ATLANTA, Sept. 11, 2018 /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:
- Revenue for the second quarter 2018 was $5.3 million;
- Net loss for the second quarter 2018 was $(1.5 million);
- Adjusted EBITDA for the second quarter 2018 was $0.4 million;
- New sales bookings for the quarter were $1.9 million; and
- Backlog at the end of the quarter was $23.4 million.
Conference Call Information
The Company will conduct a conference call to review the results on
Wednesday, September 12, 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 1552127.
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
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 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 future growth, new sales bookings, backlog, results
of investments in sales and marketing, competitive strengths,
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
July
31,
|
|
Six Months
Ended
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
accounts of $267,221 and $349,058, respectively
|
|
2,238,088
|
|
3,001,170
|
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
accumulated amortization of $19,304,635 and
$18,658,183, respectively
|
|
5,190,076
|
|
4,307,351
|
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,
2018
|
|
July
31,
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,
2018
|
|
January 31,
2018
|
|
July 31,
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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SOURCE Streamline Health, Inc.