Streamline Health Solutions, Inc.

Greetings and welcome to the Streamlined Health Solutions fourth quarter and fiscal year 2023 earnings call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jacob Goldberger, Vice President of Finance. Thank you. Please go ahead.

Thank you for joining us for the Corporate Update and Financial Results Review of Streamlined Health Solutions for the fourth quarter and fiscal year 2023, which ended January 31st, 2024. As the conference call operator indicated, my name is Jacob Kohlberger. Joining me on the call today are Ben Stillwell, President and Chief Executive Officer, and BJ Reeves, 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 with 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 with 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 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 and both SAS ACV. Management uses these measures to help provide better insight into our financial performance. 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. So if you compare these amounts on consistent terms, please refer to our website at www.streamlinehealth.net and our earnings release for reconciliation of such non-GAAP measures to the most comparable GAAP measures. I would now like to turn the call over to Ben Stillwell, President and CEO.

Thank you, Jacob. fiscal year 2023 was challenging for our business. However, the positive impact our solutions have for our client's operations continue to fuel our team and our excitement about the future. Our clients need our solutions and the market needs our business model to exist. So when we faced adversity, we knew we had to become a stronger, leaner, and more agile organization. Today, we exist as a more experienced team capable of driving innovation and growth in the complex landscape of hospital revenue cycles. As we announced yesterday, book SAS ACB, which is the annualized contract value for all agreements currently being recognized, as well as bookings that have not been implemented, totals $15.6 million, $11.7 million of which is implemented. Notably, this is above the $15.5 million run rate needed for breakeven adjusted EBITDA we discussed previously. We expect that we can implement the remaining $3.9 million of unimplemented bookings over the course of this year and achieve an adjusted EBITDA break-even run rate during the second half of this year. I'd like to take a moment to comment on the current state of our clients' challenges before talking about how our business is set up to address them. Our nation's health systems exist to provide clinical care. but more and more they are forced to spend valuable time and resources to get paid for providing that care. The reimbursement system was already incredibly complex, but in recent years, payers have made it even more difficult through increased denials and hard-nosed contract negotiation. To combat these challenges, hospitals have historically added more staff to their revenue cycle. But in today's labor market, that is just not possible. and many have turned to outsourcing the challenge altogether as a result. We think this is an unfortunate outcome, not only because it keeps the cost to collect high, but by outsourcing something so critical to operations, they miss the chance to make more fundamental fixes. My vision, which is shared by our team, recognizes that true organizational change must come from within the health system, and that we can serve as the guide for their quest to be accurately compensated for the care they've provided. Our investment in innovation via our flagship solutions, Red ID and Evaluator, reflect this vision. Both of them identify, prioritize, and make actionable, specific financial opportunities. They are then cemented by our service model, which creates the education and feedback loops necessary to allow our clients to make the systemic changes needed to improve. And as we prove our innovation and service model and message it in a way that resonates with today's inundated revenue cycle leaders, we will inevitably create growth. So let me provide some updates on the innovation and growth front before handing off to BJ. During fiscal 2023, we made significant strides within innovation. We mentioned previously the re-architecture of Rev ID, which sets the stage for enhanced performance and client satisfaction. As we look forward, Our focus for innovation within RevID is automation for our users and enhanced interoperability for increased financial impact. On Evaluator during 2023, we developed an AI model that enhances the intelligent and financial impact of our rules. We're happy to report that in the first six weeks of deployment, the enhanced rules found a million dollars of impact across our client base. And looking forward, we have opportunities to substantially improve the existing AI model, as well as other AI features Further out, we feel more comfortable tackling with the initial project under our belt. We also spent time on a feature called My Evaluator, which is rolling out to users this week. My Evaluator is a major advancement of the Evaluator user experience with role-based user profiles to enhance productivity. Going forward, we'll leverage this to create more and more efficiency for our users. And there's a theme here. Going back to the vision, health systems need to find more financial opportunities. while leveraging automation to make the most out of their teams. That's the focus of our roadmap and continued improvements in financial ROI and usability of our products will improve client relationships and help expand our footprint. And then on the growth front, we remain confident in our revised growth strategy under Amy's leadership. As we shared late last year, we went from a broad market approach to one that is much more tailored to proven market advantages. Each of these four key strategies of specific names, accounts, and approaches. And they include one, a displacement campaign related to an existing offering in evaluator space, where we believe our tool delivers better results at a lower cost. Two, a continued emphasis on our Oracle partnership, which continues to aggressively push RevID. And three, the development of a new and effective channel partner. And then four, the last one, Beyond new client sales, we have significant potential for upsell and cross-sell within our existing client base. We've seen progress in each of these strategies, and I do want to call out that we've had several recent expansions within our existing client base, including two enterprise clients contracted for both flagship solutions. Amy has been using an agile approach to managing our growth strategy, both in terms of who's on the team and where they focus. We're also enhancing our messaging to emphasize our success not only in coding and charge reconciliation, but also our ability to decrease denials and ultimately improve cash flow. These are top priority areas for all healthcare organizations. It will allow us to engage most effectively with prospects at multiple levels within their organizations. We believe that making these focus and strategy adjustments will help us to capitalize on the investments made in innovation and service. We remain optimistic about our need to be in the marketplace and ability to work with health systems on their challenges. With that, I'd like to turn the call over to our CFO, E.J. Reeves.