GlobeNewswire Inc | Dec 8, 2021 04:15PM EST

December 08, 2021

Revenues of$5.5Million;214% SaaS Revenue Growth; $(4.3) Million Net Loss;$(0.3) MillionAdjusted 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 ResultsThe 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 2020financial results do not reflect results from Aveleads operations.

Streamline acquired Avelead on August 16, 2021, and the results of Aveleads 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 Companys 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 Aveleads 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 Aveleads 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 Aveleads pre-acquisition operations, respectively.

Management CommentaryWith 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 CallThe 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 1995Statements 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 Companys 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 Companys 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 Companys 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 managements 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 GoldbergerDirector, Investor Relations and FP&A303-887-9625Jacob.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 $ 150,000 $ 19,000 $ 285,000 $ 234,000 LicensesProfessional 944,000 161,000 1,052,000 473,000 ServicesAudit Services 513,000 491,000 1,460,000 1,498,000 Maintenance 1,082,000 1,070,000 3,226,000 3,556,000 and SupportSoftware as a 2,825,000 900,000 5,310,000 2,611,000 ServiceTotal revenues 5,514,000 2,641,000 11,333,000 8,372,000 Operating expenses:Cost ofsoftware 133,000 183,000 412,000 385,000 licensesCost ofprofessional 936,000 268,000 1,411,000 779,000 servicesCost of audit 409,000 425,000 1,174,000 1,158,000 servicesCost ofmaintenance 57,000 160,000 223,000 528,000 and supportCost ofsoftware as a 1,088,000 443,000 2,276,000 1,250,000 serviceSelling,general and 3,439,000 2,283,000 8,507,000 6,859,000 administrativeexpenseResearch and 1,339,000 753,000 3,280,000 1,946,000 developmentNon-routine 1,933,000 - 2,710,000 - costsLoss on exitfrom - - - 105,000 membershipagreementTotaloperating 9,334,000 4,515,000 19,993,000 13,010,000 expensesOperating loss (3,820,000 ) (1,874,000 ) (8,660,000 ) (4,638,000 )Other (income) expense:Interestincome (85,000 ) (12,000 ) (107,000 ) (39,000 )(expense)Loss onExtinguishment (43,000 ) - (43,000 ) - of DebtOther (427,000 ) 14,000 (421,000 ) (68,000 )PPP Loan - - 2,327,000 - ForgivenessLoss fromcontinuingoperations (4,375,000 ) (1,872,000 ) (6,904,000 ) (4,745,000 )before incometaxesIncome taxbenefit (4,000 ) 803,000 (9,000 ) 1,536,000 (expense)Loss fromcontinuing $ (4,379,000 ) $ (1,069,000 ) $ (6,913,000 ) $ (3,209,000 )operationsIncome fromdiscontinued operations:Gain on saleof - - - 6,013,000 discontinuedoperationsIncome fromdiscontinued 69,000 64,000 401,000 305,000 operationsIncome tax - (50,000 ) - (1,626,000 )expenseIncome fromdiscontinued 69,000 14,000 401,000 4,692,000 operationsNet (loss) $ (4,310,000 ) $ (1,055,000 ) $ (6,512,000 ) $ 1,483,000 income Basic Earnings per Share:Continuing $ (0.10 ) $ (0.04 ) $ (0.17 ) $ (0.11 )operationsDiscontinued - - 0.01 0.16 operationsNet (loss) $ (0.10 ) $ (0.04 ) $ (0.16 ) $ 0.05 incomeWeightedaverage number 45,709,952 30,286,197 41,498,873 30,026,890 of commonshares - basicDilutedEarnings per Share:Continuing $ (0.10 ) $ (0.04 ) $ (0.17 ) $ (0.11 )operationsDiscontinued - - 0.01 0.15 operationsNet (loss) $ (0.10 ) $ (0.04 ) $ (0.16 ) $ 0.04 incomeWeightedaverage numberof common 46,063,803 30,892,526 41,995,266 30,450,572 shares ?diluted

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 - 595,000 operationsTotal current liabilities 7,435,000 7,369,000 Non-current liabilities: Term loan, net of current portion and 9,759,000 767,000 deferred financing costsDeferred 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 1,430,000 1,128,000 development costsAmortization 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 14,000 (15,000 )receivable allowanceForgiveness 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 - 406,000 (2,319,000 )discontinued operations 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 (1,048,000 ) (1,495,000 )costsPurchases of property and equipment (18,000 ) (42,000 )Net cash (used in) provided by (12,620,000 ) 9,751,000 investing activities Cash flows from financing activities: Proceeds from issuance of common stock 16,100,000 - Payments for costs directlyattributable to the issuance of common (1,313,000 ) - stockRepayment of bank term loan - (4,000,000 )Proceeds from term loan payable 10,000,000 2,301,000 Payments related to settlement of (380,000 ) (168,000 )employee shared based awardsPayment for deferred financing costs (168,000 ) - Payment of Royalty Liability - (500,000 )Other (3,000 ) - Net cash provided by (used in) 24,236,000 (2,367,000 )financing activities Net decrease in cash and cash 8,000,000 1,382,000 equivalents Cash and cash equivalents at beginning 2,409,000 1,649,000 of yearCash and cash equivalents at end of $ 10,409,000 $ 3,031,000 year

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 Nine Months Ended October 31, 31, 2021 2020 2021 2020 Loss fromcontinuing $ (4,379 ) $ (1,069 ) $ (6,913 ) $ (3,209 )operationsInterest 85 12 107 39 expenseIncome tax(benefit) 4 (803 ) 9 (1,536 )expenseDepreciation 16 4 53 35 Amortizationof capitalizedsoftware 446 477 1,430 1,128 developmentcostsAmortizationof intangible 490 123 721 370 assetsAmortization 110 89 338 242 of other costsEBITDA (3,228 ) (1,167 ) (4,255 ) (2,931 )Share-basedcompensation 537 442 1,659 1,054 expenseNon-cashvaluation 417 - 417 31 adjustmentsLoss on exitof operating - - - 105 leaseOthernon-recurring 1,933 - 2,710 - operatingexpensesForgiveness ofPPP Loan and - - (2,327 ) - accruedinterestOthernon-recurring - - 16 - operatingexpensesLoss on earlyextinguishment 43 - 43 - of debtAdjusted $ (298 ) $ (725 ) $ (1,737 ) $ (1,741 )EBITDAAdjustedEBITDA per diluted share:Net loss percommon share ? $ (0.10 ) $ (0.04 ) $ (0.17 ) $ (0.11 )dilutedAdjustedEBITDA peradjusted $ (0.01 ) $ (0.02 ) $ (0.04 ) $ (0.06 )diluted share(1) Dilutedweighted 45,709,952 30,286,197 41,498,873 30,026,890 average shares(2)Includableincrementalshares ? 353,851 606,329 496,393 423,682 AdjustedEBITDA (3)Adjusted 46,063,803 30,892,526 41,995,266 30,450,572 diluted shares

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

(2) Diluted EPS for the Companys 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.