Q3 2020 Streamline Health Solutions Inc Earnings Call
Greetings, ladies and gentlemen on welcome to the streamline health solutions third quarter 2020 earnings Conference call.
At this time all participants on the listen only mode of question and answer session will follow the formal presentation.
Anyone should require operator assistance during the conference.
Please press star zero on your telephone keypad.
As a reminder of this conference is being recorded.
It is now my pleasure to introduce your host Mr., Randy Salisbury, Chief sales and marketing officer for streamline health.
Thank you Sir you may now begin.
Thank you for joining us to review the financial results of streamline health solutions for the third quarter of 2020.
Which ended October 31st 2020.
The conference call Operator indicated my name is Randy Salisbury, as senior Vice President and Chief sales and marketing officer here at streamline health.
The manage all communications, including Investor Relations joining.
Joining me on the call today are triggering.
The Chief Executive Officer, and the chairman of the board.
Tom Gibson Chief Financial Officer.
At the conclusion of today's prepared remarks, we'll open the call free question and answer session.
If anyone participating on today's call does not have the full text copy of our press release.
Balancing these results you can retrieve it from the company's website at streamline health Dot net or numerous other financial websites before we begin with prepared remarks.
I want to be sure that we are clear for everyone on the record how certain information, which may be provided today as with all of our earnings call should be viewed.
We therefore should net for 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 day.
These are subject to risks uncertainties assumptions on all the factors that could cause actual results could differ materially from those we made the skus.
Again, 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 and assumptions.
The factors.
The always we are presenting management's current analysis of these items as of today.
The switch on this call should take into account. These risks when evaluating the topics from will discuss please note streamline health is not on the taking any commitment or obligation of the publicly revise any such forward looking statements made today.
Second, 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 expenses are not included in these measures. So these calculations may differ from those which another it's the may utilize in calculating their own non-GAAP measures.
GAAP you compare these amounts on consist of terms of please refer to our website at streamline health net and our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measures.
I'd now like to turn the call over to the Keigley, President and Chief Executive Officer. He.
Thank you Randy and thank you all for joining us this morning.
Before I review, our third quarter financial performance I want to state again, our support of our health care provider customers. During this global grown the virus crisis.
Our team has great respect from frontline on health care professionals, and we are grateful for their continued the dedication and service to their communities.
The do our part during this pandemic the streamline the team has been successfully working remotely since March and we'll continue to do so one of the foreseeable future.
We all know how difficult. This year has been as we continue to deal with the many repercussions of the current Knight team had them.
Under normal circumstances, meaning life of note pad there are health care provider systems are experts at multitasking.
Constantly working to provide the best clinical services and improve efficiencies within their organization without losing sight of security data collection of financial health.
Hospital departments work independently, while making decisions the under the corporate umbrella we.
We believe this year that rhythm has been disrupted, forcing health care system decision, making into a more linear approach.
Job one per hospital system is to understand and manage the clinic care mandated by the pandemic.
Job to the to ensure that the have the capacity to enable their respective communities to survive a surge and now it appears that job three will be to handle the logistics of providing vaccinations in an orderly fashion income.
Including the specific refrigeration requirements of the various vaccines as they gain F.D.A. approval.
We are confident that our health care providers, the ability to multi task and de centralized their purchase decisions to the various departments as it was before the pandemic will return in the near future.
And that when they do solutions like our evaluator prebuilt coating analysis technology will be high on their list of smart purchases to ensure improved revenue integrity going forward.
During this time, we of streamline had focused internally on controlling the things we can and to win at each of these things every day.
As the new co I mentioned at the beginning of this fiscal year of when we sold on the legacy E. C. N business the focus solely on providing technology and services to help providers solve problems the gain efficiencies in the middle of the revenue cycle.
I wanted us to develop a world class product management team to deliver on evaluate or technology.
I wanted us to build a world class customer success team, including an implementation team that would be second to none.
And my view.
All of this is necessary to ensure that we have delighted customers, who will readily speak to new prospects about the many benefits day, realizing by using our technology enabled services.
These are some of the things we can control and when that every day I believe we have won a lot lately as we have improved in all of the areas I just articulated.
One proof point is the during the first nine months of fiscal year 2020, our SaaS revenue grew 43% over the same period a year ago.
Further.
We had supported new customers with more rapid implementation in the last couple of months with the pandemic unabated. The team successfully completed implementations at Cooper University in New Jersey, and M Health Fairview in Minnesota, working 100% virtually.
And the team has conducted regularly scheduled monthly meetings to ensure our customers achieve the results they anticipate and see the value evaluated delivers.
This improved customer experience has delivered an expanding roster of referenceable clients.
In general I'm pleased with the stronger teams of individuals and believe they represent the kind of strong foundation any company needs to grow and growth quickly.
Turning now to our third quarter on first nine months financial performance revenues for the third quarter totaled $2.6 million down approximately 25 per cent as a result of the $700000 perpetual sales during the third quarter of fiscal 2019.
Recurring revenue accounted for 74% of total revenue this quarter compared to 55% during the third quarter of 2019.
Revenues for the first nine months of 2020 totaled $8.4 million down approximately nine per cent compared to $9.2 million. During the first nine months of the script 29 take the.
The decline was primarily attributed to the but lower perpetual revenue and lower revenues from the clinical analytics business that was sunset in 2019.
Tom Gibson, our CFO, who will provide more detail on the impact on the clinical analytics business in his remarks later on.
Despite the macro issues related to kind of in that I mentioned earlier, our sales teams successfully close $1.4 million of new bookings during the third quarter.
And $5.6 million during the first nine months of 2020, just shy of about $2 million quarterly threshold today.
Randy went out additional detail about our sales efforts and prospects for continuing evaluator booking success in a few minutes.
Another area that we can't control of our operating expenses for the non months ended October 31st 2020, and 2019, we delivered significant improvement in operating expenses, which totaled $13 million down from $13.7 million during the same year of good period.
Our team has successfully managed costs throughout the year and as a result, adjusted EBITDA improved to a loss of $1.7 million compared to an adjusted EBIT the loss of $2.5 million during the same prior year period.
As of October 31st 2020, we had $3 million of cash on hand, with no bank debt our.
Our cap table remains clean with approximately 31 million shares outstanding all of which is common stock.
Our finance team has completed the paper work to apply for conversion of our P.P.P. low we secured in April of this year into a grant.
We will provide an update on this and other financial detail shortly.
But at this point I will turn the call over to our chief sales and marketing officer, Randy Salisbury for an update on sales activity and the state of our pipeline Randy.
Randy.
Hi, Good day.
True teams point of focusing our efforts on things, we can control and when that I'm pleased to report the during the third quarter, we hired two very senior and seasoned sales professionals as we expanded our geographical coverage from three regional territories. The four.
We have new regional vice presidents in the western and central regions.
The expansion has enabled us to reposition the previous central region sales leader to the northeast where he lives on his work for many years.
As we search for true sales leaders, we came across a multitude of the people.
But I've always found greater success with executives, who had a job the found our opportunity the superior and such was the case with both of our new RV piece.
And they come with a strong database of existing relationships at some of the leading health care providers in their regions.
I look forward to reporting on the expansion of our sales pipeline as a direct result of their efforts in future quarters.
Regarding our bookings in the third quarter of.
No we did not generate enough total contract bookings to meet our quarterly target.
Of $2 million to $3 million.
The prospects, we focused on closing are still with us.
We moved most of them into the fourth quarter of this year and the first fiscal quarter of next year.
If he stated at the outset of our call the impact of the novel Cohen of virus Pandemics on our prospects final purchase decision, making has been obvious.
Many of our most mature opportunities what we turned stage four of our pipeline.
Have been focused excuse me force to delay final decision, making on internal budget or part of committees determine the most pressing needs during the crisis.
We are seeing signs of the focus on linear planning starting to dissipate in.
In some of our prospects are regaining the freedom to make purchases that will improve their departments performance.
Clearly evaluate or helps the revenue cycle compliance.
And the H. I am department to do just that.
The during the third quarter, our sales team successfully closed $1.4 million of bookings, including a new sizable of eye wear their contract with the large north Carolina based provider.
And I should note all of our selling activities remain virtual as the majority of our prospects are still working remotely, which the gates the opportunity for us to meet with on the person, which is always our preference, but it was not a hindrance to our prospecting and selling.
Our pipeline remains plentiful and continues to expand.
At the end of the third quarter, we counted 72 prospects, representing approximately $67 million of total contract value.
Via our direct sales and marketing efforts.
And for the first time, we've added five prospects to our funnel from our reseller partnerships, representing approximately $5 million in total contract value potential.
So our pipeline now holds 77 prospects.
The the potential total contract value of $72 million.
As our prospects decision, making frees up.
I believe we will see improved velocity in our contract signings and the building of our SaaS based revenue in the quarters and years ahead.
As I just mentioned, we're seeing promising sales activity from our recent partnerships.
You may recall that last quarter, we signed a new evaluate a reseller agreement with chart wise and we expanded our reseller agreement with all scripts to include evaluator and RCD I technology. In addition to abstract.
We project that the revenue generated through these partnerships will be primarily recurring SaaS based revenue.
Our goal is to lead the industry movement to prebuilt revenue integrity validation and we believe that in addition to our direct selling efforts large reseller partners should enable us to expand our reach and.
On accelerate our sales.
We continue to have discussions with other potential reseller partners and we'll update you as these materialize.
Looking ahead of the Q4 and Q1 of next year.
From a believe the number of our best prospects from the third quarter, we'll sign new volume for contracts with us.
As mentioned, our best prospects have not left that type of pipeline they've just been asked the delay our conversations and some instances contract signings.
I'll now the turn the call over to Tom Gibson, Our CFO to review of the third quarter financial results in more detail.
Tom.
Thank you Randy and good morning, everyone on the call.
As previously reported streamline health fast base revenue grew by 287007 hundred $61000 in the three months and nine months ended on.
Over 31 2020, respectively.
This represents a 48 and 43% growth rate over previous periods respectively.
Further we generated growth of 10 per cent sequentially and SAS revenue from Q2 to Q3 2020, and we are projecting a similar rate of growth in Q4.
As compared with Q3 of this fiscal year based upon recently implemented you evaluate your customers.
Our annualized run rate on the evaluate or SAS revenue at the end of this fiscal year is projected to be $2.700 million.
We believe there is ample room for our company to continue these growth rates over the next three years.
Certain of our past the initiatives are reflected in our reported financial results for the third quarter ended October 31 2020. The initiatives include the company sell of the easy EME assets effective February 24, 2020, and the funding of RPP.
Alone in April 2020 that supported our ongoing operations during the novel Corona bars and debt.
As the result of the sale of the easy on the assets. The company is reporting discontinued operations in fiscal 2020 and for comparable with the <unk>.
2019.
Discontinued operations effectively separate the easy on the assets and the operations from the remaining or continuing business as the result of the separation. We will report on continuing operations for the current and comparable previous periods. The.
This will set of basis for the guidance of revenues.
Earnings and cash flows of the continuing operations. Once these are provided on.
I will address the subject of guidance in more detail at the conclusion of my remarks.
Now, let me turn to the company's operating performance for the third quarter ended October 31 2020 as.
As announced in yesterday's press release, we generated revenues of approximately $2.6 million and $8.4 million for the three and nine month periods ending October 31 2020, respectively.
This was 25% and 9% lower than the three and nine month period, ending October 31, 2019, respectively. The.
The decrease in revenues for the three month period, ending October 31, 2020 is the direct result of both the timing of the of perpetual sell we booked in Q3 2019, and the removal of the sunset product clinical analytics, which I will.
Comment on momentarily.
The Companys professional services perpetual revenue and audit services have each been adversely impacted by Corona bars.
Perpetual sales primarily generated free.
Our reseller partnership with all scripts and centered solely on our abstract technology were delayed due to health care organizations, putting the larger system changes on the whole.
However, as previously mentioned the company SaaS revenue increased by $287000 and $761000 in the three months and nine months ended October 31, 2020 over the comparable previous periods.
This was a direct result of the companies evaluate your solution.
Our company has provided insight regarding our legacy versus growth businesses. There are two legacy revenue stream the impact fiscal year 2021 is clinical analytics, which represented approximately $330000 of revenue in the night.
The months ended October 31, 2020, as compared to approximately $605000 in the same period last year.
Political analytics, where the patient care system measuring outcomes of certain procedures and has the different buyer primarily in the research and educational segments of healthcare it.
It is not in the company's core business and as pretty loose previously announced this platform was sunset in fiscal year 2019.
The revenue stream for clinical analytics, a component of the company's Maintenances for category expired in the second quarter of this fiscal year.
The Sun setting of this platform complements our selling of the easy EME assets. The company has committed to exit solutions that are not focused on solving customer problems or helping create efficiencies in the middle of their revenue cycle.
Well the do not offer future revenue growth as we continue to make strides in moving obstacles.
Net of kept us from generating incremental top line revenue growth.
Turning now to bookings.
As C.M., Randy mentioned earlier, the company generated approximately $1.4 million of bookings in the third quarter of fiscal 2020, which was below our target.
The onset of parana bars slowed the pace of our evaluation of bookings, but we have not seen any slowdown in growth of the company's pipeline.
We remain energized about the traction we are seeing with large multi unit hospital systems and believe there will be an upward trend for future evaluate or bookings performance.
On the pipeline data confirms that our bookings are being delayed and not eliminated.
[laughter] recurring revenues were approximately 74% of total revenue.
The third quarter substantially higher than the 55% from the same period last year.
Primarily due to the after of mentioned perpetual license revenue.
Generated last year.
The largest impact on recognized revenue.
From a novel Corona bars, and our nine months ended October 31, 2020 was from perpetual sales professional services and audit services, which are non recurring in nature.
It is our view that hospitals are consumed by the need to focus on the increased demand for care as a result of that.
The plan to address the logistical dissemination of of vaccine and the budgetary obstacles of higher co the treatments and fewer elective procedures.
Moving now to adjusted EBITDA, we reported the deficit of $725000 for the three months ended October 31, 2020, as compared with the deficit of $759000 in Q3 2019.
For the first nine months of this fiscal year, we reported the deficit of $1.7 million compared with the deficit of $2.5 million in the same period last year.
This reduction in the loss from adjusted EBITDA.
Is the direct result of certain continual improvements, we're making to the company's cost structure. The does not impact growth for product development on the day.
Lower spend on trade shows and travel due to the Corona bars contributed some of the cost savings as hospitals are not currently taking in person sales calls, which as Randy mentioned has not hampered our selling efforts as we can easily current the low.
Live demonstrations of our technology virtually.
The company reported $39000 and $239000 of interest expense for the nine months of fiscal 2020, and 2019, respectively. The.
Company paid the entirety of its term loans on the day to close the sale of the easier from assets February 24 2020.
The company qualified and received a P.P. low in April of 2020, with the 1% interest rate.
Turning now to other areas the company recognized depreciation and amortization of $1.775 million and $1.499 million during the nine months of 2020 and 2019, respectively.
The company has accelerated completion of projects that are in inventory for capitalized software development under the ads from that the development and that is the leading to higher rates of amortization.
The company of bad added tighter discipline to his development procedures by limiting the starting and completion of projects the within one or two or three weeks spreads the.
This fee on the development work to completion and should result in higher amortization of future periods for capitalized software development.
The primary benefit of this the bell method is that our customers should see greater velocity and enhancements increasing their confidence and all of our technology solutions.
The company recognized the million $54000 and 700, the $19000 of share based compensation for the nine months of fiscal 2020 and 2019, respectively.
The company expects share based compensation the 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.
Further the company's development partner is receiving a portion of their compensation in stock, which is reported in the share based compensation figure.
The company reported income from discontinuing operations net of tax for the first nine months of 2020 and 2019 of.
$4.7 million and $3.4 million respectively.
The discontinued operations for fiscal 2020 includes the gain on sale of the easy EME assets of $6 million.
Discontinued operations in fiscal 2019 represents the income derived from the easy on the assets sold in February 2020.
The company has $800000 of the original proceeds from the sale of the easy on the map that held in escrow that is scheduled to appear to be released on or about may 2021, yes.
Yes, good funds are reported.
In the company's balance sheet as other assets.
Finally, the company recognized net income tax expense in the nine months of fiscal 2020, and 2019 per boat continuing and discontinued operations of the.
Approximately $90000 and $16000 respectively.
The company has substantial federal and state income tax net operating loss carry forwards that may be used for the gain on sale of the Sim assets and sufficient.
To absorb any forgiveness received on the PPP low.
We do not expect the pay any material amounts of federal or state income tax for the full fiscal year 2020.
For GAAP purposes. The income tax originally reported in the first quarter of 2020 related to the gain from discontinued operations is being reimbursed through the fourth quarter of fiscal 2020.
Income taxes, the sign to continuing operations and discontinued operations isn't the allocation of taxes the offset the.
The resulting in the company paying a minor amount.
The minimum state income tax it's one of the year.
Moving to the balance sheet. We finished the third quarter was approximately $3 million of cash on hand, compared to $1.6 million at the end of the companys previous fiscal year.
The company generated $5.4 million in the sale of the easy of assets net of the term loan repayment.
Additionally, the company applied for and received of PPP loans $2.3 million in April 2020.
The company has applied for but not the granted forgiveness of the portion of the PPP low or.
No accounting for the forgiveness will be reported in the company's financial statements unless or until it is granted by the SBS day.
Beyond the operations for the nine months of business here to the 20, we invested 1 billion of $500000 in the capitalized software development asset primarily new functionality for our key customer solution evaluate or the.
Down from $2.139 million in the same period last year.
The continuation of this spend and development on the evaluated platform the themed essential to expand our sales velocity. The company continues to have flexibility with the investments we make into our software related to the timing nature and type of spin the company has reduced head count.
The last year and refocus the its R&D efforts around the Companys go forward solutions that have the greatest growth opportunities.
During the first nine months of fiscal 2020. The company made note payment on the term loan as it was principal free from the first 12 months. The term loan balance was $4 million when we close with bridge Bank on December 12 2019.
The term loan sensible was repaid upon the closing of the sale of the Bcm assets. The company has access to a $2 million revolving credit facility with bridge bank. The revolving credit facility is asset based loan and the commitment is limited to a certain portion of the company's accounts.
The receivable.
The company has not drawn on the revolving credit facility at any time during fiscal 2020.
The PPP loan has no repayment requirements for the first seven months of.
Additionally.
Based on certain criteria the company may be forgiven, a portion or all of the PPP line.
As stated previously the company has applied for but not yet been granted forgiveness of the PPP low.
The company has non the position to provide guidance for fiscal 2020 due to the continued uncertainty around the effects of the novel Corona bars. The company will continue to report DCM revenue as the discontinued operation on fiscal 2020, and it will impact all prior periods.
For fiscal year 2020, as previously reported the company projects to generate the deficit adjusted EBITDA the.
The effects of the Corona bars have increased our estimate of the shortfall in adjusted EBITDA for this year well.
While we plan to use our cash.
Basically the effectively we have no intention of decreasing our investment in the company growth engine evaluate or or its direct sales channel.
We are speaking proud to all our stakeholders. The streamline is now a growth company the.
The company will provide guidance that says there is more certainty of.
From the return of on a macro economy from the effects of the night pain.
That concludes my remarks, but before I turn the call back the.
I want to say again that I'm very proud of our team's accomplishments over the last few quarters. We are realizing on new culture of velocity and the execution I am highly confident the you will get 10 years, the financial results that will support my confidence in the new streamline organization.
D.
Thank you Tom.
Then on executive team as managers and leaders our responsibility is to control what we can and when it that every day.
Team has embodied that sentiment throughout this difficult year.
And this has helped us develop superior R&D talent and deliberate along with World class product management, resulting in continual improvement to our Valuator platform.
Our customer success team helps nurture customers to see greater value from our technologies, resulting in happier customers willing to offer sterling references.
Our commitment to lead the industry movement to Prebuild revenue integrity validation is real.
And we believe well.
We will gain momentum in the years ahead.
I'm confident net when our health care providers catch their breath innovative financial solutions like evaluator will be at the forefront of their minds.
Before we begin our Q and a session.
I'd like to extend the heartfelt thanks to the team members of streamline for the hard work and person of interest during an enormously challenging top.
Your contributions enable us to support or hospital system customers and ensure that they have the tools they need to free up time and resources to provide quality care for the communities day Sir.
Thank you all 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, ladies and gentlemen, we will now be conducting of the question and answer session. If you would like to register a question you may do so by pressing star one on your telephone keypad.
The question today is coming from Matt Hewitt of Craig Hallum. Please go ahead.
Good morning, Thank you for the update and for taking our questions on I wanted to dig in a little bit on the pipeline if I could of the first up in maybe a little bit on the selling environment as well one of the water customers, saying right. Now obviously you look at the the I don't know if you call. It the surge map are the heat map on regarding the.
The pandemic, but we're seeing the flare up the more west and therefore, the east coast seems to at least parts of the southeast anyways seem to be.
Easing up a little bit is that making the selling environment, particularly the in that area, a little bit easier and how quickly do you anticipate.
Closing some of those pipeline opportunities.
Yeah, Matt the Green here. Thanks for the question I'll, let Randy follow it up but in general I don't know if we can point to outbreaks easing in one part of the country or another that are of that or would assist in closing contracts sooner the well what we have seen.
It is and we've talked about this previously is that the healthcare systems. Historically are very good at it multi tasking, obviously with cobot that his create more linear decision making.
And that you know we have what.
Randy answer, but five or six contracts that are in red line in prospects legal or in the financial arms of those those entities that we're moving through and then obviously everything we had to take care of the patients now we have to we have to get the logistics worked out for the vaccines were.
We're beginning to see that piece.
Net behind these health systems and now the phone calls are coming back to rain, the and team rescheduling does last meetings to go through the Red line contracts and that's happened Randy a couple of times in the last couple of weeks of that.
I can't point to cobot outbreaks of I can't point to specific conversations with Pacific specific prospects, where we have contracts in hand.
Randy you want not only in the <unk>.
Yeah, I, yeah, I would add the solely Matt that to tease very point a couple of the conversations that we're going to have.
I have one today and one day tomorrow or both in the Midwest one of them the upper Midwest where the.
The surge has really hit I think the piece point <unk>, we're kind of be on whether or not there's a surge or not of surge the.
I've lived through this this linear planning they've worked on what they've had to work on including logistics for of vaccine dissemination and on now I think they're kind of turning back to doing stuff. That's smart for their departments. So that's encouraging to me.
Oh and the answer your last part of the question Matt.
On the last part I I think with any luck, we will be able to get some decent signatures on big contracts certainly this quarter and if we can this month before we get into our last quarter of our fiscal year, which is January.
The that that's very helpful. Thank you and then I think it's slide five in the presentation. Today. In addition to the day the the nice uptick in the number of prospects. It also appears just kind of run on the simple math that the average deal size has gone up within your pipeline could you talk a little bit about that is.
The the new partners coming on board with maybe some larger health systems is it customers looking to maybe make bigger initial purchases any color there would be helpful.
Yeah, Matt T. again.
The about a year ago, we made the maybe you're in the half of your Randy we made the.
The conscious effort to.
Target the larger health systems around the country because of the ROI the devaluate or has.
So great and so as we targeted those we have a handful of now the realized that a referenceable and so I think the that that strategy a year ago, starting the pay off today range.
Yeah, I completely concur and Matt I would suggest to you that.
Your idea of your concept there is true across the board that the reseller partners are also looking at potential opportunities that are similar an average per your size. In this is not a case, where we were talking with someone.
And they increased the size of the purchase of.
You know that's we price this per bed and so that's not necessarily the case, it's it's the audience, we're gaining share and the activity we're seeing on the pipeline our larger hospital systems.
Understood. Thank you and then maybe one last one could you just walk through the remind us again regarding all scripts the time line as far as the they've signed the contract but as far as educating their sales force in the when do you think that deals might start to flow from that as well. Thank you.
Yeah go ahead Randy.
Oh Roger that.
We although the sign the abundant when all the head of <unk>.
And on the Se.
The signed on you've done them from both the see the on technology and evaluate a few months ago and then the next steps for any of our partners to go true embedding of the pricing of the commissioning on how you take it to the market. Then then about the three weeks ago. The had an internal kick off call with their sales people to introduce the tuning solutions.
And then there was a law range annual sales kick off meeting in late January that they called the global kick off of GK of which we'll participate in that.
That will pretty much be the opening salvo to say, okay. Here's here's what you can do on one of the reasons of works on I think they are two of the as we've talked Matt evaluate it was not a replacement sale, it's greenfield and most most big resellers are looking for something like that.
I think during one allscripts client in the current pipeline and based on line you know getting on early start on this over the last few months, but I would anticipate that closings of all of the Allscripts deals will probably be a second half 2021 of clinic.
Understood. Thank you very much.
Thank you again Thats Star one if you have the question. Our next question is coming from Brooks O'neil of Lake Street Capital markets. Please go ahead.
Good morning, guys I have a couple of questions I guess I'll start by following after a matts question I'm curious if.
If you could help us understand how if at all.
The contracts, you're going to get through resellers like all scripts might vary from a more more of a direct contract relationship that's number one number two.
The curious if you can help us just understand the the landscape of the reseller market place in terms of you know how many are out there how big of an opportunity do you see that.
[noise] cats.
That's where I'd like to start thank you very much.
Yeah. Thanks, Ross. This is the you know the resellers.
In theory, you know if we can get 2025 per cent of bookings the year through resellers I think that would be a great number and then obviously direct is when we launched at the most of our energy, but the deal sizes you know the with.
With the Allscripts they.
They may be just a little smaller just because of their customer installed base based on where we're trying to focus directly and then obviously you pay commissions on those deals to the Allscripts organization, but in theory or you're not doing sales work, you're not doing the demos you're not you know that that's incremental bookings the men.
Force number of resellers out there.
The cost there's a lot, but there's probably.
Doesn't that would be important to us Randy on the anything further to that.
Yeah, I think that's exactly right about all scripts with the the dollar amount of they would contribute on three year.
Faster on tracks, who would be slightly smaller than the current average you're seeing but nothing from.
Matic, and then secondly, I would say that the.
You know the of the partners were looking on right now that I referenced in my comments Brooks.
[music].
It's the Tees point, you know, we're talking to a handful right now and.
If we could get a couple of them to agree and I think we could I think that we'll have the kind of impact he's talking about they would represent a larger.
Potential existing client base that they would go to with this idea this technology.
And could add volume in the latter part of 2021 and 2022.
Great and then I apologize for trying to understand the marketplace, the little better and I. Appreciate your help with the so how would you characterize these resellers as compared to say whatever relationship and how you would describe whats your help with that.
And as you think about what ethic represents in the marketplace.
How would you characterize the additional opportunities be on ethic is that type of scenario.
Oh.
Yeah, Randy I'll, let you talk about epic and maybe.
Parlay that into how we view of maybe meditech.
Yeah sure I was going to say Brooks the.
That epic it does not have a the heritage if you will of reselling other People's technologies, but as you know they sort of.
Quietly endorsed the I'm not by if you can gain entrance into their epic App Orchard, which is their good housekeeping seal of approval, which we've done.
And that helps.
When people are considering on us that our epic users. It certainly helps the remove barriers to say hey, we've already done all the integration work and you don't have to take our word for it you could take EPS word for it and they support that and that's good make no mistake a lot of the ones that Weve talked about with you on others are epic based facilities at the larger the hospital system of the team.
James the more predominance, we find epic as the MRC.
To tease point.
The the more.
Oh say aggressive, but the more open to referring the clientele to solutions that can improve their revenue cycle of performance like of Meditech and some others would be good potential partners force in that they have a large install base that they would effectively be saying to the existing clients there are ways to get more value.
Out of your cash them are in here is one of them and that's what we're working on with them on and.
The others, but.
Epic.
Not necessarily one of those the considers doing if they did we'd be happy to do it but they know who we are and we're pretty tight with them, especially when it comes to implementation. They they are part and parcel. The how we go about doing it does that answer your question Brooks.
Yes. It does its very helpful. I really appreciate the wrap up with one last one and you probably talked about this in a it's possible I just based on sales, but when.
When you talk about going after larger hospital systems, I I see that as the huge opportunity for you and.
I'm, assuming given the comments about the cobot environment on what that they're they're sort of more focused on dealing with the pandemic right. This minute, but ultimately those must represent the it really significant opportunity for your company.
Yeah. The it absolutely. This is the Brooks you know the larger transactions represent obviously much higher bookings in revenue numbers for us, but also of the ROI for evaluator inside of those health systems. The so substantial the that we believe the ultimately it's kind of make the sales process more efficient and the more.
Sophisticated health systems are the ones that already have the plan around patient care around vaccine logistics and they're the ones that are I believe we're going to come out of this the quickest.
[noise] really tells me you have some of good kind of decks in that marketplace. So I'm, hoping you can help of mouth make it sort of thing.
[laughter] from work at night on Friday.
Okay all right.
[laughter].
Thank you at the time I'd like to turn the floor back over to the Safari for any closing comments.
Well. Thank you all for your interest and support of streamline health.
If you have any additional questions or would like more information. Please feel free to contact me directly.
Yeah, Randy Dot Salisbury.
At streamline health Dot net.
We look forward to speaking with you all again in the April one we will discuss our fourth quarter and full year 2020 financial performance until then we wish you all the good day.
Ladies and gentlemen, thank you for your participation you may disconnect your lines of log off the web cast at the time and have a wonderful day.
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