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Streamline Health® Reports Fourth Quarter and Fiscal Year 2020 Financial Results

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Streamline Health Solutions, Inc.
·15-min read
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Fiscal 2020 Revenues of $11.3 million; $0.3 million Net Income; Adjusted EBITDA ($1.9 million)

Atlanta, GA, April 21, 2021 (GLOBE NEWSWIRE) -- Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of the eValuator Revenue Integrity Program to help healthcare providers proactively address revenue leakage and compliance exposure, today announced financial results for the fourth quarter and fiscal year 2020, which ended January 31, 2021.

Total revenues for the fourth quarter of fiscal 2020 were $3.0 million, compared to $2.7 million in the prior year period. SaaS revenue was up $349,000, approximately 50%, compared to the same quarter a year ago. The revenue growth during the quarter was driven by higher revenue from SaaS, system sales and professional services offset by lower revenue form audit services and maintenance and support. Recurring revenue comprised 75% of fourth quarter fiscal 2020 revenue compared to 80% of fourth quarter fiscal 2019 revenue.

Fiscal year 2020 revenue was $11.3 million, compared to $11.9 million during fiscal 2019. SaaS revenue in fiscal 2020 grew 46% to $3.7 million compared to $2.5 million during fiscal 2019. Recurring revenue comprised 74% of revenue during fiscal 2020 compared to 68% during the prior year.

Net loss for the fourth quarter of fiscal 2020 was ($1.2 million) as compared to a net loss of ($2.4 million) during the fourth quarter of fiscal 2019. Fourth quarter fiscal 2020 net loss included $400,000 income from gain from sale, and discontinued operations of the Company’s legacy ECM business which closed February 24, 2020, compared to $18,000 income from discontinued operations during the fourth quarter of fiscal 2019. Income from discontinued operations was offset by a loss from continuing operations for the three months ended January 31, 2021 and 2020 of ($1.6 million) and ($2.4 million), respectively.

The company recorded $0.3 million of net income for the fiscal year 2020, compared to a net loss of ($2.9 million) during fiscal 2019. Fiscal year 2020 net income included $5.1 million income from discontinued operations in connection with the sale of the Company’s legacy ECM business which closed February 24, 2020, compared to $3.3 million income from discontinued operations during fiscal 2019. The income from discontinued operations was offset by a loss from continuing operations during fiscal 2020 of ($4.8 million) as compared to a loss of ($6.2 million) during fiscal 2019.

Adjusted EBITDA for the fourth quarter of fiscal 2020 was a loss of ($0.1 million), compared to an adjusted EBITDA loss of ($0.6 million) in the fourth quarter of fiscal 2019. Fiscal year 2020 adjusted EBITDA was a loss of ($1.9 million) compared to a loss of ($2.3 million) during fiscal 2019. The profitability improvements have come from cost containment activities in all areas of our business.

“Last year was a very difficult and challenging one, especially for COVID patients and healthcare providers throughout the country. Today, with more Americans receiving vaccinations, we believe a ‘return to normalcy’ during the second half of this year is a real possibility. And that should free up departmental decision making, helping us generate more eValuator contracts from our pipeline which grew throughout 2020”, stated Tee Green, President and Chief Executive Officer, Streamline Health.

“As the pandemic slowed contract closings, we asked our employees to focus on improving operations and preparing for growth. This internal focus enabled us to develop a top-level product management team to continually expand and improve our eValuator technology and build a superior customer success team to ensure customer satisfaction. I believe all of this will serve us well going forward.”

Highlights from the fourth quarter ended January 31, 2021 included:

  • Revenue for the fourth quarter of fiscal 2020 was $3.0 million; SaaS revenue grew 50% compared to the fourth quarter of fiscal 2019;

  • Loss from continuing operations for the fourth quarter of fiscal 2020 was ($1.6 million);

  • Adjusted EBITDA for the fourth quarter of fiscal 2020 was ($0.1 million);

  • Total bookings (total contract value) for the fourth quarter of fiscal 2020 were $1.8 million.

Conference Call

The Company will conduct a conference call to review the results on Thursday, April 22, 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 877-269-7756.

A replay of the conference call will be available from Thursday, April 22, 2021 at 12:00 PM ET to Thursday, April 29, 2021 at 12:00 PM ET by dialing 877-660-6853 or 201-612-7415 with conference ID 13716445. An online replay of the presentation will also be available for six months following the presentation in the Investor Relations section of the Streamline Health website, www.streamlinehealth.net.

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 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, 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.

Contact
Randy Salisbury
SVP, Chief Sales & Marketing Officer
(404) 229-4242
Randy.salisbury@streamlinehealth.net

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

Three Months Ended

Twelve Months Ended

January 31

January 31

2021

2020

2021

2020

Revenues:

Systems sales

$

356,000

$

153,000

$

590,000

$

1,121,000

Professional services

145,000

78,000

618,000

1,163,000

Audit Services

393,000

446,000

1,891,000

1,712,000

Maintenance and support

1,030,000

1,303,000

4,586,000

5,356,000

Software as a service

1,050,000

701,000

3,661,000

2,501,000

Total revenues

2,974,000

2,681,000

11,346,000

11,853,000

Operating expenses:

Cost of systems sales

116,000

457,000

501,000

1,004,000

Cost of professional services

264,000

330,000

1,040,000

1,592,000

Cost of audit services

400,000

306,000

1,558,000

1,255,000

Cost of maintenance and support

156,000

172,000

684,000

676,000

Cost of software as a service

653,000

352,000

1,906,000

824,000

Selling, general and administrative

1,706,000

2,021,000

8,565,000

9,606,000

Research and development

987,000

940,000

2,933,000

2,690,000

Executive Transition Costs

-

168,000

-

789,000

Rationalization Charges

-

388,000

-

388,000

Transaction Costs

-

230,000

-

230,000

Loss on exit of membership agreement

-

-

105,000

-

Total operating expenses

4,282,000

5,364,000

17,292,000

19,054,000

Operating loss

(1,308,000

)

(2,683,000

)

(5,946,000

)

(7,201,000

)

Other expense:

Interest expense

(12,000

)

(70,000

)

(51,000

)

(309,000

)

Miscellaneous expense

6,000

(167,000

)

(62,000

)

(366,000

)

Loss before income taxes

(1,314,000

)

(2,920,000

)

(6,059,000

)

(7,876,000

)

Income tax benefit

(276,000

)

498,000

1,260,000

1,632,000

Loss from continuing operations

$

(1,590,000

)

$

(2,422,000

)

$

(4,799,000

)

$

(6,244,000

)

Add: Redemption of Series A Preferred Stock

-

-

-

4,894,000

Net (loss) income from continuing operations

(1,590,000

)

(2,422,000

)

(4,799,000

)

(1,350,000

)

Income from discontinued operations:

Gain on sale of discontinued operations

-

-

6,013,000

-

Income from discontinued operations

51,000

522,000

356,000

5,035,000

Income tax benefit (expense)

352,000

(504,000

)

(1,274,000

)

(1,654,000

)

Income from discontinued operations

403,000

18,000

5,095,000

3,381,000

Net (loss) income

$

(1,187,000

)

$

(2,404,000

)

$

296,000

$

2,031,000

Basic Earnings per Share:

Continuing operations

$

(0.05

)

$

(0.08

)

$

(0.16

)

$

(0.06

)

Discontinued operations

0.01

-

0.17

0.14

Net (loss) income

$

(0.04

)

$

(0.08

)

$

0.01

$

0.08

Weighted average number of common shares - basic

30,528,863

29,653,550

30,152,383

22,739,679

Diluted Earnings per Share:

Continuing operations

$

(0.05

)

$

(0.08

)

$

(0.16

)

$

(0.27

)

Discontinued operations

0.01

-

0.17

0.13

Net (loss) income

$

(0.04

)

$

(0.08

)

$

0.01

$

(0.14

)

Weighted average number of common shares – diluted

31,211,252

30,096,177

30,640,742

25,083,061

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

Assets

January 31,

January 31,

2021

2020

Current assets:

Cash and cash equivalents

$

2,409,000

$

1,649,000

Accounts receivable, net

2,929,000

2,016,000

Contract receivables

174,000

803,000

Prepaid hardware and other current assets

1,216,000

501,000

Current Assets from discontinued operations

587,000

1,585,000

Total current assets

7,315,000

6,554,000

Non-current assets:

Property and equipment, net

104,000

98,000

Right of use asset on operating lease

391,000

-

Capitalized software development costs, net

5,945,000

5,782,000

Intangible assets, net

624,000

1,115,000

Goodwill

10,712,000

10,712,000

Other non-current assets

873,000

611,000

Long-term assets from discontinued operations

13,000

6,826,000

Total non-current assets

18,662,000

25,144,000

$

25,977,000

$

31,698,000

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

272,000

$

756,000

Accrued expenses

908,000

1,395,000

Current portion of term loan

1,534,000

3,872,000

Deferred revenues

3,862,000

3,593,000

Royalty liability

-

969,000

Current portion of operating lease obligation

198,000

-

Current liabilities from discontinued operations

595,000

5,053,000

Total current liabilities

7,369,000

15,638,000

Non-current liabilities:

Term loan, net of current portion

767,000

-

Deferred revenues, less current portion

130,000

55,000

Operating Lease obligations, less current portion

222,000

-

Total non-current liabilities

1,119,000

55,000

Total liabilities

8,488,000

15,693,000

Stockholders' equity

17,489,000

16,005,000

$

25,977,000

$

31,698,000

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

Fiscal Year Ended

January 31,

2021

2020

Cash flows from continuing operating activities:

Loss from continuing operations

$

(4,799,000

)

$

(6,244,000

)

Depreciation

64,000

43,000

Amortization of capitalized software development costs

1,662,000

1,494,000

Amortization of intangible assets

491,000

554,000

Amortization of other deferred costs

359,000

480,000

Valuation adjustments

31,000

64,000

Loss on exit of membership agreement

105,000

-

Loss on early extinguishment of debt

-

150,000

Share-based compensation expense

1,403,000

934,000

Benefit for accounts receivable allowance

(31,000

)

(201,000

)

Benefit for income taxes

(1,274,000

)

(1,654,000

)

Changes in assets and liabilities

(1,504,000

)

(1,329,000

)

Net cash used in operating activities

(3,493,000

)

(5,709,000

)

Net cash from operating activities - discontinued operations

(2,264,000

)

5,701,000

Cash flows used in investing activities:

Purchases of property and equipment

(44,000

)

(52,000

)

Capitalization of software development costs

(1,784,000

)

(2,800,000

)

Proceeds from sale of ECM assets

11,288,000

-

Net cash provided by (used in) investing activities

9,460,000

(2,852,000

)

Net cash used in investing activities - discontinued operations

-

(558,000

)

Cash flows from financing activities:

Proceeds from issuance of common stock

-

9,663,000

Payments for costs directly attributable to the issuance of common stock

-

(711,000

)

Proceeds from term loan

2,301,000

4,000,000

Principal payments on term loan

(4,000,000

)

(4,030,000

)

Redemption of Series A Convertible Preferred Stock

(5,791,000

)

Other

(1,244,000

)

(440,000

)

Net cash used in financing activities

(2,943,000

)

2,691,000

Net decrease in cash and cash equivalents

760,000

(727,000

)

Cash and cash equivalents at beginning of year

1,649,000

2,376,000

Cash and cash equivalents at end of year

2,409,000

$

1,649,000

STREAMLINE HEALTH SOLUTIONS, INC.
New Bookings
(Unaudited)

January 31, 2021

Three Months Ended

Twelve Months Ended

Systems Sales

$

203,000

$

560,000

Professional Services

175,000

808,000

Audit Services

37,000

114,000

Maintenance and Support

203,000

583,000

Software as a Service

1,200,000

5,327,000

Q4 2020 Bookings

$

1,818,000

$

7,392,000

Q4 2019 Bookings (1)

$

763,000

$

7,892,000

(1) January 31, 2020 excludes bookings from the ECM business of approximately $242,000 for the three months ended January 31, 2020 and $731,000 for the twelve months ended January 31, 2020.

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

Three Months Ended January 31,

Twelve Months Ended January 31,

2021

2020

2021

2020

Loss from continuing operations

$

(1,590

)

$

(2,422

)

$

(4,799

)

$

(6,244

)

Interest expense

12

70

51

309

Income tax (benefit) expense

276

(498

)

(1,260

)

(1,632

)

Depreciation

17

11

64

43

Amortization of capitalized software development costs

534

661

1,662

1,494

Amortization of intangible assets

121

130

491

554

Amortization of other costs

117

272

359

480

EBITDA

(513

)

(1,776

)

(3,432

)

(4,996

)

Share-based compensation expense

400

214

1,403

934

Impairment of long-lived assets

-

-

-

-

Loss on disposal of fixed assets

-

-

-

-

Non-cash valuation adjustments

(9

)

17

31

64

Loss on exit of operating lease

-

-

105

-

Other non-recurring operating expenses

-

786

-

1,342

Other non-recurring expenses

-

150

-

308

Adjusted EBITDA

$

(122

)

$

(609

)

$

(1,893

)

$

(2,348

)

Adjusted EBITDA per diluted share:

Net loss per common share – diluted

$

(0.05

)

$

(0.08

)

$

(0.16

)

$

(0.27

)

Adjusted EBITDA per adjusted diluted share (1)

$

-

$

(0.02

)

$

(0.06

)

$

(0.10

)

Diluted weighted average shares (2)

30,528,863

29,653,550

30,152,383

22,739,679

Includable incremental shares — Adjusted EBITDA (3)

682,389

442,627

488,359

2,343,382

Adjusted diluted shares

31,211,252

30,096,177

30,640,742

25,083,061

(1) Adjusted EBITDA per adjusted diluted share for our common stock is computed using the more dilutive of the two-class method or the if-converted method.

(2) Diluted EPS for our common stock was computed using the if-converted method, which yields the same result as the two-class method.

(3) The number of incremental shares that would be dilutive under an assumption that the Company is profitable during the reported period, which is only applicable for a period in which the Company reports a GAAP net loss. If a GAAP profit is earned in the reported periods, no additional incremental shares are assumed.