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February 19, 2015 12:00 AM

HealthStream plans to reinvest in business after 2014 growth

Beth Kutscher
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    HealthStream, which offers software products for healthcare organizations, reported that its customer base grew rapidly in 2014's fourth quarter, leading to a 22% increase in revenue.

    HealthStream reported fourth-quarter net income of $2.6 million on $45.3 million in revenue compared with $1.8 million in net income on $37.1 million in revenue for the prior-year period.

    The Nashville-based technology company, which makes tools for employee recruitment and training, as well as billing and collections and other services, increased its pre-tax income 19.4%. Higher royalties, sales commissions, additional personnel and other expenses offset some of the revenue growth.

    Its net income, however, benefited from a lower effective tax rate as it received research and development credits.

    The company's largest division, HealthStream Workforce Development Solutions, saw a 28% year-over-year increase in fourth-quarter revenue. It received a boost from its product offerings that help with ICD-10 readiness, the conversion to a more comprehensive medical coding system that is scheduled to roll out in October. Revenues from ICD-10 training products increased 44% year over year.

    HealthStream this month entered into a deal to acquire HealthLine Systems, a San Diego-based developer of products for healthcare credentialing, for about $88 million in cash. The transaction is expected to close this quarter. HealthLine reported 2014 operating income of $7.7 million on $18.8 million in revenue, an operating margin of 41%, according to HealthStream.

    HealthStream is predicting another strong year in 2015. It expects its workforce development business to increase its revenue in the 15% to 18% range, with total revenue across the company rising 18% to 21%.

    However, the company said it expects its operating income will decrease between 25% and 35% as it incurs costs related to the HealthLine transaction, develops new HealthLine products and invests in its own sales and marketing activities.

    Follow Beth Kutscher on Twitter: @MHbkutscher

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    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
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