TruBridge, Inc. (NASDAQ: TBRG), a healthcare solutions company,
today announced financial results for the third quarter and nine
months ended September 30, 2024.
Third Quarter 2024 Highlights*
All comparisons are to the quarter ended September 30, 2023,
unless otherwise noted
- Total bookings of $21.0 million compared to $15.0 million
- Total revenue of $83.8 million compared to $82.7 million
- Financial Health revenue of $54.3 million compared to $46.6
million
- Financial Health revenue represented 64.7% of TruBridge’s total
revenue
- GAAP (loss) earnings per diluted share of $(0.66) compared to
$(0.24)
- Non-GAAP (loss) earnings per diluted share of $(0.21) compared
to $0.45
- GAAP net loss of $(9.8) million and non-GAAP net loss of $(3.0)
million
- Adjusted EBITDA of $13.8 million compared to $9.7 million
*As of the third quarter of 2024, TruBridge is now reporting two
segments in its financial statements representing the two business
units. Financial Health represents the previous Revenue Cycle
Management (RCM) segment, and Patient Care represents the
previously reported Electronic Health Record (EHR) segment,
including the patient engagement business.
Commenting on the results, Chris Fowler, chief executive officer
of TruBridge, Inc., stated, “We are pleased with the strong results
our team delivered this quarter. Our Financial Health business is
showing solid growth and adjusted EBITDA margin is expanding as
anticipated. On a recent trip to India, I was able to witness
firsthand the impressive work our team is doing to successfully
execute the Viewgol integration. I am happy to report that
everything is moving along smoothly, and we remain focused on
optimizing operations and realizing margin improvements over
time.
“Our recently launched analytics offering is starting to
resonate with our initial customers, and we believe that, over
time, it has the potential to become a contributor to our growth
strategy. We have delivered consistent results so far in 2024, made
steady progress on our ongoing initiatives and generated bookings
and a pipeline that give us confidence in our outlook as we move
into 2025,” concluded Fowler.
Executive Leadership Changes
TruBridge also announced today the elevation of the Company’s
business unit general managers to report directly to the Company’s
Chief Executive Officer, reflecting the expanded scope and
evolution of these roles. In conjunction with this move, David Dye
will be retiring from his role as Chief Operating Officer,
effective December 31, 2024, at which time the Company will
eliminate that position. He will serve the remainder of his board
term through completion in 2026. Dye has been with the Company
since 1990, having held many roles in addition to his current
position, including Chairman, Chief Growth Officer, President and
Chief Executive Officer, and Chief Financial Officer.
Glenn Tobin, chairman of the Company’s Board of Directors,
added, “On behalf of our Board of Directors and the entire
TruBridge organization, I want to express my appreciation for David
and his decades of contribution. David’s leadership and numerous
accomplishments have been integral to TruBridge’s success, and his
positive impact has been felt by many employees over the
years.”
Financial Guidance
For the fourth quarter of 2024, TruBridge expects to
generate:
- Total revenue between $83.5 million and $85.5 million
- Adjusted EBITDA between $13.5 million and $14.5 million
For the full year 2024, TruBridge expects to generate:
- Total revenue of $335 million and $337 million; narrowed from
$330 million and $340 million
- Adjusted EBITDA of $49 million and $50 million; narrowed from
$45 million and $50 million
Conference Call
TruBridge will hold a conference call and live webcast to
discuss third quarter 2024 results on Friday, November 8, 2024, at
8:00 a.m. Central time/9:00 a.m. Eastern time. To access this
interactive teleconference, dial (877) 407-0890 and request
connection to the TruBridge earnings conference call. A 30-day
online replay will be available approximately one hour following
the conclusion of the live webcast. To listen to the live webcast
or access the replay, visit the Company’s investor relations
website, investors.trubridge.com.
About TruBridge
We are a trusted partner to more than 1,500 healthcare
organizations with a broad range of technology-first solutions that
address the unique needs and challenges of diverse communities,
promoting equitable access to quality care and fostering positive
outcomes. TruBridge has over four decades of experience in
connecting providers, patients and communities with innovative
data-driven solutions that create real value by supporting both the
financial and clinical side of healthcare delivery. Our industry
leading HFMA Peer Reviewed® suite of revenue cycle management (RCM)
offerings combine unparalleled visibility and transparency to
enhance productivity and support the financial health of healthcare
organizations across all care settings. We support efficient
patient care with electronic health record (EHR) product offerings
that successfully integrate data between care settings. Above all,
we believe in the power of community and encourage collaboration,
connection, and empowerment with our customers. We clear the way
for care. For more information, please visit www.trubridge.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 future financial and operational results 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: saturation of our target market and hospital
consolidations; unfavorable economic or market conditions that may
cause a decline in spending for information technology and
services; significant legislative and regulatory uncertainty in the
healthcare industry; exposure to liability for failure to comply
with regulatory requirements; pandemics and other public health
crises and related economic disruptions; transition to a
subscription-based recurring revenue model and modernization of our
technology; competition with companies that have greater financial,
technical and marketing resources than we have; potential future
acquisitions that may be expensive, time consuming, and subject to
other inherent risks; our ability to attract and retain qualified
client service and support personnel; disruption from periodic
restructuring of our sales force; potential delay in the
development of markets for our RCM service offering; potential
inability to properly manage growth in new markets we may enter;
potential disruption of our business due to our ongoing
implementation of a new enterprise resource planning software
solution; exposure to numerous and often conflicting laws,
regulations, policies, standards or other requirements through our
international business activities; potential litigation against us;
our reliance on an international workforce which exposes us to
various business disruptions; our utilization of artificial
intelligence, which could expose us to liability or adversely
affect our business if we cannot compete effectively with others
using artificial intelligence; potential failure to develop new
products or enhance current products that keep pace with market
demands; failure of our products to function properly resulting in
claims for medical and other losses; breaches of security and
viruses in our systems resulting in customer claims against us and
harm to our reputation; failure to maintain customer satisfaction
through new product releases free of undetected errors or problems;
failure to convince customers to migrate to current or future
releases of our products; failure to maintain our margins and
service rates; increase in the percentage of total revenues
represented by service revenues, which have lower gross margins;
exposure to liability in the event we provide inaccurate claims
data to payors; exposure to liability claims arising out of the
licensing of our software and provision of services; dependence on
licenses of rights, products and services from third parties;
misappropriation of our intellectual property rights and potential
intellectual property claims and litigation against us;
interruptions in our power supply and/or telecommunications
capabilities, including those caused by natural disaster; potential
inability to secure additional financing on favorable terms to meet
our future capital needs; our substantial indebtedness, and our
ability to incur additional indebtedness in the future; pressures
on cash flow to service our outstanding debt; restrictive terms of
our credit agreement on our current and future operations; changes
in and interpretations of financial accounting matters that govern
the measurement of our performance; significant charges to earnings
if our goodwill or intangible assets become impaired; fluctuations
in quarterly financial performance due to, among other factors,
timing of customer installations; volatility in our stock price;
failure to maintain effective internal control over financial
reporting; inherent limitations in our internal control over
financial reporting; vulnerability to significant damage from
natural disasters; market risks related to interest rate changes;
potential material adverse effects due to macroeconomic conditions,
including bank failures or changes in related regulation; and other
risk factors described from time to time 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 and our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2024. 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.
TruBridge, Inc. Condensed Consolidated Statements of Income (In
'000s, except per share data) (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenues Financial Health
$
54,271
$
46,582
$
161,417
$
142,973
Patient Care
29,559
36,130
90,389
110,594
Total revenues
83,830
82,712
251,806
253,567
Expenses Costs of revenue (exclusive of amortization
and depreciation) Financial Health
29,185
27,159
89,051
81,461
Patient Care
13,184
16,704
38,421
50,712
Total costs of revenue (exclusive of amortization and depreciation)
42,369
43,863
127,472
132,173
Product development
7,735
9,778
26,629
26,899
Sales and marketing
5,944
6,818
20,351
21,906
General and administrative
19,376
20,961
57,651
54,471
Amortization
6,183
6,208
21,158
17,549
Depreciation
279
297
1,079
1,392
Total expenses
81,886
87,925
254,340
254,390
Operating income (loss)
1,944
(5,213
)
(2,534
)
(823
)
Other income (expense): Other income (expense)
(376
)
224
1,139
569
Interest expense
(4,033
)
(3,071
)
(12,348
)
(8,405
)
Total other expense
(4,409
)
(2,847
)
(11,209
)
(7,836
)
Loss before taxes
(2,465
)
(8,060
)
(13,743
)
(8,659
)
Income tax expense (benefit)
7,344
(4,498
)
3,631
(5,344
)
Net loss
$
(9,809
)
$
(3,562
)
$
(17,374
)
$
(3,315
)
Net loss per common share—basic
$
(0.66
)
$
(0.24
)
$
(1.17
)
$
(0.23
)
Net loss per common share—diluted
$
(0.66
)
$
(0.24
)
$
(1.17
)
$
(0.23
)
Weighted average shares outstanding used in per common
share computations: Basic
14,323
14,205
14,290
14,181
Diluted
14,323
14,205
14,290
14,181
TruBridge, Inc. Condensed Consolidated Balance Sheets (In '000s,
except per share data) September 30,2024(Unaudited) Dec. 31,
2023
Assets Current assets Cash and cash equivalents
$
8,586
$
3,848
Accounts receivable, net of allowance for expected credit losses of
$3,896 and $3,631, respectively
56,680
59,723
Financing receivables, current portion (net of allowance for
expected credit losses of $405 and $319, respectively)
5,133
3,997
Inventories
924
475
Prepaid income taxes
1,972
1,628
Prepaid expenses and other
15,853
15,807
Assets of held for sale
2,473
25,977
Total current assets
91,621
111,455
Property & equipment, net
5,049
8,974
Software development costs, net
41,026
39,139
Operating lease assets
3,451
5,192
Financing receivables, net of current portion (net of allowance for
expected credit losses of $18 and $97, respectively)
231
1,226
Other assets, net of current portion
7,749
7,314
Intangible assets, net
79,833
89,213
Goodwill
172,573
171,909
Total assets
$
401,533
$
434,422
Liabilities & Stockholders' Equity Current
liabilities Accounts payable
$
14,028
$
10,133
Current portion of long-term debt
2,926
3,141
Deferred revenue
10,235
8,677
Accrued vacation
5,392
5,410
Other accrued liabilities
18,421
19,892
Liabilities of held for sale
-
977
Total current liabilities
51,002
48,230
Long-term debt, net of current portion
173,343
195,270
Operating lease liabilities, net of current portion
2,520
3,074
Deferred tax liabilities
2,021
1,230
Total liabilities
228,886
247,804
Stockholders' Equity Common stock, $0.001 par value; 30,000
shares authorized; 15,546 and 15,121 shares issued, respectively
15
15
Additional paid-in capital
199,244
195,546
Accumulated other comprehensive gain
107
-
Accumulated (deficit) earnings
(9,242
)
8,132
Treasury stock, 619 and 572 shares, respectively
(17,477
)
(17,075
)
Total stockholders' equity
172,647
186,618
Total liabilities and stockholders' equity
$
401,533
$
434,422
TruBridge, Inc. Condensed Consolidated Statements of Cash Flows (In
'000s) (Unaudited)
Nine Months Ended September
30,
2024
2023
Operating activities: Net loss
$
(17,374
)
$
(3,315
)
Adjustments to net loss: Provision for credit losses
1,046
810
Deferred taxes
915
(8,171
)
Stock-based compensation
3,698
2,162
Depreciation
1,079
1,392
Gain on sale of business
(1,221
)
-
Amortization of acquisition-related intangibles
9,379
12,043
Amortization of software development costs
11,779
5,506
Amortization of deferred finance costs
320
269
Change in fair value of contingent consideration
(1,044
)
-
Non-cash operating lease costs
1,879
1,478
Loss on disposal of property and equipment
1,648
117
Changes in operating assets and liabilities: Accounts receivable
2,946
(8,632
)
Financing receivables
(129
)
2,029
Inventories
(449
)
(157
)
Prepaid expenses and other
3,228
(1,972
)
Accounts payable
3,925
6,333
Deferred revenue
2,162
(2,784
)
Operating lease liabilities
(1,415
)
(1,462
)
Other liabilities
(189
)
6,656
Prepaid income taxes
(344
)
1,017
Net cash provided by operating activities
21,839
13,319
Investing activities: Purchase of business, net of
cash acquired
(664
)
-
Sale of business, net of cash and cash equivalents sold
21,410
-
Investment in software development
(13,666
)
(17,981
)
Purchases of property and equipment
(1,277
)
(332
)
Net cash provided by (used in) investing activities
5,803
(18,313
)
Financing activities: Payments of long-term debt
principal
(6,625
)
(2,625
)
Proceeds from revolving line of credit
23,765
9,716
Payments of revolving line of credit
(39,072
)
(5,000
)
Debt issuance costs
(529
)
-
Treasury stock purchases
(402
)
(2,575
)
Net cash used in financing activities
(22,863
)
(484
)
Increase (decrease) in cash and cash equivalents
4,779
(5,478
)
Change in cash and cash equivalents included in assets sold
(41
)
-
Cash and cash equivalents, beginning of period
3,848
6,951
Cash and cash equivalents, end of period
$
8,586
$
1,473
TruBridge, Inc. Consolidated Bookings (In '000s) (Unaudited)
(Non-GAAP) Three Months Ended September 30, Nine Months
Ended September 30,
2024
2023 (3)
2024
2023 (3)
Financial Health(1)
$
12,496
$
9,080
$
40,346
$
34,828
Patient Care(2)
8,454
5,897
27,464
20,966
Total
$
20,950
$
14,977
$
67,810
$
55,794
(1)
Generally calculated as the total contract price (for
non-recurring, project-related amounts) and annualized contract
value (for recurring amounts).
(2)
Generally calculated as the total contract price (for system sales)
and annualized contract value (for support) for perpetual license
system sales and total contract price for SaaS sales.
(3)
Adjustment was made to the 2023 bookings, due to 3rd Party
Software, and Forms and Supplies being doubled accounted for in the
total Patient Care bookings. TruBridge, Inc. Bookings Composition
(In '000s, except per share data) (Unaudited) (Non-GAAP)
Three Months Ended September 30, Nine Months Ended September 30,
2024
2023 (4)
2024
2023 (4)
Financial Health Net new(1)
$
6,112
$
4,387
$
21,559
$
13,810
Cross-sell(1)
6,384
4,693
18,787
21,018
Patient Care Non-subscription sales(2)
5,006
3,126
12,540
12,124
Subscription revenue(3)
3,448
2,771
14,924
8,842
Total
$
20,950
$
14,977
$
67,810
$
55,794
(1)
“Net new” represents bookings
from outside the Company’s core Patient Care client base, and
“Cross-sell” represents bookings from existing Patient Care
customers. In each case, such bookings are generally comprised of
recurring revenues to be recognized ratably over a one-year period
and an average timeframe for commencement of bookings-to-revenue
conversion of four to six months following contract execution.
(2)
Represents nonrecurring revenues
that generally exhibit a timeframe for bookings-to-revenue
conversion of five to six months following contract execution.
(3)
Represents recurring revenues to
be recognized on a monthly basis over a weighted-average contract
period of five years, with a start date in the next 12 months and
an average timeframe for commencement of bookings-to-revenue
conversion of five to six months following contract execution.
(4)
Adjustment was made to the 2023
bookings, due to 3rd Party Software, and Forms and Supplies being
doubled accounted for in the total Patient Care bookings.
TruBridge, Inc. Adjusted EBITDA - by Segment (In '000s) (Unaudited)
(Non-GAAP) Three Months Ended September 30, Nine Months
Ended September 30, In '000s
2024
2023
2024
2023
Financial Health
$
9,562
$
4,623
$
23,767
$
18,205
Patient Care
4,260
5,099
12,083
17,388
Total
$
13,822
$
9,722
$
35,850
$
35,593
TruBridge, Inc. Reconciliation of Non-GAAP Financial Measures (In
'000s) (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
Adjusted EBITDA:
2024
2023
2024
2023
Net loss, as reported
$
(9,809
)
$
(3,562
)
$
(17,374
)
$
(3,315
)
Net Income Margin
(11.7
%)
(4.3
%)
(6.9
%)
(1.3
%)
Depreciation expense
279
297
1,079
1,392
Amortization of software development costs
3,057
2,194
11,779
5,506
Amortization of acquisition-related intangibles
3,126
4,014
9,379
12,043
Stock-based compensation
1,398
1,038
3,698
2,162
Severance and other non-recurring charges
4,018
7,392
12,449
15,313
Interest expense
3,777
2,847
11,826
7,719
Change in fair value of contingent consideration
(1,044
)
-
(1,044
)
-
Loss on disposal of property and equipment
1,648
-
1,648
117
Gain on sale of AHT
28
-
(1,221
)
-
Provision (benefit) for income taxes
7,344
(4,498
)
3,631
(5,344
)
Total Adjusted EBITDA
$
13,822
$
9,722
$
35,850
$
35,593
Adjusted EBITDA Margin
16.5
%
11.8
%
14.2
%
14.0
%
TruBridge, Inc. Reconciliation of Non-GAAP Financial Measures (In
'000s, except per share data) (Unaudited) Three Months Ended
September 30, Nine Months Ended September 30,
Non-GAAP Net
Income (loss) and Non-GAAP EPS:
2024
2023
2024
2023
Net loss, as reported
$
(9,809
)
$
(3,562
)
$
(17,374
)
$
(3,315
)
Pre-tax adjustments for Non-GAAP EPS: Amortization of
acquisition-related intangible assets
3,126
4,014
9,379
12,043
Stock-based compensation
1,398
1,038
3,698
2,162
Severance and other nonrecurring charges
4,018
7,392
12,449
15,313
Non-cash interest expense
107
90
314
270
After-tax adjustments for Non-GAAP EPS: Tax-effect of pre-tax
adjustments, at 21%
(1,816
)
(2,632
)
(5,426
)
(6,255
)
Tax shortfall (windfall) from stock-based compensation
13
8
126
65
Non-GAAP net income (loss)
$
(2,963
)
$
6,348
$
3,166
$
20,283
Weighted average shares outstanding, diluted
14,323
14,205
14,290
14,181
Non-GAAP EPS
$
(0.21
)
$
0.45
$
0.22
$
1.43
TruBridge, Inc. Patient Care Revenue Composition (In '000s)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Recurring revenues - Patient Care Acute care
$
26,584
$
29,068
$
80,726
$
88,420
Post-acute care
-
3,594
597
11,230
Total recurring revenues - Patient Care
26,584
32,662
81,323
99,650
Non-recurring revenues - Patient Care Acute care
2,975
3,118
8,996
9,869
Post-acute care
-
350
70
1,075
Total non-recurring revenues - Patient Care
2,975
3,468
9,066
10,944
Total Patient Care revenues
$
29,559
$
36,130
$
90,389
$
110,594
Explanation of Non-GAAP Financial Measures
We report our financial results in accordance with accounting
principles generally accepted in the United States of America, or
“GAAP.” However, management believes that, in order to properly
understand our short-term and long-term financial and operational
trends, investors may wish to consider the impact of certain
non-cash or non-recurring items, when used as a supplement to
financial performance measures that are prepared in accordance with
GAAP. These items result from facts and circumstances that vary in
frequency and impact on continuing operations. Management uses
these non-GAAP financial measures in order to evaluate the
operating performance of the Company and compare it against past
periods, make operating decisions, and serve as a basis for
strategic planning. These non-GAAP financial measures provide
management with additional means to understand and evaluate the
operating results and trends in our ongoing business by eliminating
certain non-cash expenses and other items that management believes
might otherwise make comparisons of our ongoing business with prior
periods more difficult, obscure trends in ongoing operations, or
reduce management’s ability to make useful forecasts. In addition,
management understands that some investors and financial analysts
find these non-GAAP financial measures helpful in analyzing our
financial and operational performance and comparing this
performance to our peers and competitors.
As such, to supplement the GAAP information provided, we present
in this press release and during the live webcast discussing our
financial results the following non-GAAP financial measures:
Adjusted EBITDA, Adjusted EBITDA Margin, Non-GAAP net income, and
Non-GAAP earnings per share (“EPS”).
We calculate each of these non-GAAP financial measures as
follows:
- Adjusted EBITDA – Adjusted EBITDA
consists of GAAP net income as reported and adjusts for (i)
depreciation expense; (ii) amortization of software development
costs; (iii) amortization of acquisition-related intangibles; (iv)
stock-based compensation; (v) severance and other nonrecurring
charges; (vi) interest expense; (vii) change in fair value of
contingent consideration; (viii) loss on asset held for sale; (ix)
gain on sale of AHT; and (x) the provision (benefit) for income
taxes.
- Adjusted EBITDA Margin – Adjusted
EBITDA Margin is calculated as Adjusted EBITDA, as defined above,
divided by total revenue.
- Non-GAAP net income – Non-GAAP net
income consists of GAAP net income as reported and adjusts for (i)
amortization of acquisition-related intangible assets; (ii)
stock-based compensation; (iii) severance and other non-recurring
charges; (iv) non-cash interest expense; (v) gain on sale of AHT;
and (vi) the total tax effect of items (i) through (v).
- Non-GAAP EPS – Non-GAAP EPS
consists of Non-GAAP net income, as defined above, divided by
weighted average shares outstanding (diluted) in the applicable
period.
Certain of the items excluded or adjusted to arrive at these
non-GAAP financial measures are described below:
- Amortization of acquisition-related
intangibles – Acquisition-related amortization expense is a
non-cash expense arising primarily from the acquisition of
intangible assets in connection with acquisitions or investments.
We exclude acquisition-related amortization expense from non-GAAP
financial measures because we believe (i) the amount of such
expenses in any specific period may not directly correlate to the
underlying performance of our business operations and (ii) such
expenses can vary significantly between periods as a result of new
acquisitions and full amortization of previously acquired
intangible assets. Investors should note that the use of these
intangible assets contributed to revenue in the periods presented
and will contribute to future revenue generation, and the related
amortization expense will recur in future periods.
- Stock-based compensation –
Stock-based compensation expense is a non-cash expense arising from
the grant of stock-based awards. We exclude stock-based
compensation expense from non-GAAP financial measures because we
believe (i) the amount of such expenses in any specific period may
not directly correlate to the underlying performance of our
business operations and (ii) such expenses can vary significantly
between periods as a result of the timing and valuation of grants
of new stock-based awards, including grants in connection with
acquisitions. Investors should note that stock-based compensation
is a key incentive offered to employees whose efforts contributed
to the operating results in the periods presented and are expected
to contribute to operating results in future periods, and such
expense will recur in future periods.
- Severance and other nonrecurring
charges – Non-recurring charges relate to certain severance
and other charges incurred in connection with activities that are
considered non-recurring. We exclude non-recurring expenses
(primarily related to costs associated with our recent business
transformation initiative and transaction-related costs) from
non-GAAP financial measures because we believe (i) the amount of
such expenses in any specific period may not directly correlate to
the underlying performance of our business operations and (ii) such
expenses can vary significantly between periods.
- Non-cash Interest expense –
Non-cash interest expense includes amortization of deferred debt
issuance costs. We exclude non-cash interest expense from non-GAAP
financial measures because we believe these non-cash amounts relate
to specific transactions and, as such, may not directly correlate
to the underlying performance of our business operations.
- Interest expense: Interest expense
represents (i) interest incurred on our term loan and revolving
credit facility and (ii) non-cash interest expense. We exclude
interest expense from non-GAAP financial measures because we
believe these amounts relate to specific transactions and, as such,
may not directly correlate to the underlying performance of our
business operations.
- Change in fair value of contingent
consideration: The purchase agreement for our acquisition of
Viewgol in 2023 contained contingent consideration, or “earnout,”
provisions whereby the previous shareholders of Viewgol would
receive additional consideration depending on the achievement of
certain performance metrics. After the initial measurement period,
U.S. GAAP requires that any adjustments to the estimated fair value
of this contingent liability, including upon final determination of
amounts due, should be recorded in the relevant period’s earnings.
We exclude gains on contingent consideration from non-GAAP
financial measures because we believe (i) the amount of such gains
in any specific period may not directly correlate to the underlying
performance of our business operations and (ii) such gains can vary
significantly between periods.
- Loss on assets held for sale: Loss
on assets held for sale represents the excess of book value of
assets sold over the proceeds received in connection with the sale
of real estate assets during the period. We exclude loss on sale of
real estate assets held for sale from non-GAAP financial measures
because we believe (i) the amount of such gains gain or loss in any
specific period may not directly correlate to the underlying
performance of our business operations and (ii) such gains gain or
loss can vary significantly between periods.
- Gain on sale of AHT: Gain on sale
of AHT represents the excess of proceeds received over the net
assets sold from our sale of AHT, our previously wholly-owned
post-acute business, in January 2024. We exclude gain on sale of
AHT from non-GAAP financial measures because we believe the amount
relates to specific transaction and, as such, may not directly
correlate to the underlying performance of our business
operations
- Tax shortfall (windfall) from stock-based
compensation – ASU 2016-09, Improvements to Employee
Share-Based Payment Accounting, became effective for the Company
during the third quarter of 2017 and changes the treatment of tax
shortfall and excess tax benefits arising from stock based
compensation arrangements. Prior to ASU 2016-09, these amounts were
recorded as an increase (for excess benefits) or decrease (for
shortfalls) to additional paid-in capital. With the adoption of ASU
2016-09, these amounts are now captured in the period’s income tax
expense. We exclude this component of income tax expense from
non-GAAP financial measures because we believe (i) the amount of
such expenses or benefits in any specific period may not directly
correlate to the underlying performance of our business operations;
and (ii) such expenses or benefits can vary significantly between
periods as a result of the valuation of grants of new stock-based
awards, the timing of vesting of awards, and periodic movements in
the fair value of our common stock.
Management considers these non-GAAP financial measures to be
important indicators of our operational strength and performance of
our business and a good measure of our historical operating trends,
in particular the extent to which ongoing operations impact our
overall financial performance. In addition, management may use
Adjusted EBITDA, Non-GAAP net income and/or Non-GAAP EPS to measure
the achievement of performance objectives under the Company’s stock
and cash incentive programs. Note, however, that these non-GAAP
financial measures are performance measures only, and they do not
provide any measure of cash flow or liquidity. Non-GAAP financial
measures are not alternatives for measures of financial performance
prepared in accordance with GAAP and may be different from
similarly titled non-GAAP measures presented by other companies,
limiting their usefulness as comparative measures. Non-GAAP
financial measures have limitations in that they do not reflect all
of the amounts associated with our results of operations as
determined in accordance with GAAP. Additionally, there is no
certainty that we will not incur expenses in the future that are
similar to those excluded in the calculations of the non-GAAP
financial measures presented in this press release. Investors and
potential investors are encouraged to review the “Unaudited
Reconciliation of Non-GAAP Financial Measures” above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107152480/en/
Investor Relations Contact Asher Dewhurst, ICR Westwicke
TBRGIR@westwicke.com
Media Contact Tracey Schroeder Chief Marketing Officer
Tracey.schroeder@trubridge.com
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