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Nightingale reports fiscal 2010 first quarter results

^{Published on 2009-08-28 04:09:32 - Market Wire}
 

 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: 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 ]