3SOF

STRM announced its second contract win this week!!! ....and it's only Wednesday..

This is STRM 14th contract win so far this year or 40% higher than the total wins in 2009.

Streamline Health Announces Contract win with Texas-Based Healthcare Provider

CINCINNATI, Dec. 8, 2010 /PRNewswire/ -- Streamline Health Solutions, Inc. (Nasdaq: STRM), a leading provider of document workflow solutions for hospitals, today announced that one of the largest faith-based, nonprofit healthcare delivery systems in the United States, will implement Streamline Health's Suite of Health Information Management document workflow solutions at one of its affiliate acute-care hospitals that has served Texas for more than 20 years.

The hospital will integrate Streamline Health solutions into its EpicCare® medical record management system with an eye toward enhancing business processes, improving employee productivity, and promoting improved patient outcomes.

The total value of the contract is estimated to exceed $370,000, excluding maintenance services; with the installation and implementation of the health information management document workflows expected to take place in late calendar 2011.

The addition of Streamline Health's Suite of Health Information Management document workflow solutions will result in an efficient, secure and timelier method to access historical, and real-time, patient health records. The Texas-based institution seeks to advance patient care by creating more operational and financial efficiencies across the entire enterprise via the robust capabilities of Streamline Health's document workflow solutions.

J. Brian Patsy, president and chief executive officer of Streamline Health, said,

"We are pleased to be able to serve such a prestigious healthcare institution in the state of Texas. We recognize the beneficial financial impact of bridging the gaps between the various software systems utilized by the numerous departments of such a large medical institution. The medical staff will now be able to offer well-informed decisions based on patients' historical health information on a real-time basis. We are pleased to be the solutions provider that delivers this critical value proposition."

About Streamline Health

Streamline Health is a leading supplier of document workflow and document management tools, applications and services that assist strategic business partners and healthcare organizations to improve operational efficiencies through business process optimization. The Company provides integrated tools and technologies for automating document-intensive environments, including document workflow, document management, e-forms, connectivity, optical character recognition (OCR) and business process integration.

Streamline Health's solutions create a permanent document-based repository of historical health information that is complementary and can be seamlessly integrated with existing disparate clinical, financial and administrative information systems, providing convenient electronic access to all forms of patient information from any location, including secure web-based access.

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995


These guys are signing contracts right and left thanks to Federal stimulus money encouraging providers to optimize their operations through the use os IT tools.

STRM is right in the middle of that. The 14 contracts announced this year amount to about $2 million in licenses and $4 million in hosted services SaaS. By focusing in the SaaS delivery method 3 years ago they have increased their recurrent revenue to about $4 million now. The break-even point is $4.8 Million. Any license deals could turn a quater profitable. Even better is the fact that at this rate STRM's recurrent revenues will exceed expenses in 3Q 2011. From then on any license deals will trickle down directly to the bottom line.

I see STRM delivering 30 - 40c net income in 2011.

The beauty of growing hosted services is that those contracts last 5 years and renewal rates are almost 100%. Having predictable and recurrent revenues will insulate STRM from any recessions or bad economic climate in the future.

STRM's chart is looking good but it is likely to look even better after earnings today December 8, 2010 AH. Earnings/guidance are expected to be strong/bullish:

http://stockcharts.com/charts/gallery.html?s=strm

The company announced another contract win today. This is the 13th win compared to 8 the entire 2009, and STRM is just starting 4Q. 4Q is usually the strongest Quarter for STRM as hospitals and medical institutions spend most their budgeted funds at this time of the year. This time is different for STRM because the Federal stimulus programs are encouraging healthcare providers to spend money as soon as they can justify "meaningful use" of IT upgrades/uses to manage their businesses more efficiently. This "bonanza" for software providers in this sector will last for several years benefiting companies like Cerner, GE Healthcare (STRM's ally), STRM, and others.

Here are the numerous contract announcements this year. Keep in mind that not every contract signed is announced:

http://www.streamlinehealth.net/pressrelease.shtml

STRM Highlights:

- STRM is on the verge of attaining sustained profitability thanks to Federal stimulus funds aimed at encouraging providers to digitize electronic health records (EHR) and other functions.
- 4.5 million share float
- Market cap of only $13 million
- Trading at 0.5 times sales
- Low debt

STRM is a software company specialized in the development and implementation of tools and systems  to manage electronic health records (EHR). STRM and its partners including GE Healthcare Centricity Enterprise and others have won many contracts in the last 6 months.

The contract wins have accelerated significantly recently and continue to gain strong momentum. This trend is expected to continue for several years.

The company has reaffirmed last quarter (2Q 2010) its guidance of 10% revenue growth for the year despite a very week 1Q 2010. In order to meet the $20 million target, STRM has to average $6 Million in revenue in 3Q and 4Q. 3Q results will be announced on December 8, 2010. The current break-even point is $4.8 million. This means that 3Q and 4Q could be highly profitable.

The accelerated pace of contract wins inevitably turn STRM from a one-quarter wonder (usually 4Q of every year and reported in April....see spikes in volume and pps) to a consistently profitable company going forward. If you couple that with a low float and low debt you have a recipe for significant gains from the current very depressed pps. This makes STRM a great short and long-term investment.

STRM was on of the pioneers in the healthcare IT industry to offer hosted services using cloud computing or SaaS, or hosted services. Hosted contracts provide steady and predictable income for the life of the contract which is usually 5 years thus enabling the company to weather recessions and periods of weak economic activity. The accelerated pace of contract wins has increased its % of hosted revenues to about 85% of break-even. A few more quarters at this rate and revenues will exceed expenses. About 20 to 30% of all STRM's contract wins are license-based. Those licenses can add significantly to the bottom line as recurrent revenues equal expenses.

On a recent contract win CEO Bryan Patsy commented:

..."This order represents our 10th transaction for the fiscal year, which is substantially ahead of the number of transactions at the same time last year. The investments we made in our sales and marketing infrastructure this year are clearly translating into enhanced sales performance. "

.." We expect to complete fiscal year 2010 on a strong note and look forward to fiscal 2011 with great enthusiasm."

On a previous contract win CEO Mr. Patsy continued, "We are particularly pleased with the traction that we are gaining in our sales and marketing efforts to this point in the fiscal year. We are approaching the lower end of our sales goal for the entire year while still operating in our third fiscal quarter. We will finish the year on a strong note."

CEO Patsy also made this important observation about the recent trends:

..."We believe that the increased recent activity is primarily due to hospital organizations positioning for the potential availability of stimulus dollars earmarked for IT expenditures associated with meeting the criteria around meaningful use or physician adoption of electronic health records. Specifically, the high-tech provision in the American Recovery and Reinvestment Act (ARRA) offers healthcare organizations and physicians an opportunity to earn funding for meaningful use of EHRs"

.." Because of the opportunity to qualify for funding decreases over time, healthcare organizations are now busy how additional qualified IT investments can position them to meet requirements and earn reinvestment or reimbursement for their investments in EHRs..."


Here is an example of how GE/STRM work together:

http://www.streamlinehealth.net/pdf/2007/GE_integration.pdf