Streamline Health® Reports Second Quarter 2021 Financial Results

Streamline Health® Reports Second Quarter 2021 Financial Results




Streamline Health® Reports Second Quarter 2021 Financial Results

Second quarter 2021 Revenues of $2.9 million; ($0.1 million) Net Loss; ($0.8 million) Adjusted EBITDA

Atlanta, GA , Sept. 08, 2021 (GLOBE NEWSWIRE) — Streamline Health Solutions, Inc. (NASDAQ: STRM) (“Streamline”), provider of the eValuator Revenue Integrity Program to help healthcare providers proactively address revenue leakage and compliance exposure, today announced financial results for the second quarter of fiscal year 2021, which ended July 31, 2021.

Total revenues for the second quarter of fiscal 2021 were $2.9 million, consistent with the prior year period. SaaS revenue grew approximately 59%, compared to the same quarter a year ago. The consistent revenue volume during the quarter was the result of higher revenue from SaaS offset by lower revenue from professional services, software licenses and maintenance and support. Recurring revenue comprised 84% of second quarter fiscal 2021 revenue compared to 71% of second quarter fiscal 2020 revenue.

Net loss for the second quarter of fiscal 2021 was ($0.1 million) as compared to a net loss of ($1.1 million) during the second quarter of fiscal 2020. Second quarter fiscal 2021 net loss included $11,000 of income from discontinued operations of the Company’s legacy ECM business, the sale of which closed on February 24, 2020, compared to $28,000 of income from discontinued operations during the second quarter of fiscal 2020. Income from discontinued operations was offset by a loss from continuing operations for the three months ended July 31, 2021 and 2020 of ($0.1 million) and ($1.2 million), respectively. Loss from continuing operations for the three months ended July 31, 2021 included $2.3 million of income associated with loan forgiveness.

Adjusted EBITDA for the second quarter of fiscal 2021 was a loss of ($0.8 million), compared to an adjusted EBITDA loss of ($0.4 million) in the second quarter of fiscal 2020.

“As a result of our team’s execution to restructure and position Streamline for growth, we were thrilled to enter a new chapter with our recent acquisition of Avelead. Thanks to our focus on improved sales and customer success, we are ready to capitalize on our tremendous market opportunity while maintaining strong relationships with our existing customers.” stated Tee Green, President and Chief Executive Officer, Streamline.

“We believe that the Delta variant of COVID has delayed our reporting of successes on the sales side, however, it has not deterred our improving the systems and processes that enable the growth we are expecting. Today, we are more capable than ever of supporting our healthcare provider customers through pre-bill revenue cycle solutions to ensure their revenue integrity and improved financial performance.”

Highlights from the second quarter ended July 31, 2021 included:

  Revenue for the second quarter of fiscal 2021 was $2.9 million; SaaS revenue grew 11%, sequentially, compared to the first quarter of fiscal 2021;
  Loss from continuing operations for the second quarter of fiscal 2021 was ($0.1 million);
  Adjusted EBITDA for the second quarter of fiscal 2021 was ($0.8 million);
  Total bookings (total contract value) for the second quarter of fiscal 2021 were $1.6 million.

Conference Call

The Company will conduct a conference call to review the results and to provide additional detail about its recent acquisition on Thursday, September 9, 2021 at 9:00 AM ET. Interested parties can access the call by joining the live webcast: click here to register. You can also join by phone by dialing 877-407-8291.

A replay of the conference call will be available from Thursday September 9, 2021 at 12:00 PM ET to Thursday, September 16, 2021 at 12:00 PM ET by dialing 877-660-6853 or 201-612-7415 with conference ID 13722259. An online replay of the presentation will also be available for six months following the presentation in the Investor Relations section of the Streamline website, www.streamlinehealth.net.

Non-GAAP Financial Measures

Streamline reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). Streamline’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’s management believes that this measure provides useful supplemental information regarding the performance of Streamline’s business operations.

Streamline 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

Streamline Health Solutions, Inc. (NASDAQ: STRM) is a leader in pre-bill revenue integrity solutions for healthcare providers. Our eValuator Revenue Integrity Program includes integrated solutions, technology-enabled services and analytics that drive compliant revenue and improved financial performance across the enterprise. 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 growth prospects, estimates of backlog, industry trends and market growth, results of investments in sales and marketing, adjusted EBITDA, 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, the effects of cost-containment measures implemented by the Company, 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, 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.

Contact
Jacob Goldberger
Director, Investor Relations and FP&A
303-887-9625
Jacob.goldberger@streamlinehealth.net
  

STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

    Three Months Ended     Six Months Ended  
    July 31,     July 31,  
    2021     2020     2021     2020  
Revenues:                                
Software licenses   $     $ 215,000     $ 135,000     $ 215,000  
Professional services     30,000       160,000       108,000       312,000  
Audit Services     443,000       463,000       947,000       1,007,000  
Maintenance and support     1,087,000       1,228,000       2,144,000       2,486,000  
Software as a service     1,308,000       821,000       2,485,000       1,711,000  
Total revenues     2,868,000       2,887,000       5,819,000       5,731,000  
                                 
Operating expenses:                                
Cost of software licenses     143,000       125,000       279,000       202,000  
Cost of professional services     261,000       269,000       475,000       510,000  
Cost of audit services     376,000       373,000       765,000       733,000  
Cost of maintenance and support     80,000       182,000       166,000       368,000  
Cost of software as a service     578,000       403,000       1,188,000       808,000  
Selling, general and administrative     2,515,000       2,284,000       5,068,000       4,576,000  
Research and development     964,000       509,000       1,941,000       1,193,000  
Non-routine costs     336,000             777,000        
Loss on exit of membership agreement                       105,000  
Total operating expenses     5,253,000       4,145,000       10,659,000       8,495,000  
Operating loss     (2,385,000 )     (1,258,000 )     (4,840,000 )     (2,764,000 )
Other (expense) income:                                
Interest expense     (9,000 )     (13,000 )     (22,000 )     (27,000 )
Miscellaneous expense     (8,000 )     (64,000 )     6,000       (82,000 )
Forgiveness of PPP loan and accrued interest     2,327,000             2,327,000        
Loss before income taxes     (75,000 )     (1,335,000 )     (2,529,000 )     (2,873,000 )
Income tax benefit (expense)     4,000       172,000       (5,000 )     733,000  
Loss from continuing operations   $ (71,000 )   $ (1,163,000 )   $ (2,534,000 )   $ (2,140,000 )
Income from discontinued operations:                                
Gain on sale of discontinued operations           4,000             6,013,000  
Income from discontinued operations     11,000       104,000       332,000       241,000  
Income tax expense           (80,000 )           (1,576,000 )
Income from discontinued operations     11,000       28,000       332,000       4,678,000  
Net (loss) income   $ (60,000 )   $ (1,135,000 )   $ (2,202,000 )   $ 2,538,000  
                                 
Basic Earnings per Share:                                
Continuing operations   $ (0.00 )   $ (0.04 )   $ (0.06 )   $ (0.07 )
Discontinued operations     0.00       0.00       0.01       0.16  
Net (loss) income   $ (0.00 )   $ (0.04 )   $ (0.05 )   $ 0.09  
Weighted average number of common shares – basic     41,288,709       30,026,658       39,393,333       29,897,236  
                                 
Diluted Earnings per Share:                                
Continuing operations   $ (0.00 )   $ (0.04 )   $ (0.06 )   $ (0.07 )
Discontinued operations     0.00       0.00       0.01       0.15  
Net (loss) income   $ (0.00 )   $ (0.04 )   $ (0.05 )   $ 0.08  
Weighted average number of common shares – diluted     41,737,231       30,421,473       39,960,998       30,229,595  


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

    July 31,     January 31,  
    2021     2021  
Assets                
Current assets:                
Cash and cash equivalents   $ 15,847,000     $ 2,409,000  
Accounts receivable, net     2,625,000       2,929,000  
Contract receivables     236,000       174,000  
Prepaid and other current assets     788,000       1,216,000  
Current assets from discontinued operations     181,000       587,000  
Total current assets     19,677,000       7,315,000  
                 
Non-current assets:                
Property and equipment, net     76,000       104,000  
Right of use asset on operating lease     306,000       391,000  
Capitalized software development costs, net     5,667,000       5,945,000  
Intangible assets, net     393,000       624,000  
Goodwill     10,712,000       10,712,000  
Other non-current assets     1,003,000       873,000  
Long-term assets from discontinued operations     3,000       13,000  
Total non-current assets     18,160,000       18,662,000  
    $ 37,837,000     $ 25,977,000  
                 
Liabilities and Stockholders’ Equity                
Current liabilities:                
Accounts payable   $ 363,000     $ 272,000  
Accrued expenses     1,324,000       908,000  
Current portion of term loan           1,534,000  
Deferred revenues     4,474,000       3,862,000  
Current portion of operating lease obligation     201,000       198,000  
Current liabilities from discontinued operations     283,000       595,000  
Total current liabilities     6,645,000       7,369,000  
                 
Non-current liabilities:                
Term loan, net of current portion           767,000  
Deferred revenues, less current portion     163,000       130,000  
Operating Lease obligations, less current portion     129,000       222,000  
Total non-current liabilities     292,000       1,119,000  
Total liabilities     6,937,000       8,488,000  
                 
Stockholders’ equity     30,900,000       17,489,000  
    $ 37,837,000     $ 25,977,000  


STREAMLINE HEALTH SOLUTIONS, INC.
CONSOLIDATED AND CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)

    Six Months Ended  
    July 31,  
    2021     2020  
Cash flows from continuing operating activities:                
Loss from continuing operations   $ (2,534,000 )   $ (2,140,000 )
Depreciation     37,000       31,000  
Amortization of capitalized software development costs     984,000       651,000  
Amortization of intangible assets     231,000       247,000  
Amortization of other deferred costs     242,000       153,000  
Valuation adjustments           31,000  
Loss on exit of membership agreement           105,000  
Share-based compensation expense     1,122,000       575,000  
Benefit for accounts receivable allowance     (1,000 )     (15,000 )
Forgiveness of PPP Loan and accrued interest     (2,327,000 )      
Benefit for income taxes           (733,000 )
Changes in assets and liabilities     709,000       (876,000 )
                 
Net cash used in operating activities     (1,537,000 )     (1,971,000 )
                 
Net cash from operating activities – discontinued operations     436,000       (2,374,000 )
                 
Cash flows used in investing activities:                
Capitalization of software development costs     (706,000 )     (1,094,000 )
Purchases of property and equipment     (3,000 )     (34,000 )
Proceeds from sale of ECM assets     800,000       11,288,000  
Net cash provided by investing activities     91,000       10,160,000  
                 
Cash flows from financing activities:                
Proceeds from issuance of common stock     16,100,000        
Payments for costs directly attributable to the issuance of common stock     (1,318,000 )      
Proceeds from term loan           2,301,000  
Principal payments on term loan           (4,000,000 )
Other     (334,000 )     (58,000 )
Net cash provided by (used in) financing activities     14,448,000       (1,757,000 )
Net increase in cash and cash equivalents     13,438,000       4,058,000  
Cash and cash equivalents at beginning of period     2,409,000       1,649,000  
Cash and cash equivalents at end of period   $ 15,847,000     $ 5,707,000  


STREAMLINE HEALTH SOLUTIONS, INC.
New Bookings
(Unaudited)

    July 31, 2021  
    Three Months
Ended
    Six Months
Ended
 
Software licenses   $       135,000  
Professional Services     149,950       348,950  
Audit Services     21,800       407,800  
Maintenance and Support           135,000  
Software as a Service     1,455,000       3,180,000  
Q2 2021 Bookings   $ 1,626,750     $ 4,206,750  
Q2 2020 Bookings   $ 2,865,000     $ 4,150,000  


STREAMLINE HEALTH SOLUTIONS, INC.
Reconciliation of loss from continuing operations to non-GAAP Adjusted EBITDA
(in thousands)
(Unaudited)

    Three Months Ended July 31,     Six Months Ended July 31,  
    2021     2020     2021     2020  
Loss from continuing operations   $ (71 )   $ (1,163 )   $ (2,534 )   $ (2,140 )
Interest expense     9       13       22       27  
Income tax (benefit) expense     (4 )     (172 )     5       (733 )
Depreciation     16       17       37       31  
Amortization of capitalized software development costs     478       362       984       651  
Amortization of intangible assets     116       124       231       247  
Amortization of other costs     126       78       242       153  
EBITDA     670       (741 )     (1,013 )     (1,764 )
Share-based compensation expense     557       349       1,122       613  
Non-cash valuation adjustments           14             31  
Loss on exit of operating lease                       105  
Other non-recurring operating expenses     336             793        
Forgiveness of PPP Loan and accrued interest     (2,327 )           (2,327 )      
Adjusted EBITDA   $ (764 )   $ (378 )   $ (1,425 )   $ (1,015 )
Adjusted EBITDA per diluted share:                                
Net loss per common share – diluted   $ (0.00 )   $ (0.04 )   $ (0.05 )   $ 0.08  
Adjusted EBITDA per adjusted diluted share   $ (0.02 )   $ (0.01 )   $ (0.04 )   $ (0.03 )
                                 
Diluted weighted average shares     41,288,709       30,026,658       39,393,333       29,897,236  
Includable incremental shares — Adjusted EBITDA     448,522       394,815       567,665       332,359  
Adjusted diluted shares     41,737,231       30,421,473       39,960,998       30,229,595