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Streamline Health® Solutions Reports Q4 Results
Date:4/12/2011

CINCINNATI, April 12, 2011 /PRNewswire/ -- Streamline Health Solutions, Inc. (Nasdaq: STRM) today announced financial results for the fourth quarter of fiscal year 2010, ended January 31, 2011.

Highlights for the quarter included:

  • Company secured two new accessANYware™ purchase contracts for add-on licenses with existing clients totaling approximately $800,000; of which $450,000 of systems revenue was recognized during the quarter;
  • Company completed and delivered a new enterprise Referral Order Workflow (ROW) license from third quarter backlog resulting in $220,000 of systems revenue recorded in the fourth quarter;
  • Total system sales for the quarter were $867,000;
  • Professional services revenues improved by 44% versus the fourth quarter of the prior year;
  • Application hosting recurring revenues for the quarter increased 7% over the prior comparable quarter;
  • New bookings for the quarter, excluding maintenance revenue, exceeded $1.9 million;
  • Backlog at year end was $17.6 million

  • Revenues for the fourth quarter totaled $4.9 million, compared to $6.3 million in the prior year fourth quarter, which benefitted from a $1.7 million system sale  as a result of delivery of the newly developed accessANYware platform when it reached General Availability status in January 2010.  In fiscal 2010 the Company generated $867,000 in system sales. These system sales included nearly $450,000 from two new accessANYware add-on sales to existing clients. The Company also completed and delivered from backlog a $220,000 Referral Order Workflow solution that was sold to a Texas hospital in the third quarter.

    Professional services revenues improved by $328,000 or 44% over the prior comparable period.  Recurring revenues from maintenance contracts improved by 5% or $95,000 over the prior comparable fourth quarter.  Hosting revenues from backlog increased by $58,000 or 7% over the prior comparable quarter.

    Total operating expenses for the fourth quarter of fiscal 2010 were $5.7 million compared with $4.7 million in the comparable prior year quarter.  This increase was the result of nearly $1.4 million of one-time expenses attributable to a $755,000 non-cash charge for the impairment of capitalized software assets on uncompleted development products and nearly $500,000 of costs associated with the recent change in CEO. The results of the fourth quarter were also impacted by a $997,000 increase in non-cash tax expense due to an incremental increase in the non-cash deferred tax asset valuation allowance.

    As a result, the Company recorded a net loss for the fourth quarter ended January 31, 2011 of $1.8 million, or $0.19 per share, compared with net income of $1.6 million, or $0.17 per fully diluted share, for the prior year comparable quarter. Adjusted EBITDA* (a non-GAAP measure) for the quarter ended January 31, 2011 was $976,000, or $0.10 per fully diluted common share (adjusted), compared to $2.5 million, or $0.26 per fully diluted common share (adjusted) in the comparable prior quarter. A reconciliation table is provided below.

    New bookings for the fourth quarter, excluding maintenance services, were in excess of $1.9 million. Highlights of the new bookings included an accessANYware license to an existing client through one of our re-marketing partners and another one sold by our direct sales force.

    Backlog at January 31, 2011 was $17.6 million, compared with $19.5 million at October 31, 2010 and $19.9 million at January 31, 2010.  Current backlog was also impacted by the recognition of revenue for application-hosted and maintenance contracts that were in the prior backlog totals as well as the previously discussed ROW solution delivery in the fourth quarter that had been in the prior quarter's backlog.

    Robert E. Watson, chief executive officer of Streamline Health, commented, "We look forward to improved operational and financial results as we implement our strategic plan in the coming quarters. I firmly believe that Streamline Health has a solid portfolio of products and services that can increasingly drive significant efficiencies in healthcare institutions throughout the country while substantially assisting those institutions in meeting the requirements of 'meaningful use' and their ability to qualify for sizable incentive payments as outlined in the Health Information Technology for Economic and Clinical Health Act (HITECH). I believe there are great opportunities ahead to substantially grow our business and enhance shareholder value."

    * 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, and stock-based compensation expense.  A table illustrating this measure is included in this publication.

    Conference Call InformationThe Company will conduct a conference call and web cast to review the results of the fourth quarter of fiscal 2010, today April 12, 2011 at 4:30 p.m. ET.

    Interested parties can access the call by dialing (877) 317-6789 or (412) 317-6789, or listen via a live Internet web cast, which can be found at www.streamlinehealth.net. A replay of the call will be available by visiting www.streamlinehealth.net  for 30 days or by calling (877) 344-7529 or (412) 317-0088, access code 449946, through April 15, 2011.

    About Streamline HealthStreamline Health is a leading provider of document workflow and document management solutions, applications and services that help strategic business partners and healthcare organizations improve operational efficiencies through business process optimization.  The Company provides integrated tools and technologies for automating document-intensive environments, including document workflow, document management, e-forms, connectivity, optical character recognition (OCR) and business process integration.

    The Company's workflow-based services offer solutions to inefficient and labor-intensive healthcare business processes throughout the revenue cycle, such as chart coding, abstracting and completion, remote physician referral order processing, pre-admission registration scanning and signature capture, financial screening, perioperative processing,  mitigation processing, secondary billing services, explanation of benefits processing and release of information processing.  The Company's solutions also address the document workflow needs of the Human Resources and Supply Chain Management processes of the healthcare enterprise.  All solutions are available through a 'Software as a Service' (SaaS) model of delivery via the Company's Remote Hosting Center that better matches customers' capital or operating budget needs, or via a locally installed software licensing model.

    Streamline Health's solutions create a permanent document-based repository of historical health information that is complementary and can be seamlessly integrated with existing disparate clinical, financial and administrative information systems, providing convenient electronic access to multiple forms of patient information from any location through secure web-based access. These integrated solutions allow providers and administrators to link existing systems with documents, which can dramatically improve the availability of patient information while decreasing direct costs associated with document retrieval, work-in-process, chart processing, document retention, and archiving.

    For additional information please visit our website at www.streamlinehealth.net.

    Safe Harbor statement under the Private Securities Litigation Reform Act of 1995Statements made by Streamline Health Solutions, Inc. that are not historical facts are forward-looking statements that are subject to risks and uncertainties. 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 impact of competitive products and pricing, product demand and market acceptance, new product development, key strategic alliances with vendors that resell the Company products, the ability of the Company to control costs, availability of products produced 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 CONTACT:Robert E. WatsonJoe Diaz, Robert Blum or Joe DorameChief Executive OfficerLytham Partners, LLC(513) 794-7100(602) 889-9700Financial Tables on Following PagesSTREAMLINE HEALTH SOLUTIONS, INC.

    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSThree Months and Fiscal Year Ended January 31,(Unaudited)Three MonthsFiscal Year2011201020112010Revenues:Systems sales

    $

    867,147

    $

    2,716,138

    $

    2,557,797

    $

    3,673,522Services, maintenance and support3,133,8492,710,20811,497,96911,233,183Application-hosting services913,626855,5153,550,2253,301,493Total revenues4,914,6226,281,86117,605,99118,208,198Operating expenses:Cost of systems sales1,571,533901,4533,827,3132,993,442Cost of services, maintenance and support1,453,5351,335,4105,561,5785,033,145Cost of application-hosting services493,068437,9701,902,5211,641,576Selling, general and administrative1,841,0931,492,7036,406,1905,503,580Product research and development322,243486,1281,759,6941,682,773Total operating expenses5,681,4724,653,66419,457,29616,854,516Operating profit (loss)(766,850)1,628,197(1,851,305)1,353,682Other income (expense):Interest expense(28,471)(13,569)(116,392)(43,823)Other income (expense)4,452(1,641)34,08018,749Earnings (loss) before taxes(790,869)1,612,987(1,933,617)1,328,608Income taxes(1,002,000)(27,500)(1,017,000)(40,500)Net earnings (loss)

    $

    (1,792,869)

    $

    1,585,487

    $

    (2,950,617)

    $

    1,288,108Basic net earnings (loss) per common share

    $

    (0.19)

    $

    0.17

    $

    (0.31)

    $

    0.14Diluted net earnings (loss) per common share

    $

    (0.19)

    $

    0.17

    $

    (0.31)

    $

    0.14Number of shares used in per common share computations:   Basic9,560,6369,401,3429,504,9869,381,285   Diluted9,560,6369,554,3639,504,9869,530,891STREAMLINE HEALTH SOLUTIONS, INC.

    CONDENSED CONSOLIDATED BALANCE SHEETS

    AssetsJanuary 31,20112010Current assets:  Cash and cash equivalents

    $

    1,403,949

    $

    1,025,173  Accounts receivable, net of allowance for doubtful accounts of $100,0002,620,7561,922,279  Contract receivables680,0961,182,308  Prepaid hardware and third party software for future delivery 72,259149,281  Prepaid customer maintenance contracts794,2991,058,282  Other prepaid assets 200,056305,050  Deferred income taxes167,000224,000Total current assets5,938,4155,866,373Property and equipment:  Computer equipment2,708,8192,987,039  Computer software1,947,1351,816,397  Office furniture, fixtures and equipment747,867747,867  Leasehold improvements639,864574,2576,043,6856,125,560  Accumulated depreciation and amortization(4,517,860)(4,344,432)1,525,8251,781,128Contract receivables, less current portion241,742146,093Capitalized software development costs, net of accumulated  amortization of $12,832,347 and $10,411,828, respectively7,575,0648,049,292Other, including deferred taxes of $711,000 and $1,651,000, respectively734,3761,681,661$

    16,015,422

    $

    17,524,547Liabilities and Stockholders' EquityCurrent liabilities:  Accounts payable

    $

    565,252

    $

    887,928  Accrued compensation1,163,843559,235  Accrued other expenses480,422476,504  Current portion of capital lease obligations183,637249,309  Current portion of deferred revenues5,766,7954,956,303Total current liabilities8,159,9497,129,279Deferred revenues, less current portion-602,239Line of credit1,200,000900,000Lease incentive liability, less current portion61,034-Capital lease obligation, less current portion-161,666Total liabilities9,420,9838,793,184Stockholders' equity:  Convertible redeemable preferred stock, $.01 par value per share, 5,000,000 shares authorized, no shares issued--  Common stock, $.01 par value per share, 25,000,000 shares authorized, 9,856,517 and  9,436,824 shares issued and outstanding, respectively98,56594,368  Additional paid in capital36,975,24236,160,126  Accumulated other comprehensive income-5,620  Accumulated (deficit)(30,479,368)(27,528,751)Total stockholders' equity6,594,4398,731,363$

    16,015,422

    $

    17,524,547STREAMLINE HEALTH SOLUTIONS, INC.

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFiscal Year Ended January 31,20112010Operating activities:  Net earnings (loss)

    $

    (2,950,617)

    $

    1,288,108  Adjustments to reconcile net earnings (loss) to net cashprovided by operating activities: Depreciation and amortization3,270,9022,868,997Impairment loss on capitalized software development costs754,709-Deferred tax provision997,000-Loss on disposal of fixed assets1,0504,308Share-based compensation expense678,172274,629  Change in assets and liabilities:Accounts, contract and installment receivables(291,914)(1,098,299)Other assets440,37954,664Accounts payable(322,676)174,020Accrued expenses608,526264,627Deferred revenues208,253(1,697,272)  Net cash provided by operating activities3,393,7842,133,782Investing activities:  Purchases of property and equipment(530,434)(698,698)  Capitalization of software development costs(2,701,000)(3,668,000)  Other2,622(36,612)  Net cash used in investing activities(3,228,812)(4,403,310)Financing activities:  Net change under revolving credit facility300,000100,000  Proceeds from exercise of stock options and stock purchase plan141,14165,900 Payments on capital lease(227,337)-  Net cash provided by financing activities213,804165,900(Decrease) Increase in cash and cash equivalents378,776(2,103,628)Cash and cash equivalents at beginning of year1,025,1733,128,801Cash and cash equivalents at end of year

    $

    1,403,949

    $

    1,025,173Supplemental cash flow disclosures:  Interest paid

    $

    74,898

    $

    34,507  Income taxes paid

    $

    47,658

    $

    7,265  Property and equipment additions financed by capital leases

    $

    -

    $

    410,975STREAMLINE HEALTH SOLUTIONS, INC.

    Backlog

    (Unaudited)

    Table ABacklog (in thousands)January 31,
    2011October 31,2010January 31,
    2010Streamline Health software licenses

    $

    121298201Custom software4242105Hardware and third party software66176171Professional services4,6293,2933,977Application-hosting services7,3628,0689,414Recurring maintenance5,3847,6415,987Total

    $

    17,60419,51819,855STREAMLINE HEALTH SOLUTIONS, INC.

    Bookings

    (Unaudited)

    Table BNew bookings (a)Three Months Ended January 31, 2011Value % of Total Bookings Streamline Health Software licenses

    $

    522,00027%Application Hosting Services87,0005%Professional services 1,075,00056%Hardware & third party software227,00012%Total bookings

    $

    1,911,000100%Fiscal Year Ended January 31, 2011Value % of Total Bookings Streamline Health Software licenses

    $

    1,726,00027%Application Hosting Services810,00013%Professional services 3,026,00047%Hardware & third party software833,00013%Total bookings

    $

    6,395,000100%(a) 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.STREAMLINE HEALTH SOLUTIONS, INC.

    Reconciliation of Non-GAAP Financial Measures

    (Unaudited)

    Table CThis 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 (a, b).  Three Months EndedJanuary 31,20112010Net earnings (loss)

    $

    (1,792,869)

    $

    1,585,487EBITDA adjustments Interest expense28,47113,569Tax expense1,002,00027,500Amortization of capitalized software development costs1,274,564631,949Depreciation and amortization – other200,268197,816Stock based compensation263,68670,371Adjusted EBITDA

    $

    976,120

    $

    2,526,692Fiscal Year EndedJanuary 31,20112010Net earnings (loss)

    $

    (2,950,617)

    $

    1,288,108EBITDA adjustments Interest expense116,39243,823Tax expense1,017,00040,500Amortization of capitalized software development costs3,175,2282,100,068Depreciation and amortization – other850,383768,930Stock based compensation678,172274,630Adjusted EBITDA

    $

    2,886,558

    $

    4,516,059(a)  Earnings Before Interest, Tax, Depreciation, Amortization, and Stock-based compensation

    (b)  Adjusted EBITDA previously included foreign currency gains and losses.  These have now been excluded from the definition of Adjusted EBITDA to correspond to the definition under the terms of the line of credit, renewed in the first quarter of fiscal 2011.STREAMLINE HEALTH SOLUTIONS, INC.

    Reconciliation of Non-GAAP Financial Measures

    (Unaudited)

    Table C (continued)Reconciliation of diluted net earnings per common share to non-GAAP diluted earnings per common share.Three Months EndedJanuary 31,20112010Diluted net earnings (loss)

    $

    (0.19)

    $

    0.17EBITDA adjustments Interest expense0.000.00Tax expense0.100.00Amortization of capitalized software development costs0.130.07Depreciation and amortization – other0.020.02Stock based compensation0.030.01Adjusted EBITDA per adjusted diluted share$

    0.10

    $

    0.26Diluted weighted average shares9,560,6369,554,363   Includable incremental shares – adjusted EBITDA (a)5,889-Adjusted diluted shares9,566,5259,554,363Fiscal Year EndedJanuary 31,20112010Diluted net earnings (loss)

    $

    (0.31)

    $

    0.14EBITDA adjustments Interest expense0.010.00Tax expense0.110.00Amortization of capitalized software development costs0.330.22Depreciation and amortization – other0.090.08Stock based compensation0.070.03Adjusted EBITDA per adjusted diluted share

    $

    0.30

    $

    0.47Diluted weighted average shares9,504,9869,530,891   Includable incremental shares – adjusted EBITDA (a)83,353-Adjusted diluted shares9,588,3399,530,891Note: Per share amounts may not be additive due to rounding.(a)  The number of incremental shares that would be dilutive under a profit assumption are only applicable under a  GAAP net-loss.  If GAAP profit is earned in the current period, no incremental shares are assumed.
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    SOURCE Streamline Health Solutions, Inc.
    Copyright©2010 PR Newswire.
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