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Streamline Health® Reports Fiscal Third Quarter 2021 Financial Results

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  • STRM

Revenues of $5.5 Million; 214% SaaS Revenue Growth; $(4.3) Million Net Loss; $(0.3) Million Adjusted EBITDA

Atlanta, GA, Dec. 08, 2021 (GLOBE NEWSWIRE) -- Streamline Health Solutions, Inc. (“Streamline” or the “Company”) (Nasdaq: STRM), provider of the eValuator Revenue Integrity Program to help healthcare providers proactively address revenue leakage and improve financial performance, today announced financial results for the third quarter of fiscal year 2021, which ended October 31, 2021.

Fiscal Third Quarter 2021 Financial Results
The following financial results have been prepared in accordance with Generally Accepted Accounting Principles (GAAP). Fiscal third quarter 2021 financial results represent the consolidation of the Company with Avelead, which was acquired by Streamline during the reporting period. Fiscal third quarter 2020 financial results do not reflect results from Avelead’s operations.

Streamline acquired Avelead on August 16, 2021, and the results of Avelead’s operations are included from that date to the end of the fiscal quarter, October 31, 2021.

Total revenues for the third quarter of fiscal 2021 were $5.5 million, a 109% increase from $2.6 million during the third quarter of fiscal 2020. The increase in revenue was the result of higher revenue from SaaS and professional services as a result of the Avelead acquisition. For the first nine months of fiscal 2021, total revenue was $11.3 million, a 35% increase compared to $8.4 million during the first nine months of fiscal 2020. Recurring revenue comprised 71% and 75% of total revenue for the three- and nine-month periods ended October 31, 2021, respectively, as compared to 75% and 74% for the comparable prior year periods.

The Company is focused on the growth of its SaaS solutions. During the third quarter of 2021, SaaS revenue grew $1.9 million or 214% compared to the third quarter of 2020 and $2.7 million or 103% during the nine months ended October 31, 2021, compared to the first nine months of 2020.

Net loss for the third quarter of fiscal 2021 was $(4.3) million as compared to a net loss of $(1.1) million during the third quarter of fiscal 2020. Net loss from continuing operations during the quarter was impacted by approximately $1.9 million of non-routine costs and $0.5 million of other, non-operating expenses. The majority of the non-routine costs and non-operating costs are transaction costs associated with the acquisition of Avelead. The Company’s net loss in the third quarter of 2021 was also impacted by operating cost and amortization cost from the Avelead acquisition.

Net loss for the nine months ended October 31, 2021 was $(6.5) million, as compared to net income of $1.5 million for the same period of 2020. Net loss for the first nine months of 2021 included $0.4 million of income from discontinued operations, as compared to $4.7 million of income from a gain on sale and discontinued operations during the same period of 2020. Income from discontinued operations was offset by a $(6.9) million loss from continuing operations in the first nine months of 2021 compared to a loss from continuing operations of $(3.2) million during the same period of 2020. For the nine months ended October 31, 2021, the Company reported $2.7 million in non-routine costs and a $2.3 million gain from forgiveness of its PPP loan and approximately $0.5 million in other expenses.

Adjusted EBITDA for the third quarter of fiscal 2021 was a loss of $(0.3) million, compared to an adjusted EBITDA loss of $(0.7) million in the third quarter of fiscal 2020. Adjusted EBITDA for the nine months ended October 31, 2021 was a loss of $(1.7) million as compared to an adjusted EBITDA loss of $(1.7) million during the comparable year-ago period.

Fiscal Third Quarter 2021 Financial Results (Pro Forma)
The following financial results are pro forma and have not been prepared in accordance with GAAP. Both fiscal third quarter 2021 and 2020 financial results represent the consolidation of the Company with Avelead as if Avelead’s operations were fully recognized during both comparable periods.

Pro forma, unaudited, consolidated revenue for the third quarter of fiscal 2021 was approximately $6.1 million, an increase of 17% compared to approximately $5.2 million during the third quarter of fiscal 2020. SaaS revenue comprised approximately $3.1 million of this total, up 81% from approximately $1.7 million during the third quarter of fiscal 2020. The pro forma consolidated revenue for the three months ended October 31, 2021 and 2020 include $0.6 million and $2.6 million of revenue from Avelead’s pre-acquisition operations, respectively.

Pro forma, unaudited, consolidated revenue for the first nine months of fiscal 2021 was approximately $16.6 million, an increase of 18% compared to approximately $14.1 million during the first nine months of fiscal 2020. SaaS revenue comprised approximately $8.6 million of this total, up 115% from approximately $4.0 million during the first nine months of fiscal 2020. The pro forma consolidated revenue for the nine months ended October 31, 2021 and 2020 include $5.3 million and $5.7 million of revenue from Avelead’s pre-acquisition operations, respectively.

Management Commentary
“With the completion of our acquisition of Avelead during the period, we have taken major steps forward to drive more diversified, recurring revenue streams and better position our Company for long term growth,” stated Tee Green, President and Chief Executive Officer, Streamline Health. “Our combined technologies offer a more holistic approach to ensuring hospitals are able to collect 100% of the revenue that they have earned.”

“In the wake of the ongoing pandemic and with new variants still having an impact on healthcare providers, many operators are still experiencing significant disruptions, including suspending elective procedures, which has understandably delayed certain sales cycles. Despite these challenges we continue to grow our sales pipeline, both in terms of average contract values, and number of prospects, which we expect to translate into new sales in a more normalized environment. During the period we also completed the transformation of our eValuator sales team, which we believe will enable us to generate increased interest and acceptance of our technologies on a national footprint. The hospital revenue cycle continues to increase in complexity, and we see this challenge as a great opportunity to make the middle of the revenue cycle more accurate, timely, and efficient.”

Highlights from the third quarter ended October 31, 2021, included:

  • Total bookings (total contract value) for the third quarter of fiscal 2021 were $2.1 million;

  • Revenue for the third quarter of fiscal 2021 was $5.5 million;

  • Pro forma third quarter revenue, assuming the acquisition of Avelead was completed July 31, 2021, totaled approximately $6.1 million;

  • SaaS revenue grew 116% sequentially and 214% over the prior year period;

  • Adjusted EBITDA for the third quarter of fiscal 2021 was a loss of $(0.3) million;

  • Completed acquisition of Avelead, a recognized leader in providing solutions and services to improve Revenue Integrity for healthcare providers nationwide.

Conference Call
The Company will conduct a conference call on Thursday, December 9, 2021 at 9:00 AM ET to review results and provide a corporate update. 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, December 9, 2021 at 12:00 PM ET to Thursday, December 16, 2021 at 12:00 PM ET by dialing 877-660-6853 or 201-612-7415 with conference ID 13724715. 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.

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 improve 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.

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.

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.

Company 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

Nine Months Ended

October 31

October 31

2021

2020

2021

2020

Revenues:

Software Licenses

$

150,000

$

19,000

$

285,000

$

234,000

Professional Services

944,000

161,000

1,052,000

473,000

Audit Services

513,000

491,000

1,460,000

1,498,000

Maintenance and Support

1,082,000

1,070,000

3,226,000

3,556,000

Software as a Service

2,825,000

900,000

5,310,000

2,611,000

Total revenues

5,514,000

2,641,000

11,333,000

8,372,000

Operating expenses:

Cost of software licenses

133,000

183,000

412,000

385,000

Cost of professional services

936,000

268,000

1,411,000

779,000

Cost of audit services

409,000

425,000

1,174,000

1,158,000

Cost of maintenance and support

57,000

160,000

223,000

528,000

Cost of software as a service

1,088,000

443,000

2,276,000

1,250,000

Selling, general and administrative expense

3,439,000

2,283,000

8,507,000

6,859,000

Research and development

1,339,000

753,000

3,280,000

1,946,000

Non-routine costs

1,933,000

-

2,710,000

-

Loss on exit from membership agreement

-

-

-

105,000

Total operating expenses

9,334,000

4,515,000

19,993,000

13,010,000

Operating loss

(3,820,000

)

(1,874,000

)

(8,660,000

)

(4,638,000

)

Other (income) expense:

Interest income (expense)

(85,000

)

(12,000

)

(107,000

)

(39,000

)

Loss on Extinguishment of Debt

(43,000

)

-

(43,000

)

-

Other

(427,000

)

14,000

(421,000

)

(68,000

)

PPP Loan Forgiveness

-

-

2,327,000

-

Loss from continuing operations before income taxes

(4,375,000

)

(1,872,000

)

(6,904,000

)

(4,745,000

)

Income tax benefit (expense)

(4,000

)

803,000

(9,000

)

1,536,000

Loss from continuing operations

$

(4,379,000

)

$

(1,069,000

)

$

(6,913,000

)

$

(3,209,000

)

Income from discontinued operations:

Gain on sale of discontinued operations

-

-

-

6,013,000

Income from discontinued operations

69,000

64,000

401,000

305,000

Income tax expense

-

(50,000

)

-

(1,626,000

)

Income from discontinued operations

69,000

14,000

401,000

4,692,000

Net (loss) income

$

(4,310,000

)

$

(1,055,000

)

$

(6,512,000

)

$

1,483,000

Basic Earnings per Share:

Continuing operations

$

(0.10

)

$

(0.04

)

$

(0.17

)

$

(0.11

)

Discontinued operations

-

-

0.01

0.16

Net (loss) income

$

(0.10

)

$

(0.04

)

$

(0.16

)

$

0.05

Weighted average number of common shares - basic

45,709,952

30,286,197

41,498,873

30,026,890

Diluted Earnings per Share:

Continuing operations

$

(0.10

)

$

(0.04

)

$

(0.17

)

$

(0.11

)

Discontinued operations

-

-

0.01

0.15

Net (loss) income

$

(0.10

)

$

(0.04

)

$

(0.16

)

$

0.04

Weighted average number of common shares – diluted

46,063,803

30,892,526

41,995,266

30,450,572


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

Assets

October 31,

January 31,

2021

2021

Current assets:

Cash and cash equivalents

$

10,409,000

$

2,409,000

Accounts receivable, net

3,287,000

2,929,000

Contract receivables

581,000

174,000

Assets Held in Escrow

-

800,000

Prepaid and other current assets

876,000

416,000

Current assets of discontinued operations

-

587,000

Total current assets

15,153,000

7,315,000

Non-current assets:

Property and equipment, net

116,000

104,000

Right of use asset

262,000

391,000

Capitalized software development costs, net

5,563,000

5,945,000

Intangible assets, net

17,323,000

624,000

Goodwill

23,089,000

10,712,000

Other

908,000

873,000

Long-term assets of discontinued operations

-

13,000

Total non-current assets

47,261,000

18,662,000

$

62,414,000

$

25,977,000

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

689,000

$

272,000

Accrued expenses

2,024,000

908,000

Current portion of term loan

125,000

1,534,000

Deferred revenues

4,395,000

3,862,000

Current portion of lease obligation

202,000

198,000

Current liabilities of discontinued operations

-

595,000

Total current liabilities

7,435,000

7,369,000

Non-current liabilities:

Term loan, net of current portion and
deferred financing costs

9,759,000

767,000

Deferred revenues, less current portion

156,000

130,000

Lease obligations, less current portion

82,000

222,000

Acquisition Earnout Liability

11,101,000

-

Other Non-Current Liabilities

280,000

-

Total non-current liabilities

21,378,000

1,119,000

Total liabilities

28,813,000

8,488,000

Stockholders’ equity

33,601,000

17,489,000

$

62,414,000

$

25,977,000

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

Nine Months Ended

October 31,

2021

2020

Cash flows from continuing operating activities:

Loss from continuing operations

$

(6,913,000

)

$

(3,209,000

)

Depreciation

53,000

35,000

Amortization of capitalized software development costs

1,430,000

1,128,000

Amortization of intangible assets

721,000

370,000

Amortization of other deferred costs

369,000

242,000

Valuation adjustments

417,000

31,000

Provision for income taxes

-

(1,536,000

)

Loss on early extinguishment of debt

43,000

-

Loss on exit of membership agreement

-

105,000

Share-based compensation expense

1,659,000

1,004,000

Expense (Benefit) for accounts receivable allowance

14,000

(15,000

)

Forgiveness of PPP Loan

(2,327,000

)

-

Changes in assets and liabilities:

Accounts and contract receivables

666,000

1,151,000

Other assets

(551,000

)

(514,000

)

Accounts payable

(72,000

)

(489,000

)

Accrued expenses and other liabilities

774,000

(386,000

)

Deferred revenues

(305,000

)

(1,600,000

)

Net cash used in operating activities

(4,022,000

)

(3,683,000

)

Net cash from operating activities - discontinued operations

406,000

(2,319,000

)

Cash flows used in investing activities:

Cash paid for Avelead

(12,354,000

)

-

Proceeds from sale of ECM assets

800,000

11,288,000

Capitalization of software development costs

(1,048,000

)

(1,495,000

)

Purchases of property and equipment

(18,000

)

(42,000

)

Net cash (used in) provided by investing activities

(12,620,000

)

9,751,000

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

(1,313,000

)

-

Repayment of bank term loan

-

(4,000,000

)

Proceeds from term loan payable

10,000,000

2,301,000

Payments related to settlement of employee shared based awards

(380,000

)

(168,000

)

Payment for deferred financing costs

(168,000

)

-

Payment of Royalty Liability

-

(500,000

)

Other

(3,000

)

-

Net cash provided by (used in) financing activities

24,236,000

(2,367,000

)

Net decrease in cash and cash equivalents

8,000,000

1,382,000

Cash and cash equivalents at beginning of year

2,409,000

1,649,000

Cash and cash equivalents at end of year

$

10,409,000

$

3,031,000


STREAMLINE HEALTH SOLUTIONS, INC.
New Bookings
(Unaudited)

Total Contract Value Amounts

October 31, 2021

Three Months Ended

Nine Months Ended

Systems Sales

$

142,900

$

277,900

Professional Services *

661,080

1,010,030

Audit Services

227,000

634,800

Maintenance and Support

308,300

443,300

Software as a Service *

750,000

3,930,000

Q3 2021 Bookings

$

2,089,280

$

6,296,030

Q3 2020 Bookings

$

1,424,000

$

5,574,000

* Bookings are presented on a total contract value basis, and include Avelead from the acquisition date, August 16, 2021.

STREAMLINE HEALTH SOLUTIONS, INC.
Reconciliation of Loss from Continuing Operations to non-GAAP Adjusted EBITDA
(in thousands)
(Unaudited)

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

Loss from continuing operations

$

(4,379

)

$

(1,069

)

$

(6,913

)

$

(3,209

)

Interest expense

85

12

107

39

Income tax (benefit) expense

4

(803

)

9

(1,536

)

Depreciation

16

4

53

35

Amortization of capitalized software development costs

446

477

1,430

1,128

Amortization of intangible assets

490

123

721

370

Amortization of other costs

110

89

338

242

EBITDA

(3,228

)

(1,167

)

(4,255

)

(2,931

)

Share-based compensation expense

537

442

1,659

1,054

Non-cash valuation adjustments

417

-

417

31

Loss on exit of operating lease

-

-

-

105

Other non-recurring operating expenses

1,933

-

2,710

-

Forgiveness of PPP Loan and accrued interest

-

-

(2,327

)

-

Other non-recurring operating expenses

-

-

16

-

Loss on early extinguishment of debt

43

-

43

-

Adjusted EBITDA

$

(298

)

$

(725

)

$

(1,737

)

$

(1,741

)

Adjusted EBITDA per diluted share:

Net loss per common share – diluted

$

(0.10

)

$

(0.04

)

$

(0.17

)

$

(0.11

)

Adjusted EBITDA per adjusted diluted share (1)

$

(0.01

)

$

(0.02

)

$

(0.04

)

$

(0.06

)

Diluted weighted average shares (2)

45,709,952

30,286,197

41,498,873

30,026,890

Includable incremental shares — Adjusted EBITDA (3)

353,851

606,329

496,393

423,682

Adjusted diluted shares

46,063,803

30,892,526

41,995,266

30,450,572

(1) Adjusted EBITDA per adjusted diluted share for the Company’s common stock is computed using the treasury stock method.

(2) Diluted EPS for the Company’s common stock was computed using the treasury stock 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.


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