Streamline Health® Reports Third Quarter Fiscal Year 2012 Financial Results 52% Increase in Revenue; 49% Increase in Adjusted EBITDA*

ATLANTA, Dec. 13, 2012 /PRNewswire/ -- Streamline Health Solutions, Inc. (NASDAQ: STRM), a leading provider of enterprise content management, business analytics, computer assisted coding (CAC), and clinical documentation improvement (CDI) solutions for healthcare providers, today announced financial results for the third quarter of fiscal year 2012, which ended October 31, 2012.

Revenues for the three-month period ended October 31, 2012, were $6,534,000 as compared to $4,312,000 in the comparable period of fiscal 2011.  The quarterly increase was primarily attributable to revenues provided by increases in recurring SaaS revenues.

"We had a very successful third quarter," said Robert E. Watson, President and Chief Executive Officer of Streamline Health.  "Revenue and adjusted EBITDA continued to grow.  Additionally, we closed the acquisition of Meta Health Technology which expanded our solutions portfolio significantly and we completed a very significant financing.  It is important to note that we did not forecast these major accomplishments when we began this fiscal year.  Consequently, the accounting treatment for these transactions has negatively impacted our GAAP EPS for this fiscal year.  However, these strategic moves were major steps in positioning our company for further growth, enabling us to invest in world-class healthcare information technology solutions, and helping our clients  improve their financial outcomes."

Highlights for the quarter included:

  • Recorded net loss of $1,165,000; of which $494,000 is attributable to non-recurring transaction related expenses; resulting in an adjusted non-GAAP net loss of $671,000
  • Adjusted EBITDA* for third quarter 2012 was $1.6 million, an increase of 49% over third quarter 2011;
  • Software as a Service (SaaS) revenues for the quarter increased 23% over the prior year comparable quarter, excluding $821,000 of incremental SaaS revenue from the acquired operations of Interpoint Partners;
  • New sales bookings for the quarter were $2.9 million;
  • Maintenance and SaaS contract renewals for the quarter were $2.5 million;
  • Backlog at the end of the quarter was $48.7 million.

New sales bookings for the second quarter were $2.9 million, primarily consisting of professional services and software as a service contracts.  Maintenance and SaaS renewals or extensions were $2.5 million.  For the comparable prior period in 2011, new sales bookings were $1.4 million and renewals or extensions were $1.6 million.

Backlog at October 31, 2012 was $48.7 million, compared with $32.2 million at July 31, 2012. The increase in the current backlog reflects significant new SaaS contract signings as well as current clients purchasing additional solutions.

Conference Call Information
Streamline Health Solutions, Inc. will hold a conference call today at 11 a.m. Eastern. Interested parties can access the call by dialing 888-427-9419 and then entering the passcode 8521046. A live webcast will also be available by clicking this link: bit.ly/VrdPro

A replay of the conference call will be available from Thursday, December 13, 2012 at 2:00 p.m. EST to Tuesday, December 18, 2012 at 2:00 p.m. EST by dialing 888-203-1112 and entering passcode 8521046.

* 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.

About Streamline Health
Streamline Health Solutions, Inc. (NASDAQ: STRM) is a leading provider of SaaS-based healthcare information technology (HCIT) solutions for hospitals and physician groups with offices in Atlanta, Cincinnati and New York. The company's comprehensive suite of solutions includes: enterprise content management (ECM), business analytics, integrated workflow systems, clinical documentation improvement (CDI), and computer assisted coding (CAC). Across the revenue cycle, these solutions offer healthcare enterprises a flexible, customizable way to communicate between disparate departments and information systems to improve processes, boost productivity, and optimize clinical, administrative and financial performance.  For more information, please visit our website at http://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 and are no guarantee of future performance. 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 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 products and pricing, product demand and market acceptance, new product development, key strategic alliances with vendors that resell the Company's products, the ability of the Company to control costs, availability of products obtained 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 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.

 

Company Contact:

Ashley Moore

Director, Marketing

(404)-446-2057

ashley.moore@streamlinehealth.net

Investor Contacts:

Randy Salisbury

Investor Relations

(404)-229-4242

randy.salisbury@streamlinehealth.net


 

 

 

BPC Financial Marketing

John Baldissera

800-368-1217

 

 

 

 

STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


 

Three and Nine Months Ended October 31,
(Unaudited)


 

 

 

Three Months


 

                                                                 Nine Months


 

 

2012


 

2011


 

2012


 

2011

Revenues:


 

 

 

 

 

 

 

 

  Systems sales

$

290,294

$

232,395

$

719,495

$

526,597

  Professional services


 

1,089,814


 

833,592


 

3,153,672


 

2,708,824

  Maintenance and support


 

3,148,442


 

2,279,886


 

7,797,263


 

6,558,484

  Software as a service


 

2,005,813


 

966,218


 

5,358,120


 

2,804,141

        Total revenues


 

6,534,363


 

4,312,091


 

17,028,550


 

12,598,046


 

 

 

 

 

 

 

 

 

Operating expenses:


 

 

 

 

 

 

 

 

  Cost of systems sales


 

717,901


 

583,388


 

1,936,761


 

1,751,890

  Cost of professional services


 

854,997


 

572,056


 

1,910,951


 

1,923,576

  Cost of maintenance and support


 

918,750


 

513,868


 

2,349,745


 

1,651,884

  Cost of software as a service


 

550,875


 

480,368


 

1,849,962


 

1,334,659

  Selling, general and administrative


 

2,926,830


 

1,494,891


 

6,800,794


 

4,742,084

  Product research and development


 

866,659


 

303,973


 

1,833,865


 

1,063,903

        Total operating expenses


 

6,836,012


 

3,948,544


 

16,682,078


 

12,467,996

Operating income (loss)


 

(301,649)


 

363,547


 

346,472


 

130,050

Other income (expense):


 

 

 

 

 

 

 

 

  Interest expense


 

(895,142)


 

(25,896)


 

(1,494,161)


 

(67,529)

  Miscellaneous income (expenses)


 

43,549


 

(36,885)


 

55,805


 

(42,155)

Earnings (loss) before income taxes


 

(1,153,242)


 

300,766


 

(1,091,884)


 

20,366

  Income tax expense


 

(11,733)


 

(5,000)


 

(44,733)


 

(12,315)

Net earnings (loss)

$

(1,164,975)

$

295,766

$

(1,136,617)

$

8,051

Less: deemed dividends on Preferred Shares


 

(139,133)


 

 

 

(139,133)


 

 

Net earnings (loss) attributable to common shareholders

$

(1,304,108)


 

 

$

(1,275,750)


 

 

Basic net earnings (loss) per common share

$

(0.11)

$

0.03

$

(0.11)

$

0.00

Number of shares used in basic per common share computation


 

12,393,314


 

9,943,567


 

11,346,415


 

9,823,937

Diluted net earnings (loss) per common share

$

(0.11)

$

0.03

$

(0.11)

$

0.00

Number of shares used in diluted per common share computation


 

12,393,314


 

9,958,947


 

11,346,415


 

9,837,750

 

 

 

STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS


 

Assets


 

 

 

(Unaudited)

 October 31, 2012


 

January 31, 2012


 

 

 

 

 

Current assets:


 

 

 

 

  Cash and cash equivalents

$

10,528,695

$

2,243,054

  Accounts receivable, net of allowance for doubtful


 

 

 

 

    accounts of $134,000 and $100,000, respectively


 

3,389,738


 

4,484,605

  Contract receivables


 

648,736


 

430,370

  Prepaid hardware and third party software for future delivery


 

22,777


 

38,193

  Prepaid client maintenance contracts


 

1,038,035


 

788,917

  Prepaid and other assets


 

555,310


 

256,104

  Deferred income taxes


 

326,618


 

167,000

        Total current assets


 

16,509,909


 

8,408,243


 

 

 

 

 

Non-current assets:


 

 

 

 

Property and equipment:


 

 

 

 

  Computer equipment


 

3,418,500


 

2,892,885

  Computer software


 

2,196,236


 

2,131,730

  Office furniture, fixtures and equipment


 

818,231


 

756,375

  Leasehold improvements


 

693,890


 

667,000


 

 

7,126,857


 

6,447,990

  Accumulated depreciation and amortization


 

(5,778,675)


 

(5,232,321)

Property and equipment, net


 

1,348,182


 

1,215,669


 

 

 

 

 

 Contract receivables, less current portion


 

142,021


 

221,596

 Capitalized software development costs, net of accumulated


 

 

 

 

   amortization of $16,733,274 and $14,805,236, respectively


 

13,119,354


 

9,830,175

Intangible assets, net


 

8,517,084


 

417,666

Deferred financing cost, net


 

1,211,912


 

145,857

Goodwill


 

12,038,226


 

4,060,504

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


 

1,077,857


 

841,348

       Total non-current assets


 

37,454,636


 

16,732,815


 

$

53,964,545

$

25,141,058


 

 

 

 

STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS


 

Liabilities and Stockholders' Equity


 

 

 

(Unaudited) October 31, 2012


 

January 31, 2012


 

 

 

 

 

Current liabilities:


 

 

 

 

  Accounts payable

$

832,657

$

879,027

  Accrued compensation


 

1,603,355


 

887,130

  Accrued other expenses


 

1,373,307


 

479,526

  Deferred revenues


 

6,262,960


 

6,496,938

  Contingent consideration for earn-out


 

1,319,559


 

-

  Current portion of long-term debt


 

1,250,000


 

-

        Total current liabilities


 

12,641,838


 

8,742,621


 

 

 

 

 

Non-current liabilities:


 

 

 

 

  Term loans


 

12,750,000


 

4,120,000

 

  Convertible note payable, net of unamortized discount of $1,822,255


 

3,877,322


 

3,000,000

  Warrants liability


 

4,138,783


 

-

  Lease incentive liability


 

101,453


 

47,193

  Contingent consideration for earn-out, less current portion


 

-


 

1,232,720

  Deferred income tax liability


 

4,602,230


 

-

        Total non-current liabilities


 

25,469,788


 

8,399,913

        Total liabilities


 

38,111,626


 

17,142,534


 

 

 

 

 

Series A 0% Convertible redeemable preferred stock, $.01 par


 

 

 

 

    value per share, $7,250,355 redemption value, 5,000,000


 

 

 

 

    shares authorized, 2,416,785 shares issued


 

2,979,170


 

-


 

 

 

 

 

Stockholders' equity:


 

 

 

 

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

 


 

 

 

 

  authorized, 12,582,598 and 10,433,716 shares issued and outstanding, respectively                                                                                                   


 

125,826


 

104,338

  Additional paid in capital


 

44,351,334


 

38,360,980

  Accumulated deficit


 

(31,603,411)


 

(30,466,794)

        Total stockholders' equity


 

12,873,749


 

7,998,524


 

$

53,964,545

$

25,141,058

 

 

 

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


 

Nine Months Ended October 31,
(Unaudited)


 

 

 

2012


 

2011

Operating activities:


 

 

 

 

  Net earnings (loss)

$

(1,136,617)

$

8,051

  Adjustments to reconcile net earnings (loss) to net cash

    provided by operating activities, net of effect of acquisition:


 

 

 

 

    Depreciation and amortization


 

2,847,665


 

2,008,432

    Loss on disposal of equipment


 

-


 

26,667

    Stock-based compensation expense


 

645,407


 

529,104

    Provision for accounts receivable


 

-


 

40,000

    Amortization of debt discount


 

111,584


 

-

    Fair value adjustment for contingent earnout


 

86,839


 

-

    Net loss from conversion of convertible notes


 

56,682


 

-

  Change in assets and liabilities:


 

 

 

 

    Accounts and contract receivables


 

(1,351,935)


 

419,517

    Other assets


 

(482,785)


 

(89,066)

    Accounts payable


 

(137,107)


 

161,609

    Accrued expenses


 

947,630


 

(574,012)

    Deferred revenues


 

881,677


 

(1,904,641)

  Net cash provided by operating activities


 

2,469,040


 

625,661


 

 

 

 

 

Investing activities:


 

 

 

 

  Purchases of property and equipment


 

(546,061)


 

(245,262)

  Capitalization of software development costs


 

(1,571,420)


 

(1,970,000)

  Payment for acquisition, net of cash acquired


 

(12,161,634)


 

-

  Net cash used in investing activities


 

(14,279,115)


 

(2,215,262)


 

 

 

 

 

Financing activities:


 

 

 

 

  Net change in borrowings


 

9,880,000


 

550,000

  Payment of deferred financing costs


 

(1,246,107)


 

-

  Proceeds from exercise of stock options and stock purchase plan


 

161,823


 

92,711

  Proceeds from private placement


 

12,000,000


 

-

  Payment of success fees


 

(700,000)


 

-

  Payments on capital lease obligation


 

-


 

(156,621)

  Net cash provided by financing activities


 

20,095,716


 

486,090

Increase (decrease) in cash and cash equivalents


 

8,285,641


 

(1,103,511)

Cash and cash equivalents at beginning of period


 

2,243,054


 

1,403,949

Cash and cash equivalents at end of period

$

10,528,695

$

300,438

Supplemental cash flow disclosures:


 

 

 

 

  Interest paid

$

1,181,929

$

61,532

  Income taxes paid

$

78,041

$

19,136


 

Supplemental Disclosure of Non-Cash Financing and Investing Activities:

- 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.

- In August 2012, we issued 393,086 shares of our common stock at a price of $4.07, as part of the Meta acquisition purchase price.

- In October 2012, we issued approximately 200,000 common stock warrants, convertible into common stock shares at $4.06 per share.

- During the third quarter of 2012, we recorded approximately $139,000 of deemed dividends from preferred shares discount accretion.

 

 

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


 

Backlog


 

 

 

October 31, 2012


 

January 31, 2012


 

October 31, 2011

Streamline Health Software Licenses

$

3,650,000

$

181,000

$

67,000

Hardware and Third Party Software


 

84,000


 

194,000


 

190,000

Professional Services


 

4,348,000


 

5,945,000


 

4,946,000

Software as a service


 

19,117,000


 

10,542,000


 

6,237,000

Maintenance and support


 

21,535,000


 

10,504,000


 

5,374,000

    Total

$

48,734,000

$

27,366,000

$

16,814,000

 

 

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


 

New bookings (1)


 

 

Three Months Ended


 

 

October 31, 2012


 

 

Value


 

% of Total Bookings

Streamline Health Software licenses

$

-


 

-%

Software as a service


 

2,200,000


 

76%

Maintenance and support


 

-


 

-%

Professional services


 

684,000


 

23%

Hardware & third party software


 

20,000


 

1%

    Total bookings

$

2,904,000


 

100%


 

 

Nine Months Ended


 

 

October 31, 2012


 

 

Value


 

% of Total Bookings

Streamline Health Software licenses

$

50,000


 

-%

Software as a service


 

9,757,000


 

86%

Maintenance and support


 

64,000


 

1%

Professional services


 

1,160,000


 

10%

Hardware & third party software


 

368,000


 

3%

    Total bookings

$

11,399,000


 

100%


 

(1)  Bookings are the aggregate of signed contracts and/or completed customer purchase orders approved and accepted by the Company as binding commitments to purchase its products and/or services. New bookings do not include maintenance services as these tend to be recurring in nature on an annual or more frequent basis.

 

 

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.


 

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


 

Adjusted EBITDA Reconciliation


 

Three Months Ended,


 

Nine Months Ended,


 

 

October 31, 2012


 

October 31,  2011


 

October 31, 2012


 

October 31,

2011

Net earnings (loss)

$

(1,165)

$

296

$

(1,137)

$

8

    Interest expense


 

895


 

26


 

1,494


 

68

    Income tax expense 


 

12


 

5


 

45


 

12

    Depreciation and other amortization


 

184


 

163


 

548


 

553

    Amortization of capitalized software  development  costs


 

708


 

454


 

1,930


 

1,455

    Amortization of intangible assets


 

229


 

-


 

254


 

-

EBITDA


 

863


 

944


 

3,134


 

2,096

    Stock-based compensation expense


 

245


 

133


 

645


 

529

    Transaction  expenses


 

494


 

-


 

1,043


 

-

Adjusted EBITDA

$

1,602

$

1,077

$

4,822

$

2,625


 

 

 

 

 

 

 

 

 

Adjusted EBITDA per diluted share


 

 

 

 

 

 

Earnings (loss) per share - diluted

$

(0.11)

$

0.03

$

(0.11)

$

0.00

Adjusted EBITDA per adjusted diluted share

$

0.10

$

0.11

$

0.33

$

0.27


 

 

 

 

 

 

 

 

 

Diluted weighted average shares


 

12,393,314


 

9,958,947


 

11,346,415


 

9,837,750

    Includable incremental shares – adjusted EBITDA (1)


 

3,683,574


 

-


 

3,117,999


 

-

Adjusted diluted shares


 

16,076,888


 

9,958,947


 

14,464,414


 

9,837,750


 

 

 

 

 

 

 

 

 

(1)  Includes preferred shares on an as-if-converted basis and common stock warrants and options under the treasury stock method.

SOURCE Streamline Health Solutions, Inc.



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