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.
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(TM). 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 3,720,665 4,489,789
accounts of $385,583 and $198,449, respectively
Contract receivables 429,766 466,423
Prepaid hardware and third party software for 5,858 5,858
future delivery
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 4,399,315 4,584,245
accumulated amortization of $17,116,225 and
$16,544,797 respectively
Intangible assets, net of accumulated amortization 6,663,542 6,996,599
of $6,140,395 and $5,807,338, respectively
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 8,849,985 8,849,985
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
Stockholders' equity:
Common stock, $.01 par value per share, 45,000,000 shares 196,741 196,954
authorized, 19,674,122 and 19,695,391 shares issued and
outstanding, respectively
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, January 31, April 30,
2017 2017
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.
