UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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): November 27, 2006
Streamline Health Solutions, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-28132 | 31-1455414 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 10200 Alliance Road, Suite 200, Cincinnati, OH | 45242-4716 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (513) 794-7100
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On November 27, 2006, Streamline Health Solutions, Inc. (“Streamline Health”) issued the press
release attached hereto as Exhibit 99.1, which press release contains financial information about
Streamline Health’s third fiscal quarter ended October 31, 2006. 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
(c) Exhibits
| EXHIBIT | ||
| NUMBER | DESCRIPTION | |
99.1
|
News Release of Streamline Health Solutions, Inc.
dated November 27, 2006 Third Quarter Earnings News Release |
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.
| Streamline Health Solutions, Inc. |
||||
Date: November 28, 2006
|
By: | /s/ Paul W. Bridge, Jr. Chief Financial Officer |
||
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INDEX TO EXHIBITS
| Exhibit No. | Description of Exhibit | |
99.1
|
News Release of Streamline Health Solutions, Inc.
Dated November 27, 2006 Third Quarter Earnings News Release |
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Exhibit 99.1
STREAMLINE HEALTH SOLUTIONS, INC.
News Release of Streamline Health Solutions, Inc. Dated November 27, 2006
STREAMLINE HEALTH SOLUTIONS, INC.
News Release of Streamline Health Solutions, Inc. Dated November 27, 2006
News Release
Visit our web site at: www.streamlinehealth.net
COMPANY CONTACT:
Paul W. Bridge, Jr.
Chief Financial Officer
(513) 794-7100
Paul W. Bridge, Jr.
Chief Financial Officer
(513) 794-7100
FOR IMMEDIATE RELEASE
STREAMLINE HEALTH SOLUTIONS, INC.
REPORTS FISCAL THIRD QUARTER RESULTS
REPORTS FISCAL THIRD QUARTER RESULTS
Cincinnati, Ohio, November 27, 2006 — Streamline Health Solutions, Inc. (NASDAQ Capital Market:
STRM) today announced the financial results for the third fiscal quarter and first nine months
ended October 31, 2006.
Revenues for the fiscal third quarter increased 14% to $3.6 million, compared with $3.2 million
reported in the third quarter of last year. This represents the eighth consecutive quarterly
increase in revenues over the comparable prior quarter. The operating loss for the quarter was
$297 thousand compared with an operating loss of $463 thousand in the comparable prior quarter.
The net loss for the third quarter was $334 thousand, or $0.04 per basic and diluted common share,
compared with a net loss of $454 thousand, or $0.05 per basic and diluted common share in the third
quarter of last year.
Revenues for the first nine months increased 21% to $12 million, when compared with $9.9 million
reported in the comparable period of last year. The operating loss was $127 thousand compared with
an operating loss of $170 thousand in the comparable prior period. The net loss for the period was
$200 thousand, or $0.02 per basic and diluted common share, when compared with a net loss of $212
thousand, or $0.02 per basic and diluted common share in the comparable prior period.
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Brian Patsy, Streamline Health’s president and chief executive officer commented, “The results for
the third quarter were below management’s revenue expectations but in line with our year to date
operating results expectations due to expense controls put in place to better match our expenses
with our revenues. The revenue shortfall occurred primarily because negotiations on two large
software licensing agreements through our largest distribution partner were not completed as
anticipated during the third quarter. The first agreement, which was consummated subsequent to the
close of our third quarter, will be delivered via our remote hosting services, and the second
agreement is currently also anticipated to close in our fourth quarter.
As we have noted in the past, our quarter-to-quarter comparisons are not necessarily indicative of
our operations because of the nature and timing of large systems sales that may significantly
impact any particular quarter. More accurate assessments, we believe, are comparisons of annual
financial results. We are confident that the large software licensing agreement we had hoped to
close in the third quarter can be secured and signed during the fourth quarter. With the expected
signing of this agreement, and other anticipated large system sales and currently forecasted
additional fourth quarter revenues, we believe that we will be able to achieve annual growth in
total revenues in the 20% range for the current fiscal year.”
Mr. Patsy concluded, “Year-to-date our total revenues are $2 million or 21% ahead of last year, of
which system sales are $1.1 million or 49% ahead of last year. We anticipate this trend will
continue in the fourth quarter and accordingly, will allow us to achieve our targeted revenue and
operating profit plans for the year. As planned, all increased revenues to date have been
reinvested in our operations to expand our sales and marketing, software development and
professional services staffs to enable the company to develop new products and achieve increasing
revenues.”
Also noteworthy during our third quarter:
| • | Forbes magazine named Streamline Health to its 2006 list of The 200 Best Small Companies, appearing in the October 30, 2006 issue. Ranked 56th on the Forbes list, selections were based on the following criteria: businesses with sales between $5 million and $750 million, positive growth over the past five years and in the past 12 months, net profit margins greater than 5 percent, and a share price of more than $5. |
| • | Andrew L. Turner has been appointed to Streamline Health’s Board of Directors. Mr. Turner has extensive healthcare experience, which includes serving as the founder and chairman of EnduraCare Therapy Management, Inc., and Horizon Healthcare Corporation. Mr. Turner also currently serves on the board of directors of several corporations, including Watson Pharmaceuticals, Inc., The Sports Club Company, and EnduraCare Therapy Management, Inc. |
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Conference Call Information
The third quarter conference call is scheduled at 10:00 a.m. Eastern Time, on Tuesday, November 28,
2006. The call will feature remarks from J. Brian Patsy, president and chief executive officer,
William A. Geers, chief operating officer, and Paul W. Bridge, Jr., chief financial officer.
The Conference Call will be broadcast live via the Internet. To listen, please go to
www.streamlinehealth.net approximately twenty minutes before the conference call is scheduled to
begin. You will need to download and install any necessary audio software. The webcast will be
available at our website for the next 30 days.
About Streamline Health
Streamline Health is a leading supplier of workflow and document management tools, applications
and services that assist strategic business partners and healthcare organizations to improve
operational efficiencies through business process optimization. The Company provides integrated
technology solutions for automating document-intensive environments, including document workflow,
document management, e-forms, portal connectivity, optical character recognition (OCR), and
interoperability.
The Company’s 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 order processing, pre-admission registration scanning and signature
capture, insurance verification, secondary billing services, explanation of benefits processing,
and release of information processing. The Company’s solutions also address the document workflow
needs of the Human Resource and Supply Chain Management processes of the healthcare enterprise.
All solutions are available for purchase or through a remote hosting services model that better
matches customers’ capital or operating budget needs.
Streamline Health’s 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 all forms of patient information from any location, including 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 http://www.streamlinehealth.net.
“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995
Statements made by Streamline Health that are not historical facts are forward-looking statements
that are subject to risks and uncertainties. Streamline Health’s future financial performance
could differ materially from expectations of management and from results reported now or in the
past. Factors that could cause Streamline Health’s
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financial performance to so differ include, but are not limited to, the signing of significant new
agreements anticipated in the fourth quarter and the resulting impact on operations should they not
be signed, the impact of competitive products and pricing, product development, reliance on
strategic alliances, availability of products procured from third party vendors, the healthcare
regulatory environment, fluctuations in operating results, and other risks detailed from time to
time in Streamline Health’s filings with the U.S. Securities and Exchange Commission.
STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended | Nine Months Ended | |||||||||||||||
| October 31, | October 31, | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenues: |
||||||||||||||||
Systems sales |
$ | 561,213 | $ | 621,519 | $ | 3,476,521 | $ | 2,334,216 | ||||||||
Services, maintenance and support |
2,212,044 | 1,771,236 | 6,110,393 | 5,323,582 | ||||||||||||
Application-hosting services |
818,856 | 771,839 | 2,436,328 | 2,269,400 | ||||||||||||
Total revenues |
3,592,113 | 3,164,594 | 12,023,242 | 9,927,198 | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of systems sales |
493,343 | 451,033 | 2,049,261 | 1,397,973 | ||||||||||||
Cost of services, maintenance and
support |
956,938 | 786,290 | 2,649,273 | 2,290,288 | ||||||||||||
Cost of application-hosting services |
278,271 | 263,436 | 855,647 | 752,131 | ||||||||||||
Selling, general and administrative |
1,452,044 | 1,212,472 | 4,369,664 | 3,561,280 | ||||||||||||
Product research and development |
708,399 | 914,281 | 2,226,765 | 2,095,366 | ||||||||||||
Total operating expenses |
3,888,995 | 3,627,512 | 12,150,610 | 10,097,038 | ||||||||||||
Operating (loss) |
(296,882 | ) | (462,918 | ) | (127,368 | ) | (169,840 | ) | ||||||||
Other income expense: |
||||||||||||||||
Interest income |
11,774 | 27,317 | 64,274 | 65,208 | ||||||||||||
Interest expense |
(24,242 | ) | (35,868 | ) | (107,407 | ) | (107,087 | ) | ||||||||
(Loss) before taxes |
(309,350 | ) | (471,469 | ) | (170,501 | ) | (211,719 | ) | ||||||||
Tax (provision) benefit |
(25,000 | ) | 17,000 | (29,000 | ) | — | ||||||||||
Net (loss) |
$ | (334,350 | ) | $ | (454,469 | ) | $ | (199,501 | ) | $ | (211,719 | ) | ||||
Basic net (loss) per common share |
$ | (0.04 | ) | $ | (0.05 | ) | $ | (0.02 | ) | $ | (0.02 | ) | ||||
Diluted net (loss) per common share |
$ | (0.04 | ) | $ | (0.05 | ) | $ | (0.02 | ) | $ | (0.02 | ) | ||||
Number of shares used in per common Share computation — basic |
9,211,399 | 9,131,237 | 9,190,028 | 9,108,911 | ||||||||||||
Number of shares used in per common Share computation — diluted |
9,211,399 | 9,131,237 | 9,190,028 | 9,108,911 | ||||||||||||
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STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
| October 31, | October 31, | January 31, | ||||||||||
| 2006 | 2005 | 2006 | ||||||||||
Assets |
||||||||||||
Current assets: |
||||||||||||
Cash |
$ | 1,640,225 | $ | 3,149,633 | $ | 4,634,219 | ||||||
Accounts receivable |
2,161,596 | 1,966,952 | 2,317,495 | |||||||||
Contract receivables |
2,286,239 | 1,169,056 | 2,268,913 | |||||||||
Allowance for doubtful accounts |
(200,000 | ) | (200,000 | ) | (200,000 | ) | ||||||
Other |
1,200,773 | 751,413 | 967,731 | |||||||||
Total current assets |
7,088,833 | 6,837,054 | 9,988,358 | |||||||||
Property and equipment: |
||||||||||||
Computer equipment |
2,353,969 | 2,077,744 | 2,120,321 | |||||||||
Computer software |
1,083,440 | 969,374 | 989,556 | |||||||||
Office furniture, fixtures and equipment |
782,768 | 736,858 | 736,858 | |||||||||
Leasehold improvements |
543,318 | 522,863 | 522,863 | |||||||||
| 4,763,495 | 4,306,839 | 4,369,598 | ||||||||||
Accumulated depreciation and amortization |
(3,240,928 | ) | (2,481,506 | ) | (2,666,784 | ) | ||||||
| 1,522,567 | 1,825,333 | 1,702,814 | ||||||||||
Contract receivables |
728,541 | — | 728,541 | |||||||||
Capitalized software development costs, net of accumulated
Amortization of $4,845,734, $3,833,231 and $4,033,232 respectively |
3,249,859 | 2,356,698 | 2,706,697 | |||||||||
Other, primarily deferred tax asset |
1,305,861 | 695,991 | 1,306,741 | |||||||||
| $ | 13,895,661 | $ | 11,715,076 | $ | 16,433,151 | |||||||
Liabilities, and stockholders’ equity |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 365,627 | $ | 740,395 | $ | 1,055,539 | ||||||
Accrued compensation |
446,580 | 463,092 | 1,139,587 | |||||||||
Accrued other expenses |
615,363 | 640,820 | 744,112 | |||||||||
Deferred revenues |
2,739,739 | 1,810,483 | 2,617,184 | |||||||||
Current portion of capitalized leases |
89,450 | 99,983 | 84,951 | |||||||||
Current portion of long-term debt |
1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Total current liabilities |
5,256,759 | 4,754,773 | 6,641,373 | |||||||||
Non-current portion of long-term debt |
— | 1,000,000 | 1,000,000 | |||||||||
Non-current portion of capitalized leases |
79,390 | 168,840 | 147,051 | |||||||||
Non-current portion of lease incentives |
241,474 | 222,273 | 293,409 | |||||||||
Stockholders’ equity: |
||||||||||||
Convertible redeemable preferred stock, $0.01 par value per share,
5,000,000 shares authorized |
— | — | — | |||||||||
Common stock, $0.01 par value per share, 25,000,000 shares
Authorized,
9,211,399 shares 9,143,041 shares and 9,159,541 shares issued,
respectively |
92,114 | 91,430 | 91,595 | |||||||||
Capital in excess of par value |
35,256,004 | 35,071,130 | 35,090,302 | |||||||||
Accumulated (deficit) |
(27,030,080 | ) | (29,593,370 | ) | (26,830,579 | ) | ||||||
Total stockholders’ equity |
8,318,038 | 5,569,190 | 8,351,318 | |||||||||
| $ | 13,895,661 | $ | 11,715,076 | $ | 16,433,151 | |||||||
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STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
| Nine Months | ||||||||
| 2006 | 2005 | |||||||
Operating activities: |
||||||||
Net (loss) |
$ | (199,501 | ) | $ | (211,719 | ) | ||
Adjustments to reconcile net earnings to net
cash
provided by (used for) operating activities: |
||||||||
Depreciation and amortization |
1,386,646 | 1,085,380 | ||||||
Share-based compensation expense |
80,903 | — | ||||||
Cash provided by (used for) assets and
liabilities: |
||||||||
Accounts, contract and installment receivables |
138,573 | 370,202 | ||||||
Other assets |
(233,042 | ) | (65,297 | ) | ||||
Accounts payable and accrued expenses |
(1,511,668 | ) | (37,210 | ) | ||||
Deferred revenues |
122,555 | (420,959 | ) | |||||
Net cash (used for) provided by operating
activities |
(215,534 | ) | 720,397 | |||||
Investing activities: |
||||||||
Purchases of property and equipment |
(393,897 | ) | (804,861 | ) | ||||
Long-term lease incentive |
— | (103,727 | ) | |||||
Capitalization of software development costs |
(1,355,664 | ) | (900,000 | ) | ||||
Other |
(51,055 | ) | 154,532 | |||||
Net cash (used for) investing activities |
(1,800,616 | ) | (1,654,056 | ) | ||||
Financing activities: |
||||||||
Payment of long-term debt |
(1,000,000 | ) | — | |||||
Payment of capitalized leases |
(63,162 | ) | (166,535 | ) | ||||
Exercise of stock options and stock purchase
plan |
85,318 | 68,754 | ||||||
Net cash (used for) financing activities |
(977,844 | ) | (97,781 | ) | ||||
Decrease in cash |
(2,993,994 | ) | (1,031,440 | ) | ||||
Cash at beginning of year |
4,634,219 | 4,181,073 | ||||||
Cash at end of period |
$ | 1,640,225 | $ | 3,149,633 | ||||
Supplemental cash flow disclosures: |
||||||||
Interest paid |
$ | 107,408 | $ | 107,489 | ||||
Income taxes paid (refund) |
$ | 66,537 | $ | (27,874 | ) | |||
Leasehold improvements (included in property and
equipment) paid for by the landlord as a lease
inducement |
$ | — | $ | 326,000 | ||||
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