Streamline Health Solutions
Jun 12, 2017

Streamline Health® Reports First Quarter 2017 Revenues Of $5.9 Million; $(2.0) Million Net Loss; Adjusted EBITDA Of $(0.4) Million

ATLANTA, June 12, 2017 /PRNewswire/ -- Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of the Looking Glass® platform of integrated solutions, technology-enabled services and analytics supporting revenue cycle optimization for healthcare enterprises, today announced financial results for the first quarter of 2017, which ended April 30, 2017.

Streamline Health helps hospitals optimize their mid-revenue cycle operations in ways that transform tangled revenue cycles into dynamic revenue streams. Our integrated solutions, technology-enabled services and analytics enable providers to secure accurate reimbursement in a value-based world. (PRNewsfoto/Streamline Health Solutions)

Revenues for the three-month period ended April 30, 2017 decreased approximately 11% to $5.9 million over the April 30, 2016 quarter revenue of $6.7 million. Recurring revenue comprised 83% of total revenue in the quarter. Net loss for the first quarter was $(2.0) million as compared to a $(1.5) million net loss in the same period a year ago. Adjusted EBITDA for the first quarter 2017 was a negative $(0.4) million, down from $0.6M in first quarter of 2016.

"Our first quarter financial performance was as previously communicated, with a decline in revenue from Q4 of 2016 based primarily upon the anticipated revenue attrition of approximately $0.5 million combined with the negative net effect of selling our Scheduling solution suite while adding code auditing services," stated David Sides, President and Chief Executive Officer, Streamline Health.  "However, as we look at the remainder of the year, we are encouraged by the sales activity we are experiencing primarily with our new cloud-based pre-bill audit solution we call eValuator™. We acquired the initial concept for this new solution in September, invested development resources into it in the second half of last year and formally launched it at the HIMSS conference in February.  In just four months, the top of our sales pipeline has expanded substantially with more than 50 current clients and new prospects interested in eValuator. We anticipate closing our first of several new contracts in this quarter, and ramping up our bookings and recurring revenue performance in subsequent quarters this year and next.

"Our balance sheet was also as expected, with heavier uses of cash in the first quarter as usual.  Bookings were below our expectations as some software contracts were pushed out, and the contract size for new auditing services clients was smaller by nature, but the acquisition of new clients we believe will lead to greater growth opportunities with each one."

Highlights for the first quarter ended April 30, 2017 included:

  • Revenue for the first quarter 2017 was $5.9 million;
  • Net loss for the first quarter 2017 was $(2.0) million;
  • Adjusted EBITDA for the first quarter 2017 was $(0.4) million;
  • New sales bookings for the quarter were $0.5 million; and
  • Backlog at the end of the quarter was $47.9 million.

Conference Call Information

Date:

June 13, 2017, 9:00 AM ET



Webcast Registration:

Click Here



Conference Dial-In:

877-397-0286



International Dial-In:

719-325-4821



Conference Passcode:

2544566



Conference Call Name:

Streamline Health Solutions First 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 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, technology-enabled services 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, 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

April 30,



2017


2016

Revenues:





  Systems sales

$

378,723

$

511,267

  Professional services


420,035


690,615

  Audit Services


345,019


--

  Maintenance and support


3,354,772


3,755,553

  Software as a service


1,425,132


1,709,786

        Total revenues


5,923,681


6,667,221






Operating expenses:





  Cost of systems sales


566,051


745,484

  Cost of professional services


715,215


638,764

  Cost of audit services


440,639


--

  Cost of maintenance and support


806,522


857,818

  Cost of software as a service


339,376


484,243

  Selling, general and administrative


3,373,528


3,598,841

  Research and development


1,556,938


1,722,187

        Total operating expenses


7,798,269


8,047,337

Operating loss


(1,874,588)


(1,380,116)

Other income (expense):





  Interest expense


(127,268)


(162,012)

  Miscellaneous income


(38,044)


66,222

Loss before income taxes


(2,039,900)


(1,475,906)

  Income tax expense


(2,608)


(1,701)

Net loss

$

(2,042,508)

$

(1,477,607)

Less: deemed dividends on Series A Preferred Shares


--


(384,719)

Net loss attributable to common shareholders

$

(2,042,508)

$

(1,862,326)

Basic net loss per common share

$

(0.10)

$

(0.10)

Number of shares used in basic per common share computation


19,695,390


18,995,289

Diluted net loss per common share

$

(0.10)

$

(0.10)

Number of shares used in diluted per common share computation


19,695,390


18,995,289

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


Assets




April 30,


January 31,



2017


2017

Current assets:





  Cash and cash equivalents

$

3,577,245

$

5,654,093

  Accounts receivable, net of allowance for doubtful
    accounts of
$385,583 and $198,449, respectively


3,720,665


4,489,789

  Contract receivables


429,766


466,423

  Prepaid hardware and third party software for
    future delivery


5,858


5,858

  Prepaid client maintenance contracts


768,443


595,633

  Other prepaid assets


541,280


732,496

  Other current assets


110,899


439

        Total current assets


9,154,156


11,944,731






Non-current assets:





  Property and equipment:





    Computer equipment


3,087,261


3,110,274

    Computer software


831,242


827,642

    Office furniture, fixtures and equipment


683,443


683,443

    Leasehold improvements


729,348


729,348



5,331,294


5,350,707

  Accumulated depreciation and amortization


(3,621,128)


(3,447,198)

  Property and equipment, net


1,710,166


1,903,509






 Capitalized software development costs, net of  
   accumulated amortization
of $17,116,225 and  
  
$16,544,797 respectively


4,399,315


4,584,245

 Intangible assets, net of accumulated amortization  
  of $6,140,395 and $5,807,338, respectively


6,663,542


6,996,599

 Goodwill


15,537,281


15,537,281

 Other


594,887


672,133

       Total non-current assets


28,905,191


29,693,767


$

38,059,347

$

41,638,498

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


Liabilities and Stockholders' Equity




April 30,


January 31,



2017


2017

Current liabilities:





  Accounts payable

$

876,122

$

1,116,525

  Accrued compensation


394,466


496,706

  Accrued other expenses


989,689


484,391

  Current portion of term loan


655,804


655,804

  Deferred revenues


8,306,413


9,916,454

  Current portion of capital lease obligations


57,526


91,337

        Total current liabilities


11,280,020


12,761,217






Non-current liabilities:





  Term loan, net of deferred financing cost of $181,477 and





    $199,211, respectively


4,737,069


4,883,286

  Warrants liability


14,981


46,191

  Royalty liability


2,391,563


2,350,754

  Lease incentive liability


326,806


339,676

 Deferred revenues, less current portion


424,310


568,515

        Total non-current liabilities


7,894,729


8,188,422

        Total liabilities


19,174,749


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, 19,674,122 and 19,695,391 shares issued and
    outstanding, respectively


196,741


196,954

  Additional paid in capital


80,906,231


80,667,771

  Accumulated deficit


(71,068,359)


(69,025,851)

        Total stockholders' equity


10,034,613


11,838,874


$

38,059,347

$

41,638,498








 

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Three Months Ended April 30,



2017


2016

Operating activities:





  Net loss

$

(2,042,508)

$

(1,477,607)

  Adjustments to reconcile net loss to net cash





used in operating activities:

Depreciation


202,782


320,672

Amortization of capitalized software development costs


571,428


715,765

Amortization of intangible assets


333,057


325,446

Amortization of other deferred costs


100,815


61,184

Valuation adjustment for warrants liability


(31,210)


(39,403)

Share-based compensation expense


267,174


477,212

Other valuation adjustments


48,467


47,417

(Gain) loss on disposal of property and equipment


(720)


567

Provision for accounts receivable


187,134


71,907

  Changes in assets and liabilities, net of effects of acquisitions:





Accounts and contract receivables


618,647


108,002

Other assets


(97,889)


(39,082)

Accounts payable


(240,403)


(567,503)

Accrued expenses


382,530


(279,881)

Deferred revenues


(1,754,246)


(2,183,705)

  Net cash used in operating activities


(1,454,942)


(2,459,009)






Investing activities:





Purchases of property and equipment


(8,719)


(11,654)

Capitalization of software development costs


(386,498)


(497,988)

  Net cash used in investing activities


(395,217)


(509,642)






Financing activities:





Principal repayments on term loan


(163,951)


(168,451)

Principal payments on capital lease obligation


(33,811)


(217,110)

    Payments related to settlement of employee share-based awards


(28,927)


(11,702)

  Net cash used in financing activities


(226,689)


(397,263)

Net decrease in cash and cash equivalents


(2,076,848)


(3,365,914)

Cash and cash equivalents at beginning of period


5,654,093


9,882,136

Cash and cash equivalents at end of period

$

3,577,245

$

6,516,222

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

Backlog

(Unaudited)

Table A




April 30,
2017


January 31,
2017


April 30,

2016

Company Proprietary Software

$

11,234,000

$

11,504,000

$

21,410,000

Third Party Hardware and Software


100,000


150,000


200,000

Professional Services


3,642,000


4,068,000


5,480,000

Audit Services


1,634,000


1,847,000


--

Maintenance and Support


18,084,000


19,193,000


20,793,000

Software as a Service


13,194,000


13,861,000


14,820,000

    Total

$

47,888,000

$

50,623,000

$

62,703,000

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

New Bookings

 (Unaudited)

Table B




Three Months Ended



April 30, 2017



Value


% of Total
Bookings

Streamline Health Software licenses

$

15,000


3%

Software as a service


22,000


4%

Maintenance and support


3,000


1%

Professional services


479,000


92%

Hardware & third party software


--


0%

Total bookings

$

519,000


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 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,




April 30, 2017


April 30, 2016


Net loss

$

(2,043)

$

(1,478)


    Interest expense


127


162


    Income tax expense


3


2


    Depreciation


203


321


    Amortization of capitalized software development costs


571


716


    Amortization of intangible assets


333


325


    Amortization of other costs


84


43


EBITDA


(722)


91


    Share-based compensation expense


267


477


    (Gain) Loss of disposal of fixed assets


(1)


1


    Non-cash valuation adjustments to assets and liabilities


17


8


    Transaction related professional fees, advisory fees and   






    other internal direct costs


--


19


Adjusted EBITDA

$

(439)

$

596


Adjusted EBITDA Margin(1)


(7)%


9%


Adjusted EBITDA per diluted share






Loss per share - diluted

$

(0.10)

$

(0.10)


Adjusted EBITDA per adjusted diluted share (2)

$

(0.02)

$

0.03


Diluted weighted average shares


19,695,390


18,995,289


    Includable incremental shares — adjusted EBITDA (3)


--


3,251,455


Adjusted diluted shares


19,695,390


22,246,744




(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.

 

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SOURCE Streamline Health, Inc.

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