ATLANTA, Dec. 12, 2017 /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 third quarter of fiscal 2017, which ended
October 31, 2017.
Revenues for the three-month period ended October 31, 2017 decreased approximately 3% to
$6.4 million over the revenues for
the three-month period ended October 31,
2016 of $6.6 million, but
increased approximately 8% over the second quarter of 2017.
Recurring revenue comprised 79% of total revenue in the
quarter.
Net income for the third quarter of fiscal 2017 was essentially
breakeven ($3 thousand) as compared
to a ($2.0 million) net loss in the
same period a year ago.
Adjusted EBITDA for the third quarter of fiscal 2017 was
$1.5 million, up from $0.2 million in the third quarter of 2016.
"Our third quarter financial performance improved from the
second quarter primarily due to an increase in professional
services and some recurring revenue as we experienced growth with
existing clients in expanding the number of facilities utilizing
our software. During the quarter, we continued to attract new
clients as we added six new clients to the Streamline family, and
importantly closed four contracts for our new Streamline Health
eValuator™ technology," stated David
Sides, President and Chief Executive Officer, Streamline
Health. "Our bookings momentum continues to build, growing to
$1.9 million in the third quarter as
we realize some of the potential in our expanding pipeline of
current clients and prospects, primarily around eValuator
technology and Auditing Services. We are pleased to have closed our
fifth new eValuator deal in the month of November and anticipate
closing more new deals before our fiscal year end.
"Our balance sheet changed slightly from the second quarter of
this year as our cash on hand decreased approximately $1 million while debt declined by approximately
$100,000, but we continue to
anticipate our cash balance climbing substantially by year end
based on our quarterly cash cyclicality."
Highlights for the three months ended October 31, 2017 included:
- Revenue for the third quarter 2017 was $6.4 million;
- Net income for the third quarter 2017 was $3 thousand;
- Adjusted EBITDA for the third quarter 2017 was $1.5 million;
- New sales bookings for the quarter were $1.9 million; and
- Backlog at the end of the quarter was $47.7 million.
Conference Call Information
An accompanying conference call will be hosted by David Sides, Chief Executive Officer and
Nicholas Meeks, Senior Vice
President and Chief Financial Officer. The call will be held at
9:00 AM ET, on Wednesday, December 13, 2017 and will be
accompanied by a live webcast. Please refer to the information
below for conference call dial-in information and webcast
registration.
Conference Date: December 13,
2017, 9:00 AM ET
Webcast Registration: Click Here
Conference Dial-In: 866-548-4713
Conference Passcode: 1764102
Conference Call Name: Streamline Health Solutions Third
Quarter 2017 Results Call
Following the call, a replay will be available on the Company's
website, www.streamlinehealth.net, in the Investor Relations
section.
*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 severance and related
restructuring expenses, associate inducements, professional and
advisory fees, and internal direct costs incurred to complete
transactions. 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 – providing 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 estimates of
future revenue, cash balances, 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.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
October
31,
|
|
October
31
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
Systems
sales
|
$
|
348,526
|
$
|
314,218
|
$
|
1,055,941
|
$
|
2,190,256
|
Professional
services
|
|
801,771
|
|
630,961
|
|
1,793,618
|
|
1,869,656
|
Audit
Services
|
|
280,025
|
|
234,347
|
|
919,485
|
|
234,347
|
Maintenance
and support
|
|
3,250,229
|
|
3,749,596
|
|
9,883,563
|
|
11,237,637
|
Software as a
service
|
|
1,718,748
|
|
1,706,366
|
|
4,586,532
|
|
5,144,876
|
Total
revenues
|
|
6,399,299
|
|
6,635,488
|
|
18,239,139
|
|
20,676,772
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
systems sales
|
|
434,138
|
|
663,148
|
|
1,596,988
|
|
2,080,263
|
Cost of
professional services
|
|
555,815
|
|
723,358
|
|
1,814,236
|
|
1,891,146
|
Cost of Audit
Services
|
|
404,280
|
|
595,575
|
|
1,236,358
|
|
595,575
|
Cost of
maintenance and support
|
|
667,307
|
|
790,291
|
|
2,241,969
|
|
2,483,462
|
Cost of
software as a service
|
|
289,503
|
|
450,695
|
|
914,711
|
|
1,390,308
|
Selling,
general and administrative
|
|
2,819,549
|
|
3,212,350
|
|
8,983,248
|
|
10,153,140
|
Research and
development
|
|
932,251
|
|
1,969,415
|
|
3,985,161
|
|
5,800,169
|
Total
operating expenses
|
|
6,102,843
|
|
8,404,832
|
|
20,772,671
|
|
24,394,063
|
Operating income
(loss)
|
|
296,456
|
|
(1,769,344)
|
|
(2,533,532)
|
|
(3,717,291)
|
Other
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(113,078)
|
|
(98,871)
|
|
(360,723)
|
|
(380,897)
|
Miscellaneous
expense
|
|
(177,282)
|
|
(60,555)
|
|
(235,007)
|
|
(39,089)
|
Earnings (loss)
before income taxes
|
|
6,096
|
|
(1,928,770)
|
|
(3,129,262)
|
|
(4,137,277)
|
Income tax
benefit (expense)
|
|
(2,607)
|
|
(1,702)
|
|
(7,822)
|
|
(5,104)
|
Net earnings
(loss)
|
$
|
3,489
|
$
|
(1,930,472)
|
$
|
(3,137,084)
|
$
|
(4,142,381)
|
Less: deemed
dividends on Series A
Preferred Shares
|
|
--
|
|
(72,710)
|
|
--
|
|
(875,935)
|
Net loss attributable
to common
shareholders
|
$
|
3,489
|
$
|
(2,003,182)
|
$
|
(3,137,084)
|
$
|
(5,018,316)
|
Basic net loss per
common share
|
$
|
--
|
$
|
(0.10)
|
$
|
(0.16)
|
$
|
(0.26)
|
Number of shares used
in basic per
common share computation
|
|
19,985,822
|
|
19,645,521
|
|
19,838,691
|
|
19,477,538
|
Diluted net loss per
common share
|
$
|
--
|
$
|
(0.10)
|
$
|
(0.16)
|
$
|
(0.26)
|
Number of shares used
in diluted per
common share computation
|
|
23,068,423
|
|
19,645,521
|
|
19,838,691
|
|
19,477,538
|
STREAMLINE HEALTH
SOLUTIONS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Assets
|
|
|
October
31,
|
|
January
31,
|
|
|
2017
|
|
2017
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,892,182
|
$
|
5,654,093
|
Accounts
receivable, net of allowance for doubtful
accounts of $301,773 and $198,449,
respectively
|
|
2,532,941
|
|
4,489,789
|
Contract
receivables
|
|
283,973
|
|
466,423
|
Prepaid
hardware and third party software for
future delivery
|
|
5,858
|
|
5,858
|
Prepaid client
maintenance contracts
|
|
587,960
|
|
595,633
|
Other prepaid
assets
|
|
837,649
|
|
732,496
|
Other current
assets
|
|
392,449
|
|
439
|
Total
current assets
|
|
6,533,012
|
|
11,944,731
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
Property and
equipment:
|
|
|
|
|
Computer equipment
|
|
2,971,361
|
|
3,110,274
|
Computer software
|
|
725,700
|
|
827,642
|
Office furniture, fixtures and equipment
|
|
683,443
|
|
683,443
|
Leasehold improvements
|
|
729,348
|
|
729,348
|
|
|
5,109,852
|
|
5,350,707
|
Accumulated
depreciation and amortization
|
|
(3,762,821)
|
|
(3,447,198)
|
Property and
equipment, net
|
|
1,347,031
|
|
1,903,509
|
|
|
|
|
|
Capitalized
software development costs, net of
accumulated amortization of $18,119,290
and
$16,544,797 respectively
|
|
4,346,694
|
|
4,584,245
|
Intangible
assets, net of accumulated amortization
of $6,729,799 and $5,807,338, respectively
|
|
6,074,137
|
|
6,996,599
|
Goodwill
|
|
15,537,281
|
|
15,537,281
|
Other
|
|
677,319
|
|
672,133
|
Total
non-current assets
|
|
27,982,462
|
|
29,693,767
|
|
$
|
34,515,474
|
$
|
41,638,498
|
STREAMLINE HEALTH
SOLUTIONS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Liabilities and
Stockholders' Equity
|
|
|
October
31,
|
|
January
31,
|
|
|
2017
|
|
2017
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
|
807,778
|
$
|
1,116,525
|
Accrued
compensation
|
|
593,510
|
|
496,706
|
Accrued other
expenses
|
|
587,209
|
|
484,391
|
Current
portion of term loan
|
|
596,984
|
|
655,804
|
Deferred
revenues
|
|
6,130,259
|
|
9,916,454
|
Current
portion of capital lease obligations
|
|
--
|
|
91,337
|
Total
current liabilities
|
|
8,715,740
|
|
12,761,217
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
Term loan, net
of deferred financing cost of $146,009 and
|
|
|
|
|
$199,211, respectively
|
|
4,032,865
|
|
4,883,286
|
Warrants
liability
|
|
150,857
|
|
46,191
|
Royalty
liability
|
|
2,456,233
|
|
2,350,754
|
Lease
incentive liability
|
|
293,322
|
|
339,676
|
Deferred
revenues, less current portion
|
|
487,832
|
|
568,515
|
Total
non-current liabilities
|
|
7,421,109
|
|
8,188,422
|
Total
liabilities
|
|
16,136,849
|
|
20,949,639
|
|
|
|
|
|
Series A 0%
Convertible Redeemable Preferred stock, $.01 par
value per share, $8,849,985 redemption value, 4,000,000 shares
authorized, 2,949,995 issued and outstanding, net of
unamortized
preferred stock discount of $0
|
|
8,849,985
|
|
8,849,985
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock,
$.01 par value per share, 45,000,000 shares
authorized, 19,984,743 and 19,695,391 shares
issued and
outstanding, respectively
|
|
199,847
|
|
196,954
|
Additional
paid in capital
|
|
81,491,728
|
|
80,667,771
|
Accumulated
deficit
|
|
(72,162,935)
|
|
(69,025,851)
|
Total
stockholders' equity
|
|
9,528,640
|
|
11,838,874
|
|
$
|
34,515,474
|
$
|
41,638,498
|
|
|
|
|
|
|
|
STREAMLINE HEALTH
SOLUTIONS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Nine Months
Ended
October 31,
|
|
|
2017
|
|
2016
|
Operating
activities:
|
|
|
|
|
Net
loss
|
$
|
(3,137,084)
|
$
|
(4,142,381)
|
Adjustments to
reconcile net loss to net cash
provided by (used in)
operating activities:
|
|
|
|
|
Depreciation
|
|
595,866
|
|
895,438
|
Amortization of
capitalized software development costs
|
|
1,574,493
|
|
2,146,374
|
Amortization of
intangible assets
|
|
922,462
|
|
976,338
|
Amortization of other
deferred costs
|
|
229,780
|
|
192,947
|
Valuation adjustment
for warrants liability
|
|
104,666
|
|
(36,875)
|
Share-based
compensation expense
|
|
844,960
|
|
1,342,513
|
Other valuation
adjustments
|
|
124,423
|
|
120,912
|
(Gain) Loss on disposal of property and equipment
|
|
(14,871)
|
|
567
|
Provision for accounts receivable
|
|
181,859
|
|
136,693
|
Changes in
assets and liabilities, net of assets acquired:
|
|
|
|
|
Accounts and contract
receivables
|
|
1,957,439
|
|
1,679,810
|
Other
assets
|
|
(671,254)
|
|
130,875
|
Accounts
payable
|
|
(308,747)
|
|
(78,320)
|
Accrued
expenses
|
|
134,324
|
|
(814,707)
|
Deferred
revenues
|
|
(3,866,878)
|
|
(3,793,603)
|
Net cash used
in operating activities
|
|
(1,328,562)
|
|
(1,243,419)
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Purchases of property
and equipment
|
|
(24,517)
|
|
(501,148)
|
Capitalization of
software development costs
|
|
(1,336,942)
|
|
(1,420,678)
|
Payment for
acquisition, net of cash received
|
|
--
|
|
(1,400,000)
|
Net cash used
in investing activities
|
|
(1,361,459)
|
|
(3,321,826)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Principal repayments
on term loan
|
|
(962,443)
|
|
(2,243,624)
|
Principal payments on
capital lease obligation
|
|
(91,337)
|
|
(535,896)
|
Proceeds from exercise
of stock options and stock purchase plan
|
|
23,703
|
|
14,793
|
Payments related to
settlement of employee shared-based awards
|
|
(41,813)
|
|
(11,702)
|
Net cash used
in financing activities
|
|
(1,071,890)
|
|
(2,766,429)
|
Net decrease in cash
and cash equivalents
|
|
(3,761,911)
|
|
(7,341,674)
|
Cash and cash
equivalents at beginning of period
|
|
5,654,093
|
|
9,882,136
|
Cash and cash
equivalents at end of period
|
$
|
1,892,182
|
$
|
2,540,462
|
STREAMLINE HEALTH
SOLUTIONS, INC.
Backlog
(Unaudited)
Table
A
|
|
|
October 31,
2017
|
|
January 31,
2017
|
|
October
31,
2016
|
Company Proprietary
Software
|
$
|
10,892,000
|
$
|
11,504,000
|
$
|
15,551,000
|
Third Party Hardware
and Software
|
|
--
|
|
150,000
|
|
200,000
|
Professional
Services
|
|
2,824,000
|
|
4,068,000
|
|
4,973,000
|
Audit
Services
|
|
1,454,000
|
|
1,847,000
|
|
1,849,000
|
Maintenance and
Support
|
|
18,256,000
|
|
19,193,000
|
|
19,413,000
|
Software as a
Service
|
|
14,242,000
|
|
13,861,000
|
|
12,929,000
|
Total
|
$
|
47,668,000
|
$
|
50,623,000
|
$
|
54,915,000
|
STREAMLINE HEALTH
SOLUTIONS, INC.
New
Bookings
(Unaudited)
Table
B
|
|
|
Three Months
Ended
|
|
|
October 31,
2017
|
|
|
Value
|
|
% of Total
Bookings
|
Streamline Health
Software licenses
|
$
|
94,000
|
|
5%
|
Software as a
service
|
|
1,505,000
|
|
78%
|
Maintenance and
support
|
|
79,000
|
|
4%
|
Professional
services
|
|
197,000
|
|
10%
|
Audit
services
|
|
57,000
|
|
3%
|
Total
bookings
|
$
|
1,932,000
|
|
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. Non-GAAP financial
measures are used by Streamline Health's management in its
operating and financial decision-making 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
severance and related restructuring expenses, associate
inducements, professional and advisory fees, and internal direct
costs incurred to complete transactions.
|
Reconciliation of
net income (loss) to non-GAAP adjusted EBITDA (in
thousands)
|
|
|
|
|
|
Adjusted EBITDA
Reconciliation
|
|
Three Months
Ended,
|
|
Nine Months
Ended,
|
|
|
October 31,
2017
|
|
October 31,
2016
|
|
October 31,
2017
|
|
October 31,
2016
|
Net income
(loss)
|
$
|
3
|
$
|
(1,930)
|
$
|
(3,137)
|
$
|
(4,142)
|
Interest expense
|
|
113
|
|
99
|
|
361
|
|
381
|
Income tax expense
|
|
3
|
|
2
|
|
8
|
|
5
|
Depreciation
|
|
193
|
|
265
|
|
596
|
|
895
|
Amortization of capitalized software development
costs
|
|
431
|
|
720
|
|
1,574
|
|
2,146
|
Amortization of intangible assets
|
|
256
|
|
325
|
|
922
|
|
976
|
Amortization of other costs
|
|
51
|
|
60
|
|
177
|
|
140
|
EBITDA
|
|
1,050
|
|
(459)
|
|
501
|
|
401
|
Share-based compensation expense
|
|
290
|
|
433
|
|
845
|
|
1,343
|
(Gain) Loss on disposal of fixed assets
|
|
(14)
|
|
--
|
|
(15)
|
|
1
|
Associate severance and other costs
relating to transactions or corporate
restructuring
|
|
--
|
|
89
|
|
--
|
|
199
|
Non-cash
valuation adjustments to assets and liabilities
|
|
188
|
|
62
|
|
229
|
|
84
|
Transaction related professional fees, advisory fees and other
internal direct costs
|
|
--
|
|
103
|
|
--
|
|
358
|
Adjusted
EBITDA
|
$
|
1,514
|
$
|
228
|
$
|
1,560
|
$
|
2,386
|
Adjusted EBITDA
Margin(1)
|
|
24%
|
|
3%
|
|
9%
|
|
12%
|
Adjusted EBITDA
per diluted share
|
|
|
|
|
|
|
|
|
Loss per share –
diluted
|
$
|
--
|
$
|
(0.10)
|
$
|
(0.16)
|
$
|
(0.26)
|
Adjusted EBITDA per
adjusted diluted share (2)
|
$
|
0.07
|
$
|
0.01
|
$
|
0.07
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares
|
|
23,068,423
|
|
19,645,521
|
|
19,838,691
|
|
19,477,538
|
Includable incremental shares — adjusted
EBITDA (3)
|
|
--
|
|
3,340,390
|
|
3,242,413
|
|
3,322,710
|
Adjusted diluted
shares
|
|
23,068,423
|
|
22,985,911
|
|
23,081,104
|
|
22,800,248
|
(1)
|
Adjusted EBITDA as a
percentage of GAAP revenues.
|
(2)
|
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.
|
(3)
|
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.
|
SOURCE Streamline Health Solutions, Inc.