First Quarter Revenues $6.3 Million; ($0.6 Million Net Loss); $0.6 Million Adjusted EBITDA
ATLANTA, June 6, 2018 /PRNewswire/ -- Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of integrated solutions, technology-enabled services and analytics supporting revenue cycle optimization for healthcare enterprises in the new value-based world, today announced financial results for the first quarter of fiscal year 2018, which ended April 30, 2018.
Revenues for the three-month period ended April 30, 2018 were $6.3 million, an increase of approximately 6% as compared to the three-months ended April 30, 2017. Adjusted EBITDA for the first quarter of fiscal 2018 was approximately $0.6 million, a substantial improvement over the $400,000 loss in the first quarter a year ago. Net loss for the first quarter of fiscal 2018 was approximately $569,000, a substantial improvement over the $2.0 million net loss in the same period a year ago.
"Our first quarter performance was very solid as we began to realize the benefits of focusing our selling efforts on solutions in the middle of the revenue cycle to help our clients capture the financial reimbursement they deserve for the patient care they provided. Bookings in the quarter improved significantly to $3.4 million as we sold Abstracting, Clinical Documentation Integrity and eValuator solutions to current and new clients," stated David Sides, President and Chief Executive Officer, Streamline Health. "Our continued focus on tighter cost controls delivered improved bottom line results as well. Total operating expenses decreased by approximately 15 percent as compared to first quarter a year ago reducing operating loss in the quarter to approximately $363,000, down from last year's first quarter operating loss of $1,874,000. And net loss for the first quarter was approximately $569,000, a marked improvement over a $2 million loss in the first quarter of last year."
"We remain committed to leading an industry movement to improve hospitals' financial performance by moving mid-cycle billing interventions upstream - to improve coding accuracy before billing, enabling our clients to reduce lost revenue, mitigate overbill risk, and reduce denials and days in accounts receivable."
Highlights for the first quarter ended April 30, 2018 included:
- Revenues for the first quarter of 2018 were $6.3 million;
- Adjusted EBITDA for the first quarter of 2018 was $0.6 million;
- Net loss for the first quarter of 2018 was $569,000;
- New sales bookings for the first quarter of 2018 were $3.4 million; and
- Backlog at the end of the first quarter was $26.1 million.
The Company is planning to file its Form 10-Q for the first fiscal quarter during the week of June 11th.
The Company also announced the impending departure of its Chief Financial Officer, Nicholas Meeks, who will remain with the Company through June 15, 2018. Mr. Meeks is leaving the Company to pursue another opportunity with another company based in the Atlanta market. The Company is actively seeking his replacement and has begun interviewing potential candidates to fill this position.
Conference Call Information
The Company will conduct a conference call to review the results on Thursday, June 7, 2018 at 9:00 AM ET. Interested parties can access the call by joining the live webcast: click here to register. You can also join by phone by dialing 800-263-0877 and then entering passcode 7132733.
A replay of the conference call will be available from Thursday, June 7, 2018 at 12:00 PM ET to Tuesday, June 12, 2018 at 12:00 PM ET by dialing 888-203-1112 and entering passcode 7132733.
*Non-GAAP Financial Measures
Streamline Health reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). Streamline Health's management also evaluates and makes operating decisions using various other measures. One such measure is adjusted EBITDA, which is a non-GAAP financial measure. Streamline Health's management believes that this measure provides useful supplemental information regarding the performance of Streamline Health's business operations.
Streamline Health defines "adjusted EBITDA" as net earnings (loss) plus interest expense, tax expense, depreciation and amortization expense of tangible and intangible assets, stock-based compensation expense, significant non-recurring operating expenses, and transactional related expenses including: gains and losses on debt and equity conversions, associate severances and related restructuring expenses, associate inducements, and professional and advisory fees. A table reconciling this measure to net income is included in this press release.
About Streamline Health
Streamline Health Solutions, Inc. (NASDAQ: STRM) is a healthcare industry leader in capturing, aggregating, and translating enterprise data into knowledge - producing actionable insights that support revenue cycle optimization for healthcare enterprises. We deliver integrated solutions, technology-enabled services and analytics that empower providers to drive revenue integrity in a value-based world. We share a common calling and commitment to advance the quality of life and the quality of healthcare - for society, our clients, the communities they serve, and the individual patient. For more information, please visit our website at www.streamlinehealth.net.
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995
Statements made by Streamline Health Solutions, Inc. that are not historical facts are forward-looking statements that are subject to certain risks, uncertainties and important factors that could cause actual results to differ materially from those reflected in the forward-looking statements included herein. Forward-looking statements contained in this press release include, without limitation, statements regarding the Company's estimates of future revenue, backlog, results of investments in sales and marketing, success of future products and related expectations and assumptions. These risks and uncertainties include, but are not limited to, the timing of contract negotiations and execution of contracts and the related timing of the revenue recognition related thereto, the potential cancellation of existing contracts or clients not completing projects included in the backlog, the impact of competitive solutions and pricing, solution demand and market acceptance, new solution development and enhancement of current solutions, key strategic alliances with vendors and channel partners that resell the Company's solutions, the ability of the Company to control costs, availability of solutions from third party vendors, the healthcare regulatory environment, potential changes in legislation, regulation and government funding affecting the healthcare industry, healthcare information systems budgets, availability of healthcare information systems trained personnel for implementation of new systems, as well as maintenance of legacy systems, fluctuations in operating results, effects of critical accounting policies and judgments, changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other similar entities, changes in economic, business and market conditions impacting the healthcare industry generally and the markets in which the Company operates and nationally, and the Company's ability to maintain compliance with the terms of its credit facilities, and other risks detailed from time to time in the Streamline Health Solutions, Inc. filings with the U. S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revision to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.
Company Contact:
Randy Salisbury
SVP, Chief Marketing Officer
(404) 229-4242
randy.salisbury@streamlinehealth.net
STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
April 30,
---------
2018 2017
---- ----
Revenues:
Systems sales $1,131,674 $378,723
Professional
services 238,314 420,035
Audit Services 359,713 345,019
Maintenance
and support 3,309,104 3,354,772
Software as a
service 1,224,368 1,425,132
Total revenues 6,263,173 5,923,681
--------- ---------
Operating
expenses:
Cost of
systems sales 249,984 566,051
Cost of
professional
services 706,230 715,215
Cost of audit
services 393,979 440,639
Cost of
maintenance
and support 648,339 806,522
Cost of
software as a
service 316,387 339,376
Selling,
general and
administrative 3,249,057 3,373,528
Research and
development 1,062,319 1,556,938
--------- ---------
Total
operating
expenses 6,626,295 7,798,259
---------
Operating loss (363,122) (1,874,588)
Other income
(expense):
Interest
expense (116,218) (127,268)
Miscellaneous
income
(expenses) (87,645) (38,044)
Loss before
income taxes (566,985) (2,039,900)
Income tax
benefit
(expense) (1,714) (2,608)
------ ------
Net Income
(Loss) $(568,699) $(2,042,508)
===========
Net loss per
common share
- basic and
diluted $(0.03) $(0.10)
======
Weighted
average
number of
common shares
- basic and
diluted 19,986,425 19,695,390
========== ==========
STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Assets
April 30, January 31,
--------- -----------
2018 2018
---- ----
Current assets:
Cash
and
cash
equivalents $3,745,532 $4,619,834
Accounts
receivable, net
of allowance
for doubtful 2,819,849 3,001,170
accounts of
$323,524 and
$349,058,
respectively
Contract
receivables 923,274 223,791
Prepaid hardware
and third-
party software
for future
delivery -- 5,858
Prepaid client
maintenance
contracts 555,689 506,911
Other prepaid
assets 608,363 742,232
Other current
assets 545,431 546,885
------- -------
Total current
assets 9,198,138 9,646,681
--------- ---------
Non-current
assets:
Property and
equipment:
Computer
equipment 2,831,024 2,852,776
Computer
software 730,950 730,950
Office
furniture,
fixtures and
equipment 683,443 683,443
Leasehold
improvements 729,348 729,348
------- -------
4,974,765 4,996,517
Accumulated
depreciation
and
amortization (3,981,311) (3,834,153)
---------- ----------
Property and
equipment, net 993,454 1,162,364
Contract
Receivables,
less current
portion 686,658 --
Capitalized
software
development
costs, net of 4,717,986 4,307,351
accumulated
amortization of
$18,973,594 and
$18,658,183, respectively
Intangible
assets, net 5,600,204 5,835,151
Goodwill 15,537,281 15,537,281
Other non-
current assets 577,570 642,226
------- -------
Total non-
current assets 28,113,153 27,484,373
---------- ----------
$37,311,291 $37,131,054
STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Liabilities and Stockholders' Equity
April 30, January 31,
--------- -----------
2018 2018
---- ----
Current liabilities:
Accounts
payable $1,344,377 $421,425
Accrued compensation 829,062 342,351
Accrued other expenses 766,353 609,582
Current portion of
long-term debt 596,984 596,984
Deferred revenues 7,301,408 9,481,807
Total current
liabilities 10,838,184 11,452,149
---------- ----------
Non-current
liabilities:
Term loan, net of
deferred financing
cost of $110,541 and
$128,275, respectively 3,769,840 3,901,353
Royalty liability 2,518,068 2,469,193
Lease incentive
liability, less
current portion 254,933 274,128
Deferred revenues, less
current portion 181,877 332,645
Total non-current
liabilities 6,724,718 6,977,319
--------- ---------
Total liabilities 17,562,902 18,429,468
---------- ----------
Series A 0% Convertible
Redeemable Preferred
Stock, $.01 par value
per share, $8,849,985
redemption and
liquidation value,
4,000,000 shares
authorized, 2,895,464
and 2,949,995 issued
and outstanding,
respectively, net of 8,686,392 8,849,985
Stockholders' equity:
Common stock, $.01 par
value per share,
45,000,000 shares
authorized; 20,034,446
and 20,005,977 shares
issued and
outstanding,
respectively 200,344 200,060
Additional paid in
capital 82,115,469 81,776,606
Accumulated deficit (71,253,816) (72,125,065)
----------- -----------
Total stockholders'
equity 11,061,997 9,851,601
---------- ---------
$37,311,291 $37,131,054
STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended,
April 30, April 30,
2018 2017
---- ----
Operating activities:
Net loss $(568,699) $(2,042,508)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities,
net of acquisitions:
Depreciation 171,215 202,782
Amortization of capitalized
software development costs 315,412 571,428
Amortization of intangible
assets 234,947 333,057
Amortization of other deferred
costs 119,910 100,815
Valuation adjustment for
warrants liability -- (31,210)
Share-based compensation
expense 222,458 267,174
Other valuation adjustments 51,142 48,467
Loss (Gain) on disposal of fixed
assets (1,555) (720)
Provision for accounts
receivable (7,851) 187,134
Changes in assets and
liabilities, net of assets
acquired:
Accounts and contract
receivables (446,246) 618,647
Other assets 43,207 (97,889)
Accounts payable 922,952 (240,403)
Accrued expenses 622,020 382,530
Deferred revenues (1,641,942) (1,754,243)
Net cash provided by (used in)
operating activities 36,970 (1,454,942)
------ ----------
Investing activities:
Purchases of property and
equipment (3,300) (8,719)
Proceeds from sales of property
and equipment 14,225 --
Capitalization of software
development costs (726,047) (386,498)
-------- --------
Net cash used in investing
activities (715,122) (395,217)
-------- --------
Financing activities:
Principal repayments on term
loan (149,246) (163,951)
Principal payments on capital
lease obligations -- (33,811)
Payments related to settlement
of employee share-based awards (46,904) (28,927)
Net cash used in financing
activities (196,150) (226,689)
-------- --------
Increase (decrease) in cash and
cash equivalents (874,302) (2,076,848)
Cash and cash equivalents at
beginning of year 4,619,834 5,654,093
--------- ---------
Cash and cash
equivalents at end of
year $3,745,532 $3,577,245
STREAMLINE HEALTH SOLUTIONS, INC.
Backlog
(Unaudited)
Table A
April 30, January 31, April 30,
2018 2018 2017
---- ---- ----
Streamline
Health Software
Licenses $115,000 $984, 000 $11,234,000
Hardware and Third Party
Software -- -- 100,000
Professional Services 2,415,000 2,048,000 3,642,000
Audit Services 703,000 1,293,000 1,634,000
Maintenance and Support 12,978,000 15,420,000 18,084,000
Software as a Service 9,903,000 13,048,000 13,194,000
--------- ---------- ----------
Total $26,114,000 $32,793,000 $47,888,000
STREAMLINE HEALTH SOLUTIONS, INC.
New Bookings
(Unaudited)
Table B
Three Months Ended
April 30, 2018
--------------
Value % of
Total
Bookings
--------
Streamline Health
Software licenses $1,147,000 33%
Software as a service 398,000 12%
Maintenance and support 713,000 21%
Professional services 1,118,000 33%
Audit Services 58,000 2%
Total bookings $3,434,000 100%
Reconciliation of Non-GAAP
Financial Measures
(Unaudited)
Table C
This press release contains a non-
GAAP financial measure under the
rules of the U.S. Securities and
Exchange Commission for Adjusted
EBITDA. This non-GAAP information
supplements and is not intended to
represent a measure of performance
in accordance with disclosures
required by generally accepted
accounting principles. Non-GAAP
financial measures are used
internally to manage the business,
such as in establishing an annual
operating budget. Streamline
Health's management in its
operating and financial decision-
making uses non-GAAP financial
measures because management
believes these measures reflect
ongoing business in a manner that
allows meaningful period-to-
period comparisons. Accordingly,
the Company believes it is useful
for investors and others to review
both GAAP and non-GAAP measures in
order to (a) understand and
evaluate current operating
performance and future prospects in
the same manner as management does
and (b) compare in a consistent
manner the Company's current
financial results with past
financial results. The primary
limitations associated with the use
of non-GAAP financial measures are
that these measures may not be
directly comparable to the amounts
reported by other companies and
they do not include all items of
income and expense that affect
operations. The Company's
management compensates for these
limitations by considering the
Company's financial results and
outlook as determined in accordance
with GAAP and by providing a
detailed reconciliation of the non-
GAAP financial measures to the most
directly comparable GAAP measures
in the tables attached to this
press release. Streamline Health
defines "Adjusted EBITDA" as net
earnings (loss) plus interest
expense, tax expense, depreciation
and amortization expense of
tangible and intangible assets,
stock-based compensation expense,
significant non-recurring
operating expenses, and
transactional related expenses
including: gains and losses on debt
and equity conversions, associate
severances and related
restructuring expenses, associate
inducements, professional and
advisory fees, and internal direct
costs incurred to complete
transactions.
Reconciliation of net earnings (loss) to non-GAAP Adjusted EBITDA (in thousands):
(Unaudited)
Adjusted EBITDA
Reconciliation Three Months Ended,
April 30, April 30,
2018 2017
---- ----
Net loss $(569) $(2,043)
Interest expense 116 127
Income tax benefit 2 3
Depreciation 171 203
Amortization of
capitalized software
development costs 315 571
Amortization of
intangible assets 235 333
Amortization of other
costs 102 89
--- ---
EBITDA 372 (722)
Share-based
compensation expense 222 267
Loss on disposal of
fixed assets (2) (1)
Non-cash valuation
adjustments to assets
and liabilities 51 17
Adjusted
EBITDA $643 $(439)
Adjusted EBITDA per
diluted share
Loss per
share -
diluted $(0.03) $(0.10)
Adjusted
EBITDA per
adjusted
diluted
share (1) $0.03 $(0.02)
Diluted weighted
average shares 19,986,425 19,695,390
Includable incremental
shares -Adjusted
EBITDA (2) 3,075,198 --
--------- ---
Adjusted diluted
shares 23,061,622 19,695,390
========== ==========
(1) Adjusted EBITDA per adjusted
diluted share for the
Company's common stock is
computed using the more
dilutive of the two-class
method or the if-converted
method.
(2) The number of incremental
shares that would be dilutive
under profit assumption, only
applicable under a GAAP net
loss. If GAAP profit is
earned in the current period,
no additional incremental
shares are assumed.
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SOURCE Streamline Health Solutions, Inc.
