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 first quarter of 2020,
which ended April 30, 2020.
Total revenues for the first quarter of 2020
were $2.8 million, compared to $3.2 million in the prior year
period. First quarter 2020 revenue was negatively impacted by the
COVID-19 pandemic, which resulted in delayed customer purchase
decisions that adversely impacted professional services and
perpetual license revenue. Recurring revenue comprised 75% of first
quarter 2020 revenue compared to 66% of first quarter 2019
revenue.
Loss from continuing operations during the first
quarter of 2020 was ($1.0 million) compared to ($0.6 million)
during the first quarter of 2019. Net income for the first quarter
of 2020 was $3.7 million, compared to $0.3 million during the first
quarter of 2019. First quarter 2020 net income included a $4.7
million gain, net of tax, from the sale of the ECM business and
discontinued operations. The sale and discontinued operations
relate to the Company’s legacy ECM business that closed and funded
on February 24, 2020. This is compared to a $1.0 million income,
net of tax, from discontinued operations during the first quarter
of 2019.
Adjusted EBITDA for the first quarter of 2020
was a loss of ($638,000), compared to adjusted EBITDA loss of
($262,000) in the first quarter of 2019.
“All of us at Streamline Health are keenly aware
of the incredibly difficult and dangerous situation our healthcare
provider customers have been facing and continue to face. We remain
thankful for their selfless service to our communities,” stated Tee
Green, President and Chief Executive Officer, Streamline
Health.
“At the beginning of the first quarter, we
completed the sale of our legacy ECM business which was one of the
last steps in creating the new Streamline Health we have envisioned
and communicated in various forms. In addition, we signed a new
eValuator contract with a large academic healthcare institution in
the Midwest. Then, the novel coronavirus slowed our momentum from
mid-March through the end of the quarter which affected our
financial performance. But the environment is improving, and we are
seeing our selling activities pick up as we enter our second
quarter. We are finding that in today’s unique environment,
hospital administrators are highly motivated to find solutions that
can help them capture more compliant revenue. In May, we closed a
three-year eValuator contract with another academic facility in the
northeast.
“I am excited about our Company’s focus on the middle of the
revenue cycle and confident that eValuator’s automated, cloud-based
pre-bill auditing technology will lead a paradigm shift to help
healthcare providers achieve improved revenue integrity.”
Highlights from the first quarter ended
April 30, 2020 included
|
● |
Revenue for the first quarter of
2020 was $2.8 million; |
|
● |
Loss from continuing operations
for the first quarter of 2020 was ($1.0 million); |
|
● |
Adjusted EBITDA for the first
quarter of 2020 was ($0.6 million); |
|
● |
Bookings for the first quarter of
2020 were $1.3 million. |
Conference Call
The Company will conduct a conference call to
review the results on Thursday, June 11, 2020 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
877-269-7756.
A replay of the conference call will be
available from Thursday, June 11, 2020 at 12:00 PM ET to Thursday,
June 18, 2020 at 12:00 PM ET by dialing 877-660-6853 or
201-612-7415 with conference ID 13704294. An online replay of the
presentation will also be available for six months following the
presentation in the Investor Relations section of the Streamline
Health website, www.streamlinehealth.net.
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
illustrating this measure 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 - actionable insights
that support revenue cycle optimization for healthcare enterprises.
We deliver integrated solutions and analytics that enable providers
to drive reimbursement 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 growth
prospects, estimates of backlog, industry trends and market growth,
results of investments in sales and marketing, adjusted EBITDA,
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, the effects of cost-containment measures
implemented by the Company, 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.
Contact
Randy SalisburySVP, Chief Sales & Marketing
Officer(404) 229-4242Randy.salisbury@streamlinehealth.net
STREAMLINE HEALTH SOLUTIONS, INC.CONSOLIDATED AND
CONDENSED STATEMENTS OF OPERATIONS(Unaudited)
|
|
Three Months Ended |
|
|
April 30, |
|
|
2020 |
|
|
|
2019 |
|
Revenues: |
|
|
|
|
|
Systems sales |
$ |
- |
|
|
$ |
221,000 |
|
Professional services |
|
181,000 |
|
|
|
455,000 |
|
Audit Services |
|
544,000 |
|
|
|
395,000 |
|
Maintenance and support |
|
1,258,000 |
|
|
|
1,452,000 |
|
Software as a service |
|
861,000 |
|
|
|
641,000 |
|
Total revenues |
|
2,844,000 |
|
|
|
3,164,000 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Cost of systems sales |
|
77,000 |
|
|
|
64,000 |
|
Cost of professional
services |
|
265,000 |
|
|
|
426,000 |
|
Cost of audit services |
|
360,000 |
|
|
|
303,000 |
|
Cost of maintenance and
support |
|
186,000 |
|
|
|
127,000 |
|
Cost of software as a
service |
|
382,000 |
|
|
|
107,000 |
|
Selling, general and
administrative |
|
2,291,000 |
|
|
|
2,421,000 |
|
Research and development |
|
684,000 |
|
|
|
589,000 |
|
Loss on exit of membership
agreement |
|
105,000 |
|
|
|
- |
|
Total operating expenses |
|
4,350,000 |
|
|
|
4,037,000 |
|
Operating loss |
|
(1,506,000 |
) |
|
|
(873,000 |
) |
Other expense: |
|
|
|
|
|
Interest expense |
|
(14,000 |
) |
|
|
(78,000 |
) |
Miscellaneous expense |
|
(18,000 |
) |
|
|
(16,000 |
) |
Loss before income taxes |
|
(1,538,000 |
) |
|
|
(967,000 |
) |
Income tax benefit |
|
561,000 |
|
|
|
325,000 |
|
Net Loss from continuing
operations |
$ |
(977,000 |
) |
|
$ |
(642,000 |
) |
Income from discontinued
operations: |
|
|
|
|
|
Gain on sale of discontinued operations |
|
6,009,000 |
|
|
|
- |
|
Income from discontinued operations |
|
137,000 |
|
|
|
1,282,000 |
|
Income tax expense |
|
(1,496,000 |
) |
|
|
(327,000 |
) |
Income from discontinued
operations |
|
4,650,000 |
|
|
|
955,000 |
|
Net income |
$ |
3,673,000 |
|
|
$ |
313,000 |
|
|
|
|
|
|
|
Basic Earnings per Share: |
|
|
|
|
|
Continuing operations |
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
Discontinued operations |
|
0.16 |
|
|
|
0.04 |
|
Net income |
$ |
0.13 |
|
|
$ |
0.01 |
|
Weighted average number of
common shares - basic |
|
29,767,814 |
|
|
|
19,793,361 |
|
|
|
|
|
|
|
Diluted Earnings per
Share: |
|
|
|
|
|
Continuing operations |
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
Discontinued operations |
|
0.15 |
|
|
|
0.04 |
|
Net income |
$ |
0.12 |
|
|
$ |
0.01 |
|
Weighted average number of
common shares – diluted |
|
30,037,716 |
|
|
|
22,825,037 |
|
STREAMLINE HEALTH SOLUTIONS, INC.CONSOLIDATED AND
CONDENSED BALANCE SHEETS(Unaudited)
|
|
April 30, |
|
|
January 31, |
|
|
2020 |
|
|
2020 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
6,560,000 |
|
$ |
1,649,000 |
Accounts receivable, net |
|
688,000 |
|
|
2,016,000 |
Contract receivables |
|
867,000 |
|
|
803,000 |
Prepaid hardware and other
current assets |
|
525,000 |
|
|
501,000 |
Current Assets from
discontinued operations |
|
168,000 |
|
|
1,585,000 |
Total current assets |
|
8,808,000 |
|
|
6,554,000 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
Property and equipment,
net |
|
84,000 |
|
|
98,000 |
Right of use asset on
operating lease |
|
513,000 |
|
|
- |
Capitalized software
development costs, net |
|
5,972,000 |
|
|
5,782,000 |
Intangible assets, net |
|
992,000 |
|
|
1,115,000 |
Goodwill |
|
10,712,000 |
|
|
10,712,000 |
Other non-current assets |
|
1,377,000 |
|
|
611,000 |
Long-term assets from
discontinued operations |
|
48,000 |
|
|
6,826,000 |
Total non-current assets |
|
19,698,000 |
|
|
25,144,000 |
|
$ |
28,506,000 |
|
$ |
31,698,000 |
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
289,000 |
|
$ |
756,000 |
Accrued expenses |
|
848,000 |
|
|
1,395,000 |
Current portion of term
loan |
|
686,000 |
|
|
3,872,000 |
Deferred revenues |
|
2,262,000 |
|
|
3,593,000 |
Royalty liability |
|
986,000 |
|
|
969,000 |
Other |
|
1,112,000 |
|
|
- |
Current liabilities from
discontinued operations |
|
398,000 |
|
|
5,053,000 |
Total current liabilities |
|
6,581,000 |
|
|
15,638,000 |
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
Term loan, net of current
portion |
|
1,615,000 |
|
|
- |
Deferred revenues, less
current portion |
|
39,000 |
|
|
55,000 |
Other liabilities |
|
352,000 |
|
|
- |
Total non-current
liabilities |
|
2,006,000 |
|
|
55,000 |
Total liabilities |
|
8,587,000 |
|
|
15,693,000 |
|
|
|
|
|
|
Stockholders’ equity |
|
19,919,000 |
|
|
16,005,000 |
|
$ |
28,506,000 |
|
$ |
31,698,000 |
STREAMLINE HEALTH SOLUTIONS, INC.CONSOLIDATED AND
CONDENSED STATEMENTS OF CASH FLOWS(Unaudited)
|
|
|
Three Months Ended |
|
|
|
April 30, |
|
|
|
2020 |
|
|
|
2019 |
|
Cash flows from continuing
operating activities: |
|
|
|
|
|
|
Net Income |
|
$ |
3,673,000 |
|
|
$ |
313,000 |
|
Income from continuing operations |
|
|
4,650,000 |
|
|
|
955,000 |
|
Loss from continuing operations |
|
$ |
(977,000 |
) |
|
$ |
(642,000 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
14,000 |
|
|
|
8,000 |
|
Amortization of capitalized
software development costs |
|
|
289,000 |
|
|
|
126,000 |
|
Amortization of intangible
assets |
|
|
123,000 |
|
|
|
143,000 |
|
Amortization of other deferred
costs |
|
|
75,000 |
|
|
|
66,000 |
|
Valuation adjustments |
|
|
17,000 |
|
|
|
15,000 |
|
Loss on exit of membership
agreement |
|
|
105,000 |
|
|
|
- |
|
Share-based compensation
expense |
|
|
263,000 |
|
|
|
269,000 |
|
Benefit for accounts
receivable allowance |
|
|
(15,000 |
) |
|
|
(277,000 |
) |
Benefit for income taxes |
|
|
(561,000 |
) |
|
|
(325,000 |
) |
Changes in assets and
liabilities |
|
|
(1,236,000 |
) |
|
|
(867,000 |
) |
Net cash used in operating
activities |
|
|
(1,903,000 |
) |
|
|
(1,484,000 |
) |
Net cash from operating
activities - discontinued operations |
|
|
(2,270,000 |
) |
|
|
2,277,000 |
|
|
|
|
|
|
|
|
Cash flows used in investing
activities: |
|
|
|
|
|
|
Purchases of property and
equipment |
|
|
- |
|
|
|
(38,000 |
) |
Capitalization of software
development costs |
|
|
(479,000 |
) |
|
|
(790,000 |
) |
Proceeds from sale of ECM
assets |
|
|
11,284,000 |
|
|
|
- |
|
Net cash provided by (used in)
investing activities |
|
|
10,805,000 |
|
|
|
(828,000 |
) |
Net cash used in investing
activities - discontinued operations |
|
|
- |
|
|
|
(180,000 |
) |
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
Proceeds from term loan |
|
|
2,301,000 |
|
|
|
- |
|
Principal payments on term
loan |
|
|
(4,000,000 |
) |
|
|
(149,000 |
) |
Other |
|
|
(22,000 |
) |
|
|
(3,000 |
) |
Net cash used in financing
activities |
|
|
(1,721,000 |
) |
|
|
(152,000 |
) |
Net decrease in cash and cash
equivalents |
|
|
4,911,000 |
|
|
|
(367,000 |
) |
Cash and cash equivalents at
beginning of year |
|
|
1,649,000 |
|
|
|
2,376,000 |
|
Cash and cash equivalents at
end of year |
|
$ |
6,560,000 |
|
|
$ |
2,009,000 |
|
STREAMLINE HEALTH SOLUTIONS, INC.New
Bookings (Unaudited)Table B
|
|
Three Months Ended April 30, 2020 |
Systems Sales |
$ |
93,000 |
Professional Services |
|
170,000 |
Audit Services |
|
17,000 |
Maintenance and Support |
|
93,000 |
Software as a Service |
|
912,000 |
Q1 2020 Bookings |
$ |
1,285,000 |
Q1 2019 Bookings (1) |
$ |
1,255,000 |
|
|
|
(1) April 30, 2019
excludes bookings from the ECM business of approximately
$100,000 |
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 loss to non-GAAP Adjusted
EBITDA (in thousands):(Unaudited)
|
|
Three Months Ended April 30, |
|
|
2020 |
|
|
|
2019 |
|
Adjusted EBITDA
Reconciliation |
|
|
|
|
|
Net loss |
$ |
(977 |
) |
|
$ |
(642 |
) |
Interest expense |
|
14 |
|
|
|
78 |
|
Income tax benefit |
|
(561 |
) |
|
|
(325 |
) |
Depreciation |
|
14 |
|
|
|
8 |
|
Amortization of capitalized
software development costs |
|
289 |
|
|
|
126 |
|
Amortization of intangible
assets |
|
123 |
|
|
|
143 |
|
Amortization of other
costs |
|
75 |
|
|
|
66 |
|
EBITDA |
|
(1,023 |
) |
|
|
(546 |
) |
Share-based compensation
expense |
|
263 |
|
|
|
269 |
|
Non-cash valuation
adjustments |
|
17 |
|
|
|
15 |
|
Loss on exit of operating lease |
|
105 |
|
|
|
- |
|
Adjusted EBITDA |
$ |
(638 |
) |
|
$ |
(262 |
) |
Adjusted EBITDA per
diluted share: |
|
|
|
|
|
Net loss per common share –
diluted |
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
Adjusted EBITDA per adjusted
diluted share (1) |
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
Diluted weighted average
shares (2) |
|
29,767,814 |
|
|
|
22,825,037 |
|
Includable incremental shares
— Adjusted EBITDA (3) |
|
- |
|
|
|
- |
|
Adjusted diluted shares |
|
29,767,814 |
|
|
|
22,825,037 |
|
|
|
|
|
|
|
(1) Adjusted EBITDA per adjusted diluted share for
our common stock is computed using the more dilutive of the
two-class method or the if-converted method. |
|
(2) Diluted EPS for our common stock was computed
using the if-converted method, which yields the same result as the
two-class method. |
|
(3) The number of
incremental shares that would be dilutive under an assumption that
the Company is profitable during the reported period, which is only
applicable for a period in which the Company reports a GAAP net
loss. If a GAAP profit is earned in the reported periods, no
additional incremental shares are assumed. |
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