Randy Salisbury – SVP and Chief Marketing Officer David Sides - President and Chief Executive Officer Nick Meeks – SVP and Chief Financial Officer.

Dillon Hoover - Craig-Hallum Charles Rhyee - Cowen & Company Bruce Jackson - Lake Street Capital Markets.

Please standby, we are about to begin. Good day. And welcome to the Streamline Health Incorporated Announced Second Quarter 2015 Financial Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Randy Salisbury, Chief Marketing Officer. Please go ahead, sir..

Thank you for joining us to review the financial results of Streamline Health Solutions for the second quarter and first half of fiscal year 2015, which ended July 31st of this year. As the conference call operator indicated, my name is Randy Salisbury, as Senior Vice President and Chief Marketing Officer here at Streamline Health.

I manage all communications, including Investor Relations. Joining me on the call today are David Sides, our President and Chief Executive Officer; and Nick Meeks, Senior Vice President and 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 the release, you can retrieve it from the company's website at www.streamlinehealth.net or at numerous financial websites. Before we begin with prepared remarks, we submit for the record the following statement.

Statements made by the management team of Streamline Health Solutions during the course of 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, and are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those reflected in the forward-looking statements included herein.

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 reports, for more information about these risks, uncertainties and assumptions and other factors.

Participants on this call are cautioned not to place undue reliance on these forward-looking statements that reflect management’s analysis only as of the date hereof. The company undertakes no obligation to publicly revise these forward-looking statements. On this call, the company will discuss non-GAAP financial measures such as adjusted EBITDA.

Again, please refer to our website at streamlinehealth.net and our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measures. Management uses certain non-GAAP measures to evaluate and monitor the ongoing financial performance of our operations.

These non-GAAP measures do not include certain items of income and expense that affect operations and other companies may calculate these non-GAAP measures differently. With that said, let me turn the call over to David Sides, President and Chief Executive Officer.

David?.

Thank you, Randy, and good afternoon, everyone. I'm pleased to report very solid quarter of performance in all areas of our business.

Before I review some of the highlights from our second quarter performance, I want to remind everyone that last quarter, I said, we believe our Q1 financial results represent the lowest point in our company’s go-forward path to improved performance.

Specifically, we discussed how we should be able to realize meaningful improvements in the areas of revenue, adjusted EBITDA and cash while reducing our bank debt.

We said that our visibility into the 2015 guidance we provided during our year-end earnings call in April continued to improve and that we remain confident that we would achieve those goals.

Further, we stated that this quarter we would exceed $7 million in revenue and that our adjusted EBITDA would be no lower than break-even and our use of cash would be net neutral at a minimum.

As previously released during the second quarter of fiscal 2015, we generated revenues of $8.6 million, increase of 39% over the previous quarter and approximately 19% higher than the revenue generated in the second quarter last year. Revenues in the quarter included the previously mentioned perpetual license contract in the amount of $1.6 million.

We anticipated a perpetual license sale in our annual guidance numbers for fiscal year 2015. With this in mind, recurring revenues were 72% of total revenue for the second quarter. Looking ahead, we believe the growth trend will continue, albeit without the perpetual license and that revenues next quarter will exceed $7 million.

New contract bookings for the second quarter were solid at $5.9 million. As stated quarter we continue to build the pipeline that we believe is capable of generating multimillion dollars in new bookings each quarter going forward.

We continue to generate interest, particularly in our Looking Glass Clinical Analytics and Coding and Clinical Documentation Improvement Solutions. As previously mentioned, last quarter we sold our Enterprise Content Management Solution to Acadia, a leading national behavioral health provider.

We completed the implementation for the first facility in just under eight weeks. The go live date was July 1st. As anticipated, Professional Services revenue increased appreciably in the quarter up 88% over Q1 to $659,000. We invoiced nearly $300,000 of additional Professional Services delivered during the quarter.

However, those revenues were deferred and will be recognized ratably over the client’s contract terms, in conformity with current accounting guidance. We continue to see positive traction in our Professional Services Group as we sign new booking that lead to more immediate implementations.

Turning our attention now to adjusted EBITDA, we generated approximately $1.9 million in Q2, bringing the total amount through the first six months of fiscal year 2015 to nearly $600,000 from a negative $1.3 million in Q1 of this year.

Looking ahead, we continue to see positive trends in our adjusted EBITDA performance and are confident that we will meet or exceed estimated range in our fiscal 2015 annual guidance of $1 million to $1.5 million.

Finally, before turning the call over to Nick Meeks, our Chief Financial Officer, I want to discuss the meaningful improvement in our balance sheet during the second quarter. Our cash balance for the quarter increased approximately 14% to $6 million from $5.3 million last quarter.

While at the same time we reduced our term debt by approximately $900,000. In total, we generated $1.8 million of cash from operations during the second quarter and we expect to generate a similar amount of cash in Q3. Our goal is to increase cash enough over the next few quarters to reach a debt neutral position.

Part of this improvement in our cash position can be found in the reduction in our accounts receivables. Some clients who had substantial past due balances have come current, thanks to our investment and support, engineering and account management.

I will now turn the call over to Nick Meeks, our CFO for additional insight into our quarterly performance.

Nick?.

Thanks, David, and good afternoon, everyone. As David mentioned, we are all very pleased with this quarter’s headline figures. Let me begin with some of the supporting revenue metrics for the quarter. Unimplemented quarterly committed recurring revenue at the end of the fiscal second quarter was $1 million.

This measure represents contracts which have been executed and are somewhere in the implementation cycle, but for which we are not yet recognizing recurring revenues. This number is a sub-component of total revenue backlog, which was $69.7 million, a 13% growth over the same period in fiscal year 2014.

In our earnings release and on our website at www.streamlinehealth.net, we've included a table reconciling our net loss to the non-GAAP financial measure of adjusted EBITDA.

We define adjusted EBITDA as net earnings or loss, plus interest and tax expense, depreciation and amortization expense of tangible and intangible assets, stock-based compensation expense and non-recurring expenses such as severance costs.

Given the relatively large amount of non-cash charges and certain non-recurring expenses, we feel that adjusted EBITDA is a more meaningful measure in understanding our underlying cash-based earnings.

While revenue was a strong contributor to the adjusted EBITDA performance in the second quarter, I also want to highlight that the cost savings efforts led by David is implemented by the team are continuing to have a positive and compounding impact.

Total operating expenses are down $1.3 million or 6% through the first half of the fiscal year relative to the same time period last fiscal year.

Allowing for the $351,000 difference in capitalized software expense, spending was uniformly down in every area of our company while selling, general and administrative expenses continue to be rebalanced towards the sales organization. There were no material adjustments to EBITDA during the quarter other than equity-based compensation expense.

Turning now to the balance sheet and our cash position as David noted, we finished the quarter with $6 million of cash on hand, having generated enough cash to completely eclipse the first quarter’s use of cash in operations and bring year-to-date cash generation from operations up to $810,000.

While account receivable are building on the balance sheet, this is primarily a result of the large revenue quarter and collection success played a large part in cash generation as did the lower expense base. During the quarter, we also prepaid approximately $875,000 of our principal on our term loan facility with Wells Fargo.

I’d like to take a moment to add my thanks to the entire Streamline team for their efforts in making this a successful quarter. That concludes my remarks. I will now turn the call back over to David..

Thanks Nick. Our number one objective this year is to ramp up our sales growth primarily in the form of new contract bookings and to improve our client retention. This will remain our primary focus for the fiscal year and in years to come as we seek to take advantage of large market opportunity we have before us.

Part of that sales growth we believe can come from expanding our go-to-market strategy to include more channel partner opportunities. In pursuit of this strategy, we're having discussions with numerous leading healthcare IT providers regarding the benefits of reselling some of our Looking Glass solutions.

We are working to establish contracts for these leading vendors, who are interested in reselling our coding and CDI workflows as well as our clinical analytics and patient scheduling solution.

We’re excited not only about the potential revenues that these channel partners may be able to generate but also in the knowledge that large well known healthcare IT providers us in our space view our Looking Glass solutions as best of breed and believe their customers will benefit from deployment.

These potential channel partners are much larger than we are. As mentioned before, they tend to be quite deliberate in their negotiating. We remain confident however that we will find new reseller agreements with at least one of these leading companies in the near future. We will of course announce any new agreement as soon as we can.

Our second strategic objective is to complete link among solutions on our Looking Glass platform. We continue to make progress here. First, we combined the source code for all of our solutions and synchronized all of our development teams on three-week agile spreads.

We have now selected and are implementing a message bus to tie together the various solutions using RESTful APIs. We expect to deploy our first integration between ECM and our trading solutions in the coming quarters. These are two of our largest existing client message and also represent some of our best cross-selling opportunities.

I want to be clear that this is not an expensive rewrite as many of our applications but rather an extension of all of them to allow the access to the capabilities of the others, thereby enabling the reuse of the solutions capabilities in new ways. Our overall strategy is to surround existing EMRs in order to be able to superior value to our clients.

For example, this can be done by aggregating data in ECM which is then passed to our analytics solutions for real-time decision support. We’re increasing revenue for our clients by enabling better coding decisions through the use of a combination of our tools.

Our platform gives us the ability to create new value around EMR without having to rip and replace existing systems. We think this market will only expand over time, as value-based care goes beyond the four walls of the hospital and into the community. Here is another example.

By using data from our client’s multiple EMRs, regardless of the type of EMR our proven solutions like our Looking Glass clinical analytics solution can enable ACOs to determine the root cause of care [variances] [ph], which can help our clients control their risk across multiple care venues.

I commented on our third strategic objective for the year, already which is to improve our professional services. Specific example of this improving performance can be found in our ability to bring our ECM solutions for Acadia online in just eight weeks.

We state many times that as long as we get a willing client, we can make some of their IT personnel available, we can bring the right resources to bear to get our solutions implemented more efficiently than in quarter’s past. A few other highlights from the quarter before I turn the call over to the operator for question-and-answer session.

Recently we announced that for the second consecutive year, our Looking Glass Enterprise Content Management Solution was ranked number one in the category of financial management, content management solutions, in a recent survey conducted by Black Book Rankings.

Black Book surveyed hospitals CFOs, CIOs, technology and financial professionals about their financial system, software and services.

Survey ranked healthcare IT and outsource service vendors by customer satisfaction on client experience-based key performance indicators, and our Looking Glass enterprise content management solution ranked the highest in its category again.

We believe this is no accident as we have made some major performance upgrades on this platform over the past year, which certainly helped us in landing the Acadia account last quarter.

Further, our upgraded Looking Glass ECM solution recently passed the 2014 ONC HIT certification, providing our clients with the opportunity to apply for and certify on meaningful use Stage 2 standards. In essence, our clients could become eligible for the various state and federal EHR adoption incentive payments in the market today.

This is not a simple rubberstamp ceremony by the way. There were eight different tests ranging from user access management to transaction logging to document integrity. Many members of our Streamline team worked on the certification and they have certainly earned appreciation from our clients.

On an investor relations note, September will be a busy month for us as we have some non-deal road show dates with First Analysis. We plan to be in Milwaukee on September 14th, Austin on September 15th, New York City on September 16th.

In addition, we've been invited to participate again in the Craig-Hallum Alpha Select Conference, New York City, on Thursday, September 17. We appreciate opportunities to meet with our current and potential future shareholders whenever we can.

I want to thank the many shareholders that continue to support us as we’ve implemented the programs that we believe will lead to sustained, improved financial performance. As shareholders ourselves, we are aligned with you, and are committed to increasing shareholder value.

Finally, this afternoon, I want to thank our Streamline Health Associates for their continued hard work, dedication to our clients, to our shareholders and to each other. I especially enjoyed time we spent in Manhattan two weeks ago when we opened the NASDAQ stock exchange.

Many of our associates from our Atlanta office traveled up to New York and everyone from our New York office participated. It is great to see first-hand the excitement and esprit de corps our associates have developed this year. Thanks to them, we’re making progress toward the three strategic objectives we laid out at the beginning of this year.

We know we have a lot of work to do in order to realize the full potential of the opportunity we have in front of us. But certainly, we are encouraged by our improved performance today. I will now turn the call over to the operator for a Q&A session.

Operator?.

[Operator Instructions] And we will take our first question from Matt Hewitt with Craig-Hallum..

Hey guys. This is actually Dillon on for Matt. Congrats on the quarter..

Thanks, Dillon..

So with respect -- initially with respect to the pipeline, obviously we can see the size, I’m just trying to get a better sense for the breadth.

I think, David, what you said in your opening remarks, as you have guys have no more of these large perpetual type deals in the hopper for this fiscal year and then just maybe kind of provide some color around the breadth of the pipeline and how many more base hit type deals you guys have?.

This was the perpetual deal we kind of had in our guidance from the beginning of the year. We had a couple there. Some other ones in there but they are smaller. So if we close another smaller being a 100,000, couple 100,000 deals, they may still come through. But this one was one we tracked from when we set our original guidance.

On the pipeline as a whole, it looks healthy. It’s growing. We have a lot of interest in clinical analytics. We are especially excited around the DSRIP opportunities that are present where a lot of our clients are and so making a concerted push in that direction as well to see what we can do with clinical analytics as well as Coding & CDI..

Okay. And then a follow-up there. Under the prior regime, it was the preference to go SaaS all the time as opposed to these perpetual deals.

Do you kind of adopt the same focus, or is there really no preference?.

I mean, we prefer recurring revenue, so that’s still the same strategy. But some of our clients have bought perpetual, so this client had bought perpetual licenses from us and probably seven or eight years ago.

And that’s one of the things that when you have an existing contract that’s easier to stay in existing contract terms, and so rather than make things more difficult, we choose to do what the clients ask for.

So, we will continue to do that but there are less of those opportunities because over the last few years we’ve sold a lot more recurring revenue contracts and we are just trying to add on to going forward..

Sure. Sure. Okay. And then I apologize if I missed this in your segment commentary. But SaaS did have a pretty nice performance in the quarter both sequentially and year-over-year.

Can you provide any color on that?.

Yeah. There is some seasonal variances. So it was good from that perspective and could move around some, but we are really focused on the recurring number being as high as possible. So without the perpetual deal, we’d have been 88% recurring in the quarter and so that’s what we are trying to build on..

And then lastly for me.

With respect to ICD-10, how much of your revenues are tied to the implementation and maintenance of ICD-10 and if you guys have been seeing increased level of interest as we move towards the deadline? And are you expecting an increased level of interests or was there anymore baked into your guidance for the back half of the year?.

We’ve been working with our clients on this for some time. So, I think all of our clients are ready because they were ready last year. I think we'll see good -- an uptick in buying post October. We will meet with a number of clients this month and next month just to be sure that they are set and they are comfortable.

And in those conversations talking about how do we improve your coder productivity, knowing that after ICD-10 it may slow down with the expansion of codes so they’ll need better productivity there.

So, I think you'll see in our forecast and it is in our plan from the beginning of the year that in kind of Q4, we will probably see a decent uptick in coding and in that piece as a result of ICD-10. This quarter I think we will have a reasonable quarter but many places are kind of on pause as they just kind of work through and be sure they are set..

Okay.

And can you quantify it? Is it a couple million bucks of your overall revenue or is it a little opaque?.

There is maybe a $1.5 million of revenue from the coding segment..

Okay..

And from a pipeline, I think it’s a good pipeline space because there has been a little bit of pause around ICD-10. So, I think we will see an uptick there..

Okay. Cool. Thanks for the questions, guys..

Thanks, Dillon..

And we will take our next question from Charles Rhyee with Cowen & Company..

Hey guys.

How’s it going?.

Good, Charles.

How are you?.

Good. Hey. Thanks for taking the questions here. Just a few, you talked about Acadia 8 weeks to implement, obviously a good sign here. David, I think in the past you talked about trying to do a lot of the work before you get the client site to kind of preconfigure as much as you could.

Is that an example? Is this an example of that process and in other words, how repeatable do you feel your implementation process has gone? Is this something you can bring to other clients and say we can do this in this kind of eight week timeframe?.

Yeah. So, I think it’s repeatable. So this is a SaaS based client. We host all the software associated with this client. They were a great client to work with. They followed our new methodology. We did training as we went.

So for that kind of implementation, you are kind of training people on a pre-build system right from the start and it went up very smoothly. So, we welcome the opportunity to do more business with them in additional facilities and do the same for other clients.

I think that the model can have that kind of speed to it, especially when you move things through quickly with the client ask capabilities. So, I think it’s indicative of things we can do.

We had another clients that went live after about three, three and a half months, which was also substantially faster than we’ve done in the past for a different solution and so both of those were pleased with the move, continue to iterate on those and work on total quality management system of how do we lean this process out and get to a better place and faster still..

And one other things, was that also SaaS client or was that an on-premise kind of -- what are you going to achieve like if someone buys perpetual license or wants to do them, have it on site kind of thing? Are you able to -- what the implementation times looking like there?.

Well, they are usually longer. The other client was also a SaaS based client. They were two separate solutions I just pointed out because with different solutions, we’ve been able to bring both ECM and coding to a faster timeframe.

But if it’s a perpetual client, it really depends on the client capability because they already have servers or they have to order servers. If they have to order servers, we wait 45 days for them to show up.

Since we virtualized everything, if a client signs up now, in a couple days, we can copy the virtual environment and we provisioned it and we are ready to go. So it’s really a lot faster processing, speed the value for the client as well because we are not using as many their hours.

Our services approach are smaller and we are able to get the solutions to the end-users faster, which is ultimately where the ROIs for our clients..

Okay. That’s helpful. Obviously, I think, Nick you mentioned obviously, costs have come down, obviously across all of COGS as well as in the rest of income statement.

How much more savings are you guys think that you can kind of ring out of the system here, or is this the run rate we should be thinking about as we move forward?.

I think we will continue to squeeze at the margins, but I think we are also looking at where we can invest in the sales process. And so on that, I would look at this as being pretty close to run rate. You may tickle down a little bit, but not materially..

Okay.

On the bookings, $12 million, I might have missed this, did you guys kind of talk about what the mix was between net new claims versus cross-sell at the existing claims?.

No, we didn’t really break that out. It was probably on or around maybe half and half, maybe a little bit over to say existing claims actually..

Yes. It is little more cross-sell..

Okay.

And so then when I think about like net new clients, you just talked David about clinical analytics, you obviously signed NantHealth a while back, can you talk about how that has ramped up? And it’s a fairly sort of a premier client, how much of that helped? Is it possible to point to any sort of intangible benefit as you try to sell clinical analytics elsewhere as it kind of -- as it helped you anywhere in the pipeline?.

Sure. I mean, they are good client, they are pushing us and we are working with them on genomics and what to do there, what you get to be a little more cutting edge and frankly fun to work on for us and our engineering teams.

We have other life clients as well that are helping as we get to more clients to say, okay, now we’ve got three life clients, four life clients. It helps the next client say, okay, this is actually something that’s sustainable. And it’s also I think we’ve been working with Montefiore for some time.

I really think there is a decent opportunity there with DSRIP and the work we’ve done there to improve the quality of care could the government is trying to really disrupt the system that we can do things that are unique as far as root cause analysis for a wiser variance of care rather than just dashboards.

Now we have the dashboards now two, but it’s really what you have to change to improve the quality, I think it will really help drive a lot of business for us..

And I am sorry, I apologize if I might have missed this. Did you update guidance for the full year? Are we -- has there been any changes? We obviously outperformed in the revenue.

How should we think about that in relation to the full year outlook?.

Yes. We are still comfortable with our guidance we reiterated. We feel pretty solid about it..

Okay. All right. Great. Thanks, guys..

Thanks, Charles..

Thanks, Charles..

[Operator Instructions] We will take our next question from Bruce Jackson with Lake Street Capital Markets..

Hi. Thanks for taking my question.

If I could go back to the ICD-10 implementation which is set to go into effect on October 1, do you think there could be -- once hospitals start submitting claims and not getting paid, do you think they might start to take a look at their revenue cycle software and could that potentially pull through some other products for you?.

Yes. So it’s a good question. We think so. I compare it to Y2K with claims sometimes. You may technically being able to spend things to CMS or insurers in the Y2K terms to clock the turnover to 00.

But you get at all kinds of problems for today’s later when reports not run or in the ICD-10 role when you get a lot of denials because you chose the wrong code or there is an explosion 10 times more codes and people choose the wrong combinations.

So that’s where we’ve seen some of our clients start to buy clinical documentation improvement to be sure that they can fall that through. We have functionality in the system to do dual coding between ICD-09 and ICD-10 that frankly I have originally expect the clients to use as they were trying to learn ICD-10.

And we talked to clients, well, we will turn that off and they say no, no, once we’re in ICD-10, we are going to look at it too because they won’t still think an ICD-09 for a while. So that functionality is hugely valuable for us to kind of cross check that we’re going things correctly. So I think that you’re right.

I think that there will be lot of denials that happened, add that onto the same size coding team and then there will be a lot of push for productivity for coders and that will need software. So we’ve got the clinical documentation and computer systems coding that made people productive in the post ICD-10 kind of return of codes from denials..

Okay.

So basically the reality could set in around fourth quarter and then we might actually see a bit of an uptick on some of the other products potentially?.

That’s what we think will happen and we expect will happen, but we will see how quick that works out, but our quarter ends in January. So I think clients will start to have a good idea of where they are sometime in late November and December.

And our goal is to be sure they know that we have the tools they need to make their coding associates productive and get them contracted for additional solutions in January.

And then like we talked about earlier get them implemented in two to three months and get the value there quickly so they can get out of any potential hold they might have from the rebound from their submitted bills to the ICD-10 codes not being exactly what people are looking for..

Okay. And the other question I have got is, there is the movement to move to more risk-based reimbursement systems and the accountable care organizations.

Are there any milestones that could potentially drive the clinical analytics side of the business with those various reimbursement programs that you’re trying to switch over?.

Yes. I think as soon as the government, they are doing some work on value-based care to how they are going to reimburse organizations for that. With Montefiore, they were the number one in the country for shared medical savings with the government.

So we really liked the work that they did with the tools and we talked to clients about how they have ACOs or don’t, how they could expand that to reduce readmission rates or other quality measures like Hitscores which may be part of the DSRIP process.

So I think we’re excited about DSRIP from a state perspective of the incentives that are there to perform care to be the quality based and then how do you tell that you have both quality there and quality-based care.

It’s a perfect setup for our clinical analytics solution because with the map built in that we have in that solution, it’s telling you here is the standard deviation, here's the quality of this data, and then it’s giving you the real cause of care variances causing a change in care.

So we’re really excited about those opportunities and frankly like the direction the government is going of pay for value rather than pay for procedure systems that run today..

All right. That's very helpful. Thank you very much..

Thank you..

And we will take follow-up question from Charles Rhyee with Cowen & Company..

Yes. Thanks. David, just kind of following on your comments here. When they fix the sustainable growth rate SGR and they replace it with this NIPS, within there right there are starting to merge a bunch of the different programs like Meaningful Use, PCRS and some of these value based measures.

Can you talk about how, first, providers viewing this because it seems like it will be very significant as the 2017 is the start year of the performance? And can you talk about how you guys are positioned to help clients maximize either reimbursement or to avoid really some of the penalties here? Thanks..

Yeah. It’s a really good question. So it reminds me a little bit of PQRS estimate started, where it was two years late and people thought, well, that will be a long time from now, it won’t happen and then right next thing we knew from a client perspective here in the baseline here, if you didn’t make it, you didn’t make it.

So we’ve had some good conversations with NCQA earlier this week, talking with them about how do you baseline for this type of changes, ideas on data quality, how to use that epidemiological scoring and risk-based adjustments to help people know whether true baseline should look like and what’s the starting point and what should the ending point be.

I mean I think part of the difficult today is it -- there aren’t enough examples where you can say that is quality care, I know that that is quality care, 1% readmission rates on total needs is quality care. There is not like a great standard.

So we had a lot of discussion around what is the -- how do you get to that number and then what kind of math and tools you need to bring and data do you have to have to get a baseline set and then you can know to measure people against a number they chose and excellent outcome from our personal perspective.

So I think a lot of our clients, they know that 2017 is here pretty quickly, luckily we can declare our solution in about 2.5 months for Clinical Analytics.

So they have sometime but you want to start to use that data and get an idea of what your baselines looks like, so you can change any clinical processes you need to before you start to get measured.

So we talk to client look it, do you think about 2017 is the start, you think by the middle of next year you need to have a system like ours in place and already be experimenting with us to try to find out where you might be off from the mark, because otherwise you’re going to get into 2017 find something, try to change it and not have time for organizationally to go to change management process and sync in.

So I think that’s on a lot of client’s minds, it’s a big shift for sure. And I think the governments putting their incentive payments behind it and trying to align their system so that they’re doing it in a concerted effort.

And I think they’re doing a pretty decent job of that and it will drive a lot of change in the system once they get those all aligned..

So would you say that overall your customers that provide in general are pretty aware of -- there could be huge penalties in 2019 if they’re not ready in 2017?.

Yeah, yes. So I think our clients are aware of it. I think the smaller clients are extremely nervous about it because it's hard to have the level of expertise that you need for some of these. So we talked about being sure that our solutions scaled down to smaller health systems.

And the larger health systems, I think you’re seeing a consolidation just like you are in the insurance agency of providers consolidating because these changes are hard to weather without decent financial resources and it appears standalone facility in a town like Atlanta, it would be tough to compete.

So I think that’s part of what’s driving some of the consolidation at a macro level..

Okay. And one last question for me, just as I think about the guidance here, you saw half way to the revenue goal.

What would you think or what was the puts and takes here that you could -- what would be the reason that we’re going to outperform it or what could be the reasons why we might fall short at this point and when you’re looking at your backlog and what you got in the pipeline? And that will be it for me. Thanks..

It’s hard to answer that one. I think we feel pretty solid about guidance overall. I think to the extent that the costs are still coming down and haven’t -- in last quarter isn’t the baseline but this quarter is the baseline. There could be upside on the EBITDA number. I think our cash position looks really strong as we said in the comments.

I think this quarter will be similar to last quarter for cash generation. That puts us on really solid footing that we haven’t been in, in the past. If you just look at the statement of cash flows of what this year looks like on every measure, we’re doing a lot better job of cash. So those would be my puts and takes. We’re still really focused on sale.

So that's where I think you’ll see if we were to spend some more, at some point it will be in sales. But so far those expenses are being right on budget or under so far..

On the topline though like what could drive sort of outperformance in topline? Is it simply a function of making sure we can drive implementation times faster, or is there things in the pipeline that can convert faster? Or was it really just the visibility you have, this is probably what it is?.

There is thing that could drive it up, some like some device resale or hardware resale. But for now right now we’re looking more comfortable to kind of -- we’re on a pretty good path..

Okay..

There could always be a perpetual that came through but we’re not targeting those. That will be more client driven than us driving it but those could happen. But right now we don’t see something like that. We certainly don’t see another perpetual of this size in the next few quarters..

Okay. Great. Thanks a lot guys..

Yeah..

It appears there are no further questions at this time. I’d like to turn the conference back over to Mr. Randy Salisbury for any additional or closing remarks..

Well, thank you again for your interest in and support of Streamline Health. If you have any additional questions or you need more information, please contact me at randy.salisbury@streamlinehealth.net. We look forward to speaking with you all again in early December, when we’ll discuss our third quarter 2015 financial performance. Good day..

That does conclude today’s conference. Thank you for your participation..