HealthStream (HSTM, Financial) is dedicated to improving patient outcomes through the development of healthcare organizations’ greatest asset: their people. This Nashville, Tennessee based company provides research solutions and gives valuable insight to healthcare providers to meet HCAHPS requirements, improve patient experience, engage their workforce, and enhance physician alignment.
First Quarter Report Card
Revenues
Revenues during the first quarter of 2015 increased by 23% (by $8.8 million) to $47.2 million. This was an increase from the 2014 first quarter (which was $38.3 million).
HealthStream Workforce Solutions: Revenues from HealthStream Workforce Solutions segment increased by $7.6 million, or 25%, when compared to the first quarter of 2014. Revenues from subscription-based solutions increased by approximately $7.4 million from the first quarter of 2014. Revenues from ICD-10-readiness training products were approximately $7.1 million in the first quarter of 2015, compared to $6.6 million in the prior year first quarter.
During the first quarter of 2015, revenues from ICD-10-readiness training products were approximately $7.1 million. Acquisition of Health Care Compliance Strategies (HCCS) contributed to $2.1 million revenues in this quarter.
HealthStream Patient Experience Solutions: Revenues increased by $594,000 (8%) from the first quarter of 2014. Revenues from Patient Insights surveys (a survey research product that generates recurring revenues) increased by $818,000 (14%), when compared to the first quarter of 2014. Revenues from other products (including surveys conducted on annual or bi-annual cycles and consulting/coaching services), collectively declined by $225,000 as compared to the first quarter of 2014.
HealthStream Provider Solutions: 2015 first quarter revenues from this segment increased by $584,000. Revenues from the HealthLine Systems acquisition, were $342,000 during the first quarter of 2015.
GAAP Revenues
During the first quarter of this year, there was a decrease of $578,000 in the GAAP revenues. Operating income and net income decreased by $578,000 and $328,000. This was a result of deferred revenue write-downs for the HLS and HCCS acquisitions. There was a decrease of $369,000 GAAP revenues. Operating income and net income decreased by $369,000 and $215,000 as a result of deferred revenue write-downs for the HCCS and Baptist Leadership Group acquisitions.
Operating Income
Operating income during the first quarter of 2015 was $4.8 million compared to $3.3 million for the first quarter of 2014. This increase in operating income was partially offset by increased operating expenses associated with higher royalties, personnel additions, transaction costs from the HLS acquisition, depreciation and amortization, and other general expenses.
Net Income
Net income during the first quarter of 2015 was $2.7 million, which increased from last year’s first quarter net income of $1.9 million.
EPS
Earnings per share were $0.10 per share (diluted) for the first quarter of 2015, compared to $0.07 per share (diluted) for the first quarter of 2014.
Adjusted EBITDA
It increased by 39% to $8.4 million for the first quarter of 2015, compared to $6.1 million for the first quarter of 2014.
Cash and marketable securities
During the first quarter of 2015 cash and marketable securities stood at about $64.4 million.
Capex
Capital expenditures totaled at 4.3 million during the 2015 first quarter.
Recently, HSTM completed the acquisition of San Diego-based HealthLine Systems, a leading healthcare credentialing and privileging company. With the acquisition, HealthStream added important capabilities to its talent management offering for healthcare organizations, which includes solutions to manage workforce qualifications and competencies. Over 1,000 healthcare facilities have implemented and are currently using HealthLine's installed or SaaS-based credentialing and privileging solution to manage, validate, and analyze provider data.
Expectations from 2015
The company expects that consolidated revenues will grow 18 to 21 % as compared to 2014. Revenues from Workforce Solutions segment to be in the range of 15 to 18%. Patient Experience Solutions segment's revenue to increase by approximately one to three percent. HSTM anticipates that, Provider Solutions to contribute between $11 million and $14 million in revenues during 2015. HealthLine Systems to contribute between $7 million to $9 million of this total, which is the estimated amount after the write-down of the acquired deferred revenue balance as required under GAAP.
The company expects that full-year operating income will decrease between 25 and 35% as compared to full-year 2014 results. HSTM expects Interest expense to be in the range of $400,000 and $500,000. Full year capex may range between $11 million and $14 million.
To End
Their software-as-a-service (SaaS) solutions are used by, collectively, over 4.1 million healthcare employees in the U.S. for workforce development, training & learning management, talent management, performance assessment, and managing simulation-based education programs.
It is a leader in this industry and has an innovative approach. It is growing rapidly by constant acqusitions and is heading for a steady growth. The healthcare industry is constantly growing and this company has lots of possibilities.
HealthStream is a company with strong fundamentals in the healthcare education market. The company posted strong first quarter results and is expected to continue its growth spree in the coming future. It has a dominant position in this industry and is poised for future growth. It is expected to create shareholder wealth. I would recommend this company to the investors. This is my personal opinion.
(Source: Company’s Website)
