Streamline Health® Reports First Quarter 2014 Revenues Of $7.0 Million Recurring Revenues Up 15%; Sales Backlog Up 19% Over First Quarter 2013

ATLANTA, July 24, 2014 /PRNewswire/ -- Streamline Health Solutions, Inc. (NASDAQ: STRM), a leading provider of transformational data-driven solutions to help healthcare providers reduce exposure to risk, enhance clinical, financial, and operational performance, and improve patient care, today announced financial results for the first quarter of 2014, which ended April 30, 2014.

Revenues for the three-month period ended April 30, 2014, increased approximately 7% to $7.0 million versus $6.5 million in the comparable period of fiscal 2013. Recurring revenues increased 15% over year ago period, and sales backlog continued to grow at a double-digit rate, increasing 19% over Q1 2013.

"As stated in our fourth quarter and year end report, we recognized that due to the lateness of our filings we would be late filing our first quarter results.  These delays are now behind us and we are back on our normal quarterly filing schedule," stated Robert E. Watson, President and CEO, Streamline Health Solutions, Inc.

"Regarding our first quarter financial performance, we are seeing some positive trends, such as a steady increase in recurring revenues, continued strong growth in our sales backlog, and solid renewals among our key clients." 

Highlights for the first quarter ended April 30, 2014 included:

  • Revenue for the first quarter 2014 was $7.0 million, an increase of 7% over the comparable period in 2013;
  • Adjusted EBITDA for the first quarter 2014 was ($0.5 million);
  • Recorded net loss of $2.7 million for the three-month period ended April 30, 2014;
  • Maintenance and support revenues for the quarter increased $0.8 million, over the same period one year ago;
  • New sales bookings and long term renewal agreements for quarter were $10.7 million comprised of $9.0 million in renewals and $1.7 million in new bookings; and
  • Backlog at the end of the quarter was $62.9 million.

Conference Call Information

The Company will conduct a conference call to review the results on Thursday, July 24, 2014 at 5:00 PM EDT. Interested parties can access the call by dialing 800-691-0338 and then entering Conference ID 3622071. A live webcast will also be available; click here to register.

A replay of the conference call will be available from Thursday, July 24, 2014 at 8:00 PM EDT to Tuesday, July 29, 2014 at 8:00 PM EDT by dialing 888-203-1112 and entering passcode 3622071.

*Non-GAAP Financial Measures

Streamline Health reports its financial results in accordance with generally accepted accounting principles in the United States ("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 reduce exposure to risk, enhance operational performance, and improve patient care. Through our Looking Glass™ Platform we provide clients with meaningful, intelligent SaaS-based solutions from patient engagement to reimbursement. We share a common calling and commitment to advance the quality of life and the quality of healthcare – for society, our industry, 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, renewal sales 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, key strategic alliances with vendors 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.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




Three Months Ended



April 30,



2014


2013

Revenues:





  Systems sales

$

339,205

$

324,646

  Professional services


608,951


919,351

  Maintenance and support


4,171,812


3,380,600

  Software as a service


1,831,202


1,848,741

        Total revenues


6,951,171


6,473,338






Operating expenses:





  Cost of systems sales


835,468


638,597

  Cost of services


986,425


974,462

  Cost of maintenance and support


960,186


984,588

  Cost of software as a service


771,579


579,080

  Selling, general and administrative


4,640,456


3,580,867

  Research and development


2,350,443


1,097,010

        Total operating expenses


10,544,557


7,854,604

Operating loss


(3,593,387)


(1,381,266)

Other expense (income):





  Interest expense


(169,478)


(566,565)

  Miscellaneous income (expenses)


1,092,771


(742,265)

Loss before income taxes


(2,670,094)


(2,690,096)

  Income tax expense


(1,145)


(19,750)

Net loss

$

(2,671,239)

$

(2,709,846)

Less: deemed dividends on Series A Preferred Shares


(229,766)


(341,637)

Net loss attributable to common shareholders

$

(2,901,005)

$

(3,051,483)

Basic net loss per common share

$

(0.16)

$

(0.24)

Number of shares used in basic per common share computation


18,146,232


12,534,474

Diluted net loss per common share

$

(0.16)

$

(0.24)

Number of shares used in diluted per common share computation


18,146,232


12,534,474

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

Assets




April 30,

2014


January 31,

2014






Current assets:





  Cash and cash equivalents

$

6,965,739

$

17,924,886

  Accounts receivable, net of allowance for doubtful





    accounts of $253,080 and $267,264, respectively


9,002,126


7,999,571

  Contract receivables


195,841


1,181,606

  Prepaid hardware and third party software for





    future delivery


27,510


25,640

  Prepaid client maintenance contracts


1,095,009


909,464

  Other prepaid assets


1,919,881


1,407,515

  Deferred income taxes


95,498


95,498

  Other current assets


78,587


144,049

        Total current assets


19,380,191


29,688,229






Non-current assets:





Property and equipment:





  Computer equipment


3,830,157


3,769,564

  Computer software


2,320,557


2,239,654

  Office furniture, fixtures and equipment


900,900


889,080

  Leasehold improvements


1,172,070


697,570



8,223,684


7,595,868

  Accumulated depreciation and amortization


(6,827,484)


(6,676,824)

Property and equipment, net


1,396,200


919,044






 Contract receivables, less current portion


69,684


78,395

 Capitalized software development costs, net of





   accumulated amortization of $9,085,345 and





   $7,949,352, respectively


11,537,757


10,238,357

Intangible assets, net


12,489,756


12,175,634

Deferred financing costs


41,947


44,898

Goodwill


15,931,098


11,933,683

Other


781,725


500,634

       Total non-current assets


42,248,167


35,890,645


$

61,628,358

$

65,578,874

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

Liabilities and Stockholders' Equity




April 30,

2014


January 31,

2014






Current liabilities:





  Accounts payable

$

1,780,392

$

1,796,418

  Accrued compensation


1,567,606


1,782,599

  Accrued other expenses


801,963


554,877

  Current portion of long-term debt


1,214,280


1,214,280

  Deferred revenues


9,336,655


9,658,232

  Current portion of note payable


300,000


300,000

  Current portion of capital lease obligation


112,345


105,573

        Total current liabilities


15,113,241


15,411,979






Non-current liabilities:





  Term loans


6,665,076


6,971,767

  Warrants liability


2,979,704


4,117,725

  Royalty liability


2,302,200


2,264,000

  Swap contract


132,800


111,086

  Note payable


600,000


600,000

  Lease incentive liability, less current portion


67,641


74,434

  Capital lease obligation


100,789


121,089

  Deferred income tax liability, less current portion


825,677


816,079

        Total non-current liabilities


13,673,887


15,076,180

        Total liabilities


28,787,128


30,488,158






Series A 0% Convertible Redeemable Preferred stock, $.01 par

value per share, $8,849,985 and $8,849,985 redemption value,

4,000,000 shares authorized, 2,949,995 and 2,949,995 issued

and outstanding, net of unamortized preferred stock discount of

$3,020,551 and $3,250,317, respectively


5,829,434


5,599,668






Stockholders' equity:





  Common stock, $.01 par value per share, 25,000,000 shares





    authorized, 18,176,120 and 18,175,787 shares issued and         





    outstanding, respectively


181,761


181,758

  Convertible redeemable preferred stock, $.01 par value per





  Additional paid in capital


77,196,787


76,983,088

  Accumulated deficit


(50,233,952)


(47,562,712)

  Accumulated other comprehensive loss


(132,800)


(111,086)

        Total stockholders' equity


27,011,796


29,491,048


$

61,628,358

$

65,578,874

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Three Months Ended April 30,



2014


2013

Operating activities:





  Net loss

$

(2,671,239)

$

(2,709,846)

  Adjustments to reconcile net loss to net cash





used in operating activities:

Depreciation


150,660


171,443

Amortization of capitalized software development costs


916,868


694,689

Amortization of intangible assets


358,879


314,488

Amortization of other deferred costs


38,838


82,814

Valuation adjustment for warrants liability


(1,138,021)


645,354

Share-based compensation expense


442,876


467,401

Other valuation adjustments


38,200


-

  Changes in assets and liabilities, net of assets acquired:





Accounts and contract receivables


528,680


38,880

Other assets


(927,325)


(414,056)

Accounts payable


(142,824)


(768,793)

Accrued expenses


(378,084)


(632,741)

Deferred revenues


(1,161,803)


(598,984)

  Net cash used in operating activities


(3,944,295)


(2,709,351)






Investing activities:





Purchases of property and equipment


(592,498)


(78,516)

Capitalization of software development costs


(193,379)


(460,177)

Payment for acquisition


(5,890,402)


-

  Net cash used in investing activities


(6,676,279)


(583,693)






Financing activities:





Principal repayments on term loan


(202,380)


(312,501)

Principal payments on capital lease obligation


(23,985)


-

Payment of deferred financing costs


(112,800)


-

Proceeds from exercise of stock options and stock purchase plan


592


61,512

  Net cash used in financing activities


(338,573)


(250,989)

Decrease in cash and cash equivalents


(10,959,147)


(3,499,033)

Cash and cash equivalents at beginning of period


17,924,886


7,500,256

Cash and cash equivalents at end of period

$

6,965,739

$

4,001,223

 

STREAMLINE HEALTH SOLUTIONS, INC.

Backlog

(Unaudited)

Table A




April 30,
2014


January 31,

2014


April 30,

2013

Streamline Health Software Licenses

$

2,006,000

$

2,230,000

$

3,304,000

Hardware and Third Party Software


54,000


79,000


77,000

Professional Services


6,948,000


7,255,000


8,040,000

Maintenance and Support


27,114,000


25,936,000


23,017,000

Software as a Service


26,808,000


21,073,000


18,607,000

    Total

$

62,930,000

$

56,573,000

$

53,045,000

 

STREAMLINE HEALTH SOLUTIONS, INC.

New Bookings

(Unaudited)

Table B




Three Months Ended



April 30, 2014



Value


% of Total

Bookings

Streamline Health Software licenses

$

133,000


8%

Software as a service


1,163,000


70%

Maintenance and support


24,000


1%

Professional services


327,000


20%

Hardware & third party software


8,000


0%

Total bookings

$

1,655,000


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,

2014


April 30,

2013

Net loss

$

(2,671)

$

(2,710)

    Interest expense


169


567

    Income tax expense


1


20

    Depreciation


151


171

    Amortization of capitalized software  development   costs


917


695

    Amortization of intangible assets


359


314

    Amortization of other costs


27


10

EBITDA


(1,047)


(933)

    Share-based compensation expense


443


467

    Associate severances and other costs relating to





      transactions or corporate restructuring


451


383

    Non-cash valuation adjustments to assets and liabilities


(1,100)


645

    Transaction related professional fees, advisory fees and





      other internal direct costs


164


74

    Other non-recurring operating expenses


574


49

Adjusted EBITDA

$

(515)

$

685

Adjusted EBITDA Margin(1)


(7%)


11%

Adjusted EBITDA per diluted share





Loss per share – diluted

$

(0.16)

$

(0.24)

Adjusted EBITDA per adjusted diluted share (2)

$

(0.03)

$

0.04






Diluted weighted average shares


18,146,232


12,534,474

    Includable incremental shares — adjusted EBITDA (3)


-


5,213,514

Adjusted diluted shares


18,146,232


17,747,988

 

(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.

 

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SOURCE Streamline Health Solutions, Inc.



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