ATLANTA, April 10, 2017 /PRNewswire/ — Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of the Looking Glass® platform of integrated solutions, technology-enabled services and analytics supporting revenue cycle optimization for healthcare enterprises, today announced financial results for the fourth quarter and fiscal year of 2016, which ended January 31, 2017.

Revenues for the three-month period ended January 31, 2017 were $6.4 million, same as the three-months ended January 31, 2016. Adjusted EBITDA for the fourth quarter was $0.5 million, same as the fourth quarter a year ago.  Net loss for the fourth quarter was $1.0 million, an improvement over the $1.4 million net loss in the same period a year ago.

Revenues for fiscal year 2016 were $27.1 million, down 4.4% from $28.3 million the previous fiscal year.  Recurring revenues for the year constituted 82.4% of overall revenue, or $22.3 million. Net loss for 2016 was $5.2 million. Adjusted EBITDA for the fiscal year was $2.9 million, up from $2.8 million in fiscal year 2015.

«2016 was another year of significant improvement in terms of our balance sheet and operational efficiency as our cash on hand is effectively even with our bank debt,» stated David Sides, President and Chief Executive Officer, Streamline Health. «As importantly, during the year we made two strategic moves to enable us to place more emphasis on solutions and services with the greatest demand in the marketplace.  Our acquisition of Opportune IT added coding audit services and technologies to our mix, and the sale of our scheduling solutions moved us more firmly into the middle of the revenue cycle where our primary decision makers of CFOs, HIM and Revenue Cycle directors are focused on improving the fiscal health of their organizations.»

«We continue to expand our reseller network to help us reach more potential clients, faster.  And we are investing in the development of new technologies in machine learning to give us a strategic advantage in the market, specifically in pre- and post-bill auditing.»

Highlights for the fourth quarter and fiscal year ended January 31, 2017 included:

  • Revenues for the fourth quarter 2016 were $6.4 million, and for the year were $27.1 million;
  • Recorded net loss of $(1.0) million for the three-month period ended January 31, 2017, and $(5.2) million for the fiscal year 2016;
  • Adjusted EBITDA for the fourth quarter 2016 was $0.5 million, and for the year was $2.9 million;
  • New sales bookings for the quarter were $2.9 million and $8.3 million for the fiscal year; and
  • Backlog at the end of the quarter was $50.6 million.

Conference Call Information

The Company will conduct a conference call to review the results on Monday, April 10, 2017 at 5:00 PM ET. Interested parties can access the call via live webcast; click here to register. The call can also be accessed by dialing 877-397-0286 and then entering passcode 2135649.

A replay of the conference call will be available from Monday, April 10, 2017 at 8:00 PM ET to Friday, April 14, 2017 at 8:00 PM ET by dialing 888-203-1112 and entering passcode 2135649.

*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 support revenue cycle optimization for healthcare enterprises. Our Looking Glass® platform delivers integrated solutions, technology-enabled services and analytics that enable providers to drive reimbursement in a value-based world. We share a common calling and commitment to advance the quality of life and the quality of healthcare – for society, 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 Company’s estimates of future revenue, backlog, results of investments in sales and marketing, success of future products 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 and enhancement of current solutions, key strategic alliances with vendors and channel partners 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
[email protected]

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended

January 31,

Fiscal Year Ended

2017

2016

2017

2016

Revenues:

  Systems sales

$

322,323

$

378,594

$

2,512,579

$

2,946,304

  Professional services

526,331

580,124

2,395,987

2,212,002

  Audit Services

393,572

627,919

  Maintenance and support

3,572,298

3,829,816

14,809,935

15,145,480

  Software as a service

1,568,609

1,582,314

6,713,485

8,010,672

        Total revenues

6,383,133

6,370,848

27,059,905

28,314,458

Operating expenses:

  Cost of systems sales

632,400

660,632

2,712,663

2,778,041

  Cost of professional services

832,932

894,852

2,724,078

3,143,881

  Cost of audit services

504,579

1,100,154

  Cost of maintenance and support

743,049

738,778

3,226,511

3,036,550

  Cost of software as a service

373,397

389,385

1,763,705

2,442,143

  Selling, general and administrative

2,934,934

2,806,429

13,088,074

13,442,799

  Research and development

1,653,469

2,377,712

7,453,638

9,093,353

  Gain on sale of business

(238,103)

(238,103)

        Total operating expenses

7,436,657

7,867,788

31,830,720

33,936,767

Operating loss

(1,053,524)

(1,496,940)

(4,770,815)

(5,622,309)

Other income (expense):

  Interest expense

(127,962)

(185,824)

(508,859)

(884,226)

  Miscellaneous income (expenses)

145,173

284,880

106,084

2,224,423

Loss before income taxes

(1,036,313)

(1,397,884)

(5,173,590)

(4,282,112)

  Income tax (expense) benefit

17,128

(5,358)

12,024

(8,003)

Net loss

$

(1,019,185)

$

(1,403,242)

$

(5,161,566)

$

(4,290,115)

Less: deemed dividends on Series A Preferred Shares

(369,058)

(875,935)

(1,336,072)

Net loss attributable to common shareholders

$

(1,019,185)

$

(1,772,300)

$

(6,037,501)

$

(5,626,187)

Basic net loss per common share

$

(0.05)

$

(0.09)

$

(0.31)

$

(0.30)

Number of shares used in basic per common share computation

19,680,751

18,783,539

19,528,341

18,689,854

Diluted net loss per common share

$

(0.05)

$

(0.09)

$

(0.31)

$

(0.30)

Number of shares used in diluted per common share computation

19,680,751

18,783,539

19,528,341

18,689,854

 

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

Assets

January 31,

2017

2016

Current assets:

  Cash and cash equivalents

$

5,654,093

$

9,882,136

  Accounts receivable, net of allowance for doubtful
    accounts of $198,449 and $155,407, respectively

4,489,789

4,199,315

  Contract receivables

466,423

119,697

  Prepaid hardware and third party software for
    future delivery

5,858

5,858

  Prepaid client maintenance contracts

595,633

956,913

  Other prepaid assets

732,496

941,532

  Other current assets

439

97,986

        Total current assets

11,944,731

16,203,437

Non-current assets:

  Property and equipment:

  Computer equipment

3,110,274

2,647,135

  Computer software

827,642

801,895

  Office furniture, fixtures and equipment

683,443

683,443

  Leasehold improvements

729,348

729,348

5,350,707

4,861,821

  Accumulated depreciation and amortization

(3,447,198)

(2,407,746)

  Property and equipment, net

1,903,509

2,454,075

 Contract receivables, less current portion

8,711

 Capitalized software development costs, net of  
   accumulated amortization of $16,544,797 and  
   $14,919,948 respectively

4,584,245

6,123,638

 Intangible assets, net

6,996,599

8,155,325

 Goodwill

15,537,281

16,184,667

 Other non-current assets

672,133

746,018

       Total non-current assets

29,693,767

33,672,434

$

41,638,498

$

49,875,871

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

Liabilities and Stockholders’ Equity

January 31,

2017

2016

Current liabilities:

  Accounts payable

$

1,116,525

$

1,136,779

  Accrued compensation

496,706

935,324

  Accrued other expenses

484,391

328,551

  Current portion of long-term debt

655,804

673,807

  Deferred revenues

9,916,454

10,447,280

  Current portion of capital lease obligations

91,337

592,642

        Total current liabilities

12,761,217

14,114,383

Non-current liabilities:

  Term loan, net of deferred financing cost of $199,211 and $270,147, respectively

4,883,286

7,590,937

  Warrants liability

46,191

205,113

  Royalty liability

2,350,754

2,291,888

  Lease incentive liability, less current portion

339,676

369,406

  Capital lease obligations

93,257

  Deferred revenues, less current portion

568,515

1,212,709

        Total non-current liabilities

8,188,422

11,763,310

        Total liabilities

20,949,639

25,877,693

Series A 0% Convertible Redeemable Preferred stock, $.01 par value per share, $8,849,985 redemption value, 4,000,000 shares authorized, 2,949,995 issued and outstanding, net of unamortized preferred stock discount of $0 and $875,935, respectively

8,849,985

7,974,050

Stockholders’ equity:

  Common stock, $.01 par value per share, 45,000,000 shares
    authorized, 19,695,391 and 18,783,540 shares issued and
    outstanding, respectively

196,954

187,836

  Additional paid in capital

80,667,771

79,700,577

  Accumulated deficit

(69,025,851)

(63,864,285)

        Total stockholders’ equity

11,838,874

16,024,128

$

41,638,498

$

49,875,871

 

 

STREAMLINE HEALTH SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Fiscal Year

2016

2015

Operating activities:

  Net loss

$

(5,161,566)

$

(4,290,115)

  Adjustments to reconcile net loss to net cash provided by (used in)

     operating activities, net of acquisitions:

     Depreciation

1,099,957

1,245,400

Amortization of capitalized software development costs

2,771,437

3,073,479

Amortization of intangible assets

1,344,980

1,344,992

    Amortization of other deferred costs

324,496

206,881

    Valuation adjustment for warrants liability

(158,922)

(1,629,267)

    Deferred tax expense (benefit)

(9,575)

    Other valuation adjustments

94,009

(39,299)

    Gain from early extinguishment of lease liability

(33,059)

    Gain on sale of business

(238,103)

    Loss on disposal of fixed assets

567

92,448

    Share-based compensation expense

1,787,367

2,386,490

    Provision for accounts receivable

121,025

124,235

  Changes in assets and liabilities, net of assets acquired:

Accounts and contract receivables

(344,445)

2,718,330

Other assets

449,673

575,774

Accounts payable

(51,071)

(1,117,986)

Accrued expenses

(690,094)

(174,133)

Deferred revenues

(341,008)

1,405,980

  Net cash provided by (used in) operating activities

1,008,302

5,880,575

Investing activities:

Purchases of property and equipment

(506,040)

(518,254)

Capitalization of software development costs

(1,978,946)

Payment for acquisition

(1,400,000)

Proceeds from sale of business

2,000,000

  Net cash used in investing activities

(1,884,986)

(518,254)

Financing activities:

Principal repayments on term loan

(2,796,590)

(1,465,109)

Payments related to settlement of employee share-based awards

(11,702)

Principal payments on capital lease obligations

(569,189)

(815,826)

Recovery of deferred financing costs

2,111

Proceeds from exercise of stock options and stock purchase plan

26,122

276,039

  Net cash used in financing activities

(3,351,359)

(2,002,785)

Increase (decrease) in cash and cash equivalents

(4,228,043)

3,359,536

Cash and cash equivalents at beginning of year

9,882,136

6,522,600

Cash and cash equivalents at end of year

$

5,654,093

$

9,882,136

 

STREAMLINE HEALTH SOLUTIONS, INC.

Backlog

(Unaudited)

Table A

January 31,
2017

October 31,
2016

January 31,
2016

Streamline Health Software Licenses

$

11,504,000

$

15,551,000

$

21,586,000

Hardware and Third Party Software

150,000

200,000

200,000

Professional Services

4,068,000

4,973,000

5,803,000

Audit Services

1,847,000

1,849,000

Maintenance and Support

19,193,000

19,413,000

23,292,000

Software as a Service

13,861,000

12,929,000

16,264,000

    Total

$

50,623,000

$

54,915,000

$

67,145,000

 

STREAMLINE HEALTH SOLUTIONS, INC.

New Bookings

 (Unaudited)

Table B

Fiscal Year Ended

January 31, 2017

Value

% of
Total
Bookings

Streamline Health Software licenses

$

819,000

10%

Software as a service

2,359,000

28%

Maintenance and support

716,000

9%

Professional services

4,244,000

51%

Hardware & third party software

143,000

2%

Total bookings

$

8,281,000

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 generally accepted accounting principles. Non-GAAP financial measures are used internally to manage the business, such as in establishing an annual operating budget. Streamline Health’s management in its operating and financial decision-making uses non-GAAP financial measures 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, 2017

January 31, 2016

January 31, 2017

January 31, 2016

Net loss

$

(1,020)

$

(1,403)

$

(5,162)

$

(4,290)

    Interest expense

128

186

509

884

    Income tax benefit

(17)

5

(12)

8

    Depreciation

205

314

1,100

1,245

    Amortization of capitalized software development costs

625

741

2,771

3,073

    Amortization of intangible assets

369

333

1,345

1,345

    Amortization of other costs

114

46

254

136

EBITDA

404

222

805

2,402

    Share-based compensation expense

444

527

1,787

2,386

    Gain on sale of business

(238)

(238)

    Loss on disposal of fixed assets

1

92

    Non-cash valuation adjustments to assets and liabilities

(149)

(317)

(65)

(1,669)

    Transaction related professional fees, advisory fees and

      other internal direct costs

34

40

392

93

    Associate severances and other costs relating to

      transactions or corporate restructuring

40

239

206

    Other non-recurring operating expenses

(750)

Adjusted EBITDA

$

535

$

472

$

2,921

$

2,761

Adjusted EBITDA per diluted share

Loss per share – diluted

$

(0.05)

$

(0.09)

$

(0.31)

$

(0.30)

Adjusted EBITDA per adjusted diluted share (1)

$

0.02

$

0.03

$

0.13

$

0.13

Diluted weighted average shares

19,680,751

18,783,539

19,528,341

18,689,854

    Includable incremental shares — Adjusted EBITDA (2)

3,340,390

2,989,571

3,327,130

3,075,278

Adjusted diluted shares

23,021,141

21,773,110

22,855,471

21,765,132

(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.

 

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SOURCE Streamline Health Solutions, Inc.