Streamline Health® Reports Fourth Quarter Fiscal Year 2013 Revenues Of $6.5 Million

Total FY 2013 Revenues Were $28.5 Million; Sales Backlog $56.6 Million

Jun 13, 2014, 18:00 ET from Streamline Health Solutions, Inc.

ATLANTA, June 13, 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 fourth quarter and fiscal year 2013, which ended January 31, 2014.

Revenues for the three-month period ended January 31, 2014, declined approximately 3% to $6.5 million versus $6.7 million in the comparable period of fiscal 2012.

"We apologize for the delay in filing our Form 10-K. The combination of switching to a Big Four auditor along with reaching certain milestones requiring our first audit of internal controls over financial reporting pursuant to the Sarbanes-Oxley Act created the environment where a delay was likely.  We believe that this process will turn out to be very beneficial to our company in the long term, however, as we look to make improvements in our financial staff and the technology infrastructure that supports them," stated Robert E. Watson, President and CEO, Streamline Health Solutions, Inc.

"Regarding our fourth quarter financial performance, revenues were essentially flat despite the expected attrition from a few clients who announced in 2010 that they would not renew their contracts.  The extended implementation timelines discussed throughout the year and the attendant revenue recognition delays we faced, primarily based on client shortages of information technology personnel, began to abate in the first quarter of this year. In fact, year to date in fiscal 2014 we have successfully completed five go lives.

For the year, revenue increased 20% over fiscal year 2012, and SaaS-based revenue increased 4.5%.  We ended fiscal year 2013 with our sales backlog up 11% to $56.6 million.  Adjusted EBITDA for the year decreased 73% over 2012, primarily due to investments in our clinical analytics platform and our professional services teams.  Net loss for the year increased 118% over 2012.

Looking ahead, we are pleased with the progress we are making with the integration of the Unibased Systems Architecture acquisition, made in early February, which we expect to be accretive this year.  It has made a healthy contribution to our sales pipeline through the first four months of 2014," continued Watson.

Highlights for the quarter and the fiscal year ended January 31, 2014 included:

  • Revenue for the fourth quarter and fiscal year end 2013 was $6.5 million and $28.5 million, respectively, a decrease of 3% and an increase of 20% over comparable periods in 2012;
  • Adjusted EBITDA for the fourth quarter and the fiscal year 2013 was ($2.2) million, driven in part by increased investment in implementation consultants and client services personnel designed to accelerate go lives dates, and $1.8 million for the fiscal year, respectively, decreases of 230% and 73% over comparable periods in 2012;
  • Recorded net loss of $1.9 million for the three-month period ended January 31, 2014;
  • Recorded net loss of $11.7 million for the fiscal year ended January 31, 2014 of which $4.8 million was attributable to the final IPP acquisition earn out adjustments, and non-recurring costs associated with inorganic activity;
  • Software-as-a-Service (SaaS) revenues for fiscal year 2013 increased 4.5% over 2012;
  • Maintenance and support revenues for the quarter and the year increased $48 thousand and $2.8 million, respectively, over comparable periods of 2012;
  • New sales bookings and long-term renewal agreements for the year were $27.3 million and for the quarter were $6.6 million;
  • Backlog at the end of the quarter was $56.6 million.

Conference Call Information

The Company will conduct a conference call to review the results on Monday, June 16, 2014 at 8:30 AM EDT. Interested parties can access the call by dialing 888-438-5519 and then entering the passcode 1362559. A live webcast will also be available; click here to register.

A replay of the conference call will be available Monday, June 16, 2014 at 11:30 AM EDT to Saturday June 21, 2014 at 11:30 AM EDT by dialing 888-203-1112 and entering passcode 1362559.

*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 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 integration and financial performance of our Unibased Systems Architecture acquisition, backlog, improvements to the Company's financial reporting process 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

January 31,

Fiscal Year Ended

2014

2013

2013

2012

Revenues:

  Systems sales

$

333,723

$

743,730

$

3,239,569

$

1,463,225

  Professional services

716,178

638,897

3,641,731

3,792,569

  Maintenance and support

3,461,971

3,413,934

13,986,566

11,211,197

  Software as a service

2,004,600

1,941,692

7,626,837

7,299,812

        Total revenues

6,516,472

6,738,253

28,494,703

23,766,803

Operating expenses:

  Cost of systems sales

830,587

810,469

3,142,525

2,747,230

  Cost of services

948,677

1,177,045

4,052,113

3,087,997

  Cost of maintenance and support

940,549

895,824

3,460,500

3,245,569

  Cost of software as a service

909,967

662,194

2,523,184

2,512,156

  Selling, general and administrative

4,228,140

3,259,675

14,546,335

10,060,469

  Research and development

3,460,743

1,114,448

7,088,077

2,948,313

        Total operating expenses

11,318,663

7,919,656

34,812,734

24,601,734

Operating loss

(4,802,191)

(1,181,403)

(6,318,031)

(834,931)

Other expense (income):

  Interest expense

(31,049)

(567,849)

(1,765,813)

(1,957,010)

  Loss on conversion of convertible notes

-

(5,913,320)

-

(5,970,002)

  Loss on early extinguishment of debt

(160,713)

-

(160,713)

-

  Miscellaneous income (expenses)

2,787,828

487,190

(3,573,091)

494,677

Loss before income taxes

(2,206,125)

(7,175,382)

(11,817,648)

(8,267,266)

  Income tax benefit (expense)

259,403

(631,342)

100,459

2,888,537

Net loss

$

(1,946,722)

$

(7,806,724)

$

(11,717,190)

$

(5,378,729)

Less: deemed dividends on Series A Preferred Shares

(449,595)

(36,915)

(1,180,904)

(176,048)

Net loss attributable to common shareholders

$

(2,396,317)

$

(7,843,639)

$

(12,898,094)

$

(5,554,777)

Basic net loss per common share

$

(0.14)

$

(0.63)

$

(0.94)

$

(0.48)

Number of shares used in basic per common share computation

16,337,000

12,492,611

13,747,700

11,634,540

Diluted net loss per common share

$

(0.14)

$

(0.63)

$

(0.94)

$

(0.48)

Number of shares used in diluted per common share computation

16,337,000

12,492,611

13,747,700

11,634,540

 

STREAMLINE HEALTH SOLUTIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Assets

January 31, 2014

January 31, 2013

Current assets:

  Cash and cash equivalents

$

17,924,886

$

7,500,256

  Accounts receivable, net of allowance for doubtful

    accounts of $267,000 and $134,000, respectively

7,999,571

8,685,017

  Contract receivables

1,181,606

1,481,819

  Prepaid hardware and third party software for

    future delivery

25,640

22,777

  Prepaid client maintenance contracts

909,464

1,080,330

  Other prepaid assets

1,407,515

997,024

  Deferred tax assets

95,498

-

  Other current assets

144,049

110,555

        Total current assets

29,688,229

19,877,778

Non-current assets:

Property and equipment:

  Computer equipment

3,769,564

3,420,452

  Computer software

2,239,654

2,196,236

  Office furniture, fixtures and equipment

889,080

843,274

  Leasehold improvements

697,570

697,570

7,595,868

7,157,532

  Accumulated depreciation and amortization

(6,676,824)

(5,958,727)

Property and equipment, net

919,044

1,198,805

 Contract receivables, less current portion

78,395

126,626

 Capitalized software development costs, net of

   accumulated amortization of $7,949,000 and

   $17,465,000, respectively

10,238,357

12,816,486

Intangible assets, net

12,175,634

8,188,131

Deferred financing costs, net of accumulated amortization of $1,741 and $196,947, respectively

44,898

541,740

Goodwill

11,933,683

12,133,304

Other

500,634

383,708

       Total non-current assets

35,890,645

35,388,800

$

65,578,874

$

55,266,578

 

STREAMLINE HEALTH SOLUTIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Liabilities and Stockholders' Equity

January 31, 2014

January 31, 2013

Current liabilities:

  Accounts payable

$

1,796,418

$

1,495,913

  Accrued compensation

1,782,599

2,088,850

  Accrued other expenses

554,876

1,325,039

  Current portion of long-term debt

1,214,280

1,250,000

  Deferred revenues

9,658,232

9,810,442

  Contingent consideration for earn-out

-

1,319,559

  Current portion of note payable

300,000

-

  Current portion of capital lease obligation

105,573

-

  Deferred income tax liabilities

-

35,619

        Total current liabilities

15,411,978

17,325,422

Non-current liabilities:

  Term loans

6,971,767

12,437,501

  Warrants liability

4,117,725

3,649,349

  Royalty liability

2,264,000

-

  Swap contract

111,086

-

  Note payable

600,000

-

  Lease incentive liability, less current portion

74,434

99,579

  Capital lease obligation

121,089

-

  Deferred income tax liability, less current portion

816,079

529,709

        Total non-current liabilities

15,076,180

16,716,138

        Total liabilities

30,488,158

34,041,560

Series A 0% Convertible Redeemable Preferred stock, $.01 par value per share, $8,849,985 and $11,999,985 redemption value, 4,000,000 shares authorized, 2,949,995 and 3,999,995 issued and outstanding, net of unamortized preferred stock discount of $3,250,317 and $4,234,269, respectively

5,599,668

7,765,716

Stockholders' equity:

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

    authorized, 18,175,787 and 12,643,620 shares issued and

    outstanding, respectively

181,758

126,436

  Convertible redeemable preferred stock, $.01 par value per

    share, 1,000,000 shares authorized, no shares issued

-

-

  Additional paid in capital

76,983,088

49,178,389

  Accumulated deficit

(47,562,712)

(35,845,523)

  Accumulated other comprehensive loss

(111,086)

-

        Total stockholders' equity

29,491,048

13,459,302

$

65,578,874

$

55,266,578

 

STREAMLINE HEALTH SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Fiscal Year

2013

2012

Operating activities:

  Net loss

$

(11,717,190)

$

(5,378,729)

  Adjustments to reconcile net loss to net cash

(used in) provided by operating activities:

Depreciation

718,097

726,406

Amortization of capitalized software development costs

3,192,157

2,659,365

Amortization of intangible assets

1,341,734

583,535

Amortization of other deferred costs

385,461

241,478

Amortization of debt discount

4,327

111,583

Valuation adjustment for warrants liability

(140,928)

(489,434)

Deferred tax expense (benefit)

155,253

(2,935,522)

Valuation adjustment for contingent earn-out

3,580,441

86,839

Other valuation adjustments

(95,368)

-

Net loss from conversion of convertible notes

-

5,970,002

Loss from early extinguishment of debt

160,713

-

Share-based compensation expense

1,660,598

956,144

Provision for accounts receivable

330,907

67,464

  Changes in assets and liabilities, net of assets acquired:

Accounts and contract receivables

827,435

(2,923,242)

Other assets

(439,477)

(1,129,255)

Accounts payable

275,360

526,149

Accrued expenses

125,402

992,285

Deferred revenues

(152,210)

(180,200)

  Net cash provided by (used in) operating activities

212,712

(115,132)

Investing activities:

Purchases of property and equipment

(152,283)

(576,736)

Capitalization of software development costs

(614,028)

(1,999,676)

Payment for acquisition

(3,000,000)

(12,161,614)

  Net cash used in investing activities

(3,766,311)

(14,738,026)

Financing activities:

Proceeds from term loan

4,958,333

9,880,000

Principal repayments on term loans

(10,348,214)

(312,500)

Principal payments on capital lease obligation

(34,391)

-

Payment of deferred financing costs

(115,900)

(1,271,862)

Proceeds from private placement

-

12,000,000

Proceeds from exercise of stock options and stock purchase plan

1,356,060

282,628

Settlement of earn-out consideration

(1,300,000)

-

Proceeds from the sale of common stock

20,586,619

-

Payment of success fee

(1,124,279)

(467,906)

  Net cash provided by financing activities

13,978,228

20,110,360

Increase in cash and cash equivalents

10,424,630

5,257,202

Cash and cash equivalents at beginning of year

7,500,256

2,243,054

Cash and cash equivalents at end of year

$

17,924,886

$

7,500,256

 

Supplemental cash flow disclosures:

             Interest Paid

$

2,422,997

$

1,626,750

             Income taxes paid

$

375,688

$

84,990

Supplemental disclosure of non-cash financing activities:

Conversion of $3,000,000 note payable to common shares

$

-

$

3,116,182

Conversion of 1,050,000 shares of Series A Preferred Stock to common shares

$

3,150,000

$

-

Issuance of 393,086 shares of common stock, as part of Meta purchase price

$

-

$

1,501,609

Issuance of 400,000 shares of common stock, as part of settlement of earn-out consideration

$

2,700,000

$

-

Issuance of $900,000 note payable as part of settlement of earn-out consideration

$

900,000

$

-

Deemed dividends on Series A Preferred Stock

$

1,180,904

$

176,048

Issuance of warrants to placement agents

$

-

$

753,737

Reclassification of warrants from equity to warrants liability

$

-

$

4,138,783

Conversion of notes issued in conjunction with the private placement to Series A Preferred Stock, at fair value

$

-

$

9,182,652

Interest rate swap contract

$

111,086

$

-

 

STREAMLINE HEALTH SOLUTIONS, INC. Backlog (Unaudited) Table A

January 31, 2014

October 31, 2013

January 31, 2013

Streamline Health Software Licenses

$

2,230,000

$

2,529,000

$

3,416,000

Hardware and Third Party Software

79,000

20,000

100,000

Professional Services

7,255,000

7,141,000

4,527,000

Software as a Service

25,936,000

17,087,000

20,439,000

Maintenance and Support

21,073,000

28,234,000

22,504,000

    Total

$

56,573,000

$

55,011,000

$

50,986,000

 

STREAMLINE HEALTH SOLUTIONS, INC. New Bookings (Unaudited) Table B

Three Months Ended

January 31, 2014

Value

% of Total Bookings

Streamline Health Software licenses

$

-

0%

Software as a service

3,410,000

65%

Maintenance and support

294,000

6%

Professional services

1,488,000

28%

Hardware & third party software

81,000

2%

Total bookings

$

5,273,000

100%

 

Fiscal Year Ended

January 31, 2014

Value

% of Total Bookings

Streamline Health Software licenses

$

2,065,000

0%

Software as a service

7,586,000

28%

Maintenance and support

6,720,000

64%

Professional services

4,894,000

7%

Hardware & third party software

159,000

0%

Total bookings

$

21,424,000

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 U.S. 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,

Twelve Months Ended,

January 31, 2014

January 31, 2013

January 31, 2014

January 31, 2013

Net loss

$

(1,947)

$

(7,807)

$

(11,717)

$

(5,379)

    Interest expense

31

568

1,766

1,957

    Income tax expense (benefit)

(259)

632

(100)

(2,888)

    Depreciation

228

179

718

726

    Amortization of capitalized software  development   costs

1,105

728

3,192

2,659

    Amortization of intangible assets

398

314

1,342

584

    Amortization of other costs

24

35

74

35

EBITDA

(419)

(5,351)

(4,725)

(2,306)

    Share-based compensation expense

457

312

1,661

956

    Loss on conversion of convertible notes

-

5,913

-

5,970

    Loss on early extinguishment of debt

161

-

161

-

    Transaction related professional fees, advisory fees and

      other internal direct costs

405

-

769

796

    Associate severances and other costs relating to

      transactions or corporate restructuring

33

588

415

866

    Other non-recurring operating expenses

(2,787)

191

3,489

278

Adjusted EBITDA

$

(2,150)

$

1,653

1,770

$

6,560

Adjusted EBITDA per diluted share

Loss per share - diluted

$

(0.14)

$

(0.63)

$

(0.94)

$

(0.48)

Adjusted EBITDA per adjusted diluted share (1)

$

(0.11)

$

0.09

$

0.10

$

0.46

Diluted weighted average shares

16,336,668

12,492,611

13,747,700

11,634,540

    Includable incremental shares — adjusted EBITDA (2)

4,059,747

5,090,421

4,863,140

494,109

Adjusted diluted shares

20,396,415

17,583,032

18,610,840

12,128,649

 

(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.

 

Logo - http://photos.prnewswire.com/prnh/20140506/85083

SOURCE Streamline Health Solutions, Inc.



RELATED LINKS

http://www.streamlinehealth.net