Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of integrated solutions, technology-enabled services and analytics supporting revenue cycle optimization for healthcare enterprises, today announced financial results for the second quarter and first half of fiscal 2018, which ended July 31, 2018.
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ATLANTA, /PRNewswire/ -- Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of integrated solutions, technology-enabled services and analytics supporting revenue cycle optimization for healthcare enterprises, today announced financial results for the second quarter and first half of fiscal 2018, which ended July 31, 2018. Revenues for the three-month period ended July 31, 2018 decreased approximately 11% to $5.3 million over the July 31, 2017 quarter revenue of $5.9 million. Recurring revenue comprised 83% of total revenue in the quarter. Revenues for the first six months of fiscal year 2018 were $11.5 million, down approximately 3% as compared to $11.8 million in the first half of fiscal 2017. Net loss for the second quarter was $(1.5 million) as compared to a ($1.1 million) net loss in the same period a year ago. Net loss for the first six months of fiscal 2018 was ($2.1 million) as compared to ($3.1 million) net loss for the same period in 2017. Adjusted EBITDA for the second quarter 2018 was $0.4 million, down from $0.5 million in the second quarter of 2017. Adjusted EBITDA for the first six months of 2018 was $1.0 million, as compared to $45,000 in the first half of fiscal 2017. "We continued to make meaningful operational progress in the second quarter. Our bookings included our first Abstracting client through our reseller agreement with Allscripts, and two new eValuator clients - one of which is a leading educational facility on the west coast, which uses Epic as their EMR provider," stated David Sides, President and Chief Executive Officer, Streamline Health. "We continue to drive incremental operational efficiencies and we are deploying these savings to fund future growth and development. In the second quarter we expanded the capabilities of eValuator from the original Inpatient version to Outpatient; Profee - for physician practices, and Value-based Care (by adding Hospital Acquired Conditions, HACs, and Patient Safety Indicators, PSIs). We believe we have a spectrum of middle revenue cycle solutions for healthcare providers that no other competitor in the marketplace can match. In addition, during the quarter we brought Tom Gibson on to our team at Streamline Health. We are very excited to have Tom on the team given his extensive financial and strategic experience in the industry." Highlights for the second quarter ended July 31, 2018 included:
Conference Call Information A replay of the conference call will be available from Wednesday, September 12, 2018 at 12:00 PM ET to Monday, September 17, 2018 at 12:00 PM ET by dialing 888-203-1112 and entering passcode 1552127. *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 non-GAAP measure to net loss is included in this press release. About Streamline Health Safe Harbor statement under the Private Securities Litigation Reform Act of 1995 Company Contact:
STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
July 31,
July 31,
2018 2017 2018 2017
Revenues:
Systems sales $
385,875 $
328,692 $
1,517,549 $
707,415
Professional services 271,121 571,812 509,435 991,847
Audit Services 247,843 294,441 607,556 639,460
Maintenance and support 3,216,251 3,278,562 6,525,355 6,633,334
Software as a service 1,147,642 1,442,652 2,372,010 2,867,784
Total revenues 5,268,732 5,916,159 11,531,905 11,839,840
Operating expenses:
Cost of systems sales 289,890 596,799 539,874 1,162,850
Cost of professional services 697,467 543,206 1,403,697 1,258,421
Cost of audit services 300,081 391,439 694,060 832,078
Cost of maintenance and support 566,248 768,140 1,214,587 1,574,662
Cost of software as a service 281,872 285,832 598,259 625,208
Selling, general and administrative 2,518,893 2,790,171 5,767,950 6,163,699
Research and development 1,212,845 1,495,972 2,275,164 3,052,910
Loss on exit of operating lease 806,163 806,163
Total operating expenses 6,673,459 6,871,559 13,299,754 14,669,828
Operating loss (1,404,727) (955,400) (1,767,849) (2,829,988)
Other expense:
Interest expense (110,385) (120,377) (226,603) (247,645)
Miscellaneous expense (5,383) (19,681) (93,028) (57,725)
Loss before income taxes (1,520,495) (1,095,458) (2,087,480) (3,135,358)
Income tax benefit (1,713) (2,607) (3,427) (5,215)
Net Loss $
(1,522,208) $
(1,098,065) $
(2,090,907) $
(3,140,573)
Net loss per common share - basic and diluted $
(0.08) $
(0.06) $
(0.10) $
(0.16)
Weighted average number of common shares - basic and diluted 19,971,090 19,834,859 19,978,757 19,765,125
STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Assets
July 31, January 31,
2018 2018
Current assets:
Cash and cash
equivalents $
3,246,395 $
4,619,834
Accounts receivable, net of
allowance for doubtful 2,238,088 3,001,170
accounts of $267,221 and
$349,058, respectively
Contract receivables 826,277 223,791
Prepaid hardware and third-
party software for future
delivery 5,858
Prepaid client maintenance
contracts 560,004 506,911
Other prepaid assets 828,257 742,232
Other current assets 367,326 546,885
Total current assets 8,066,347 9,646,681
Non-current assets:
Property and equipment:
Computer equipment 2,876,707 2,852,776
Computer software 704,562 730,950
Office furniture, fixtures and
equipment 662,157 683,443
Leasehold improvements 582,271 729,348
4,825,697 4,996,517
Accumulated depreciation and
amortization (3,956,221) (3,834,153)
Property and equipment, net 869,476 1,162,364
Contract Receivables, less
current portion 683,031
Capitalized software
development costs, net of 5,190,076 4,307,351
accumulated amortization of
$19,304,635 and
$18,658,183, respectively
Intangible assets, net 5,365,257 5,835,151
Goodwill 15,537,281 15,537,281
Other non-current assets 378,672 642,226
Total non-current assets 28,023,793 27,484,373
$
36,090,140 $
37,131,054
STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Liabilities and Stockholders' Equity
July 31, January 31,
2018 2018
Current liabilities:
Accounts payable $
789,239 $
421,425
Accrued compensation 883,386 342,351
Accrued other expenses 1,402,972 609,582
Current portion of long-term
debt 596,984 596,984
Deferred revenues 8,273,251 9,481,807
Other 37,135
Total current liabilities 11,982,967 11,452,149
Non-current liabilities:
Term loan, net of deferred
financing cost of $92,808 and
$128,275, respectively 3,638,328 3,901,353
Royalty liability 874,437 2,469,193
Deferred revenues, less current
portion 882,672 332,645
Other Liabilities 316,514 274,128
Total non-current liabilities 5,711,951 6,977,319
Total liabilities 17,694,918 18,429,468
Series A 0% Convertible
Redeemable Preferred Stock,
$.01 par value per share,
$8,686,392 and $8,849,985
redemption value, 4,000,000
shares authorized, 2,895,464
and 2,949,995 issued and
outstanding, respectively 8,686,392 8,849,985
Stockholders' equity:
Common stock, $.01 par value
per share, 45,000,000 shares
authorized; 20,039,893 and
20,005,977 shares issued and
outstanding, respectively 200,399 200,060
Additional paid in capital 82,284,445 81,776,606
Accumulated deficit (72,776,024) (72,125,065)
Total stockholders' equity 9,708,830 9,851,601
$
36,090,140 $
37,131,054
STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended,
July 31, July 31,
2018 2017
Operating activities:
Net loss $
(2,090,907) $
(3,140,573)
Adjustments to reconcile net loss
to net cash provided by (used
in) operating activities:
Depreciation 324,640 403,090
Amortization of capitalized
software development costs 646,452 1,143,624
Amortization of intangible assets 469,894 666,114
Amortization of other deferred
costs 228,497 161,064
Valuation adjustment for warrants
liability (45,831)
Other valuation adjustments 56,211 86,192
Loss on exit of operating lease 806,163
Gain on disposal of fixed assets (1,555) (720)
Share-based compensation expense 366,906 555,229
Provision for accounts receivable (64,154) 166,170
Changes in assets and liabilities,
net of assets acquired:
Accounts and contract receivables 292,442 99,068
Other assets 105,148 (333,401)
Accounts payable 367,814 449,929
Accrued expenses 587,226 (352,132)
Deferred revenues (1,618,004) (822,867)
Net cash provided by (used in)
operating activities 476,773 (965,026)
Investing activities:
Purchases of property and
equipment (14,457) (9,812)
Proceeds from sales of property
and equipment 14,225
Capitalization of software
development costs (1,529,177) (844,448)
Net cash used in investing
activities (1,529,409) (854,260)
Financing activities:
Principal repayments on term loan (298,492) (813,197)
Principal payments on capital
lease obligations (68,149)
Payments related to settlement of
employee shared-based awards (57,699) (37,002)
Proceeds from exercise of stock
options and stock purchase plan 35,388
Net cash used in financing
activities (320,803) (918,348)
Net decrease in cash and cash
equivalents (1,373,439) (2,737,634)
Cash and cash equivalents at
beginning of year 4,619,834 5,654,093
Cash and cash
equivalents at end of
year $
3,246,395 $
2,916,459
STREAMLINE HEALTH SOLUTIONS, INC.
Backlog
(Unaudited)
Table A
July 31, January 31, July 31,
2018 2018 2017
Streamline Health
Software
Licenses $
53,000 $
984, 000 $
11,458,000
Hardware and Third Party
Software 50,000
Professional Services 1,867,000 2,048,000 3,517,000
Audit Services 1,019,000 1,293,000 1,454,000
Maintenance and Support 11,489,000 15,420,000 16,583,000
Software as a Service 8,936,000 13,048,000 13,300,000
Total $
23,364,000 $
32,793,000 $
46,362,000
STREAMLINE HEALTH SOLUTIONS, INC.
New Bookings
(Unaudited)
Table B
Three Months Ended
July 31, 2018
Value % of
Total
Bookings
Streamline Health
Software
licenses $
308,000 16%
Software as a service 756,000 40%
Maintenance and support 374,000 20%
Professional services 433,000 23%
Audit Services 33,000 2%
Total bookings $
1,904,000 100%
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, and professional and
advisory fees.
Reconciliation of net earnings (loss) to non-GAAP Adjusted EBITDA (in thousands):
(Unaudited)
Adjusted EBITDA Reconciliation Three Months Ended, Six Months Ended,
July 31, 2018 July 31, 2017 July 31, 2018 July 31, 2017
Net loss $
(1,522) $
(1,098) $
(2,091) $
(3,141)
Interest expense 110 120 227 248
Income tax benefit 2 3 3 5
Depreciation 153 200 325 403
Amortization of capitalized software development costs 331 572 646 1,144
Amortization of intangible assets 235 333 470 666
Amortization of other costs 91 43 193 126
EBITDA (600) 173 (227) (549)
Share-based compensation expense 144 288 367 555
Gain on disposal of fixed assets (2) (1)
Non-cash valuation adjustments to assets and liabilities 5 23 56 40
Loss on exit of operating lease 806 806
Adjusted EBITDA $
355 $
484 $
1,000 $
45
Adjusted EBITDA per diluted share
Loss per share - diluted $
(0.08) $
(0.06) $
(0.10) $
(0.16)
Adjusted EBITDA per adjusted diluted share (1) $
0.02 $
0.02 $
0.04 $
0.00
Diluted weighted average shares 19,971,090 19,834,859 19,978,757 19,765,125
Includable incremental shares - Adjusted EBITDA (2) 3,053,210 3,378,484 3,064,204 3,322,319
Adjusted diluted shares 23,024,300 23,213,343 23,042,961 23,087,444
(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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Company Codes: NASDAQ-SMALL:STRM |
