Streamline Health Solutions (STRM)
Q4 2011 Earnings Call
April 23, 2012 11:00 am ET
Landon Barretto -
Robert E. Watson - Chief Executive Officer, President and Director
Stephen H. Murdock - Chief Financial Officer and Senior Vice President
William H. Bunn - Fort Washington Investment Advisors, Inc.
Frank Sparacino - First Analysis Securities Corporation, Research Division
Previous Statements by STRM
» Streamline Health Solutions' CEO Discusses Q3 2012 Results - Earnings Call Transcript
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Greetings, and welcome to Streamline Health Solutions Fourth Quarter 2011 and Year-End Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Landon Barretto. Thank you, sir. You may begin.
Good morning. Thank you for joining us to review the financial results of Streamline Health Solutions for the fourth quarter of fiscal year 2011, which ended January 31, 2012, and for the fiscal year ended the same date.
As the conference call operator indicated, my name is Landon Barretto. I'm with Barretto Pacific Corporation. We're the Investor Relations and consulting firm for Streamline Health. With us on the call representing the company today are Bob Watson, President and Chief Executive Officer; Steve Murdock, Senior Vice President and Chief Financial Officer; Rick Leach, Senior Vice President, Solutions Marketing.
At the conclusion of today’s prepared remarks, we'll open the call for a question-and-answer session. If anyone participating on today’s call does not have a full text copy of the release, you can retrieve it from the company’s website at www.streamlinehealth.net or numerous financial websites.
Before we begin with prepared remarks, we submit for the record, the following statement: The 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 U.S. 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 events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
With that said, let me turn the call over to Bob Watson, President and Chief Executive Officer of Streamline Health Solutions. Bob?
Robert E. Watson
Thank you, Landon, and good morning to all of you participating on today's call. We thank you for your time today and for your continued interest and support of our company. With 4 full quarters behind this management team, it is clear that we are making meaningful progress towards becoming a best-in-class healthcare information technology company, delivering solutions that improve our clients' operating and financial performance.
Looking back at the fourth quarter, which ended January 31, 2012, we're pleased with our financial performance for the period. We achieved breakeven after accounting for the transaction cost associated with the December acquisition of Interpoint Partners. Absent the impact of that transaction, net income would have exceeded $400,000 for the quarter even with the cost of this important acquisition, we returned the company to profitability.
As noted in our press release, the company achieved net earnings of $13,000 for the year. This is a $3 million improvement approximately over the prior year. This was accomplished on revenue with nearly 3% less than fiscal 2010 which was in line with our 2011 guidance. Adjusting for the revenue contribution from the acquisition in Q4, revenues for the year were down 5% on the core electronic content management business. Again, this was in line with our previous guidance for the fiscal year 2011.
In our earnings release, we have included a table reconciling our net earnings to the non-GAAP financial measure of adjusted EBITDA. We defined adjusted EBITDA as net earnings plus interest expense, tax expense, depreciation, amortization of tangible and intangible assets and stock-based compensation expense. Given the relatively large amount of noncash charges included in our financial results, we believe that adjusted EBITDA is a more meaningful measure in understanding our underlying cash-based earnings.
For the fiscal year ended January 31, 2012, adjusted EBITDA was $3.8 million, an improvement of approximately $1 million over the prior year. As we have noted previously, we will continue to provide this non-GAAP financial measure in future earnings releases. We believe that this is a very meaningful improvement which was achieved despite the burden of high severance costs in 2011, the cost of on boarding new executives and associates as part of the overall transition of our human capital talent and the cost of the Interpoint Partners acquisition in December.