Tee Green - President, Chief Executive Officer, Chairman Tom Gibson - Chief Financial Officer Randy Salisbury - Senior Vice President, Chief Sales and Marketing Officer.

Hello! And welcome to the Streamline Health Solutions, Fourth Quarter and Fiscal Year 2020 Earnings Conference Call and Webcast. At this time all participants are in a listen-only mode. As a reminder, this conference is being recorded.

It’s now my pleasure to turn the call over to Randy Salisbury, Senior Vice President, Chief Sales and Marketing Officer for Streamline Health Solutions. Please go ahead sir..

Thank you for joining us to review the financial results of Streamline Health Solutions for the fourth quarter and fiscal year 2020 which ended January 31, 2021. As the conference call operator indicated, my name is Randy Salisbury. I’m the Senior Vice President and Chief Sales and Marketing Officer here at Streamline Health.

I manage all communications, including Investor Relations..

Thank you, Randy, and thank you all for joining us this morning. We all know how difficult this year has been as we continue to deal with the many repercussions of the COVID-19 pandemic. For our healthcare systems customers, the rhythm of day-to-day operations was upended, forcing linear decision making focus solely on the global pandemic.

Today with more Americans receiving vaccinations, we believe a return to normalcy during the second half of this year is a real possibility and that should free up decision makers leading to new eValuator contract wins from our pipeline which steadily grew throughout 2020. .

Thank you, Tee. We began 2020 with a great deal of promise.

In February we closed the University of Louisville hospital, an Epic Based Academic Medical Center, a great start to achieving our stated objective of 12 new eValuator contracts in fiscal year 2020 with total contract value of $10.8 million, and then just a few weeks later, I completed what was to be my last on-site sales call at a large facility in the Midwest.

That was more than a year ago, and that prospect remains very engaged and we believe they will sign a contract for eValuator as soon as the organization returns to more standard departmental decision making. I believe this is an example – this example is representative of the state of the market over the last 13 months.

Financial uncertainty created by the pandemic led to decision delays, even for paradigm shifting solutions like eValuator shown to generate a positive return on investment. Given this, I believe our sales performance last year should be assessed in two ways.

First, the number of new eValuator contracts and corresponding total contract value; and second, the number of prospects in our sales pipeline with corresponding total contract value. On the first measure, we closed five new eValuator contracts totaling $5.6 million in total contract value.

Secondly, at the end of the fiscal year our pipeline contained 72 prospects representing $79 million in total contract value as compared to 69 prospects representing $54 million in total contract value at the end of our last fiscal year of 2019. As Tee mentioned, we believe the departmental decision making is beginning again.

Given the health of our pipeline which contains nearly all the prospects we engaged with over a year ago, plus new customers introduced in 2020, we remain committed to our goal of $2 million to $3 million of total contract value bookings per quarter going forward.

The target for the number of new eValuator contractors has increase substantially from last year's target and now stands at 18.

We believe we can achieve the increased volume of contracts by activating our robust pipeline as we begin to exit the COVID restrain decision environment and continuous sign, target and close through prospects for expanding channel partnerships.

We plan to increase our direct sales force in a deliberate manner to get more coverage in the regions where we’re seeing the greatest response.

In addition, our focus last year to attract new reseller partners is gaining traction as we have already signed one new large partner, joining both Allscripts and ChartWise and we're negotiating with two others, both of which have very large healthcare customer footprints. .

Thank you, Randy. Total revenues for the fourth quarter of fiscal 2020 were $3 million compared to $2.7 million in the prior year period. SaaS revenue was up $349,000 or approximately 50% compared to the same quarter a year ago.

The revenue growth during the quarter was driven primarily by SaaS, System Sales and Professional Services, but offset somewhat by lower revenues from audit services and maintenance and support. Fiscal year 2020 revenue was $11.3 million compared to $11.9 million during fiscal 2019.

SaaS revenue in fiscal 2020 grew 46% to $3.7 million compared to $2.5 million during 2019. Recurring revenue comprised 74% of total revenues during fiscal 2020 compared to 68% during the prior year. Net loss for the fourth quarter of fiscal 2020 was $1.2 million as compared to a net loss of $2.4 million during the fourth quarter of fiscal 2019.

Fourth quarter fiscal 2020 net loss included $0.4 million of income from discontinued operations in connection with the sale of the company's legacy ECM business which closed February 24, 2020, compared to $18,000 of income from discontinued operations during the fourth quarter of fiscal 2019.

The company recorded $0.3 million of net income for the 12 months ended January 31, 2021, which included $5.1 million of income from discontinued operations. This is compared to a net loss of $2.9 million during fiscal 2019, which included $3.4 million of income from discontinued operations.

Loss from continuing operations improved in fiscal year 2020 to $4.8 million as compared to a loss of $6.2 million during fiscal 2019. Adjusted EBITDA for the fourth quarter of fiscal 2020 was a loss of $100,000 compared to adjusted EBITDA loss of $600,000 in the fourth quarter of fiscal 2019.

Fiscal year 2020 adjusted EBITDA was a loss of $1.9 million compared to a loss of $2.3 million during fiscal 2019. The profitability improvements that we have seen through the operations have come primarily from cost containment actives.

Moving to the balance sheet, we finished the fourth quarter with approximately $2.4 million of cash-on-hand compared to $1.6 million at the end of last year. The company generated $5.4 million on the sale of the ECM assets net of the term loan repayment. Additionally the company applied for and received a PPP loan of $2.3 million in April 2020.

The company has applied for, but not been granted forgiveness of the PPP loan at this time. No accounting for the forgiveness will be reported in the company's financial statements unless or until it is granted by the SPA. .

Thank you, Tom. Within our executive team, its managers and leaders, our responsibility is to control what we can and win that every day.

Throughout the difficulties of the past year, we successfully managed costs by making significant improvements to our organization, including our teams and our products that create a foundation for the rapid growth of our eValuator platform.

With the additional capital from our recent offering, we will be able to grow our sales team and continue to invest in our evaluator technology to help us capitalize on the opportunity in front of us.

Our commitment to leading industry movement to pre-bill revenue integrity validation is real and we believe we’ll gain momentum in the quarters and years ahead.

I am confident that as healthcare providers return to more normal budgeting and purchase decision making, innovative financial solutions like eValuator will be at the forefront of their minds. .

Thank you. Our first question today is coming from Matt Hewitt from Craig-Hallum. Your line is now live..

Good morning. Congratulations on you know getting through a pretty challenging year. Two more questions, first on the pipeline.

Maybe you speak to this a little bit of an update on the conversations you've been having with not only the customers that are in the pipeline, but those that are you know potential new customers – where are they as they get through kind of dealing with the rush of patients. Now you're starting to see more vaccinations.

How has the conversation with those customers or potential customers evolved?.

Yeah, thanks Matt. This is Tee. I’ll lead into that and then let Randy follow that up.

You know if you look at the ones that we have, kind of the first half of the year, these are conversations that obviously have been going on for some time and what we're seeing is we've seen in the last month as we announced these new deals is most of these 17, 18 deals that we've been targeting, you know were in the final stages or and say you know those deals are coming back to the CFO's desk and the CEO’s desk and red lines have been done, legal has reviewed, DA's are signed and so all of that is super encouraging.

What we're seeing in the, what we call maybe net new – the new prospects that are coming in for the – you know slated for the back half of the year.

In general the health systems are saying May 1, at least this is – you know what we're hearing is that it appears that that's the date that many of these health system for some reason that have said it's back to business. The vaccinations are you know for the most part being managed, the COVID cases and many parts in the country are down.

I was with the Chief Medical Officer last night in the health system and I think they have one or two COVIDs patients in the whole health system and so he was saying that you know it feels like things are going to get back to normal.

What that means is, historically these health systems should have been able to make clinical decisions, financial decisions and administrative decisions simultaneously, like in the COVID if there’s anything like one year we talked about that in the past. I think you're going to see these departmental initiatives come back on the table.

We're seeing some bonus already, especially for the ones that are already contracted or even redlined, but these new ones, it looks like new demos, new meeting and all – it looks like that May timeframe things are starting and open back up, so.

Randy, anything else to add there?.

I think I was very thorough. I would suggest just on the latter part of that, the newbies coming in, we've been doing a nice job mapping our prospecting of sharing, the identified press releases and the like to let them know that there is a, I want to say ground format to join a good company and I think that's helping as well. .

That's great. And then maybe – and you touched on this a little bit in your prepared remarks regarding your resellers. I think in the slide deck you called out ChartWise and Allscripts, maybe an update on those.

And then the new potential resellers coming onboard, I realize you might not be able to name names yet, but if you could maybe provide a little bit of color and maybe the types of resellers you’re looking at.

Are these traditional auditing firms, are these – you know any additional color to just to help us kind of think about where those opportunities may lie?.

Yeah Randy, go ahead. .

Great, thanks. I was hoping Tee would take this. But we find that really I think a terrific reseller partner map that we cannot name. It’s in the consulting auditing arena as you could imagine. The two others I mentioned that we're currently negotiating with are also like minded.

In other words, they have a practice that is our healthcare oriented practice obviously in the services arena, because they're looking at our technology to add on and it’s about unfortunately all I can say, because you know they've asked us not.

The one that have signed and who are already gone to market with asked us not to mention their name, and the two new ones not signed yet, hopefully we’ll be able to talk about them in the not too distant future. .

Thank you for that. As far as with ChartWise and Allscripts, I would assume at this point they are starting to kind of maybe build their own pipelines.

I think that those are probably not included in your pipeline, but how should we be thinking about those partners and how their business could ramp for you?.

Yeah, thanks Matt, this is Tee.

You know it takes a lot of energy and time to build good channel partners where you know you train your sales force to have the ability to talk intelligent about the platform and so that you know those kind of quarter are behind us and you are seeing the pipelines build inside these and I got the last – you know we just did a release.

We had our first business partner transaction close. So the pipeline is certainly building in these business partners, but we've actually seen a contract order come through, so that's super encouraging to us.

And as Randy said, we do have some really exciting, very large organizations in the consulting world, in the auditing world that are going to be taking the eValuator platform to their customer base and you know these have the potential to be substantial partnerships for Streamline. .

That's great and helpful. Maybe one for Tom. There is a noticeable step down in SG&A in Q4. Was that – was there some timing there? You know should that bounce back starting in Q1, particularly given your comments regarding the incremental cash that you brought in, in Q1, and your desire to add some sales and marketing resources.

Any color along those lines would be helpful..

Hey man, how are you doing? Good to talk to you. I appreciate your questions man. So as you may recall in our Q4, we always have a step down in SG&A. It's associated with two very specific items.

One is the reversal of our PTO that’s accrued up until the end of the calendar year and then reversed; and the second is our R&D tax credit which comes out in the fourth quarter of every year. So that has a meaningful decrease on our SG&A and it has to happen in the fourth quarter every year based on timing. So we'll always have that step down.

This year it was a little bit higher than it has been in years past, but that is the step down and it should return to more normalcies in Q1 and Q2 because you won't have those one-time items. I'm not expecting the investments in the sale side to hit us until Q3. .

Okay, perfect. That's helpful. I think that's all I had. Thank you, thank you very much for the help. .

Thanks Matt. .

Thank you. We’ve reached the end of our question-and-answer session. I'd like to hand the call back to your host, Randy Salisbury for closing comments. .

Thank you again for your interest and support of Streamline Health. If you have any additional questions or need more information, please contact me directly at Randy.salisbury@streamlinehealth.net. We look forward to speaking with you again in June when we’ll discuss our first quarter 2021 financial performance.

Good day!.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today..