TruBridge Inc (TBRG) 2018 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by.

Welcome to the CPSI Fourth Quarter and Year-End 2018 Earnings Conference Call.

(Operator Instructions) As a reminder, this conference is being recorded, Friday, February 15, 2019.

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

Please go ahead.

Thank you, Chris, and good morning, everyone.

Thanks for joining us.

During this call, we may make statements regarding the 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 risk, 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, our Chief Financial Officer.

At the conclusion of our prepared comments, the 2 of us, David Dye and our Chief -- and Chris Fowler, will be available to take any questions you may have.

As we announced in our Q4 results this morning, we are pleased with the solid finish we had in 2018.

This year, TruBridge eclipsed $100 million in revenue and delivered a third consecutive quarter of growth for total bookings, which included $3 million in bookings for our new SaaS offering, nTrust.

Last year, we began positioning nTrust with our current clients as an alternative to their existing license and maintenance model.

We are excited about the level of interest from our base, and we will continue to leverage this SaaS offering to convert our client revenue stream to a subscription model.

TruBridge continues to make strides in their reach outside of the community health care market.

Just one example is the contract we were recently awarded with the University of Louisville Physicians to overhaul their upfront collections process.

This deal is yet another example of the fact that TruBridge has scalable solutions and services for larger health care organizations.

In addition, our EHR base continues to fuel TruBridge, helping them deliver key results for CPSI.

In 2018, TruBridge was awarded the prestigious designation of Peer-Reviewed by HFMA, and earlier this week, they were recognized as a top rank revenue cycle management solutions and consulting services by Black Book Research.

We are very proud of these accolades and view them as independent third-party endorsements that carry real credibility.

Turning to our key EHR business.

There were 18 Centriq and Classic clients that chose to move to our Thrive product in 2018, signifying their loyalty to CPSI and our family of companies.

The acute EHR replacement market continues to experience churn, resulting in 29 net new community hospitals installations in 2018.

Another sound quarter of net new hospital bookings contributed to the 25% growth in total bookings sequentially.

On the AHT front, work continues on our 2-year development plan that we have previously discussed.

Our optimism remains high as we continue to hit internal milestones and also continue to receive positive feedback from the customer base.

Based on regulatory changes in the post-acute space, we see organic growth opportunities for software and for TruBridge in this sector of our business.

As we head into 2019, we are emboldened by our strengthening cash flows with operating cash flows of just over $9 million in the fourth quarter alone and a healthy recurring revenue base.

With a clear line of sight, we will achieve our $10 million set goal of incremental benefit to our bottom line in 2019 based on the 2018 expense exit run rate.

Before I turn the call over to Matt, I will close by reiterating our vision of helping communities thrive through vision, innovation and collaboration.

There are many examples in 2018 of our progress, and we have kicked off 2019 with a strong start.

Just this week, we announced that patients of the Evident community hospitals and clinics can access their health records via health records on iPhone.

This collaboration allows patients to easily see at any time their hospital and clinic medical data organized into one comprehensive and easy-to-understand patient view through the existing Apple Health app.

This is a step toward helping our clients improve the health of their community by increasing the level of engagement with patients outside the walls of their hospital or clinic.

Our shared solution strategy where we are designing and developing applications once to be shared across all of our EHR platforms, continues to gain traction as our efforts are geared toward improving the experience providers have with our solutions across the inpatient, ambulatory and skilled nursing care settings.

Building these solutions with an architecture, which depends upon a suite of containerized microservices, accelerates the process of building functionality, expands future scalability and allows us to bring valuable new solutions and improvements to our clients in a more efficient manner in the near term as well as into the future.

With that, I'd like to turn the call over to Matt.

Thanks, Boyd, and good afternoon, everyone.

As we mentioned in the earnings release, the fourth quarter's 12 new Thrive implementations marked our highest point since 2010 and drove solid results on both the top and bottom lines.

Quarterly revenues of $72.3 million are up 4% sequentially and were the second highest in the history of CPSI, trailing only the fourth quarter of 2017's meaningful use driven results.

Non-GAAP EPS effectively matched last quarter's all-time high and outpaced the fourth quarter of 2017 by 24%.

Adjusted EBITDA grew 28% sequentially and reached the highest point since our acquisition of Healthland.

We're proud to close out 2018 with such a strong quarter with post-acquisition highs in operating, pretax, net and adjusted EBITDA margins with second-best results for non-GAAP net margin.

Operating cash flows for the quarter increased for the third consecutive period to $9.1 million, up nearly 30% sequentially and over 70% from the fourth quarter of 2017.

The combined strengths of our sizable recurring revenue base and cash conversion on existing financing receivables propelled us to our best cash flow period since the first quarter of 2017, all while faced with a $3.5 million further expansion in financing receivables driven by the record new Thrive implementations.

All told, operating cash flows doubled from $7.8 million during the first half of 2018 to $16.1 million during the second half of the year.

These strong operating cash flows, particularly in the second half of the year, allowed for a year-over-year increase in balance sheet cash of $5.2 million, while net payments against long-term debt totaled $11.7 million, including a $5 million advance payment against our revolving credit facility during the fourth quarter.

Reduced debt levels combined with continued EBITDA execution resulted in our leverage ratio, as calculated under the terms of our credit agreement, decreasing from 2.7 to 2.54, just shy of our target of 2.5.

Timing issues aside, we expect this elevated level of cash flows to continue in 2019, with financing receivables no longer expected to be a drag on cash flow for the next 12 months.

Recurring revenues made up 79% of revenues for the period and 81% of trailing 12-month revenues.

Quarterly revenues grew 22 -- 2% sequentially and 3% year-over-year with the full fiscal year showing 5% growth in recurring revenues.

Moving away from the income statement for a moment, total bookings showed impressive growth as well, increasing 25% sequentially and 19% over the fourth quarter of 2017.

TruBridge bookings continued their upward trajectory for the year, posting a third consecutive quarter of growth with bookings that were up 6% sequentially and 41% over the fourth quarter of 2017.

The software side of our business experienced solid bookings performance as well, with increases in nearly all categories, driving a 37% sequential increase, while a $3.1 million MU3 booking headwind dragged the year-over-year quarterly increase down to 11%.

Of the $15.9 million in system sales and support bookings, roughly $2.2 million is included in our fourth quarter revenues.

$9.4 million represents non-subscription sales that should trickle into revenue over the next 12 months, with an average lag between booking and install of 5 to 6 months.

$4.2 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 non-subscription sales and average lag between booking and install of 5 to 6 months.

Our $7.8 million of bookings from TruBridge are nearly all comprised of recurring revenues to be recorded over a 1-year period starting in the next 4 to 6 months.

Twelve customer sites went live with our Thrive acute care product compared to 6 in the previous quarter and 7 in the fourth quarter of 2017.

One of this period's go-lives were under a cloud or subscription model compared to none in either the third quarter of 2018 or the fourth quarter of 2017.

At this time, we expect 6 new client facilities to go live with our Thrive solution in the first quarter of 2019 with one expected to go live in the cloud environment.

Our employee headcount as of December 31 was roughly 2,020, a 1% decrease from the September 30 number.

Turning to the income statement.

TruBridge posted results that were relatively flat sequentially, with revenues up 9% year-over-year for the fourth quarter versus the fourth quarter of 2017, with total fiscal year revenues eclipsing prior year amounts by 13%.

Specific to the quarterly numbers, Accounts Receivable Management and insurance services revenues were the primary drivers of the year-over-year quarterly growth.

Accounts Receivable Management revenues increased 21% year-over-year as hospital clients continue to partner with us for their full business office needs, and insurance services revenues increased 10% as consistently strong bookings for the TruBridge RCM solution are beginning to hit full revenue run rate.

Increased labor cost contributed to a sequential decline in margins from 45% to 43%, while year-over-year quarterly margins improved from 42% to 43%.

System sales and support revenues increased $2.8 million sequentially as the 8-year record number of installations resulted in a $3.2 million increase in net new revenues.

Year-over-year quarterly revenues were down $7.8 million as the $2.7 million increase in net new installation revenues was eclipsed by a $9.2 million decline in MU3-related revenues.

It's worth noting that the fourth quarter of 2017 was a particularly strong period of MU3-related revenue with $12.3 million of revenue for the related applications compared to $3.1 million in the fourth quarter of 2018.

That $12.3 million of MU3 revenue in the fourth quarter of 2017 makes up roughly 43% of total life-to-date MU3 revenue and is nearly 3x the second highest quarter for such revenues, underscoring exactly how outsized an impact this nonrecurring element had on year-over-year comparatives.

To date, we've recognized $28.2 million in MU3-related revenue with live to date bookings of $30.1 million.

Of the remaining $1.9 million of MU3 bookings and backlog, we currently have $1.4 million scheduled for implementation and revenue recognition during the first quarter of 2019.

Our cost of system sales and support were down nearly 6% sequentially as hardware costs declined due to revenue mix.

Costs were down 10% year-over-year as revenue mix resulted in lower hardware costs, a more efficient implementation approach led to reduced travel spend and employee bonus expense decreased $700,000.

The flat sequential cost, coupled with the sequential increase in revenues, resulted in margins improving from 56% to 61%, which were the second highest since our acquisition of Healthland and trailing only the fourth quarter of last year's 63% margins, which were heavily impacted by the aforementioned $12.3 million of high-margin MU3 revenue.

Product development costs were down slightly from the third quarter of 2018 and flat year-over-year as the $400,000 year-over-year decrease in bonus expense has been offset by additional salary costs due to our strategic initiatives designed to improve provider adoption and clinical workflow and rejuvenate our post-acute offering.

Sales and marketing costs increased $400,000 as improved implementation volumes drove commission expense higher, while year-over-year cost decreased $1.8 million due to a $0.5 million decrease in bonus expense and a $1.3 million reduction in commission expense due to the aforementioned decline in MU3 revenues.

General and administrative costs decreased $700,000 from the third quarter due to decreased costs related to severance and other employee benefits with increased health care costs, mostly offset by decreased costs associated with our 401(k) match and paid time off benefits.

Year-over-year costs are down $2.5 million primarily as health care costs and bad debt have normalized from the record high levels reached during the fourth quarter of 2017.

For a bit of perspective, health care claims during the fourth quarter of 2017 were $400,000 higher than the second highest period since the Healthland acquisition, while bad debt expense was $1.1 million higher than the second highest period.

Lastly, our effective tax rate during the quarter, was 4%, primarily as an updated analysis of our state net operating loss carry-forwards resulted in improved estimates regarding future utilization, prompting a $1.1 million beneficial adjustment to the related valuation allowance.

We've obviously, seen a lot of noise in our effective tax rate over the past couple of years with the adoption of 2017's tax reform legislation and the ASC 730 safe harbor directive related to our research and development tax credit.

Assuming no other discrete items, we anticipate an effective tax rate of approximately 17% for 2019 with the ASC 730 safe harbor directive impacting our expectations by 4.5% to 5%.

One year ago, we pointed towards a healthy replacement market, significant long-term growth prospects for TruBridge, continued execution around our MU3 initiatives and the strength of our recurring revenue base as the basis for our optimism in the future of CPSI.

2018's results have proven that optimism to be well founded, and we remain excited for what the future holds at CPSI.

For 2019, we're confident that continued execution around TruBridge and our cost savings initiative will result in continued revenue growth and improved profitability.

And with that, we'd like to open the call up for any questions.

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

Want to start with the backlog.

Maybe if you could give us the split between the recurring and nonrecurring portion.

And then just maybe some commentary on how we can think about the right coverage level for the next 12 months revenue really.

Anything different to call out from typical historical performance versus that metric?

Yes, Jeff.

This is Matt.

So the backlog split as of 12/31 was roughly $228 million for recurring and $29 million on the nonrecurring side.

There was a little bit of a pullback on nonrecurring backlog, which was somewhat to be expected given the work-through of the Meaningful Use 3 backlog during 2018.

Other than that, kind of the status of where we are, backlog-wise versus kind of revenue outlook for 2019 is kind of where we expect things to be.

Got it.

Maybe another one on the revenue front.

You gave the expectation for Q1 installs, which seems quite healthy.

I was hoping you could give us some type of expectation for full year installs versus this past year and the year before.

I know you guys have kind of called out long term that '17 and '18 seemed to represent probably the right expectation for net new installs going forward, but wanted to check in there.

This is David.

The expectation is 28 to 30 net new installs in 2019.

Great, perfect.

So then maybe one more for me, more on the operating expense side of things.

Operating expenses, I think, down 3% for 2018, but down 19% if we look at Q4.

So hoping you could help us understand what in Q4 represents the right run rate going forward or maybe other areas where we should look at the full year as being more representative of future spending.

Yes, this is Matt.

I'd say the Q4 is a pretty good glimpse of where we're starting 2019.

That -- the fourth quarter represents a good kind of run rate, I guess, leaving the year.

There weren't any kind of goofy onetime items that were coming through.

Now that being said, we do have $10 million or so worth of cost savings initiatives that we do intend to execute on during 2019.

So we do expect the cost profile for the company to come out significantly less than where we are right now.

But that's the answer, the Q4 is kind of a good base for exiting the year.

Our next question comes from the line of Mohan Naidu with Oppenheimer.

Congratulations on reaching the $100 million mark on TruBridge.

Just a couple of questions on nTrust.

In the nTrust bookings, do you guys split them between system sales and TruBridge or is it all going to one bucket?

Yes.

So for bookings reporting, there is an allocation of the revenue between the subscription revenues.

So the amounts that we called out related to bookings for the software side that are subscription based, those would include any subscription side of the nTrust deal, with the other side being allocated to the business office services that we provide for TruBridge, so there is an allocation that's performed.

Okay.

Boyd, maybe a question around the replacement market.

You said -- you gave us some comments around there.

What is driving the cost [pulls] now to still look at replacements without any regulatory, I guess, pressures on them, on the changes?

I would say the major driver is and has been for a while now physicians and their satisfaction with the system.

Again, there's still a lot of people that made -- are a lot of hospitals that made not good long-term decisions with Meaningful Use.

And so coming out of Meaningful Use, they realized that whatever solution they're on is not a good long-term solution.

Physicians aren't happy, other caregivers aren't happy and that's why they're looking mainly.

I think others -- I think cost can be a factor.

Maybe there were -- it's costing more than what the vendor initially implied and/or overall overhead to run a system, so things like that, but mainly dissatisfaction on the users.

Maybe last one, Matt, to your earlier comments to Jeff.

The $10 million cost synergies going into '19, should we think about that as looking at 2018 expenses and taking out $10 million out of that into '19 in the face of a flat or up-ish revenue growth?

Or how should we think about a $10 million savings going into '19?

Yes.

So the $10 million represent savings we're going to execute on throughout the year, and the overwhelming majority of those will be actually realized during the year.

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

Matt, it seems like the cost reduction efforts, I thought it was -- you had $10 million of savings as you exit 2018, so that would manifest in 2019.

It appears to me like you're not done yet and you're still going to go after even more [market cost reduction] in 2019, is that correct?

And can you give us any sort of color around what you would like to see personally in terms of like long-term either EBITDA or gross margin expansion context?

Yes.

So David, your line was breaking up a little bit on me.

Perhaps I was the only one that was getting that interference.

But I think I heard your question well.

The $10 million is still a pretty solid number for where we think that we're going to land year-over-year cost reduction-wise 2018 to 2019.

We've identified the steps that we have to take.

And in many cases, we already kind of decisioned those and are now just kind of waiting for the benefits to start flowing through.

And when it comes to long term where we'd like to see particularly EBITDA margins land, I think we've stated previously that 20% is, we think, is a healthy EBITDA margin profile for our business, and that's our target, to reach that level and sustain it naturally.

Obviously, we reached that level this past quarter on the heels of some heavy nonrecurring revenues, but the idea is to strip some cost out of the system so that we're not overly reliant on nonrecurring revenues to get us to that target.

Our next question comes from the line of Donald Hooker with KeyBanc.

Question on sort of the MU3 bookings and revenue, I just want to make sure I understand.

How much of your client base overall has taken advantage of that opportunity or has taken advantage of that?

So is there any leakage?

I mean, you gave guidance for 1Q '19 of I think $1.4 million revenue there.

But is there any chance you get some revenue from that in the following quarters?

Yes.

This is David.

About 65% of our clients have taken advantage of it.

The remaining, there's -- approximately 20% to 25% of our customer base wouldn't attest for MU3 because of their status as a facility, maybe they're a specialty facility, behavioral, et cetera.

The remaining in the numbers that we're thinking going forward, being pretty conservative.

There's some hospitals that have decided to take the penalty at this point.

Of course, that could change.

So yes, there is opportunity beyond just this quarter, but it's a relative unknown at this point.

Got you.

And in the software and -- in the system sales and support line, I guess, I'll see it in the K, but what is the recurring revenue in that, of the $47.2 million?

Yes.

So it looks like $33 million of recurring revenue from system sales and support for the period.

Okay, got you.

Maybe just -- maybe a last one.

Just thinking about the Healthland acquisition from a few years back.

Can you just update us in terms of -- I assume a lot of the migrations are done.

Are there any remaining sort of legacy users of, I guess, Classic or whatever left?

Are there any -- are sort of most of the migrations done?

Donald, there's about 15 Healthland Classic sites that are left that are potential for migrations.

Got you.

Why would they stay on?

I mean, is there a reason why they stay on Classic?

They are just comfortable with it?

Yes, they're comfortable with it.

It works.

There is some expense in transitioning.

As comfortable as we try to make that for them, obviously, there's expense in conversion, et cetera.

So that would be the primary reasons, that there -- the 15 are left.

Our next question comes from the line of Jonathan Bentley with SVB Leerink.

I just had one question to follow up after Dave's question earlier.

I think last quarter, you had talked about having 13 implementations scheduled for fourth quarter, and I think I heard that you guys had actually 12 occur.

Is that correct that one got pushed?

And why did that get pushed if it is the case?

Yes.

This is Matt, Jonathan.

The pushes that we've been seeing all throughout the year, and the fourth quarter push is really no difference here, has been with start-up facilities with our implementation and go-live heavily reliant upon a number of different kind of balls lining up in place, including they're getting provider numbers and things like that.

So that's effectively all of our -- every time we've had a slip from one quarter to the next, that's kind of been the answer and that's what happened in Q4 as well.

Okay.

You don't -- do you expect that those pushes will then be implemented in the future?

Or are these -- any deals that are actually getting hung up?

No.

So these aren't hung up deals.

These are just deals that are -- I mean, they're -- we certainly -- they're on our implementation calendar right now for 2019.

There's a particular hospital, I can't remember exactly whether it's in Q1 or early Q2 now.

But it's -- as far as any slippage off of our radar completely, that's not something that we typically see.

Our next question comes from the line of Sean Wieland with Piper Jaffray.

Curious if you have any initial reactions to ONC's proposed regs on embracing of higher standards and information blocking that came out earlier this week.

How do you think that impacts how you're going to market?

And as well as more broadly for the industry, what you think the effects of that will be?

Yes, Sean.

From a development perspective, certainly it's a lift for us.

As has been the case in the past, typically, new regulations and things like that from ONC or whoever are typically good for us because it drives some of the smaller players here out of the market or where they can't comply.

And so -- and their customers see that and look to us because they've got the confidence in us that we will meet those regulations.

It certainly will affect our road map for our future, things that we were planning on doing.

But that's part of what we do and kind of normal course of business to have these type of things happen.

So we view it as a positive.

I think it's good for industry.

It will be interesting to see how that aligns with what we're doing with CommonWell and how that comes into play.

But we certainly welcome the change and look forward to the final rule.

Okay.

And just a quick one, what percentage of the TruBridge bookings was from within your base versus outside your base?

Sean, this is Chris.

Just a bit of a slag on that, I would say probably 85%, 90% in Q4.

Is within your base?

Yes.

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

I guess, maybe real quick, on TruBridge, the gross margin kind of trended down over the course of the year.

I suspect you guys may have been doing some hiring late in the year for business that you think is going to ramp early this year.

Could you just talk about how we should think about the gross margin there?

It's kind of bounced from the low 40s to the mid-40s, depending on what quarter you look at.

If you could start there, that would be great.

This is Chris.

So the margins for TruBridge overall, we anticipate staying in that 43% to 46% overall.

A lot of that depends though on where the growth comes from.

On the TruBridge RCM side, obviously, our -- we have much higher margins.

We're in the 70%, whereas in the Accounts Receivable service, which is our -- 35% of the business, those margins are about 30%.

We aren't -- that's where we're probably seeing the trend a little bit down on that.

And a little bit of that is just based on our hiring philosophy, changing to where -- we're going to a little bit more of a remote staff, more senior employees that are a little more efficient in the operation that they can run.

So we feel confident we hold that number at about 30% for the arms.

And so again, a little bit dependent on what the mix looks like in the services, but feel confident for 2019 overall margins in that 45% range.

And then maybe just a quick one on the balance sheet.

I think Matt said you guys are basically at about 2.5 turns net debt to trailing EBITDA.

And I think last quarter, you said that was kind of your target and it was possible that once you hit that level, you might either get a little more aggressive at investing in the technology platform or maybe start to do some more tuck-in acquisitions.

Can you just give us an update on your thoughts about the balance sheet now and potential M&A kind of as we go through 2019?

Yes, Jamie, you're right.

It was exactly a year ago that we identified the target of 2.5, and as you know, we're right there.

I think we've made commentary throughout the year that we continue to look at potential tuck-in acquisitions, especially those that we think could help accelerate our TruBridge growth, and we continue to do that.

(Operator Instructions) Our next question comes from the line of Stephanie Demko with Citi.

Just a quick one coming out of HIMS.

Can you talk to some of the areas of client demand that may have surprised you in some of the foot traffic in the booths?

I don't know that there were any huge surprises from it.

HIMS, I would call it the typical HIMS.

Frankly, we don't get a lot of traffic from either existing customers or potential customers.

And typically, in our market, they just can't afford to come to something like that.

And we certainly encourage them if they're going to spend travel dollars to come to our user conference that's in May to get a lot more benefit out of it.

So it's the usual, you do get a flavor of international at HIMS.

But whether any of that will really ever pan out, you don't know.

But you usually get some foot traffic related to that, and we did get some of that again this year.

I'll add to that too.

I mean, I think -- and it's a focus of ours.

I think there's increased chatter.

And at HIMS every year, there's something that sort of goes to the next level, and I think that this year is patient engagement and the future of that.

And we certainly saw that and it's something that we're thinking heavily about.

I hear that.

And so I mean, I guess, beyond being jealous of clients that don't have to go to HIMS, is there any thought on the patient engagement side if that is a potential area of M&A now that you have freed up some cash in the balance sheet?

Or would that be more of an internal investment project?

We look at it both ways.

Certainly, we've already got some functionality there that we are in the process of continually enhancing.

And as in anything with regard to how it could help us grow the -- our services business going forward, from an M&A perspective or from a development perspective, that's something that we're heavily invested in.

And that's all provided in the prepared comments obviously.

The press release we just announced with Apple is a step in that direction.

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

Congrats on a good finish to the year.

With respect to TruBridge, guys, I think in the past, Boyd, you've discussed your targets of mid-teens growth for that business.

We saw about 9% growth in the back half of the year.

So just want to try to reconcile what gives you the confidence that we can get there this year to that mid-teens number.

I do note a really positive bookings number in the fourth quarter.

So is that kind of what gives you that comfort level?

This is Chris, that's exactly right.

I mean, what we're seeing, I think, Boyd's comments spoke to it from an nTrust standpoint.

Obviously, that's one of the largest drivers for that number.

Year-over-year, we were at 13% growth from '18 to -- or from '17 to '18.

So with the optimism around nTrust, what's already booked and to be implemented this year and also what the pipeline looks like, feel pretty good about that mid-teen growth again.

Okay, excellent.

And with respect to nTrust, really exciting model there.

I'm just curious to date how many clients have opted for that, and if you have any expectation for what conversion might look like going forward.

Would you think 10% of the base or 20% of the base would opt for this model?

So first question, the number is 10 so far.

And it's hard to put a pin on it.

I would love to say we'd see getting upwards of 50% of the base that would go to this model.

I think David and Boyd have both said it in calls in the past that we anticipate one day where people won't be running their own business offices, that virtually all hospitals will outsource the business office.

So yes, we feel like we're positioned to get the vast majority of that for the CPSI base.

So I think 2019 will be a telling year for what we think will give us an opportunity to have a little more insight into what that looks like going forward.

But again, the pipeline is strong both from an internal customer base conversion to that model as well as the net new deals.

Well, I mean, that's terrific.

So my last question would be then on that is, can you talk about maybe the revenue lift for a customer to go from a license model today to an nTrust model?

What does that look like in terms of wallet share, so to speak?

So there's one variable in there that is contingent on the software that they've purchased to date.

Obviously, converting them from a perpetual license into that SaaS model.

But from a pure TruBridge standpoint, the number is on average $400,000 of additional revenue that we would see.

So just if you want to take a baked number all the way from a customer, a current customer going from the license model to nTrust, probably $0.5 million a year.

And there are no further questions on the phone lines at this time.

Mr. Douglas, I'll turn the presentation back to you.

Yes, I want to thank everyone for being on the call this morning.

Obviously, we're excited with the way we ended the year and are looking forward to a great 2019.

So thank you for being on the call and hope everyone has a great weekend.

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

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