Founder-CEO Bobby Frist

NASHVILLE-based HealthStream (NASDAQ-HSTM) didn't complete a business acquisition in roughly the past 14 months, but the company has done more than two-dozen deals since 1999 -- and remains a disciplined hunter.

Founder, Chairman and CEO Robert F. "Bobby" Frist Jr. told analysts during a regularly scheduled February 22 conference call that he was sensing that conditions might be improving for building merger and acquisition pipelines.

Responding to an analyst's question during that call, Frist acknowledged that founders who own "a hot company that's a SaaS model and [your company is] emerging and growing fast, you're going to be able to demand a premium for your business when you sell it... I think that is almost always true. Maybe fewer companies meet [those] criteria and they're also burning cash. So, I think...there's going to be some deals out there," in the next year or so, as early-stage companies seek growth capital.

CFO Scotty Roberts, who joined the company shortly after it went public, said during the same call, in part, "We have a strong balance sheet with over $71 million of cash, no debt and improving free cash flows, with available capital to deploy, we apply disciplined approach to our capital allocation strategy, which includes M&A, dividends and share repurchases." The company's market cap at mid-afternoon today is hovering around $792MM.

Michael Collier

There's also M&A talent: Often during the past 13 years, Michael Collier JD has been a key M&A team member. He is HealthStream's general counsel and corporate secretary, as well as its EVP for corporate strategy and development.

According to his LinkedIn profile today, he is "Currently focused on leading: (i) platform strategies to achieve interoperability between SaaS applications; (ii) continued growth through M&A, with 18 acquisitions completed in the past 10 years; (iii) innovative and disruptive partnership models to expand the healthcare ecosystem; and (iv) leading a successful minority investment program to jump start early-stage companies."

Early-stage founders, advisors, investors and others would do well to scour HealthStream's discussions of its strategy via its filed documents, presentations and other documentation.

HealthStream seems coherently evolving, thus outsiders who take the effort to learn more about its increasingly "platformed" offering, its refreshed approach to direct-to-professional and payer-sector market segments -- in addition to its health and medical-employer segments -- and other ecosystem-building stratagems may realize opportunities or theses worth pursuing.

HealthStream did 28 acquisition transactions during 1999-2022, according to information provided Feb. 29 at request of VentureNashville by Mollie Condra PhD, the company's vice president for investor relations and communications.

Additional information is available on many of these 28 firms via online search and several popular venture databases.

SilverPlatter 1999
KnowledgeReview 2000
Quickstudy 2000
M3 2000
Eminet 2000
Education Design 2000
Synquest Technologies 2000
de'MEDICI Systems 2001
Data Management & Research 2005
The Jackson Organization 2007
Decision Critical 2012
Sy.Med Development 2012
Baptist Leadership Group 2013
Health Care Compliance Strategies 2014
HealthLine Systems 2015
Nurse Competency 2016
PBDS 2016
Morrisey 2016
CredentialMyDoc 2019
Providigm 2019
NurseGrid 2020
ShiftWizard 2020
MyClinical Exchange 2020
ANSOS 2020
ComplyAlign 2021
Rievent Technologies 2021
CloudCME 2022
EEDS 2022

On Feb. 19, HealthStream's press release provided results for 4Q2023 and FY2023. Some highlights are below. Most Recent SEC filings here. HSTM IR website here. Current HSTM analysts here. HSTM Press Releases here.

Fourth Quarter 2023

● Revenues of $70.6 million, up 3% from $68.5 million in the fourth quarter of 2022

● Operating income of $4.3 million, up 38% from $3.1 million in the fourth quarter of 2022

● Net income of $4.6 million, up 87% from $2.5 million in the fourth quarter of 2022

● Earnings per share (EPS) of $0.15 per share (diluted), up from $0.08 per share (diluted) in the fourth quarter of 2022

● Adjusted EBITDA1 of $16.0 million, up 17% from $13.6 million in the fourth quarter of 2022

● Board of Directors has declared a quarterly cash dividend of $0.028 per share, an increase of 12% over the previous quarter's dividend of $0.025 per share

Full-Year 2023

● Revenues of $279.1 million, up 5% from $266.8 million in 2022

● Operating income of $16.0 million, up 29% from $12.4 million in 2022

● Net income of $15.2 million, up 26% from $12.1 million in 2022

● Earnings per share (EPS) of $0.50 per share (diluted) in 2023, compared to $0.39 per share (diluted) in 2022

● Adjusted EBITDA of $61.3 million, up 15% from $53.4 million in 2022.

Previous VNC coverage of HealthStream here. VNC

. last edited 0614 3 April 2024