Nightingale reports fiscal 2009 results
Company extends debt maturity to July 2012
MARKHAM, ON, July 30 /CNW/ - Nightingale Informatix Corporation
("Nightingale" or the "Company") (TSX-V: NGH), an application service provider
(ASP) of electronic medical record (EMR) software and related services with
more than 5.3 million patient records under management, announces its
financial results for the three and twelve month periods ended March 31, 2009.
All results are reported in Canadian dollars unless otherwise stated.
Q4 and Fiscal 2009 Highlights
-----------------------------
- Recurring revenues increased $1.4 million, or 11%, to $14.5 million
in fiscal 2009 compared to 2008 and increased $0.5 million, or 15%,
to $3.7 million in the fourth quarter of fiscal 2009 compared to the
fourth quarter of 2008.
- Non-recurring revenues decreased $1.9 million, or 32%, to
$3.9 million in fiscal 2009 compared to 2008 and increased $0.04
million, or 4%, to $1 million in the fourth quarter of fiscal 2009
compared to the fourth quarter of 2008.
- EBITDA for the fiscal year 2009 was a loss of $0.7 million compared
to a loss of $3.5 million for the fiscal year 2008. EBITDA was a
positive $0.01 million for the quarter compared to an EBITDA loss of
$1.2 million in the prior year and an EBITDA loss of $34,000 in the
previous quarter.
- The Company paid down its subordinated debt by $1.0 million during
fiscal 2009 to $5.3 million and, subsequent to year end, extended the
term of the debt to July 2012.
- Nightingale was ranked the number one fastest growing technology
company in Canada on Deloitte's 2008 Technology Fast 50 and number
ten fastest growing company in North America on Deloitte's 2008
Technology Fast 500.
- In July 2008, the Company completed the OntarioMD certification
process enabling eligible primary care physicians across Ontario to
receive funding when implementing Nightingale's hosted EMR solution.
- The Company reached a significant milestone by completing
Certification Commission for Healthcare Information Technology
(CCHIT) certification for its Nightingale on Demand hosted EMR
product in the US.
"Through our continuous focus on achieving profitability and building
more cost effective operations, in fiscal 2009 we were able to significantly
improve EBITDA and overall financial performance," said Sam Chebib, President
& CEO Nightingale Informatix Corporation. "While we faced challenges in fiscal
2009 as spending decisions were delayed as the market anticipated upcoming
Government EMR funding announcements, we believe we are in a healthy position
to take advantage of the market when the program details are finalized."
"We enter fiscal 2010 focused on achieving our financial goals, which
call for continued improvement in EBITDA and cash flow and expanding our base
of recurring revenue. We intend to continue to increase the number of
healthcare practitioners on our EMR technology, continue to cross-sell our
products and services to our existing customers and capitalize on our patient
base by launching patient-centric products. We expect to see further
improvement in our financial performance in fiscal 2010 as we bring in new
business from both sides of the border due to Government incentive programs
for healthcare practitioners who adopt EMR."
Subordinated Debt Amendment
---------------------------
On July 29, 2009, the Company amended its subordinated debt financing
agreements with Wellington Financial LP and Export Development Canada (the
"Lenders") to extend the term to July 29, 2012 at which point the remaining
principal balance of $5,250,000 will be due. Certain terms and covenants were
also amended at this time and, subject to regulatory approval, the Company
agreed to issue an aggregate of 4,233,870 warrants to the Lenders, each
warrant being exercisable for one common share of the Company at a strike
price of $0.31 per share and with an expiration date of July 29, 2012. In the
event such regulatory approval is not received the Company is required to
provide the Lenders equivalent economic consideration which puts the Lenders
in substantially the same economic position that the Lender would have been in
if the Lenders had been issued warrants.
Cancellation of Common Shares
-----------------------------
On June 30, 2009 an aggregate of 272,702 common shares were cancelled and
returned to treasury. The shares were originally issued to the former officers
of the Company and were returned to the Company for cancellation in connection
with their departure from the Company. After giving effect to the cancellation
of shares noted above, the Company has 72,295,218 common shares issued and
outstanding.
Q4 and Fiscal 2009 Financial Review
-----------------------------------
Revenue from continuing operations for fiscal 2009 was $18.5 million.
This compares to $18.9 million for the year ended March 31, 2008, representing
a 2% decrease from the prior year. This decrease was due primarily to a
decrease in non-recurring revenue and revenues from transcription services
over the prior fiscal year, offset partially by an increase in recurring
revenue. For Q4 fiscal 2009 revenue from continuing operations was $4.7
million, a 13% increase over revenue of $4.2 million in Q4 2008.
Recurring revenue, consisting of support and maintenance, utilization and
transaction fees, transcription, billing services and an increase in software
maintenance revenues, increased $1.4 million, or 11%, to $14.5 million, for
fiscal 2009. This compares to recurring revenue of $13.1 million, for fiscal
2008. Recurring revenue for Q4 fiscal 2009 increased to $3.7 million, compared
to $3.2 million, in Q4 fiscal 2008.
During 2009, Nightingale generated approximately 73% of its revenue in
the US. With the increase in the value of the US dollar relative to the
Canadian dollar during fiscal 2009, the Company estimates that revenue was
positively impacted by approximately 6%, or $1.1 million, during the current
fiscal year compared to the previous fiscal year. In Q4 fiscal 2009,
Nightingale generated approximately 70% of its revenue from the US market.
With the increase in the value of the US dollar relative to the Canadian
dollar, the Company estimates that revenue was positively impacted by
approximately 14%, or $0.7 million, during the current quarterly period
compared to the same quarterly period last fiscal year. The Company expects to
continue to be susceptible to currency exchange fluctuations.
In fiscal 2009, gross profit margin remained unchanged at 73% in
comparison to fiscal 2008. Gross profit margin for Q4 fiscal 2009 was 70%,
which is a slight decrease from gross profit margin of 71% in Q4 fiscal 2008.
Nightingale generated an EBITDA loss of $0.7 million in fiscal 2009,
compared to an EBITDA loss of $3.5 million in fiscal 2008. For Q4 fiscal 2009,
Nightingale generated positive EBITDA of $9,000, compared to an EBITDA loss of
$1.2 million for the same period in fiscal 2008. The Company has been focused
on achieving profitability and has implemented several cost reduction
initiatives during the fiscal year in an effort to achieve this goal. This
improvement in EBITDA is a reflection of these initiatives as well as an
increase in recurring revenue, including the strengthening of the US dollar
compared to the previous year.
Loss from continuing operations was $4.6 million, or $(0.07) per share,
in fiscal 2009, compared to a net loss from continuing operations of $14.3
million, or $(0.22) per share, in fiscal 2008. The year-over-year improvement
is related primarily to the cost reduction initiatives and increases in
recurring revenues as previously noted.
Cash and cash equivalents decreased $1.5 million to $3.5 million at March
31, 2009, from $5.0 million at March 31, 2008. The Company also repaid
approximately $1 million of its subordinated debt during fiscal 2009.
At March 31, 2009, total shares issued and outstanding were 67,666,557.
The financial statements and MD&A were made available at
http://www.nightingale.md and filed on www.sedar.com on July 29, 2009. This
press release should be read in conjunction with Nightingale's Consolidated
Financial Statements for the fiscal year ended March 31, 2009 and the
accompanying Management Discussion and Analysis.
Non-GAAP Financial Measures
The Company internally measures its performance and results of
initiatives through a number of measures that are not recognized under
Canadian generally accepted accounting principles (GAAP) and may not be
comparable to similar measures used by other companies.
a. Recurring and Non-Recurring Revenue
The Company has included recurring revenue and non-recurring revenue
measurements since it believes that this information is useful to investors to
evaluate its performance. Investors should be cautioned, however, that
recurring revenue and non-recurring revenue should not be construed as an
alternative to revenue as determined in accordance with GAAP.
b. EBITDA
EBITDA is a non-GAAP measure that management believes is a useful
measurement to evaluate the performance of the Company. Investors should be
cautioned, however, that EBITDA should not be construed as an alternative to
net earnings as determined in accordance with GAAP. The Company's method of
calculating EBITDA may differ from the methods used by other companies and,
accordingly, it may not be comparable to similarly titled measures used by
other companies.
EBITDA is defined as earnings before other loss (income), interest,
income taxes, depreciation, amortization, and stock-based compensation.
Management believes it is useful to exclude these items as they are either
non-cash expenses, items that cannot be influenced by management in the short
term, or items that do not impact core operating performance, and Management
uses this information internally for forecasting and budgeting purposes.
The following provides a reconciliation of EBITDA to Net Loss calculated
in accordance with GAAP:
-------------------------------------------------------------------------
Fiscal Fiscal
Quarter Quarter Year Year
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
Definition 2009 2008 2009 2008
-------------------------------------------------------------------------
Loss and Comprehensive
Loss $ (1,004) $ (6,273) $ (4,632) $ (12,811)
-------------------------------------------------------------------------
Adjustments for:
Gain on Sale of
Discontinued Operations $ - $ (977) $ - $ (977)
Earnings from Discontinued
Operations - (92) - (501)
Current Tax Expense
(Benefit) - 1,299 - 1,299
Future Tax Expense - 3,300 - 3,300
Other Loss (Income) (23) (28) (197) 142
Interest 370 1,008 1,418 3,297
Depreciation and
Amortization 674 552 2,609 2,190
Stock-based Compensation (8) 23 83 535
-------------------------------------------------------------------------
EBITDA $ 9 $ (1,188) $ (719) $ (3,526)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Notice of Conference Call and Webcast
-------------------------------------
Nightingale will host a conference call on Thursday July 30, 2009 at 8:30
a.m. Eastern Standard Time. To access the conference call by telephone, dial
416-644-3427 or 1-800-588-4490. Please connect approximately fifteen minutes
prior to the beginning of the call to ensure participation. The conference
call will be archived for replay until Thursday, August 6, 2009. To access the
archived conference call, dial 416-640-1917 or 1-877-289-8525 and enter
reference 21311355 followed by the number sign. A live audio webcast of the
call will be available at www.newswire.ca and http://www.nightingale.md.
Please connect to the website at least 15 minutes prior to the conference call
to ensure adequate time for any software download that may be necessary. The
webcast will be archived for 365 days.
Forward-Looking Statement
This press release contains "forward-looking statements" respecting the
issuance and cancellation of securities of the Company within the meaning of
applicable Canadian securities legislation. Generally, forward-looking
statements can be identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or "will be
taken", "occur" or "be achieved". Forward-looking statements are subject to
known and unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of Nightingale
to be materially different from those expressed or implied by such
forward-looking statements, including but not limited to: risks related to the
speculative nature of the medical software industry, which is affected by
numerous factors beyond Nightingale's control; the ability of Nightingale to
successfully integrate its acquisitions and any liabilities arising as a
result of such acquisitions, access to capital and agreements with its
Lenders; the existence of present and possible future government regulation;
access to debt or equity financing and agreements with its Lenders; the
significant and increasing competition that exists in the medical software
industry; the early stage of Nightingale's business; and therefore it is
subject to the risks associated with early stage companies, including
uncertainty of revenues, markets and profitability and the need to raise
additional funding. All material assumptions used in making forward-looking
statements are based on management's knowledge of current business conditions
and expectations of future business conditions and trends. Although management
believes the assumptions used to make such statements are reasonable at this
time, our assumptions may not to be as anticipated, estimated or intended.
Certain material factors or assumptions applied by management in making
forward-looking statements, include without limitation, factors and
assumptions regarding Nightingale's continued ability to fund its business,
rates of customer defaults, relationships with, and payments to, lenders,
demand for Nightingale's products, as well as Nightingale's operating cost
structure.
Although Nightingale has attempted to identify important factors that
could cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements. Nightingale does not undertake to update any forward-looking
statements that are incorporated by reference herein, except in accordance
with applicable securities laws. Further information on Nightingale Informatix
Corporation is available at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEAR ENDED MARCH 31, 2009
-------------------------------------------------------------------------
12 months 12 months
ended ended
March March
31, 2009 31, 2008
-------------------------------------------------------------------------
Revenue $ 18,465,149 $ 18,875,556
Cost of sales 5,055,039 5,169,218
------------- -------------
Gross profit 13,410,110 13,706,338
------------- -------------
Expenses
General and administration 3,457,051 3,773,406
Sales and marketing 2,417,913 3,191,495
Research and development 3,630,108 4,611,547
Client services 4,623,546 5,655,493
Stock based compensation 82,981 534,992
Amortization 2,608,753 2,189,582
------------- -------------
16,820,352 19,956,515
------------- -------------
Operating loss (3,410,242) (6,250,177)
------------- -------------
Interest 1,418,057 3,296,683
Foreign currency loss (gain) (196,773) 143,956
------------- -------------
Loss from continuing operations before tax (4,631,526) (9,690,816)
Current tax expense (benefit) - 1,298,811
Future tax expense - 3,299,857
------------- -------------
Loss from continuing operations (4,631,526) (14,289,484)
Earnings from discontinued operations - 501,113
Gain on sale of discontinued operations - 976,944
------------- -------------
Loss and comprehensive loss $ (4,631,526) $(12,811,427)
------------- -------------
------------- -------------
Basic and diluted earnings (loss) per
common share
Loss from continuing operations $ (0.07) $ (0.22)
Earnings from discontinued operations - 0.01
Gain on sale of discontinued operations - 0.01
------------- -------------
Loss and comprehensive loss per common share $ (0.07) $ (0.19)
------------- -------------
------------- -------------
Weighted average number of common shares 67,845,301 66,227,558
------------- -------------
------------- -------------
----------------------------
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31, 2009
-------------------------------------------------------------------------
As at As at
March March
31, 2009 31, 2008
-------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 3,514,056 $ 5,033,746
Accounts receivable 2,324,377 3,151,582
Other receivables 21,218 1,034,721
Inventory 62,182 168,948
Prepaid expenses 448,275 649,207
------------- -------------
6,370,108 10,038,204
------------- -------------
Long-term assets
Deferred costs 129,104 201,940
Property and equipment 1,216,596 1,722,276
Intangible assets 5,497,436 7,336,804
Goodwill 4,692,399 4,692,399
------------- -------------
11,535,535 13,953,419
------------- -------------
Total assets $ 17,905,643 $ 23,991,623
------------- -------------
------------- -------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 3,693,844 $ 4,048,260
Income taxes payable 948,701 1,336,270
Current portion of deferred revenue 3,935,954 4,199,690
Current portion of capital lease obligations 178,655 278,658
------------- -------------
8,757,154 9,862,878
------------- -------------
Long term liabilities
Subordinated debt 4,938,425 5,295,648
Deferred revenue 1,296,842 1,214,110
Capital lease obligations 281,463 438,682
------------- -------------
6,516,730 6,948,440
------------- -------------
Total liabilities 15,273,884 16,811,318
------------- -------------
SHAREHOLDERS' EQUITY
Capital stock 27,596,692 27,521,485
Contributed surplus 3,274,607 1,459,085
Warrants 1,469,262 3,277,011
Deficit (29,708,802) (25,077,276)
------------- -------------
2,631,759 7,180,305
------------- -------------
Total liabilities and shareholders' equity $ 17,905,643 $ 23,991,623
------------- -------------
------------- -------------
----------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2009
-------------------------------------------------------------------------
12 months 12 months
ended ended
March March
31, 2009 31, 2008
-------------------------------------------------------------------------
Cash flow from operating activities
Loss from continuing operations $ (4,631,526) $(14,289,484)
Adjustments for:
Depreciation and amortization 2,608,753 2,189,583
Amortization of transaction costs related to
debt financing 219,099 536,398
Gain on sale of asset - (22,130)
Stock based compensation 82,981 534,992
Future tax expense - 3,299,857
Unrealized foreign exchange gain (loss) 132,513 (143,956)
Interest accretion 423,678 1,138,700
------------- -------------
(1,164,502) (6,468,128)
Changes in non-cash working capital balances
Accounts receivable 1,154,497 500,593
Prepaid expenses 200,932 (195,044)
Inventory 106,766 (132,224)
Deferred costs 72,836 424,950
Other receivables 1,100,117 (929,806)
Accounts payable and accrued liabilities (818,042) (1,072,642)
Income taxes payable (691,204) 1,298,811
Deferred revenue (181,004) (71,523)
------------- -------------
Cash flows used in operating activities (219,604) (6,645,013)
------------- -------------
Cash flow from investing activities
Purchase of property and equipment (204,164) (368,671)
Sale of helper division - 10,810,873
VantageMed acquisition - (13,533,087)
------------- -------------
Cash flows provided by (used in) investing
activities (204,164) (3,090,885)
------------- -------------
Cash flow from financing activities
Increase in capital stock - 8,741,932
Proceeds from subordinated debt financing - 11,089,812
Repayment of subordinated debt financing (1,000,000) (6,000,000)
Repayment of capital lease obligations (343,138) (297,961)
Increase (decrease) in borrowing under line
of credit - (1,541,733)
------------- -------------
Cash flows provided by (used in) financing
activities (1,343,138) 11,992,050
------------- -------------
Foreign exchange gains (losses) on cash in
foreign currency 247,216 (227,769)
Increase (decrease) in cash from continuing
operations (1,519,690) 2,028,383
Increase in cash from discontinued operations - 1,257,703
------------- -------------
Increase in cash during the period - 3,286,086
Cash and cash equivalents, beginning of period 5,033,746 1,747,660
------------- -------------
Cash and cash equivalents, end of period $ 3,514,056 $ 5,033,746
------------- -------------
------------- -------------
----------------------------
Non-cash investing and financing activities:
Acquisition of property and equipment under
capital lease $ 59,542 $ 520,128
Supplemental cash flow information:
Interest paid $ 953,731 $ 1,734,905
Income taxes paid $ 564,467
OVERALL PERFORMANCE, RESULTS OF OPERATIONS AND FINANCIAL CONDITION
QUARTERLY DATA
-------------------------------------------------------------------------
Fiscal Fiscal
Year Q1 Q2 Q3 Q4 Year
In $ 000's Ended Ended Ended Ended Ended Ended
(Except per March 31, June 30, Sept 30, Dec 31, March March
Share Amounts) 2007 2007 2007 2007 31, 2008 31, 2008
-------------------------------------------------------------------------
Recurring Revenue $9,828 $3,213 $3,399 $3,229 $3,247 $13,088
Non-Recurring
Revenue 4,186 1,785 2,358 713 931 5,788
Revenue 14,014 4,998 5,757 3,942 4,178 18,876
Gross Profit 9,589 3,750 4,318 2,660 2,979 13,706
Expenses 14,856 4,913 5,084 5,220 4,739 19,957
EBITDA Loss
(non-GAAP measure) (3,841) (381) (158) (1,799) (1,188) (3,526)
Operating Loss for
the Period (5,267) (1,163) (766) (2,561) (1,761) (6,250)
Loss from
Continuing
Operations (5,713) (1,915) (1,602) (3,430) (7,342) (14,289)
Loss from
Continuing
Operations
per Common
Share $(0.14) $(0.03) $(0.02) $(0.05) $(0.11) $(0.22)
Loss and
Comprehensive
Loss (5,713) (1,787) (1,428) (3,324) (6,273) (12,811)
Loss and
Comprehensive
Loss per Common
Share $(0.14) $(0.03) $(0.02) $(0.05) $(0.09) $(0.19)
Weighted Avg. No.
of Common Shares 40,120 63,345 66,914 66,914 67,460 66,228
-------------------------------------------------------------------------
Total Assets $17,531 $39,536 $38,557 $36,257 $23,992 $23,992
Total Long Term
Liabilities $2,014 $11,398 $11,831 $12,097 $6,948 $6,948
-------------------------------------------------------------------------
----------------------------------------------------------------
Fiscal
Q1 Q2 Q3 Q4 Year
In $ 000's Ended Ended Ended Ended Ended
(Except per June 30, Sept 30, Dec 31, March March
Share Amounts) 2008 2008 2008 31, 2009 31, 2009
----------------------------------------------------------------
Recurring Revenue $3,309 $3,431 $4,045 $3,746 $14,531
Non-Recurring
Revenue 1,637 815 511 971 3,934
Revenue 4,946 4,246 4,556 4,717 18,465
Gross Profit 3,669 3,164 3,272 3,305 13,410
Expenses 4,561 4,275 4,022 3,962 16,820
EBITDA Loss
(non-GAAP measure) (236) (458) (34) 9 (719)
Operating Loss for
the Period (892) (1,112) (750) (656) (3,410)
Loss from
Continuing
Operations (1,260) (1,492) (876) (1,004) (4,632)
Loss from
Continuing
Operations
per Common
Share $(0.02) $(0.02) $(0.01) $(0.01) $(0.07)
Loss and
Comprehensive
Loss (1,260) (1,492) (876) (1,004) (4,632)
Loss and
Comprehensive
Loss per Common
Share $(0.20) $(0.02) $(0.01) $(0.01) $(0.07)
Weighted Avg. No.
of Common Shares 67,479 67,479 67,667 67,845 67,845
----------------------------------------------------------------
Total Assets $21,807 $20,308 $20,078 $17,906 $17,906
Total Long Term
Liabilities $6,366 $6,251 $6,234 $6,517 $6,517
----------------------------------------------------------------
%SEDAR: 00022709E
For further information: Michael Ford, CFO, Nightingale Informatix
Corporation, Tel: (905) 307-7870, mford@nightingale.md; Alan Kriss, VP
Marketing, Nightingale Informatix Corporation, Tel: (905) 307-6863,
akriss@nightingale.md
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