Computer Programs and Systems Inc. (CPSI) on Wednesday announced approval of a stock repurchase program by its Board of Directors.
The program will allow the company likely to be repurchasing of up to a sum of $30 million of common stock shares outstanding. The repurchase will be done making purchases from open market, private negotiations or otherwise according to Rule 10b-18 of the Securities Exchange Act of 1934.
The stocks repurchasing transactions will not be made immediately but time to time. The company will repurchase stock over next two year subject to market conditions. As this program will result in value enhancement of company’s stock, the Board decided not to pay quarterly dividends indefinitely.
The company remains following strategy of allocating capital while growing in past few years. Current move by the company is based on that capital allocation strategy to make better and beneficial use of capital. The company successfully reduced its debts and refinanced its credit facility on more positive terms. That has helped the company to achieve the desired level of flexibility. Even in the face of COVID-19 impact, company’s operation remained generating significant cash flow. That enables the company to be well-aligned to utilize capital in a way more beneficial for the stakeholders.
CPSI’s long history of dividends highlights that it values distributing of capital to stockholders, Boyd Douglas, President and Chief Executive Officer. Now the company has secured its desired level of flexibility in capital. This will help company to pursue multi-dimension capital allocation strategy. Through this company will repurchase stock while maintaining sufficient capital. Which will used to make further investments and to enter into acquisition deals to make its position stronger. This will also allow the company to cater with the needs of its customer base but to further excel for the benefit of stockholders, Douglas commented.