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™. 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: |
|
| 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
[email protected]
| 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 |
||
| Contract receivables |
429,766 |
466,423 |
||
| Prepaid hardware and third party software for |
5,858 |
5,858 |
||
| 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 |
||
| Intangible assets, net of accumulated amortization |
6,663,542 |
6,996,599 |
||
| 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 |
||||
| Stockholders' equity: |
||||||
| Common stock, $.01 par value per share, 45,000,000 shares |
196,741 |
196,954 |
||||
| 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, 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 |
|||
| 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. |
SOURCE Streamline Health, Inc.
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