Streamline Health® Reports Improved Income and EPS For Third Quarter 2012
ATLANTA, Dec. 14, 2012 /PRNewswire/ -- Streamline Health Solutions, Inc. [1] (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 that following the release of its third quarter 2012 earnings on December 13, 2012, after having received approval for that press release from its independent auditors, the company has been encouraged by its auditors to take a non-cash adjustment in its tax valuation allowance, as a result of the deferred tax liabilities recorded in conjunction with the Meta Health Technology acquisition, thereby altering its net income and earnings per share (EPS) performance for the quarter.
The adjustment in the tax valuation allowance also increased the company's year-to-date net income and EPS, to $2.3 million and $.20 respectively.
About Streamline Health
Streamline Health Solutions, Inc. [2] (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 [3].
* 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.
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: Investor Contacts:
Ashley Moore Randy Salisbury
Director, Marketing Investor Relations
(404)-446-2057 (404)-229-4242
ashley.moore@streamlinehealth.net 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 benefit (expense) 3,552,879 (5,000) 3,519,879 (12,315)
--------- ------ --------- -------
Net earnings $2,399,637 $295,766 $2,427,995 $8,051
Less: deemed dividends on Series A Preferred Shares (139,133) (139,133)
--------
Net earnings attributable to common shareholders $2,260,504 $2,288,862
Basic net earnings per common share $0.18 $0.03 $0.20 $0.00
Number of shares used in basic per common share computation 12,393,352 9,943,567 11,346,428 9,823,937
========== ========= ========== =========
Diluted net earnings per common share $0.15 $0.03 $0.18 $0.00
Number of shares used in diluted per common share computation 15,365,238 9,958,947 12,417,256 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 - 167,000
--- -------
Total current assets 16,183,291 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 $0 and $711,000, respectively 366,857 841,348
------- -------
Total non-current assets 36,743,636 16,732,815
---------- ----------
$52,926,927 $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 3,877,322 3,000,000
$1,822,255 and $0, respectively
Warrants liability 4,138,783 -
Lease incentive liability 101,453 47,193
Contingent consideration for earn-out, less current portion - 1,232,720
Total non-current liabilities 20,867,558 8,399,913
---------- ---------
Total liabilities 33,509,396 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 125,826 104,338
authorized, 12,582,598 and 10,433,716 shares issued and
outstanding, respectively
Convertible Redeemable Preferred Stock, $0.01 par value per share, 1,000,000 authorized, no shares issued - -
Additional paid in capital 44,351,334 38,360,980
Accumulated deficit (28,038,799) (30,466,794)
----------- -----------
Total stockholders' equity 16,438,361 7,998,524
---------- ---------
$52,926,927 $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 $2,427,995 $8,051
Adjustments to
reconcile net
earnings 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
Share-based
compensation
expense 645,407 529,104
Deferred tax
benefit (3,564,612) -
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 note 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 fee (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, October 31, October 31, October 31,
2012 2011 2012 2011
---- ---- ---- ----
Net earnings $2,400 $296 $2,428 $8
Interest expense 895 26 1,494 68
Income tax benefit (expense) (3,553) 5 (3,520) 12
Depreciation and other amortization 184 163 548 553
Amortization of capitalized software 708 454 1,930 1,455
development costs
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 per share - diluted $0.15 $0.03 $0.18 $0.00
Adjusted EBITDA per adjusted diluted share $0.10 $0.11 $0.39 $0.27
===== ===== ===== =====
Diluted weighted average shares 15,365,238 9,958,947 12,417,256 9,837,750
---------- --------- ---------- ---------
SOURCE Streamline Health Solutions, Inc.
Links:
[1] http://www.streamlinehealth.net/
[2] http://www.streamlinehealth.net/
[3] http://www.streamlinehealth.net/
[4] http://www.freshnews.com/node/109692