HealthStream, Inc. reported consolidated earnings results for the first quarter ended March 31, 2018. For the quarter, the company reported revenues of $54,858,000 against $51,967,000 a year ago. Operating income was $3,730,000 against $2,365,000 a year ago. The increase in operating income reflects revenue growth, revenue on product development and a capitalization of commissions under the new revenue standard ASC 606. Income from continuing operations before income taxes was $4,043,000 against $2,495,000 a year ago. Income from continuing operations was $3,629,000 or $0.11 per basic and diluted share against $1,709,000 or $0.05 per basic and diluted share a year ago. Net income was $23,846,000 or $0.74 per basic and diluted share against $1,285,000 or $0.04 per basic and diluted share a year ago. Net cash provided by operating activities was $8,549,000 against $16,527,000 a year ago. Purchases of property and equipment were $1,858,000 against $931,000 a year ago. Adjusted EBITDA from continuing operations was $10,229,000 against $8,666,000 a year ago. Adjusted EBITDA was $30,446,000 against $8,242,000 a year ago. Non-GAAP operating income was $3,775,000 against $3,209,000 a year ago. Non-GAAP net income was $23,887,000 against $1,863,000 a year ago.

For the year 2018, the company continues to anticipate that consolidated revenues will increase 6% to 8% as compared to 2017. The company continues to anticipate operating income for 2018 to increase between 20% and 30% as compared to 2017 under ASC 605. Under ASC 606 the company anticipated that operating income will increase between 25% and 40%. The primary reason for the different ranges pertains to the capitalization of commissions under ASC 606, which has the impact of deferring commissions over an extended period versus its current period expense treatment under ASC 605. The company continues to anticipate that capital expenditures will be approximately $20 million during 2018. The company expected the annual effective income tax rate to range between 21% and 23% for 2018.

This company expects an effective tax rate of 26% to 28% for the remaining three quarters of 2018.