Streamline
Health Solutions, Inc. (NASDAQ: STRM), a leading provider of
knowledge management solutions for healthcare providers, today announced
that it has signed letters of intent to purchase two companies to
augment its existing solutions across the entire patient experience. The
transactions are subject to the negotiation and execution of definitive
acquisition agreements and the satisfaction of typical and customary
closing conditions, including approval of the respective Board of
Directors of the Company and the targets and the targets’ shareholders.
There can be no assurance as to whether or when the acquisitions may be
completed or as to the actual terms of the acquisitions.
The transaction expected to close first in the fiscal fourth quarter of
2013 would add patient access and scheduling capabilities. The target
company sells these solutions generally under a perpetual license model,
however Streamline intends to transition this revenue stream into a
SaaS-based model much like the Company has done with that of Meta Health
Technology, a company Streamline Health acquired in 2012. The target
company currently has 29 clients, only 9 of whom are Streamline clients.
For the twelve months ended June 30, 2013 total revenues were $3.9
million, of which $3.2 million were recurring. The letter of intent
provides that at closing Streamline would pay approximately $6.5 million
in cash for the target company.
The second transaction, which is in the due diligence stage, is expected
to close in the fiscal fourth quarter of 2013 or in the fiscal first
quarter of 2014, and would add additional financial and operational
analytics to Streamline Health’s existing suite of solutions. The target
company sells these solutions today as a SaaS-based model. The company
currently has 35 clients, none of whom are Streamline clients today. The
letter of intent provides that at closing Streamline Health anticipates
paying approximately $13.75 million in a combination of cash and shares
of STRM common stock.
“We are constantly seeking to improve and expand the SaaS-based
solutions we offer across the entire patient experience. Adding patient
access and scheduling solutions, along with additional financial and
operational analytics, would give us greater ability to meet the growing
needs of our clients,” stated Robert E. Watson, chief executive officer
of Streamline Health. “The addition of new client relationships through
these acquisitions would also provide cross selling opportunities for
our existing suite of solutions.”
Finalizing IPP Acquisition
The Company has agreed in principle to the final earn-out payment for
its acquisition of substantially all of the assets of Interpoint
Partners, LLC that was completed in December of 2011. The Company agreed
to pay the seller an additional $3.0 million of aggregate consideration
in satisfaction of the earn-out obligation, consisting of $1.3 million
in cash, 400,000 shares of Company common stock and an unsecured, fully
subordinated three-year note in the amount of $900,000. This represents
the final payment for Streamline Health’s most popular solution –
OpportunityAnyWare™ business analytics.
Preliminary Q3 Financial Results
The following statements are based on Streamline Health’s current
expectations. These statements contain forward-looking statements and
company estimates, and actual results may differ materially. Streamline
Health assumes no duty to update any forward-looking statements made in
this press release.
In the third quarter of 2013, the Company’s sales organization was
successful in its efforts to shift a large license transaction in its
quarterly forecast to a SaaS model sales opportunity, a strategy that
Streamline Health continues to emphasize with its client base. Given
this change in projected license terms, the Company expects to report Q3
2013 revenue of approximately $6.7 million. Bookings were up
approximately 19% over the previous quarter, and bookings plus renewals
in the period were approximately $10.0 million. Total backlog increased
from $51.9 million in Q2 2013 to approximately $55.0 million in Q3 2013.
Financial Guidance
Excluding any possible impact of the two proposed acquisitions, and
based on current business trends Streamline Health anticipates that net
revenues for 2013 will be in the range of $29.0 million to $31.0
million, approximately 80% of which will be recurring revenue, and for
fiscal year 2014, will be in the range of $35.0 million to $37.0
million, respectively. This represents organic revenue growth of 20% for
2014 compared to 2013. For 2014, the Company anticipates Adjusted EBITDA
in the range of $6.0 million to $8.0 million.
About Streamline Health
Streamline
Health Solutions, Inc. (NASDAQ: STRM) is a leading provider of
SaaS-based healthcare information technology (HCIT) solutions for
healthcare providers. The company's comprehensive suite of solutions
includes: enterprise content management (ECM), business analytics,
integrated workflow systems, clinical documentation improvement (CDI),
and computer assisted coding (CAC). This unique combination of solutions
is designed to help healthcare organizations manage the financial and
operational challenges they face in the ever-changing world of
healthcare today and in the future. For more information, please visit
our website at www.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 are forward-looking statements that are subject to
risks and uncertainties and are no guarantee of future performance.
Forward-looking statements include all statements that do not relate
solely to historical or current facts, and can generally be identified
by the use of words such as “may,” “believe,” “will,” “expect,”
“project,” “estimate,” “intend,” “anticipate,” “plan,” “continue” or
similar expressions. The forward looking statements contained
herein 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. These risks
and uncertainties include, but are not limited to, whether negotiations
over the acquisitions will result in definitive purchase agreements, whether
the conditions for closing will be met, whether the purchase prices or
other key terms of the acquisitions change, the Company’s ability to
achieve expected benefits from the acquisitions, events that could give
rise to a termination of the purchase agreements, the availability of
funding, and the level of expenses and other charges related to the
acquisitions and the funding thereof, 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 products and pricing, product demand
and market acceptance, new product development, the integration of
businesses or other assets acquired by or licensed to the Company with
its existing business, key strategic alliances with vendors that resell
the Company’s products, the ability of the Company to control costs,
availability of products obtained 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
Accountings Standards Board or other similar entities, changes in
economic, business and market conditions impacting the healthcare
industry, 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.
Copyright Business Wire 2013