HealthStream Announces Fourth Quarter & Full-Year 2021 Results|||

NASHVILLE, Tenn.–(Business WIRE)–HealthStream, Inc. (Nasdaq: HSTM), a leading provider of workforce and provider solutions for the healthcare industry, announced today results for the fourth quarter and total twelvemonth ended December 31, 2021.

Quaternary Quarter 2021

  • Our CEO contributed $ii.4 million of his personally owned HealthStream stock to the Visitor in order to facilitate the grant of 86,494 shares of common stock to over ane,000 employees under our 2016 Charabanc Incentive Plan, which resulted in a corresponding $2.4 million charge for stock-based compensation and related expenses in the fourth quarter
  • Revenues of $64.three million, up 4% from $61.8 1000000 in the fourth quarter of 2020
  • Operating loss of $0.5 million, downwards from operating income of $ane.1 million in the 4th quarter of 2020, which comparison was negatively impacted in the corporeality of $2.4 1000000 past the charge in the fourth quarter of 2021 associated with the stock grant to employees referenced above
  • Net loss of $0.iv meg, downwardly from net income of $0.9 million in the fourth quarter of 2020, which comparison was negatively impacted in the amount of $1.ix meg by the charge in the fourth quarter of 2021 associated with the stock grant to employees referenced above
  • Loss per share (EPS) of $0.01 per share (diluted), compared to income of $0.03 per share (diluted) in the fourth quarter of 2020, which was negatively impacted in the amount of $0.06 per share during the fourth quarter of 2021 associated with the stock grant to employees referenced above
  • Adjusted EBITDAi
    of $12.0 million, up 12% from $10.7 1000000 in the 4th quarter of 2020
  • Authorized a share repurchase program to repurchase up to $20.0 meg of outstanding shares of mutual stock on November 30, 2021, with shares valued at approximately $5.ane million purchased in the fourth quarter
  • Completed the conquering of Rievent Technologies, LLC, a Virginia-based healthcare engineering company, on Dec one, 2021 for approximately $4.0 million in greenbacks

Full-Year 2021

  • Revenues of $256.7 million, upwardly 5% from $244.viii million in 2020
  • Operating income of $eight.1 million, down 49% from $15.eight million in 2020
  • Net income of $5.eight meg, downward 59% from $14.ane meg in 2020
  • Earnings per share (EPS) of $0.eighteen per share (diluted) in 2021, compared to $0.44 per share (diluted) in 2020
  • Adapted EBITDA of $52.seven million, representing a Company record for full twelvemonth adjusted EBITDA, upwardly 15% from $46.0 million in 2020

2022 Upshot

  • Terry Allison Rappuhn joined Board of Directors on Jan xi, 2022

ane
Adjusted EBITDA is a non-GAAP financial measure out. A reconciliation of adjusted EBITDA to net income and disclosure regarding why we believe adjusted EBITDA provides useful data to investors is included after in this release.

Fiscal Results:

Fourth Quarter 2021 Compared to Quaternary Quarter 2020

Revenues for the 4th quarter of 2021 increased by $2.5 million, or four per centum, to $64.three one thousand thousand, compared to $61.viii million for the fourth quarter of 2020.

Revenues from our Workforce Solutions segment were $50.ix million for the fourth quarter of 2021, compared to $49.7 million for the fourth quarter of 2020. The workforce segment achieved this year-over-year comeback while overcoming a $six.vi 1000000 decrease in revenues from the legacy resuscitation products. Other workforce revenues, including revenues from contempo acquisitions, more showtime this reject in legacy resuscitation revenues. In addition, workforce revenues also benefitted from a $0.five meg increment in professional services revenues, primarily associated with recently acquired businesses.

Revenues from our Provider Solutions segment were $13.4 million for the 4th quarter of 2021, compared to $12.1 million for the fourth quarter of 2020. Revenue growth of $ane.iii one thousand thousand was attributable to both subscription revenues in the corporeality of $0.viii million and professional services revenues in the amount of $0.5 meg.

Mostly accepted accounting principles (GAAP) crave companies to write downwardly beginning balances of acquired deferred acquirement equally part of “fair value” bookkeeping as defined past GAAP. During the quaternary quarter of 2021, HealthStream reported a reduction of $0.4 one thousand thousand to revenue and operating income and a reduction of $0.3 one thousand thousand to internet income as a outcome of deferred revenue write-downs from recent acquisitions. During the fourth quarter of 2020, HealthStream reported a reduction of $0.9 million to revenue and operating income and a reduction of $0.7 million to net income as a result of deferred acquirement write-downs from acquisitions.

Equally appear on Dec 29, 2021, Robert A. Frist, Jr. contributed 86,494 of his personally owned shares of common stock (a value at $2.2 million at the fourth dimension of such grant) to the Company for the benefit of HealthStream employees, without any consideration paid to Mr. Frist. These shares were granted under the 2016 Coach Incentive Plan to over 1,000 of the Company’s employees. These shares were non bailiwick to whatsoever vesting conditions. Mr. Frist also contributed an additional 7,113 of his personally owned shares to embrace the Company’s costs associated with such grants, such as administrative expenses and employer payroll taxes. Together, these grants resulted in the Company recognizing approximately $two.2 million of stock-based compensation expense and $0.2 million for administrative expenses and payroll taxes in the fourth quarter of 2021. These transactions adversely impacted adjusted EBITDA in the corporeality of $0.2 million. Cheers to Mr. Frist’s generous contribution of shares, all of HealthStream’s employees at the time of such grant are now owners of the Company, further aligning our employees with the goal of creating shareholder value.

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Operating loss was $0.5 meg for the 4th quarter of 2021, down from income of $ane.1 meg for the fourth quarter of 2020. The decrease in operating income was primarily attributable to the $2.4 million of stock-based compensation and related expenses recognized in the fourth quarter of 2021 as a result of the stock gift from Mr. Frist to employees noted above and higher operating expenses and amortization, primarily associated with recently acquired businesses.

Net loss was $0.4 million in the fourth quarter of 2021, down from net income of $0.9 million in the fourth quarter of 2020, and EPS was a loss of $0.01 per share (diluted) in the fourth quarter of 2021, compared to income of $0.03 per share (diluted) for the quaternary quarter of 2020. The decreases were driven by the $i.9 one thousand thousand, or $0.06 per share, of stock-based compensation and related expenses recognized in the fourth quarter of 2021 resulting from the stock gift from Mr. Frist to employees noted above.

Adapted EBITDA was $12.0 million for the fourth quarter of 2021, up 12 percentage from $10.7 one thousand thousand in the fourth quarter of 2020.

At Dec 31, 2021, the Visitor had greenbacks and cash equivalents and marketable securities of $51.nine million. Capital expenditures incurred during the fourth quarter of 2021 were $6.6 one thousand thousand.

Full-Year 2021 Compared to Total-Twelvemonth 2020

For 2021, revenues were $256.vii meg, an increase of five pct from revenues of $244.eight million for 2020. Operating income for 2021 decreased by 49 pct to $8.1 million, compared to $15.8 million for 2020. Cyberspace income for 2021 was $v.8 million, compared to $fourteen.1 million for 2020. Earnings per share were $0.18 per share (diluted) for 2021, compared to $0.44 per share (diluted) for 2020. Adapted EBITDA increased by xv percent to $52.vii million for 2021, representing a record adapted EBITDA for the Company, compared to $46.0 one thousand thousand for 2020.

Other Business Updates

At Dec 31, 2021, nosotros had approximately 5.04 one thousand thousand contracted subscriptions to hStream, our Platform-as-a-Service technology. hStream technology enables healthcare organizations and their corresponding workforces to hands connect to and proceeds value from the growing HealthStream ecosystem of applications, tools, and content.

On November 30, 2021, the Visitor’s Board of Directors authorized a share repurchase program to repurchase up to $20.0 million of outstanding shares of common stock. Pursuant to this potency, the Visitor acquired shares valued at $5.ane million in the fourth quarter and may go along to make such purchases in the open market through privately negotiated transactions or otherwise, including under a Dominion 10b5-one plan. The share repurchase programme will terminate on the earlier of Nov 29, 2022 or when the maximum dollar corporeality has been expended. The share repurchase program does not crave the Company to acquire any amount of shares and may be suspended or discontinued at any time.

On December ane, 2021, the Company acquired substantially all of the assets of Rievent Technologies, LLC, a Virginia-based healthcare applied science company offer a SaaS-based continuing education (CME/CE) direction and delivery application, branded as Rievent, which supports publishers, professional associations, healthcare insurance companies, and healthcare providers. The consideration paid for Rievent consisted of approximately $4.0 million in greenbacks, bailiwick to customary purchase price adjustments.

Addition to Board of Directors

On January 11, 2022, we announced the improver of Terry Allison Rappuhn to the Company’due south Board of Directors where she is serving as a member of its Audit Committee. Ms. Rappuhn has served on half-dozen public company boards with revenue ranging from $70 million to $5 billion, primarily amid healthcare provider companies. She served as an audit committee fellow member and financial good for all half-dozen boards, while concurrently chairing four of those committees. She also served as the Primary Financial Officer for Quorum Health Group from 1999 to 2001. Along with Ms. Rappuhn’s executive-level financial expertise and leadership, she holds a CERT Certificate in Cybersecurity Oversight from the National Association of Corporate Directors and Carnegie Mellon University.

Financial Outlook for 2022

The Company is providing guidance for 2022 for the measures gear up forth beneath, including adjusted EBITDA, a non-GAAP financial measure equally defined later in this release. For a reconciliation of projected adapted EBITDA to projected net income (the most comparable GAAP measure) for 2022, see the tabular array included on folio 10 of this release.

Full Year 2022 Guidance

Acquirement

Depression

High

Workforce Solutions

$

214.5

$

218.0

meg

Provider Solutions

53.0

55.0

million

Consolidated

$

267.5

$

273.0

million

Adjusted EBITDA1

$

fifty.0

$

53.v

million

Capital Expenditures

$

26.0

$

29.0

one thousand thousand

1
Adjusted EBITDA is a not-GAAP financial measure. A reconciliation of projected adapted EBITDA to projected net income (the most comparable GAAP measure) is included afterward in this release.

The Company’s guidance for 2022 every bit set up along to a higher place reflects the Visitor’s assumptions regarding, among other things, the COVID-19 pandemic as noted below and increased expenses in 2022 compared to 2021 associated with growth in staffing levels, lower employee turnover, and the resumption of employee travel. This consolidated guidance does not include the impact of any acquisitions that nosotros may complete during 2022.

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The Visitor’s financial guidance assumes that public wellness weather condition associated with the pandemic and general economic conditions (including conditions impacting healthcare organizations) exercise not deteriorate during 2022.

Commenting on 2021 results, Robert A. Frist, Jr., Primary Executive Officer, HealthStream, said, “Terminal yr nosotros reached record levels of revenue and adjusted EBITDA, which is particularly remarkable given the previously discussed headwinds nosotros had to overcome. With a cash and investments balance of $51.nine million and no debt, we are well positioned for growth in the coming year.”

“I believe HealthStream’due south operational metrics may exist equally insightful indicants of our progress. Cumulatively, over five million subscriptions have been contracted for our hStream applied science platform; approximately 400,000 American Red Cross certifications have been awarded through HealthStream; and just in the year 2021, approximately three.ii new contracts
per week
for CredentialStream were signed. I, forth with all of our employees—who are now also shareholders in the Visitor, am excited about 2022 and the opportunities we have to back up the healthcare workforce with our innovative solutions.”

A briefing call with Robert A. Frist, Jr., Chief Executive Officer, Scott A. Roberts, Chief Financial Officeholder and Senior Vice President, and Mollie Condra, Vice President of Investor Relations and Corporate Communications, will be held on Tuesday, February 22, 2022, at nine:00 a.m. (ET). To heed to the briefing, please dial 877-647-2842 (no conference ID needed) if yous are calling within the domestic U.South. or Canada. If you are an international caller, please dial 914-495-8564 (no conference ID needed). The conference may besides be accessed by going to
http://ir.healthstream.com/events.cfm
for the simultaneous Webcast of the call, which volition subsequently be available for replay. The replay telephone numbers are 855-859-2056 (conference ID #2232968) for U.Due south. and Canadian callers and 404-537-3406 (conference ID #2232968) for international callers.

Utilise of Non-GAAP Financial Measures

This press release presents adjusted EBITDA, a non-GAAP financial measure used by management in analyzing the Company’s financial results and ongoing operational functioning. In club to meliorate assess the Company’s fiscal results, management believes that cyberspace income excluding the affect of the deferred revenue write-downs associated with fair value bookkeeping for acquired businesses and before interest, income taxes, stock-based compensation, depreciation and amortization, changes in off-white value of non-marketable disinterestedness investments, the de-recognition of non-cash expense resulting from the PTO expense reduction in the first quarter of 2021, and the resolution of a mutual disagreement related to various elements of a by partnership which resulted in a reduction to cost of sales in the start quarter of 2020 (“adapted EBITDA”) is a useful mensurate for evaluating the operating operation of the Company because adjusted EBITDA reflects net income adapted for certain GAAP bookkeeping, non-cash and non-operating items which may not, in any such case, fully reflect the underlying operating performance of our concern. We also believe that adjusted EBITDA is useful to many investors to assess the Visitor’s ongoing operating performance and to compare the Visitor’s operating performance between periods. In improver, beginning in 2021, executive bonuses are based on the achievement of adjusted EBITDA targets.

As noted above, the definition of adjusted EBITDA includes an adjustment for the touch on of the deferred revenue write-downs associated with fair value accounting for caused businesses. Following the completion of whatever acquisition past the Company, the Visitor must record the acquired deferred revenue at fair value as defined in GAAP, which may issue in a write-downwardly of deferred revenue. If the Company is required to record a write-downwards of deferred revenue, information technology may result in lower recognized revenue, operating income, and net income in subsequent periods. Revenue for any such caused business is deferred and is typically recognized over a one-to-two-twelvemonth period following the completion of any item acquisition, and then our GAAP revenues for this one-to-two-year flow will not reflect the full corporeality of revenues that would have been reported if the acquired deferred revenue was not written down to fair value. Management believes that including an adjustment in the definition of adjusted EBITDA for the impact of the deferred write-downs associated with fair value accounting for acquired businesses provides useful data to investors because the deferred revenue write-down recognized in periods afterwards an acquisition may, given the nature of this non-greenbacks accounting impact, cause our GAAP financial results during such periods to not fully reflect our underlying operating performance and thus adjusting for this amount may assist in comparing the Company’s results of operations between periods.

Adapted EBITDA is a non-GAAP fiscal measures and should not exist considered as measures of financial functioning under GAAP. Because adjusted EBITDA is not a measurement determined in accordance with GAAP, adjusted EBITDA is susceptible to varying calculations. Accordingly, adjusted EBITDA, equally presented, may not exist comparable to other similarly titled measures of other companies and take limitations as an analytical tool.

This non-GAAP financial mensurate should not exist considered a substitute for, or superior to, measures of financial operation, which are prepared in accord with GAAP. Investors are encouraged to review the reconciliations of adjusted EBITDA to internet income (the almost comparable GAAP measure), which is set along beneath in this release.

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Virtually 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 beyond the U.S. for workforce evolution, training & learning management, nurse & staff scheduling, clinical education, credentialing, privileging, provider enrollment, performance cess, and managing simulation-based education programs. HealthStream’south corporate role is in Nashville, Tennessee. For more than data, visit http://www.healthstream.com or call 800-521-0574.

HEALTHSTREAM, INC.

Condensed Consolidated Statements of Income

(In thousands, except per share information)

(Unaudited)

3 Months Ended

December 31,

Yr Ended

December 31,

2021

2020

2021

2020

Revenues, cyberspace

$

64,338

$

61,818

$

256,712

$

244,826

Operating costs and expenses:

Cost of revenues (excluding depreciation and amortization)

22,979

22,736

91,033

89,332

Product development

11,454

8,815

41,659

32,305

Sales and marketing

10,745

9,010

39,457

35,297

Other full general and administrative expenses

10,250

11,936

39,695

41,885

Depreciation and amortization

9,370

viii,184

36,813

30,189

Total operating costs and expenses

64,798

60,681

248,657

229,008

Operating (loss) income

(460

)

ane,137

viii,055

fifteen,818

Other (loss) income, internet

(39

)

(ane

)

(289

)

2,005

(Loss) income before income revenue enhancement provision

(499

)

1,136

7,766

17,823

Income tax (do good) provision

(112

)

213

1,921

3,732

Net (loss) income

$

(387

)

$

923

$

v,845

$

14,091

Cyberspace (loss) income per share:

Basic

$

(0.01

)

$

0.03

$

0.19

$

0.44

Diluted

$

(0.01

)

$

0.03

$

0.18

$

0.44

Weighted boilerplate shares of common stock outstanding:

Basic

31,520

31,552

31,534

31,960

Diluted

31,520

31,594

31,618

31,989

HEALTHSTREAM, INC.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

Dec 31,

Dec 31,

2021

2020

Assets

Current avails:

Cash and greenbacks equivalents

$

46,905

$

36,566

Marketable securities

five,041

ix,928

Accounts and unbilled receivables, internet

34,920

46,100

Prepaid and other current assets

19,979

22,131

Total electric current assets

106,845

114,725

Capitalized software evolution, internet

32,412

26,631

Property and equipment, net

17,950

22,218

Operating charter right of use assets, net

25,168

28,081

Goodwill and intangible assets, net

271,706

279,155

Deferred taxation avails

601

974

Deferred commissions

24,012

19,907

Other assets

viii,059

8,622

Full assets

$

486,753

$

500,313

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable, accrued and other liabilities

$

26,534

$

38,266

Deferred revenue

73,816

81,176

Full current liabilities

100,350

119,442

Deferred revenue enhancement liabilities

18,146

14,523

Deferred revenue, non-electric current

1,583

1,603

Operating charter liability, non-current

26,178

28,479

Other long-term liabilities

i,477

ii,204

Total liabilities

147,734

166,251

Shareholders’ equity:

Mutual stock

270,791

271,784

Accumulated other comprehensive income

106

one

Retained earnings

68,122

62,277

Total shareholders’ equity

339,019

334,062

Total liabilities and shareholders’ disinterestedness

$

486,753

$

500,313

HEALTHSTREAM, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Year Concluded

December 31,

Dec 31,

2021

2020

Operating activities:

Cyberspace income

$

5,845

$

fourteen,091

Adjustments to reconcile net income to net cash provided past operating activities:

Depreciation and amortization

36,813

30,189

Amortization of deferred commissions

9,169

eight,768

Stock-based compensation

5,303

2,217

Deferred income taxes

ane,539

4,295

Provision for credit losses

723

274

Loss on disposal of fixed assets

21

Loss on equity method investments

462

51

Not-greenbacks paid fourth dimension off expense

(i,011

)

Non-cash royalty expense

(iii,440

)

Change in off-white value of non-marketable equity investments

(279

)

(one,181

)

Other

184

347

Changes in assets and liabilities:

Accounts and unbilled receivables

10,344

(ii,992

)

Deferred commissions

(thirteen,274

)

(11,030

)

Prepaid and other avails

2,240

(700

)

Accounts payable, accrued and other liabilities

(8,101

)

(iii,548

)

Deferred revenue

(vii,593

)

(1,467

)

Cyberspace greenbacks provided by operating activities

42,385

35,874

Investing activities:

Business combinations, net of cash acquired

(four,705

)

(121,342

)

Changes in marketable securities

4,708

xxx,992

Proceeds from auction of non-marketable equity investments

i,370

Payments to acquire non-marketable disinterestedness investments

(ane,750

)

(1,257

)

Purchases of holding and equipment

(3,417

)

(1,988

)

Payments associated with capitalized software evolution

(21,929

)

(xvi,815

)

Net cash used in investing activities

(25,723

)

(110,410

)

Financing activities:

Taxes paid related to internet settlement of equity awards

(i,182

)

(435

)

Repurchases of common stock

(five,008

)

(xx,019

)

Payment of cash dividends

(19

)

(xl

)

Net cash used in financing activities

(vi,209

)

(20,494

)

Upshot of exchange charge per unit changes on cash and cash equivalents

(114

)

58

Internet increase (decrease) in cash and greenbacks equivalents

10,339

(94,972

)

Greenbacks and greenbacks equivalents at outset of period

36,566

131,538

Cash and cash equivalents at end of catamenia

$

46,905

$

36,566

Reconciliation of GAAP to Non-GAAP Financial Measures(1)

Operating Results Summary

(In thousands)

(Unaudited)

Iii Months Ended

December 31,

Year Ended

Dec 31,

2021

2020

2021

2020

GAAP internet (loss) income

$

(387

)

$

923

$

5,845

$

fourteen,091

Deferred acquirement write-down

383

919

iv,040

one,274

Involvement income

(fifteen

)

(74

)

(80

)

(993

)

Interest expense

33

19

132

96

Income tax (benefit) provision

(112

)

213

1,921

3,732

Stock-based compensation expense

3,043

553

5,303

ii,218

Depreciation and amortization

9,370

8,184

36,813

30,189

Non-cash paid time off expense

(i,011

)

Modify in fair value of not-marketable disinterestedness investments

(279

)

(279

)

(1,181

)

Non-cash royalty expense

(3,440

)

Adjusted EBITDA

$

12,036

$

x,737

$

52,684

$

45,986

(1) This press release presents adjusted EBITDA, which is a non-GAAP financial measure used by management in analyzing its financial results and ongoing operational operation.

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