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Streamline Health® Reports Fourth Quarter 2014 Revenues Of $6.6 Million; 2014 Recurring Revenues Of 88%

ATLANTA, April 16, 2015 /PRNewswire/ -- Streamline Health Solutions, Inc. (NASDAQ: STRM), a leading provider of transformational data-driven solutions to help healthcare providers reduce exposure to risk, enhance clinical, financial, and operational performance, and improve patient care, today announced financial results for the fourth quarter and fiscal year of 2014, which ended January 31, 2015.

Revenues for the three-month period ended January 31, 2015 increased approximately 1.2% to $6.6 million versus $6.5 million in the comparable period of fiscal 2013. Adjusted EBITDA for the fourth quarter was $(0.7) million, up from $(2.2) million in the same period a year ago.

Revenues for fiscal year 2014 were $27.6 million, a 3.1 percent decrease over the previous fiscal year.  Recurring revenues for the year were $24.4 million, up 9.4% over fiscal year 2013. Adjusted EBITDA for the fiscal year was $(1.0) million, down from $1.8 million in fiscal year 2013.

"2014 was a difficult year for our company, and for many other companies in our industry, as purchasing slowed down following the most recent phase of Meaningful Use," stated David W. Sides, President and CEO, Streamline Health Solutions, Inc.  "A higher level of revenue attrition - nearly twice our historical average - comprised of the loss of some legacy GE clients along with some acquired client relationships negatively affected revenue in 2014 and will affect it in 2015 as well."

"We did, however, establish a new annual record for contract bookings in 2014, and large contracts, such as the ones we signed in Q3 last year, are a very positive development for our company in the long term, although these wins usually take longer to implement and, therefore, longer to recognize revenue. Today our committed, unimplemented quarterly recurring revenue stands at approximately $1.2 million, equating to nearly $5 million in annual revenues that are unrecognized at this time," continued Sides.

"As I look at the challenges and opportunities for our Company, I have implemented three key initiatives that we believe will lead to improved financial performance in 2015 and beyond, as follows. First, grow sales - both inside our existing client base and outside - and focus on improving our client retention.  To augment our selling efforts, besides the addition of more sales people and in-house lead generation resources already accomplished, we are looking to expand and better manage strategic channel partners to help sell our solutions to more clients faster.  Second, we will complete the links among the solutions inside our Looking Glass® platform to improve the user experience for those who have more than one of our software modules and to aid in cross-selling to our current clients.  Third, we will improve our professional services performance to deliver a meaningful contribution to revenue and profit."

"Our clients are some of the most well-regarded healthcare providers in the industry.  Our job - and our most immediate opportunity for growth - is to provide them with industry-leading solutions that help make their lives easier, and the performance of their institutions better."

Highlights for the fourth quarter and fiscal year ended January 31, 2015 included:

  • Revenues for the fourth quarter 2014 were $6.6 million, and for the year were $27.6 million;
  • Adjusted EBITDA for the fourth quarter 2014 was $(0.7) million, and for the year was $(1.0) million;
  • Recorded net loss of $(4.8) million for the three-month period ended January 31, 2015, and $(12.0) million for the fiscal year 2014;
  • Maintenance and support revenues for the quarter increased $0.3 million over the same period one year ago, and were $16.2 million for fiscal year 2014 up 16% over fiscal year 2013;
  • New sales bookings for the quarter were $0.3 million and $24.0 million for the fiscal year; and
  • Backlog at the end of the quarter was $72.5 million.

The Company will conduct a conference call to review the results on Thursday, April 16, 2015 at 5:00 PM ET. Interested parties can access the call by dialing 888-337-8169 and then entering Conference ID 8280083. A live webcast will also be available; click here to register.

A replay of the conference call will be available from Thursday, April 16, 2015 at 8:00 PM ET to Tuesday, April 21, 2015 at 8:00 PM ET by dialing 888-203-1112 and entering passcode 8280083.

*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 reduce exposure to risk, enhance operational performance, and improve patient care. Through our Looking Glass™ Platform we provide clients with meaningful, intelligent SaaS-based solutions from patient engagement to reimbursement. We share a common calling and commitment to advance the quality of life and the quality of healthcare -- for society, our industry, 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, renewal sales, interoperability among the Company's solutions, new client sales, success of the Company's channel partner relationships 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




Three Months Ended
January 31,


Fiscal Year Ended



2015


2014


2015


2014

Revenues:









  Systems sales

$

215,670

$

333,723

$

1,214,879

$

3,239,569

  Professional services


848,279


716,178


2,580,167


3,641,731

  Maintenance and support


3,745,952


3,461,971


16,157,371


13,986,566

  Software as a service


1,785,622


2,004,600


7,672,990


7,626,837

        Total revenues


6,595,523


6,516,472


27,625,407


28,494,703










Operating expenses:









  Cost of systems sales


1,031,305


830,587


3,536,495


3,142,525

  Cost of services


1,012,518


948,677


3,458,984


4,052,113

  Cost of maintenance and support


534,662


940,549


3,087,842


3,460,500

  Cost of software as a service


807,013


909,967


2,920,403


2,523,184

  Selling, general and administrative


3,299,977


4,228,140


16,225,574


14,546,335

  Research and development


2,905,233


3,460,743


9,756,206


7,088,077

  Impairment of intangible assets


1,952,000


-


1,952,000


-

        Total operating expenses


11,542,708


11,318,663


40,937,504


34,812,734

Operating loss


(4,947,185)


(4,802,191)


(13,312,097)


(6,318,031)

Other income (expense):









  Interest expense


(225,370)


(31,049)


(748,969)


(1,765,813)

  Loss on early extinguishment of debt


(315,327)


(160,713)


(429,849)


(160,713)

  Miscellaneous income (expenses)


(211,060)


2,787,828


1,592,449


(3,573,091)

Loss before income taxes


(5,698,942)


(2,206,125)


(12,898,466)


(11,817,648)

  Income tax benefit


889,299


259,403


887,009


100,459

Net loss

$

(4,809,643)

$

(1,946,722)

$

(12,011,457)

$

(11,717,190)

Less: deemed dividends on Series A Preferred Shares


(286,809)


(449,595)


(1,038,310)


(1,180,904)

Net loss attributable to common shareholders

$

(5,096,452)

$

(2,396,317)

$

(13,049,767)

$

(12,898,094)

Basic net loss per common share

$

(0.28)

$

(0.14)

$

(0.71)

$

(0.94)

Number of shares used in basic per common share computation


18,417,100


16,337,000


18,261,800


13,747,700

Diluted net loss per common share

$

(0.28)

$

(0.14)

$

(0.71)

$

(0.94)

Number of shares used in diluted per common share computation


18,417,100


16,337,000


18,261,800


13,747,700











 

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


Assets




January 31,



2015


2014

Current assets:





  Cash and cash equivalents

$

6,522,600

$

17,924,886

  Accounts receivable, net of allowance for doubtful





    accounts of $665,962 and $267,264, respectively


6,935,270


7,999,571

  Contract receivables


191,465


1,181,606

  Prepaid hardware and third party software for





    future delivery


55,173


25,640

  Prepaid client maintenance contracts


935,858


909,464

  Other prepaid assets


1,437,680


1,407,515

  Deferred income taxes


220,004


95,498

  Other current assets


207,673


144,049

        Total current assets


16,505,723


29,688,229






Non-current assets:





  Property and equipment:





  Computer equipment


2,381,923


3,769,564

  Computer software


964,857


2,239,654

  Office furniture, fixtures and equipment


683,443


889,080

  Leasehold improvements


724,015


697,570



4,754,238


7,595,868

  Accumulated depreciation and amortization


(1,617,423)


(6,676,824)

  Property and equipment, net


3,136,815


919,044






 Contract receivables, less current portion


43,553


78,395

 Capitalized software development costs, net of





   accumulated amortization of $11,846,468 and





   $7,949,352 respectively


9,197,118


10,238,357

   Intangible assets, net of accumulated amortization       





   of $13,677 and $98,102, respectively


9,500,317


12,175,634

 Deferred financing costs


387,199


44,898

 Goodwill


16,184,667


11,933,683

 Other


823,723


500,634

       Total non-current assets


39,273,392


35,890,645


$

55,779,115

$

65,578,874

 

 

 


STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


Liabilities and Stockholders' Equity




January 31,



2015


2014

Current liabilities:





  Accounts payable

$

2,298,851

$

1,796,418

  Accrued compensation


865,865


1,782,599

  Accrued other expenses


563,838


554,877

  Current portion of long-term debt


500,000


1,214,280

  Deferred revenues


9,289,076


9,658,232

  Current portion of note payable


-


300,000

  Current portion of capital lease obligation


781,961


105,573

        Total current liabilities


14,299,591


15,411,979






Non-current liabilities:





  Term loans


9,500,000


6,971,767

  Warrants liability


1,834,380


4,117,725

  Royalty liability


2,385,826


2,264,000

  Swap contract


-


111,086

  Note payable


-


600,000

  Lease incentive liability, less current portion


342,129


74,434

  Capital lease obligation


582,911


121,089

 Deferred revenues, less current portion


964,933


-

  Deferred income tax liability, less current portion


229,579


816,079

        Total non-current liabilities


15,839,758


15,076,180

        Total liabilities


30,139,349


30,488,159






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 $2,212,007 and $3,250,317, respectively


6,637,978


5,599,668






Stockholders' equity:





  Common stock, $.01 par value per share, 45,000,000 shares





    authorized, 18,553,389 and 18,175,787 shares issued and





    outstanding, respectively


185,534


181,758

  Convertible redeemable preferred stock, $.01 par value per





  Additional paid in capital


78,390,424


76,983,088

  Accumulated deficit


(59,574,170)


(47,562,713)

  Accumulated other comprehensive loss


-


(111,086)

        Total stockholders' equity


19,001,788


29,491,047


$

55,779,115

$

65,578,874

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




Fiscal Year



2014


2013

Operating activities:





  Net loss

$

(12,011,457)

$

(11,717,190)

  Adjustments to reconcile net loss to net cash (used in) provided by





     operating activities:





     Depreciation


1,005,283


718,097

Amortization of capitalized software development costs


3,677,991


3,192,157

Amortization of intangible assets


1,396,317


1,341,734

    Amortization of other deferred costs


189,107


385,461

    Amortization of debt discounts


47,552


4,327

    Valuation adjustment for warrants liability


(2,283,345)


(140,928)

    Deferred tax expense (benefit)


(720,582)


20,885

    Valuation adjustment for contingent earn-out


-


3,580,441

    Other valuation adjustments


128,855


(95,368)

    Loss on impairment of intangible assets


1,952,000



    Loss from early extinguishment of debt


315,327


160,713

    Loss on disposal of fixed assets


180,793


-

    Loss on exit of operating lease


234,823


-

    Share-based compensation expense


1,934,298


1,660,598

    Provision for accounts receivable


440,771


330,907

  Changes in assets and liabilities, net of assets acquired:





Accounts and contract receivables


2,157,977


827,435

Other assets


(637,348)


(439,477)

Accounts payable


600,263


275,360

Accrued expenses


(1,422,571)


259,771

Deferred revenues


(197,698)


(152,210)

  Net cash (used in) provided by operating activities


(3,011,644)


212,713






Investing activities:





Purchases of property and equipment


(2,125,240)


(152,283)

Capitalization of software development costs


(619,752)


(614,028)

Payment for acquisition, net of cash acquired


(6,058,225)


(3,000,000)

  Net cash used in investing activities


(8,803,217)


(3,766,311)






Financing activities:





Proceeds from term loan


10,000,000


4,958,333

Principal repayments on term loan


(8,297,620)


(10,348,214)

Principal repayments on note payable


(900,000)


-

Principal payments on capital lease obligation


(368,386)


(34,391)

Payment of deferred financing costs


(573,002)


(115,900)

Proceeds from exercise of stock options and stock purchase plan


551,583


1,356,060

Settlement of earn-out consideration


-


(1,300,000)

Proceeds from the sale of common stock


-


20,586,619

Payment of debt success fee


-


(1,124,279)

  Net cash provided by (used in) financing activities


412,575


13,978,228

(Decrease) increase in cash and cash equivalents


(11,402,286)


10,424,630

Cash and cash equivalents at beginning of year


17,924,886


7,500,256

Cash and cash equivalents at end of year

$

6,522,600

$

17,924,886

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

Backlog

(Unaudited)

Table A




January 31,
2015


October 31,
2014


January 31,
2014

Streamline Health Software Licenses

$

20,888,000

$

21,103,000

$

2,230,000

Hardware and Third Party Software


244,000


126,000


79,000

Professional Services


7,485,000


8,095,000


7,255,000

Maintenance and Support


21,304,000


21,657,000


25,936,000

Software as a Service


22,574,000


24,928,000


21,073,000

    Total

$

72,495,000

$

75,909,000

$

56,573,000

 

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

New Bookings

(Unaudited)

Table B




Fiscal Year Ended



January 31, 2015



Value


% of
Total
Bookings

Streamline Health Software licenses

$

19,842,000


83%

Software as a service


1,163,000


5%

Maintenance and support


102,000


0%

Professional services


2,882,000


12%

Hardware & third party software


52,000


0%

Total bookings

$

24,041,000


100%

 

 

Reconciliation of Non-GAAP Financial Measures

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 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):


Adjusted EBITDA Reconciliation


Three Months Ended,


Twelve Months Ended,



January 31,
2015


January 31,
2014


January 31,
2015


January 31,
2014

Net loss

$

(4,809)

$

(1,947)

$

(12,011)

$

(11,717)

    Interest expense


225


31


749


1,766

    Income tax benefit


(889)


(259)


(887)


(100)

    Depreciation


334


228


1,005


718

    Amortization of capitalized software  development costs


942


1,105


3,678


3,192

    Amortization of intangible assets


345


398


1,396


1,342

    Amortization of other costs


45


24


166


74

EBITDA


(3,807)


(419)


(5,904)


(4,725)

    Share-based compensation expense


648


457


1,934


1,661

    Loss on impairment of intangibles


1,952


-


1,952


-

    Loss on early extinguishment of debt


315


161


430


161

    Loss on disposal of fixed assets


70


-


181


-

    Non-cash valuation adjustments to assets and liabilities


52


(2,796)


(2,154)


3,427

    Transaction related professional fees, advisory fees and









      other internal direct costs


6


406


182


769

    Associate severances and other costs relating to









      transactions or corporate restructuring


70


32


901


415

    Other non-recurring operating expenses


0


9


1,491


62

Adjusted EBITDA

$

(694)

$

(2,150)

$

(987)

$

1,771

Adjusted EBITDA per diluted share









Loss per share - diluted

$

(0.28)

$

(0.15)

$

(0.71)

$

(0.94)

Adjusted EBITDA per adjusted diluted share (1)

$

(0.04)

$

(0.13)

$

(0.05)

$

0.10










Diluted weighted average shares


18,417,100


16,336,668


18,261,800


13,747,700

    Includable incremental shares — adjusted EBITDA (2)


-


-


-


4,863,140

Adjusted diluted shares


18,417,100


16,336,668


18,261,800


18,610,840



(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.

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