19% Quarterly Revenue Growth
MARKHAM, ON, Feb. 8 /CNW/ - Nightingale Informatix Corporation
("Nightingale" or the "Company") (TSX-V: NGH), a healthcare application
service provider (ASP) of Electronic Medical Record (EMR) and practice
management solutions, announces its financial results for the three- and
nine-month periods ended December 31, 2006.Q3 Fiscal 2007 Highlights
- Revenue of $4.2 million, a 19% increase over Q2 2007 and
246% increase over Q3 2006
- Adjusted EBITDA(*) (as defined at the end of this press release)
increased to $0.05 million from ($0.66) million in Q2 2007
- Net loss of $0.35 million compared to net loss of $1.1 million in
Q2 2007 and net loss of $0.47 million in Q3 2006
- Signed $3.6 million contract renewal for Medical Records and Data
Distribution Services agreement with Kaleida Health for a term of
three years
- Announced contract with The Ottawa Hospital Academic Family Health
Team to support more than 80 healthcare professionals
- Provided 45 new licenses to physicians in the province of Nova Scotia"During the quarter, we expanded our user base, achieved record revenue
and reached an important milestone by generating positive Adjusted EBITDA,"
said Sam Chebib, President and CEO of Nightingale. "Our long-term strategy to
build the business is focused on increasing the number of physicians and
healthcare providers on our technology platform, and we are pursuing this goal
through organic and acquisitive growth activities."
Mr. Chebib continued: "Year to date, on an organic basis, we have
announced several deals involving sales of new licenses in Canada and the U.S.
and have invested in our product suite and in our sales and marketing
capabilities. From an acquisition perspective, our goal is to cross-sell our
value-add EMR solutions to the acquired user base. With the integration of
HealtheNet and IHPS now complete, we are beginning to capitalize on such
opportunities, and subsequent to quarter-end we announced a 220 EMR license
agreement with the Center for Disability Services in Albany, New York, a
legacy client of IHPS."
Q3 Fiscal 2007 Operational Review
During the quarter, Nightingale continued to demonstrate growth in its
EMR customer base primarily as a result of winning a number of enterprise
contracts such as the contract to provide over 80 members of The Ottawa
Hospital Academic Family Health Team, signing a contract with the Center for
Disability Services in Albany, New York for 220 EMR licenses, and providing
45 new licenses to the province of Nova Scotia.
Within its recently acquired customer base, Nightingale renewed its
agreement with Buffalo, New York-based Kaleida Health Systems to provide
Medical Records Data Distribution Services for an additional three-year term.
The contract, which is estimated at $3.6 million U.S., also includes
provisions for higher service volumes and additional consulting and
implementation fees.
Nightingale continued to execute on the successful roll-out of its large
contracts during the quarter, as it completed the second phase of Nova
Scotia's Primary Healthcare Information Management program. This included
creating a province-wide direct interface between Nova Scotia's labs and
Diagnostic Imaging systems and Nightingale's EMR system.
Throughout the quarter, Nightingale worked to strengthen its presence
within the U.S. EMR market by adding sales and implementation resources in New
York and Alabama.
Q3 Fiscal 2007 Financial Review
Revenue for Q3 2007 was $4.2 million, a 19% increase over the previous
quarter, mainly as a result of higher software sales. Revenue for Q3 2007
increased 246% from $1.2 million generated in Q3 2006.
For the quarter, Nightingale's gross profit margin of 73%, compares with
gross profit margin of 72% in Q2 2007 but is lower than gross profit margin in
Q3 2006 of 91%. The year-over-year decrease in gross profit margin reflects
the change in the Company's overall revenue mix following the acquisition of
IHPS and HealtheNet, which generated lower margins from components of its
service businesses.
Operating expenses for the quarter were reduced by 5% or $0.2 million
from the previous quarter. The decrease was primarily due to sales and
marketing and research and development cost synergies, resulting from
Nightingale's successful acquisition integration. The Company incurred total
expenses of $3.4 million, or 81% of revenue, compared to $3.6 million, or
103% of revenue in Q2 2007. Expenses for the same period of last fiscal year
were $1.6 million, or 133% of revenue.
Driven by improvement in revenues and overall expense control, Adjusted
EBITDA(*) for Q3 2007 was $0.05 million compared to Adjusted EBITDA of
($0.66) million for the previous quarter. For the same period in fiscal 2006,
Adjusted EBITDA was ($0.3) million.
Net loss for the three months ended December 31, 2006, was $0.35 million,
or $0.01 per share, compared with a net loss of $1.1 million, or $0.03 per
share in Q2 2007. Net loss for Q3 2006 was $0.47 million, or $0.02 per share.
Nine Month Financial Review
Revenue for the nine-month period ended December 31, 2006 was
$10.7 million, up 215% from the same fiscal period last year.
Gross profit margin for the nine months ended December 31, 2006 was 69%,
compared to a gross profit margin of 89% generated over the same period in
fiscal 2006. The lower margin for the period was primarily a result of the
change in revenue mix from acquired business and lower margins in the first
quarter of fiscal 2007.
Total expenses for the nine months ended December 31, 2006, were
$11.1 million, or 104% of revenue, compared to $3.9 million, or 116% of
revenue, for the same period in fiscal 2006.
Adjusted EBITDA(*) for the nine-month period ended December 31, 2006 was
($2) million. For the same period in fiscal 2006, Adjusted EBITDA(*) was ($0.5)
million.
For the nine months ended December 31, 2006, net loss was $3.8 million
compared to $0.90 million for the same period in the previous year. The
increase in net loss is largely a result of the increase in scale of
operations as a result of the two acquisitions.
Strategy and Business Model
Nightingale believes that the window of opportunity for EMR adoption is
limited, and therefore a focused effort to gain market share in an accelerated
fashion is imperative. In addition, Nightingale believes that the U.S. and
Canadian markets for basic business management software for physicians has
reached a point of maturity, while the EMR market is only at an adoption rate
approximately 15-20%, thus offering a compelling growth opportunity. As such,
Nightingale's growth strategy is two-fold, consisting of an organic growth
component and an acquisitive growth component. These efforts are focused on
increasing the number of physicians and healthcare providers on its
proprietary technology platform.Organic Growth Initiatives:
- Leverage successes in the Canadian market to increase penetration in
U.S. enterprise market
- Capitalize on cross-selling opportunities resulting from acquired
client base
- Invest in sales and marketing in selected U.S. markets
- Launch enhanced EMR products and applications
Acquisitive Initiative:
- Selectively seek healthcare business management software companies
that are accretive and/or provide a captive client base offering
cross-selling opportunities and accelerated adoption of Nightingale's
clinical products.Business Model:
Nightingale generates revenues through the delivery of proprietary
software and services to physicians and healthcare providers directly, and
indirectly through their buying groups, such as hospitals, healthcare
associations and government agencies.Nightingale's revenue model consists of three key components:
1. Traditional licensing fees, including annual support & maintenance
fees
2. Utilization fees, i.e. "Software-as-a-Service"
3. Transactional fees for software & services including:
- Training and implementation services
- Hardware and ancillary services
- Data management, transcription and billing servicesNightingale's revenue model has multiple recurring revenue sources, which
include data management, transcription and billing services, annual support
and maintenance and utilization fees and non-recurring sources, which are
primarily license fees.
"In general, physicians and healthcare organizations in Canada and the
United States are becoming more aware that technology is the solution to many
of the challenges of efficiently and effectively managing patient
information," Chebib added. "As a result, the demand for EMR solutions is
growing, and our flexible business model and broad product suite have us
uniquely positioned to capture a significant portion of this growing market."
To view the full set of financial statements and MD&A for Nightingale,
visit http://www.nightingale.md or www.sedar.com(*) The Company defines Adjusted EBITDA as Net Income/Loss+Interest+
Taxes+Depreciation and Amortization+Stock-based Compensation. To
better understand the definition and reconciliation to Net Income
see 4. Non-GAAP measures in the MD&A for the three- and nine-month
periods ended December 31, 2006.Notice of Conference Call and Webcast
Nightingale will host a conference call on Thursday, February 8, 2007 at
8:30 a.m. Eastern Daylight Time. To access the conference call by telephone,
dial 416-664-3419 or 1-800-731-5774. 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 February 15, 2007.
To access the archived conference call, dial 416-640-1917 or 1-877-289-8525
and enter reference number 21218709 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 90 days.
About Nightingale
Nightingale Informatix Corporation is one of North America's fastest
growing healthcare application service providers (ASP) for outpatient clinics.
Nightingale's Internet-based Electronic Health Record (EHR), Electronic
Medical Record (EMR) and practice management solutions are designed to help
physicians, clinics, hospitals and other healthcare organizations more
efficiently manage their operations and patient records.
Nightingale's products and services offer physicians in United States and
Canada leading-edge functionality for clinical documentation, patient
scheduling, resource scheduling, billing, transcription, end-to-end coding and
claims processing, data management, work flow tools, laboratory interfaces,
documentation management and patient portals, along with other real-time
services. The company's proprietary offerings of software include
myNightingale, Entity and Physician WorkStation, providing physicians with a
fully integrated, simple-to-use system that automates daily tasks and creates
a single, accessible source of patient data.
Forward Looking Statement
This press release contains "forward-looking statements" 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; the existence of present
and possible future government regulation; 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.
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
The TSX Venture Exchange Inc. has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.CONSOLIDATED BALANCE SHEET (Unaudited)
AS AT DECEMBER 31, 2006
-------------------------------------------------------------------------
As at As at
December 31, March 31,
2006 2006
-------------------------------------------------------------------------
ASSETS
Current Assets
Cash and Cash Equivalents, $ 2,085,974 $ 373,691
Accounts Receivable 4,274,320 1,371,981
Investment Tax Credits Receivable 57,830 221,191
Prepaid Expenses 279,814 349,559
------------- -------------
6,697,938 2,316,422
------------- -------------
Long Term Assets
Deferred Costs 195,151 372,062
Other Receivables - 145,107
Property and Equipment, 620,078 1,891,530
Intangible Assets 700,325 -
Goodwill 8,611,402 4,796,386
------------- -------------
12,126,956 7,205,085
------------- -------------
$ 18,824,894 $ 9,521,507
------------- -------------
------------- -------------
LIABILITIES
Current Liabilities
Line of Credit, $ 1,908,606 -
Accounts Payable and Accrued Liabilities 1,916,961 1,808,217
Current Portion of Deferred Revenue 2,137,914 1,159,405
Promissory Note Payable - 1,000,000
Bank Loan Payable - 148,782
Current Portion of Capital Lease Obligations 252,341 185,012
------------- -------------
6,215,822 4,301,416
------------- -------------
Long Term Liabilities
Deferred Compensation Payable to Employees 86,565 403,975
Deferred Revenue 1,237,548 1,185,481
Capital Lease Obligations 261,087 206,064
------------- -------------
1,585,200 1,795,520
------------- -------------
SHAREHOLDERS' EQUITY
Capital Stock 18,555,962 9,160,446
Contributed Surplus 970,280 742,503
Warrants 1,807,749 74,235
Deficit (10,310,119) (6,552,613)
------------- -------------
11,023,872 3,424,571
------------- -------------
Total Liabilities and Shareholders' Equity $ 18,824,894 $ 9,521,507
------------- -------------
------------- -------------
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2006
-------------------------------------------------------------------------
3 months 3 months 9 months 9 months
ended ended ended ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
-------------------------------------------------------------------------
Revenue $ 4,171,239 $ 1,204,190 $ 10,653,227 $ 3,383,749
Cost of Sales
Hardware,
Software and
Services 993,424 76,868 3,105,447 231,877
Sales
Commissions 114,153 34,288 225,314 128,890
------------- ------------- ------------- -------------
1,107,577 111,156 3,330,761 360,767
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Gross Profit 3,063,662 1,093,034 7,322,466 3,022,982
------------- ------------- ------------- -------------
Expenses
General and
Administration 778,541 394,789 2,325,512 1,003,965
Sales and
Marketing 576,096 467,287 2,164,702 1,155,294
Research and
Development 856,463 313,644 2,830,936 751,784
Implementation
and Customer
Support 805,860 224,122 1,998,365 609,570
Stock Based
Compensation 126,264 113,433 506,442 263,226
Interest 57,929 3,101 644,939 9,575
Amortization 214,759 48,232 609,076 133,986
------------- ------------- ------------- -------------
3,415,912 1,564,608 11,079,972 3,927,400
------------- ------------- ------------- -------------
Net Loss for the
Period (352,250) (471,574) (3,757,506) (904,418)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net Loss per
Common Share,
Basic (0.01) (0.02) (0.10) (0.03)
Weighted Average
Number of Common
Shares 41,945,189 29,610,930 39,528,391 27,028,639
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CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2006
-------------------------------------------------------------------------
3 months 3 months 9 months 9 months
ended ended ended ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
-------------------------------------------------------------------------
Cash Flow from
Operating Activities
Net Loss for
the Period $ (352,250) $ (471,574) $ (3,757,506) $ (904,418)
Adjustments for:
Amortization 214,759 48,232 609,076 133,986
Stock Based
Compensation 126,264 113,433 506,442 263,226
Notional Interest - - 431,000 -
------------- ------------- ------------- -------------
341,023 161,665 1,546,518 397,212
Changes in Non-
Cash Working
Capital Balances,
Decrease (Increase)
in Accounts
Receivable (1,324,742) (1,088,116) (2,902,339) (466,864)
Decrease (Increase)
in Investment Tax
Credits Receivable 163,361 (62,500) 163,361 (187,500)
Decrease (Increase)
in Prepaid
Expenses 87,916 (8,635) 69,745 (91,018)
Decrease (Increase)
in Inventory - - - (88,484)
Decrease (Increase)
in Common Share
Subscription
Receivable - - - 250,000
Decrease (Increase)
in Deferred Costs (48,288) (20,553) 175,105 (144,284)
Decrease (Increase)
in Other
Receivables - 18,796 145,107 18,796
Increase (Decrease)
in Accounts
Payable and
Accrued
Liabilities 291,107 26,808 108,744 83,925
Increase (Decrease)
in Deferred
Compensation
Payable (30,918) (61,189) (317,410) (72,252)
Increase (Decrease)
in Deferred
Revenue 374,098 558,297 1,030,576 459,646
------------- ------------- ------------- -------------
(498,695) (947,001) (3,738,099) (745,241)
Increase (Decrease)
in Working Capital
due to IHPS
Acquisition - (682,404)
------------- ------------- ------------- -------------
Cash flows provided
from (used in)
operating
activities (498,820) (947,001) (4,420,503) (745,241)
------------- ------------- ------------- -------------
Cash Flow from
Investing
Activities
Purchase of
Property and
Equipment (96,719) (80,921) (527,412) (228,870)
IHPS Acquisition - (2,990,880)
------------- ------------- ------------- -------------
Cash flows provided
from (used in)
investing
activities (96,719) (80,921) (3,518,292) (228,870)
------------- ------------- ------------- -------------
Cash Flow from
Financing
Activities
Increase in
Capital Stock - 3,754 9,424,866 2,416,338
Decrease in
Bank Loan Payable - (8,931) (148,782) (26,794)
Decrease in Due to
Shareholders - (18,640) - (158,640)
Decrease In Notes
Payable (165,944) - (1,643,500) -
Increase in Capital
Lease Obligations (65,613) - 109,888 -
Increase in Line of
Credit 939,682 - 1,908,606 -
------------- ------------- ------------- -------------
Cash flows provided
from (used in)
financing
activities 708,125 (23,817) 9,651,078 2,230,904
------------- ------------- ------------- -------------
Net Increase
(Decrease) in Cash 112,711 (1,051,739) 1,712,283 1,256,793
Cash (Bank
Indebtedness),
Beginning of
Period 1,973,263 2,497,414 373,691 188,882
------------- ------------- ------------- -------------
Cash, End of
Period $ 2,085,974 $ 1,445,675 $ 2,085,974 $ 1,445,675
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
For further information: Dave Mason, Investor Relations, The Equicom
Group, Tel: (416) 815-0700 x237, Email: damson@equicomgroup.com; Nick Vaney,
Chief Financial Officer, Nightingale Information Corporation, Tel: (905)
943-2606, Email: nvaney@nightingale.md
