Nightingale reports fiscal 2008 second quarter results



    Year-over-year revenue growth of 102% with positive adjusted
    EBITDA

    Michael Ford appointed Chief Financial Officer and Nick Vaney
    appointed VP, Operations and Chief Strategy Officer

    MARKHAM, ON, Nov. 26 /CNW/ Nightingale Informatix Corporation
("Nightingale" or the "Company") (TSX-V: NGH), a North American healthcare
application service provider (ASP) of Electronic Medical Record (EMR) and
practice management software solutions, announces its financial results for
the three- and six-month periods ended September 30, 2007. All results are
reported in Canadian dollars unless otherwise stated.

    
    Q2 Fiscal 2008 Financial Summary
    --------------------------------
    -  Revenue was $7.0 million, a 102% increase from $3.5 million in
       Q2 fiscal 2007.
    -  After subtracting revenue from VantageMed operations, Q2
       fiscal 2008 organic growth was 20% over the same period in the
       prior fiscal year.
    -  Recurring revenue(1a) was $4.4 million, or 63% of total
       revenue, compared to $2.5 million, or 73% of total revenue in
       Q2 fiscal 2007.
    -  Adjusted EBITDA(1b) (earnings before interest, taxes,
       depreciation, amortization and stock based compensation)
       increased to $0.3 million, compared to negative adjusted
       EBITDA of $0.7 million in Q2 fiscal 2007.
    -  Net loss was $1.4 million, or ($0.02) per share, compared to
       net loss of $1.1 million, or ($0.03) per share, in Q2 fiscal
       2007.
    -  Change in the value of the U.S. dollar is estimated to have
       negatively impacted Q2 revenue by approximately 7%, or
       $0.4 million versus the same period during the previous fiscal
       year.
    

    "During the quarter we generated strong organic growth and made
significant progress toward integrating our acquisition of VantageMed, which
was reflected in our revenue growth and positive adjusted EBITDA performance,"
said Sam Chebib, President and CEO of Nightingale. "We are pleased with the
results of the acquisition to date. We believe we have established an
operating platform with the right technology, strategy and personnel to
deliver continued year-over-year top-line growth and margin improvement."

    
    Recent Operational Highlights
    -----------------------------
    -  Won contract to provide EMR and practice management solutions
       to healthcare providers throughout the Northwest Territories.
       The initial phase of the agreement is valued at $600,000, with
       the potential future contract value estimated at $2.0 million.
       During the quarter, none of the $400,000 of license revenue
       associated with the initial phase was recognized.
    -  Signed four cross-sell agreements to license its EMR solution
       and provide associated support, training and implementation
       services to customers in Pennsylvania; Minnesota; New Jersey
       and South Carolina.
    -  Received vendor conformance and usability requirements
       certification in Alberta.
    -  Signed a $475,000 cross-sell agreement to provide an ASP EMR
       solution to Healthcare South, PC, a group practice of
       45 healthcare providers in the greater Boston, Massachusetts
       area.
    -  Won $860,000 in contracts to provide EMR solutions to support
       41 OntarioMD funded physicians at three clinics.
    -  Appointed Simon Lee as Vice President, Sales for the U.S.
       market, and hired four U.S.-based sales representatives - two
       started during Q2 with the others joining in late Q3.
    -  Subsequent to quarter end, appointed Michael Ford as Chief
       Financial Officer and Nick Vaney as VP, Operations and Chief
       Strategy Officer, as announced in a separate press release
       issued today.
    -  Subsequent to quarter end, signed a 15-year contract with
       OntarioMD to be one of three ASP EMR providers. Under the
       terms of the agreement, eligible primary care physicians
       across Ontario will receive funding through OntarioMD when
       implementing Nightingale's ASP EMR solution. Currently, there
       is total funding of $28,600 per physician for 2,700 of
       Ontario's 22,000 physicians, with additional funding expected
       to come available. Management believes this agreement will
       position Nightingale to capture a significant share of the
       Ontario market, accelerating the Company's growth over the
       next two to three years.
    

    Mr. Chebib continued: "Our selection as a funded ASP provider in Ontario
is exciting. Along with other successful selling initiatives in the U.S., this
contract win reinforces our position as one of the fastest growing providers
of EMR solutions in North America. With a significant captive customer base to
sell our EMR solution to in the U.S., the investment in our North American
sales and marketing resources and our established market leadership position
in Canada, we are well positioned to maintain our momentum and strengthen our
competitive position in this rapidly growing market."

    Q2 Fiscal 2008 Financial Review
    -------------------------------
    Total revenue for Q2 fiscal 2008 was $7.0 million, a 102% increase
compared to $3.5 million in Q2 fiscal 2007. The year-over-year improvement was
driven by a combination of organic growth and a full quarter of revenue
contribution from the acquired VantageMed operations. For Q2 fiscal 2008,
recurring revenue, consisting of software support and maintenance, utilization
fees, transaction fees, data management, transcription and billing services,
accounted for approximately 63% of Q2 revenue.
    Nightingale generated approximately 78% of its revenue and 53% of its
expenses (including cost of goods sold) in the U.S. in the second quarter.
This provided the Company with a natural hedge position that helped offset
some of effects of the reduction in value of the U.S. dollar relative to the
Canadian dollar. However, on the top-line, the Company estimates that revenue
was negatively impacted by U.S. currency fluctuations relative to the Canadian
dollar by a difference of approximately 7%, or $0.4 million for the second
quarter.
    For the first half of fiscal 2008, revenue increased 103% to $13.1
million, compared to the $6.4 million generated in the first half of fiscal
2007. For the year to date period, recurring revenue was 64% of total revenue.
The Company estimates that revenue was negatively impacted by a difference of
approximately 5%, or $0.5 million for the first half of fiscal 2008, due to
year-over-year U.S. currency fluctuations relative to the Canadian dollar.
Going forward, the continued drop in the value of the U.S. dollar since the
end of the second fiscal quarter combined with an anticipated increase in
revenue from the U.S. market over the coming quarters is expected to have a
greater impact on the Company's financial results.
    In Q2 fiscal 2008, gross profit margin was 78%, compared to 72% in Q2
fiscal 2007. The improvement in gross profit margins reflects a greater
portion of revenue generated by higher margin software license and maintenance
sales than in Q2 fiscal 2007. For the six months ended September 30, 2007,
gross profit margin was 78%, up from 66% for the same period last year.
    Nightingale generated positive adjusted EBITDA of $0.3 million in Q2
fiscal 2008, compared to negative adjusted EBITDA of $0.7 million in Q2 fiscal
2007. Adjusted EBITDA improved year-over-year due to the significant increase
in revenue, higher gross profit margin, a focus on cost control and a full
quarter of cost synergies generated from the integration of VantageMed, all of
which were partially offset by Nightingale's investment in its infrastructure
to support future growth.
    Adjusted EBITDA for the first half of fiscal 2008 was $0.4 million,
compared to negative adjusted EBITDA of $2.2 million in the first half of
fiscal 2007. As a result of the reduction in the value of the U.S. dollar, the
Company estimates that adjusted EBITDA for the six months ended September 30,
2007 was negatively impacted by $0.1 million, when compared to the same period
in the previous fiscal year.
    For Q2 fiscal 2008, net loss was $1.4 million, or ($0.02) per share,
compared to a net loss of $1.1 million, or ($0.03) per share in Q2 fiscal
2007. For the six months ended September 30, 2007, net loss was $3.1 million,
or ($0.05) per share, compared to a loss of $3.4 million or ($0.09) per share
for the same period last year.
    To view the full set of financial statements and MD&A for Nightingale,
visit http://www.nightingale.md or www.sedar.com.

    (1)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 would be useful to
investors to help 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. Adjusted EBITDA

    The Company has included an adjusted EBITDA measurement since it believes
that this information would be useful to investors to help evaluate the
performance of the Company. Investors should be cautioned, however, that
adjusted EBITDA should not be construed as an alternative to net earnings as
determined in accordance with GAAP. The Company's method of calculating
adjusted 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.
    Adjusted EBITDA is a non-GAAP measure that management believes is a
useful supplemental measure of operating performance prior to 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 Adjusted EBITDA to Net Income/
Loss:


    
    -----------------------------------------------------------------
                                              Fiscal          Fiscal
                                             Quarter         Quarter
                                               Ended           Ended
                                           September       September
    Name      Definition                    30, 2007        30, 2006
    -----------------------------------------------------------------
    Adjusted
    EBITDA    Net Income/Loss            $-1,394,723     $-1,084,251
             --------------------------------------------------------
              Adjustments for:
              Other Loss (Income)             99,331         -25,324
              Interest                       602,380          12,227
              Depreciation
               and Amortization              952,923         230,633
              Stock-based Compensation        70,431         156,960
             --------------------------------------------------------
              Adjusted EBITDA (Loss)        $330,342       $-709,755
    -----------------------------------------------------------------
    -----------------------------------------------------------------


    -----------------------------------------------------------------
                                                 Six             Six
                                              Months          Months
                                               Ended           Ended
                                           September       September
    Name      Definition                    30, 2007        30, 2006
    -----------------------------------------------------------------
    Adjusted
    EBITDA    Net Income/ Loss           $-3,147,788     $-3,405,256
             --------------------------------------------------------
              Adjustments for:
              Other Loss (Income)            153,010        -116,863
              Interest                     1,148,818         553,597
              Depreciation
               and Amortization            1,942,432         394,318
              Stock-based Compensation       295,554         380,178
             --------------------------------------------------------
              Adjusted EBITDA (Loss)        $392,026     $-2,194,026
    -----------------------------------------------------------------
    -----------------------------------------------------------------
    

    Notice of Conference Call and Webcast
    -------------------------------------
    Nightingale will host a conference call Monday November 26, 2007, at 8:30
a.m. Eastern Standard Time.  To access the conference call by telephone, dial
416-644-3417 or 1-800-733-7560. Please connect approximately fifteen minutes
prior to the beginning of the call to ensure participation. The conference
call will be archived for replay until December 3, 2007. To access the
archived conference call, dial  416-640-1917 or 877-289-8525 and enter
reference number 21251916 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 (www.nightingale.md) is one of North
America's fastest growing healthcare application service providers (ASP).
Nightingale's Internet-based Electronic Health Record (EHR), Electronic
Medical Record (EMR) and practice management solutions are designed to help
physicians, health centers, 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 Nightingale
On-Demand, RidgeMark, Medical Helper, Therapist Helper, Northern Health
Anesthesia, Entity and Physician WorkStation and SecureConnect, providing
physicians with fully integrated, simple-to-use systems that automate daily
tasks and create 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

    
    INTERIM CONSOLIDATED BALANCE SHEET
    (unaudited)

    -----------------------------------------------------------------
                                                  As at        As at
                                              September        March
                                               30, 2007     31, 2007
    -----------------------------------------------------------------

    ASSETS

    Current Assets
    Cash and Cash Equivalents              $  3,656,069 $  1,747,660
    Accounts Receivable                       4,584,656    3,018,767
    Other Receivables                                 -       79,739
    Inventory                                   115,790        7,893
    Prepaid Expenses                            762,369      257,157
                                           ------------- ------------
                                              9,118,884    5,111,216
                                           ------------- ------------

    Long-Term Assets
    Deferred Costs                              205,969      626,890
    Property and Equipment                    1,628,703    1,352,739
    Proprietary Software                      1,022,572    1,230,472
    Intangible Assets                        11,573,085    1,878,099
    Goodwill                                 15,007,773    7,331,853
                                           ------------- ------------
                                             29,438,102   12,420,053
                                           ------------- ------------

                                           $ 38,556,986 $ 17,531,269
                                           ------------- ------------
                                           ------------- ------------

    LIABILITIES

    Current Liabilities
    Borrowing under Line of Credit         $          - $  1,541,733
    Accounts Payable
     and Accrued Liabilities                  4,381,489    2,770,367
    Current Portion of Deferred Revenue       5,672,893    1,829,931
    Current Portion of
     Capital Lease Obligations                  195,675      258,586
                                           ------------- ------------
                                             10,250,057    6,400,617
                                           ------------- ------------

    Long Term Liabilities
    Subordinated Debt                        10,215,413            -
    Deferred Compensation
     Payable to Employees                             -      100,824
    Deferred Revenue                          1,469,073    1,716,512
    Capital Lease Obligations                   146,413      196,246
                                           ------------- ------------
                                             11,830,899    2,013,582
                                           ------------- ------------

    Total Liabilities                        22,080,956    8,414,199
                                           ------------- ------------
                                           ------------- ------------

    SHAREHOLDERS' EQUITY
    Capital Stock                            27,295,885   18,553,953
    Contributed Surplus                       1,316,771    1,021,217
    Warrants                                  3,277,011    1,807,749
    Deficit                                 (15,413,637) (12,265,849)
                                           ------------- ------------
                                             16,476,030    9,117,070
                                           ------------- ------------

    Total Liabilities
     and Shareholders' Equity              $ 38,556,986 $ 17,531,269
                                           ------------- ------------
                                           ------------- ------------
                                           --------------------------
                                           --------------------------


    INTERIM CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE
    LOSS
    FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2007
    (unaudited)

                     3 months     3 months     6 months     6 months
                       ending        ended       ending        ended
                    September    September    September    September
                     30, 2007     30, 2006     30, 2007     30, 2006
    -----------------------------------------------------------------

    Revenue      $  6,985,717 $  3,466,740 $ 13,066,898 $  6,448,574

    Cost of Sales
    Hardware,
     Software and
     Services       1,261,205      936,482    2,418,684    2,112,023
    Sales
     Commissions      244,582       43,934      393,572      111,161
                  ------------ ------------ ------------ ------------
                    1,505,787      980,416    2,812,256    2,223,184

                  ------------ ------------ ------------ ------------
    Gross Profit    5,479,930    2,486,324   10,254,642    4,225,390
                  ------------ ------------ ------------ ------------

    Expenses
    General and
     Adminis-
     tration        1,243,378      790,773    2,101,175    1,663,833
    Sales and
     Marketing        922,682      813,134    1,865,879    1,588,606
    Research and
     Development    1,370,861      971,311    2,664,654    1,974,473
    Client
     Services       1,612,667      620,861    3,230,908    1,192,504
    Stock Based
     Compensation      70,431      156,960      295,554      380,178
    Depreciation
     and
     Amortization     952,923      230,633    1,942,432      394,318
                  ------------ ------------ ------------ ------------
                    6,172,942    3,583,672   12,100,602    7,193,912
                  ------------ ------------ ------------ ------------

    Operating
     Loss for
     the Period      (693,012)  (1,097,348)  (1,845,960)  (2,968,522)
                  ------------ ------------ ------------ ------------

    Interest          602,380       12,227    1,148,818      553,597
    Other Loss
     (Income)          99,331      (25,324)     153,010     (116,863)

    Net Loss and
     Comprehensive
     Loss for
     the Period    (1,394,723)  (1,084,251)  (3,147,788)  (3,405,256)
                  ------------ ------------ ------------ ------------
                  ------------ ------------ ------------ ------------

    Net Loss per
     Common Share,
     Basic and
     Diluted     $     (0.02) $     (0.03) $     (0.05) $     (0.09)
                  ------------ ------------ ------------ ------------
                  ------------ ------------ ------------ ------------

    Weighted
     Average
     Number of
     Common
     Shares        66,914,490   41,817,643   65,139,625   38,313,388
                  ------------ ------------ ------------ ------------
                  ------------ ------------ ------------ ------------


    INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
    FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2007
    (unaudited)
                     3 months     3 months     6 months     6 months
                       ending        ended       Ending        Ended
                    September    September    September    September
                     30, 2007     30, 2006     30, 2007     30, 2006
    -----------------------------------------------------------------
    Cash Flow
     from
     Operating
     Activities
    Net Loss for
     the Period    (1,394,723) $(1,084,251)  (3,147,788) $(3,405,256)

    Adjustments
     for:
    Depreciation
     and
     Amortization     952,923      230,633    1,942,432      394,318
    Stock Based
     Compensation      70,431      156,960      295,554      380,178
    Interest
     Accretion        196,856            -      393,714            -
                  ------------ ------------ ------------ ------------
                     (174,513)    (696,658)    (516,088)  (2,630,760)

    Changes in
     Non-Cash
     Working
     Capital
     Balances,
    Decrease
     (Increase)
     in Accounts
     Receivable    (1,224,635)    (948,060)    (738,866)  (1,440,116)
    Decrease
     (Increase)
     in Prepaid
     Expenses        (268,713)     125,079     (308,205)      70,647
    Decrease
     (Increase)
     in Inventory     (23,931)           -      (79,066)           -
    Decrease
     (Increase)
     in Deferred
     Costs             20,111      (24,633)     403,511      223,392
    Decrease
     (Increase)
     in Other
     Receivables       41,004            -       79,739      145,107
    Increase
     (Decrease)
     in Accounts
     Payable and
     Accrued
     Liabilities       24,840     (183,627)    (863,193)    (647,434)
    Increase
     (Decrease) in
     Deferred
     Compensation
     Payable                -       24,000      (98,862)    (286,493)
    Increase
     (Decrease) in
     Deferred
     Revenue          106,197      295,423     (116,716)     212,848
                  ------------ ------------ ------------ ------------
    Cash flows
     provided from
     (used in)
     operating
     activities    (1,499,640)  (1,408,476)  (2,237,746)  (4,352,809)
                  ------------ ------------ ------------ ------------

    Cash Flow from
     Investing
     Activities
    Purchase of
     Property and
     Equipment       (305,425)    (304,409)    (453,683)    (430,692)
    IHPS
     Acquisition            -            -            -   (2,990,880)
    VantageMed
     Acquisition            -            -  (13,533,087)           -
    Cash flows
     provided from
     (used in)
     investing
     activities      (305,425)    (304,409) (13,986,770)  (3,421,572)
                  ------------ ------------ ------------ ------------

    Cash Flow from
     Financing
     Activities
    Increase in
     Capital Stock          -      159,496    8,741,932    9,424,866
    Decrease in
     Bank Loan
     Payable                -            -            -     (148,782)
    Proceeds from
     subordinated
     debt financing         -            -   11,089,812    5,000,000
    Repayment of
     Subordinated
     Debt Financing         -            -            -   (4,569,000)
    Decrease In
     Promissory
     Notes Payable          -     (249,636)           -   (1,477,556)
    Increase
     (Decrease) in
     Capital Lease
     Obligations      (82,765)     112,976     (157,086)     175,501
    Increase
     (Decrease) in
     Borrowing under
     Line of Credit         -       43,722   (1,541,733)     968,924
                  ------------ ------------ ------------ ------------
    Cash flows used
     in financing
     activities       (82,765)      66,558   18,132,925    9,373,953
                  ------------ ------------ ------------ ------------

    Net Increase in
     Cash During
     the Period    (1,887,830)  (1,646,327)   1,908,409    1,599,572
    Cash and Cash
     Equivalents,
     Beginning of
     Period         5,543,899    3,619,590    1,747,660      373,691
                  ------------ ------------ ------------ ------------

    Cash and Cash
     Equivalents,
     End of
     Period       $ 3,656,069  $ 1,973,263  $ 3,656,069  $ 1,973,263
                  ---------------------------------------------------
                  ---------------------------------------------------
    





For further information:

For further information: Nick Vaney, CFO, Nightingale Informatix
Corporation, Tel: (905) 943-2606, nvaney@nightingale.md; Dave Mason, Investor
Relations, The Equicom Group, Tel: (416) 815-0700 x237, Email:
dmason@equicomgroup.com

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