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Press release from CNW Group

Nightingale Reports Fiscal 2012 Fourth Quarter and Year End Results

Wednesday, July 18, 2012

Nightingale Reports Fiscal 2012 Fourth Quarter and Year End Results07:00 EDT Wednesday, July 18, 2012- Strong demand for Company's cloud-based EMR software fuels top line growth for fiscal 2012 as well as year-over-year and sequential revenue improvements for the fourth quarter -MARKHAM, ON, July 18, 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 three months and year ended March 31, 2012. All results are reported under International Financial Reporting Standards (IFRS) and are in Canadian dollars unless otherwise stated.Q4 Fiscal 2012 Financial and Operational SummaryRevenue was $5.4 million, up 23% from $4.4 million in Q4 F2011, reflecting a significant increase in software revenue. Total Q4 revenue was also up 6% from $5.1 million in Q3 F2012.Total software revenue (EMR and Practice Management) was $5.0 million, up 31% from $3.9 million in Q4 F2011.Gross profit was $4.5 million (or 84% of revenue) up 24% from $3.7 million (84% of revenue) in Q4 F2011.Operating Expenses, excluding stock based compensation, depreciation, amortization and one-time business acquisition, integration and other costs were $4.3 million, up 31% compared to $3.3 million in Q4 F2011.Adjusted EBITDA1 was $0.3 million (5% of revenue) compared to $0.4 million (9% of revenue) in Q4 F2011.Net loss was $0.3 million in both Q4 F2012 and Q4 F2011.Cash from operations was $1.3 million in both Q4 F2012 and Q4 F2011.Total deferred revenue was $7.3 million compared to $7.5 million as at March 31, 2011.Fiscal 2012 Financial and Operational SummaryRevenue was $18.1 million, up 4% from $17.4 million in F2011, reflecting a significant increase in software revenue.Total software revenue was $16.4 million, up 11% from $14.8 million in F2011.Gross profit was $15.0 million (or 83% of revenue) up 7% from $14.0 million (81% of revenue) in F2011.Operating Expenses, excluding stock based compensation, depreciation, amortization and one-time business acquisition, integration and other costs were $13.8 million, up 12% from $12.3 million in F2011.Adjusted EBITDA1 was $1.3 million (7% of revenue) compared to $1.7 million (10% of revenue) in F2011.Net loss was $1.2 million compared to a net loss of $1.0 million for F2011.Cash from operations was $1.9 million compared to $3.1 million in F2011.Won a 10-year approximately $17 million contract with the Association of Ontario Health Centres (AOHC) to deploy Nightingale on Demand EMR to 3,500 healthcare providers across Ontario over a two-year period. The Company also signed additional enterprise and SMB (small and medium-sized business) EMR agreements during the year.Acquired assets of the Medrium Practice Management software business for US $1.7 million on December 19, 2011.  The Medrium software business is expected to add approximately $2 million of recurring revenue on an annual basis."During fiscal 2012, we experienced a number of positive events that are acting as catalysts for growth, profitability and predictability of future financial performance," said Sam Chebib, President and CEO of Nightingale. "We signed one of the largest EMR contracts ever awarded in Canada, completed an accretive acquisition that further bolsters our presence in the U.S. and Quebec EMR markets, and we transitioned the business to a pure-play technology company by moving away from increasingly commoditized revenue cycle management and transcription healthcare services. Our EMR market share gains translated into top line growth for the year and the quarter, which we expect to translate into notable improvements in profitability going forward."Mr. Chebib added: "We invested heavily during the fourth quarter in various initiatives to ensure the success of our AOHC deployment as well as the integration of Medrium. We expect our growth momentum to continue in fiscal 2013 and to contribute in a meaningful way to our profitability on a go forward basis. Our acquisition and existing EMR deployment pipeline provide greater predictability in our financial results. In addition, due to the credibility and brand awareness our major contract win is creating, as well as increasing overall demand, we are seeing new opportunities emerge for our cloud-based EMR in both the enterprise and SMB markets. With our plans to grow our customer footprint in Canada, strengthen our presence in the U.S. and augment our organic growth initiatives with strategic acquisitions, we are positioned to deliver long-term growth."Fiscal 2012 Year End and Q4 Financial ReviewNightingale's F2012 and F2011 annual and Q4 results are prepared in accordance with IFRS. For more detailed information regarding the Company's transition to IFRS, including a reconciliation of the Company's fiscal 2011 results as originally reported in Canadian Generally Accepted Accounting Principles (CGAAP) to IFRS please refer to the Company's financial statements and MD&A filings on SEDAR at for F2012 was $18.1 million, up 4% from $17.4 million for F2011.  Revenue for Q4 F2012 was $5.4 million, up 23% from $4.4 million for Q4 F2011.  The year-over-year improvement was driven by a 11% increase in software revenue in the annual period ($16.4 million for F2012, compared to $14.8 million in F2011) and a 31% increase in software revenue in the quarterly period ($5.0 million for Q4 F2012, compared to $3.9 million for Q4 F2011). This was a result of strong EMR sales, particularly the Company's major EMR contract win with the AOHC as Nightingale recognized part of the revenue related to the contract in F2012. The Company generated 40% of F2012 revenue and 43% of Q4 F2012 revenue in US dollars.  Foreign exchange fluctuations had a positive impact on revenue for F2012 of approximately 1%, or $0.2 million, compared to the previous year, and a negative 1% impact or $0.03 million for Q4 F2012.Recurring revenue2 for F2012 was $10.2 million (56% of revenue) compared to $10.7 million (61% of revenue) for F2011. This reflects a reduction in Revenue Cycle Management (RCM) revenue, as the Company has moved away from providing healthcare services to increasingly focus on being a leading technology provider. Recurring revenue for Q4 F2012 increased 16% to $2.9 million (54% of revenue) from $2.5 million (56% of revenue) for Q4 F2011 because the year-over-year decline in RCM revenue was more than offset by revenue resulting from the Company's acquisition of the Medrium assets.Non-recurring revenue2 for F2012 was $7.9 million, up 18% from $6.7 million for F2011. Non-recurring revenue for Q4 F2012 was $2.5 million, up 34% from $1.9 million in Q4 F2011. These increases were largely the result of revenue related to the Company's significant EMR contract with the AOHC.For F2012, gross margin was 83% ($15.0 million gross profit) compared to 81% ($14.0 million gross profit) for F2011. For Q4 F2012, gross margin was 84% ($4.5 million gross profit) compared to 84% ($3.7 million gross profit) for Q4 F2011.As a result of the Company's continued strategic investment in the business to support long-term growth initiatives, operating expenses for F2012 increased 16% to $14.3 million excluding charges for stock based compensation and depreciation and amortization, or 12% to $13.8 million also excluding one-time business acquisition, integration and other one-time costs incurred in Q3 F2012. This is compared to operating expenses of $12.3 million excluding charges for stock based compensation and depreciation and amortization for F2011. Operating expenses for Q4 F2012 were $4.3 million excluding charges for stock based compensation and depreciation and amortization, up 31% compared to $3.3 million for Q4 F2011.For F2012, adjusted EBITDA was $1.3 million compared to $1.7 million in F2011 reflecting the Company's increased investment in the business. For Q4 F2012, adjusted EBITDA was $0.3 million compared to $0.4 million for Q4 F2011.For F2012, net loss was $1.2 million, or $0.6 million excluding one-time business acquisition, integration and other costs and a one-time write-off to interest expense. This is compared to $1.0 million in F2011. Net loss was $0.3 million for Q4 F2012 and Q4 F2011.Cash and cash equivalents were $3.2 million at March 31, 2012, down from $4.2 million at March 31, 2011, primarily as a result of the Company's increased investments in its long-term strategic growth initiatives.At March 31, 2012, total common shares issued and outstanding were 76,310,915.The financial statements and MD&A will be available at and filed on on July 18, 2012.  This press release should be read in conjunction with Nightingale's Consolidated Financial Statements and the accompanying Management Discussion and Analysis for the year ended March 31, 2012.Notice of Conference CallNightingale will host a conference call on Wednesday, July 18, 2012, at 8:30 a.m. Eastern Standard Time. To access the conference call by telephone, dial (888) 231-8191 (or (647) 427-7450 for international). Please connect approximately fifteen minutes prior to the call, and reference conference ID 99385855 prior to the beginning of the call to ensure participation. The conference call will be archived for replay until Wednesday, July 25, 2012. To access the archived conference call, dial 416-849-0833 or 1-855-859-2056 and enter reference 99385855#. To listen to the conference call replay on the internet please visit the Nightingale website shortly after the call at Financial MeasuresThe 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 EBITDAAdjusted 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:           QuarterEnded QuarterEnded Fiscal YearEnded Fiscal YearEndedDefinition March 31,2012 March 31,2011 March 31,2012 March 31,2011         Loss and Comprehensive Loss$   (285,457)$   (266,013)$   (1,218,396)$  (988,551)         Adjustments for:        Current Tax Expense (Benefit)$12,032 $(12,888) $18,514 $(23,408)Other Loss (Income) (74,954) (35,490) (79,508) (50,060)Interest 108,247 119,043 466,509 642,615Depreciation and Amortization 505,557 578,865 1,513,913 1,891,966Stock-based Compensation 19,814 696 115,803 263,307Acquisition, Integration and Other - - 512,889 -Adjusted EBITDA$     285,239$     384,213$     1,329,724$    1,735,8692. Recurring and Non-Recurring RevenueThe 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:           Quarter Quarter Fiscal Year Fiscal Year Ended Ended Ended Ended  March March March MarchDefinition 31, 2012 31, 2011 31, 2012 31, 2011Non-Recurring Revenue$       2,486,361$    1,901,461$       7,888,115$     6,695,059         Recurring Revenue 2,889,396  2,451,968    10,192,269   10,679,036         Revenue$       5,375,757$    4,353,429$       18,080,384$     17,374,095About NightingaleNightingale 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.comForward Looking StatementThis 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 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.CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE TWELVE MONTHS ENDED MARCH 31, 2012 and MARCH 31, 2011  March 31, 2012   March 31, 2011              Revenue$   18,080,384  $    17,374,095       Cost of sales 3,050,782   3,327,190       Gross profit 15,029,602   14,046,905       Expenses      General and administration 3,351,479   3,381,836Sales and marketing 3,291,377   3,272,314Research and development 4,433,611   3,773,445Client services 4,307,829   4,038,714Business acquisition, integration and       other 512,889   -  15,897,185   14,466,309       Operating loss (867,583)   (419,404)       Interest 466,509   642,615Other financing gain (54,702)   -Foreign currency gain (79,508)   (50,060)       Loss before tax (1,199,882)   (1,011,959)Current tax expense (benefit)               18,514   (23,408)       Loss and comprehensive loss$           (1,218,396)  $           (988,551)       Basic and diluted loss per common share      Basic and diluted loss per common share$          (0.02)  $          (0.01)       Weighted average number of common shares 76,310,915   75,979,348              CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2012 and MARCH 31, 2011     March 31, 2012   March 31, 2011           ASSETS                 Current assets        Cash and cash equivalents$      3,199,058  $      4,165,406  Accounts receivable 2,267,854   3,006,073  Other receivables 103,513   66,868  Inventory -   19,882  Prepaid expenses 581,593   418,072    6,152,018   7,676,301           Long-term assets        Property and equipment 450,989   573,928  Intangible assets 5,808,744   3,273,672  Goodwill 4,792,399   4,692,399    11,052,132   8,539,999           Total assets$   17,204,150  $    16,216,300           LIABILITIES                 Current liabilities        Line of credit$        670,000  $         950,000  Accounts payable and accrued liabilities 3,351,187   2,323,880  Current portion of deferred revenue 4,689,175         4,778,811  Current portion of finance lease obligations 122,710            145,437  Current portion of term loan 872,813   800,000    9,705,885         8,998,128           Long term liabilities        Term loan 2,287,608     767,857  Convertible debentures 1,802,256   1,820,050  Deferred revenue 2,619,448      2,731,075  Finance lease obligations 37,345         128,130  Income taxes payable 686,921   667,708    7,433,578       6,114,820           Total liabilities 17,139,463     15,112,948           SHAREHOLDERS' EQUITY         Capital stock 29,629,683   29,629,683  Contributed surplus 4,811,456         4,695,653  Equity portion of convertible debentures 333,808   269,880  Warrants 701,452            701,452  Deficit (35,411,712)   (34,193,316)    64,687   1,103,352           Total liabilities and shareholders' equity$   17,204,150  $   16,216,300           CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE TWELVE MONTHS ENDED MARCH 31, 2012 and MARCH 31, 2011         March 31, 2012   March 31, 2011       Cash flow from operating activities      Loss from operations$    (1,218,396)  $  (988,551)       Adjustments for:      Depreciation and amortization       1,513,913          1,891,966Amortization of transaction costs related to debt financing          130,313              40,516Stock based compensation           115,803              298,196Other financing gain (54,702)   -Unrealized foreign exchange (gain) loss            12,079             92,438Provision for bad debt 90,845   -Interest accretion          92,484          61,657         682,339         1,396,222       Changes in non-cash working capital balances       Accounts receivable 653,236   (374,344) Prepaid expenses (154,389)   35,998 Inventory          19,882              10,826 Other receivables (53,338)   72,982 Accounts payable and accrued liabilities 945,147   (230,832) Income taxes payable 19,213   (38,232) Deferred revenue (201,263)   2,270,860       Cash flows provided by operating activities 1,910,827   3,143,480       Cash flow from investing activities      Purchase of property and equipment (241,177)   (168,772)Capitalized development costs (1,869,120)           (638,223)Acquisition of assets and liabilities from Medrium (1,761,880)   -Cash flows used in investing activities (3,872,177)   (806,995)       Cash flow from financing activities      Proceeds from line of credit borrowing -   950,000Repayment of line of credit (net of borrowings) (280,000)   -Proceeds from issuance of common shares (net of costs) -   1,208,231Proceeds from convertible debt financing (net of costs) -   2,017,372Proceeds from term loan (net of costs) 3,374,983   1,871,575Repayment of term loans (1,886,917)   (333,333)Repayment of subordinated debt financing -   (5,250,000)Repayment of finance lease obligations (230,724)   (339,448)Cash flows provided by financing activities 977,342   124,397       Foreign exchange losses on cash in foreign currency 17,660   (93,723)       Net increase (decrease) in cash (966,348)   2,367,159Cash and cash equivalents, beginning of period       4,165,406     1,798,247       Cash and cash equivalents, end of period$    3,199,058  $    4,165,406                     OVERALL PERFORMANCE, RESULTS OF OPERATIONS AND FINANCIAL CONDITION QUARTERLY DATA              CGAAP(1)IFRSIFRSIFRSIFRSIFRSIFRSIFRSIFRSIFRSIFRS FiscalYearQ1Q2Q3Q4Fiscal YearQ1Q2Q3Q4Fiscal YearIn $ 000's(Except per Share Amounts)EndedEndedEndedEndedEndedEndedEndedEndedEndedEndedEndedMarch 31,2010June 30,2010Sept 30,2010Dec 31,2010March 31,2011March 31,2011June 30,2011Sept 30,2011Dec 31,2011March 31,2012March 31,2012            Recurring Revenue$13,096$2,843$2,723$2,661$2,452$10,679$2,463$2,367$2,473$2,889$10,192            Non-Recurring Revenue3,4851,5591,4911,7441,9016,6951,3421,4392,6202,4867,888            Revenue16,5814,4024,2144,4054,35317,3743,8053,8075,0935,37618,080            Gross Profit12,2383,5333,3363,5023,67514,0473,1752,9614,3844,50915,030            Operating Expenses13,6933,3573,5533,6863,87014,4663,5003,2254,3694,80415,897            EBITDA  (non-IFRS measure)1,2036163953403841,73635939172851,330            Operating Income (Loss) for the Period(1,455)176(216)(184)(195)(419)(325)(263)16(295)(868)            Loss and Comprehensive Loss(3,444)(1)(413)(309)(266)(989)(425)(353)(155)(285)(1,218)            Loss and Comprehensive Loss per Common Share$(0.05)$(0.00)$(0.01)$(0.00)$(0.00)$(0.01)$(0.00)$(0.00)$(0.00)$(0.01)$(0.02)            Weighted Avg. #of Common Shares70,23272,80976,31176,31176,31175,97976,31176,31176,31176,31176,311            Total Assets$14,651$16,789$15,669$15,080$16,216$16,216$15,334$15,042$17,794$17,204$17,204            Total Long-TermLiabilities$7,918$1,979$5,185$5,337$6,115$6,115$5,819$5,972$8,102$7,434$7,434            Total Deferred Revenue$5,239$5,805$6,010$6,788$7,510$7,510$7,588$7,607$7,797$7,309$7,309(1) Financial information in this table for periods prior to April 1, 2010 have not been restated for changes in accountingpolicies on adoption of IFRS. Refer to the Company's MD&A filed on SEDAR at for a discussion of IFRSand its impact on the Company's financial statements. For further information: Michael Ford, CFO Nightingale Informatix Corporation Tel: 905-307-7870  Kristen Dickson, Account Executive The Equicom Group Tel: 416-815-0700 ext. 273