|
| [April 23, 2012] |
 |
HealthStream Announces First Quarter 2012 Results
NASHVILLE, Tenn. --(Business Wire)--
HealthStream, Inc. (NASDAQ: HSTM), a leading provider of learning and
research solutions for the healthcare industry, announced today results
for the first quarter ended March 31, 2012.
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 $5.2 million, or 28
percent, to $23.7 million, compared to $18.5 million for the first
quarter of 2011. Revenues for HealthStream Learning and HealthStream
Research grew by 37 percent and six percent, respectively, over the
prior year first quarter.
Revenues from HealthStream Learning increased by $4.9 million, or 37
percent, when compared to the first quarter of 2011. Revenues from our
Internet-based subscription products increased by approximately $3.5
million, or 28 percent, over the prior year quarter due to a higher
number of subscribers and more courseware consumption by subscribers.
Revenues from project-based services increased $595,000 over the prior
year quarter. SimVentures, our collaborative arrangement with Laerdal
Medical A/S, delivered $374,000 in revenues in the first quarter of
2012, which compares to no revenue in the first quarter of 2011.
Revenues from HealthStream Research increased by $357,000, or six
percent, when compared to the first quarter of 2011. Revenues from
Patient Insights™ surveys-a survey research product that generates
recurring revenues-increased by $556,000, or 13 percent, when compared
to the first quarter of 2011. Revenues from other surveys, which are
conducted on annual or bi-annual cycles, decreased by $199,000, or 16
percent, when compared to the first quarter of 2011.
Operating income for the first quarter of 2012 was $2.3 million,
compared to $2.6 million for the first quarter of 2011. This decrease
was influenced by the timing of our annual customer Summit, which
occurred during the second quarter of 2011. In the first quarter of
2012, our holding of the Summit decreased operating income by
approximately $520,000. In addition, because of record sales
performance, the Company experienced higher commissions expense compared
with the prior year first quarter.
Net income for the first quarter of 2012 was $1.4 million, compared to
$1.5 million in the first quarter of 2011. Earnings per share (EPS) were
$0.05 per share (diluted) in the first quarter of 2012, compared to
$0.07 per share (diluted) for the first quarter of 2011. Key factors
impacting EPS in the first quarter of 2012 were the effect of additional
shares outstanding from the Company's fourth quarter 2011 follow-on
stock offering and the timing of the Summit. The impact of the follow-on
offering added approximately 3.6 million shares to the first quarter
2012 fully diluted EPS calculation.
Adjusted EBITDA (which we define as net income before interest, income
taxes, share-based compensation, and depreciation and amortization) was
$4.1 million for the first quarter of 2012 compared to $3.8 million for
the first quarter of 2011.
At March 31, 2012, the Company had cash and marketable securities of
$91.6 million, compared to $89.5 million at December 31, 2011. Capital
expenditures totaled $1.8 million for the first quarter of 2012.
Other Business Updates
At March 31, 2012, approximately 2,659,000 healthcare professionals were
fully implemented to use our Internet-based HLC for training and
education. Revenue recognition commences when a contract is fully
implemented. This number is up from approximately 2,400,000 at March 31,
2011. The total number of contracted subscribers at March 31, 2012 was
approximately 2,790,000, up from approximately 2,523,000 at March 31,
2011. "Contracted subscribers" include both the 2,659,000 subscribers
already implemented and the 131,000 subscribers in the process of
implementation.
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 March 31, 2012, customers
representing approximately 97 percent of subscribers that were up for
renewal did renew during the trailing four quarter period, while our
renewal rate based on the annual contract value was approximately 105
percent. The trailing four quarter renewal measurements are calculated
on the same basis as the quarter results.
On March 6-9, 2012, we welcomed approximately 600 of our customers and
40 prospects from across the nation to our Summit 2012, held in
Nashville. At this annual event, workshops and presentations focused on
the sharing of best practices for developing the healthcare workforce
and on improving healthcare organizations. Sessions were provided along
four tracks: Leadership & Strategy, Human Resources, Education, and
Quality. In collaboration with our partners-with about half of our
content partners in attendance at the Summit-we introduced new products
for talent development, including Lippincott Williams & Wilkins'
Professional Development Programs. Together with our partner, Laerdal
Medical A/S, we showcased our innovative SimCenter platform and
associated products for making simulation-based learning easier and more
accessible. Attendees also had the chance to participate in continuing
education opportunities; collectively, over 380 learning activities were
completed.
In March 2012, HealthStream announced the launch of the HealthStream
Performance Center™ (HPC), an innovative software-as-a-service (SaaS (News - Alert))
based performance management solution for hospitals. The HPC provides an
automated, paperless performance appraisal process, which increases
completion rates and consistency with all aspects of hospitals'
workforce appraisal processes-enterprise-wide. The launch of the HPC
further contributes to our larger suite of talent management and
development solutions for hospitals.
In January 2012, HealthStream launched two new Physician Insights™
surveys to complement our traditional medical staff survey. The new
surveys allow our hospital customers to obtain input from two different
sectors of the physician community: referring physicians, physicians who
actively refer to the hospital but do not regularly admit patients, and
employed physicians, physicians who are employed by a hospital or
healthcare system.
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 November 2011. We anticipate that
our effective book income tax rate will be between 39 percent and 40
percent. Actual tax payments will be substantially less than our income
tax provision as we continue to utilize our federal and state net
operating loss carry-forwards of approximately $14.5 million and $12.6
million, respectively, to offset taxable income.
We expect that capital expenditures, including hardware, software,
capitalized software development and additional office space will range
between $8.0 and $9.0 million during the full year of 2012.
"With first quarter revenues up 28 percent over the prior year quarter
and record quarterly sales, HealthStream is starting the year strong,"
said Robert A. Frist, Jr., chairman and chief executive officer. "To
support our healthcare organization customers develop their workforce
and improve their outcomes, we are investing in our products and
workforce, while we continue to innovate new solutions-such as the
HealthStream Performance Center launched in the first quarter. I believe
we are well positioned for sustained growth in 2012."
A conference call with Robert A. Frist, Jr., chief executive officer,
Gerard M. Hayden, Jr., senior vice president and chief financial
officer, and Mollie Condra, associate vice president of investor
relations and communications will be held on Tuesday, April 24, 2012 at
9:00 a.m. (EDT). To listen to the conference, please dial 877-647-2842
(no conference ID needed) if you are calling within the domestic U.S. or
Canada. If you are an international caller, please dial 914-495-8564 (no
conference ID needed). The conference may also be accessed by going to http://ir.healthstream.com/events.cfm
for the simultaneous Webcast of the call, which will subsequently be
available for replay. The replay telephone numbers are 855-859-2056
(conference ID #72800374) for U.S. and Canadian callers and 404-537-3406
(conference ID #72800374) for international callers.
About HealthStream
HealthStream (NASDAQ: HSTM) is dedicated to improving patient outcomes
through the development of healthcare organizations' greatest asset:
their people. Our unified suite of software-as-a-service (SaaS)
solutions are used by, collectively, approximately 2.8 million
healthcare employees in the U.S. for training & learning management,
talent management, performance assessment, and managing simulation-based
education programs. Our research solutions provide valuable insight to
healthcare providers to meet HCAHPS requirements, engage their
workforce, and enhance physician alignment. Based in Nashville,
Tennessee, HealthStream has an additional office in Laurel, Maryland.
For more information, visit http://www.healthstream.com
or call 800-933-9293.
1 Adjusted EBITDA is a non-GAAP financial measure. A
reconciliation of adjusted EBITDA to net income is included in this
release.
|
|
|
HEALTHSTREAM, INC.
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:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
25,999
|
|
|
|
21,837
|
|
Diluted
|
|
|
|
27,335
|
|
|
|
22,969
|
|
|
|
(1) Includes approximately $870,000 of expenses
associated with the Summit during the three months ended March 31,
2012.
|
|
|
|
|
|
HEALTHSTREAM, INC.
Condensed Consolidated Balance Sheets
(In thousands)
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
March 31,
|
|
|
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 December
31, 2011.
|
|
|
|
|
|
HEALTHSTREAM, INC.
Condensed Consolidated Statement of Cash Flows
(In thousands)
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
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
HealthStream. These statements are based upon management's beliefs, as
well as assumptions made by and data currently available to management.
This information has been, or in the future may be, included in reliance
on the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such results or events
predicted in these statements may differ materially from actual future
events or results. The forward-looking statements are subject to
significant uncertainties and other risks referenced in the Company's
Annual Report on Form 10-K and in the Company's other filings with the
Securities and Exchange Commission. Consequently, such forward-looking
information should not be regarded as a representation or warranty by
the Company that such projections will be realized. Many of the factors
that will determine the Company's future results are beyond the ability
of the Company to control or predict. Readers should not place undue
reliance on forward-looking statements, which reflect management's views
only as of the date hereof. The Company undertakes no obligation to
update or revise any such forward-looking statements.
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NEW Bring Your Own Device
(BYOD): HTML5 and Google's WebRTC are
transforming our industry: The disaggregation of the telecom industry has long
been talked about, while available solutions remain
vertically integrated in spite of a growing industry of
standards-based individual components...
NEW SSOA - SIP Service Oriented Architecture™:
Cloud and large enterprise communications
and collaboration infrastructure: This eBook introduces eZuce's SIP Service Oriented
Architecture (SSOA). SSOA is a 'carrier-class'
system that offers the demanding global enterprise
a modern built-for-the-cloud and highly
scalable...
NEW Benefits of Broadvox VAR Partner Program: We built our Partner Program to work for you. We understand that different
types of partners have different needs, and we don't play favorites. When
you partner with Broadvox, every member of our team stands behind you
and your customers 100%... 
What's New?
