TruBridge Inc (TBRG) 2017 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the CPSI Second Quarter 2017 Earnings Conference Call.

(Operator Instructions) As a reminder, this conference is being recorded today, Thursday, August 3, 2017.

I would now like to turn the conference over to Mr. Boyd Douglas, President and Chief Executive Officer with CPSI.

Please go ahead, sir.

Thank you, Colin.

Good afternoon, everyone, and thank you for joining us.

During this conference call, we may make statements regarding future operating plans, expectations and performance that constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

We caution you that any such forward-looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance.

Actual results might differ materially from those expressed or implied by such forward-looking statements as a result of known and unknown risks, uncertainties and other factors, including those described 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.

We also caution investors that the forward-looking information provided in this call 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 call.

Joining me on the call today will be Matt Chambless, Chief Financial Officer; Chris Fowler, Chief Operating Officer; and David Dye, Chief Growth Officer.

At the conclusion of our prepared comments, we will be available to take any questions you may have.

As we close off the first half of 2017, I am very pleased with the consistent performance from CPSI and our family of companies.

Our company achieved another quarterly record with company bookings over $33 million.

And as we stated last quarter, our healthy install schedule continues to have a positive impact on our revenue this year.

As expected, our now larger client base is generating increased opportunity for add-on sales.

We started out the year partnering with our clients to map out a reasonable approach and plan for MU3.

This approach has paid off as our MU3 package was a significant contributor to our add-on bookings this quarter.

Obviously, the CMS ruling that was announced yesterday afternoon will spread out the way this revenue will be recognized over the next several quarters.

Prior to this rule change, we were expecting the majority of the MU3 revenue to be recognized in the fourth quarter of 2017 and the first quarter of 2018.

We now expect that to shift approximately 2 quarters.

That is the majority of the MU3 revenue we now expect to recognize in the second and third quarters of 2018.

I think it is important for everyone to know that our MU3 bundle has a lot more to offer than just compliance such as Thrive UX and our new report scheduler.

In addition to MU3 bundle sales, TruBridge revenue cycle management solution and services are addressing a real need in our client base.

All indications point to a sustained level of add-on sales through the second half of 2017.

Factors that contribute to this expected pattern include our very healthy client retention rates across our family of companies, genuine interest in our recently launched Business Intelligence Dashboard, having only skimmed the full potential of our revenue cycle management solutions and the remaining sales opportunity for our MU3 package.

We continue to make progress in our goal of creating healthier, financially stronger and more vital communities.

With the progression of value-based care and the corresponding reimbursement changes coming to fruition across care settings, CPSI continues to be the partner of choice for small and rural communities.

Since the announcement of our partnership with Caravan Health and the CPSI Rural ACO program, we have been accepting applications from small communities across the country.

As we enter the final stages of the application process and await final signoff from CMS, we expect 8 CPSI rural ACOs to launch in January of 2018 across 16 states.

These 8 CPSI rural ACOs are made up of both clients from the CPSI family of companies and nonclients.

This innovative approach is an important component to our strategy as it aligns us with small communities and their effort to improve community health and thrive within the new reimbursement models.

As we continue executing on our plans through the second half of the year, making steady progress operationally and financially across our family of companies, we will continue to invest in our future.

Product development effort and investment across our acute and post-acute EHR solutions are committed to improving provider adoption and clinical workflow between all care settings.

Our most recent post-acute EHR release of [17.0] for our American HealthTech clients revealed at our national client conference in May received high marks for the customizable workflows and delivery of patient information at the right time.

Efforts led by our recently named Chief Medical Officer, Dr. Bill Hayes, with our cross-company provider counsel, continues to foster our partnership with our clients and provide clear direction and tangible deliverables that we feel confident in our ability to deliver.

Finally, addressing the real and everyday strain that our clients face in terms of protecting capital, managing operations of the revenue cycle and improving cash flow is core to the business needs that the TruBridge solutions meet.

Both Chris and David will provide more color around this in a bit.

But we are thrilled not only with the trend and traction and success TruBridge has experienced in our client base, but we are also energized by the level of growth ahead of them through the end of the year and beyond with both our clients and an ending net new market.

With that, I would like to turn the call over to Matt Chambless.

Thanks, Boyd.

Good afternoon, everyone.

As Boyd alluded to and as we mentioned in the earnings release, a healthy Thrive implementation schedule, working in tandem with TruBridge momentum, resulted in our first period of sequential revenue growth since the Healthland acquisition, which translated into growth in non-GAAP EPS and adjusted EBITDA despite a heavy dose of operating expenses during the second quarter.

However, as impressive as these 2 indicators were during the second quarter, we weren't able to fully overcome the headwinds created by the past 12 months work down of Healthland migration opportunities, resulting in revenues, non-GAAP EPS and adjusted EBITDA all coming in below prior year results.

In addition to the healthy Thrive implementation schedule and impressive TruBridge revenue growth, a few other things were noticeable in this quarter's performance.

First, this proved to be a heavy quarter for operating expenses.

This is most apparent in our general and administrative expenses for the quarter, which included the lion's share of the costs associated with our onetime Voluntary Early Retirement Program that we have announced on the last quarter's call and substantially all of the annual expense associated with our first combined national client conference for our family of companies, which was held in May this year.

Secondly, some noise in our balance sheet made its way prominently into our cash flows as a high volume of finance system sales purchases led to a sequential expansion in financing receivables of more than $4 million and combined payables and accrued liabilities expanded $6 million through the timing of payroll and vendor payments.

All told, cash performance was sufficient to allow for a $1.5 million advance payment against our revolving credit facility at the end of the quarter.

Lastly, bookings came in at a record $33.7 million, beating the previous high marks set in the fourth quarter of 2016 by 10%.

This is particularly exciting for TruBridge and provides a clear and enviable path for future growth of our already significant recurring revenue base, a base which currently accounts for 81% of our year-to-date revenues.

Of the $25 million in system sales and support bookings, roughly $1.1 million is included in our second quarter revenues.

$20.7 million represents nonsubscription sales that should trickle into revenue over the next 12 months, with an average lag between booking and install of 5 to 6 months.

$3.2 million represents EHR subscription revenue to be recorded over a weighted average period of 5 years, with a start date in the next 12 months and similar to our nonsubscription sales, an average lag between booking and install of 5 to 6 months.

Our $8.7 million of bookings from TruBridge are mostly made up of recurring revenues to be recorded over a 1-year period starting in the next 4 to 6 months.

For some added depth on our healthy implementation schedule, 10 customer sites went live with our Thrive Financial and Patient Accounting Systems compared to 3 in the first quarter.

As for licensing mix, 1 of this quarter's 10 go lives were under a cloud or subscription model compared to 1 out of 3 during the first quarter.

At this time, we expect 10 new client facilities to go live with our Thrive Financial and Patient Accounting Systems in the third quarter of 2017, only one of which is expected to go live in the cloud environment.

On the Healthland front, we had one migration from Classic to Centriq during the second quarter, with none expected in the third quarter.

As we pointed out on prior calls, discerning reliable patterns regarding our license mix is a difficult task as we remain agnostic towards licensing model, preferring to give our customers the choice to select the model that best suits their unique needs.

Our year-to-date implementations suggest a heavy dose of perpetual licenses, which is perhaps influenced by our continued willingness to work with our customers by providing long-term financing of our solutions.

Naturally, license mix can inject variability into our quarterly revenues and profits while financing decisions can inject variability into our periodic cash flows, as I mentioned previously.

We plan to continue offering such choices to our customers while effectively managing the resulting impact on our earnings and cash flows.

Our employee headcount as of June 30 was roughly 2,019, an increase of 61 from the end of the first quarter.

That's mostly related to expanding TruBridge capacity to accommodate anticipated volumes resulting from our recent strong bookings performance.

Moving on to the income statement for the quarter.

System sales and support revenues posted a nice incremental increase from the first quarter behind a healthy implementation schedule for Evident's Thrive product despite a bit of drag created by Healthland as the first quarter received the benefit of a net new Centriq implementation with no such activity in the second quarter.

The end result was an increase in Evident revenues of $3.1 million, partially offset by a $1 million decline in revenues from the Healthland entities for a total net sequential growth of $2.1 million.

Year-over-year revenues declined $2.2 million despite a doubling of Thrive go lives from 5 in the second quarter of 2016 with none in the cloud environment to 10 in the second quarter of 2017 with only 1 in the cloud environment.

This overall decline is due to the previously mentioned work down of Healthland migration opportunities over the past 12 months, resulting in a $3.5 million year-over-year decrease in revenues from the Healthland entities.

The strengthening new implementation schedule for Evident was also met with an approximately $1 million softening in add-on sales as recent MU3 bookings have yet to convert to revenue for a net increase in Evident system sales and support revenues of $1.3 million.

On the cost side, this quarter's gross margin on system sales and support were the highest we've seen since the acquisition of Healthland.

Cost of system sales and support showed a slight increase from the first quarter mostly due to increased travel associated with the heavier Thrive installation schedule.

With the majority of our cost structure relatively fixed, increased revenues in the second quarter led to margins improving to 58.5% from 57% in the first quarter.

Second quarter 2017's 58.5% gross margin also outpaced the second quarter of 2016's gross margin of 54.1%.

Despite the declining year-over-year revenues, these incremental synergies and other cost-containment measures saw cost savings outpace the aforementioned year-over-year revenue decline.

We mentioned on last earnings call that TruBridge had finally turned the corner after the disappointing finish to 2016, and that story continues to materialize as the solid bookings performance in late 2016 and to date in 2017 are making their effects known in our top line.

Once again, our combined accounts receivable management and Private Pay Services have been our largest net gainers in both sequential and year-over-year revenue growth, followed closely by the impressive growth we've seen with the Rycan RCM products, with the end result being 7.5% sequential revenue growth and 7.3% growth year-over-year.

Similar to system sales and support, this quarter's gross margins on TruBridge revenues were the highest we've seen since the acquisition of Healthland.

Due to ramp-up efforts in prior periods, we were able to achieve these impressive revenue growth numbers while keeping our cost relatively flat sequentially and increasing only 2.7% year-over-year, resulting in a gross margin of 46.3% in the second quarter of 2017 compared to 42.6% in the first quarter and 43.9% in the second quarter of last year.

Our product development cost increased roughly $400,000 or 4.2% sequentially and are up $1.1 million or 13.8% year-over-year.

This focused investment supports the continued expansion of our consolidated development team.

Leveraging our unique position in the market is our priority as we remain committed to improving provider adoption and clinical workflow and increasing the integration of our acute and post-acute EHR products.

Sales and marketing costs are up sequentially and year-over-year due to commission timing and continued increased cost associated with our ongoing initiative to build brand awareness around the now larger CPSI and our family of companies that are focused on improving community health care.

General and administrative cost increased 10.8% from the first quarter, primarily driven by a $1.3 million increase in severance expense associated with our Voluntary Early Retirement Program that we announced on last earnings call.

Although this program began in the first quarter, it was concluded in the second quarter with the majority of employee decisions being made in the second quarter.

Adding to this increased severance expense was a $1.1 million increase in cost associated with the national client conference for our family of companies in May and partially offset by decreased legal and accounting cost.

The 6.5% year-over-year increase in G&A cost was similarly impacted by the conclusion of the Voluntary Early Retirement Program in the second quarter of 2017 and similarly offset by decreased legal and accounting cost.

But it's worth noting that the year-over-year increase related to our national client conference was only $400,000.

During 2016, we held 3 separate user events spanning the second and third quarters, targeting both our acute and post-acute customers.

In 2017, we essentially combined those 3 events in 1 large client event in the second quarter.

Combining these 3 key events into a single event should allow us to scale and achieve overall efficiency in our annual spend in this area.

Interest expense increased both sequentially and year-over-year as market conditions had led to increases in the underlying rates paid in our variable rate debt.

And the quarter's effective tax rate of 38.5% marked a significant reduction from the first quarter's 83.6% as the second quarter held less expense impact from shortfalls associated with stock-based compensation.

The rate also improved from last year's 45.9% as the second quarter of 2016 was significantly impacted by nondeductible transaction cost and state rate adjustments.

And with that, I'll now turn things over to Chris Fowler, our Chief Operating Officer.

Thank you, Matt, and good afternoon, everyone.

Last quarter, we provided a preview into Q2 by sharing that in April, TruBridge had signed the largest contract in our history with a $3.1 million value.

In addition, this quarter, TruBridge obtained a bookings record of $8.7 million.

We attribute this performance and long-term upward trend to the increasing demand of community hospitals needing to improve their financial operations.

To add some color to the strong and solid bookings performance, TruBridge again booked $1.5 million in add-on business for Rycan revenue cycle management solutions.

We expect this consistent performance of $1 million to $1.5 million of bookings each quarter to carry through well into the future as we estimate having only penetrated approximately 15% of our entire acute care client base today.

We see a clear path to achieving at least 50% penetration into our expanded base over the next 2 years.

In addition, $5.6 million of our Q2 bookings were attributed to our accounts receivable management solution, which continues to build a healthy reoccurring revenue stream for us.

We have seen a 5% growth in revenue compared to 2016 year-to-date and a 7% increase in revenues since Q1 of this year.

With the sales momentum we are building for our accounts receivable management solution, we project to have 20% growth in the second half of this year compared to the second half of 2016.

Looking ahead, we see a sustained level of net new and add-on sales through the second half of 2017 for TruBridge.

At our national client conference in May, we launched our new Business Intelligence Dashboard.

The genuine interest we are seeing across the base is a testament to our development efforts meeting the mark in terms of client need, including analytics that are integrated with their EHR, delivering real-time access to data and providing automatic visualization of that data and accurate business insights.

By the midpoint of Q2, we had more than 10% of our clients requesting a proposal for our BI Dashboard.

A number of those have already translated into purchase agreements, and we had our first customer up and running within the last week.

With this early level of traction, we believe this solution will bring additional tiers of opportunity following the release of more BI offerings and services even before the end of the year.

As we continue to understand the power of all the Rycan revenue cycle management products and how we can harness them, we've also paired the patient liability estimator product from Rycan with TruBridge services to further address the complexities our clients face every day in managing the world of private pay collections.

This, too, looks to be a promising opportunity for additional growth from an add-on perspective as well as for the net new sales.

And finally, from an operational perspective, we are pleased to share that we have completed 75% of the transition of the American HealthTech client base to the TruBridge cloud environment.

This progress, along with the work that is underway to prepare the Healthland client base for the transition, is aligning well to our expected $800,000 of savings this year.

With that, I will turn it over to our Chief Growth Officer, David Dye.

Thanks, Chris.

The good work of our sales teams over the past several quarters has our company positioned to experience meaningful growth over the next several quarters.

Year-to-date through June 30 of this year, combined Evident, Healthland and AHT EHR bookings are up 11% year-over-year; Rycan, 189%; TruBridge, 39%; and total CPSI bookings across all companies, 21%.

We are particularly excited about the last 9 months of sales execution within TruBridge.

Chris mentioned that these sales efforts are now translating into revenue, and as such, we expect significant year-over-year and sequential growth within TruBridge over the remainder of 2017 and into 2018.

In addition, the TruBridge sales pipeline remains full with a number of mid- to larger accounts receivable management engagements in the mix between now and the end of the year.

On the EHR side of the business, add-on sales were once again strong in large part due to MU3-related orders.

In the second quarter, we closed over $10 million in MU3 sales.

We expect these orders to continue in the third quarter before tapering off in the fourth.

However, we also expect sales of our BI Dashboard to accelerate late this year and into 2018.

New hospital system sales of Thrive in the second quarter were steady, with 6 new deals averaging just over $1 million.

Based on our current pipeline, we expect to sign 6 to 8 new customer contracts in the third quarter.

And in addition to new contracts, we now have 14 hospital customers or an additional 4 since the last earnings call that had previously signed a contract with a competitive vendor but after a failed implementation, have returned to either Thrive or Centriq.

Once again, this demonstrates that a complete single-source integrated product is the only truly effective EHR for community health care.

Colin, please open the call for questions.

(Operator Instructions) Our first question comes from the line of Jeff Garro with William Blair & Company.

I want to ask a couple of questions on bookings first, the first of which is how is your win rate trending?

And why are organizations taking CPSI?

The win rate's steady, Jeffrey, as it has been in the last couple of years.

The deals where we kind of have an opportunity to demonstrate, we delivered just over 50% with our win rate, and that's been steady now for a couple of years.

(inaudible) why the picked CPSI, or in this case, Evident Thrive, is that they realize that it's a completely integrated solution.

And this is an opportunity for them to get the function that they need in the clinical areas but also to have all the information from the clinical areas flow down to the financials so that they can improve their cash flow.

And I think that's typically the reason that we win.

Got it.

Maybe another one following up.

Has there been a change in average deal size?

And maybe more specifically, are more deals including TruBridge from the start?

And maybe throwing that one other way, you're talking about integrated solution, is that integrated solution including both your clinical and financial software as well as some of the services that your company can provide?

Yes.

We do have more deals that are including TruBridge.

Now when I say, for example, that we had 6 deals that averaged over $1 million each, that $1 million does not include any of the TruBridge component.

That would fall over to the TruBridge bookings themselves.

I think we're running somewhere between 1/3 to 1/2 in any given quarter of the deals are -- include the accounts receivable management.

When they sign on with Evident Thrive, they're also getting TruBridge to run their back office.

Got it.

One more for me before I hop back in the queue.

You had very strong bookings in the quarter, and you talked about the impact from that CMS final rule changing meaningfully your Stage 3 regulations and that how will impact revenue recognition.

But curious how you see that final rule impacting bookings activity for the rest of the year.

Yes.

I think -- our clients know.

We've been through this and our customers have been through this now.

This will be the third year-long delay that we've had since the start of the Meaningful Use program.

So I think we're all not terribly surprised but also know that it's not going away.

They're still staring us down.

I think there'll be some folks that do delay now on booking MU3 into the beginning of 2018.

However, I think the vast majority of our customer base will commit to that, and it will show up in bookings sometime in the third or fourth quarter of this year.

Our next question comes from the line of Jamie Stockton with Wells Fargo.

This is actually Nathan, in for Jamie.

Given that Allscripts is buying the McKesson hospital software business, can you talk about how often you see Paragon and Sunrise?

And then I guess as a second one related to that, do you have any thoughts on what is likely to happen in the market with that transaction?

Yes.

Great question.

We -- I can't remember the last time we saw -- not Paragon.

What did you say?

Horizon?

It's probably been a decade.

Yes, Sunrise.

Same thing.

With regard to Paragon, we haven't competed head to head with them in a deal or been included with them in a deal.

It's been at least 18 months.

I think the knowledge that, that product was for sale has kind of taken them out of the market in terms of folks buying it as a replacement product.

So head to head, it's been a long time.

How do we think it will affect it?

I don't know what Allscripts is going to articulate today and down the road as far as what their plans are for these Paragon customers.

Obviously, they have a plan.

We have seen, over the last, I would say, 12 months a handful of Paragon sites that were maybe a bit on edge about their future and have entered our sales pipeline.

It remains to be seen what Allscripts plans to do about that.

Okay.

Great.

And then one more question.

Can you run us through your high-level thoughts around how penetrated your TruBridge solutions are in the current client base?

Nathan, this is Chris.

So depending on what service we're talking about, as I said in the prepared comments, we're about 15% on Rycan.

When we look at the Accounts Receivable Management Service, which is our flagship offering, I would say we're closer to 11%.

And then on the Private Pay Services, which is the early out, we're probably right at about 18%.

So there's still a tremendous amount of runway within the customer base on most all of our lines.

Our next question comes from the line of Stuart Goldberg with Litespeed Capital.

A couple of quick questions just for Matt, balance sheet items to clean up.

I wanted to understand the financing receivables a little better, the growth there.

And then the deferred revenues, I know they tend to peak in the first quarter and drift downward in the next 3 quarters.

Do we expect to see the same thing over the next 2 quarters from here?

Yes, Stuart.

So first of all, on the deferred revenue, you're exactly right.

We mentioned on the first quarter earnings call that we saw an increase in deferred revenue due to some annual subscription renewals or build-out in the first quarter, and we don't see anything like that for the remainder of this year.

So we should see just a steady work down of deferred revenue for the rest of the year.

With the financing receivables and the way that impacts the balance sheet, that's all dependent upon the volume at which -- or the demand that we see from our customer base for long-term financing of those solutions.

And that can be -- I don't want to use the word volatile, but it can be variable from period to period.

And during the second quarter of 2017, we saw, of the 9 non-SAAS or non-cloud installs, I believe, 8 of those were long-term finance-type arrangements.

So that level of financing is certainly unusual for us, but that -- is that the explanation you're looking for?

Yes, no, that's fine.

And then cash balances, whenever you have a 1 in front of your cash balance, I always get a little nervous.

And you've always carried low cash balances.

But now we're carrying about $1 million plus, almost $2 million.

Do you not -- I mean, shouldn't we be carrying a little bit higher cash balances for that -- if there's a quarter where we're lighter, something goes wrong?

When it comes to liquidity, we look at our liquidity as coming from 3 sources.

So it's balance sheet cash, cash flow from operations that we project for the next quarter and then also the runway or the dry powder that we have on our revolving credit facility.

And we -- that cash balance, it does have a 1 in front of it, and I'll say that that's, to a certain extent, intentional.

We attempt as much as we can to manage our debt balances to alleviate ourselves from interest burden.

So we feel as though we still have adequate liquidity from cash flow from operations and the revolver, if necessary.

But it doesn't really do us any good to just maintain heavy cash on the balance sheet in an environment where interest rates are increasing on us.

Okay.

And then last question.

The debt-to-EBITDA calculation for your covenants, if I have it correctly, it looks like you're bumping up against it.

Are we asking for relief on that?

Do you think you're going to be much below that?

And it seems to have been getting closer and closer to that 3.5x level.

Even though your quarters have been improving, it looks like we're bumping up against that.

What are we doing about that?

And I believe it bumps down to 3x in December.

So as far as December's number goes, we're over that, but where are we going to be as far as this covenant goes?

Yes.

So the way the covenant math works out, we're going to be fine for this quarter.

So there's not necessarily going to be for Q2 the need for covenant relief.

But admittedly, it is tight due to the kind of the declining trailing 12 months EBITDA that's caused by Q4 and Q1, Q4 of 2016, Q1 of 2017.

So something that we're obviously keeping our eye on, but we have terrific relationships with our banks and relationships that we value and they value.

So we continue to monitor that and worked those relationships.

Our next question comes from the line of Dave Larsen with Leerink Partners.

It's actually Matt, in for Dave.

Just a question on the OpEx.

You said it was heavy in the quarter.

How should we think about that the next few quarters?

Is SG&A going to come down now that the Voluntary Retirement Program is over?

Yes.

So if I were thinking about that sequentially, Matt, $1.3 million of the sequential increase this quarter is going to come out from the Voluntary Retirement Program.

$1.1 million of the sequential increase was from the national client conference that we held, and that's not going to be recurring in the second quarter or the third quarter.

So we should see that come down and normalize.

But that combines to $2.4 million.

So that's $2.4 million of our sequential increase that won't be there next quarter.

Okay, great.

And then SG&A -- or sales and marketing, we should think of steady going forward?

Yes.

I mean, sales and marketing is going to be driven by commission.

So as the forecast for revenue goes, so goes sales and marketing, to a certain extent.

Okay.

And then just one other one.

I don't know if I heard this in prior quarters.

You gave us an update on retention rates.

That's been steady or improving this quarter?

Yes.

I'd say that retention rates for both Evident and Healthland are materially consistent where they -- with what we've been announcing for the last few quarters.

Our next question comes from the line of Sean Mcbride with Robert W. Baird.

I wanted to ask about the competitive environment.

So given your success in winning back a number of these clients that had previously left, how is that changing your dialogue with clients and prospects?

And then with this in mind, has the competitive process at all changed in the dialogue with the competitors?

Yes.

Thanks, Sean.

It certainly has helped (inaudible) in terms of competition with a vendor or 2. That was maybe problematic in the past.

I mean, certainly, when you can point them to and have them have conversations with folks that maybe kind of bought into a sales pitch and the glamor of it, and then once the rubber met the road and they had to have equipment that come in and the docs had to use these and their nurses and their lab techs and their radiologist techs and their billers and their medical records (inaudible) and their cash flow suffered as a result, that's a completely different thing.

So when you can give some current prospects, those folks that have tried and failed with some other systems to talk to, that certainly helps us and it is helping us.

Having said that, no surprise, we've been doing this now for longer than we'd care to admit, 3 decades plus, [it's a] competitive environment out there.

There's a lot of good competitors.

There always have been.

There certainly are right now, and so each deal is extremely competitive.

Our next question comes from the line of Gene Mannheimer from Dougherty & Company.

A question on the BI Dashboard.

What's the -- how would you size that opportunity if every one of your clients were to buy it?

What would that -- what would the add-on opportunity look like?

And is that something that can scale down with the Healthland base and even the AHT base?

Gene, this is Chris.

So I think we talked about it last quarter as well.

Right now, we're still working on getting those early adopters in and continuing to build out the panels that we've got in that offering.

And right now, we have a little incentive going on to help facilitate that.

Right now, projected bookings are somewhere between $35,000 and $50,000.

We have one with the subscription going forward being anywhere from $12,000.

And I think that's pretty consistent for both Evident and Healthland.

We are looking at probably a lighter offering than that as this relates to the fee base.

And so we're still trying to formulate exactly how we want to deliver that just based on their operating margins and their wallet size and making sure that we're providing them what they need.

Obviously not quite as complex and as many offerings needed as we need on the acute space.

So that's something that we're working from a development standpoint for the second half of the year and hopefully prepared to be able to delivering that [during] the first of 2018.

Okay.

Great update, Chris.

And Boyd, you led off the call with some comments around the 8 ACO communities, which sounds interesting.

How, if at all, is that a monetizable event?

How should we be thinking about that?

Yes, that -- or go ahead, Chris.

Okay.

I was going to take that, Gene.

So what we're looking at from a -- how that is going to translate, we should have, as Boyd said, 35 plus hospitals participating in our ACO initiative, right, at 8 ACOs that we're delivering.

We're still working through the number that, that will actually cover, which -- that will then dictate the spend for us and then also the potential for reimbursement.

Starting January of 2018, we'll be collecting $4 per covered life per month from the facility.

And one of those -- and we will add $1 into that as well.

So for every covered life that we have, CPSI will have $1 expense per month.

And we should see reimbursement or revenue opportunities starting in the third quarter of 2019.

So for the first -- for all of 2018 and the first half of 2019, there will be an investment on our side as well as the hospitals, and then we'll start seeing that pay out in the second half of 2019.

But I forget to give you the numbers.

I think we'll be better equipped probably on the next call as we're still ramping up the final parts of these applications and getting the full numbers of the facilities that will be included in the project.

That's terrific.

I'm sorry I missed what you said.

What would the PMPM fee that you would collect be?

We're going to be paying $1 a month, and we'll be collecting $4 per member per month from the facilities.

(Operator Instructions) Our next question comes from the line of Mike Ott with Oppenheimer.

Just curious how the implementation is going on that big $3.1 million TruBridge contract you signed in April.

Or if that's complete at this time?

Yes.

Mike, this is Chris.

We're trucking along with it.

Things are going well, and we continue to see further opportunity with the customer.

It is part of a 5-year deal, so the great news about that is we see that reoccurring over the next several years.

But early indications, everything's going really well.

Obviously, with the size of the deal, we've got a lot of attention and focus on it, so making sure that there's no hiccup.

Great.

And then I believe last call you guys mentioned a couple of implementation delays, the customers had pushed out from Q1 to Q2.

Just wanted to see, were those in the 10 deals you announced this quarter?

Yes, this is Matt.

One of those were.

So on the last call, we guided towards 11 go lives, and the drop down to 10 wasn't as simple a matter.

It's just one slipping.

There were some ins and out there, but the end result was that one site delay.

But yes, so one of the 2 that delayed in the first quarter did install.

The other one slipped to the third.

And there are no further questions on the phone lines.

I'll now turn the call back to the presenters for closing remarks.

Great.

I'd just like to thank everyone for being on the call this afternoon.

I appreciate it, and hope everyone has a great weekend.

Thank you.

And ladies and gentlemen, that does conclude the conference call for today.

We thank you all for your participation and ask that you please disconnect your lines.