GlobeNewswire Inc | Dec 8, 2020 04:30PM EST

December 08, 2020

Total First Nine Months of Fiscal 2020 Revenues of $8.4 million; $1.5 million Net Income; Adjusted EBITDA ($1.7 million)

Atlanta, GA, Dec. 08, 2020 (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 third quarter and first nine months of fiscal 2020, which ended October 31, 2020.

Total revenues for the third quarter of fiscal 2020 were $2.6 million, compared to $3.5 million in the prior year period. SaaS revenue was up $287,000, or 48%, compared to the same quarter a year ago. The total revenue decline during the period was primarily attributable to one-time perpetual revenue during the third quarter of 2019 and lower professional services revenue offset by the significant growth of the Companys SaaS revenues. Recurring revenue comprised 74% of third quarter fiscal 2020 revenue compared to 55% of third quarter fiscal 2019 revenue. The Company has continued to experience headwinds as a result of the novel coronavirus. Hospitals are delaying final purchase decisions due to their need to focus on patient care, vaccine logistics and budgetary constraints.

For the first nine months of fiscal 2020, total revenue was $8.4 million, compared to $9.2 million during the first nine months of fiscal 2019. Although total revenue was lower, growth was reported by the Company in its SaaS revenue. Recurring revenue comprised 73% of revenue for the first nine months of fiscal 2020 compared to 64% during the prior year period.

The Companys focus has been on the growth of its eValuator product. SaaS -based revenue grew by $287,000 or 48% in the third quarter and $761,000 or 43% in the nine months ended, October 31, 2020, over the corresponding previous periods. The Company grew SaaS -based revenue by 10%, sequentially, from Q2 to Q3 2020 and is projected to grow by that rate, again, in Q4 2020.

Net loss for the third quarter of fiscal 2020 was ($1.1 million) as compared to ($0.2 million) during the third quarter of fiscal 2019. Third quarter fiscal 2020 net loss included a $14,000 income from discontinued operations, in connection with the sale of the Companys legacy ECM business which closed February 24, 2020, compared to a $1.4 million income from discontinued operations during the third quarter of fiscal 2019. Income from discontinued operations was offset by loss from continuing operations for the three months ended October 31, 2020 and 2019 of ($1.1 million) and ($1.5 million), respectively.

The company recorded $1.5 million of net income for the nine months ended October 31, 2020, compared to a net loss of ($0.5 million) during the same period of 2019. The first nine months fiscal 2020 net income included a $4.7 million income from discontinued operations, in connection with the sale of the Companys legacy ECM business which closed February 24, 2020, compared to a $3.4 million income from discontinued operations during the first nine months of fiscal 2019. The income from discontinued operations was offset by loss from continuing operations for the first nine months of fiscal 2020 of ($3.2 million) as compared to ($3.8 million) for the same period in 2019.

Adjusted EBITDA for the third quarter of fiscal 2020 was a loss of ($0.7 million), compared to an adjusted EBITDA loss of ($0.8 million) in the third quarter of fiscal 2019. For the nine months ended October 31, 2020, adjusted EBITDA was a loss of ($1.7 million) compared to an adjusted EBITDA loss of ($2.5 million) during the first nine months of fiscal 2019. The improvements have come from cost containment activities upon the sale of the ECM Business in February 2020.

We thank our countrys healthcare workers for the heroic job they do every day to provide care in their communities during these incredibly trying times, stated Tee Green, President and Chief Executive Officer, Streamline Health. Like all Americans, we look forward to the arrival of vaccines to help us control this pandemic and allow us to return to a state of normalcy.

Although we are pleased with the growth in our SaaS-based revenues as more eValuator customers come online, we did not meet our bookings goal in the quarter, primarily due to our prospects needing to deal with the effects of the pandemic. We remain enthusiastic, however, as our sales team has continued to expand the number and dollar value of new eValuator opportunities. We believe that purchase decision-making for our automated, cloud-based pre-bill auditing technology will accelerate as our prospects complete their logistic planning for distribution of the promised vaccines.

Highlights from the third quarter ended October 31, 2020 included:

-- Revenue for the third quarter of 2020 was $2.6 million; SaaS revenue grew 48% compared to the third quarter of 2019; -- Loss from continuing operations for the third quarter of 2020 was ($1.1 million); -- Adjusted EBITDA for the third quarter of 2020 was ($0.7 million); -- Bookings for the third quarter of 2020 were $1.4 million.

Conference Call

The Company will conduct a conference call to review the results on Wednesday, December 9, 2020 at 9:00 AM ET. Interested parties can access the call by joining the live webcast:click hereto register. You can also join by phone by dialing 877-269-7756.

A replay of the conference call will be available from Wednesday, December 9, 2020 at 12:00 PM ET to Thursday, December 16, 2020 at 12:00 PM ET by dialing 877-660-6853 or 201-612-7415 with conference ID 13712341. 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 across the enterprise. We share a common calling and commitment to advance the quality of life and the quality of healthcarefor society, our clients, the communities they serve, and the individual patient. For more information, please visit our website atwww.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 areforward-looking statementsthat aresubject 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 productsand 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 developmentand enhancement of current solutions, key strategic alliances with vendorsand channel partnersthat 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 thirdparty 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.

ContactRandy SalisburySVP, Chief Sales & Marketing Officer(404) 229-4242Randy.salisbury@streamlinehealth.net

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

Three Months Ended Nine Months Ended October 31 October 31 2020 2019 2020 2019 Revenues: Systems $ 19,000 $ 636,000 $ 234,000 $ 968,000 sales Professional 180,000 444,000 540,000 1,102,000 services Audit 491,000 517,000 1,498,000 1,266,000 Services Maintenance 1,070,000 1,328,000 3,556,000 4,053,000 and support Software as 881,000 594,000 2,544,000 1,783,000 a service Total 2,641,000 3,519,000 8,372,000 9,172,000 revenues Operating expenses: Cost of 183,000 455,000 385,000 547,000 systems sales Cost ofprofessional 295,000 374,000 852,000 1,262,000 services Cost of 425,000 325,000 1,158,000 949,000 audit services Cost ofmaintenance 160,000 201,000 528,000 504,000 and support Cost ofsoftware as a 416,000 226,000 1,177,000 472,000 service Selling,general and 2,283,000 2,762,000 6,859,000 7,585,000 administrative Research and 753,000 501,000 1,946,000 1,750,000 development ExecutiveTransition - 481,000 - 621,000 Costs Loss on exitof membership - - 105,000 - agreement Totaloperating 4,515,000 5,325,000 13,010,000 13,690,000 expensesOperating loss ) ) (4,638,000 ) ) (1,874,000 (1,806,000 (4,518,000Other income (expense): Interest (12,000 ) (91,000 ) (39,000 ) (239,000 )expense

Miscellaneous 14,000 (80,000 ) (68,000 ) (199,000 )income(expense)Loss before ) ) ) )income taxes (1,872,000 (1,977,000 (4,745,000 (4,956,000 Income tax 803,000 454,000 1,536,000 1,134,000 benefitLoss from continuing $ (1,069,000 ) $ (1,523,000 ) $ (3,209,000 ) $ (3,822,000 )operationsNet loss from continuing $ (1,069,000 ) $ (1,523,000 ) $ (3,209,000 ) $ (3,822,000 )operationsIncome fromdiscontinued operations:Gain on saleof - - 6,013,000 - discontinuedoperationsIncome fromdiscontinued 64,000 1,825,000 305,000 4,513,000 operationsIncome tax benefit (50,000 ) (466,000 ) (1,626,000 ) (1,150,000 )(expense)Income fromdiscontinued 14,000 1,359,000 4,692,000 3,363,000 operationsNet (loss) $ ) $ (164,000 ) $ 1,483,000 $ (459,000 )income (1,055,000 Add:Redemption ofSeries A - 4,894,000 - 4,894,000 PreferredStockNet (loss)income fromcontinuingoperations $ (1,069,000 ) $ 3,371,000 $ (3,209,000 ) $ 1,072,000 attributableto commonshareholders Basic Earnings per Share:Continuing $ (0.04 ) $ 0.16 $ (0.11 ) $ 0.05 operationsDiscontinued - 0.06 0.16 0.15 operationsNet (loss) $ (0.04 ) $ 0.22 $ 0.05 $ 0.20 incomeWeightedaverage number 30,286,197 21,598,146 30,026,890 20,435,055 of commonshares - basic DilutedEarnings per Share: Continuing $ (0.04 ) $ (0.07 ) $ (0.11 ) $ (0.19 )operations

Discontinued - 0.06 0.15 0.14 operationsNet (loss) $ (0.04 ) $ (0.01 ) $ 0.04 $ (0.05 )incomeWeightedaverage number of common 30,892,526 24,334,221 30,450,572 23,412,022 shares ?diluted

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

Assets October 31, January 31, 2020 2020Current assets: Cash and cash equivalents $ 3,031,000 $ 1,649,000 Accounts receivable, net 937,000 2,016,000 Contract receivables 746,000 803,000 Prepaid hardware and other current assets 571,000 501,000 Current Assets from discontinued operations 168,000 1,585,000 Total current assets 5,453,000 6,554,000 Non-current assets: Property and equipment, net 105,000 98,000 Right of use asset on operating lease 432,000 ? Capitalized software development costs, net 6,200,000 5,782,000 Intangible assets, net 745,000 1,115,000 Goodwill 10,712,000 10,712,000 Other non-current assets 1,670,000 611,000 Long-term assets from discontinued 28,000 6,826,000 operationsTotal non-current assets 19,892,000 25,144,000 $ 25,345,000 $ 31,698,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 267,000 $ 756,000 Accrued expenses 1,185,000 1,395,000 Current portion of term loan 1,480,000 3,872,000 Deferred revenues 1,977,000 3,593,000 Royalty liability 500,000 969,000 Other 196,000 ? Current liabilities from discontinued 208,000 5,053,000 operationsTotal current liabilities 5,813,000 15,638,000 Non-current liabilities: Term loan, net of current portion 820,000 ? Deferred revenues, less current portion 71,000 55,000 Other liabilities 266,000 ? Total non-current liabilities 1,157,000 55,000 Total liabilities 6,970,000 15,693,000 Stockholders' equity 18,375,000 16,005,000 $ 25,345,000 $ 31,698,000

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

Nine Months Ended October 31, 2020 2019 Cash flowsfromcontinuing operatingactivities:Loss fromcontinuing $ (3,209,000 ) $ (3,822,000 )operations Adjustments toreconcile loss tonet cash used in operatingactivities: 35,000 33,000 Depreciation

Amortizationof capitalized 1,128,000 834,000 softwaredevelopmentcosts

Amortization 370,000 424,000 of intangibleassets

Amortization 242,000 208,000 of otherdeferred costs

Valuation 31,000 48,000 adjustments Loss onexit of 105,000 membership -agreement

Share-based 1,004,000 719,000 compensationexpense Benefitfor accounts (15,000 ) (125,000 )receivableallowanceBenefit for (1,536,000 ) (1,134,000 )income taxes

Changes in (1,838,000 ) (2,477,000 )assets andliabilitiesNet cash usedin operating (3,683,000 ) (5,292,000 )activitiesNet cash fromoperatingactivities - (2,319,000 ) 4,317,000 discontinuedoperations Cash flowsused in investingactivities:

Purchases of (42,000 ) (51,000 )property andequipment

Capitalizationof software (1,495,000 ) (2,139,000 )developmentcosts

Proceeds from 11,288,000 sale of ECM -assetsNet cashprovided by(used in) 9,751,000 (2,190,000 )investingactivitiesNet cash usedin investing activities - - (591,000 )discontinuedoperations Cash flowsfrom financing activities: Proceeds from 2,301,000 - term loan

Principal (4,000,000 ) payments on -term loan Other (668,000 ) 2,600,000 Net cashprovided by (2,367,000 ) 2,600,000 financingactivitiesNet decreasein cash and 1,382,000 (1,156,000 )cashequivalents Cashand cashequivalents at 1,649,000 2,376,000 beginning ofyear Cashand cash $ 3,031,000 $ 1,220,000 equivalents atend of year

STREAMLINE HEALTH SOLUTIONS, INC.New Bookings(Unaudited)

October 31, 2020 Three Months Ended Nine Months EndedSystems $ $ Sales 20,000 357,000Professional 226,000 Services 633,000Audit Services 34,000 77,000Maintenance and Support 4,000 380,000Software as 1,140,000 4,127,000a ServiceQ3 2020 $ 1,424,000 $ 5,574,000BookingsQ3 2019 $ 2,403,000 $ 7,129,000Bookings (1)

(1) October 31, 2019 excludes bookings from the ECM business of approximately $209,000 for the three months ended October 31, 2019 and $489,000 for the nine months ended October 31, 2019.

STREAMLINE HEALTH SOLUTIONS, INC.Reconciliation of net earnings (loss) to non-GAAP Adjusted EBITDA (in thousands):(Unaudited)

Adjusted Three Months Ended Nine Months EndedEBITDA October 31, October 31, Reconciliation 2020 2019 2020 2019 Loss fromcontinuing $ (1,069 ) $ (1,523 ) $ (3,209 ) $ (3,822 ) operations Interest 12 91 39 239 expense Income tax (803 ) (454 ) (1,536 ) (1,134 ) benefit 4 11 35 33 Depreciation

Amortizationof capitalized 477 598 1,128 834 softwaredevelopmentcosts

Amortization 123 139 370 424 of intangibleassets

Amortization 89 72 242 208 of other costsEBITDA (1,167 ) (1,066 ) (2,931 ) (3,218 )

Share-based 442 290 1,054 719 compensationexpense Non-cashvaluation - 17 31 48 adjustmentsLoss on exitof operating - - 105 - leaseAdjusted $ (725 ) $ (759 ) $ (1,741 ) $ (2,451 ) EBITDAAdjustedEBITDA per diluted share:Net loss percommon share ?diluted $ (0.04 ) $ (0.07 ) $ (0.11 ) $ (0.19 ) continuingoperationsAdjustedEBITDA peradjusted $ (0.02 ) $ (0.04 ) $ (0.06 ) $ (0.12 ) diluted share(1) Dilutedweighted 30,286,197 21,598,146 30,026,890 20,435,055 average shares(2) Includableincrementalshares ? 606,329 2,736,075 423,682 2,976,967 AdjustedEBITDA(3)Adjusted 30,892,526 24,334,221 30,450,572 23,412,022 diluted shares (1) Adjusted EBITDA per adjusted diluted share for our common stock iscomputed using the more dilutive of the two-class method or the if-convertedmethod.(2) Diluted EPS for our common stock was computed using the if-convertedmethod, which yields the same result as the two-class method.(3) The number of incremental shares that would be dilutive under anassumption that the Company is profitable during the reported period, which isonly applicable for a period in which the Company reports a GAAP net loss. If aGAAP profit is earned in the reported periods, no additional incremental sharesare assumed.