Streamline Health Solutions,
Inc. (“Streamline” or the “Company”) (Nasdaq:
STRM), a leading provider of solutions that enable
healthcare providers to proactively address revenue leakage and
improve financial performance, today announced financial results
for the fiscal first quarter of 2024 which ended April 30,
2024.
Fiscal First Quarter Financial Results
Total revenue for the first quarter of fiscal 2024 was $4.3
million as compared to $5.3 million during the first quarter of
fiscal 2023. The change in total revenue was attributable to
previously announced client non-renewals offset by successful
implementation of new SaaS contracts.
SaaS revenue totaled $2.7 million and $3.2 million and
represented 63% and 60% of total revenue during the first quarter
of fiscal 2024 and 2023 respectively. As previously reported, the
Company had a SaaS contract which did not renew at the end of its
2023 fiscal year. On a pro forma basis, excluding the revenue
recognized from that contract SaaS revenue grew 22% in the first
quarter of fiscal 2024 compared to the first quarter of fiscal
2023.
Net loss for the first quarter of fiscal 2024 was ($2.7 million)
compared to a net loss of ($2.9 million) during the first quarter
of fiscal 2023. The improved net loss despite lower revenue
resulted from cost savings achieved through the strategic
restructuring executed during fiscal 2023 offset by higher interest
expense and non-cash valuation adjustments.
Cash and cash equivalents as of April 30, 2024 was $4.0 million
compared to $3.2 million as of January 31, 2024. The Company had
access to $2.0 million of liquidity through its revolving credit
facility as of April 30, 2024, compared to $0.5 million as of
January 31, 2024. During the first quarter of fiscal 2024 the
Company closed a private placement of common stock, unsecured
promissory notes and warrants resulting in aggregate gross proceeds
of approximately $4.5 million.
Adjusted EBITDA for the first quarter of fiscal 2024 was ($0.7
million) compared to ($1.3 million) during the first quarter of
fiscal 2023. The significant improvement of Adjusted EBITDA is the
result of the Company’s focus on the growth of its SaaS revenue
solutions as well as significant cost savings achieved through the
previously announced strategic restructuring.
As of April 30, 2024, the Company’s total Booked SaaS Annual
Contract Value (“ACV”) was $15.6 million compared to $15.0 million
as of January 31, 2024. $11.6 million of the Booked SaaS ACV was
implemented as of April 30, 2024 as compared to $11.1 million as of
January 31, 2024. Subsequent to the end of the fiscal quarter, the
Company successfully booked additional contracts and implemented
existing contracts. As a result, as of June 11, 2024 booked SaaS
ACV totaled $15.9 million and $13.1 million was implemented.
Booked SaaS ACV represents the annualized value of all executed
SaaS contracts, including contracts that have not been fully
implemented as of the measurement date, assuming any contract that
expires during the twelve months following the measurement date is
renewed on its existing terms unless the Company has knowledge of
the non-renewal.
The Company reiterated that it believes its adjusted EBITDA
breakeven run rate is $15.5 million of SaaS ARR and that it expects
to achieve this run rate during the second half of fiscal 2024. Due
to the continued unpredictability of timing related to the closing
of new contracts, the Company has not provided more specific
guidance related to the timing of bookings.
Management Commentary
“As a result of executing contract implementations while
expanding our footprint with new and existing clients we expect to
achieve ongoing adjusted EBITDA profitability during the second
half of this fiscal year,” stated Ben Stilwill, President and Chief
Executive Officer, of the Company. “Furthermore, we continue to
improve the impact of our existing solutions for clients by
incorporating novel AI techniques furthering our mission to ensure
our nation’s health systems are paid for all of the care they
provide.”
Conference Call
The Company will conduct a conference call on Wednesday, June
12, 2024, 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
Wednesday, June 12, 2024 at 12:00 PM ET to Wednesday, June 19, 2024
at 12:00 PM ET by dialing 877-660-6853 or 201-612-7415 with
conference ID 13746953. 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
Streamline Health Solutions, Inc. (Nasdaq: STRM) enables
healthcare organizations to proactively address revenue leakage and
improve financial performance. We deliver integrated solutions,
technology-enabled services and analytics that drive compliant
revenue leading to improved financial performance across the
enterprise. For more information,
visit 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, share-based compensation expense, significant
non-recurring operating expenses, restructuring expenses,
impairment of goodwill and long-lived assets and transactional
related expenses including: gains and losses on debt and
equity conversions, associate severances and related alignment
expenses, associate inducements, and professional and advisory
fees. A table reconciling this measure to “net
loss,” to the extent relevant items were recognized in the periods
covered, is included in this press release.
Booked SaaS ACV represents the annualized value of all executed
SaaS contracts, including contracts that have not been fully
implemented, as of the measurement date, assuming any contract that
expires during the twelve months following the measurement date is
renewed on its existing terms unless the Company has knowledge of
the non-renewal. Booked SaaS ACV should be viewed
independently of revenue and does not represent revenue calculated
in accordance with GAAP on an annualized basis, as it is an
operating metric that can be impacted by contract execution start
and end dates and renewal rates. Booked SaaS ACV is not
intended to be a replacement for, or forecast of,
revenue. There is no GAAP measure comparable to Booked SaaS
ACV.
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, anticipated bookings, recognition
of revenue from contracts included in Booked SaaS ACV,
anticipated cost savings from previously announced strategic
restructuring, expected improved implementation timelines and lower
expenses for our clients, industry trends and market growth,
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 and Booked SaaS ACV, achievement of a breakeven
SaaS ARR run rate, 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 generate cash from operations, the
availability of additional debt and equity financing to fund the
Company’s ongoing operations, 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 GoldbergerVice President,
Finance303-887-9625jacob.goldberger@streamlinehealth.net
STREAMLINE HEALTH SOLUTIONS, INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(rounded to the nearest thousand dollars, except share and
per share information) |
|
|
Three Months Ended April 30, |
|
2024 |
|
2023 |
Revenues: |
|
|
|
|
|
Software as a service |
$ |
2,723,000 |
|
|
$ |
3,175,000 |
|
Maintenance and support |
|
890,000 |
|
|
|
1,157,000 |
|
Professional fees and licenses |
|
717,000 |
|
|
|
1,000,000 |
|
Total revenues |
|
4,330,000 |
|
|
|
5,332,000 |
|
Operating
expenses |
|
|
|
|
|
Cost of software as a service |
|
1,348,000 |
|
|
|
1,589,000 |
|
Cost of maintenance and support |
|
42,000 |
|
|
|
89,000 |
|
Cost of professional fees and licenses |
|
887,000 |
|
|
|
1,108,000 |
|
Selling, general and administrative expense |
|
3,192,000 |
|
|
|
3,841,000 |
|
Research and development |
|
1,111,000 |
|
|
|
1,701,000 |
|
Total operating expenses |
|
6,580,000 |
|
|
|
8,328,000 |
|
Operating loss |
|
(2,250,000 |
) |
|
|
(2,996,000 |
) |
Other
(expense)/income: |
|
|
|
|
|
Interest expense |
|
(465,000 |
) |
|
|
(248,000 |
) |
Valuation adjustments |
|
(24,000 |
) |
|
|
364,000 |
|
Other |
|
- |
|
|
|
32,000 |
|
Loss before income taxes |
|
(2,739,000 |
) |
|
|
(2,848,000 |
) |
Income tax benefit (expense) |
|
- |
|
|
|
(53,000 |
) |
Net loss |
$ |
(2,739,000 |
) |
|
$ |
(2,901,000 |
) |
Basic and Diluted Earnings Per
Share: |
|
|
|
|
|
Net loss per share, basic and
diluted |
$ |
(0.05 |
) |
|
$ |
(0.05 |
) |
Weighted average number of
common shares - basic and diluted |
|
58,224,090 |
|
|
|
55,970,880 |
|
STREAMLINE HEALTH SOLUTIONS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(rounded to the nearest thousand dollars, except share and
per share information) |
|
|
|
April 30, 2024 |
|
|
January 31, 2024 |
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
3,979,000 |
|
$ |
3,190,000 |
|
Accounts receivable, net of allowance for credit losses of $117,000
and $86,000, respectively |
|
4,706,000 |
|
|
4,237,000 |
|
Contract receivables |
|
294,000 |
|
|
780,000 |
|
Prepaid and other current assets |
|
722,000 |
|
|
629,000 |
|
Total current assets |
|
9,701,000 |
|
|
8,836,000 |
|
Non-current
assets: |
|
|
|
|
|
|
Property and equipment, net of accumulated amortization of $304,000
and $291,000 respectively |
|
76,000 |
|
|
88,000 |
|
Capitalized software development costs, net of accumulated
amortization of $8,396,000 and $7,960,000, respectively |
|
5,624,000 |
|
|
5,798,000 |
|
Intangible assets, net of accumulated amortization of $4,428,000
and $4,019,000, respectively |
|
11,662,000 |
|
|
12,071,000 |
|
Goodwill |
|
13,276,000 |
|
|
13,276,000 |
|
Other |
|
1,386,000 |
|
|
1,666,000 |
|
Total non-current assets |
|
32,024,000 |
|
|
32,899,000 |
|
Total assets |
$ |
41,725,000 |
|
$ |
41,735,000 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
1,120,000 |
|
$ |
1,253,000 |
|
Accrued expenses |
|
1,777,000 |
|
|
2,023,000 |
|
Current portion of term loan |
|
1,750,000 |
|
|
1,500,000 |
|
Deferred revenues |
|
7,351,000 |
|
|
7,112,000 |
|
Acquisition earnout liability |
|
817,000 |
|
|
1,794,000 |
|
Total current liabilities |
|
12,815,000 |
|
|
13,682,000 |
|
Non-current
liabilities: |
|
|
|
|
|
|
Term loan, net of current portion and deferred financing costs |
|
7,089,000 |
|
|
7,566,000 |
|
Line of credit |
|
— |
|
|
1,500,000 |
|
Notes payable, net of current portion and deferred financing
costs |
|
3,587,000 |
|
|
— |
|
Warrants - common stock |
|
746,000 |
|
|
— |
|
Deferred revenues, less current portion |
|
185,000 |
|
|
173,000 |
|
Total non-current liabilities |
|
11,607,000 |
|
|
9,239,000 |
|
Total liabilities |
|
24,422,000 |
|
|
22,921,000 |
|
Commitments and
contingencies – Note 8 |
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
Common stock, $0.01 par value per share, 85,000,000 shares
authorized; 61,825,587 and 58,945,498 shares issued and
outstanding, respectively |
|
617,000 |
|
|
590,000 |
|
Additional paid in capital |
|
135,124,000 |
|
|
133,923,000 |
|
Accumulated deficit |
|
(118,438,000 |
) |
|
(115,699,000 |
) |
Total stockholders’ equity |
|
17,303,000 |
|
|
18,814,000 |
|
Total liabilities and
stockholders’ equity |
$ |
41,725,000 |
|
$ |
41,735,000 |
|
STREAMLINE HEALTH SOLUTIONS, INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(rounded to the nearest thousand dollars) |
|
|
|
Three Months Ended April 30, |
|
|
|
2024 |
|
|
2023 |
|
Net loss |
|
$ |
(2,739,000 |
) |
|
$ |
(2,901,000 |
) |
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,120,000 |
|
|
|
1,059,000 |
|
Accrued interest expense - notes payable |
|
|
152,000 |
|
|
|
— |
|
Valuation adjustments |
|
|
24,000 |
|
|
|
(364,000 |
) |
Benefit for deferred income taxes |
|
|
— |
|
|
|
39,000 |
|
Share-based compensation expense |
|
|
499,000 |
|
|
|
572,000 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts and contract receivables |
|
|
17,000 |
|
|
|
3,900,000 |
|
Other assets |
|
|
(100,000 |
) |
|
|
(15,000 |
) |
Accounts payable |
|
|
(161,000 |
) |
|
|
(327,000 |
) |
Accrued expenses and other liabilities |
|
|
(262,000 |
) |
|
|
(795,000 |
) |
Deferred revenue |
|
|
251,000 |
|
|
|
(1,042,000 |
) |
Net cash (used in) provided by
operating activities |
|
|
(1,199,000 |
) |
|
|
126,000 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
— |
|
|
|
(29,000 |
) |
Capitalization of software development costs |
|
|
(232,000 |
) |
|
|
(404,000 |
) |
Net cash (used in) investing
activities |
|
|
(232,000 |
) |
|
|
(433,000 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Repayment of bank term loan |
|
|
(250,000 |
) |
|
|
(125,000 |
) |
Repayment of line of credit |
|
|
(1,500,000 |
) |
|
|
— |
|
Proceeds from issuance of common stock |
|
|
100,000 |
|
|
|
— |
|
Proceeds from notes payable |
|
|
4,400,000 |
|
|
|
— |
|
Payments of acquisition earnout liabilities |
|
|
(447,000 |
) |
|
|
— |
|
Payments for deferred financing costs |
|
|
(16,000 |
) |
|
|
— |
|
Payments related to settlement of employee share-based awards |
|
|
(67,000 |
) |
|
|
(179,000 |
) |
Net cash (used in) provided by
financing activities |
|
|
2,220,000 |
|
|
|
(304,000 |
) |
Net (decrease) increase in
cash and cash equivalents |
|
|
789,000 |
|
|
|
(611,000 |
) |
Cash and cash equivalents at
beginning of period |
|
|
3,190,000 |
|
|
|
6,598,000 |
|
Cash and cash equivalents at
end of period |
|
$ |
3,979,000 |
|
|
$ |
5,987,000 |
|
STREAMLINE HEALTH SOLUTIONS, INC. |
RECONCILIATION OF NET LOSS TO NON-GAAP ADJUSTED
EBITDA |
(Unaudited, rounded to the nearest thousand
dollars) |
|
|
|
Three Months Ended |
In thousands, except per share data |
|
April 30, 2024 |
|
April 30, 2023 |
Adjusted EBITDA
Reconciliation |
|
|
|
|
|
|
Net Loss |
|
$ |
(2,739 |
) |
|
$ |
(2,901 |
) |
Interest expense |
|
|
465 |
|
|
|
248 |
|
Income tax expense |
|
|
— |
|
|
|
53 |
|
Depreciation and amortization |
|
|
1,017 |
|
|
|
1,031 |
|
EBITDA |
|
$ |
(1,257 |
) |
|
$ |
(1,569 |
) |
Share-based compensation expense |
|
|
499 |
|
|
|
572 |
|
Non-cash valuation adjustments |
|
|
24 |
|
|
|
(364 |
) |
Acquisition-related costs, severance, and transaction-related
bonuses |
|
|
31 |
|
|
|
57 |
|
Other non-recurring charges |
|
|
— |
|
|
|
(33 |
) |
Adjusted EBITDA |
|
$ |
(703 |
) |
|
$ |
(1,337 |
) |
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