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HealthStream Announces First Quarter 2019 Results
-
Revenues of
$65.2 million in the first quarter of 2019, up 19% from$54.9 million in the first quarter of 2018 -
Operating income of
$5.4 million in the first quarter of 2019, up 44% from$3.7 million in the first quarter of 2018 -
Income from continuing operations of
$4.8 million in the first quarter of 2019, up 32% from$3.6 million in the first quarter of 2018 -
Earnings per share (EPS) from continuing operations of
$0.15 per share (diluted) in the first quarter of 2019, compared to$0.11 per share (diluted) in the first quarter of 2018 -
Adjusted EBITDA1 from continuing operations of
$12.5 million in the first quarter of 2019, up 22% from$10.2 million in the first quarter of 2018 Acquired Providigm, LLC , aDenver -based company focused on quality assurance and performance improvement in healthcare, primarily serving skilled nursing facilities onJanuary 10, 2019 Scott McQuigg joinedHealthStream as Senior Vice President, hStream Solutions
1 Adjusted EBITDA from continuing operations is a non-GAAP financial measure. A reconciliation of adjusted EBITDA from continuing operations to income from continuing operations and disclosure regarding why we believe adjusted EBITDA from continuing operations provides useful information to investors is included later in this release.
Financial Results:
First Quarter 2019 Compared to First Quarter 2018
Revenues for the first quarter of 2019 increased by
Revenues from our HealthStream Workforce Solutions segment were
approximately
Revenues from our HealthStream Provider Solutions segment were
approximately
Operating income was
Income from continuing operations was
Net income (from continuing and discontinued operations) was
Adjusted EBITDA from continuing operations increased to
Adjusted EBITDA (from continuing and discontinued operations) was
At
Other Business Updates
At
On
Management Team Announcement
On
Financial Outlook for 2019
Below we present our updated 2019 financial guidance:
| Full Year 2019 Guidance | ||||||||
| Revenue | ||||||||
| Workforce Solutions | $ 207 | - | $ 213 | million | ||||
| Provider Solutions | 44 | - | 45 | million | ||||
| Consolidated | $ 251 | - | $ 258 | million | ||||
| Operating Income | $11 | - | $13 | million | ||||
| Capital Expenditures | $ 36 | million | ||||||
| Annual Effective Income Tax Rate | 26 | - | 28 | percent | ||||
This guidance includes the impact of the acquisition of Providigm, which is included in our Workforce Solutions segment, but does not include the impact of any other acquisitions or strategic investments that we may complete during 2019.
“HealthStream is off to a strong start in 2019, setting the groundwork
for further innovation for our customers and growth for the Company,”
said
A conference call with
Use of Non-GAAP Financial Measures
This press release presents adjusted EBITDA from continuing operations and adjusted EBITDA, both of which are non-GAAP financial measures used by management in analyzing the Company’s financial results and ongoing operational performance.
In order to better assess the Company’s financial results, management
believes that net income before interest, income taxes, share-based
compensation, depreciation and amortization, and changes in fair value
of cost method investments (“adjusted EBITDA”) is a useful measure for
evaluating the operating performance of the Company because adjusted
EBITDA reflects net income adjusted for certain non-cash and
non-operating items. Management also believes that adjusted EBITDA from
continuing operations is a useful measure for evaluating the operating
performance of the Company because such measure excludes the results of
operations of the PX business that we no longer own and the gain on sale
in connection with the sale of such business in
These non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance, which are prepared in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review the reconciliations of our GAAP to non-GAAP financial measures, which are set forth below in this release.
About
|
HEALTHSTREAM, INC. Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) |
||||||||
| Three Months Ended | ||||||||
| March 31, 2019 |
March 31, 2018 |
|||||||
| Revenues, net | $ | 65,187 | $ | 54,858 | ||||
| Operating costs and expenses: | ||||||||
| Cost of revenues (excluding depreciation and amortization) | 26,861 | 22,248 | ||||||
| Product development | 6,927 | 6,001 | ||||||
| Sales and marketing | 9,521 | 9,064 | ||||||
| Other general and administrative expenses | 9,970 | 7,742 | ||||||
| Depreciation and amortization | 6,539 | 6,073 | ||||||
| Total operating costs and expenses | 59,818 | 51,128 | ||||||
| Operating income | 5,369 | 3,730 | ||||||
| Other income, net | 822 | 313 | ||||||
| Income from continuing operations before income tax provision | 6,191 | 4,043 | ||||||
| Income tax provision | 1,411 | 414 | ||||||
| Income from continuing operations | 4,780 | 3,629 | ||||||
| Discontinued operations | ||||||||
| Loss from discontinued operations before income tax provision | — | (64 | ) | |||||
| Gain on sale of discontinued operations | 1,620 | 30,991 | ||||||
| Income tax provision | 426 | 10,710 | ||||||
| Income from discontinued operations | 1,194 | 20,217 | ||||||
| Net Income | $ | 5,974 | $ | 23,846 | ||||
| Net Income per share – basic: | ||||||||
| Continuing operations | $ | 0.15 | $ | 0.11 | ||||
| Discontinued operations | 0.03 | 0.63 | ||||||
| Net Income per share - basic | $ | 0.18 | $ | 0.74 | ||||
| Net Income per share - diluted: | ||||||||
| Continuing operations | $ | 0.15 | $ | 0.11 | ||||
| Discontinued operations | 0.03 | 0.63 | ||||||
| Net Income per share - diluted | $ | 0.18 | $ | 0.74 | ||||
| Weighted average shares of common stock outstanding: | ||||||||
| Basic | 32,337 | 32,097 | ||||||
| Diluted | 32,377 | 32,132 | ||||||
| Dividends declared per share | $ | — | $ | 1.00 | ||||
|
HEALTHSTREAM, INC. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
||||||||
| March 31, | December 31, | |||||||
| 2019 | 2018 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 110,610 | $ | 134,321 | ||||
| Marketable securities | 36,322 | 34,497 | ||||||
| Accounts and unbilled receivables, net | 40,588 | 41,004 | ||||||
| Prepaid and other current assets | 36,222 | 31,612 | ||||||
| Total current assets | 223,742 | 241,434 | ||||||
| Capitalized software development, net | 20,425 | 18,352 | ||||||
| Property and equipment, net | 23,708 | 15,866 | ||||||
| Operating lease right of use assets, net | 31,710 | — | ||||||
| Goodwill and intangible assets, net | 160,306 | 145,522 | ||||||
| Deferred tax assets | 257 | 145 | ||||||
| Deferred commissions | 15,731 | 16,470 | ||||||
| Other assets | 7,621 | 4,159 | ||||||
| Total assets | $ | 483,500 | $ | 441,948 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable, accrued and other liabilities | $ | 38,380 | $ | 40,793 | ||||
| Deferred revenue | 72,602 | 66,061 | ||||||
| Total current liabilities | 110,982 | 106,854 | ||||||
| Deferred tax liabilities | 11,503 | 11,068 | ||||||
| Deferred revenue, non-current | 2,868 | 2,868 | ||||||
| Operating lease liability, noncurrent | 32,390 | — | ||||||
| Other long-term liabilities | 616 | 2,211 | ||||||
| Total liabilities | 158,359 | 123,001 | ||||||
| Shareholders’ equity: | ||||||||
| Common stock | 286,785 | 286,597 | ||||||
| Accumulated other comprehensive income (loss) | 9 | (23 | ) | |||||
| Retained earnings | 38,347 | 32,373 | ||||||
| Total shareholders’ equity | 325,141 | 318,947 | ||||||
| Total liabilities and shareholders' equity | $ | 483,500 | $ | 441,948 | ||||
|
HEALTHSTREAM, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
|||||||||
| Three Months Ended | |||||||||
| March 31, | March 31, | ||||||||
| 2019 | 2018 | ||||||||
| Operating activities: | |||||||||
| Net income | $ | 5,974 | $ | 23,846 | |||||
| Income from discontinued operations | (1,194 | ) | (20,217 | ) | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation and amortization | 6,539 | 6,073 | |||||||
| Share-based compensation | 516 | 419 | |||||||
| Amortization of deferred commissions | 2,121 | 1,827 | |||||||
| Deferred income taxes | 433 | 608 | |||||||
| Provision for doubtful accounts | 2 | 390 | |||||||
| Gain on equity method investments | (54 | ) | (7 | ) | |||||
| Other | (28 | ) | 30 | ||||||
| Changes in assets and liabilities: | |||||||||
| Accounts and unbilled receivables | 1,387 | (1,864 | ) | ||||||
| Prepaid and other assets | (3,967 | ) | (4,403 | ) | |||||
| Accounts payable, accrued and other liabilities | (2,044 | ) | (5,568 | ) | |||||
| Deferred revenue | 6,400 | 8,417 | |||||||
| Net cash provided by continuing operating activities | 16,085 | 9,551 | |||||||
| Net cash used in discontinued operating activities | — | (1,002 | ) | ||||||
| Net cash provided by operating activities | 16,085 | 8,549 | |||||||
| Investing activities: | |||||||||
| Business combinations, net of cash acquired | (18,002 | ) | — | ||||||
| Proceeds from sale of discontinued operations | — | 58,203 | |||||||
| Changes in marketable securities | (1,764 | ) | 6,988 | ||||||
| Payments to acquire cost method investments | (3,342 | ) | — | ||||||
| Purchases of property and equipment | (11,338 | ) | (1,858 | ) | |||||
| Payments associated with capitalized software development | (4,933 | ) | (2,541 | ) | |||||
| Net cash (used in) provided by continuing investing activities | (39,379 | ) | 60,792 | ||||||
| Net cash used in discontinued investing activities | — | (115 | ) | ||||||
| Net cash (used in) provided by investing activities | (39,379 | ) | 60,677 | ||||||
| Financing activities: | |||||||||
| Proceeds from exercise of stock options | 31 | 2,368 | |||||||
| Taxes paid related to net settlement of equity awards | (359 | ) | (297 | ) | |||||
| Payment of earn-outs related to prior acquisitions | (37 | ) | (37 | ) | |||||
| Payment of cash dividends | (52 | ) | — | ||||||
| Net cash (used in) provided by continuing financing activities | (417 | ) | 2,034 | ||||||
| Net cash used in discontinued financing activities | — | — | |||||||
| Net cash (used in) provided by financing activities | (417 | ) | 2,034 | ||||||
| Net (decrease) increase in cash and cash equivalents | (23,711 | ) | 71,260 | ||||||
| Cash and cash equivalents at beginning of period | 134,321 | 84,768 | |||||||
| Cash and cash equivalents at end of period | $ | 110,610 | $ | 156,028 | |||||
|
Reconciliation of GAAP to Non-GAAP Financial Measures(1) (In thousands) (Unaudited) |
||||||||
| Three Months Ended March 31, |
||||||||
| 2019 | 2018 | |||||||
| GAAP income from continuing operations | $ | 4,780 | $ | 3,629 | ||||
| Interest income | (790 | ) | (340 | ) | ||||
| Interest expense | 21 | 34 | ||||||
| Income tax provision | 1,411 | 414 | ||||||
| Stock based compensation expense | 516 | 419 | ||||||
| Depreciation and amortization | 6,539 | 6,073 | ||||||
| Change in fair value of cost method investments | — | — | ||||||
| Adjusted EBITDA from continuing operations | $ | 12,477 | $ | 10,229 | ||||
| GAAP net income | $ | 5,974 | $ | 23,846 | ||||
| Interest income | (790 | ) | (340 | ) | ||||
| Interest expense | 21 | 34 | ||||||
| Income tax provision | 1,837 | 11,124 | ||||||
| Stock based compensation expense | 516 | 328 | ||||||
| Depreciation and amortization | 6,539 | 6,254 | ||||||
| Change in fair value of cost method investments | — | — | ||||||
| Adjusted EBITDA | $ | 14,097 | $ | 41,246 | ||||
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(1) This press release contains certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA from continuing operations, which are used by management in analyzing its financial results and ongoing operational performance. |
||||||||
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 2019, that involve risks and uncertainties regarding
View source version on businesswire.com: https://www.businesswire.com/news/home/20190422005454/en/
Source:
Scott A. Roberts
Interim Chief Financial Officer
(615) 301-3182
ir@healthstream.com
Media:
Mollie
Condra, Ph.D.
Vice President,
Investor Relations &
Communications
(615)
301-3237
mollie.condra@healthstream.com