Streamline Health Solutions, Inc. (
Q3 2010 Earnings Call Transcript
December 8, 2010 4:30 pm ET
Joe Diaz – IR
Brian Patsy – President and CEO
Don Vick – Interim CFO
Gary Winzenread – COO
Mark Cahill [ph]
Walter Ramsley – Walrus Partners
Sam Rebotsky – SER Asset Management
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Good afternoon and welcome to the Streamline Health Solutions reports third quarter 2010 conference call. All participants will be in listen-only mode. (Operator instructions) Please note this event is being recorded. I would now like to turn the conference over to Joe Diaz. Please go ahead.
Thanks, Amy. And thank all of you for joining us today to review the financial results of Streamline Health Solutions for the third quarter of fiscal year 2010, which ended on October 31, 2010. As the conference call operator indicated, my name is Joe Diaz. I’m with Lytham Partners. We are the Investor Relations consulting firm for Streamline Health.
With us on the call representing the company today are Mr. Brian Patsy, President and Chief Executive Officer; Mr. Don Vick, Interim Chief Financial Officer; and Mr. Gary Winzenread, Chief Operating Officer. At the conclusion of today’s prepared remarks, we will open the call for a question-and-answer session. If anyone participating on today’s call does not have a full text copy of today’s release, you can retrieve it off the company’s website at streamlinehealth.net or numerous financial sites on the Internet.
Before we begin with prepared remarks, we submit for the record the following statement. Statements made by the management team of Streamline Health Solutions during the course of this conference call that are not historical facts are considered to be forward-looking statements subject to risks and uncertainties. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for such forward-looking statements.
The words believe, expect, anticipate, estimate, will, and other similar statements of expectation identify forward-looking statements. 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, the impact of competitive products and pricing; product demand and market acceptance; new product development; key strategic alliances with vendors that resell the company’s products; the ability of the company to control costs; availability of products produced from third-party vendors; the healthcare regulatory environment; 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 and other risks detailed from time to time in the Streamline Health Solutions’ filings with the US Securities and Exchange Commission.
Participants on this call 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 results or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
With that, let me turn the call over to Brian Patsy, President and Chief Executive Officer of Streamline Health Solutions. Brian?
Thank you, Joe. And good afternoon, everyone. For today’s call, Don Vick, our Interim Chief Financial Officer, will summarize our financial results. After Don’s summary, I’ll discuss our third quarter results and then Don Vick, Gary Winzenread and I will participate in our question-and-answer session.
At this point, I’d like to turn the call over to Don Vick for his financial summary. Don?
Thanks, Brian. I would like to highlight the more significant aspects of the financial results of our third quarter of our fiscal year ended October 31, 2010. Revenues for the three months ended October 31, 2010 were $4.5 million compared to $4.1 million in the comparable quarter of 2009, representing an increase of 9%.
The increase in revenues is primarily a result of the $410,000 or 241% increase in system sales. The increase in system sales is highlighted by one new and one add-on Access Anywhere enterprise license sale. Recurring revenues from maintenance contracts also experienced a significant improvement, increasing by $217,000 or 12%.
Hosting revenues from backlog remained relatively consistent with the prior year, decreasing by only $28,000 or 3% over the prior comparable quarter. The revenue increases in the quarter were partially offset by a decrease in professional services revenues of $233,000 from the prior comparable period.
As you may have seen in our recent press releases, we were successful in closing three new purchase contracts during this quarter, two of which contributed software system sales revenues in the quarter totaling nearly $300,000. The larger of these contracts was sold through our direct sales force to an existing customer for their new premier outpatient heart and vascular clinic. This solution will integrate Streamline Health Solutions into the customer’s existing EpicCare medical record management system from Epic Systems Corporation. This contract included Streamline Health’s HIM Suite software and related professional services.
Another contract sold this quarter was an Access Anywhere 5.0 license through our remarketing partner TELUS Health in Canada, for which $184,000 was recognized in the quarter. In addition, a large contract was signed late in the quarter to deliver our referral order workflow for an existing customer in Texas, with the contract value in excess of $400,000.
The delivery of this software was delayed until the fourth quarter and therefore is not included in our reported systems sales, although $220,000 of software revenue associated with this contract is currently anticipated to be recognized in the fourth quarter. These sales, in addition to sales of professional services and third-party hardware and software into our existing customer base, allowed for total new bookings for the quarter in excess of $1.2 million.