Streamline Health Solutions, Inc.

Hello and welcome to the Streamline Health third quarter 2022 earnings conference call-in webcast. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Jacob Goldberger. Please go ahead, sir.

Thank you for joining us for the corporate update and financial results review of Streamline Health Solutions for the third quarter 2022, which ended October 31st, 2022. As the conference call operator indicated, my name is Jacob Goldberger. Joining me on the call today are T. Green, Chief Executive Officer and Chairman of the Board, Ben Stillwell, President, and Tom Gibson, Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question and answer session. If anyone participating on today's call does not have a full-text copy of our press release announcing these results, you can retrieve it from the company's website at www.streamlinehealth.net or from numerous financial websites. Before we begin with prepared remarks, we want to be sure we are clear for everyone on the record how certain information which may be provided today, as in all of our earnings calls, should be viewed. We therefore submit for the record the following statement. Statements made on this conference call that are not historical facts are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These are subject to risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from those we may discuss. Please refer to the company's press releases and filings made with the U.S. Securities and Exchange Commission including our most recent Form 10-K Annual Report, which is on file at the SEC for more information about these risks, uncertainties, and assumptions and other factors. As always, we are presenting management's current analysis of these items as of today. Participants on this call should take into account these risks when evaluating the topics we will discuss. Please note, Streamline Health is not undertaking any commitment or obligation to publicly revise any such forward-looking statements made today. On today's call, we will discuss non-GAAP financial measures such as adjusted EBITDA, booked staff ACV, and unaudited figures related to our acquisition of AdLib. Management uses these measures to help provide better insight into our financial performance. However, certain items of income and expense are not included in these measures, so these calculations may differ from those which another entity may utilize in calculating their own non-GAAP measures. To help you compare these results on consistent terms, please refer to our website at www.streamlinehealth.net and our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measures. I would now like to turn the call over to T. Green, Chief Executive Officer.

Thank you, Jacob. And thank you all for joining us this morning. Following my opening remarks, Ben Stilwell, President, will provide an operations and sales update, followed by a financial update from our CFO, Tom Gibson. As a reminder, on August 16th, 2021, we acquired Avali, and their financial performance will be included in our GAAP results from that date. With that, I'll get started. Beginning with the financial overview, as of October 31st, 2022, bookings for the nine months ended October 31st, 2022 totaled $15.9 million. $14.1 million of which was attributable to our SAS product. As a reminder, we estimated we would average $3 to $5 million of TCV per quarter in fiscal 2022. Our continued booking success is a credit to the strong direct sales channel we've built and the value our products provide our clients. Macro headwinds associated with our hospital clients, staffing, and backlog of IT projects continue to hinder conversion of our new bookings to revenue. However, we successfully grew total revenue 13% to $6.2 million during the third quarter, and our SAS revenues were up 14%, or $0.4 million. Last quarter, we began reporting a new metric, Book SAS ACV, which is the annualized contract value for all agreements that are being recognized into revenue, as well as bookings that have not been implemented. As of October 31st, book SAS ACV was $14.9 million as compared to 10.3 million as of January 31st, 2022. Subsequent to the end of the quarter, we successfully closed two large deals. And as of November 30th, 2022, our total book SAS ACV was $15.9 million. We remain confident in our achievement of $17 million of book SAS ACV by the end of fiscal 2022. As of October 31st, 2022, we had $11.7 million of cash on our balance sheet. As previously announced on October 25th, we closed a registered direct offering that resulted in gross proceeds of approximately $8.3 million. Notably, more than 30% of the offering was raised from insiders, including each member of the company's board of directors and key members of the company's management team. We have begun to make the initial principal payments on our term loan. As of October 31st, the balance of our term loan was $9.8 million. We believe our cash on hand is sufficient to achieve positive adjusted EBITDA less capitalized software development. Finally, on November 29th, 2022, we expanded our relationship with Bridge Bank to allow access to an additional liquidity through a $2 million non-formula line of credit. Late in the quarter, we announced a strategic alignment of our business to enhance growth and profitability. By combining the Avalieve and Evaluator operations, We expect to accelerate our progress within our innovation and service functions while increasing the effectiveness of our Salesforce as the Evaluator and Avalanche Software Solutions share a common call point. In addition to the operational benefits from the alignment, we expect to realize a total $3 million of annualized cost savings, $1.5 million of which was executed on November the 1st. and the balance of which we expect to execute through the course of the next fiscal year. The cost savings was attributable to the elimination of redundant management positions, voluntary reduction of executive salaries, and certain other contractors. We remain confident in our growth prospects going forward. The macro environment for our hospital clients result in a higher demand for our products and services. Our team is dedicated to delivering improved net revenue to our hospital clients through automated pre-bill solutions like RebID and Evaluator, which enable them to capture and bill accurately for all the care they have provided. This has never been more critical to our industry than it is today, and we believe our bookings will continue to accelerate as a result. In conjunction with the alignment, Javad Shaikh was appointed chief strategy officer and Ben Steele was promoted to president of our organization. Javad has made a seamless transition to focus on thought leadership and strategy while maintaining his successful relationships with our channel partners in large hospital systems. Prior to his promotion to president, Ben was CEO of the evaluator business. Ben developed our world-class client success organization, which has become a primary differentiator for us in the market. I am thrilled to have him lead the operations of our combined organization going forward. Ben?