Streamline Health® Reports Fourth Quarter And Fiscal Year 2017 Financial Performance

Streamline Health® Reports Fourth Quarter And Fiscal Year 2017 Financial Performance

Fourth Quarter Revenues $6.1 Million; $4.6 Million Cash on Hand; FY 2017 Revenues $24.3 Million; $2.0 Million in Cash from Operations; $3.1 Million Net Loss; 2017 Adjusted EBITDA $2.8 Million

ATLANTA, April 25, 2018 /PRNewswire/ -- Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of integrated solutions, technology-enabled services and analytics supporting revenue cycle optimization for healthcare enterprises in the new value-based world, today announced financial results for the fourth quarter and fiscal year of 2017, which ended January 31, 2018.

Revenues for the three-month period ended January 31, 2018 were $6.1 million, a decline of approximately 5% as compared to the three-months ended January 31, 2017. Adjusted EBITDA for the fourth quarter of fiscal 2017 was $1.2 million, up appreciably over the $535,000 in the fourth quarter a year ago. Net income for the fourth quarter of fiscal 2017 was $38,000, an improvement over the $1.0 million net loss in the same period a year ago.

Revenues for fiscal year 2017 were $24.3 million, down approximately 10% from the previous fiscal year. Recurring revenues for the year constituted 80% of overall revenue, or $19.5 million. Adjusted EBITDA for the fiscal year was $2.8 million, down slightly from $2.9 million in fiscal year 2016.

"Fiscal year 2017 was the beginning of our new, more narrowly focused efforts to sell solutions and services in the middle of the revenue cycle - improving healthcare providers' coding accuracy to help them capture the financial reimbursement they deserve for the patient care they have provided," stated David Sides, President and Chief Executive Officer, Streamline Health. "We are committed to leading an industry movement to improve hospitals' financial performance by moving mid-cycle billing interventions upstream - to improve coding accuracy before billing, enabling our clients to reduce lost revenue, mitigate overbill risk, and reduce denials and days in accounts receivable. This enables providers to turn unpredictable revenue cycles into dynamic revenue streams.

By narrowing our focus to the middle of the revenue cycle we won 15 new clients in 2017. We believe we have a more distinct and compelling value proposition that can help us win more often. And not just with hospitals, but with outpatient centers and clinics and physician practices as well. Our coding solutions and services like CDI and Abstracting are established performers, and they were the primary contributors to a strong start to this new year. Our new eValuator coding analysis platform helped us win more new clients last year. The eValuator technology is right for the market which is driving new attention to Streamline Health. Our current client base continues to show interest in eValuator, but we have an even greater number of new clients than existing clients signing up for the solution.

Importantly, we have instigated and maintained tight cost and investment controls so that the transition to focusing our efforts in the middle of the revenue cycle has not negatively affected our balance sheet."

Highlights for the fourth quarter and fiscal year ended January 31, 2018 included:

    --  Revenues for the fourth quarter 2017 were $6.1 million, and for the year
        were $24.3 million;
    --  Adjusted EBITDA for the fourth quarter 2017 was $1.2 million, and for
        the year was $2.8 million;
    --  Recorded net income of $38,000 for the fourth quarter ended January 31,
        2018, and a net loss of $(3.1) million for the fiscal year 2017;
    --  New sales bookings for the quarter were $1.2 million and $4.8 million
        for the fiscal year; and
    --  Backlog at the end of the fourth quarter was $33 million.

Conference Call Information

The Company will conduct a conference call to review the results on Thursday, April 26, 2018 at 9:00 AM ET. Interested parties can access the call by joining the live webcast: click here to register. You can also join by phone by dialing 888-394-8218 and then entering passcode 3375507.

A replay of the conference call will be available from Thursday, April 26, 2018 at 12:00 PM ET to Tuesday, May 1, 2018 at 12:00 PM ET by dialing 888-203-1112 and entering passcode 3375507

*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 reconciling this measure to net income 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 - producing actionable insights that support revenue cycle optimization for healthcare enterprises. We deliver integrated solutions, technology-enabled services and analytics that empower providers to drive revenue integrity 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.

                                     CONSOLIDATED STATEMENTS OF OPERATIONS


                                                 Three Months Ended                   Fiscal Year Ended

                                                     January 31,                         January 31,
                                                     -----------                         -----------

                                                  2018                         2017                 2018                       2017
                                                  ----                         ----                 ----                       ----

    Revenues:

      Systems sales                             $287,347                     $322,323           $1,343,288                 $2,512,579

      Professional services                    950,452                      526,331            2,744,070                  2,395,987

      Audit Services                           296,800                      393,572            1,216,285                    627,919

      Maintenance and support                3,287,081                    3,572,298           13,170,644                 14,809,935

      Software as a service                  1,277,256                    1,568,609            5,863,788                  6,713,485

            Total revenues                   6,098,936                    6,383,133           24,338,075                 27,059,905
                                             ---------                    ---------           ----------                 ----------


    Operating expenses:

      Cost of systems sales                    349,359                      632,400            1,946,347                  2,712,663

      Cost of professional services            586,298                      832,932            2,400,534                  2,724,078

      Cost of audit services                   367,214                      504,579            1,603,572                  1,100,154

      Cost of maintenance and
       support                                 662,212                      743,049            2,904,181                  3,226,511

      Cost of software as a service            403,917                      373,397            1,318,628                  1,763,705

      Selling, general and
       administrative                        2,451,028                    2,934,934           11,434,276                 13,088,074

      Research and development               1,367,028                    1,653,469            5,352,189                  7,453,638

      Gain on sale of business         --                   (238,103)                  --                  (238,103)
                                      ---

            Total operating expenses         6,187,056                    7,436,657           26,959,727                 31,830,720
                                             ---------

    Operating loss                            (88,120)                 (1,053,524)         (2,621,652)               (4,770,815)

    Other income (expense):

      Interest expense                       (113,934)                   (127,962)           (474,657)                 (508,859)

      Miscellaneous income
       (expenses)                              148,272                      145,173             (86,735)                   106,084

    Loss before income taxes                  (53,782)                 (1,036,313)         (3,183,044)               (5,173,590)

      Income tax benefit                        91,652                       17,128               83,830                     12,024
                                                ------                       ------               ------                     ------

    Net Income (Loss)                            $37,870                 $(1,019,185)        $(3,099,214)              $(5,161,566)

    Less: deemed dividends on
     Series A Preferred Shares         --                          --                  --                  (875,935)
                                                                  ---                 ---                   --------

    Net Gain (Loss)
     attributable to
     common shareholders                         $37,870                 $(1,019,185)        $(3,099,214)              $(6,037,501)


    Basic net loss per
     common share                                  $0.00                      $(0.05)             $(0.16)                   $(0.31)


    Number of shares used in basic
     per common share computation           19,989,461                   19,680,751           19,876,383                 19,528,341
                                            ==========                   ==========           ==========                 ==========

    Diluted net loss per
     common share                                  $0.00                      $(0.05)             $(0.16)                   $(0.31)


    Number of shares used in
     diluted per common share
     computation                            23,241,521                   19,680,751           19,876,383                 19,528,341
                                            ==========                   ==========           ==========                 ==========


                         STREAMLINE HEALTH SOLUTIONS, INC.

                            CONSOLIDATED BALANCE SHEETS



                                       Assets



                                                            January 31,
                                                            -----------

                                                              2018              2017
                                                              ----              ----

    Current assets:

    Cash and cash
     equivalents                                          $4,619,834        $5,654,093

    Accounts receivable, net of
     allowance for doubtful accounts
     of $349,058 and $198,449,
     respectively                                        3,001,170         4,489,789

    Contract receivables                                   223,791           466,423

    Prepaid hardware and third-
     party software for future
     delivery                                                5,858             5,858

    Prepaid client maintenance
     contracts                                             506,911           595,633

    Other prepaid assets                                   742,232           732,496

    Other current assets                                   546,885               439
                                                           -------               ---

    Total current assets                                 9,646,681        11,944,731
                                                         ---------        ----------


    Non-current assets:

      Property and equipment:

      Computer equipment                                 2,852,776         3,110,274

      Computer software                                    730,950           827,642

      Office furniture, fixtures and
       equipment                                           683,443           683,443

      Leasehold improvements                               729,348           729,348
                                                           -------           -------

                                                         4,996,517         5,350,707

      Accumulated depreciation and
       amortization                                    (3,834,153)      (3,447,198)
                                                        ----------        ----------

      Property and equipment, net                        1,162,364         1,903,509


     Capitalized software development
      costs, net of accumulated
      amortization of $18,658,183 and
      $16,544,797, respectively                          4,307,351         4,584,245

     Intangible assets, net                              5,835,151         6,996,599

     Goodwill                                           15,537,281        15,537,281

     Other non-current assets                              642,226           672,133
                                                           -------           -------

     Total non-current assets                           27,484,373        29,693,767
                                                        ----------        ----------

                                                         $37,131,054       $41,638,498


                         STREAMLINE HEALTH SOLUTIONS, INC.

                            CONSOLIDATED BALANCE SHEETS



                        Liabilities and Stockholders' Equity


                                                                 January 31,
                                                            -----------

                                                              2018                        2017
                                                              ----                        ----

    Current
     liabilities:

       Accounts
       payable                                              $421,425                  $1,116,525

      Accrued
       compensation                                        342,351                     496,706

      Accrued
       other
       expenses                                            609,582                     484,391

      Current
       portion of
       long-term
       debt                                                596,984                     655,804

      Deferred
       revenues                                          9,481,807                   9,916,454

      Current
       portion of
       capital
       lease
       obligations                                  -                      91,337
                                                  ---                      ------

            Total
             current
             liabilities                                11,452,149                  12,761,217
                                                        ----------                  ----------


    Non-current
     liabilities:

    Term loan,
     net of
     deferred
     financing
     cost of
     $128,275
     and
     $199,211,
     respectively                                        3,901,353                   4,883,286

      Warrants
       liability                                   --                      46,191

      Royalty
       liability                                         2,469,193                   2,350,754

      Lease
       incentive
       liability,
       less
       current
       portion                                             274,128                     339,676

      Deferred
       revenues,
       less
       current
       portion                                             332,645                     568,515

            Total non-
             current
             liabilities                                 6,977,319                   8,188,422
                                                         ---------                   ---------

            Total
             liabilities                                18,429,468                  20,949,639
                                                        ----------                  ----------


    Series A 0%
     Convertible
     Redeemable
     Preferred
     Stock, $.01
     par value
     per share,
     $8,849,985
     redemption
     and
     liquidation                                         8,849,985                   8,849,985


     Stockholders'
     equity:

      Common
       stock, $.01
       par value
       per share,
       45,000,000
       shares
       authorized;
       20,005,977
       and
       19,695,391
       shares                                              200,060                     196,954

      Additional
       paid in
       capital                                          81,776,606                  80,667,771

      Accumulated
       deficit                                        (72,125,065)                (69,025,851)
                                                       -----------                 -----------

            Total
             stockholders'
             equity                                      9,851,601                  11,838,874
                                                         ---------                  ----------

                                                         $37,131,054                 $41,638,498


                           STREAMLINE HEALTH SOLUTIONS, INC.

                         CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                    Fiscal Year
                                                                    -----------

                                                                     2017                         2016
                                                                     ----                         ----

    Operating activities:

      Net loss                                              $(3,099,214)                $(5,161,566)

      Adjustments to reconcile net loss
       to net cash provided by (used in)

         operating activities, net of
          acquisitions:

         Depreciation                                          774,074                    1,099,957

    Amortization of capitalized
     software development costs                              2,113,385                    2,771,437

    Amortization of intangible assets                        1,161,448                    1,344,980

        Amortization of other deferred
         costs                                                 340,502                      324,496

        Valuation adjustment for warrants
         liability                                            (46,191)                   (158,922)

        Other valuation adjustments                            141,038                       94,009

        Gain on sale of business                       --                    (238,103)

        Loss (Gain) on disposal of fixed
         assets                                               (15,947)                         567

        Share-based compensation expense                     1,109,241                    1,787,367

        Provision for accounts receivable                      233,550                      121,025

      Changes in assets and liabilities,
       net of assets acquired:

    Accounts and contract receivables                        1,497,701                    (344,445)

    Other assets                                             (695,444)                     449,673

    Accounts payable                                         (695,100)                    (51,071)

    Accrued expenses                                         (117,311)                   (690,094)

    Deferred revenues                                        (670,517)                   (341,008)

      Net cash provided by (used in)
       operating activities                                  2,031,215                    1,008,302
                                                             ---------                    ---------


    Investing activities:

    Purchases of property and
     equipment                                                (48,616)                   (506,040)

    Proceeds from sales of property
     and equipment                                              19,959                           --

    Capitalization of software
     development costs                                     (1,836,491)                 (1,978,946)

    Payment for acquisition                            --                  (1,400,000)

    Proceeds from sale of business                     --                    2,000,000
                                                      ---                    ---------

      Net cash used in investing
       activities                                          (1,865,148)                 (1,884,986)
                                                            ----------                   ----------


    Financing activities:

    Principal repayments on term loan                      (1,111,689)                 (2,796,590)

    Payments related to settlement of
     employee share-based awards                              (41,813)                    (11,702)

    Principal payments on capital
     lease obligations                                        (91,337)                   (569,189)

    Proceeds from exercise of stock
     options and stock purchase plan                            44,513                       26,122

      Net cash used in financing
       activities                                          (1,200,326)                 (3,351,359)
                                                            ----------                   ----------

    Increase (decrease) in cash and
     cash equivalents                                      (1,034,259)                 (4,228,043)

    Cash and cash equivalents at
     beginning of year                                       5,654,093                    9,882,136
                                                             ---------                    ---------

    Cash and cash
     equivalents at end of
     year                                                     $4,619,834                   $5,654,093


                               STREAMLINE HEALTH SOLUTIONS, INC.

                                            Backlog

                                          (Unaudited)

                                            Table A


                             January 31,                                 October 31,               January 31,
                                    2018                                         2017                       2017
                                    ----                                         ----                       ----

    Company
     Proprietary
     Software                                                  $984, 000              $10,892,000                $11,504,000

    Third-Party Hardware and
     Software                         --                                          --                   150,000

    Professional Services                                    2,048,000                 2,824,000                  4,068,000

    Audit Services                                           1,293,000                 1,454,000                  1,847,000

    Maintenance and Support                                 15,420,000                18,256,000                 19,193,000

    Software as a Service                                   13,048,000                14,242,000                 13,861,000
                                                            ----------                ----------                 ----------

        Total                                                $32,793,000               $47,668,000                $50,623,000


                         STREAMLINE HEALTH SOLUTIONS, INC.

                                   New Bookings

                                    (Unaudited)

                                      Table B


                                                             Fiscal Year Ended

                                                        January 31, 2018
                                                        ----------------

                                            Value                        % of
                                                                         Total
                                                                       Bookings
                                                                       --------

    Streamline Health
     Software licenses                                     $463,000               10%

    Software as a service                               2,056,000               43%

    Maintenance and support                               315,000                7%

    Professional services                               1,388,000               29%

    Audit Services                                        534,000               11%

    Total bookings                                       $4,756,000              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. Streamline
     Health's management in its
     operating and financial decision-
     making uses non-GAAP financial
     measures 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,          Twelve Months Ended,

                                                            January                      January                       January            January
                                                                                31, 2018                     31, 2017          31, 2018           31, 2017
                                                                                --------                     --------          --------           --------

    Net Income (loss)                                                                $38                      $(1,020)          $(3,099)           $(5,162)

        Interest expense                                                             114                           128                475                 509

        Income tax benefit                                                          (92)                         (17)              (84)               (12)

        Depreciation                                                                 178                           205                774               1,100

        Amortization of
         capitalized software
         development costs                                                           539                           625              2,113               2,771

        Amortization of
         intangible assets                                                           239                           369              1,161               1,345

        Amortization of other
         costs                                                                        93                           114                270                 254
                                                                                     ---                           ---                ---                 ---

    EBITDA                                                                         1,109                           404              1,610                 805

        Share-based
         compensation expense                                                        264                           444              1,109               1,787

        Gain on sale of
         business                                                                     --                        (238)                --              (238)

        Loss (Gain) on
         disposal of fixed
         assets                                                                      (1)                           --              (16)                  1

        Non-cash valuation
         adjustments to assets
         and liabilities                                                           (134)                        (149)                95                (65)

        Transaction related
         professional fees,
         advisory fees and

          other internal direct
           costs                                                                      --                           34                 --                392

        Associate severances
         and other costs
         relating to

          transactions or
           corporate
           restructuring                                                              --                           40                 --                239

    Adjusted EBITDA                                                               $1,238                          $535             $2,798              $2,921
                                                                                  ======                          ====             ======              ======

    Adjusted EBITDA per
     diluted share

    Loss per share -
     diluted                                                                       $0.00                       $(0.05)           $(0.16)            $(0.31)
                                                                                   -----                        ------             ------              ------

    Adjusted EBITDA per
     adjusted diluted
     share (1)                                                                     $0.05                         $0.02              $0.12               $0.13
                                                                                   =====                         =====              =====               =====


    Diluted weighted
     average shares                                                           23,241,521                    19,680,751         19,876,383          19,528,341

        Includable incremental
         shares -Adjusted
         EBITDA (2)                                                                   --                    3,340,390          3,244,825           3,327,130
                                                                                     ---                    ---------          ---------           ---------

    Adjusted diluted
     shares                                                                   23,241,521                    23,021,141         23,121,208          22,855,471
                                                                              ==========                    ==========         ==========          ==========


            (1)    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.

            (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.

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SOURCE Streamline Health Solutions, Inc.