8-K
HEALTHSTREAM INC (HSTM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 18, 2020 (February 18, 2020)
HealthStream, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Tennessee | 000-27701 | 62-1443555 |
|---|---|---|
| (State or Other Jurisdiction<br><br><br>of Incorporation) | (Commission File Number) | (IRS Employer<br><br><br>Identification No.) |
| 500 11th Avenue North, Suite 1000,<br><br><br>Nashville, Tennessee | 37203 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: 615-301-3100
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock (Par Value $0.00) | HSTM | Nasdaq Global Select Market |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 18, 2020, HealthStream, Inc. (the “Company”) issued a press release announcing results of operations for the fourth quarter and full-year ended December 31, 2019 and provided guidance for the full-year 2020, the text of which is set forth in Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
On February 18, 2020, the Company issued a press release announcing results of operations for the fourth quarter and full-year ended December 31, 2019 and provided guidance for the full-year 2020, the text of which is set forth in Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit<br><br><br>Number | Description |
|---|---|
| 99.1* | Press release dated February 18, 2020 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| * | Furnished herewith. |
| --- | --- |
Exhibit Index
| Exhibit<br><br><br>Number | Description |
|---|---|
| 99.1* | Press release dated February 18, 2020 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| * | Furnished herewith. |
| --- | --- |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| HealthStream, Inc. | ||
|---|---|---|
| Date: February 18, 2020 | By: | /s/ Scott A. Roberts |
| Scott A. Roberts | ||
| Chief Financial Officer |
hstm-ex991_6.htm
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 1<br><br><br>February 18, 2020 | Exhibit 99.1 |
|---|---|
| Contact: | Scott A. Roberts |
| --- | --- |
| Chief Financial Officer | |
| (615) 301-3182 | |
| ir@healthstream.com | |
| Media: | |
| Mollie Condra, Ph.D. | |
| Vice President, | |
| Investor Relations & | |
| Communications | |
| (615) 301-3237 | |
| mollie.condra@healthstream.com |
HEALTHSTREAM ANNOUNCES FOURTH QUARTER & FULL-YEAR 2019 RESULTS
NASHVILLE, Tenn. (February 18, 2020)—HealthStream, Inc. (Nasdaq: HSTM), a leading provider of workforce and provider solutions for the healthcare industry, announced today results for the fourth quarter and full-year ended December 31, 2019. In this earnings release, all results are from continuing operations only, unless otherwise indicated (i.e., results for 2018 and 2019 exclude the gain on the sale of our divested Patient Experience (PX) business segment, which was completed in February 2018, and the results of operations of such segment prior to this divestiture).
Fourth Quarter 2019
| • | Revenues of $62.7 million in the fourth quarter of 2019, up 5% from $59.8 million in the fourth quarter of 2018 |
|---|---|
| • | Operating income of $3.3 million in the fourth quarter of 2019, up 18% from $2.8 million in the fourth quarter of 2018 |
| --- | --- |
| • | Income from continuing operations of $3.6 million in the fourth quarter of 2019, up 21% from $2.9 million in the fourth quarter of 2018 |
| --- | --- |
| • | Earnings per share (EPS) from continuing operations of $0.11 per share (diluted) in the fourth quarter of 2019, compared to $0.09 per share (diluted) in the fourth quarter of 2018 |
| --- | --- |
| • | Adjusted EBITDA^1^ from continuing operations of $11.2 million in the fourth quarter of 2019, up 18% from $9.5 million in the fourth quarter of 2018 |
| --- | --- |
| • | Completed the acquisition of CredentialMyDoc on December 16, 2019 for $9.0 million |
| --- | --- |
Full-Year 2019
| • | Revenues of $254.1 million in 2019, up 10% from $231.6 million in 2018 |
|---|---|
| • | Operating income of $14.7 million in 2019, down 5% from $15.5 million in 2018, which comparison was negatively impacted in the amount of $2.2 million by the charge associated with the stock grant to employees in the second quarter of 2019 |
| --- | --- |
| • | Income from continuing operations of $14.2 million in 2019, up 7% from $13.3 million in 2018, which comparison was negatively impacted in the amount of $1.7 million by the charge associated with the stock grant to employees in the second quarter of 2019 |
| --- | --- |
| • | Earnings per share (EPS) from continuing operations of $0.44 per share (diluted) in 2019, which was negatively impacted in the amount of $0.05 by the charge associated with the stock grant to employees in the second quarter of 2019, compared to $0.41 per share (diluted) in 2018 |
| --- | --- |
| • | Adjusted EBITDA from continuing operations of $46.9 million in 2019, up 13% from $41.5 million in 2018 |
| --- | --- |
^1^ Adjusted EBITDA from continuing operations is a non-GAAP financial measure. A reconciliation of adjusted EBITDA from continuing operations to income from continuing operations and disclosure regarding why we believe adjusted EBITDA from continuing operations provides useful information to investors is included later in this release.
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 2<br><br><br>February 18, 2020 |
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Financial Results:
Fourth Quarter 2019 Compared to Fourth Quarter 2018
Revenues for the fourth quarter of 2019 increased by $2.9 million, or 5 percent, to $62.7 million, compared to $59.8 million for the fourth quarter of 2018.
Revenues from our Workforce Solutions segment were $50.9 million for the fourth quarter of 2019, compared to $49.1 million for the fourth quarter of 2018. Revenue growth of $1.8 million included a $1.6 million increase in revenue from our platform and content subscriptions, which was offset by a reduction in revenue from our legacy resuscitation products of $1.5 million. Revenues from legacy resuscitation products were $12.6 million in the fourth quarter of 2019, compared to $14.1 million in the fourth quarter of 2018. The acquisition of Providigm, LLC, which was completed in January 2019, also added $1.7 million of revenue to the fourth quarter of 2019.
Revenues from our Provider Solutions segment were $11.8 million for the fourth quarter of 2019, compared to $10.7 million for the fourth quarter of 2018. Revenue growth of $1.1 million was primarily attributable to professional services for client implementations and new VerityStream subscriptions.
Operating income was $3.3 million for the fourth quarter of 2019, up 18 percent from $2.8 million for the fourth quarter of 2018. The increase in operating income resulted primarily from the growth in revenue and lower royalties, but was partially offset by higher personnel costs and depreciation and amortization.
Income from continuing operations was $3.6 million in the fourth quarter of 2019, up 21 percent from $2.9 million in the fourth quarter of 2018, and EPS from continuing operations was $0.11 per share (diluted) in the fourth quarter of 2019, compared to $0.09 per share (diluted) for the fourth quarter of 2018. Net income (from continuing and discontinued operations) was $3.7 million in the fourth quarter of 2019, compared to $2.8 million in the fourth quarter of 2018. EPS was $0.11 per share (diluted) for the fourth quarter of 2019, compared to $0.09 per share (diluted) for the fourth quarter of 2018.
Adjusted EBITDA from continuing operations was $11.2 million for the fourth quarter of 2019, up 18 percent from $9.5 million in the fourth quarter of 2018.
Adjusted EBITDA (from continuing and discontinued operations) was $11.2 million for the fourth quarter of 2019, up 19 percent from $9.5 million in the fourth quarter of 2018.
At December 31, 2019, the Company had cash and cash equivalents and marketable securities of $172.9 million. Capital expenditures incurred during the fourth quarter of 2019 were $4.7 million.
Full-Year 2019 Compared to Full-Year 2018
For 2019, revenues were $254.1 million, an increase of 10 percent over revenues of $231.6 million for 2018. Operating income for 2019 decreased by 5 percent to $14.7 million, compared to $15.5 million for 2018, and was negatively impacted by the approximately $2.2 million expense associated with the June 2019 stock grant to employees in connection with the contribution of stock by our CEO to the Company to enable a stock grant. Income from continuing operations for 2019 was $14.2 million, up 7 percent from $13.3 million for 2018. Earnings per share from continuing operations were $0.44 per share (diluted) for 2019, compared to $0.41 per share (diluted) for 2018. Net income for 2019 was $15.8 million, compared to $32.2 million for 2018, which decrease was primarily driven by the $19.0 million gain, net of tax, on the sale of the PX business in 2018. Earnings per share were $0.49 per share (diluted) for 2019, compared to $1.00 per share (diluted) for 2018. Adjusted EBITDA from continuing operations increased by 13 percent to $46.9 million for 2019, compared to $41.5 million for
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 3<br><br><br>February 18, 2020 |
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- Adjusted EBITDA decreased to $48.9 million for 2019, compared to $71.1 million for 2018, which decrease was driven primarily by the gain on the sale of the PX business in 2018.
Other Business Updates
At December 31, 2019, we had approximately 3.15 million contracted subscriptions to hStream™, our Platform-as-a-Service technology. hStream technology enables healthcare organizations and their respective workforces to easily connect to and gain value from the growing HealthStream ecosystem of applications, tools, data, and content.
On December 16, 2019, the Company acquired CredentialMyDoc, a Savannah-based company offering SaaS-based credentialing, enrollment, and privileging solutions to multi-specialty medical groups, ambulatory surgery centers, clinics, and federally qualified health centers (FQHCs), for $9.0 million in cash, subject to a post-closing working capital adjustment. The acquisition adds to the Company’s provider solutions with its intuitive, easy-to-use, and fast to implement solutions, enabling clients to receive the benefits and network effects of a larger and more robust ecosystem. The results of CredentialMyDoc have been included in the HealthStream Provider Solutions segment from the date of acquisition.
Financial Outlook for 2020
Below we present our 2020 financial guidance:
| Full Year 2020 Guidance | ||||||
|---|---|---|---|---|---|---|
| Revenue | ||||||
| Workforce Solutions | $ | 197.0 | - | $ | 203.0 | million |
| Provider Solutions | 50.5 | - | 52.5 | million | ||
| Consolidated | $ | 247.5 | - | $ | 255.5 | million |
| Operating Income | $ | 12.0 | - | $ | 14.5 | million |
| Capital Expenditures | $ | 24.0 | - | $ | 26.0 | million |
| Annual Effective Income Tax Rate | 23 | - | 25 | percent |
Our 2020 Workforce Solutions revenue guidance includes anticipated revenues of approximately $36.0 million from our legacy resuscitation products, representing a decline of $23.0 million from 2019. We expect the quarterly revenues from the legacy products to be as follows: approximately $11.0 million in first quarter, approximately $10.5 million in second quarter, approximately $8.5 million in third quarter, approximately $6.0 million in fourth quarter, and approximately zero thereafter. Our Provider Solutions revenue guidance includes approximately $1.5 million from the recently acquired CredentialMyDoc business.
Our operating income guidance of $12.0 million to $14.5 million is impacted by the anticipated reduction in legacy resuscitation revenues noted above coupled with an anticipated operating loss of $1.0 million related to the CredentialMyDoc acquisition. Also included in operating income guidance will be a one-time favorable contractual adjustment of $3.4 million to royalties expense resulting from our resolution of a mutual disagreement relating to various elements of a past partnership, which adjustment will be recorded in the first quarter of 2020.
“Our full-year 2019 results reflect an exciting year during which we made significant progress in expanding our ecosystem and marketplace, innovating for the future with new technologies, and launching new products for the healthcare industry,” said Robert A. Frist, Jr., Chief Executive Officer,
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 4<br><br><br>February 18, 2020 |
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HealthStream. “As we begin 2020, our operations are tightly focused as we work to improve gross margins to over 60 percent; continue introducing superior resuscitation solutions to the market—like our new VR-based team leader training; and further develop, enhance, and grow the number of hStream subscriptions beyond 3.15 million.”
A conference call with Robert A. Frist, Jr., Chief Executive Officer, Scott A. Roberts, Chief Financial Officer and Senior Vice President, and Mollie Condra, Vice President of Investor Relations and Corporate Communications, will be held on Wednesday, February 19, 2020, at 9:00 a.m. (ET). To listen to the conference, please dial 877-647-2842 (no conference ID needed) if you are calling within the domestic U.S. or Canada. If you are an international caller, please dial 914-495-8564 (no conference ID needed). The conference may also be accessed by going to http://ir.healthstream.com/events.cfm for the simultaneous Webcast of the call, which will subsequently be available for replay. The replay telephone numbers are 855-859-2056 (conference ID #6463349) for U.S. and Canadian callers and 404-537-3406 (conference ID #6463349) for international callers.
Use of Non-GAAP Financial Measures
This press release presents adjusted EBITDA from continuing operations and adjusted EBITDA, both of which are non-GAAP financial measures used by management in analyzing the Company’s financial results and ongoing operational performance.
In order to better assess the Company’s financial results, management believes that net income before interest, income taxes, stock based compensation, depreciation and amortization, and changes in fair value of non-marketable equity investments (“adjusted EBITDA”) is a useful measure for evaluating the operating performance of the Company because adjusted EBITDA reflects net income adjusted for certain non-cash and non-operating items. Management also believes that adjusted EBITDA from continuing operations is a useful measure for evaluating the operating performance of the Company because such measure excludes the results of operations of the PX business that we no longer own and the gain on sale in connection with the sale of such business in February 2018 and thus reflects the Company’s ongoing business operations and assists in comparing the Company’s results of operations between periods. We also believe that adjusted EBITDA and adjusted EBITDA from continuing operations are useful to many investors to assess the Company’s ongoing results from current operations. Adjusted EBITDA and adjusted EBITDA from continuing operations are non-GAAP financial measures and should not be considered as measures of financial performance under GAAP. Because adjusted EBITDA and adjusted EBITDA from continuing operations are not measurements determined in accordance with GAAP, such non-GAAP financial measures are susceptible to varying calculations. Accordingly, adjusted EBITDA and adjusted EBITDA from continuing operations, as presented, may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools.
These non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance, which are prepared in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review the reconciliations of our GAAP to non-GAAP financial measures, which are set forth below in this release.
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 5<br><br><br>February 18, 2020 |
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About HealthStream
HealthStream (Nasdaq: HSTM) is dedicated to improving patient outcomes through the development of healthcare organizations’ greatest asset: their people. Our unified suite of solutions is contracted by healthcare organizations across the U.S. for workforce development, training & learning management, talent management, credentialing, privileging, provider enrollment, performance assessment, and managing simulation-based education programs. Based in Nashville, Tennessee, HealthStream has additional offices in Jericho, New York; Boulder, Colorado; Denver, Colorado; San Diego, California; and Chicago, Illinois. For more information, visit http://www.healthstream.com or call 800-521-0574.
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 6<br><br><br>February 18, 2020 |
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HEALTHSTREAM, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | ||||||||
| Revenues, net | $ | 62,695 | $ | 59,825 | $ | 254,112 | $ | 231,616 | |||
| Operating costs and expenses: | |||||||||||
| Cost of revenues (excluding depreciation and amortization) | 24,875 | 25,429 | 103,890 | 96,014 | |||||||
| Product development | 7,346 | 6,586 | 29,109 | 25,735 | |||||||
| Sales and marketing | 9,601 | 9,161 | 37,945 | 35,698 | |||||||
| Other general and administrative expenses | 10,296 | 9,678 | 40,579 | 34,447 | |||||||
| Depreciation and amortization | 7,240 | 6,134 | 27,869 | 24,231 | |||||||
| Total operating costs and expenses | 59,358 | 56,988 | 239,392 | 216,125 | |||||||
| Operating income | 3,337 | 2,837 | 14,720 | 15,491 | |||||||
| Other income, net | 681 | 842 | 3,209 | 1,084 | |||||||
| Income from continuing operations before income tax provision | 4,018 | 3,679 | 17,929 | 16,575 | |||||||
| Income tax provision | 464 | 748 | 3,733 | 3,324 | |||||||
| Income from continuing operations | 3,554 | 2,931 | 14,196 | 13,251 | |||||||
| Discontinued operations | |||||||||||
| Loss from discontinued operations before income tax provision | — | — | — | (64 | ) | ||||||
| Gain on sale of discontinued operations | 93 | — | 2,053 | 29,489 | |||||||
| Income tax (benefit) provision | (36 | ) | 141 | 479 | 10,459 | ||||||
| Income (loss) from discontinued operations | 129 | (141 | ) | 1,574 | 18,966 | ||||||
| Net income | $ | 3,683 | $ | 2,790 | $ | 15,770 | $ | 32,217 | |||
| Earnings per share – basic: | |||||||||||
| Continuing operations | $ | 0.11 | $ | 0.09 | $ | 0.44 | $ | 0.41 | |||
| Discontinued operations | — | — | 0.05 | 0.59 | |||||||
| Earnings per share - basic | $ | 0.11 | $ | 0.09 | $ | 0.49 | $ | 1.00 | |||
| Earnings per share - diluted: | |||||||||||
| Continuing operations | $ | 0.11 | $ | 0.09 | $ | 0.44 | $ | 0.41 | |||
| Discontinued operations | — | — | 0.05 | 0.59 | |||||||
| Earnings per share - diluted | $ | 0.11 | $ | 0.09 | $ | 0.49 | $ | 1.00 | |||
| Weighted average shares of common stock outstanding: | |||||||||||
| Basic | 32,379 | 32,325 | 32,372 | 32,264 | |||||||
| Diluted | 32,465 | 32,416 | 32,428 | 32,335 | |||||||
| Dividends declared per share | $ | — | $ | — | $ | — | $ | 1.00 | |||
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 7<br><br><br>February 18, 2020 | |||||||||||
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HEALTHSTREAM, INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| December 31, | December 31, | ||||
|---|---|---|---|---|---|
| 2019 | 2018 | ||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 131,538 | $ | 134,321 | |
| Marketable securities | 41,328 | 34,497 | |||
| Accounts and unbilled receivables, net | 30,376 | 41,004 | |||
| Prepaid and other current assets | 21,330 | 31,612 | |||
| Total current assets | 224,572 | 241,434 | |||
| Capitalized software development, net | 21,445 | 18,352 | |||
| Property and equipment, net | 26,065 | 15,866 | |||
| Operating lease right of use assets, net | 29,615 | — | |||
| Goodwill and intangible assets, net | 162,277 | 145,522 | |||
| Deferred tax assets | 269 | 145 | |||
| Deferred commissions | 17,645 | 16,470 | |||
| Other assets | 7,656 | 4,159 | |||
| Total assets | $ | 489,544 | $ | 441,948 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable, accrued and other liabilities | $ | 39,674 | $ | 40,793 | |
| Deferred revenue | 65,511 | 66,061 | |||
| Total current liabilities | 105,185 | 106,854 | |||
| Deferred tax liabilities | 13,183 | 11,068 | |||
| Deferred revenue, non-current | 1,918 | 2,868 | |||
| Operating lease liability, non-current | 30,733 | — | |||
| Other long-term liabilities | 357 | 2,211 | |||
| Total liabilities | 151,376 | 123,001 | |||
| Shareholders’ equity: | |||||
| Common stock | 290,021 | 286,597 | |||
| Accumulated other comprehensive income (loss) | 4 | (23 | ) | ||
| Retained earnings | 48,143 | 32,373 | |||
| Total shareholders’ equity | 338,168 | 318,947 | |||
| Total liabilities and shareholders' equity | $ | 489,544 | $ | 441,948 | |
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 8<br><br><br>February 18, 2020 | |||||
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HEALTHSTREAM, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Year Ended | ||||||
|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||
| 2019 | 2018 | |||||
| Operating activities: | ||||||
| Net income | $ | 15,770 | $ | 32,217 | ||
| Income from discontinued operations | (1,574 | ) | (18,966 | ) | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 27,869 | 24,231 | ||||
| Amortization of deferred commissions | 8,305 | 7,659 | ||||
| Stock based compensation | 4,244 | 1,777 | ||||
| Deferred income taxes | 2,167 | 3,017 | ||||
| Provision for doubtful accounts | 211 | 1,033 | ||||
| Gain on equity method investments | (64 | ) | (42 | ) | ||
| Change in fair value of non-marketable equity investments | — | 1,271 | ||||
| Other | (72 | ) | (9 | ) | ||
| Changes in assets and liabilities: | ||||||
| Accounts and unbilled receivables | 11,605 | (4,050 | ) | |||
| Deferred commissions | (9,479 | ) | (11,577 | ) | ||
| Prepaid and other assets | 6,518 | (2,329 | ) | |||
| Accounts payable, accrued and other liabilities | 2,077 | 4,915 | ||||
| Deferred revenue | (1,920 | ) | 5,103 | |||
| Net cash provided by continuing operating activities | 65,657 | 44,250 | ||||
| Net cash used in discontinued operating activities | — | (1,004 | ) | |||
| Net cash provided by operating activities | 65,657 | 43,246 | ||||
| Investing activities: | ||||||
| Business Combinations, net of cash acquired | (27,018 | ) | — | |||
| Proceeds from sale of discontinued operations, net of tax | 6,070 | 44,049 | ||||
| Changes in marketable securities | (6,739 | ) | 11,907 | |||
| Proceeds from sale of fixed assets | 15 | — | ||||
| Payments to acquire non-marketable equity investments | (3,342 | ) | (833 | ) | ||
| Purchases of property and equipment | (21,997 | ) | (7,166 | ) | ||
| Payments associated with capitalized software development | (14,513 | ) | (11,284 | ) | ||
| Net cash (used in) provided by continuing investing activities | (67,524 | ) | 36,673 | |||
| Net cash used in discontinued investing activities | — | (115 | ) | |||
| Net cash (used in) provided by investing activities | (67,524 | ) | 36,558 | |||
| Financing activities: | ||||||
| Proceeds from exercise of stock options | 214 | 2,582 | ||||
| Taxes paid related to net settlement of equity awards | (1,034 | ) | (338 | ) | ||
| Payment of earn-out related to prior acquisitions | (38 | ) | (38 | ) | ||
| Payment of debt issuance costs | — | (100 | ) | |||
| Payment of cash dividends | (58 | ) | (32,357 | ) | ||
| Net cash used in by financing activities | (916 | ) | (30,251 | ) | ||
| Net (decrease) increase in cash and cash equivalents | (2,783 | ) | 49,553 | |||
| Cash and cash equivalents at beginning of period | 134,321 | 84,768 | ||||
| Cash and cash equivalents at end of period | $ | 131,538 | $ | 134,321 | ||
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 9<br><br><br>February 18, 2020 | ||||||
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Reconciliation of GAAP to Non-GAAP Financial Measures^(1)^
(In thousands)
(Unaudited)
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| GAAP income from continuing operations | $ | 3,554 | $ | 2,931 | $ | 14,196 | $ | 13,251 | ||||
| Interest income | (733 | ) | (859 | ) | (3,272 | ) | (2,444 | ) | ||||
| Interest expense | 26 | 32 | 102 | 130 | ||||||||
| Income tax provision | 464 | 748 | 3,733 | 3,324 | ||||||||
| Stock based compensation expense | 601 | 472 | 4,244 | 1,777 | ||||||||
| Depreciation and amortization | 7,240 | 6,134 | 27,869 | 24,231 | ||||||||
| Change in fair value of non-marketable equity investments | — | — | — | 1,271 | ||||||||
| Adjusted EBITDA from continuing operations | $ | 11,152 | $ | 9,458 | $ | 46,872 | $ | 41,540 | ||||
| GAAP net income | $ | 3,683 | $ | 2,790 | $ | 15,770 | $ | 32,217 | ||||
| Interest income | (733 | ) | (859 | ) | (3,272 | ) | (2,444 | ) | ||||
| Interest expense | 26 | 32 | 102 | 130 | ||||||||
| Income tax provision (benefit) | 428 | 889 | 4,212 | 13,783 | ||||||||
| Stock based compensation expense | 601 | 472 | 4,244 | 1,686 | ||||||||
| Depreciation and amortization | 7,240 | 6,134 | 27,869 | 24,412 | ||||||||
| Change in fair value of non-marketable equity investments | — | — | — | 1,271 | ||||||||
| Adjusted EBITDA | $ | 11,245 | $ | 9,458 | $ | 48,925 | $ | 71,055 |
^(1)^This press release contains certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA from continuing operations, which are used by management in analyzing its financial results and ongoing operational performance.
| HealthStream Announces Fourth Quarter and Full-Year 2019 Results<br><br><br>Page 10<br><br><br>February 18, 2020 |
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This press release includes certain forward-looking statements (statements other than solely with respect to historical fact), including statements regarding expectations for the financial performance for 2020, that involve risks and uncertainties regarding HealthStream. These statements are based upon management’s beliefs, as well as assumptions made by and data currently available to management. This information has been, or in the future may be, included in reliance on the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company cautions that forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by the forward-looking statements, including, without limitation, as the result of risks referenced in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 25, 2019, and in the Company’s other filings with the Securities and Exchange Commission from time to time. Consequently, such forward-looking information should not be regarded as a representation or warranty or statement by the Company that such projections will be realized. Many of the factors that will determine the Company’s future results are beyond the ability of the Company to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. The Company undertakes no obligation to update or revise any such forward-looking statements.
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