Streamline Health® Reports Second Quarter 2018 Revenues Of $5.3 Million; ($1.5 Million) Net Loss; Adjusted EBITDA Of $0.4 Million
ATLANTA, Sept. 11, 2018 /PRNewswire/ -- Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of integrated solutions, technology-enabled services and analytics supporting revenue cycle optimization for healthcare enterprises, today announced financial results for the second quarter and first half of fiscal 2018, which ended July 31, 2018.
Revenues for the three-month period ended July 31, 2018 decreased approximately 11% to $5.3 million over the July 31, 2017 quarter revenue of $5.9 million. Recurring revenue comprised 83% of total revenue in the quarter. Revenues for the first six months of fiscal year 2018 were $11.5 million, down approximately 3% as compared to $11.8 million in the first half of fiscal 2017.
Net loss for the second quarter was $(1.5 million) as compared to a ($1.1 million) net loss in the same period a year ago. Net loss for the first six months of fiscal 2018 was ($2.1 million) as compared to ($3.1 million) net loss for the same period in 2017.
Adjusted EBITDA for the second quarter 2018 was $0.4 million, down from $0.5 million in the second quarter of 2017. Adjusted EBITDA for the first six months of 2018 was $1.0 million, as compared to $45,000 in the first half of fiscal 2017.
"We continued to make meaningful operational progress in the second quarter. Our bookings included our first Abstracting client through our reseller agreement with Allscripts, and two new eValuator clients - one of which is a leading educational facility on the west coast, which uses Epic as their EMR provider," stated David Sides, President and Chief Executive Officer, Streamline Health. "We continue to drive incremental operational efficiencies and we are deploying these savings to fund future growth and development. In the second quarter we expanded the capabilities of eValuator from the original Inpatient version to Outpatient; Profee – for physician practices, and Value-based Care (by adding Hospital Acquired Conditions, HACs, and Patient Safety Indicators, PSIs). We believe we have a spectrum of middle revenue cycle solutions for healthcare providers that no other competitor in the marketplace can match.
In addition, during the quarter we brought Tom Gibson on to our team at Streamline Health. We are very excited to have Tom on the team given his extensive financial and strategic experience in the industry."
Highlights for the second quarter ended July 31, 2018 included:
- Revenue for the second quarter 2018 was $5.3 million;
- Net loss for the second quarter 2018 was $(1.5 million);
- Adjusted EBITDA for the second quarter 2018 was $0.4 million;
- New sales bookings for the quarter were $1.9 million; and
- Backlog at the end of the quarter was $23.4 million.
Conference Call Information The Company will conduct a conference call to review the results on Wednesday, September 12, 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 800-263-0877 and then entering passcode 1552127.
A replay of the conference call will be available from Wednesday, September 12, 2018 at 12:00 PM ET to Monday, September 17, 2018 at 12:00 PM ET by dialing 888-203-1112 and entering passcode 1552127.
*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 non-GAAP measure to net loss is included in this press release.
About Streamline HealthStreamline 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 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 future growth, new sales bookings, backlog, results of investments in sales and marketing, competitive strengths, 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. | |||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(Unaudited) | |||||||||
Three Months Ended July 31, | Six Months Ended July 31, | ||||||||
2018 | 2017 | 2018 | 2017 | ||||||
Revenues: | |||||||||
Systems sales | $ | 385,875 | $ | 328,692 | $ | 1,517,549 | $ | 707,415 | |
Professional services | 271,121 | 571,812 | 509,435 | 991,847 | |||||
Audit Services | 247,843 | 294,441 | 607,556 | 639,460 | |||||
Maintenance and support | 3,216,251 | 3,278,562 | 6,525,355 | 6,633,334 | |||||
Software as a service | 1,147,642 | 1,442,652 | 2,372,010 | 2,867,784 | |||||
Total revenues | 5,268,732 | 5,916,159 | 11,531,905 | 11,839,840 | |||||
Operating expenses: | |||||||||
Cost of systems sales | 289,890 | 596,799 | 539,874 | 1,162,850 | |||||
Cost of professional services | 697,467 | 543,206 | 1,403,697 | 1,258,421 | |||||
Cost of audit services | 300,081 | 391,439 | 694,060 | 832,078 | |||||
Cost of maintenance and support | 566,248 | 768,140 | 1,214,587 | 1,574,662 | |||||
Cost of software as a service | 281,872 | 285,832 | 598,259 | 625,208 | |||||
Selling, general and administrative | 2,518,893 | 2,790,171 | 5,767,950 | 6,163,699 | |||||
Research and development | 1,212,845 | 1,495,972 | 2,275,164 | 3,052,910 | |||||
Loss on exit of operating lease | 806,163 | -- | 806,163 | -- | |||||
Total operating expenses | 6,673,459 | 6,871,559 | 13,299,754 | 14,669,828 | |||||
Operating loss | (1,404,727) | (955,400) | (1,767,849) | (2,829,988) | |||||
Other expense: | |||||||||
Interest expense | (110,385) | (120,377) | (226,603) | (247,645) | |||||
Miscellaneous expense | (5,383) | (19,681) | (93,028) | (57,725) | |||||
Loss before income taxes | (1,520,495) | (1,095,458) | (2,087,480) | (3,135,358) | |||||
Income tax benefit | (1,713) | (2,607) | (3,427) | (5,215) | |||||
Net Loss | $ | (1,522,208) | $ | (1,098,065) | $ | (2,090,907) | $ | (3,140,573) | |
Net loss per common share – basic and diluted | $ | (0.08) | $ | (0.06) | $ | (0.10) | $ | (0.16) | |
Weighted average number of common shares – basic and diluted | 19,971,090 | 19,834,859 | 19,978,757 | 19,765,125 | |||||
STREAMLINE HEALTH SOLUTIONS, INC. | ||||
CONSOLIDATED BALANCE SHEETS | ||||
(Unaudited) | ||||
Assets | ||||
July 31, | January 31, | |||
2018 | 2018 | |||
Current assets: | ||||
Cash and cash equivalents | $ | 3,246,395 | $ | 4,619,834 |
Accounts receivable, net of allowance for doubtful accounts of $267,221 and $349,058, respectively | 2,238,088 | 3,001,170 | ||
Contract receivables | 826,277 | 223,791 | ||
Prepaid hardware and third-party software for future delivery | -- | 5,858 | ||
Prepaid client maintenance contracts | 560,004 | 506,911 | ||
Other prepaid assets | 828,257 | 742,232 | ||
Other current assets | 367,326 | 546,885 | ||
Total current assets | 8,066,347 | 9,646,681 | ||
Non-current assets: | ||||
Property and equipment: | ||||
Computer equipment | 2,876,707 | 2,852,776 | ||
Computer software | 704,562 | 730,950 | ||
Office furniture, fixtures and equipment | 662,157 | 683,443 | ||
Leasehold improvements | 582,271 | 729,348 | ||
4,825,697 | 4,996,517 | |||
Accumulated depreciation and amortization | (3,956,221) | (3,834,153) | ||
Property and equipment, net | 869,476 | 1,162,364 | ||
Contract Receivables, less current portion | 683,031 | -- | ||
Capitalized software development costs, net of accumulated amortization of $19,304,635 and $18,658,183, respectively | 5,190,076 | 4,307,351 | ||
Intangible assets, net | 5,365,257 | 5,835,151 | ||
Goodwill | 15,537,281 | 15,537,281 | ||
Other non-current assets | 378,672 | 642,226 | ||
Total non-current assets | 28,023,793 | 27,484,373 | ||
$ | 36,090,140 | $ | 37,131,054 | |
STREAMLINE HEALTH SOLUTIONS, INC. | ||||
CONSOLIDATED BALANCE SHEETS | ||||
(Unaudited) | ||||
Liabilities and Stockholders' Equity | ||||
July 31, | January 31, | |||
2018 | 2018 | |||
Current liabilities: | ||||
Accounts payable | $ | 789,239 | $ | 421,425 |
Accrued compensation | 883,386 | 342,351 | ||
Accrued other expenses | 1,402,972 | 609,582 | ||
Current portion of long-term debt | 596,984 | 596,984 | ||
Deferred revenues | 8,273,251 | 9,481,807 | ||
Other | 37,135 | -- | ||
Total current liabilities | 11,982,967 | 11,452,149 | ||
Non-current liabilities: | ||||
Term loan, net of deferred financing cost of $92,808 and $128,275, respectively | 3,638,328 | 3,901,353 | ||
Royalty liability | 874,437 | 2,469,193 | ||
Deferred revenues, less current portion | 882,672 | 332,645 | ||
Other Liabilities | 316,514 | 274,128 | ||
Total non-current liabilities | 5,711,951 | 6,977,319 | ||
Total liabilities | 17,694,918 | 18,429,468 | ||
Series A 0% Convertible Redeemable Preferred Stock, $.01 par value per share, $8,686,392 and $8,849,985 redemption value, 4,000,000 shares authorized, 2,895,464 and 2,949,995 issued and outstanding, respectively | 8,686,392 | 8,849,985 | ||
Stockholders' equity: | ||||
Common stock, $.01 par value per share, 45,000,000 shares authorized; 20,039,893 and 20,005,977 shares issued and outstanding, respectively | 200,399 | 200,060 | ||
Additional paid in capital | 82,284,445 | 81,776,606 | ||
Accumulated deficit | (72,776,024) | (72,125,065) | ||
Total stockholders' equity | 9,708,830 | 9,851,601 | ||
$ | 36,090,140 | $ | 37,131,054 | |
STREAMLINE HEALTH SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||
Six Months Ended, | ||||
July 31, 2018 | July 31, 2017 | |||
Operating activities: | ||||
Net loss | $ | (2,090,907) | $ | (3,140,573) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
Depreciation | 324,640 | 403,090 | ||
Amortization of capitalized software development costs | 646,452 | 1,143,624 | ||
Amortization of intangible assets | 469,894 | 666,114 | ||
Amortization of other deferred costs | 228,497 | 161,064 | ||
Valuation adjustment for warrants liability | -- | (45,831) | ||
Other valuation adjustments | 56,211 | 86,192 | ||
Loss on exit of operating lease | 806,163 | -- | ||
Gain on disposal of fixed assets | (1,555) | (720) | ||
Share-based compensation expense | 366,906 | 555,229 | ||
Provision for accounts receivable | (64,154) | 166,170 | ||
Changes in assets and liabilities, net of assets acquired: | ||||
Accounts and contract receivables | 292,442 | 99,068 | ||
Other assets | 105,148 | (333,401) | ||
Accounts payable | 367,814 | 449,929 | ||
Accrued expenses | 587,226 | (352,132) | ||
Deferred revenues | (1,618,004) | (822,867) | ||
Net cash provided by (used in) operating activities | 476,773 | (965,026) | ||
Investing activities: | ||||
Purchases of property and equipment | (14,457) | (9,812) | ||
Proceeds from sales of property and equipment | 14,225 | -- | ||
Capitalization of software development costs | (1,529,177) | (844,448) | ||
Net cash used in investing activities | (1,529,409) | (854,260) | ||
Financing activities: | ||||
Principal repayments on term loan | (298,492) | (813,197) | ||
Principal payments on capital lease obligations | -- | (68,149) | ||
Payments related to settlement of employee shared-based awards | (57,699) | (37,002) | ||
Proceeds from exercise of stock options and stock purchase plan | 35,388 | -- | ||
Net cash used in financing activities | (320,803) | (918,348) | ||
Net decrease in cash and cash equivalents | (1,373,439) | (2,737,634) | ||
Cash and cash equivalents at beginning of year | 4,619,834 | 5,654,093 | ||
Cash and cash equivalents at end of year | $ | 3,246,395 | $ | 2,916,459 |
STREAMLINE HEALTH SOLUTIONS, INC. | ||||||
Backlog | ||||||
(Unaudited) | ||||||
Table A | ||||||
July 31, 2018 | January 31, 2018 | July 31, 2017 | ||||
Streamline Health Software Licenses | $ | 53,000 | $ | 984, 000 | $ | 11,458,000 |
Hardware and Third Party Software | -- | -- | 50,000 | |||
Professional Services | 1,867,000 | 2,048,000 | 3,517,000 | |||
Audit Services | 1,019,000 | 1,293,000 | 1,454,000 | |||
Maintenance and Support | 11,489,000 | 15,420,000 | 16,583,000 | |||
Software as a Service | 8,936,000 | 13,048,000 | 13,300,000 | |||
Total | $ | 23,364,000 | $ | 32,793,000 | $ | 46,362,000 |
STREAMLINE HEALTH SOLUTIONS, INC. | ||||
New Bookings | ||||
(Unaudited) | ||||
Table B | ||||
Three Months Ended | ||||
July 31, 2018 | ||||
Value | % of Total Bookings | |||
Streamline Health Software licenses | $ | 308,000 | 16% | |
Software as a service | 756,000 | 40% | ||
Maintenance and support | 374,000 | 20% | ||
Professional services | 433,000 | 23% | ||
Audit Services | 33,000 | 2% | ||
Total bookings | $ | 1,904,000 | 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, and professional and advisory fees. |
Reconciliation of net earnings (loss) to non-GAAP Adjusted EBITDA (in thousands): | ||||||||
(Unaudited) | ||||||||
Adjusted EBITDA Reconciliation | Three Months Ended, | Six Months Ended, | ||||||
July 31, 2018 | July 31, 2017 | July 31, 2018 | July 31, 2017 | |||||
Net loss | $ | (1,522) | $ | (1,098) | $ | (2,091) | $ | (3,141) |
Interest expense | 110 | 120 | 227 | 248 | ||||
Income tax benefit | 2 | 3 | 3 | 5 | ||||
Depreciation | 153 | 200 | 325 | 403 | ||||
Amortization of capitalized software development costs | 331 | 572 | 646 | 1,144 | ||||
Amortization of intangible assets | 235 | 333 | 470 | 666 | ||||
Amortization of other costs | 91 | 43 | 193 | 126 | ||||
EBITDA | (600) | 173 | (227) | (549) | ||||
Share-based compensation expense | 144 | 288 | 367 | 555 | ||||
Gain on disposal of fixed assets | -- | -- | (2) | (1) | ||||
Non-cash valuation adjustments to assets and liabilities | 5 | 23 | 56 | 40 | ||||
Loss on exit of operating lease | 806 | -- | 806 | -- | ||||
Adjusted EBITDA | $ | 355 | $ | 484 | $ | 1,000 | $ | 45 |
Adjusted EBITDA per diluted share | ||||||||
Loss per share – diluted | $ | (0.08) | $ | (0.06) | $ | (0.10) | $ | (0.16) |
Adjusted EBITDA per adjusted diluted share (1) | $ | 0.02 | $ | 0.02 | $ | 0.04 | $ | 0.00 |
Diluted weighted average shares | 19,971,090 | 19,834,859 | 19,978,757 | 19,765,125 | ||||
Includable incremental shares — Adjusted EBITDA (2) | 3,053,210 | 3,378,484 | 3,064,204 | 3,322,319 | ||||
Adjusted diluted shares | 23,024,300 | 23,213,343 | 23,042,961 | 23,087,444 | ||||
(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, Inc.