Nightingale reports fiscal 2010 first quarter results



    MARKHAM, ON, Aug. 28 /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
announces its financial results for the quarter ended June 30, 2009. All
results are reported in Canadian dollars unless otherwise stated.

    
    Q1 Fiscal 2010 Summary
    ----------------------
    -   Despite a significant decline in revenues from $4.9 million in the
        quarter ended June 30, 2008 to $4.1 million in the quarter ended June
        30, 2009, primarily the result of the Company's recognition of $1
        million of software revenue related to a Canadian government agency
        in the same quarter last fiscal year, recurring revenue increased 8%
        from $3.3 million to $3.6 million in the quarter ended June 30, 2009.
    -   The Company achieved its second consecutive quarter of positive
        EBITDA in the quarter ended June 30, 2009. EBITDA was a positive
        $0.02 million for the quarter ended June 30, 2009, compared to an
        EBITDA loss of $0.2 million for the same quarter last fiscal year and
        compared to positive EBITDA of $0.01 million for the previous
        quarter.
    -   Net loss was $0.8 million, or $(0.01) per share, compared to a loss
        of $1.3 million, or $(0.02) per share, for the same quarter last
        fiscal year.
    -   Expenses decreased $1.1 million, or 23%, to $3.5 million in the
        quarter ended June 30, 2009 from $4.6 million in the year ago quarter
        and decreased $0.5 million, or 11%, from $4 million in the previous
        quarter.
    -   The change in the value of the US dollar is estimated to have
        positively impacted revenue during the fiscal quarter ended June 30,
        2009 by approximately 10%, or $0.4 million, compared to the same
        quarter last fiscal year.
    -   In July 2009, the Company amended its debt financing agreements and
        extended the term through July 2012.
    -   The Company was selected to provide its web-based OntarioMD Certified
        Nightingale On Demand EMR to the North Burlington Medical Centre,
        where the application will be used by more than 30 full and part-time
        physicians providing family practice, pediatrics and walk-in (urgent
        care) medical services with over 75,000 patients visits per year.
    

    "We continue to focus on achieving our financial goals through continued
improvement in EBITDA," said Sam Chebib, President and CEO of Nightingale. "In
the quarter ended June 30, 2009 we saw further improvement in our EBITDA and I
am pleased to report that we have now achieved two consecutive quarters of
break even EBITDA and we are on our way toward achieving cash breakeven.
    "In the second quarter we are focused on increasing the number of
healthcare practitioners on our EMR technology and with Government EMR funding
announcements expected, we believe these developments will act as a catalyst
for the market at large, which will help drive the EMR industry in general and
drive top line growth for Nightingale."

    
    Q1 Fiscal 2010 Financial Review
    -------------------------------
    
    Revenue for the quarter ended June 30, 2009 was $4.1 million, compared to
$4.9 million for the same quarter last fiscal year. This decrease is primarily
the result of a decrease in software license revenue, as the Company
recognized $1 million of software revenue related to a Canadian government
agency in the same quarter last fiscal year. This decrease was partially
offset by an increase in revenues from billing and financial management
revenues.
    Recurring revenue, consisting of support and maintenance, utilization and
transaction fees, transcription and billing services was $3.6 million for the
quarter ended June 30, 2009 compared to $3.3 million for the same quarter last
fiscal year, representing an 8% increase over these respective periods. This
increase in Recurring Revenue over the same quarter last fiscal year is
primarily the result of increases in billing and financial management revenues
and the strengthening of the US dollar relative to the Canadian dollar versus
the same quarter last fiscal year. This increase was partially offset by a
decrease in data management and transcription services revenue.
    During the quarter ended June 30, 2009, Nightingale generated
approximately 78% of its revenue in the U.S. With the increase in the value of
the US dollar relative to the Canadian dollar during the consecutive quarters,
the Company estimates that revenue was positively impacted by approximately
10%, or $0.4 million, during the quarter ended June 30, 2009 compared to the
same quarter last fiscal year. Nightingale generates approximately 52% of its
expenses (including costs of goods sold) in the U.S., providing the Company
with a natural hedge position offsetting some of the effects that the
fluctuations in the foreign exchange rate have on revenues.
    Gross profit was $2.9 million, or 71% of revenue, in the quarter ended
June 30, 2009 compared to a gross profit of $3.7 million, or 74% of revenue,
for the same quarter last fiscal year. The decrease is primarily the result of
the decrease in high margin software revenues in the quarter ended June 30,
2009 compared to the same quarter last fiscal year.
    As a result of the steps Nightingale has taken to streamline costs, total
operating expenses decreased to $3.5 million in the quarter ended June 30,
2009, from $4.0 million in previous quarter and from $4.6 million in the same
quarter last fiscal year. Although the Company is focused on prudent expense
management as it seeks to achieve consistent and sustainable profitability and
positive cash flows, the Company will continue to re-deploy resources and may
invest in new employees for select job functions as it expands its sales and
marketing programs and delivery capabilities in support of revenue generating
initiatives.
    Nightingale realized a positive EBITDA of $0.02 million in the quarter
ended June 30, 2009, compared to positive EBITDA of $0.01 million in the
previous quarter and an EBITDA loss of $0.2 million in the quarter ended June
30, 2008. The year-over-year improvement reflects a decrease in the Company's
overall operating expenses.
    Net loss was $0.8 million, or $(0.01) per share, in the quarter ended
June 30, 2009, compared to a net loss of $1.3 million, or $(0.02) per share,
in the same quarter last fiscal year. The year-over-year improvement is a
result of cost reductions initiatives as well as an increase in
Recurring-Revenue.
    Cash and cash equivalents were $2.5 million at June 30, 2009, compared to
$3.5 million at March 31, 2009. At June 30, 2009, total common shares issued
and outstanding were 70,534,543.
    The financial statements and MD&A will be available at
http://www.nightingale.md and filed on www.sedar.com on August 28, 2009. This
press release should be read in conjunction with Nightingale's Consolidated
Financial Statements for the quarter ended June 30, 2009 and the accompanying
Management Discussion and Analysis.

    
    Notice of Conference Call and Webcast
    -------------------------------------
    
    Nightingale will host a conference call on Friday August 28, 2009 at 8:30
a.m. Eastern Standard Time. To access the conference call by telephone, dial
416-644-3426 or 1-800-731-5319. Please connect approximately fifteen minutes
prior to the beginning of the call to ensure participation.
    The conference call will be archived for replay until Friday September 4,
2009. To access the archived conference call, dial 416-640-1917 or
1-877-289-8525 and enter reference 21313695 followed by the number sign. To
listen to the conference call on-demand at your convenience please send an
email to info@nightingale.md and a copy of the call recording will be emailed
directly to you.

    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.

    
    1.  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.

    2.  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 Loss and
Comprehensive Loss:

    
    -------------------------------------------------------------------------
                                                         Fiscal       Fiscal
                                                        Quarter      Quarter
                                                          Ended        Ended
                                                           June         June
    Definition                                         30, 2009     30, 2008
    -------------------------------------------------------------------------

    Loss and Comprehensive Loss                         $  (844)     $(1,259)
    -------------------------------------------------------------------------

    Adjustments for:
    Other Loss (Income)                                     (44)          12
    Interest                                                316          356
    Depreciation and Amortization                           569          612
    Stock-based Compensation                                 25           43
    -------------------------------------------------------------------------

    EBITDA (Loss)                                       $    22      $  (236)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    About Nightingale

    Nightingale is one of the fastest growing health care service and
software companies in North America with over 5.3 million patient records
under management in a hosted (ASP) environment. It is recognized as an
industry leader in Web-based clinician and community based electronic medical
records (EMR) serving the needs of small primary care practices,
multi-physician outpatient clinics, and large scale regional health
organizations and networks. Coupled with integrated practice management,
transcription and revenue cycle management, Nightingale's comprehensive
service offering allows customers to enhance patient care, increase revenue
opportunities and optimize operations. Nightingale is continuously innovating
and enhancing its services to meet the needs of its growing and diverse
customer base. Nightingale - Healthcare connected. www.nightingale.md

    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.



    INTERIM CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
    (Unaudited) FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2009
    -------------------------------------------------------------------------
                                                       3 months     3 months
                                                          ended        ended
                                                           June         June
                                                       30, 2009     30, 2008
    -------------------------------------------------------------------------

    Revenue                                         $ 4,130,220  $ 4,945,587

    Cost of sales                                     1,193,602    1,276,809
                                                   ------------- ------------

    Gross profit                                      2,936,618    3,668,778
                                                   ------------- ------------
    Expenses
    General and administration                          765,926      852,579
    Sales and marketing                                 424,421      696,897
    Research and development                            732,148    1,061,720
    Client services                                     991,094    1,293,533
    Stock based compensation                             25,349       43,593
    Amortization                                        568,569      612,302
                                                   ------------- ------------
                                                      3,507,507    4,560,624
                                                   ------------- ------------

    Operating loss                                     (570,889)    (891,846)
                                                   ------------- ------------

    Interest                                            316,408      356,027
    Foreign currency loss (gain)                        (43,521)      11,996
                                                   ------------- ------------

    Loss and comprehensive loss                     $  (843,776) $(1,259,869)
                                                   ------------- ------------
                                                   ------------- ------------

    Basic and diluted loss per common share         $     (0.01) $     (0.02)

    Weighted average number of common shares         69,322,220   67,478,540
                                                   ------------- ------------
                                                   ------------- ------------

                                                   --------------------------



    INTERIM CONSOLIDATED BALANCE SHEET (Unaudited)
    AS AT JUNE 30, 2009
    -------------------------------------------------------------------------
                                                          As at        As at
                                                           June        March
                                                       30, 2009     31, 2009
    -------------------------------------------------------------------------

    ASSETS

    Current assets
    Cash and cash equivalents                       $ 2,477,741  $ 3,514,056
    Accounts receivable                               2,344,388    2,324,377
    Other receivables                                    15,765       21,218
    Inventory                                            44,915       62,182
    Prepaid expenses                                    559,524      448,275
                                                   ------------- ------------
                                                      5,442,333    6,370,108
                                                   ------------- ------------

    Long-term assets
    Deferred costs                                      116,760      129,104
    Property and equipment                            1,035,162    1,216,596
    Intangible assets                                 5,126,547    5,497,436
    Goodwill                                          4,692,399    4,692,399
                                                   ------------- ------------
                                                     10,970,868   11,535,535
                                                   ------------- ------------

    Total assets                                    $16,413,201  $17,905,643
                                                   ------------- ------------
                                                   ------------- ------------

    LIABILITIES

    Current liabilities
    Accounts payable and accrued liabilities        $ 2,994,544  $ 3,693,844
    Income taxes payable                                875,151      948,701
    Current portion of deferred revenue               4,052,593    3,935,954
    Current portion of capital lease obligations        138,831      178,655
                                                   ------------- ------------
                                                      8,061,119    8,757,154
                                                   ------------- ------------

    Long term liabilities
    Subordinated debt                                 4,843,569    4,938,425
    Deferred revenue                                  1,228,860    1,296,842
    Capital lease obligations                           236,321      281,463
                                                   ------------- ------------
                                                      6,308,750    6,516,730
                                                   ------------- ------------

    Total liabilities                                14,369,869   15,273,884
                                                   ------------- ------------

    SHAREHOLDERS' EQUITY
    Capital stock                                    28,348,960   27,596,692
    Contributed surplus                               4,246,950    3,274,607
    Warrants                                                  -    1,469,262
    Deficit                                         (30,552,578) (29,708,802)
                                                   ------------- ------------
                                                      2,043,332    2,631,759
                                                   ------------- ------------

    Total liabilities and shareholders' equity      $16,413,201  $17,905,643
                                                   ------------- ------------
                                                   ------------- ------------

                                                   --------------------------



    INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
    FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2009
    -------------------------------------------------------------------------
                                                       3 months     3 months
                                                          ended        ended
                                                           June         June
                                                       30, 2009     30, 2008
    -------------------------------------------------------------------------

    Cash flow from operating activities
    Loss and comprehensive loss                     $  (843,776) $(1,259,869)

    Adjustments for:
    Amortization                                        568,569      612,302
    Amortization of transaction costs
     related to debt financing                           33,525       33,525
    Stock based compensation                             25,349       43,592
    Foreign currency loss (gain)                       (116,361)      11,996
    Interest accretion                                  101,619      127,777
                                                   ------------- ------------
                                                       (231,075)    (430,677)

    Changes in non-cash working capital balances
    Accounts receivable                                (144,661)     355,954
    Prepaid expenses                                   (111,249)     (65,135)
    Inventory                                            17,267       59,981
    Deferred costs                                       12,344       46,691
    Other receivables                                     5,244      580,229
    Accounts payable and accrued liabilities           (570,554)    (359,916)
    Income taxes payable                                (54,273)           -
    Deferred revenue                                     48,657     (664,373)
                                                   ------------- ------------
    Cash flows used in operating activities          (1,028,300)    (477,246)
                                                   ------------- ------------

    Cash flow from investing activities
    Purchase of property and equipment                  (16,246)     (61,221)
                                                   ------------- ------------
    Cash flows used in investing activities             (16,246)     (61,221)
                                                   ------------- ------------

    Cash flow from financing activities
    Repayment of capital lease obligations              (76,388)    (102,632)
                                                   ------------- ------------
    Cash flows used in financing activities             (76,388)    (102,632)
                                                   ------------- ------------

    Foreign exchange gains on
     cash in foreign currency                            84,619       26,559

    Decrease in cash during the period               (1,036,315)    (614,540)
    Cash and cash equivalents, beginning of period    3,514,056    5,033,746
                                                   ------------- ------------

    Cash and cash equivalents, end of period        $ 2,477,741  $ 4,419,206
                                                   ------------- ------------
                                                   ------------- ------------

                                                   --------------------------

    Supplemental cash flow information:
      Interest paid                                 $   182,627  $   221,410
      Income taxes paid                             $    54,273  $         -



    OVERALL PERFORMANCE, RESULTS OF OPERATIONS AND FINANCIAL CONDITION
    QUARTERLY DATA

    ----------------------------------------------------------------
                         Fiscal                              Fiscal
                           Year       Q2       Q3       Q4     Year
    In $ 000's            Ended    Ended    Ended    Ended    Ended
    (Except per        March 31, Sept 30,  Dec 31,   March,   March
     Share Amounts)        2007     2007     2007 31, 2008 31, 2008
    ----------------------------------------------------------------
    Recurring Revenue    $9,828   $3,399   $3,229   $3,247  $13,088

    Non-Recurring
     Revenue              4,186    2,358      713      931    5,788

    Revenue              14,014    5,757    3,942    4,178   18,876

    Gross Profit          9,589    4,318    2,660    2,979   13,706

    Expenses             14,856    5,084    5,220    4,739   19,957

    EBITDA Income
     (Loss)              (3,841)    (158)  (1,799)  (1,188)  (3,526)

    Operating Loss
     for the Period      (5,267)    (766)  (2,561)  (1,761)  (6,250)

    Loss and
     Comprehensive
     Loss                (5,713)  (1,428)  (3,324)  (6,273) (12,811)

    Loss and
     Comprehensive
     Loss per Common
     Share               $(0.14)  $(0.02)  $(0.05)  $(0.09)  $(0.19)

    Weighted Avg. No.
     of Common Shares    40,120   66,914   66,914   67,460   66,228
    ----------------------------------------------------------------
    Total Assets        $17,531  $38,557  $36,257  $23,992  $23,992

    Total Long Term
     Liabilities         $2,014  $11,831  $12,097   $6,948   $6,948
    ----------------------------------------------------------------


    -------------------------------------------------------------------------
                                                             Fiscal
                             Q1       Q2       Q3       Q4     Year       Q1
    In $ 000's            Ended    Ended    Ended    Ended    Ended    Ended
    (Except per         June 30, Sept 30,  Dec 31,   March,   March  June 30,
     Share Amounts)        2008     2008     2008 31, 2009 31, 2009     2009
    -------------------------------------------------------------------------
    Recurring Revenue    $3,309   $3,431   $4,045   $3,746  $14,531   $3,564

    Non-Recurring
     Revenue              1,637      815      511      971    3,934      566

    Revenue               4,946    4,246    4,556    4,717   18,465    4,130

    Gross Profit          3,669    3,164    3,272    3,305   13,410    2,937

    Expenses              4,561    4,275    4,022    3,962   16,820    3,508

    EBITDA Income
     (Loss)                (236)    (458)     (34)       9     (719)      22

    Operating Loss
     for the Period        (892)  (1,112)    (750)    (656)  (3,410)    (571)

    Loss and
     Comprehensive
     Loss                (1,260)  (1,492)    (876)  (1,004)  (4,632)    (844)

    Loss and
     Comprehensive
     Loss per Common
     Share               $(0.02)  $(0.02)  $(0.01)  $(0.01)  $(0.07)  $(0.01)

    Weighted Avg. No.
     of Common Shares    67,479   67,479   67,667   67,845   67,845   69,322
    -------------------------------------------------------------------------

    Total Assets        $21,807  $20,308  $20,078  $17,906  $17,906  $16,413

    Total Long Term
     Liabilities         $6,366   $6,251   $6,234   $6,517   $6,517   $6,309
    -------------------------------------------------------------------------
    

    %SEDAR: 00022709E




For further information:

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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