Q1 2020 Streamline Health Solutions Inc Earnings Call
Greetings welcome to streamline health solutions first quarter 2020 earnings conference call.
At this time, all participants are in listen only mode.
Next question and answer session will follow the formal presentation.
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Please note this conference is being recorded.
Ill now turn the conference over to Randy Salisbury, Senior Vice President and Chief sales and marketing officer.
Randy you May proceed.
Thank you for joining us to review the financial results of streamline health solutions.
The first quarter, Twentytwenty, which ended April Thirtyth 2020.
The conference call Operator indicated my name is Randy Salisbury.
Senior Vice President and Chief sales and marketing officer here at streamline health and manage all communications, including Investor Relations.
Joining me on the call today, our T. Green.
And Chief Executive Officer, and Chairman of the Board and Tom Gibson, Chief Financial Officer.
At the conclusion of today's prepared remarks, well open the call for a question and answer session.
If anyone participating on today's call does not have a full text copy of our press release announcing these results you can retrieve it from the company's website at streamline health dot net or at numerous other financial websites.
Before we begin with prepared remarks, we ought to be sure. We're clear for everyone on the record how certain information, which may be provided today as with all of our earnings calls should be viewed.
We therefore submitted to the record the following statement first statements made on 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. These are subject to risks uncertainties assumptions and other factors that could cause actual results to differ.
Materially from those we may discuss.
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 annual report, which is on file with the FCC for more information about these risks uncertainties assumptions and other factors.
As always we are presenting managements current analysis of these items as of today.
Participants on this call should take into account these risks when evaluating the topics we on the Scott.
Please note streamline health is not undertaking any commitment or obligation to publicly revise any such forward looking statements made today.
Okay, we'll discuss non-GAAP financial measures such as adjusted EBIT da.
Management uses these measures to help provide better insight into our financial performance. However, certain items of income and expense are not included in these measures. So these calculations may differ from those which another entity may utilize in calculating their own non-GAAP measures.
Talk compare these amounts on consistent terms, please refer to our web site at streamline health Dot net.
And our earnings release for a reconciliation of such non-GAAP measures for the most comparable GAAP measures.
I'd now like to turn the call over the T. Green, President and Chief Executive Officer Day.
Thank you Randy and thank you all for joining us. This morning during the first quarter streamline completed the sale of its legacy E M business.
A key strategic move we believe will enable the transformation of our company into a more nimble.
<unk>, one with a laser focused on bringing value to the middle of the revenue cycle.
Charge capture build drop for our customers.
Before I review, our first quarter financial performance I'd like to comment on the code been 19 endemic and affects we've seen in our industry.
All the bosses streamline health are keenly aware of incredibly difficult and dangerous situation, our health care provider customers had been.
And continue to face.
Our frontline health care professionals are the best in the World.
And the job they have done he's just incredible we remain thank all of the self services to our communities our thoughts and prayers continues to be with all of them.
As I mentioned in our fourth quarter earnings call in April our hospital, certainly customers had been deeply impacted by this ongoing crisis. They had seen their high margin elective procedure business were placed by low margin critical care patients.
From Medmarc most of my.
Our customers and prospects primary focus was on the treatment those patients suffering from cobot Nike swim symptom.
As it should have been.
But the fact that this had been over the past few months. It's clearly created the revenue shortfall almost every health care provider in the country.
As I said in April we believe when we see the beginning of a return to more normal times, we will see how demand for all forms of health care that have been delayed due to this and then it.
And with it the need to generate accurate billing quickly and efficiently.
Looking back on our first quarter all of US we're very encouraged at the mini side.
But how are the we're seeing it ourselves pipeline.
We began the quarter with a very nice three year contract for evaluator University of little help in February.
[music] avail health is a 1200 bit teaching hospital located in Kentucky.
46000 patient discharges per year.
And when the final stages, but the number.
Other key prospects as we entered the March when our prospects focus shifted away from technology purchasers.
Just mentioned.
This pause in decision, making blasted throughout March and then come back midnight.
And I'm happy to report, but as of today are selling activities or wants more proceeding at an exciting pace just as we anticipated back in April.
Last month, we close to three year Valuator contract with another academic health care facility.
This time with Cooper University Health care in Camden, New Jersey.
Hooper is an academic medical center, what 574 beds and more than 28000 patient discharges annually.
The pipeline remains healthy with numerous opportunities for more sales this quarter.
One of the many metrics, we use and sales to help lead us to the most fertile opportunities there's a tracking of cares funding hospitals throughout the country.
The cares that provided $12 billion hospitals that provided inpatient care for 100, a more individual code. The 19 patients through April 10th of this year.
They were state of these funds.
Healthy providers are some serious cash shortages.
And can help make the decision to implement important technology like ours is a little easier.
Currently 16 of our active evaluated prospects and the pipeline received an aggregate.
$122 million funding through this program.
I'll, let Randy provide more specifics on our sales efforts in just a few minutes.
Now I'd like to review some financial highlights from the quarter.
As a reminder, we closed the sale of our legacy business on February 24 could this year.
And these figures are representative of our continuing business units.
Total revenue for the quarter was $2.8 million compared to $3.2 million in the first quarter of last year.
Our revenue was negatively impacted by the cobot Nike pandemic, it's not only resulted in delayed customer purchase decisions that impacted our professional services and perpetual license revenue as well.
Tom gifts and we'll provide more specifics in his remarks later in this call.
Recurring revenue for the quarter was 75% of total revenue compared to 66% during the first quarter of 29.
Adjusted EBITDA for the first quarter 2020 was a loss of $638000 compared to a loss of $262000. During the same period of 29 thing.
As of April Thirtyth, 2020, we got $6.6 million of cash and cash equivalents, when our balance sheet and no bank debt.
Over the long term, we believe that covered 19 pandemics has strengthened awareness of the need for improved revenue integrity tools.
Healthcare providers experienced a dramatic drop in their revenues as many if not all high value elective procedures were hawk.
It's important to remember I C. D 10 protocol exponentially increase the amount of complex complexity and walk in medical coding.
Oh evaluate a pretty deal coding analysis technology can help health care providers manages complexity by improving that could see of hospital coaters before bill goes out the door and we have already added new Covent 19 billing codes into devaluated platform to help our customers improve the accuracy of the billing for these new.
Never seen before cobot 19 cases.
Hi, I'm, just saying I'm pleased to the progress we made in the first quarter to improve the critical internal functions necessary to be the nimble fast growing company, we're focused on becoming.
I've used the paulson purchase decisions, making I just mentioned, that's a great opportunity for us to focus on improving or by waiter platform.
Slowdown in activity enabled our R&D team can prove somebody foundation elements of evaluator.
And it gave or product management team the chance to write input additional rule sets, including more than 30, new rules revolving around the new Koby 19 Cody.
In addition, we've expanded the reporting functionality for both inpatient and outpatient burdens of evaluating.
And improve our dashboard functionality as well.
Additionally, in the first quarter, we lost her new customer success organization.
When we combine several separate departments into one and named a new leader of this important function.
I'm committed to developing world class R&D product management and customer success teams to support our company selling efforts I believe we've made great progress to that in in the first quarter of this fiscal year I will now turn the call over to maybe for additional comments on ourselves efforts.
Andy.
Okay.
Looking back at our first quarter selling efforts I was pleased that our team remain fully engaged.
And effectively leveraged digital communication tools.
The maintain as much contact and collaboration as possible with our targeted prospects.
The discussions we've been having with our prospects mirror what can you just outlined.
Hospital administrator seem to be much more focused on finding solutions that can improve the efficiency of their mid revenue cycle systems, especially something like about anywhere they can improve their revenue integrity and help improve their organizations cash flow.
Capitalize on this momentum we've developed a tech enabled services offering.
Coupling evaluator.
Our world Class auditing services professionals.
Weve positioned this as the evaluator revenue integrity program.
Going forward, new evaluator customers will not only get the power of our cloud based prebuilt coating analysis technology will also get a certain number of patient record reviews by our audit staff every month to helping manage the auditing oh flagged that counts that evaluator generates.
This way our customers get the traditional professional services functions, they know well, adding the power of new technology like evaluator.
As Steve mentioned, our sales team has seen a return to more productive purchase decision, making resulting in the nice when we've already received in the month of Bang for the second quarter.
During the quarter. Despite the impact of covered my team because about $1.3 million of new bookings, which is short of our ongoing quarterly goal of $2 million to $3 million, a new bookings every quarter, but given the effects of the pandemic. This bookings amount is not concerning to me.
Especially when I look at the quick start we had in May.
And the improve pay some negotiations we're experiencing so far.
Second quarter.
I believe the target of $2 million to $3 million in bookings.
Is attainable going forward.
Specifically.
Pipeline metrics today stands at $62 million evaluated pipeline opportunities among 89 prospects, which is up in terms of dollars and prospects from our Q4 report.
I will be available for questions and answers following our prepared remarks.
But for now I'd like to turn the call over to CFO, Tom Gibson, who will review the financial results for Q1 in greater detail.
Tom.
Thank you Randy and good morning, everyone on the call.
The company has built on the initiatives reported to you in our previous call initiatives will be highlighted first doesn't hurt to the overall financial results for the quarter ended April 32020.
The initiatives include the company sale.
Assets and the closing of a PPP loan in support of operations journey the novel Corona virus and then.
He stated earlier the company so the CMS that's effective February 20 over.
2020 that put in place the accounting requirements for discontinued operations.
Discontinued operations effectively separate the easy EME assets from the remaining or continuing business.
As a result this separation we will report on continuing operations for the current degree.
As well as all previously filed periods.
This will set a basis for the guidance of revenue.
Earnings and cash flows of the continuing operations. Once these are movies.
Oh, the draft guidance in more detail.
The conclusion of my remarks.
Now, let me turn to the company's operating performance for the first quarter ended April 32020.
Announced in yesterday's press release regarding our performance the first quarter, we generated revenues of approximately <unk> point $8 million.
Down 10% from fourth quarter of last fiscal year.
The shortfall to last year is derived from perpetual sales and professional services each were directly impacted by the Corona bars.
The company had no perpetual revenue for the first quarter and the shortfall above 50% of the expected professional services revenue.
Perpetual sales were delayed based on health care organizations, putting larger system changes on home.
Additionally, certain professional services are being delayed as hospitals being them, a distraction relative to the corona bars and damage.
Our company has given substantial insight you regarding our legacy versus growth businesses.
There are only two legacy revenue streams that continue for the company.
One is clinical analytics and it represented approximately $200000 and the first quarter ended April 32020.
This is a patient care system measuring outcomes of certain procedures. It is not in the company's core business and has a different buyer.
Early in the research for educational segment of health care.
We have previously announced.
The clinical analytics platform, what sunset and fiscal year 2019.
The company wrote off all of the intangible assets related to clinical analytics and fiscal year 2018.
The revenue stream expires and our second quarter of this fiscal year.
Complementing our selling of DCM assets. The company has made strong business decisions to exit areas that do not all for future growth.
And we continue to make strides in removing obstacles that kept us from generating topline revenue growth.
Turning now to bookings as Randy mentioned earlier, the company achieved $1.3 million, but he's in the first quarter fiscal 2002, one which was lower than our target.
Clearly the onset of the current birds slowed the pace of everybody would but.
But we're now seeing traction and remain enthusiastic about future bookings performance.
Recurring revenues were approximately 75% of total revenue for the first quarter.
Lower than the 79% from the fourth quarter fiscal 2019, but higher than Q1 of last fiscal year.
All of the revenues that were impacted by Corona bars, and our first quarter of 2020.
Hi, Joel and professional services revenue, where nonrecurring in nature.
Moving now to adjusted EBITDA.
We reported the deficit of $630000.
In Q1 of 2020 as compared to a deficit of 206 $2000 in the same comparative period of fiscal 2019.
The higher deficit and adjusted EBITDA is a direct result of lower revenues in Q1 2020 as compared with the same period in 2019 as well as some one time costs for the exit of an operating leads.
The company incurred $105000 in a nonrecurring loss on the exit of an operating lease during that first quarter.
Fiscal 2020.
As reported.
Company moved its corporate office space, Alpharetta, Georgia, and took a charge of $105000 upon exiting its previous shared office studies.
The company reported $14000 and $78000 of interest expense for the first quarter fiscal 2020 and 2019, respectively.
The company paid the entirety of its term loan on the data closed the sale of bcm assets.
Were 24 2020.
The company qualified and received a P. P P low.
April of 2021% interest rate.
As long as the company is recognized any interest expense it may be capitalized to software development.
Accordingly, there was entrust capitalize in the software development and both the first three months of fiscal year 2020 and 2019.
Turning now to other areas the company recognize depreciation and amortization of 500 in $1000 a $343000 in Q1, 2020 and 2019, respectively.
The company has accelerated completion of projects that are getting inventory under the job method that development and that is leading to higher amortization.
The company has that added tighter discipline to its development procedures by limiting the starting and completion of projects.
Then one.
For two.
Three week sprint.
The speed the development work to completion and will result in higher amortization in future periods for capitalized software development.
The company also recognize $263000 and $269000.
Share based compensation for the first quarter fiscal 2020 and 2019, respectively.
The company is expecting share based compensation will trend higher in fiscal 2020 as compared with last year.
The board has continued to favor equity compensation for executives as opposed to the company's cash.
The company reported income from discontinued operations net of tax for the first quarter of 2020 and 29 chain.
$4.650 million and $955000 respectable.
The discontinued operations for the first quarter fiscal year 2020 includes a one time gain on the sale of the E C M assets of $6.009 million.
Finally, the company recognized income tax expense between continuing and discontinued operations of 935000 and $2000 for the first three months of fiscal 2020 and 2019, respectively.
The company has substantial federal and state income tax net operating loss carry forwards that maybe used for the gain on sale of bcm assets.
We do not expect to pay any income tax for the full year fiscal 2020.
For GAAP purposes, the income taxes that was in the quarter.
Discontinued operations is first reported and then reversed out during the remaining quarters of the fiscal year.
Moving to the balance sheet, we finished the quarter with approximately $6.6 million cash on hand compared to $1.6 million.
End of the fourth quarter, the company generated $5.4 million and the sale of the easy EME assets net of the term loan repayment.
Additionally, the company applied for and received a PPP loan of $2.3 million in April 2020.
[noise] beyond operations for the fiscal year 2020, we invested $479000 into the capitalized software development asset primarily new functionality for our key client solution evaluating.
This is comparable to $790000 in the first quarter fiscal year 2019.
The continuation of this spend and development of the evaluated platform was deemed essential to expand ourselves velocity through extended capabilities for inpatient and outpatient much.
We're also continuing to develop the problem. It was improved dashboards to increase our functionality and client satisfaction.
The company continues to have flexibility with the investments we make into our software, but the timing major and types of span. It's worth noting that then the company's mdna disclosures.
Total research and development costs have come down substantially from prior years.
This is the result of our ability to focus development attention on the company's growth engine evaluating.
The company has reduced head count from last year and refocused its R&D efforts around the companies go forward solutions that have the greatest growth opportunities.
During the first quarter ended April 32020, the company made note payment.
On the term loan as it was principal free for the first 12 months the term loan balance was $4 million.
When we closed with bridge Bank on December 12, 2019.
The term loan was repaid upon the closing of the sale of DCM assets.
The company did not draw on the revolving credit facility during the first quarter.
The PPP loan has no repayment requirements for the first seven months.
Additionally, based on certain criteria.
Company may not be required to repay a portion of the P. P. P loan at all.
The criteria is still being finalized by federal regulations. So we will not attempt to establish or estimate any amounts that may be forgiven under this loan at this time.
The company has not offering guidance due to the continued uncertainty around the effects of the novel Corona Vars. However, we did want to provide measures to help our investors understand the size and shape of the go forward streamline health.
The company will continue to report DCM revenue as a discontinued operation in fiscal 2020, and it will impact all prior periods.
The company reported $2.8 million in revenue in the first quarter ended April 32020.
This was the higher end of where Weve indicated during our earnings stall at the end of fiscal 2019.
We believe that revenues will step back to approximately $2.1 million to $2.5 million in the second quarter of 2020 and began a solid growth quarter over quarter thereafter.
Depending of course upon the macro market conditions.
For fiscal year 2020, as previously reported the company projects to having the deficit adjusted EBITDA.
[noise] they affects.
A bit Corona bars have increased our estimate of the shortfall in adjusted EBITDA for the year.
The company is running the business such that it will be no other operating cash through end of next fiscal year 2021.
We are testing to solve for that through operating cost controls and our back office functions.
We have no intention of decreasing our investment in the company's growth engine evaluate.
Once again, we're not intending for these comments to be considered guidance.
Rather they are an effort to help our investors understand the way, we're thinking about management of the business through this critical growth stage.
The company will provide guidance as soon as there is more certainty around the timing of the return of our economy as it relates to cope with nice.
That concludes my remarks, but before I turn the call back tea.
Wanted to reiterate that I'm very proud of our teams accomplishments over the last few months, we are realizing a new culture of velocity and execution I am confident you will continue to hear that feature releases about <unk>. Okay.
C.
Thank you Tom.
It would appear that our industrial economy is starting to come back online and I see significant opportunity for our company in the remainder of our fiscal year 2020 and beyond.
Our focus on helping health care providers with the many issues they face with the middle of their revenue cycle is right the market and provides our newco with excellent growth opportunities.
According to report from research and markets the mid revenue cycle management, and clinical documentation improvement market as expected the growth of $4.5 billion, but 2023, and the baseline of $3.1 billion and 28 team.
The report specifically stated and I quote the market growth is largely driven by the increasing utilization of mid revenue cycle management solutions to reduce healthcare cost checking the loss of revenue due to medical billing and coding areas resolve issues raised by the decline in reimbursement rates managed.
Ever increasing amounts of unstructured data and maintain regulatory compliance.
Growth in the mid revenue cycle management solutions market for health care providers can be attributed to the significant demand for these solutions from health care providers, who are improving data accuracy in clinical documentation maximizing hospital revenues by minimizing coding errors and shortening the claims reimbursement.
Cycle.
Revenue losses, due to medical billing and coding errors declining reimbursement rates and the need to reduce the rising healthcare costs or other key factor supporting the growth in the demand for these solutions unquote.
Our evaluated revenue integrity program, along with our at our abstract thing and CBR technologies are specifically designed to meet these needs.
Before we begin or two in a session I like to extend the heartfelt. Thanks to the team members it streamline for their hard work and perseverance during an enormously challenging comp.
Your contribution to enable us to support our hospital system customers and then sure they have the tools they need to free up time and resources preclinical time.
Thank you for your support of streamline health.
And for your support of our vision.
Now I'd like to open the call up to your questions operator.
Thank you.
Well now be conducting a question answer session. If you like to ask the question. Please press star one on your telephone keypad and a confirmation tone indicate your line is in the question Q.
You mean press star to here late you move your question from the Q.
Just interesting speaker equipment, it may be necessary to pick up your handset before pressing the star Keith.
One moment, please hold the poll for questions.
[noise] [noise] [noise]. Thank you. My first question comes from the line of Matt Hewitt with Craig Hallum. Please proceed with your question.
Good morning, Thank you for taking the questions.
The first one is the new wherever revenue integrity program that you announced this morning, maybe you could provide a little bit more detail is that going to be included in that kind of the base a product or is that an incremental opportunity or an up sell if you will just a little bit more detail would be helpful.
Yeah sure. This is Pete Thanks, Matt I'll I'll start and then let Randy finished the question, but not Wholl go with seeing that the power behind evaluate or.
With the technology and recognize the staffing issues that these customers are facing especially coming out of kind of at night team and we have a professional audit services you know component of our business and so coupling the technology with the services. So you true we have a tech enabled service we.
Perfect answer it also gives us ability.
Two you know obviously augment our customers, but also it gives us ability where we have.
Opportunities to to provide audit services to customers and you know our audit services team uses evaluator and also can be kind of a reverse trojan in getting the technology into the enterprise. So we think it kind of goes both ways and Randy I'll, let you kinda talk about a week, including it in every day.
Dealers are we using it opportunistically.
Yeah. Thanks T map, we [noise] in fact, we have adjusted the pricing to allow for this and so we actually have tiered pricing based on the number beds in a hospital system [noise], but weve adjusted the pricing up to cover this so that its automatic.
You know kind of in the base like buying a car, Matt you would get certain things in the base model.
At the end of the day map, if someone really said man, we got plenty, we don't need it we can figure out away the strip it out to lower it a little bit, but we've built at all in.
That's great and I appreciate the color.
Randy since its since I got see here.
We talked a little bit about the pipeline. Obviously your Q1 was at the peak of the pandemic here in the states and I'm sure you were having frequent dialogue with potential customers. How have those discussions kind of evolved from February to March to April and now May and June.
And maybe talk a little bit about I don't know qualities the word but talk about the size of the the various hospitals and health systems that you're in discussions with and when you think that those deals could be site.
Well thanks, Matt.
Yeah, I think as we've talked in April.
The.
The good news inside all of this is that those prospects.
Asked us to sort of a table the conversations while they confronted the never seen before issue of the pandemic that we're still suffering through.
I think we're really encouraged that even though our team stayed in touch with them generally.
Almost to a person they came back as they said they would the so a few said can you wait till the fall and we will but most of them said, let's just table. This for a month and let us get our feet under us and sure enough within a month to six weeks. They were back on the phone. We are backed on virtual done what we're picking up right, where we left off so that leads them to.
Next point, which is I.
I think what she clearly inferred was boy we thought starting in March she is a year February what's the deal with a Cooper. We thought were boy in March and April were going to get two or three more these they got delayed now I think.
We're very close I believe to signing a couple more here in the not too distant future.
Same guys that were sort of maturing in the pipeline and moving into the what we'd call stage foreign stage five star back in those various stages.
We are actually you know looking at some contract Red linings.
And to your point, Matt the size of a couple of them right now that we're looking at our some of the largest ones. We've seen so far so I think our sales team has done a good job really trying to target the sizable systems, an idea and because the power of the numbers are the right we're not necessarily.
Really targeting the rural and then smaller hospital system, we're kinda to 50 bed and up is our focus and in some answers there were looking at some systems a 2000 beds in up so that's part of our encouragement as well and lastly, as I mentioned real quickly. The numbers are the pipeline are both up from Q4.
In terms of dollars and number of prospects.
That's great. Thank you and maybe one last one for Tom how should we be thinking about gross margins, obviously Q1, and I would suspect even Q2, there will be impac with pro Serv professional services not being fully utilized or some of the delays that weve heard regarding mute.
Contract signings with evaluator, how should how should we thinking about gross margins first half maybe even versus second half. Thank you.
Yeah. Thank you, Matt I appreciate it and I hope you're doing well.
So Q1 in Q2 are gonna have a little bit of compressed or.
Gross margin.
Primarily because the volumes on a revenue side for the most part a lot of our cost of sales as you know is kind of fixed it's a lot of depreciation amortization and people.
So we need to get the expansion of the revenue piece in order to start expanding that gross margin and absent DCM and with the slowdown in perpetual and professional services, you're definitely going to see a lower.
Gross margin in the first half.
As we grow revenue you're going to see that expand again for the most part because our cost of sales is rather fixed so that's kind of the way to think about it without giving you specific numbers.
That's helpful. Thank you.
Our next question comes from the line of Brooks O'neil with Lake Street Capital. Please she is your question.
Thank you good morning, So I have a couple of questions too I was hoping maybe T or already you can talk about the.
Product enhancements and improvements you guys had identified and been working on I think he he commented on some of those but I'm curious a.
If you feel the work you'd need to do on the core product is complete be recognized that we haven't gotten a lot of oh of these contracts over the goal line yet, but can you give us any anecdotal information or feedback regarding the customer response to that.
Work, you've done do you get a sense people are excited about it or they are they just satisfied you've done what what they felt needed to be done or no.
What's the reaction out there in the marketplace.
Yeah, I'll take the first part of that and then I'll, let Randy talk about the contracts and getting them over the goal line, but on thanks for the question Rose Yeah. The the R&D team and the product management teams have done an incredible job over the last quarter.
And product management team was new with ended the year last year, and we restructured entire R&D organization and it allows us to laser focused on improving the core of evaluator, which was a pretty big lift, but obviously it had to be done if we were going to scale the business.
A lot of that had to do with.
Getting the foundation right, making sure that all of our reporting was accurate across the multiple ways. You can report out of evaluator, and then getting the inpatient and outpatient dashboards into what I'd call eight.
Hey, I'm, a scalable platform for an enterprise and so if you think about the core and you think about the reports in the two dashboard platforms.
The core of it.
We are have already demoed improvements to a couple of customers and there's great excitement there they're excited about imprimis more stability more speed.
And then the and they should be.
You know really hitting customer sites in June or into June and then the the dashboards will be coming as we said later in the summer So I think.
You know what would we like it to go a lot faster, sometimes we do and normally but also have to make sure your poured solid concrete and letting it sets. So you can build off of and that's what we've done the team has been incredibly disciplined and bass would probably most excited about I can say that prior.
Years, I don't think we had the disciplined in R&D and product management and now it's there.
We're going to see off.
Continued progress in you know once you have the solid foundation. It allows you to increase velocity and so that's where we are and then Randy I'll. Let you talk about that where we are in some of these maybe contracts and pipeline.
Absolutely.
One thing I would add Brooks is we've actually used the current customer experience to help guide us and some of this so here's a to bid for the early on we had about 34 different reports you could use with evaluator impatient and our users were telling us that's all willing good but.
If I want to get a couple of things together I Gotta go from one report to another so part of Tees guidance and work was we consolidated the number of reports you can get from 32 ish to 20.
And in that 20 now you have some reports and give you a little bit more maybe a lot more data at one glance yet you still have the capability of customizing. Those report. So that's that's how we're taking customer experience and making the product better going forward.
To tease point, when we present to prospects besides the nature and effectiveness of what prebuilt coding does for a firm, which is where we get the most residents right. Its they look at Oh boy that yeah, we need to do this to have our coding accuracy go up and our revenue integrity go up I.
I think what they're finding is that the ability through these dashboards in our inpatient dashboard is up and running it is great. It's the outpatient dashboard that we need to bring into the market here in the next couple of months.
It's fabulous you can put your finger on any kind of piece of data you want at any time 24 hours a day and unlike a report that instant and that tells you exactly what you need to know to better manage resources and now I think it towards the middle of a demonstration Brooks really gets intention of prospects.
Great Great. So let me ask one other question.
I think I heard a either time or Randy say.
I think it was a pipeline of 62 million with 89 prospects.
Is it I mean, obviously the basic math is divide 62 by 89, you get some average number is there a pretty good uniformity liked that across the pipeline or are there a few that are bigger or maybe a lot bigger and then some that are small.
Paul or kind of help us get a feel for how that pipeline actually looks sort of one level below the surface.
Yeah, Randy I'll, let you take that you might want to break it down to <unk> asked in the in the total but also to make the top 16 or the top 20.
Yeah, absolutely. Thanks, Brooks I think.
Yeah as you can imagine there's a variety of but I would say that you know a year ago year and a half ago everything we looked at was between 100 to say $200000 a year for three years SAS fees.
The average as you can tell from the math is up a currently in the top 16.
There are a handful of opportunities that are in the a 400 to 500000 dollar a year range. So we've we've had that opportunity as I mentioned.
Earlier to kind of move up in the hospital system ranking and and I've said this before Brooks, but one of the things I'm. Most pleased with is that the evaluate a technology.
Yes, so unique in the market that it's given our company an opportunity to speak with almost any.
Hospital system or health care provider, you can name and heretofore, we couldn't do that and that's because of utility of the solution.
So I think as each day dawns, you look at us moving up but we've been talking in general terms than an average contract is at least $300000 a year for three years, some are little bit smaller and some are much larger so that's not a bad average to work off of.
Absolutely that's great. Let me just that's the one more question. So obviously you talked quite a little about the impact of coal bid in the environment you have out there I my sense personally as hospitals are exactly fast moving animals or more like the elephants out there in the jungle and.
What do you think what's your sense are these guys ready to take action or are they still at a point, where a covidiens distracting them or be there just the budget constrained and they say rather than put something new and did the into the system or we're going to wait a while.
Well make sure we're you know I'm level ground or something.
How do you evaluate kind of what you're just started the pulse of the marketplace out there right now.
Yeah. Thanks, Brooks is t. I'll start and Randy may add and more to this but the health systems that.
One you know that as we pointed out in our remarks with the cares that.
Yes.
16, Thats, our top prospects have received funding.
So that helps.
Decision, making.
And obviously, we're targeting some of these larger health systems, which are more sophisticated and much more analytical about kind of where they are coming out of this and revenues that top of the the the list for any health system right now and say revenue integrity at the top of the list in the digital transformation of.
Where they are coming out it is so many of these hospitals I think recognize their lack of digital transformation.
And so we're we're seeing we're seeing health system <unk>, maybe edson.
It's pretty early obviously coming out so I'm sure sure.
Got it more but.
Other than ours top 16 prospects. They did receive cares funding that that's a data point outside of that this was our gut and having conversations with many health systems.
I think theres the leaders maybe a third of these guys are leaning into this is quickly as possible because they know they have to do something after righted. The ship. Then you have these these these guys in the middle <unk>.
And maybe aren't quite as prepared and I'm a bit slower with their executive teams you know in their boards.
And then and then you have this third group that might not be around anymore [laughter] [laughter], but they were just so woefully under prepared going into this but for do you mean.
Look at our top I'm not talking about the whole pipeline because I'm sure. We have group in each segment, but if you look at where were focused in this pipeline call at the top 20.
You know there, they're they're lean back into this pretty quickly and if you look at the claims and you look at the scripts and you look at things that are starting to come back on line with elective surgeries in the like you know there's there's.
There's a lot of optimism you know now I think everybody pretty cautious.
Thinking about the fall what kind of rebound as cobot have or not but yeah, no nobody knows but you know Fortunately, we're seeing at least as the CEO CFO.
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I think they recognize they have to do something different and that bodes well for us.
That's great.
[laughter].
Randy you may have some other things to add but.
You know excellent answer other tier, especially if we got some that are aggressive and smart and looking for new things and others to your point Brooks that are more moving like elephant. The last thing out onto it though is it has helped us in the story to talk about the fact that evaluator contains cobot 19.
Coding analysis, they've never done they've never had covered and so we've done some analyses on one of the ways. We market is we say look give us your data Brooks and we can look back over the last 90 days and let's see how you've done at coating your cobot cases and.
I won't name names, but on a few that I've seen most recently, it's pretty impressive as to how much.
Revenue they've missed him a couple of the record revenue they've left on the table because of the uncertainty as to how to go about this and it's just another plank in our platform to say with evaluator you have this capability as well because to tease point you know, we don't know to what level, but this is going to come back again.
Well frankly, it's still around here, but if cove. It remains part of the mix going forward any progressive health care provider is going to want to be able to code that as efficiently as they count.
Yeah, that's great that's fantastic keep it up congratulations on getting the business or sold and.
Headed in the right direction.
Thank you Rob Thanks, Brian.
Thank you at this time if reached the end of the question answer session and I'll now turn the call over to Randy Salisbury for closing remarks.
Thank you all again for your interest in support of streamline health. If you have any additional questions or anymore information. Please contact me that Randy dots Ellsbury at streamline health button that we look forward to speaking with you all again in September when we'll discuss our second quarter 2020.
<unk> financial performance good day.
This will conclude today's conference you may now disconnect. Your lines at this time. Thank you for your participation.