.png)
.png)
HealthStream Announces First Quarter 2024 Results
First Quarter 2024
-
Revenues of
$72.8 million in the first quarter of 2024, up 6% from$68.9 million in the first quarter of 2023 -
Operating income of
$5.7 million in the first quarter of 2024, up 97% from$2.9 million in the first quarter of 2023 -
Net income of
$5.2 million in the first quarter of 2024, up 99% from$2.6 million in the first quarter of 2023 -
Earnings per share (EPS) of
$0.17 per share (diluted) in the first quarter of 2024, up from$0.09 per share (diluted) in the first quarter of 2023 -
Adjusted EBITDA1 of
$17.1 million in the first quarter of 2024, up 24% from$13.7 million in the first quarter of 2023 -
Board of Directors declared a quarterly cash dividend of
$0.028 per share, payable onMay 17, 2024 to holders of record onMay 6, 2024
|
1 Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of adjusted EBITDA to net income and disclosure regarding why we believe adjusted EBITDA provides useful information to investors is included later in this release. |
Financial Results:
First Quarter 2024 Compared to First Quarter 2023
Revenues for the first quarter of 2024 increased by
Operating income was
Net income was
Adjusted EBITDA was
At
Other Business Updates
On
On
Financial Outlook for 2024
The Company reaffirms its guidance for 2024 for the measures set forth below as previously announced on
|
|
Full-Year 2024 Guidance |
|||||||||||
|
|
|
Low |
|
|
|
High |
|
|
||||
|
Revenue |
|
$ |
292.0 |
|
- |
|
$ |
296.0 |
|
million |
||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Adjusted EBITDA1 |
|
$ |
64.5 |
|
- |
|
$ |
67.5 |
|
million |
||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Capital Expenditures |
|
$ |
28.0 |
|
- |
|
$ |
30.0 |
|
million |
||
| 1 Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of projected adjusted EBITDA to projected net income (the most comparable GAAP measure) is included later in this release. |
The Company’s guidance for 2024 as set forth above reflects the Company’s assumptions regarding, among other things, expectations for new sales and renewals, and assumes that general economic conditions, including inflationary pressures, do not deteriorate. This consolidated guidance does not include the impact of any acquisitions that we may complete during 2024, gains or losses from changes in the fair value of minority investments, or impairment of long-lived assets.
Commenting on first quarter 2024 results,
A conference call with
Use of Non-GAAP Financial Measures
This press release presents adjusted EBITDA, a non-GAAP financial measure 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, stock-based compensation, depreciation and amortization, and changes in fair value of, including gains (losses) on the sale of, non-marketable equity investments (“adjusted EBITDA”), is a useful measure for evaluating the operating performance of the Company because adjusted EBITDA reflects net income adjusted for certain GAAP accounting, non-cash, and/or non-operating items which may not, in any such case, fully reflect the underlying operating performance of our business. In addition, as discussed below, for periods ended on or prior to
As previously disclosed, prior to the Company early adopting ASU 2021-08 effective
Adjusted EBITDA is a non-GAAP financial measure and should not be considered as a measure of financial performance under GAAP. Because adjusted EBITDA is not a measurement determined in accordance with GAAP, adjusted EBITDA is susceptible to varying calculations. Accordingly, adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies and has limitations as an analytical tool.
This non-GAAP financial measure should not be considered a substitute for, or superior to, measures of financial performance, which are prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of adjusted EBITDA to net income (the most comparable GAAP measure), which is set forth below in this release.
About
|
|
|||||||
|
Condensed Consolidated Statements of Income |
|||||||
|
(In thousands, except per share data) |
|||||||
|
(Unaudited) |
|||||||
|
|
|
|
|||||
|
|
|
Three Months Ended |
|||||
|
|
|
|
|
|
|
||
|
Revenues, net |
|
$ |
72,760 |
|
|
$ |
68,946 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
Cost of revenues (excluding depreciation and amortization) |
|
|
24,617 |
|
|
|
23,856 |
|
Product development |
|
|
12,032 |
|
|
|
11,680 |
|
Sales and marketing |
|
|
11,773 |
|
|
|
11,728 |
|
Other general and administrative expenses |
|
|
8,312 |
|
|
|
8,865 |
|
Depreciation and amortization |
|
|
10,336 |
|
|
|
9,926 |
|
Total operating costs and expenses |
|
|
67,070 |
|
|
|
66,055 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
5,690 |
|
|
|
2,891 |
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
853 |
|
|
|
250 |
|
|
|
|
|
|
|
|
|
|
Income before income tax provision |
|
|
6,543 |
|
|
|
3,141 |
|
Income tax provision |
|
|
1,316 |
|
|
|
518 |
|
Net income |
|
$ |
5,227 |
|
|
$ |
2,623 |
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.17 |
|
|
$ |
0.09 |
|
Diluted |
|
$ |
0.17 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares of common stock outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
30,313 |
|
|
|
30,591 |
|
Diluted |
|
|
30,418 |
|
|
|
30,659 |
|
Dividends declared per share |
|
$ |
0.028 |
|
|
$ |
0.025 |
|
|
|||||||||
|
Condensed Consolidated Balance Sheets |
|||||||||
|
(In thousands) |
|||||||||
|
(Unaudited) |
|||||||||
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||
|
|
|
2024 |
|
|
2023 |
|
|||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
52,407 |
|
|
$ |
40,333 |
|
|
|
Marketable securities |
|
|
31,265 |
|
|
|
30,800 |
|
|
|
Accounts and unbilled receivables, net |
|
|
44,054 |
|
|
|
38,446 |
|
|
|
Prepaid and other current assets |
|
|
19,663 |
|
|
|
20,631 |
|
|
|
Total current assets |
|
|
147,389 |
|
|
|
130,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized software development, net |
|
|
41,118 |
|
|
|
40,643 |
|
|
|
Property and equipment, net |
|
|
12,537 |
|
|
|
13,005 |
|
|
|
Operating lease right of use assets, net |
|
|
19,483 |
|
|
|
20,114 |
|
|
|
|
|
|
255,522 |
|
|
|
259,410 |
|
|
|
Deferred commissions |
|
|
30,671 |
|
|
|
31,700 |
|
|
|
Other assets |
|
|
4,885 |
|
|
|
4,860 |
|
|
|
Total assets |
|
$ |
511,605 |
|
|
$ |
499,942 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts payable, accrued and other liabilities |
|
$ |
27,802 |
|
|
$ |
34,738 |
|
|
|
Deferred revenue |
|
|
98,268 |
|
|
|
83,623 |
|
|
|
Total current liabilities |
|
|
126,070 |
|
|
|
118,361 |
|
|
|
Deferred tax liabilities |
|
|
16,868 |
|
|
|
16,132 |
|
|
|
Deferred revenue, noncurrent |
|
|
2,076 |
|
|
|
2,169 |
|
|
|
Operating lease liability, noncurrent |
|
|
19,484 |
|
|
|
20,247 |
|
|
|
Other long-term liabilities |
|
|
2,253 |
|
|
|
2,281 |
|
|
|
Total liabilities |
|
|
166,751 |
|
|
|
159,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
249,280 |
|
|
|
249,075 |
|
|
|
Accumulated other comprehensive loss |
|
|
(1,172 |
) |
|
|
(691 |
) |
|
|
Retained earnings |
|
|
96,746 |
|
|
|
92,368 |
|
|
|
Total shareholders’ equity |
|
|
344,854 |
|
|
|
340,752 |
|
|
|
Total liabilities and shareholders' equity |
|
$ |
511,605 |
|
|
$ |
499,942 |
|
|
|
|
||||||||
|
Condensed Consolidated Statements of Cash Flows |
||||||||
|
(In thousands) |
||||||||
|
(Unaudited) |
||||||||
|
|
|
|
|
|||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
|
|
|
|
|
||
|
|
|
2024 |
|
|
2023 |
|
||
| Operating activities: | ||||||||
| Net income | $ |
5,227 |
$ |
2,623 |
||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization |
10,336 |
9,926 |
||||||
| Stock-based compensation |
1,060 |
945 |
||||||
| Amortization of deferred commissions |
2,957 |
2,712 |
||||||
| Deferred income taxes |
771 |
800 |
||||||
| Provision for credit losses |
174 |
209 |
||||||
| Loss on equity method investments |
31 |
127 |
||||||
| Other |
(346 |
) |
(85 |
) |
||||
| Changes in assets and liabilities: | ||||||||
| Accounts and unbilled receivables |
(5,782 |
) |
(4,787 |
) |
||||
| Prepaid and other assets |
(1,783 |
) |
(2,750 |
) |
||||
| Accounts payable, accrued, and other liabilities |
(6,259 |
) |
(3,683 |
) |
||||
| Deferred revenue |
14,552 |
14,504 |
||||||
| Net cash provided by operating activities |
20,938 |
20,541 |
||||||
| Investing activities: | ||||||||
| Business combinations, net of cash acquired |
— |
(6,621 |
) |
|||||
| Changes in marketable securities |
(124 |
) |
(1,850 |
) |
||||
| Proceeds from sale of non-marketable equity investments |
765 |
— |
||||||
| Purchases of property and equipment |
(742 |
) |
(879 |
) |
||||
| Payments associated with capitalized software development |
(7,019 |
) |
(7,566 |
) |
||||
| Net cash used in investing activities |
(7,120 |
) |
(16,916 |
) |
||||
| Financing activities: | ||||||||
| Taxes paid related to net settlement of equity awards |
(855 |
) |
(791 |
) |
||||
| Payment of cash dividends |
(849 |
) |
— |
|||||
| Net cash used in financing activities |
(1,704 |
) |
(791 |
) |
||||
| Effect of exchange rate changes on cash and cash equivalents |
(40 |
) |
(21 |
) |
||||
| Net increase in cash and cash equivalents |
12,074 |
2,813 |
||||||
| Cash and cash equivalents at beginning of period |
40,333 |
46,023 |
||||||
| Cash and cash equivalents at end of period | $ |
52,407 |
$ |
48,836 |
|
|||
|
Reconciliation of GAAP to Non-GAAP Financial Measures(1) |
||||||||
|
Operating Results Summary |
||||||||
|
(In thousands) |
||||||||
|
(Unaudited) |
||||||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2024 |
|
|
2023 |
|
||
|
Net income |
|
$ |
5,227 |
|
|
$ |
2,623 |
|
|
Deferred revenue write-down |
|
|
— |
|
|
|
50 |
|
|
Interest income |
|
|
(904 |
) |
|
|
(363 |
) |
|
Interest expense |
|
|
24 |
|
|
|
33 |
|
|
Income tax provision |
|
|
1,316 |
|
|
|
518 |
|
|
Stock-based compensation expense |
|
|
1,060 |
|
|
|
945 |
|
|
Depreciation and amortization |
|
|
10,336 |
|
|
|
9,926 |
|
|
Adjusted EBITDA |
|
$ |
17,059 |
|
|
$ |
13,732 |
|
|
(1) This press release presents adjusted EBITDA, which is a non-GAAP financial measure used by management in analyzing its financial results and ongoing operational performance. |
|
Reconciliation of GAAP to Non-GAAP Financial Measures |
||||||||
|
Financial Outlook for 2024 |
||||||||
|
(In thousands) |
||||||||
|
(Unaudited) |
||||||||
|
|
|
Low |
|
|
High |
|
||
|
Net income |
|
$ |
14,500 |
|
|
$ |
16,500 |
|
|
Interest income |
|
|
(2,400 |
) |
|
|
(2,600 |
) |
|
Interest expense |
|
|
100 |
|
|
|
100 |
|
|
Income tax provision |
|
|
5,200 |
|
|
|
5,800 |
|
|
Stock-based compensation expense |
|
|
4,800 |
|
|
|
5,000 |
|
|
Depreciation and amortization |
|
|
42,300 |
|
|
|
42,700 |
|
|
Adjusted EBITDA |
|
$ |
64,500 |
|
|
$ |
67,500 |
|
This press release includes certain forward-looking statements (statements other than solely with respect to historical fact), including statements regarding expectations for financial performance for 2024 and our quarterly dividend policy, that involve risks and uncertainties regarding
View source version on businesswire.com: https://www.businesswire.com/news/home/20240422804604/en/
Chief Financial Officer
(615) 301-3182
ir@healthstream.com
Media:
Vice President,
Investor Relations &
Communications
(615) 301-3237
mollie.condra@healthstream.com
Source: