8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 7, 2011
Streamline Health Solutions, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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0-28132
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31-1455414 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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10200 Alliance Road, Suite 200,
Cincinnati, OH
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45242-4716 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (513) 794-7100
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On June 7, 2011, Streamline Health Solutions, Inc. (Streamline Health) issued the press
release attached hereto as Exhibit 99.1, which press release contains financial information about
Streamline Healths first fiscal quarter ended April 30, 2011. The information hereunder shall not
be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934 (the
Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be
incorporated by reference into a filing under the Securities Act of 1933 or the Exchange Act,
except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
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EXHIBIT |
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NUMBER |
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DESCRIPTION |
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99.1 |
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First Quarter Earnings News Release of Streamline Health Solutions, Inc. dated June 7, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
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Streamline Health Solutions, Inc.
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Date: June 7, 2011 |
By: |
/s/ Stephen H. Murdock
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Stephen H. Murdock |
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Chief Financial Officer |
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2
INDEX TO EXHIBITS
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Exhibit No. |
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Description of Exhibit |
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99.1 |
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First Quarter Earnings News Release of Streamline Health Solutions,
Inc. dated June 7, 2011. |
3
Exhibit 99.1
Exhibit 99.1
News Release
Visit our web site at: www.streamlinehealth.net
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COMPANY CONTACT:
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INVESTOR CONTACT: |
Robert E. Watson
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Joe Diaz, Robert Blum or Joe Dorame |
Chief Executive Officer
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Lytham Partners, LLC |
(513) 794-7100
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(602) 889-9700 |
STREAMLINE HEALTH® SOLUTIONS REPORTS Q1 RESULTS
Cincinnati, Ohio June 7, 2011 Streamline Health Solutions, Inc. (Nasdaq: STRM) today
announced financial results for the first quarter of fiscal year 2011, ended April 30, 2011.
Highlights for the quarter included:
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Total revenues increased by 17% as compared to the first quarter of fiscal 2010; |
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Professional services revenues improved by 53% over the prior comparable quarter; |
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Software as a service (SaaS) revenues for the quarter increased 9% over the prior
comparable quarter; |
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New bookings for the quarter, excluding maintenance revenue, exceeded $700,000; |
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Backlog at quarter end was $17.7 million. |
Revenues for the first quarter totaled $4.1 million, compared to $3.5 million in the prior year
first quarter, which benefitted from improved professional services revenues over the prior
comparable quarter as a result of progress on implementations of systems and other related services
sold in prior quarters. Professional services revenues improved by $348,000 or 53% over the prior
comparable period.
Increases in revenues for the first quarter were also aided by increases in recurring revenues from
maintenance contracts and SaaS subscriptions. Recurring revenues from maintenance contracts
improved by 10% or $192,000 over the prior comparable first quarter. The increase is due to the
continued revenue recognition from backlog, and the incremental maintenance revenues from systems
sold in prior quarters for which maintenance periods commenced subsequent to the close of the first
quarter of 2010. SaaS revenues increased by $75,000 or 9% over the prior comparable quarter due to
one large customer subscription sold in fiscal 2010 which reached go-live status.
Total operating expenses for the first quarter of fiscal 2011 were $4.4 million compared with $4.7
million in the comparable prior year quarter. This decrease was the result of decreased
capitalized software amortization due to older assets becoming fully amortized subsequent to the
end of the first quarter of fiscal 2010. In addition, cost saving measures were implemented to
reduce costs and create better efficiency in the organization going forward, that were partially
offset by increased stock-based compensation expenses, an increase to the allowance for doubtful
accounts, and accrued expenses for annual bonus and severance costs.
As a result, the Company recorded a net loss for the first quarter ended April 30, 2011 of
$281,000, or $0.03 per fully diluted share, compared with net loss of $1.2 million, or $0.13 per
fully diluted share, for the prior year comparable quarter. Adjusted EBITDA* (a non-GAAP measure)
for the quarter ended April 30, 2011 was $630,000, or $0.06 per fully diluted common share
(adjusted), compared to ($225,000), or ($0.03) per fully diluted common share (adjusted) in the
comparable prior quarter. A reconciliation table is provided below.
New bookings for the first quarter, excluding maintenance services, were in excess of $790,000,
primarily consisting of professional services and third-party hardware and software.
Backlog at April 30, 2011 was $17.7 million, compared with $18.6 million at April 30, 2010 and
$17.6 million at January 31, 2011. The decrease in current backlog was impacted by the recognition
of revenue for SaaS and maintenance contracts that were in the prior backlog totals, and offset by
new maintenance contracts from software sold in the quarters subsequent to April 30, 2010 and
January 31, 2011.
Robert E. Watson, president and chief executive officer of Streamline Health, commented, We are
pleased with the results of the first quarter of fiscal 2011. With increased revenues and a strong
focus on managing operating expenses we were able to substantially reduce our net loss versus the
comparable quarter last year, and adjusted EBITDA (a non-GAAP measure) for the quarter was
$630,000, or $0.06 per share, compared to ($225,000), or ($0.03) per share in the comparable prior
quarter of fiscal 2010. We expect that financial results in the coming quarters will more fully
reflect the impact of the expense reductions that we are in the process of implementing. We believe
that substantial progress has been made in repositioning the Company for improved financial results
in fiscal 2011 and beyond.
* Non-GAAP Financial Measures
Streamline Health reports its financial results in accordance with generally accepted accounting
principles in the United States (GAAP). Streamline Healths 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 Healths management believes that these measures provide
useful supplemental information regarding the performance of Streamline Healths business
operations.
2
Streamline Health defines adjusted EBITDA as net earnings (loss) plus interest expense, tax
expense, depreciation and amortization expense of tangible and intangible assets, and stock-based
compensation expense. A table illustrating this measure is included in this publication.
Conference Call Information
The Company will conduct a conference call and webcast to review the results of the first quarter
of fiscal 2011 today, June 7, 2011, at 4:30 p.m. ET.
Interested parties can access the call by dialing (877) 317-6789 or (412) 317-6789, or listen via a
live Internet webcast, which can be found at www.streamlinehealth.net. A replay of the call
will be available for 30 days by visiting www.streamlinehealth.net or by calling (877)
344-7529 or (412) 317-0088, access code 451358, through
June 10, 2011.
About Streamline Health
Streamline Health is a leading provider of document workflow and document management solutions,
applications and services that help strategic business partners and healthcare organizations
improve operational efficiencies through business process optimization. The Company provides
integrated tools and technologies for automating document-intensive environments, including
document workflow, document management, e-forms, connectivity, optical character recognition (OCR),
and business process integration.
The Companys workflow-based services offer solutions to inefficient and labor-intensive healthcare
business processes throughout the revenue cycle, such as chart coding, abstracting and completion,
remote physician referral order processing, pre-admission registration scanning and signature
capture, financial screening, perioperative processing, mitigation processing, secondary billing
services, explanation of benefits processing, and release of information processing. The Companys
solutions also address the document workflow needs of the Human Resources and Supply Chain
Management processes of the healthcare enterprise. All solutions are available through a software
as a service (SaaS) model of delivery via the Companys Remote Hosting Center that better matches
customers capital or operating budget needs, or via a locally installed software licensing model.
Streamline Healths solutions create a permanent document-based repository of historical health
information that is complementary and can be seamlessly integrated with existing disparate
clinical, financial and administrative information systems, providing convenient electronic access
to multiple forms of patient information from any location through secure web-based access. These
integrated solutions allow providers and administrators to link existing systems with documents,
which can dramatically improve the availability of patient information while decreasing direct
costs associated with document retrieval, work-in-process, chart processing, document retention,
and archiving.
For additional information please visit our website at www.streamlinehealth.net.
3
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 risks and uncertainties. The forward looking
statements contained herein 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. These risks and uncertainties include, but are not limited to, the
impact of competitive products and pricing, product demand and market acceptance, new product
development, key strategic alliances with vendors that resell the Company products, the ability of
the Company to control costs, availability of products produced 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 Accountings Standards Board or other similar entities, changes in economic, business and
market conditions impacting the healthcare industry, the markets in which the Company operates and
nationally, and the Companys 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 managements 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.
Financial Tables on Following Pages
4
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended,
(Unaudited)
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April 30, 2011 |
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April 30, 2010 |
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Revenues: |
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Systems sales |
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$ |
131,002 |
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$ |
150,438 |
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Services, maintenance and support |
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3,083,961 |
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2,543,575 |
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Software as a service(1) |
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925,059 |
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850,003 |
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Total revenues |
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4,140,022 |
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3,544,016 |
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Operating expenses: |
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Cost of systems sales |
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540,952 |
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737,889 |
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Cost of services, maintenance and support |
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1,333,871 |
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1,382,210 |
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Cost of software as a service |
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436,423 |
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457,028 |
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Selling, general and administrative |
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1,664,661 |
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1,697,577 |
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Product research and development |
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417,774 |
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470,171 |
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Total operating expenses |
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4,393,681 |
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4,744,875 |
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Operating loss |
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(253,659 |
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(1,200,859 |
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Other income (expense): |
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Interest expense |
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(19,842 |
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(22,335 |
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Miscellaneous income (expenses) |
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(4,955 |
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51,809 |
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Loss before income taxes |
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(278,456 |
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(1,171,385 |
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Income tax (expense) |
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(2,315 |
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(5,000 |
) |
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Net loss |
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$ |
(280,771 |
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$ |
(1,176,385 |
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Basic and diluted net loss per common share |
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$ |
(0.03 |
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$ |
(0.13 |
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Number of shares used in basic and diluted
per common share computation |
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9,649,508 |
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9,413,367 |
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(1) |
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Software as a service was previously labeled Application hosting services, management
determined that Software as a service more closely defines the Companys service
offering. |
5
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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April 30, 2011 |
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January 31, 2011 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
481,717 |
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$ |
1,403,949 |
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Accounts receivable, net of allowance for doubtful
accounts of $150,000 and $100,000, respectively |
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1,550,789 |
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2,620,756 |
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Contract receivables |
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663,375 |
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680,096 |
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Prepaid hardware and third party software for future delivery |
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55,363 |
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72,259 |
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Prepaid customer maintenance contracts |
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960,099 |
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794,299 |
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Other prepaid assets |
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257,464 |
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200,056 |
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Deferred income taxes |
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167,000 |
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167,000 |
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Total current assets |
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4,135,807 |
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5,938,415 |
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Property and equipment: |
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Computer equipment |
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2,785,062 |
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2,708,819 |
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Computer software |
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1,988,573 |
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1,947,135 |
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Office furniture, fixtures and equipment |
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747,867 |
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747,867 |
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Leasehold improvements |
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639,864 |
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639,864 |
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6,161,366 |
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6,043,685 |
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Accumulated depreciation and amortization |
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(4,702,279 |
) |
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(4,517,860 |
) |
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1,459,087 |
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1,525,825 |
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Other assets: |
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Contract receivables, less current portion |
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286,239 |
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241,742 |
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Capitalized software development costs, net of accumulated
amortization of $13,325,939 and $12,832,347, respectively |
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7,866,472 |
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7,575,064 |
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Other, including deferred taxes of $711,000, respectively |
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737,134 |
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734,376 |
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Total other assets |
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8,889,845 |
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8,551,182 |
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$ |
14,484,739 |
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$ |
16,015,422 |
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Liabilities and Stockholders Equity |
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Current liabilities: |
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Accounts payable |
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$ |
591,640 |
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$ |
565,252 |
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Accrued compensation |
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541,682 |
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1,163,843 |
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Accrued other expenses |
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247,904 |
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480,422 |
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Capital lease obligation |
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132,299 |
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183,637 |
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Deferred revenues |
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4,902,831 |
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5,766,795 |
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Total current liabilities |
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6,416,356 |
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8,159,949 |
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Long-term liabilities: |
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Line of credit |
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1,500,000 |
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1,200,000 |
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Lease incentive liability |
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57,748 |
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61,034 |
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Total liabilities |
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7,974,104 |
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9,420,983 |
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Stockholders equity: |
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Convertible redeemable preferred stock, $.01 par value per share,
5,000,000 shares authorized, no shares issued |
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Common stock, $.01 par value per share, 25,000,000 shares
authorized, 9,881,517 and 9,856,517 shares issued and
outstanding,
respectively |
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98,815 |
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|
98,565 |
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Additional paid in capital |
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37,171,959 |
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|
36,975,242 |
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Accumulated deficit |
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(30,760,139 |
) |
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|
(30,479,368 |
) |
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Total stockholders equity |
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6,510,635 |
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|
|
6,594,439 |
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|
|
|
|
|
|
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$ |
14,484,739 |
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$ |
16,015,422 |
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6
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended,
(Unaudited)
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April 30, 2011 |
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April 30, 2010 |
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Operating activities: |
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|
|
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Net loss |
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$ |
(280,771 |
) |
|
$ |
(1,176,385 |
) |
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities: |
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|
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Depreciation and amortization |
|
|
691,345 |
|
|
|
837,019 |
|
Loss on disposal of fixed asset |
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|
26,666 |
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|
|
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Stock-based compensation expense |
|
|
196,967 |
|
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|
87,446 |
|
Change in assets and liabilities: |
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Accounts, contract and installment receivables |
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1,042,191 |
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|
1,222,930 |
|
Other assets |
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(209,070 |
) |
|
|
(127,979 |
) |
Accounts payable |
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|
26,388 |
|
|
|
(283,538 |
) |
Accrued expenses |
|
|
(857,965 |
) |
|
|
(53,208 |
) |
Deferred revenues |
|
|
(863,964 |
) |
|
|
(504,687 |
) |
|
|
|
|
|
|
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Net cash (used in) provided by operating activities |
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|
(228,213 |
) |
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|
1,598 |
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Investing activities: |
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|
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|
|
|
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Purchases of property and equipment |
|
|
(157,681 |
) |
|
|
(153,407 |
) |
Capitalization of software development costs |
|
|
(785,000 |
) |
|
|
(696,000 |
) |
Other |
|
|
|
|
|
|
(34,344 |
) |
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(942,681 |
) |
|
|
(883,751 |
) |
|
|
|
|
|
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|
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|
|
|
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|
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Financing activities: |
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|
|
|
|
|
|
|
Net change under revolving credit facility |
|
|
300,000 |
|
|
|
800,000 |
|
Proceeds from exercise of stock options and stock
purchase plan |
|
|
|
|
|
|
83,041 |
|
Payments on capital lease obligation |
|
|
(51,338 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
248,662 |
|
|
|
883,041 |
|
|
|
|
|
|
|
|
(Decrease) Increase in cash and cash equivalents |
|
|
(922,232 |
) |
|
|
888 |
|
Cash and cash equivalents at beginning of period |
|
|
1,403,949 |
|
|
|
1,025,173 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
481,717 |
|
|
$ |
1,026,061 |
|
|
|
|
|
|
|
|
Supplemental cash flow disclosures: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
16,841 |
|
|
$ |
13,276 |
|
|
|
|
|
|
|
|
Income taxes paid |
|
$ |
11,897 |
|
|
$ |
8,994 |
|
|
|
|
|
|
|
|
7
STREAMLINE HEALTH SOLUTIONS, INC.
Backlog
(Unaudited)
Table A
Backlog (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, 2011 |
|
|
January 31, 2011 |
|
|
April 30, 2010 |
|
Streamline Health Software Licenses |
|
$ |
82,000 |
|
|
$ |
121,000 |
|
|
$ |
188,000 |
|
Custom Software |
|
|
29,000 |
|
|
|
42,000 |
|
|
|
107,000 |
|
Hardware and Third Party Software |
|
|
107,000 |
|
|
|
66,000 |
|
|
|
145,000 |
|
Professional Services |
|
|
4,729,000 |
|
|
|
4,629,000 |
|
|
|
3,800,000 |
|
Software as a service |
|
|
6,550,000 |
|
|
|
7,362,000 |
|
|
|
9,310,000 |
|
Recurring Maintenance |
|
|
6,199,000 |
|
|
|
5,384,000 |
|
|
|
5,078,000 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
17,696,000 |
|
|
$ |
17,604,000 |
|
|
$ |
18,628,000 |
|
|
|
|
|
|
|
|
|
|
|
8
STREAMLINE HEALTH SOLUTIONS, INC.
Bookings
(Unaudited)
Table B
New bookings (a)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
April 30, 2011 |
|
|
|
Value |
|
|
% of Total Bookings |
|
Streamline Health Software licenses |
|
$ |
|
|
|
|
0 |
% |
Software as a service |
|
|
25,000 |
|
|
|
3 |
% |
Professional services |
|
|
571,000 |
|
|
|
72 |
% |
Hardware & third party software |
|
|
195,000 |
|
|
|
25 |
% |
|
|
|
|
|
|
|
Total bookings |
|
$ |
791,000 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
(a) |
|
Bookings are the aggregate of signed contracts and/or completed customer purchase
orders approved and accepted by the Company as binding commitments to purchase its products
and/or services. New bookings do not include maintenance services as these tend to be
recurring in nature on an annual or more frequent basis. |
9
STREAMLINE HEALTH SOLUTIONS, INC.
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
Healths 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 companys 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 Companys management compensates for these limitations by
considering the companys 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.
Reconciliation
of net earnings(loss) to non-GAAP adjusted EBITDA (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended, |
|
|
|
April 30, 2011 |
|
|
April 30, 2010 |
|
Adjusted EBITDA Reconciliation |
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
(281 |
) |
|
$ |
(1,176 |
) |
Interest expense |
|
|
20 |
|
|
|
22 |
|
Tax expenses |
|
|
2 |
|
|
|
5 |
|
Depreciation and other amortization |
|
|
198 |
|
|
|
222 |
|
Amortization of capitalized software development costs |
|
|
494 |
|
|
|
615 |
|
|
|
|
|
|
|
|
EBITDA |
|
|
433 |
|
|
|
(312 |
) |
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
197 |
|
|
|
87 |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
630 |
|
|
$ |
(225 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA per diluted share |
|
|
|
|
|
|
|
|
Earnings (loss) per share diluted |
|
$ |
(0.03 |
) |
|
$ |
(0.13 |
) |
Interest expense (1) |
|
|
0.00 |
|
|
|
0.00 |
|
Tax expenses (1) |
|
|
0.00 |
|
|
|
0.00 |
|
Depreciation and other amortization (1) |
|
|
0.02 |
|
|
|
0.02 |
|
Amortization of capitalized software development costs (1) |
|
|
0.05 |
|
|
|
0.07 |
|
Stock-based compensation expense (1) |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
|
|
|
|
|
Adjusted EBITDA per adjusted diluted share |
|
$ |
0.06 |
|
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares |
|
|
9,649,508 |
|
|
|
9,413,367 |
|
Includable incremental shares adjusted EBITDA (2) |
|
|
8,108 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted shares |
|
$ |
9,657,616 |
|
|
$ |
9,413,367 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Per adjusted diluted weighted average shares |
|
(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. If negative adjusted EBITDA is incurred, no
additional incremental shares are assumed for adjusted diluted shares. |
10