Nightingale reports fiscal 2008 first quarter results



    
         - Company delivers positive adjusted EBITDA in Q1 -
    

    MARKHAM, ON, Aug. 16 /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 software solutions, announces its financial results for the
three-month period ended June 30, 2007. All results are reported in Canadian
dollars unless otherwise stated.

    
    Q1 Fiscal 2008 Highlights
    -------------------------
    -   Revenue of $6.1 million, a 105% increase from $3.0 million
        in Q1 fiscal 2007.
    -   Recurring revenue was $4.0 million, or 65% of total revenue.
    -   Adjusted EBITDA(1) was $0.1 million, a $1.6 million
        improvement from Q1 fiscal 2007.
    -   Net loss decreased to $1.8 million, or $(0.02) per share,
        compared to net loss of $2.3 million, or $(0.07) per share,
        in Q1 fiscal 2007.
    -   Completed the VantageMed acquisition; restructured operations
        to capitalize on expected cost synergies of $2.4 million
        annually.
    -   Signed five new EMR and practice management enterprise
        customer contracts.
    -   Named one of North America's Top 100 Healthcare Information
        Technology Companies by Healthcare Informatics magazine.
    

    "With the VantageMed acquisition completed, we will focus on leveraging
our platform to generate organic growth in both the U.S. and Canada, achieve
sustainable positive adjusted EBITDA with expanding margins, and establish a
clear path toward profitability," said Sam Chebib, President and CEO of
Nightingale. "We are pleased with our progress in Q1. We expect results for
the remainder of the year to strengthen as we continue to bring in new
business from both sides of the border. In addition, we expect financial
performance to further improve in the coming quarters as our Q1 results only
reflect two months of revenue contribution from the VantageMed business and
one month of the cost saving synergies derived from the purchase."

    Q1 Fiscal 2008 Financial Review
    -------------------------------
    Total revenue for Q1 fiscal 2008 increased to $6.1 million, a 105%
increase compared to $3.0 million in Q1 fiscal 2007. The increase was driven
by a combination of organic growth in the Nightingale business and
approximately two months of revenue contribution from the acquired VantageMed
operations. Nightingale generated approximately 70% of Q1 fiscal 2008 revenue
in the U.S. As a result of year-over-year U.S. currency fluctuations relative
to the Canadian dollar, revenues were negatively impacted by a difference of
approximately 3.6% for the quarter.
    Recurring revenue, consisting of software support and maintenance,
utilization fees, transaction fees, data management, transcription and billing
services, was approximately 65% in the quarter.
    Q1 fiscal 2008 gross profit margin was 79%, compared to 58% in Q1 fiscal
2007. The year-over-year increase in gross profit margin was primarily due to
a greater portion of revenue coming from higher margin software license and
maintenance revenue than in the prior year period.
    Total operating expenses in Q1 fiscal 2008 were $5.9 million, compared to
$3.6 million in the first quarter of fiscal 2007. The increase in
year-over-year expenses was driven by additional costs inherited from the
VantageMed acquisition, including increased client services expenses, a
$0.8 million increase in amortization expense, and the Company's investment in
sales and marketing and research and development resources to support
expansion into the U.S.
    Nightingale generated positive adjusted EBITDA of $0.1 million, or 2%, in
Q1 fiscal 2008, compared to negative adjusted EBITDA of $1.5 million in Q1
fiscal 2007. Adjusted EBITDA increased year-over-year due to the significant
increase in revenue, higher gross profit margin, a focus on cost control and
synergies generated from the integration of VantageMed, partially offset by
the Company's investment in its infrastructure to support future growth.
    For Q1 fiscal 2008, net loss was $1.8 million, or $(0.02) per share,
compared to a net loss of $2.3 million, or $(0.07) per share in Q1 2007.

    
    Subsequent to Quarter-End
    -------------------------
    -   Signed agreements to license its EMR solution and provide
        associated support, training and implementation services to
        VantageMed customers in Pennsylvania; Minnesota; New Jersey
        and South Carolina.
    -   Won the 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.
    

    Fiscal 2008 Outlook
    -------------------
    Nightingale has established objectives to achieve positive adjusted
EBITDA and cash from operations for the fiscal year. The Company intends to
first demonstrate its goal of improved financial performance before continuing
to pursue its strategy of expansion through acquisitions.
    Nightingale expects that the current fiscal year's revenue from recurring
sources, consisting of software support and maintenance, utilization fees,
transaction fees, data management, transcription and billing services, will
comprise approximately 60% of total revenue.
    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

    Nightingale reports its financial results in accordance with Canadian
generally accepted accounting principles ("GAAP"). Nightingale's management
also evaluates and makes operating decisions using various other measures and
one such measure is adjusted EBITDA, which is a non-GAAP financial measure.
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 Ended  Quarter Ended
    Name       Definition               June 30, 2007  June 30, 2006
    -----------------------------------------------------------------
    Adjusted
     EBITDA    Net Income/Loss             -1,753,065     -2,321,005
               ------------------------------------------------------

               Adjustments for:
               Other Loss (Income)             53,679        -91,539
               Interest                       587,469        548,639
               Taxes                                -              -
               Depreciation and Amortization  989,509        163,685
               Stock-based Compensation       225,123        223,218
               ------------------------------------------------------

               Adjusted EBITDA                102,715     -1,477,002
    -----------------------------------------------------------------
    -----------------------------------------------------------------
    

    Notice of Conference Call and Webcast
    -------------------------------------
    Nightingale will host a conference call on August 16, 2007 at 8:30 a.m.
Eastern Daylight Time. To access the conference call by telephone, dial
416-644-3414 or 1-800-732-9307. Please connect approximately fifteen minutes
prior to the beginning of the call to ensure participation. The conference
call will be archived for replay until August 23, 2007. To access the archived
conference call, dial 416-640-1917, or 1-877-289-8525 and enter reference
number 21242636 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)

    -----------------------------------------------------------------
                                              June 30,      March 31,
                                                 2007           2007
    -----------------------------------------------------------------

    ASSETS

    Current Assets
    Cash and Cash Equivalents            $  5,543,899   $  1,747,660
    Accounts Receivable                     3,360,021      3,018,767
    Other Receivables                          41,004         79,739
    Inventory                                  91,859          7,893
    Prepaid Expenses                          493,656        257,157
                                        -------------- --------------
                                            9,530,439      5,111,216
                                        -------------- --------------

    Long-Term Assets
    Deferred Costs                            226,080        626,890
    Property and Equipment                  1,459,812      1,352,739
    Proprietary Software                    1,126,423      1,230,472
    Intangible Assets                      12,185,047      1,878,099
    Goodwill                               15,007,773      7,331,853
                                        -------------- --------------
                                           30,005,135     12,420,053
                                        -------------- --------------

                                         $ 39,535,574   $ 17,531,269
                                        -------------- --------------
                                        -------------- --------------

    LIABILITIES

    Current Liabilities
    Borrowing under Line of Credit       $          -   $  1,541,733
    Accounts Payable and Accrued
     Liabilities                            4,354,686      2,770,367
    Current Portion of Deferred Revenue     5,736,103      1,829,931
    Current Portion of Capital Lease
     Obligations                              246,521        258,586
                                        -------------- --------------
                                           10,337,310      6,400,617
                                        -------------- --------------

    Long Term Liabilities
    Subordinated Debt                       9,917,981              -
    Deferred Compensation Payable to
     Employees                                  1,963        100,824
    Deferred Revenue                        1,299,666      1,716,512
    Capital Lease Obligations                 178,332        196,246
                                        -------------- --------------
                                           11,397,942      2,013,582
                                        -------------- --------------

    Total Liabilities                      21,735,252      8,414,199
                                        -------------- --------------
                                        -------------- --------------

    SHAREHOLDERS' EQUITY
    Capital Stock                          27,295,885     18,553,953
    Contributed Surplus                     1,246,340      1,021,217
    Warrants                                3,277,011      1,807,749
    Deficit                               (14,018,914)   (12,265,849)
                                        -------------- --------------
                                           17,800,322      9,117,070
                                        -------------- --------------

    Total Liabilities and Shareholders'
     Equity                              $ 39,535,574   $ 17,531,269
                                        -------------- --------------
                                        -------------- --------------
                                        -----------------------------



    INTERIM CONSOLIDATED STATEMENT OF OPERATIONS AND
    COMPREHENSIVE LOSS
    FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2007
    (unaudited)

    -----------------------------------------------------------------
                                              June 30,       June 30,
                                                 2007           2006
    -----------------------------------------------------------------

    Revenue                              $  6,122,213   $  2,989,106
                                        -------------- --------------

    Cost of Sales
    Hardware, Software and Services         1,157,479      1,175,541
    Sales Commissions                         148,989         67,227
                                        -------------- --------------
                                            1,306,468      1,242,768
                                        -------------- --------------

    Gross Profit                            4,815,745      1,746,338
                                        -------------- --------------

    Expenses
    General and Administration                857,799        873,062
    Sales and Marketing                       943,197        775,472
    Research and Development                1,292,882      1,003,163
    Client Services                         1,619,152        571,643
    Stock-Based Compensation                  225,123        223,218
    Amortization                              989,509        163,685
                                        -------------- --------------
                                            5,927,662      3,610,243
                                        -------------- --------------

    Operating Loss for the Period          (1,111,917)    (1,863,905)
                                        -------------- --------------

    Interest                                  587,469        548,639
    Other Loss (Income)                        53,679        (91,539)

    Net Loss and Comprehensive Loss
     for the Period                        (1,753,065)    (2,321,005)
                                        -------------- --------------
                                        -------------- --------------

    Loss per Common Share, Basic                (0.02)         (0.07)
                                        -------------- --------------
                                        -------------- --------------

    Weighted Average Number of Common
     Shares                                63,345,256     34,551,915
                                        -------------- --------------
                                        -------------- --------------
                                        -----------------------------



    INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
    FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2007
    (unaudited)

    -----------------------------------------------------------------
                                              June 30,       June 30,
                                                 2007           2006
    -----------------------------------------------------------------

    Cash Flow from Operating Activities
    Loss for the Period                  $ (1,753,065)  $ (2,321,005)

    Adjustments for:
    Amortization                              989,509        163,685
    Stock-Based Compensation                  225,123        223,218
    Interest Accretion                        196,857              -
                                        -------------- --------------
                                             (341,576)    (1,934,102)

    Changes in Non-Cash Working
     Capital Balances:
    Decrease (Increase) in Accounts
     Receivable                               485,772       (492,055)
    Decrease (Increase) in Prepaid
     Expenses                                 (39,493)       (54,421)
    Decrease (Increase) in Inventory          (55,135)             -
    Decrease (Increase) in Deferred Costs     383,400        248,025
    Decrease (Increase) in Other
     Receivables                               38,735        145,107
    Increase (Decrease) in Accounts
     Payable and Accrued Liabilities         (888,034)      (463,819)
    Increase (Decrease) in Deferred
     Compensation Payable                     (98,861)      (310,493)
    Increase (Decrease) in Deferred
     Revenue                                 (222,913)       (82,575)
                                        -------------- --------------
    Cash flows used in operating
     activities                              (738,105)    (2,944,333)
                                        -------------- --------------

    Cash Flow from Investing Activities
    Purchase of Property and Equipment       (148,258)      (126,283)
    IHPS Acquisition                                -     (2,990,880)
    VantageMed Acquisition, Net of Cash
     Received                             (13,533,087)             -
                                        -------------- --------------
    Cash flows used in investing
     activities                           (13,681,345)    (3,117,163)
                                        -------------- --------------

    Cash Flow from Financing Activities
    Increase in Capital Stock               8,741,932      9,265,370
    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            -     (1,227,920)
    Increase (Decrease) in Capital
     Lease Obligations                        (74,322)        62,525
    Increase (Decrease) in Borrowing
     under Line of Credit                  (1,541,733)       925,202
                                        -------------- --------------
    Cash flows used in financing
     activities                            18,215,689      9,307,395
                                        -------------- --------------

    Net Increase in Cash During the
     Period                                 3,796,239      3,245,899
    Cash and Cash Equivalents,
     Beginning of Period                    1,747,660        373,691
                                        -------------- --------------

    Cash and Cash Equivalents,
     End of Period                       $  5,543,899   $  3,619,590
                                        -------------- --------------
                                        -------------- --------------
                                        -----------------------------
    





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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Nightingale Informatix Corporation

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