Streamline Health® Reports Q2 Results 22% INCREASE IN REVENUE; 61% INCREASE IN ADJUSTED EBITDA*

CINCINNATI, Sept. 12, 2012 /PRNewswire/ -- Streamline Health Solutions, Inc. (Nasdaq: STRM) today announced financial results for the second quarter of fiscal year 2012, ended July 31, 2012.

Revenues for the three-month period ended July 31, 2012, were $5,049,000 as compared to $4,146,000 in the comparable period of fiscal 2011.  The quarterly increase was primarily attributable to revenues provided by increases in recurring maintenance and SaaS revenues.

Robert E. Watson, President and Chief Executive Officer of Streamline Health said, "We continue to make meaningful progress on our journey to become a high-growth, profitable, world-class healthcare information technology company.  Revenue growth continues to track as planned, and our net new sales performance continues to be ahead of plan. Most importantly, during this quarter, we were able to successfully recruit new associates to fill roles that are required to address the implementation of these new sales."

Highlights for the quarter included:

  • Recorded net loss of $463,000 (net profit of $61,000 excluding non-recurring items related to the acquisition of Meta Health Technology Inc. subsequent to the end of the quarter);
  • Adjusted EBITDA* for second quarter 2012 was $1.5 million, an increase of 61% over second quarter 2011;
  • Recurring maintenance revenues improved by 4% over the prior year comparable quarter;
  • Software as a Service (SaaS) revenues for the quarter increased 21% over the prior year comparable quarter, excluding $630,000 of incremental SaaS revenue from the acquired operations of Interpoint Partners;
  • New sales bookings for the quarter were $4.7 million;
  • Maintenance and SaaS contract renewals for the quarter were $1.2 million;
  • Backlog at the end of the quarter was $32.2 million.

Operating expenses for the three-month period ending July 31, 2012 were $5,07 3,000, compared to $4,126,000 in the comparable prior year period; an increase of $947,000 or 23% over the prior year comparable period.  These values include $524,000 dollars of non-recurring expenses related to the acquisition of Meta Health Technology Inc. that closed on August 16, 2012. Note that $26,000 of non-recurring expense related to the Meta transaction was recorded in the first quarter.  In addition, management estimates that an additional non-recurring expense of approximately $110,000 dollars related to the Meta acquisition will be recorded during the third quarter of this fiscal year.

As a result, Streamline Health recorded an operating loss of $24,000 for the three-month period ended July 31, 2012 compared with an operating profit of $20,000 for the prior year comparable quarter.  Adjusted EBITDA* (a non-GAAP measure) for the quarter ended July 31, 2012 was $1.5 million, or $0.12 per fully diluted common share, compared to $919,000, or $0.09 per fully diluted common share in the comparable prior year quarter. A reconciliation table is provided below.

New sales bookings for the second quarter were $4.7 million, primarily consisting of professional services and software as a service contracts.  Maintenance and SaaS renewals or extensions were $1.2 million.  For the comparable prior period in 2011, new sales bookings were $1.9 million and renewals or extensions were $849,000.

Backlog at July 31, 2012 was $32.2 million, compared with $31.4 million at April 30, 2012. The increase in the current backlog reflects significant new SaaS contract signings as well as current clients purchasing additional solutions.  Additions to backlog included a five-year agreement with a 13 hospital system in the southeastern United States for the use of OpportunityAnyWare™, Streamline Health's business analytics solution on a SaaS basis; a new six-year agreement with United Hospital System (Kenosha, WI) for the use of OpportunityAnyWare on a SaaS basis plus a co-terminus renewal of their maintenance agreement for Streamline Health's enterprise content management solution, AccessAnyWare™; and a new SaaS agreement with FTI Consulting to deploy OpportunityAnyWare in their consulting practice.

* 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 these measures provide 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, and non-recurring transaction costs.  A table illustrating this measure is included in this publication.

Conference Call Information
Streamline Health will conduct a conference call and webcast to review the results of the second quarter of fiscal 2012 today, September 12, 2012, at 11:00 a.m. ET.

Interested parties can access the call by dialing 877-407-8037, or listen via a live Internet webcast, which can be found at www.streamlinehealth.net or http://www.investorcalendar.com/IC/CEPage.asp?ID=169663.

In addition, a replay of the conference call will be archived and available until October 13, 2012 at the following number: 877-660-6853, account number: 396 and then conference ID: 400058.

About Streamline Health
Streamline Health provides solutions that help hospitals and physician groups improve efficiencies and business processes across the enterprise to enhance and protect revenues. Our enterprise content management solutions transform unstructured data into digital assets that seamlessly integrate with disparate clinical, administrative, and financial information systems. Our business analytics solutions provide real-time access to key performance metrics that enable healthcare organizations to identify and manage opportunities to maximize financial performance. Our integrated workflow systems automate and manage critical business activities to improve organizational accountability to drive both operational and financial performance. Across the revenue cycle, our solutions offer a flexible, customizable way to optimize the clinical and financial performance of any healthcare organization. For more information visit 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 risks and uncertainties. The forward looking statements contained herein 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. These risks and uncertainties include, but are not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, key strategic alliances with vendors that resell Streamline Health products, the ability of Streamline Health to control costs, availability of products produced 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 Accountings Standards Board or other similar entities, changes in economic, business and market conditions impacting the healthcare industry, the markets in which Streamline Health operates and nationally, and Streamline Health'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. Streamline Health 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.

Financial Tables on Following Pages

 

STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

Three and Six Months Ended July 31,
(Unaudited)








Three Months


Six Months



2012


2011


2012


2011

Revenues:









  Systems sales

$

75,670

$

163,200

$

429,200

$

294,202

  Professional services


941,419


868,179


2,063,858


1,875,233

  Maintenance and support


2,297,246


2,201,690


4,648,821


4,278,597

  Software as a service


1,734,719


912,864


3,352,308


1,837,923

        Total revenues


5,049,054


4,145,933


10,494,187


8,285,955










Operating expenses:









  Cost of systems sales


532,332


627,550


1,218,859


1,168,502

  Cost of professional services


503,474


614,978


1,055,956


1,164,015

  Cost of maintenance and support


705,713


540,689


1,430,995


1,325,523

  Cost of software as a service


616,781


417,868


1,299,087


854,291

  Selling, general and administrative


2,204,205


1,582,532


3,873,965


3,247,193

  Product research and development


510,842


342,157


967,205


759,931

        Total operating expenses


5,073,347


4,125,774


9,846,067


8,519,455

Operating income (loss)


(24,293)


20,159


648,120


(233,500)

Other income (expense):









  Interest expense


(391,188)


(21,791)


(599,018)


(41,633)

  Miscellaneous income (expense)


(23,788)


(311)


12,257


(5,266)

Earnings (loss) before income taxes


(439,269)


(1,943)


61,359


(280,399)

   Income tax expense


(24,000)


(5,000)


(33,000)


(7,315)

Net earnings (loss)

$

(463,269)

$

(6,943)

$

28,359

$

(287,714)

Basic net earnings (loss) per common share

$

(0.04)

$

(0.00)

$

0.00

$

(0.03)

Number of shares used in basic per common share computation


11,315,581


9,817,370


 

10,816,960


 

9,847,348

Diluted net earnings (loss) per common share

$

(0.04)

$

(0.00)

$

0.00

$

(0.03)

Number of shares used in diluted per common share computation


11,315,581


9,817,370


11,400,177


 

9,847,348










See Notes to Condensed Consolidated Financial Statements









 

 

STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

 

Assets








(Unaudited)

July 31, 2012


(Audited)
January 31, 2012






Current assets:





  Cash and cash equivalents

$

4,071,522

$

2,243,054

  Accounts receivable, net of allowance for doubtful





    accounts of $100,000 and $100,000, respectively


2,190,052


4,484,605

  Contract receivables


339,025


430,370

  Prepaid hardware and third party software for future delivery


22,777


38,193

  Prepaid client maintenance contracts


941,751


788,917

  Prepaid and other assets


594,735


256,104

  Deferred income taxes


167,000


167,000

        Total current assets


8,326,862


8,408,243






Non-current assets:





Property and equipment:





  Computer equipment


3,285,529


2,892,885

  Computer software


2,187,854


2,131,730

  Office furniture, fixtures and equipment


756,375


756,375

  Leasehold improvements


667,000


667,000



6,896,758


6,447,990

  Accumulated depreciation and amortization


(5,594,952)


(5,232,321)

 Property and equipment, net


1,301,806


1,215,669

 Contract receivables, less current portion


168,546


221,596

 Capitalized software development costs, net of accumulated





   amortization of $16,027,630 and $14,805,236, respectively


9,577,781


9,830,175

 Intangible assets, net


392,348


417,666

 Deferred financing cost, net


302,097


145,857

 Goodwill


4,060,504


4,060,504

 Other, including deferred income taxes of $711,000 and $711,000, respectively


946,073


841,348

       Total non-current assets


16,749,155


16,732,815


$

25,076,017

$

25,141,058

 

STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

 

Liabilities and Stockholders' Equity

 



(Unaudited)

July 31, 2012


(Audited)
January 31, 2012






Current liabilities:





  Accounts payable

$

711,029

$

879,027

  Accrued compensation


997,080


887,130

  Accrued other expenses


1,039,256


479,526

  Current portion of deferred revenues


5,368,738


6,496,938

  Contingent consideration for earn-out


1,232,720


-

        Total current liabilities


9,348,823


8,742,621






Non-current liabilities:





  Term loan


4,120,000


4,120,000

  Convertible note

 


-


3,000,000

  Lease incentive liability


41,870


47,193

  Contingent consideration for earn-out, less current portion


-


1,232,720

        Total non-current liabilities


4,161,870


8,399,913

        Total liabilities


13,510,693


17,142,534






Stockholders' equity:





  Preferred stock, $.01 par value per share,





    5,000,000 shares authorized, no shares issued


-


-

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





  authorized, and 12,144,644 and 10,433,716 shares issued and outstanding, respectively


 

121,447


 

104,338

  Additional paid in capital


41,882,312


38,360,980

  Accumulated deficit


(30,438,435)


(30,466,794)

        Total stockholders' equity


11,565,324


7,998,524


$

25,076,017

$

25,141,058

 

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

 

Six Months Ended July 31,
(Unaudited)

 



2012


2011

Operating activities:





  Net earnings (loss)

$

28,359

$

(287,714)

  Adjustments to reconcile net earnings (loss) to net cash

    provided by operating activities:





    Depreciation and amortization


1,610,343


1,391,822

    Loss on disposal of equipment


-


26,667

    Stock-based compensation expense


399,961


395,732

    Provision for accounts receivable


-


40,000

  Change in assets and liabilities:





    Accounts, contract and installment receivables


2,438,948


540,548

    Other assets


(610,237)


(121,302)

    Accounts payable


(167,998)


187,202

    Accrued expenses


597,038


(790,017)

    Deferred revenues


(1,128,200)


(673,179)

  Net cash provided by operating activities


3,168,214


709,759






Investing activities:





  Purchases of property and equipment


(448,768)


(236,196)

  Capitalization of software development costs


(970,000)


(1,391,000)

  Net cash used in investing activities


(1,418,768)


(1,627,196)






Financing activities:





  Net change in borrowings


-


50,000

  Proceeds from exercise of stock options, stock purchase plan,





    and subscriptions


79,022


92,711

  Payments on capital lease obligation


-


(51,338)

  Net cash provided by financing activities


79,022


91,373

Increase (decrease) in cash and cash equivalents


1,828,468


(826,064)

Cash and cash equivalents at beginning of period


2,243,054


1,403,949

Cash and cash equivalents at end of period

$

4,071,522

$

577,885

Supplemental cash flow disclosures:





  Interest paid

$

299,712

$

29,621

  Income taxes paid

$

23,276

$

16,957

*Supplemental Disclosure of Non-Cash Financing Activity
In June 2012, the $3,000,000 convertible note and accrued interest was converted to 1,529,729 common shares at $2.00 per share.


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

Backlog









July 31, 2012


January 31, 2012


July 31, 2011

Streamline Health proprietary software

$

120,000

$

181,000

$

80,000

Hardware and third party software


119,000


194,000


152,000

Professional services


4,678,000


5,945,000


4,573,000

Maintenance and support


9,937,000


10,542,000


6,009,000

Software as a service


17,332,000


10,504,000


7,275,000

    Total

$

32,186,000

$

27,366,000

$

18,089,000

 

 

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

New bookings





Three Months Ended



July 31, 2012



Value


% of Total Bookings

Streamline Health Software licenses

$

0


0%

Software as a service


4,539,820


97%

Maintenance and support


1,780


0%

Professional services


117,860


2%

Hardware & third party software


41,115


1%

    Total bookings

$

4,700,575


100%

 

STREAMLINE HEALTH SOLUTIONS, INC.
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, Streamline Health 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.

Reconciliation of net earnings (loss) to non-GAAP adjusted EBITDA (in thousands)

Adjusted EBITDA Reconciliation


Three Months Ended,


Six Months Ended,



July 31, 2012


July 31, 2011


July 31, 2012


July 31, 2011

Net earnings (loss)

$

(463)

$

(7)

$

28

$

(288)

    Interest expense


391


22


599


42

    Income tax expense 


24


5


33


7

    Depreciation


183


193


363


391

    Amortization of capitalized software  development  costs


580


507


1,223


1,001

    Amortization of intangible assets


22


-


25


-

EBITDA


737


720


2,271


1,153

    Stock-based compensation expense


221


199


400


396

    Transaction expenses


524


-


550


-

Adjusted EBITDA

$

1,482

$

919

$

3,221

$

1,549










Adjusted EBITDA per diluted share









Earnings (loss) per share - diluted

$

(0.04)

$

(0.00)

$

0.00

$

(0.03)

Adjusted EBITDA per adjusted diluted share

$

0.12

$

0.09

$

0.28

$

0.16










Diluted weighted average shares


11,315,581


9,817,370


11,400,177


9,847,348

    Includable incremental shares – adjusted EBITDA (1)


885,652


12,715


-


17,951

Adjusted diluted shares


12,201,233


9,830,085


11,400,177


9,865,299

 

(1)

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.  If negative adjusted EBITDA is incurred, no additional incremental shares are assumed for adjusted diluted shares.

 

COMPANY CONTACT:

INVESTOR CONTACT:

Robert E. Watson

John Baldissera

Chief Executive Officer

BPC Financial Marketing

(513) 794-7100

(800) 368-1217

SOURCE Streamline Health Solutions, Inc.



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