
 
  
 
89,934
 
    


  


    
 
7,594,435
 
  
 
6,840,236
 
Less accumulated depreciation
  
 
(3,322,049
)
  
 
(2,805,709
)
    


  


Net property and equipment
  
 
4,272,386
 
  
 
4,034,527
 
Financing receivables
  
 
852,018
 
  
 
998,797
 
    


  


Total assets
  
$
25,339,868
 
  
$
17,251,486
 
    


  


Liabilities and Stockholders’ Equity
                 
Current liabilities:
                 
Current portion of note payable
  
$
—  
 
  
$
86,185
 
Accounts payable
  
 
1,043,780
 
  
 
1,033,349
 
Deferred revenue
  
 
1,996,037
 
  
 
1,601,130
 
Sales, income and use taxes payable
  
 
1,887,079
 
  
 
1,879,939
 
Accrued vacation
  
 
1,254,149
 
  
 
1,075,450
 
Accrued stockholders’ distribution
  
 
1,250,000
 
  
 
—  
 
Other accrued liabilities
  
 
724,290
 
  
 
875,339
 
Income taxes payable
  
 
376,020
 
  
 
—  
 
    


  


Total current liabilities
  
 
8,531,355
 
  
 
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
  
 
17,543,552
 
  
 
109,811
 
Deferred compensation
  
 
(250,942
)
  
 
—  
 
Retained earnings (deficit)
  
 
(494,585
)
  
 
9,917,283
 
    


  


Total stockholders’ equity
  
 
16,808,513
 
  
 
10,036,382
 
    


  


Total liabilities and stockholders’ equity
  
$
25,339,868
 
  
$
17,251,486
 
    


  


 
See accompanying notes.

3


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

    
Six months ended
June 30

 
    
2002

    
2001

    
2002

    
2001

 
Sales revenues:
                                   
System sales
  
$
8,914,120
 
  
$
7,027,524
 
  
$
17,714,352
 
  
$
13,794,161
 
Support and maintenance
  
 
7,377,216
 
  
 
6,272,661
 
  
 
14,467,144
 
  
 
12,280,713
 
Outsourcing
  
 
1,220,108
 
  
 
832,817
 
  
 
2,250,655
 
  
 
1,587,384
 
    


  


  


  


Total sales revenue
  
 
17,511,444
 
  
 
14,133,002
 
  
 
34,432,151
 
  
 
27,662,258
 
Costs of sales:
                                   
System sales
  
 
6,313,630
 
  
 
5,435,651
 
  
 
12,360,414
 
  
 
10,488,037
 
Support and maintenance
  
 
3,275,248
 
  
 
2,842,777
 
  
 
6,506,160
 
  
 
5,536,642
 
Outsourcing
  
 
723,977
 
  
 
455,551
 
  
 
1,347,699
 
  
 
880,641
 
    


  


  


  


Total costs of sales
  
 
10,312,855
 
  
 
8,733,979
 
  
 
20,214,273
 
  
 
16,905,320
 
    


  


  


  


Gross profit
  
 
7,198,589
 
  
 
5,399,023
 
  
 
14,217,878
 
  
 
10,756,938
 
Operating expenses:
                                   
Sales and marketing
  
 
1,326,909
 
  
 
1,146,944
 
  
 
2,672,894
 
  
 
2,530,273
 
General and administrative
  
 
3,108,938
 
  
 
2,342,601
 
  
 
5,983,647
 
  
 
4,590,403
 
    


  


  


  


Total operating expenses
  
 
4,435,847
 
  
 
3,489,545
 
  
 
8,656,541
 
  
 
7,120,676
 
    


  


  


  


Operating income
  
 
2,762,742
 
  
 
1,909,478
 
  
 
5,561,337
 
  
 
3,636,262
 
Other income (expense):
                                   
Interest income
  
 
51,338
 
  
 
31,514
 
  
 
93,867
 
  
 
55,394
 
Miscellaneous income
  
 
63,438
 
  
 
19,111
 
  
 
108,488
 
  
 
28,313
 
Interest expense
  
 
(9,334
)
  
 
(29,493
)
  
 
(23,677
)
  
 
(45,381
)
    


  


  


  


Total other income
  
 
105,442
 
  
 
21,132
 
  
 
178,678
 
  
 
38,326
 
    


  


  


  


Income before taxes
  
$
2,868,184
 
  
$
1,930,610
 
  
$
5,740,015
 
  
$
3,674,588
 
Income taxes
  
 
486,147
 
  
 
—  
 
  
 
486,147
 
  
 
—  
 
    


  


  


  


Net income
  
$
2,382,037
 
  
$
1,930,610
 
  
$
5,253,868
 
  
$
3,674,588
 
    


  


  


  


Net income per share—basic
  
$
0.24
 
  
$
0.21
 
  
$
0.55
 
  
$
0.40
 
    


  


  


  


Net income per share—diluted
  
$
0.24
 
  
$
0.21
 
  
$
0.55
 
  
$
0.40
 
    


  


  


  


Weighted average shares outstanding
                                   
Basic
  
 
9,815,473
 
  
 
9,288,000
 
  
 
9,553,193
 
  
 
9,288,000
 
Diluted
  
 
9,829,027
 
  
 
9,288,000