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.