HealthStream (HSTM) Tops Q4 EPS by 7c, Revenues Beat; Offers FY21 Revenue Guidance Above Consensus

February 22, 2021 4:45 PM EST

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HealthStream (NASDAQ: HSTM) reported Q4 EPS of $0.11, $0.07 better than the analyst estimate of $0.04. Revenue for the quarter came in at $61.8 million versus the consensus estimate of $59.08 million.

Fourth Quarter 2020

  • Revenues of $61.8 million, down 1% from $62.7 million in the fourth quarter of 2019
  • Operating income of $1.1 million, down 66% from $3.3 million in the fourth quarter of 2019, which comparison was negatively impacted in the amount of $3.0 million by operating losses associated with the four companies we acquired during 2020 (driven in part by deferred revenue write-downs), along with diligence and other professional expenses associated with such acquisitions
  • Income from continuing operations of $0.9 million, down 74% from $3.6 million in the fourth quarter of 2019, which comparison was negatively impacted in the amount of $2.3 million associated with the factors noted above under operating income
  • Earnings per share (EPS) from continuing operations of $0.03 per share (diluted), compared to $0.11 per share (diluted) in the fourth quarter of 2019, which was negatively impacted in the amount of $0.07 associated with the factors noted above under operating income
  • Adjusted EBITDA1 from continuing operations of $10.7 million, down 4% from $11.2 million in the fourth quarter of 2019
  • Completed the acquisition of ShiftWizard, Inc., a Raleigh, North Carolina-based company focused on providing a SaaS-based scheduling solution, on October 12, 2020 for approximately $32.0 million
  • Completed the acquisition of Change Healthcare’s staff scheduling business, which includes their ANSOSTM Staff Scheduling application and related products, on December 2, 2020 for approximately $67.5 million
  • Completed the acquisition of myClinicalExchange LLC, a Denver-based information technologies company, on December 10, 2020 for approximately $4.5 million

GUIDANCE:

HealthStream sees FY2021 revenue of $242.5-252.5 million, versus the consensus of $225.96 million.

The Company’s guidance for 2021 as set forth above reflects the Company’s assumptions regarding, among other things, the COVID-19 pandemic as noted below, anticipated integration costs and additional investments in sales, marketing, and product development in 2021 for recently acquired companies, and estimated deferred revenue write-downs of $4.3 to $5.3 million during 2021 as the result of recent acquisitions, which would result in reductions to net revenues and operating income in such amount during 2021.

The Company’s financial guidance assumes that public health conditions associated with the pandemic and general economic conditions (including conditions impacting healthcare organizations) continue to improve over the course of the year, including that COVID-19 vaccines are successfully distributed and perform according to current expectations and that new variants of the virus, or other unknown variants, do not further impede recovery from the pandemic.

Robert A. Frist, Jr., Chief Executive Officer, HealthStream, said “In 2020, we launched a new solution suite focused on nurse & staff scheduling that was formed from three acquisitions made during the year: NurseGrid, ShiftWizard, and ANSOS and is being led by Senior Vice President, Scott McQuigg. Another acquisition in December was made, as well as another one in January, both adding to our workforce solutions. In 2020 alone, over 180 new contracts were signed for our American Red Cross resuscitation suite. Subscriptions of our PaaS-enabled hStream platform exceeded four million by the end of the year—and is now led by Senior Vice President, Kevin O’Hara.”

Frist added, “2020 was also a year of great technology innovations for the Company. In the fourth quarter, fifteen Brandon Hall industry awards were bestowed upon HealthStream, recognizing a half-dozen of our products for their innovation and effectiveness in healthcare organizations. HealthStream was also awarded two patents for its innovations in the fourth quarter. This past year has been very busy with many significant developments that position us well for 2021 and thereafter.”

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



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