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HealthStream Announces First Quarter 2012 Results
Highlights:
-
Revenues of
$23.7 million in the first quarter of 2012, up 28% over the first quarter of 2011 -
Operating income of
$2.3 million in the first quarter of 2012, compared to$2.6 million in the first quarter of 2011: annual customer Summit net costs of approximately$520,000 incurred in the first quarter of 2012 versus the second quarter of 2011 -
Net income of
$1.4 million in the first quarter of 2012, compared to net income of$1.5 million in the first quarter of 2011, and earnings per share (EPS) of$0.05 per share in the first quarter of 2012, compared to EPS of$0.07 per share in the first quarter of 2011 -
Adjusted EBITDA1 of
$4.1 million in the first quarter of 2012, up 8% from$3.8 million in the first quarter of 2011
Financial Results:
First Quarter 2012 Compared to First Quarter 2011
Revenues for the first quarter of 2012 increased
Revenues from HealthStream Learning increased by
Revenues from
Operating income for the first quarter of 2012 was
Net income for the first quarter of 2012 was
Adjusted EBITDA (which we define as net income before interest, income
taxes, share-based compensation, and depreciation and amortization) was
At
Other Business Updates
At
Customers representing approximately 96 percent of subscribers that were up for renewal did renew in the first quarter of 2012, while our renewal rate based on the annual contract value was approximately 102 percent. Our renewal rates reflect the addition of subscribers compared to previously contracted amounts combined with any pricing adjustments that may occur at renewal. The renewal rates for the first quarter of 2012 compare to a subscriber renewal rate of 100 percent and an annual contract value renewal rate of 105 percent during the first quarter of 2011.
For the trailing four quarters ended
On
In
In
Financial Expectations
The Company also reiterated its previous guidance and anticipates that consolidated revenues for the full year 2012 will grow by 21 percent to 25 percent when compared to the full year 2011. We anticipate revenue growth in the Learning segment to be in the 28 percent to 32 percent range and the Research segment's revenue to increase by approximately six percent to nine percent.
We expect that operating income will increase between 20 percent and 26 percent for the full year of 2012 versus our 2011 results.
We believe that equivalent shares for purposes of calculating diluted
earnings per share will be between 27.4 million and 27.6 million as a
result of our follow-on offering in
We expect that capital expenditures, including hardware, software,
capitalized software development and additional office space will range
between
"With first quarter revenues up 28 percent over the prior year quarter
and record quarterly sales,
A conference call with
About
1 Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of adjusted EBITDA to net income is included in this release.
|
Summary Financial Data (In thousands, except per share data) |
||||||||
| Unaudited | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2012 | 2011 | |||||||
| Revenues | $ | 23,674 | $ | 18,506 | ||||
| Operating expenses: | ||||||||
| Cost of revenues (excluding depreciation and amortization) | 9,575 | 7,070 | ||||||
| Product development | 1,869 | 1,786 | ||||||
| Sales and marketing(1) | 5,536 | 3,508 | ||||||
| Other general and administrative | 2,819 | 2,542 | ||||||
| Depreciation and amortization | 1,534 | 1,043 | ||||||
| Total operating expenses | 21,333 | 15,949 | ||||||
| Operating income | 2,341 | 2,557 | ||||||
| Other income (expense), net | 19 | 20 | ||||||
| Income before income taxes | 2,360 | 2,577 | ||||||
| Income tax provision | 940 | 1,051 | ||||||
| Net income | $ | 1,420 | $ | 1,526 | ||||
| Net income per share: | ||||||||
| Net income per share, basic | $ | 0.05 | $ | 0.07 | ||||
| Net income per share, diluted | $ | 0.05 | $ | 0.07 | ||||
| Weighted average shares outstanding: | ||||||||
|
|
25,999 | 21,837 | ||||||
| Diluted | 27,335 | 22,969 | ||||||
|
(1) Includes approximately |
||||||||
|
Condensed Consolidated Balance Sheets (In thousands) |
||||||||||
| Unaudited | ||||||||||
|
|
December 31, | |||||||||
| 2012 |
2011(1) |
|||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 24,268 | $ | 76,904 | ||||||
| Marketable securities — short term | 61,284 | 6,552 | ||||||||
| Accounts and unbilled receivables, net | 17,370 | 17,330 | ||||||||
| Prepaid and other current assets | 3,839 | 5,213 | ||||||||
| Deferred tax assets, current | 4,140 | 5,080 | ||||||||
| Total current assets | 110,901 | 111,079 | ||||||||
| Marketable securities — long term | 6,002 | 5,996 | ||||||||
| Capitalized software development, net | 8,302 | 7,940 | ||||||||
| Property and equipment, net | 6,229 | 6,087 | ||||||||
| Goodwill and intangible assets, net | 22,886 | 23,104 | ||||||||
| Other assets | 31 | 31 | ||||||||
| Total assets | $ | 154,351 | $ | 154,237 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable, accrued and other liabilities | $ | 6,002 | $ | 9,689 | ||||||
| Deferred revenue | 24,233 | 22,759 | ||||||||
| Total current liabilities | 30,235 | 32,448 | ||||||||
|
Deferred tax liabilities, non-current |
323 |
323 |
||||||||
| Other long-term liabilities | 620 | 551 | ||||||||
| Total liabilities | 31,178 | 33,322 | ||||||||
|
Shareholders' equity: |
||||||||||
| Common stock | 155,247 | 154,409 | ||||||||
| Comprehensive loss | (7 | ) | (7 | ) | ||||||
| Accumulated deficit | (32,067 | ) | (33,487 | ) | ||||||
| Total shareholders' equity | 123,173 | 120,915 | ||||||||
|
Total liabilities and shareholders' equity |
$ | 154,351 | $ | 154,237 | ||||||
|
(1) Derived from audited financial statements contained
in the Company's filing on Form 10-K for the year ended |
||||||||||
|
Condensed Consolidated Statement of Cash Flows (In thousands) |
||||||||||
| Unaudited | ||||||||||
| Three Months Ended | ||||||||||
|
|
March 31, | |||||||||
| 2012 | 2011 | |||||||||
| Operating activities: | ||||||||||
| Net income | $ | 1,420 | $ | 1,526 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
| Depreciation and amortization | 1,534 | 1,043 | ||||||||
| Deferred income taxes | 940 | 1,051 | ||||||||
| Share-based compensation | 242 | 190 | ||||||||
| Changes in assets and liabilities: | ||||||||||
| Accounts and unbilled receivables | (40 | ) | (2,075 | ) | ||||||
| Prepaid and other assets | 1,463 | 646 | ||||||||
| Accounts payable, accrued and other liabilities | (3,620 | ) | (2,180 | ) | ||||||
| Deferred revenue | 1,475 | 3,342 | ||||||||
| Net cash provided by operating activities | 3,414 | 3,543 | ||||||||
| Investing activities: | ||||||||||
| Changes in marketable securities | (54,883 | ) | (2,593 | ) | ||||||
| Purchases of property and equipment | (763 | ) | (708 | ) | ||||||
| Payments associated with capitalized software development | (1,000 | ) | (4,086 | ) | ||||||
| Net cash used in investing activities | (56,646 | ) | (7,387 | ) | ||||||
| Financing activities: | ||||||||||
| Proceeds from exercise of stock options | 596 | 199 | ||||||||
| Payments on capital leases | -- | (2 | ) | |||||||
| Net cash provided by financing activities | 596 | 197 | ||||||||
| Net decrease in cash and cash equivalents | (52,636 | ) | (3,647 | ) | ||||||
| Cash and cash equivalents at beginning of period | 76,904 | 17,868 | ||||||||
| Cash and cash equivalents at end of period | $ | 24,268 | $ | 14,221 | ||||||
|
Reconciliation of Adjusted EBITDA (In thousands, except per share data) |
||||||||||
|
Income before interest, taxes, share-based compensation, depreciation and amortization, or adjusted EBITDA(1): |
||||||||||
| Unaudited | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2012 | 2011 | |||||||||
| Net income | $ | 1,420 | $ | 1,526 | ||||||
| Interest income | (31 | ) | (22 | ) | ||||||
| Interest expense | 12 | 9 | ||||||||
| Income tax provision | 940 | 1,051 | ||||||||
| Share-based compensation expense | 242 | 190 | ||||||||
| Depreciation and amortization | 1,534 | 1,043 | ||||||||
| Adjusted EBITDA | $ | 4,117 | $ | 3,797 | ||||||
|
(1) |
In order to better assess the Company's financial results, management believes that income before interest, income taxes, share-based compensation, depreciation and amortization ("adjusted EBITDA") is an appropriate measure for evaluating the operating performance of the Company at this stage in its life cycle because adjusted EBITDA reflects net income adjusted for non-cash and non-operating items. Adjusted EBITDA is also used by many investors to assess the Company's results from current operations. Adjusted EBITDA is a non-GAAP financial measure and should not be considered as a measure of financial performance under generally accepted accounting principles. Because adjusted EBITDA is not a measurement determined in accordance with generally accepted accounting principles, it is susceptible to varying calculations. Accordingly, adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. | |
This press release includes certain forward-looking statements
(statements other than solely with respect to historical fact),
including statements regarding expectations for the financial
performance for 2012 that involve risks and uncertainties regarding
Chief
Financial Officer
ir@healthstream.com
or
Media:
Associate Vice President,
mollie.condra@healthstream.com
Source:
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