Nightingale Reports Fiscal 2013 First Quarter Results

Company reports 46% year-over-year revenue growth and material profitability for the quarter

MARKHAM, ON, Aug. 15, 2012 /CNW/ - Nightingale Informatix Corporation ("Nightingale" or the "Company") (TSXV: 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, 2012.

Q1 Fiscal 2013 Financial and Operational Summary

• Revenue was $5.6 million, up 46% compared to $3.8 million in Q1 F2012, primarily reflecting an increase in revenue from the Company's software business. Revenue was up 3% from $5.4 million in Q4 F2012.
• Total software revenue (EMR and Practice Management) was $5.5 million, up 64% from $3.3 million in Q1 F2012 and up 9% from $5.0 million in Q4 F2012.
• Gross profit was $4.9 million, or 89% of revenue, compared to $3.2 million, or 83% of revenue, in Q1 F2012 and $4.5 million, or 84% of revenue, in Q4 F2012.
  
  
• Operating Expenses, excluding stock based compensation, depreciation, amortization and one-time business acquisition, integration and other one-time costs were $4.0 million compared to $3.1 million in Q1 F2012 and $4.3 million in Q4 F2012.
   
• Adjusted EBITDA¹ was $0.9 million, 16% of revenue, up from $0.03 million in Q1 F2012 and $0.3 million in Q4 F2012, or 8% of revenue.
  
  
• Net income was $0.25 million compared to a net loss of $0.42 million in Q1 F2012 and a net loss of $0.29 million in Q4 F2012.
  
  
• Cash used in operations was $0.4 million compared to $0.1 million in Q1 F2012.
  
  
• Total deferred revenue was $7.5 million up from $7.3 million as at March 31, 2012.

"Fiscal 2013 is off to a strong start," said Sam Chebib, President and CEO of Nightingale. "As a result of our EMR market share gains, we generated a material year-over-year increase in revenue and Adjusted EBITDA, and we achieved solid profitability in the quarter. After exiting the Revenue Cycle Management service business, this is our first quarter as a software "pure-play", and our strong results for the quarter validate our strategy. We have a robust EMR deployment pipeline, we are seeing increasing demand with physicians and new opportunities are emerging with peripheral healthcare practitioners and markets. As a result, we are confident our revenue growth and year-over-year improvements in Adjusted EBITDA will continue."

Fiscal 2013 First Quarter Financial Review

The Company's results are prepared in accordance with International Financial Reporting Standards (IFRS) and in Canadian dollars unless otherwise stated.

Revenue for Q1 F2013 was $5.6 million, an increase of $1.8 million, or 46%, from $3.8 million for Q1 F2012. The year-over-year improvement reflects a $2.1 million increase in revenue from the Company's software business, which grew to $5.5 million in Q1 F2013 primarily as a result of the Company's major contract win in Q3 F2012. The strengthening in revenue from Nightingale's software business was partially offset by a decrease in revenue from the Company's Revenue Cycle Management services business, which is no longer a strategic focus for Nightingale.

Recurring Revenue² for Q1 F2013 was $2.7 million (49% of revenue), an increase of $0.2 million, or 10%, from $2.5 million (65% of revenue) in Q1 F2012, predominantly as a result of the acquisition of the Medrium business in Q3 F2012. Non-Recurring Revenue² for Q1 F2013 was $2.9 million, an increase of $1.5 million, or 113%, from $1.3 million for Q1 F2012, primarily as a result of the Company's major contract win.

For Q1 F2013, gross margin was 89% ($4.9 million gross profit) compared to 83% ($3.2 million gross profit) for Q1 F2012. The year-over-year increase was a function of product mix, as the Company has moved away from providing lower margin healthcare services to increasingly focus on being a leading technology provider.

Operating expenses for Q1 F2013 increased 30% to $4.1 million (73% of revenue) excluding charges for stock based compensation and depreciation and amortization, or 28% to $4.0 million (72% of revenue) also excluding one-time business acquisition, integration and other one-time costs, compared to operating expenses of $3.1 million (83% of revenue) excluding charges for stock based compensation and depreciation and amortization for Q1 F2012. Sequentially, operating expenses were down 5% from $4.3 million in Q4 F2012.

For Q1 F2013, Adjusted EBITDA was $0.9 million (16% of revenue), compared to $0.03 million (1% of revenue) in Q1 F2012.

For Q1 F2013, net income was $0.25 million, or $0.30 million excluding one-time business acquisition, integration and other costs. This is compared to a net loss of $0.42 million in Q1 F2012.

Cash and cash equivalents were $1.4 million at June 30, 2012, down from $3.2 million at March 31, 2012, primarily as a result of the Company's increased investments in its long-term strategic growth initiatives. Current assets remained flat at $6.2 million from March 31, 2012 to June 30, 2012.

At June 30, 2012, total common shares issued and outstanding were 76,310,915.

The financial statements and MD&A will be available at www.nightingalemd.com and filed on www.sedar.com on August 15, 2012.  This press release should be read in conjunction with Nightingale's Consolidated Financial Statements and the accompanying Management Discussion and Analysis for the quarter ended June 30, 2012.

Notice of Conference Call

Nightingale will host a conference call on Wednesday, August 15, 2012, at 8:30 a.m. Eastern Standard Time. To access the conference call by telephone, dial [phone] (or [phone] for international). Please connect approximately fifteen minutes prior to the call, and reference conference ID 17543339 prior to the beginning of the call to ensure participation. The conference call will be archived for replay until Wednesday, August 22, 2012. To access the archived conference call, dial 416-849-0833 or 1-855-859-2056 and enter reference 17543339#. To listen to the conference call replay on the internet please visit the Nightingale website shortly after the call at www.nightingalemd.com.

Non-IFRS Financial Measures

The Company internally measures its performance and results of initiatives through a number of measures that are not recognized under IFRS and may not be comparable to similar measures used by other companies.

1. Adjusted EBITDA

Adjusted EBITDA is a non-IFRS measure that management believes is a useful measurement to 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 IFRS. 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 defined as earnings before other loss (income), interest, income taxes, depreciation, amortization, stock-based compensation, and business acquisition, integration and other costs. 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 Loss and Comprehensive Loss:

					Three Months Ended				Three Months Ended
Definition					June 30, 2012				June 30, 2011
Loss and Comprehensive Income (Loss)				$	249,637			$	(425,170)
Adjustments for:
Current Tax Expense (Benefit)				$	13,480			$	(6,198)
Other Loss (Income)					68,171				(8,924)
Interest					93,214				114,930
Depreciation and Amortization					374,877				320,437
Stock-Based Compensation					66,423				39,915
Acquisition, Integration and Other					49,971				-
Adjusted EBITDA				$	915,773			$	34,990

2. 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 IFRS.  Recurring Revenue is comprised of utilization fees, hosting, support and maintenance revenue, data management and transcription services, billing and financial management services and transactional fees.  Non-Recurring Revenue is comprised of revenues generated from sales of perpetual software and systems licenses and related training, data conversion and installation services.

The following provides a reconciliation of Recurring Revenue and Non-Recurring Revenue to Revenue:

						Three Months				Three Months
						Ended				Ended
Definition						June 30, 2012				June 30, 2011
Non-Recurring Revenue					$	2,856,388			$	1,342,310
Recurring Revenue						2,704,729				2,462,890
Revenue					$	5,561,117			$	3,805,200

About Nightingale

Nightingale is one of the fastest growing health care service and software companies in North America and 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.nightingalemd.com

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",  "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", "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 secure customer contracts and the timing of securing such contracts; the ability of Nightingale to complete and successfully integrate its acquisitions on an accretive basis, Nightingale's access to debt and capital facilities, including compliance with current debt arrangements; the existence of present and possible future government regulation; the significant competition that exists in the medical software industry; the early stage of Nightingale's business, and 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. Certain material factors or assumptions applied by management in making forward-looking statements, include without limitation, factors and assumptions regarding future trends in healthcare spending, economic conditions affecting Nightingale and North American economies; Nightingale's ability to continue to fund its business, rates of customer defaults, relationships with, and payments to lenders, 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.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME AND LOSS
FOR THE THREE MONTHS ENDED JUNE 30, 2012
Unaudited (Canadian Dollars)

				Three Months				Three Months
				Ended				Ended
				June 30,2012				June 30, 2011
Revenue			$	5,561,117			$	3,805,200
Cost of sales				620,671				630,393
Gross profit				4,940,446				3,174,807
Expenses
General and administration				864,502				727,156
Sales and marketing				1,056,375				810,868
Research and development				1,522,606				946,997
Client services				1,022,490				1,015,148
Business acquisition, integration and other				49,971				-
				4,515,944				3,500,169
Operating income (loss)				424,502				(325,362)
Interest				93,214				114,930
Foreign currency loss (gain)				68,171				(8,924)
Income (Loss) before tax				263,117				(431,368)
Current tax expense (benefit)				13,480				(6,198)
Income (Loss) and comprehensive income (loss)			$	249,637			$	(425,170)
Basic and diluted income (loss) per common share
Basic and diluted income (loss) per common share			$	0.00			$	(0.01)
Weighted average number of common shares				76,310,915				76,310,915

 

CONDENSED CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2012
Unaudited (Canadian Dollars)

				June 30, 2012					March 31, 2012
ASSETS
Current assets
Cash and cash equivalents			$	1,422,130				$	3,199,058
Accounts receivable				3,990,144					2,267,854
Other receivables				91,705					103,513
Prepaid expenses				675,714					581,593
				6,179,693					6,152,018
Long-term assets
Property and equipment				719,120					450,989
Intangible assets				6,270,538					5,808,744
Goodwill				4,792,399					4,792,399
				11,782,057					11,052,132
Total assets			$	17,961,750				$	17,204,150
LIABILITIES
Current liabilities
Line of credit				670,000				$	670,000
Accounts payable and accrued liabilities				3,767,721					3,351,187
Current portion of deferred revenue				4,908,908					4,689,175
Current portion of finance lease obligations				99,331					122,710
Current portion of term loan				890,838					872,813
				10,336,798					9,705,885
Long term liabilities
Term loan				2,110,195					2,287,608
Convertible debentures				1,829,464					1,802,256
Deferred revenue				2,569,945					2,619,448
Finance lease obligations				33,494					37,345
Income taxes payable				701,107					686,921
				7,244,205					7,433,578
Total liabilities				17,581,003					17,139,463
SHAREHOLDERS' EQUITY
Capital stock				29,629,683					29,629,683
Contributed surplus				4,877,879					4,811,456
Equity portion of convertible debentures				333,808					333,808
Warrants				701,452					701,452
Deficit				(35,162,075)					(35,411,712)
				380,747					64,687
Total liabilities and shareholders' equity			$	17,961,750				$	17,204,150

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 2012
Unaudited (Canadian Dollars)

				Three Months				Three Months
				Ended				Ended
				June 30, 2012				June 30, 2011
Cash flow from operating activities
Income (Loss) from operations			$	249,637			$	(425,170)
Adjustments for:
Depreciation and amortization				374,876				320,438
Charge to bad debt expense				15,326				-
Amortization of transaction costs related to debt financing				11,595				13,131
Stock based compensation				66,423				39,915
Unrealized foreign exchange (gain) loss				116,559				(24,762)
Interest accretion				23,121				23,121
				857,535				(53,327)
Changes in non-cash working capital balances
Accounts receivable				(1,760,592)				421,075
Prepaid expenses				(94,121)				(97,528)
Inventory				-				2,233
Other receivables				9,990				15,617
Accounts payable and accrued liabilities				375,229				(362,711)
Income taxes payable				14,186				(3,512)
Deferred revenue				170,230				78,153
Cash flows provided by (used in) operating activities				(427,541)				(126,147)
Cash flow from investing activities
Purchase of property and equipment				(339,403)				(20,844)
Acquisition of intangible assets				(765,398)				(191,769)
Cash flows used in investing activities				(1,104,801)				(212,613)
Cash flow from financing activities
Proceeds  from line of credit borrowing				-				960,000
Repayment of line of credit borrowing				-				(950,000)
Repayment of term loan				(218,749)				(200,000)
Repayment of capital lease obligations				(27,230)				(85,793)
Cash flows provided by (used in) financing activities				(245,979)				(275,793)
Foreign exchange losses on cash in foreign currency				1,393				(2,649)
Net increase (decrease) in cash				(1,776,928)				(617,202)
Cash and cash equivalents, beginning of period				3,199,058				4,165,406
Cash and cash equivalents, end of period			$	1,422,130			$	3,548,204

OVERALL PERFORMANCE, RESULTS OF OPERATIONS AND FINANCIAL CONDITION

	Q1	Q2	Q3	Q4	Fiscal Year	Q1	Q2	Q3	Q4	Fiscal Year	Q1
In $ 000's	Ended	Ended	Ended	Ended	Ended	Ended	Ended	Ended	Ended	Ended	Ended
(Except per Share Amounts)	June 30, 2010	Sept 30, 2010	Dec 31, 2010	March 31, 2011	March 31, 2011	June 30, 2011	Sept 30, 2011	Dec 31, 2011	March 31, 2012	March 31, 2012	June 30, 2012
Recurring Revenue	$2,843	$2,723	$2,661	$2,452	$10,679	$2,463	$2,367	$2,473	$2,889	$10,192	$ 2,705
Non-Recurring Revenue	1,559	1,491	1,744	1,901	6,695	1,342	1,439	2,620	2,486	7,888	2,856
Revenue	4,402	4,214	4,405	4,353	17,374	3,805	3,807	5,093	5,376	18,080	5,561
Gross Profit	3,533	3,336	3,502	3,675	14,047	3,175	2,961	4,384	4,509	15,030	4,940
Operating Expenses	3,357	3,553	3,686	3,870	14,466	3,500	3,225	4,369	4,804	15,897	4,516
EBITDA  (non-IFRS measure)	616	395	340	384	1,736	35	93	917	231	1,330	916
Operating Income (Loss) for the Period	176	(216)	(184)	(195)	(419)	(325)	(263)	16	(295)	(868)	425
Income (Loss) and Comprehensive Income (Loss)	(1)	(413)	(309)	(266)	(989)	(425)	(353)	(155)	(285)	(1,218)	250
Income (Loss) and Comprehensive Income (Loss) per Common Share	$(0.00)	$(0.01)	$(0.00)	$(0.00)	$(0.01)	$(0.00)	$(0.00)	$(0.00)	$(0.01)	$(0.02)	$0.00
Weighted Avg. # of Common Shares	72,809	76,311	76,311	76,311	75,979	76,311	76,311	76,311	76,311	76,311	76,311
Total Assets	$16,789	$15,669	$15,080	$16,216	$16,216	$15,334	$15,042	$17,794	$17,204	$17,204	$17,962
Total Long-Term Liabilities	$1,979	$5,185	$5,337	$6,115	$6,115	$5,819	$5,972	$8,102	$7,434	$7,434	$7,244
Total Deferred Revenue	$5,805	$6,010	$6,788	$7,510	$7,510	$7,588	$7,607	$7,797	$7,309	$7,309	$7,479

 

 

SOURCE: Nightingale Informatix Corporation

Michael Ford, CFO
Nightingale Informatix Corporation
Tel: [phone]
[email protected] 

Kristen Dickson, Senior Account Executive
TMX Equicom
Tel: [phone] ext. 273
[email protected]