SEGMENT REPORTING

6 Months Ended

Jun. 30, 2017

Our chief operating decision makers ("CODM") utilize three operating segments, "Acute Care EHR", "Post-acute Care EHR" and "TruBridge", based on our three distinct business units with unique market dynamics and opportunities. Revenues and cost of sales are primarily derived from the provision of services and sales of our proprietary software, and our CODM assess the performance of these three segments at the gross profit level. Operating expenses and items such as interest, income tax, capital expenditures and total assets are managed at a consolidated level and thus are not included in our operating segment disclosures. Our CODM group is comprised of the Chief Executive Officer, Chief Growth Officer, Chief Operating Officer, and Chief Financial Officer. Accounting policies for each of the reportable segments are the same as those used on a consolidated basis.

As of January 1, 2017, the operating segment formerly identified as "TruBridge, Rycan, and Other Outsourcing" is now identified as "TruBridge".

The following table presents a summary of the revenues and gross profits of our three operating segments for the three and six months ended June 30, 2017 and 2016:



	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2017			2016			2017			2016
Revenues:
Acute Care EHR	$	39,394		$	40,754		$	76,525		$	83,494
Post-acute Care EHR	6,080			6,965			12,372			13,934
TruBridge	22,203			20,696			42,854			40,630
Total revenues	$	67,677		$	68,415		$	131,751		$	138,058

Cost of sales:
Acute Care EHR	$	16,836		$	19,364		33,753			39,250
Post-acute Care EHR	2,023			2,522			4,036			4,903
TruBridge	11,933			11,616			23,520			22,903
Total cost of sales	$	30,792		$	33,502		$	61,309		$	67,056

Gross profit:
Acute Care EHR	$	22,558		$	21,390		42,772			44,244
Post-acute Care EHR	4,057			4,443			8,336			9,031
TruBridge	10,270			9,080			19,334			17,727
Total gross profit	$	36,885		$	34,913		$	70,442		$	71,002

Corporate operating expenses	$	(32,437	)	(29,650		)	(62,761		)	(64,963		)
Other income	70			69			140			68
Interest expense	(1,938		)	(1,642		)	(3,745		)	(3,110		)
Income before taxes	$	2,580		$	3,690		$	4,076		$	2,997