Press Release

Streamline Health® Reports First Quarter 2014 Revenues Of $7.0 Million

Streamline Health® Reports First Quarter 2014 Revenues Of $7.0 Million 72.1 KB

ATLANTA, July 24, 2014 /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 first quarter of 2014, which ended April 30, 2014.

Revenues for the three-month period ended April 30, 2014, increased approximately 7% to $7.0 million versus $6.5 million in the comparable period of fiscal 2013. Recurring revenues increased 15% over year ago period, and sales backlog continued to grow at a double-digit rate, increasing 19% over Q1 2013.

"As stated in our fourth quarter and year end report, we recognized that due to the lateness of our filings we would be late filing our first quarter results. These delays are now behind us and we are back on our normal quarterly filing schedule," stated Robert E. Watson, President and CEO, Streamline Health Solutions, Inc.

"Regarding our first quarter financial performance, we are seeing some positive trends, such as a steady increase in recurring revenues, continued strong growth in our sales backlog, and solid renewals among our key clients."

Highlights for the first quarter ended April 30, 2014 included:

Revenue for the first quarter 2014 was $7.0 million, an increase of 7% over the comparable period in 2013;
Adjusted EBITDA for the first quarter 2014 was ($0.5 million);
Recorded net loss of $2.7 million for the three-month period ended April 30, 2014;
Maintenance and support revenues for the quarter increased $0.8 million, over the same period one year ago;
New sales bookings and long term renewal agreements for quarter were $10.7 million comprised of $9.0 million in renewals and $1.7 million in new bookings; and
Backlog at the end of the quarter was $62.9 million.

Conference Call Information

The Company will conduct a conference call to review the results on Thursday, July 24, 2014 at 5:00 PM EDT. Interested parties can access the call by dialing 800-691-0338 and then entering Conference ID 3622071. A live webcast will also be available; click here to register.

A replay of the conference call will be available from Thursday, July 24, 2014 at 8:00 PM EDT to Tuesday, July 29, 2014 at 8:00 PM EDT by dialing 888-203-1112 and entering passcode 3622071.

*Non-GAAP Financial Measures

Streamline Health reports its financial results in accordance with generally accepted accounting principles in the United States ("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 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, key strategic alliances with vendors 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,
		2014		2013
Revenues:
Systems sales	$	339,205	$	324,646
Professional services		608,951		919,351
Maintenance and support		4,171,812		3,380,600
Software as a service		1,831,202		1,848,741
Total revenues		6,951,171		6,473,338

Operating expenses:
Cost of systems sales		835,468		638,597
Cost of services		986,425		974,462
Cost of maintenance and support		960,186		984,588
Cost of software as a service		771,579		579,080
Selling, general and administrative		4,640,456		3,580,867
Research and development		2,350,443		1,097,010
Total operating expenses		10,544,557		7,854,604
Operating loss		(3,593,387)		(1,381,266)
Other expense (income):
Interest expense		(169,478)		(566,565)
Miscellaneous income (expenses)		1,092,771		(742,265)
Loss before income taxes		(2,670,094)		(2,690,096)
Income tax expense		(1,145)		(19,750)
Net loss	$	(2,671,239)	$	(2,709,846)
Less: deemed dividends on Series A Preferred Shares		(229,766)		(341,637)
Net loss attributable to common shareholders	$	(2,901,005)	$	(3,051,483)
Basic net loss per common share	$	(0.16)	$	(0.24)
Number of shares used in basic per common share computation		18,146,232		12,534,474
Diluted net loss per common share	$	(0.16)	$	(0.24)
Number of shares used in diluted per common share computation		18,146,232		12,534,474

STREAMLINE HEALTH SOLUTIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Assets

		April 30, 2014		January 31, 2014

Current assets:
Cash and cash equivalents	$	6,965,739	$	17,924,886
Accounts receivable, net of allowance for doubtful
accounts of $253,080 and $267,264, respectively		9,002,126		7,999,571
Contract receivables		195,841		1,181,606
Prepaid hardware and third party software for
future delivery		27,510		25,640
Prepaid client maintenance contracts		1,095,009		909,464
Other prepaid assets		1,919,881		1,407,515
Deferred income taxes		95,498		95,498
Other current assets		78,587		144,049
Total current assets		19,380,191		29,688,229

Non-current assets:
Property and equipment:
Computer equipment		3,830,157		3,769,564
Computer software		2,320,557		2,239,654
Office furniture, fixtures and equipment		900,900		889,080
Leasehold improvements		1,172,070		697,570
		8,223,684		7,595,868
Accumulated depreciation and amortization		(6,827,484)		(6,676,824)
Property and equipment, net		1,396,200		919,044

Contract receivables, less current portion		69,684		78,395
Capitalized software development costs, net of
accumulated amortization of $9,085,345 and
$7,949,352, respectively		11,537,757		10,238,357
Intangible assets, net		12,489,756		12,175,634
Deferred financing costs		41,947		44,898
Goodwill		15,931,098		11,933,683
Other		781,725		500,634
Total non-current assets		42,248,167		35,890,645
	$	61,628,358	$	65,578,874

STREAMLINE HEALTH SOLUTIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Liabilities and Stockholders' Equity

		April 30, 2014		January 31, 2014

Current liabilities:
Accounts payable	$	1,780,392	$	1,796,418
Accrued compensation		1,567,606		1,782,599
Accrued other expenses		801,963		554,877
Current portion of long-term debt		1,214,280		1,214,280
Deferred revenues		9,336,655		9,658,232
Current portion of note payable		300,000		300,000
Current portion of capital lease obligation		112,345		105,573
Total current liabilities		15,113,241		15,411,979

Non-current liabilities:
Term loans		6,665,076		6,971,767
Warrants liability		2,979,704		4,117,725
Royalty liability		2,302,200		2,264,000
Swap contract		132,800		111,086
Note payable		600,000		600,000
Lease incentive liability, less current portion		67,641		74,434
Capital lease obligation		100,789		121,089
Deferred income tax liability, less current portion		825,677		816,079
Total non-current liabilities		13,673,887		15,076,180
Total liabilities		28,787,128		30,488,158

Series A 0% Convertible Redeemable Preferred stock, $.01 par value per share, $8,849,985 and $8,849,985 redemption value, 4,000,000 shares authorized, 2,949,995 and 2,949,995 issued and outstanding, net of unamortized preferred stock discount of $3,020,551 and $3,250,317, respectively		5,829,434		5,599,668

Stockholders' equity:
Common stock, $.01 par value per share, 25,000,000 shares
authorized, 18,176,120 and 18,175,787 shares issued and
outstanding, respectively		181,761		181,758
Convertible redeemable preferred stock, $.01 par value per
Additional paid in capital		77,196,787		76,983,088
Accumulated deficit		(50,233,952)		(47,562,712)
Accumulated other comprehensive loss		(132,800)		(111,086)
Total stockholders' equity		27,011,796		29,491,048
	$	61,628,358	$	65,578,874

STREAMLINE HEALTH SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

		Three Months Ended April 30,
		2014		2013
Operating activities:
Net loss	$	(2,671,239)	$	(2,709,846)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation		150,660		171,443
Amortization of capitalized software development costs		916,868		694,689
Amortization of intangible assets		358,879		314,488
Amortization of other deferred costs		38,838		82,814
Valuation adjustment for warrants liability		(1,138,021)		645,354
Share-based compensation expense		442,876		467,401
Other valuation adjustments		38,200		-
Changes in assets and liabilities, net of assets acquired:
Accounts and contract receivables		528,680		38,880
Other assets		(927,325)		(414,056)
Accounts payable		(142,824)		(768,793)
Accrued expenses		(378,084)		(632,741)
Deferred revenues		(1,161,803)		(598,984)
Net cash used in operating activities		(3,944,295)		(2,709,351)

Investing activities:
Purchases of property and equipment		(592,498)		(78,516)
Capitalization of software development costs		(193,379)		(460,177)
Payment for acquisition		(5,890,402)		-
Net cash used in investing activities		(6,676,279)		(583,693)

Financing activities:
Principal repayments on term loan		(202,380)		(312,501)
Principal payments on capital lease obligation		(23,985)		-
Payment of deferred financing costs		(112,800)		-
Proceeds from exercise of stock options and stock purchase plan		592		61,512
Net cash used in financing activities		(338,573)		(250,989)
Decrease in cash and cash equivalents		(10,959,147)		(3,499,033)
Cash and cash equivalents at beginning of period		17,924,886		7,500,256
Cash and cash equivalents at end of period	$	6,965,739	$	4,001,223

STREAMLINE HEALTH SOLUTIONS, INC. Backlog (Unaudited) Table A

		April 30, 2014		January 31, 2014		April 30, 2013
Streamline Health Software Licenses	$	2,006,000	$	2,230,000	$	3,304,000
Hardware and Third Party Software		54,000		79,000		77,000
Professional Services		6,948,000		7,255,000		8,040,000
Maintenance and Support		27,114,000		25,936,000		23,017,000
Software as a Service		26,808,000		21,073,000		18,607,000
Total	$	62,930,000	$	56,573,000	$	53,045,000

STREAMLINE HEALTH SOLUTIONS, INC. New Bookings (Unaudited) Table B

		Three Months Ended
		April 30, 2014
		Value	% of Total Bookings
Streamline Health Software licenses	$	133,000	8%
Software as a service		1,163,000	70%
Maintenance and support		24,000	1%
Professional services		327,000	20%
Hardware & third party software		8,000	0%
Total bookings	$	1,655,000	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, 2014		April 30, 2013
Net loss	$	(2,671)	$	(2,710)
Interest expense		169		567
Income tax expense		1		20
Depreciation		151		171
Amortization of capitalized software development costs		917		695
Amortization of intangible assets		359		314
Amortization of other costs		27		10
EBITDA		(1,047)		(933)
Share-based compensation expense		443		467
Associate severances and other costs relating to
transactions or corporate restructuring		451		383
Non-cash valuation adjustments to assets and liabilities		(1,100)		645
Transaction related professional fees, advisory fees and
other internal direct costs		164		74
Other non-recurring operating expenses		574		49
Adjusted EBITDA	$	(515)	$	685
Adjusted EBITDA Margin⁽¹⁾		(7%)		11%
Adjusted EBITDA per diluted share
Loss per share - diluted	$	(0.16)	$	(0.24)
Adjusted EBITDA per adjusted diluted share ⁽²⁾	$	(0.03)	$	0.04

Diluted weighted average shares		18,146,232		12,534,474
Includable incremental shares — adjusted EBITDA ⁽³⁾		-		5,213,514
Adjusted diluted shares		18,146,232		17,747,988

(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.

Logo- http://photos.prnewswire.com/prnh/20140506/85083

SOURCE Streamline Health Solutions, Inc.

News Provided by Acquire Media