Streamline Health® Solutions Reports $8.8 Million Revenue; $2.7 Million Adjusted EBITDA in Q2 2013

Streamline Health® Solutions Reports $8.8 Million Revenue;
$2.7 Million Adjusted EBITDA in Q2 2013

ATLANTA--(BUSINESS WIRE)-- Streamline Health Solutions, Inc. (NAS: STRM) , a leading provider of knowledge management solutions for healthcare providers, today announcedfinancial results for the second quarter of fiscal year 2013, which ended July 31, 2013.

Revenues increased 74% for the three-month period ended July 31, 2013 to $8.8 million, as compared to $5.0 million in the second quarter of fiscal 2012. The quarterly increase was attributable to significant new sales in the Collabra suite, which includes computer assisted coding and clinical documentation improvement solutions acquired from Meta Health Technology in Q3 2012, increases in SaaS-based revenue primarily in the Company's business analytics suite, OpportunityAnyWare and recurring maintenance in the AccessAnyWare and Collabra suites.


Adjusted EBITDA increased 81% in the quarter to $2.7 million, as compared to $1.5 million in the second quarter of fiscal 2012. Cash on the balance sheet also increased appreciably to $5.4 million.

"We continue to grow with our clients," said Robert E. Watson, President and Chief Executive Officer of Streamline Health. "Our clients are telling us what they need to be successful in this rapidly changing industry, and we believe our solutions help them meet those needs as witnessed by our first eCAC solution sale in the second quarter. Our plan is to leverage our many relationships to cross sell incremental solutions, with particular emphasis on our business analytics and our coding solutions as the deadline for ICD-10 nears."

Highlights for the quarter included:

 Revenue for the second quarter 2013 was $8.8 million, an increase of 74% over the comparable period in 2012;
Software as a Service (SaaS) revenues for second quarter 2013 was $1.9 million, an increase of 9% over Q2 2012;
Maintenance and support revenues for the second quarter 2013 was $3.6 million, a 58% increase over the comparable period in 2012 primarily attributable to the contracts acquired as part of the Meta Health Technologies acquisition in August 2012;
New sales bookings for the quarter were $5.3 million;
Backlog at the end of the quarter was $51.9 million.
 

Operating expenses for the three-month period ending July 31, 2013 were $7.8 million, compared to $5.1 million in the comparable prior year period; an increase of $2.7 million, or 54%, over the prior year comparable period.

Backlog at July 31, 2013 was $51.9 million, compared with $51.0 million at January 31, 2013 and $32.2 million at July 31, 2012. The fiscal second quarter backlog decline of approximately $1.3 million as compared to the fiscal first quarter is primarily attributable to recognized revenue in this quarter being drawn from backlog as expected.

Conference Call Information

The Company will conduct a conference call and webcast to review the results on Monday, September 9, 2013 at 5:00 pm EDT. Interested parties can access the call by dialing 888-504-7963 and then entering the passcode 2615298. A live webcast will also be available by clicking this link: http://bit.ly/19FlIAQ

A replay of the conference call will be available from Monday, September 9, 2013 at 7:00 p.m. EDT to Saturday, September 14, 2013 at 7:00 p.m. EDT by dialing 888-203-1112 and entering passcode 2615298.

* 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 these measures provide useful supplemental information regarding the performance of Streamline Health's business operations.

Streamline Health defines "non-GAAP adjusted net earnings (loss)" as GAAP net earnings (loss), plus losses on conversion of convertible notes, transaction related expenses, and non-recurring operational costs.

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, and internal direct costs incurred to complete transactions.

About Streamline Health

Streamline Health Solutions, Inc. (NAS: STRM) is a leading provider of SaaS-based healthcare information technology (HCIT) solutions for healthcare providers. 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). This unique combination of solutions is designed to help healthcare organizations manage the financial and operational challenges they face in the ever-changing world of healthcare today and in the future. 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 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.

STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
Three Months EndedSix Months Ended
July 31,July 31,
2013  2012 2013  2012 
Revenues:
Systems sales$2,233,668$75,670$2,558,314$429,200
Professional services1,039,240941,4191,958,5912,063,858
Maintenance and support3,620,4462,297,2467,001,0464,648,821
Software as a service1,880,007 1,734,719 3,728,748 3,352,308 
Total revenues8,773,361 5,049,054 15,246,699 10,494,187 
 
Operating expenses:
Cost of systems sales661,124532,3321,299,7221,218,859
Cost of services, maintenance and support2,062,2201,209,1874,021,2712,486,951
Cost of software as a service514,075616,7811,093,1541,299,087
Selling, general and administrative3,408,1532,204,2056,989,0203,873,965
Research and development1,160,147 510,842 2,257,157 967,205 
Total operating expenses7,805,719 5,073,347 15,660,324 9,846,067 
Operating income (loss)967,642(24,293)(413,625)648,120
Other income (expense):
Interest expense(587,808)(391,188)(1,154,373)(599,018)
Miscellaneous income (expenses)(1,064,163)(23,788)(1,806,428)12,257 
Earnings (loss) before income taxes(684,329)(439,269)(3,374,426)61,359
Income tax expense(143,874)(24,000)(163,624)(33,000)
Net (loss) earnings$(828,203)$(463,269)$(3,538,050)$28,359 
Less: deemed dividends on Series A Preferred Shares(15,510)- (357,147)- 
Net (loss) earnings attributable to common shareholders$(843,713)$(463,269)$(3,895,197)$28,359 
Basic net (loss) earnings per common share$(0.07)$(0.04)$(0.31)$0.00 
Number of shares used in basic per common share computation12,861,715 11,316,083 12,698,094 10,817,214 
Diluted net (loss) earnings per common share$(0.07)$(0.04)$(0.31)$0.00 
Number of shares used in diluted per common share computation12,861,715 11,316,083 12,698,094 10,936,752 
 
 
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
 
Assets
 
July 31, 2013January 31, 2013
 
Current assets:
Cash and cash equivalents$5,355,673$7,500,256
Accounts receivable, net of allowance for doubtful
accounts of $134,000 and $134,000, respectively10,773,1828,685,017
Contract receivables1,769,7381,481,819
Prepaid hardware and third party software for
future delivery22,77722,777
Prepaid client maintenance contracts1,176,4321,080,330
Other prepaid assets924,512997,024
Other current assets- 110,555 
Total current assets20,022,314 19,877,778 
 
Non-current assets:
Property and equipment:
Computer equipment3,481,6793,420,452
Computer software2,202,4442,196,236
Office furniture, fixtures and equipment870,079843,274
Leasehold improvements697,570 697,570 
7,251,7727,157,532
Accumulated depreciation and amortization(6,296,766)(5,958,727)
Property and equipment, net955,006 1,198,805 
 
Contract receivables, less current portion95,816126,626
Capitalized software development costs, net of
accumulated amortization of $18,861,000 and
$17,465,000, respectively12,218,23012,816,486
Intangible assets, net7,559,1548,188,131
Deferred financing costs, net331,955541,740
Goodwill12,166,95912,133,304
Other459,823 383,708 
Total non-current assets33,786,943 35,388,800 
$53,809,257 $55,266,578 
 
 
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
 
Liabilities and Stockholders' Equity
 
 
July 31, 2013January 31, 2013
 
Current liabilities:
Accounts payable$1,605,745$1,495,913
Accrued compensation1,021,5152,088,850
Accrued other expenses1,318,9471,325,039
Deferred revenues10,040,0059,810,442
Contingent consideration for earn-out1,358,7221,319,559
Current portion of long-term debt1,250,0001,250,000
Current portion of deferred tax liability35,619 35,619 
Total current liabilities16,630,553 17,325,422 
 
Non-current liabilities:
Term loans, less current portion11,812,50012,437,501
Warrants liability5,981,0003,649,349
Lease incentive liability, less current portion79,60399,579
Deferred income tax liability, less current portion663,033 529,709 
Total non-current liabilities18,536,136 16,716,138 
Total liabilities35,166,689 34,041,560 
 
Series A 0% Convertible Redeemable Preferred Stock, $.01 par
value per share, $11,999,985 redemption value, 4,000,000
shares authorized, 3,999,995 issued and outstanding, net of
unamortized preferred stock discount of $4,034,470 and7,965,5157,765,716
$4,234,269, respectively
 
Stockholders' equity:
Common stock, $.01 par value per share, 25,000,000 shares
authorized, 13,039,619 and 12,643,620 shares issued and
outstanding, respectively130,396126,436
Convertible redeemable preferred stock, $.01 par value per
share, 1,000,000 shares authorized, no shares issued--
Additional paid in capital49,930,23049,178,389
Accumulated deficit(39,383,573)(35,845,523)
Total stockholders' equity10,677,053 13,459,302 
$53,809,257 $55,266,578 
 
 
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 
Six Months Ended
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