Computer Programs and Systems, Inc. Announces Third Quarter 2008 Results

Computer Programs and Systems, Inc. (NASDAQ: CPSI):

Company Declares Regular Quarterly Dividend of $0.36 Per Share

Highlights:

• Revenues of $30.4 million for the third quarter;
• Earnings per diluted share of $0.38;
• Cash flow from operations of $2.8 million; and
• Quarterly dividend of $0.36 per share.

Computer Programs and Systems, Inc. (NASDAQ: CPSI), a leading provider of healthcare information solutions, today announced results for the third quarter and nine months ended September 30, 2008.

The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.36 (thirty-six cents) per share, payable on November 21, 2008, to stockholders of record as of the close of business on November 6, 2008.

Total revenues for the third quarter ended September 30, 2008, increased 8.4% to $30.4 million, compared with total revenues of $28.0 million for the prior-year period. Net income for the quarter ended September 30, 2008, increased 26.8% to $4.1 million, or $0.38 per diluted share, compared with $3.2 million, or $0.30 per diluted share, for the quarter ended September 30, 2007. Cash flow from operations for the third quarter of 2008 was $2.8 million, compared with $4.3 million for the prior-year period.

Commenting on the results, Boyd Douglas, chief executive officer and president of CPSI, stated, "Our strong performance continued in the third quarter, driven by demand and the compelling value proposition we offer our customers. In addition, feedback from the community hospital marketplace suggests that there is still a high degree of interest in our products and services in spite of national economic conditions. As our guidance for the fourth quarter indicates, we expect a continuation of the positive trends that have contributed to our strong performance throughout the year. As a result, we remain confident about the rest of the year and cautiously optimistic about 2009.”

Total revenues for the nine months ended September 30, 2008, increased 7.0% to $87.6 million, compared with total revenues of $81.9 million for the prior-year period. Net income for the nine months ended September 30, 2008, increased 16.5% to $10.6 million, or $0.98 per diluted share, compared with $9.1 million, or $0.85 per diluted share, for the nine months ended September 30, 2007. Cash provided from operations for the nine months ended September 30, 2008, was $12.3 million, compared with $12.9 million for the same period last year.

For the fourth quarter of 2008, the Company anticipates total revenues of $30.5 million to $32.0 million and net income of approximately $4.5 million to $4.7 million, or $0.41 to $0.43 per diluted share. CPSI’s 12-month backlog as of September 30, 2008, was $98.9 million, consisting of $23.2 million in non-recurring system purchases and $75.7 million in recurring payments for support, outsourcing, ASP and ISP contracts.

A listen-only simulcast and replay of CPSI’s third quarter 2008 conference call will be available on-line at www.cpsinet.com and www.earnings.com on October 24, 2008, beginning at 9:00 a.m. Eastern Time.

About Computer Programs and Systems, Inc.

CPSI is a leading provider of healthcare information solutions for community hospitals with over 640 client hospitals in 46 states. Founded in 1979, the Company is a single-source vendor providing comprehensive software and hardware products, complemented by complete installation services and extensive support. Its fully integrated, enterprise-wide system automates clinical and financial data management in each of the primary functional areas of a hospital. CPSI’s staff of over 700 technical, healthcare and medical professionals provides system implementation and continuing support services as part of a comprehensive program designed to respond to clients’ information needs in a constantly changing healthcare environment. For more information, visit www.cpsinet.com.

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 estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and future financial 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: overall business and economic conditions affecting the healthcare industry; saturation of our target market and hospital consolidations; changes in customer purchasing priorities and demand for information technology systems; competition with companies that have greater financial, technical and marketing resources than we have; failure to develop new technology and products in response to market demands; fluctuations in quarterly financial performance due to, among other factors, timing of customer installations; failure of our products to function properly resulting in claims for medical losses; government regulation of our products and customers, including changes in healthcare policy affecting Medicare reimbursement rates; interruptions in our power supply and/or telecommunications capabilities 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. 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.