HealthStream (HSTM) Tops Q1 EPS by 3c, Comments on Outlook

HealthStream (NASDAQ: HSTM) reported Q1 EPS of $0.10, $0.03 better than the analyst estimate of $0.07. Revenue for the quarter came in at $47.2 million versus the consensus estimate of $45.62 million.

Financial Outlook for 2015

The Company’s updated guidance for the full year of 2015, which is set forth below, includes the estimated impact of the HealthLine Systems acquisition.

We anticipate that consolidated revenues will grow 18 to 21 percent as compared to 2014 and will be derived from the following three areas. First, we anticipate that revenue growth in our Workforce Solutions segment will be in the 15 to 18 percent range. Second, we expect our Patient Experience Solutions segment's revenue to increase by approximately one to three percent. Third, we anticipate our new segment, Provider Solutions—which consists of our recent HealthLine Systems acquisition and Sy.Med—to contribute between $11 million and $14 million in revenues during 2015. We expect HealthLine Systems to contribute between $7 million to $9 million of this total, which is the estimated amount after the write-down of the acquired deferred revenue balance as required under GAAP.

We anticipate that the Company's 2015 full-year operating income will decrease between 25 and 35 percent as compared to full-year 2014 results. This operating income range takes into account the following:

Between $6.5 million and $7.5 million of write-down to the deferred revenue balances of recently acquired HealthLine Systems
Approximately $1 million of transaction costs related to the HealthLine Systems acquisition
An increased rate of investment over full-year 2014 in HealthStream’s product development related to new products, enhancements to existing products, and integration of acquired products—including an increase in investment in HealthLine System’s products
An increase in sales and marketing investments, including the Company’s customer Summit, which will be held in Nashville during the second quarter of 2015.

The Company funded the purchase of HealthLine Systems with approximately $60 million of cash on hand and $28 million of borrowings under its revolving credit facility. Accordingly, we expect to incur between $400,000 and $500,000 in interest expense in 2015, which will be reported in other income (expense). We expect the effective interest rate on these borrowings to be approximately two percent per annum based on current interest rates.

We anticipate that our full-year 2015 capital expenditures will be between $11 million and $14 million. We expect our effective tax rate during 2015 to be between 42 percent and 44 percent.

The aforementioned guidance does not include the impact from any other acquisitions that we may complete during 201

For earnings history and earnings-related data on HealthStream (HSTM) click here.

You May Also Be Interested In

• Tractor Supply (TSCO) Tops Q1 EPS by 12c ; Offers Guidance
• Bristol-Myers Squibb (BMY) stock slips despite earnings beat
• United Bankshares (UBSI) Misses Q1 EPS by 1c