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SEGMENT REPORTING | 9 Months Ended
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Sep. 30, 2022
Segment Reporting [Abstract] |
SEGMENT REPORTING | SEGMENT REPORTING Our chief operating decision makers ("CODM") utilize three operating segments, "TruBridge," "Acute Care EHR," and "Post-acute Care EHR" based on our three distinct business units with unique market dynamics and opportunities. These segments represent the components of the Company for which separate financial information is available that is utilized on a regular basis by the CODM in assessing segment performance and in allocating the Company's resources. Management evaluates the performance of the segments based on revenues and adjusted EBITDA. The Company previously evaluated the performance of the segments based on segment gross profit. Management believes adjusted EBITDA is a useful measure to assess the performance and liquidity of the Company as it provides meaningful operating results by excluding the effects of expenses that are not reflective of its operating business performance. Our CODM group is comprised of the Chief Executive Officer, Chief Growth Officer, and Chief Financial Officer. Accounting policies for each of the reportable segments are the same as those used on a consolidated basis. Adjusted EBITDA consists of GAAP net income as reported and adjusts for (i) deferred revenue purchase accounting adjustments arising from purchase allocation adjustments related to business acquisitions; (ii) depreciation expense; (iii) amortization of software development costs; (iv) amortization of acquisition-related intangible assets; (v) stock-based compensation; (vi) severance and other non-recurring charges; (vii) interest expense and other, net; (viii) gain (loss) on contingent consideration; and (ix) the provision for income taxes. There are no intersegment revenues to be eliminated in computing segment revenue. The CODM do not evaluate operating segments nor make decisions regarding operating segments based on assets. Consequently, we do not disclose total assets by reportable segment. The following table presents a summary of the revenues and adjusted EBITDA of our three operating segments for the three and nine months ended September 30, 2022 and 2021:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) | 2022 |  | 2021 |  | 2022 |  | 2021
Revenues by segment: |  |  |  |  |  |  |
TruBridge | $ | 47,878 |  |  | $ | 34,531 |  |  | 139,569 |  |  | 98,736 |
Acute Care EHR |  |  |  |  |  |  |
Recurring revenue | 27,237 |  |  | 26,776 |  |  | $ | 81,333 |  |  | $ | 80,792 |
Non-recurring revenue | 3,500 |  |  | 4,350 |  |  | 9,467 |  |  | 13,786 |
Total Acute Care EHR revenue | 30,737 |  |  | 31,126 |  |  | 90,800 |  |  | 94,578 |
Post-acute Care EHR |  |  |  |  |  |  |
Recurring revenue | 3,817 |  |  | 4,010 |  |  | 11,504 |  |  | 12,402 |
Non-recurring revenue | 395 |  |  | 424 |  |  | 1,551 |  |  | 913 |
Total Post-acute Care EHR revenue | 4,212 |  |  | 4,434 |  |  | 13,055 |  |  | 13,315 |
Total revenues | $ | 82,827 |  |  | $ | 70,091 |  |  | $ | 243,424 |  |  | $ | 206,629 |
Adjusted EBITDA by segment: |  |  |  |  |  |  |
TruBridge | 8,060 |  |  | 6,840 |  |  | 27,609 |  |  | 20,216 |
Acute Care EHR | 4,584 |  |  | 4,773 |  |  | 13,915 |  |  | 15,650 |
Post-acute Care EHR | 705 |  |  | 624 |  |  | 1,147 |  |  | 2,487 |
Total adjusted EBITDA | $ | 13,349 |  |  | $ | 12,237 |  |  | $ | 42,671 |  |  | $ | 38,353 |
The following table reconciles net income from continuing operations to adjusted EBITDA:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) | 2022 |  | 2021 |  | 2022 |  | 2021
Net income from continuing operations, as reported | $ | 2,161 |  |  | $ | 2,744 |  |  | 13,350 |  |  | 13,029 |
Deferred revenue and other acquisition-related adjustments | — |  |  | 388 |  |  | 109 |  |  | 546 |
Depreciation expense | 622 |  |  | 525 |  |  | 1,890 |  |  | 1,641 |
Amortization of software development costs | 1,024 |  |  | 262 |  |  | 2,283 |  |  | 527 |
Amortization of acquisition-related intangibles | 4,486 |  |  | 3,674 |  |  | 12,917 |  |  | 10,114 |
Stock-based compensation | 1,864 |  |  | 1,700 |  |  | 5,284 |  |  | 4,179 |
Severance and other non-recurring charges | 410 |  |  | 1,157 |  |  | 1,671 |  |  | 4,163 |
Interest expense and other, net | 1,416 |  |  | 702 |  |  | 3,255 |  |  | 1,089 |
(Gain)/Loss on contingent consideration | 589 |  |  | — |  |  | (992) |  |  | — |
Provision for income taxes | 777 |  |  | 1,085 |  |  | 2,904 |  |  | 3,065 |
Total adjusted EBITDA | $ | 13,349 |  |  | $ | 12,237 |  |  | $ | 42,671 |  |  | $ | 38,353 |
Certain of the items excluded or adjusted to arrive at adjusted EBITDA are described below: •Deferred revenue and other acquisition-related adjustments - Deferred revenue and other acquisition-related adjustments includes acquisition-related deferred revenue adjustments, which reflect the fair value adjustments to deferred revenues acquired in business acquisitions. The fair value of deferred revenue represents an amount equivalent to the estimated cost plus an appropriate profit margin, to perform services related to the acquiree's software and product support, which assumes a legal obligation to do so, based on the deferred revenue balance as of the acquisition date. We add back deferred revenue and other adjustments for adjusted EBITDA because we believe the inclusion of this amount directly correlates to the underlying performance of our operations. •Amortization of acquisition-related intangibles - Acquisition related amortization expense is a non-cash expense arising primarily from the acquisition of intangibles in connection with acquisitions or investments. We exclude acquisition-related amortization expense from adjusted EBITDA 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. •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 adjusted EBITDA 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. •Severance and other non-recurring 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 non-recurring lease termination costs) and transaction-related costs from adjusted EBITDA 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.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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