MARKHAM, ON, Feb. 27 /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 with more than 5.3 million patient records under management, announces its financial results for the three and nine-month period ended December 31, 2008.
As a result of Nightingale's sale of Therapist Helper in Q4 fiscal 2008, all financial results for fiscal 2008 are reported on a continuing operations basis and are in Canadian dollars unless otherwise stated.
Q3 Fiscal 2009 Highlights
--------------------------
- Revenue increased 7.3% from the previous quarter to $4.6 million and
increased 15.6% over revenue of $3.9 million achieved in the same
quarter last year. On a year-over-year basis revenue was 6.5% lower
than revenue of $14.7 million for the nine months ended December 31,
2007.
- Recurring revenue increased 17.9% from the previous quarter to
$4 million and increased approximately 25.3% over the same quarter
last year. Year to date, recurring revenues increased 9.6% to $10.8
million.
- Gross profit for Q3 was $3.3 million representing a margin of 71.8%,
an increase from the previous quarter's gross profit of $3.2 million,
but a decrease in margin compared to 74.5% achieved in Q2. Q3 gross
profit margin was higher than the 67.5% achieved in the same quarter
last year. Gross profit was $10.1 million and a margin of 73.5% for
the nine months ended December 31, 2008, slightly lower than gross
profit of $10.7 million, but representing a higher margin than 72.9%
from the same period last year.
- Loss and comprehensive loss was approximately $876,000, or 19.2% of
revenue compared to a loss of $1.5 million or 35.1% for the previous
quarter. Year-to-date loss and comprehensive loss was $3.6 million or
26.4% compared to $6.9 million or 47.3% of revenue for the same
period last year.
- During the quarter Nightingale closed an agreement to provide its
OntarioMD Certified web-based Nightingale EMR solution to the three
core urban Family Health Organizations (FHOs) in London, Ontario.
These clinics are associated with London Health Sciences Centre and
St. Joseph's Health Care in London, Ontario along with several of
their community family practice partners. Nightingale's EMR will be
accessed by over 125 users in these FHOs to provide care to tens of
thousands of patients in the London area.
- Subsequent to quarter end, the Company was selected by the
Saskatchewan Medical Association (SMA) as one of four preferred EMR
vendors for the SMA EMR Program. The EMR Program will be made
available to approximately 1,400 fee-for-service and contracted
physicians within the province of Saskatchewan. Upon completion of
further conformance testing and signing of an agreement between the
SMA and Nightingale, physicians will have the option to choose
Nightingale as one of four funding eligible EMR solutions under this
program.
"Notwithstanding the overall positive impact from the strengthening of the US dollar relative to the Canadian dollar, our quarterly results demonstrate continued strength and growth in our Recurring Revenue base as well as continued reductions in our costs moving us closer to our goal of achieving profitability," said Sam Chebib, President and CEO of Nightingale. "Over the last four quarters we have worked diligently to improve operating efficiencies. While we are not satisfied that our efforts are complete, we are proud to report the progress that we have made to date."
Mr. Chebib continued: "Nightingale has been successful in gaining further product acceptance by physicians, academic teams and provincial ministries of health. We believe that our focus on our current customers, demonstrated by our recurring revenues, is an important driver of this recognition and ultimately our growth. I am confident that our ability to win the approval of stakeholders at all levels within the healthcare system coupled with our sensible approach to management should serve us well in subsequent quarters."
Q3 Fiscal 2009 Financial Review --------------------------------
Revenue for Q3 fiscal 2009 was $4.6 million, compared to revenue from continuing operations of $3.9 million for Q3 fiscal 2008. The year-over-year increase is largely due to the positive impact of the US dollar exchange rate on the growing base of Recurring Revenues, offset partially by a decrease in Non-Recurring Revenue.
For the three months ended December 31, 2008, the Company generated 83% of its revenue from the US market. With the recent increase in the value of the US dollar relative to the Canadian dollar, the Company estimates that revenue was positively impacted by approximately $700,000 during the current quarter compared to the same quarter of the previous fiscal year, approximately $550,000 during the consecutive quarterly periods and approximately $400,000 during the year to date periods. During the quarter ended December 31, 2008, Nightingale incurred approximately 52% of its expenses (including costs of goods sold) in the U.S., providing the Company with a natural hedge position. The Company continues to expect that a significant portion of its revenue and expenses will be generated from the U.S., as a result, Nightingale will remain susceptible to currency fluctuations.
Recurring revenue, consisting of support and maintenance, utilization and transaction fees, transcription and billing services was $4.0 million, or 88.8% of total revenue, marking the fourth consecutive quarterly increase in recurring revenues. The increase from the quarter ended September 30, 2008 to the quarter ended December 31, 2008 was largely due to the impact of the improvement in the US dollar as well as an increase in revenue cycle management revenues.
As a result of the steps Nightingale has taken to control costs, total operating expenses were reduced. Total operating expenses for the three and nine months ended December 31, 2008, were $4 million and $12.9 million, respectively. This compares to $5.2 million and $15.2 million for the three and nine months ended December 31, 2007, representing a 23.1% and 15.1% decrease over these respective periods. These decreases in expenses were partially offset by one time expenses in the quarter related to severance and in lieu pay costs associated with the headcount reductions as well as increases in expense associated with the increase in the value of the US dollar.
Net loss was $876,000, or $(0.01) per share, in Q3 fiscal 2009, compared to a net loss from continuing operations of $3.4 million, or $(0.05) per share, in Q3 fiscal 2008. The year-over-year improvement is primarily due to a reduction in operating expenses as well as repayment of debt and subsequent interest expense reductions. The Company remains focused on achieving positive cash flow.
Cash and cash equivalents were $3.1 million at December 31, 2008.
At December 31, 2008, total common shares issued and outstanding were 67,666,557.
The financial statements and Management's Discussion and Analysis will be available at http://www.nightingale.md and filed on www.sedar.com on February 27, 2009. This press release should be read in conjunction with Nightingale's Consolidated Financial Statements for the quarter ended December 31, 2008 and the accompanying Management Discussion and Analysis.
Notice of Conference Call and Webcast --------------------------------------
Nightingale will host a conference call on Friday, February 27, 2009 at 8:30 a.m. Eastern Standard Time. To access the conference call by telephone, dial 416-644-3424 or 1-800-590-1817. 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, March 6, 2009. To access the archived conference call, dial 416-640-1917 or 1-877-289-8525 and enter reference 21299200 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 365 days.
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 Nine Months Nine Months
Ended Ended Ended Ended
In $000's December 31, December 31, December 31, December 31,
Definition 2008 2007 2008 2007
-------------------------------------------------------------------------
Loss and
Comprehensive
Loss $ (876) $ (3,431) $ (3,628) $ (6,947)
-------------------------------------------------------------------------
Adjustments
for:
-------------------------------------------------------------------------
Other Loss (202) 17 (174) 170
-------------------------------------------------------------------------
Interest 328 854 1,049 2,288
-------------------------------------------------------------------------
Depreciation
and Amortiza-
tion 690 521 1,935 1,640
-------------------------------------------------------------------------
Stock-based
Compensation 26 241 91 512
-------------------------------------------------------------------------
EBITDA (Loss)
-------------------------------------------------------------------------
$ (34) $ (1,798) $ (727) $ (2,337)
-------------------------------------------------------------------------
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. Nightingale 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" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and 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 Company's ability to succeed in the US market, a new market for the Company; the existence of present and possible future government regulation; Nightingale's ability to continue to service its debt obligations and to comply with the related covenants and conditions; Nightingale's ability to successfully integrate its acquisitions and any liabilities arising as a result of such acquisitions; the significant and increasing competition that exists in the medical software industry; and the early stage of Nightingale's business. The Company is subject to the risks associated with early stage companies, including uncertainty of revenues, markets and profitability and the ability to access debt or equity financing, as necessary. 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. 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, including their knowledge of the current sales trends, spending on healthcare and general economic conditions affecting Nightingale and the Canadian and US economies. Although Nightingale believes the assumptions used to make such statements are reasonable at this time and has attempted to identify in its continuous disclosure documents 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. Certain material factors or assumptions are applied by the Company in making forward-looking statements, including without limitation, factors and assumptions regarding, acceptance of its products in the marketplace, as well as its operating cost structure and current and future trends in healthcare spending. 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 has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
INTERIM CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS FOR
THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2008
-------------------------------------------------------------------------
3 months 3 months 9 months 9 months
ending ended ending ended
December December December December
31, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Revenue $ 4,556,485 $ 3,942,345 $ 13,748,385 $ 14,697,495
Cost of sales
Hardware,
software and
services 1,234,833 1,153,171 3,456,645 $ 3,539,111
Sales
commissions 49,316 129,397 187,093 430,633
------------- ------------- ------------- -------------
1,284,149 1,282,568 3,643,738 3,969,744
------------- ------------- ------------- -------------
Gross profit 3,272,336 2,659,777 10,104,647 10,727,751
------------- ------------- ------------- -------------
Expenses
General and
administra-
tion 801,924 950,125 2,485,633 2,753,691
Sales and
marketing 621,682 859,277 1,969,147 2,494,365
Research and
development 780,782 1,221,594 2,765,729 3,584,011
Client
services 1,102,187 1,427,293 3,612,134 4,233,159
Stock based
compensation 25,544 241,111 90,549 512,078
Depreciation
and
amortization 689,845 520,991 1,934,718 1,639,906
------------- ------------- ------------- -------------
4,021,964 5,220,391 12,857,910 15,217,210
------------- ------------- ------------- -------------
Operating loss (749,628) (2,560,614) (2,753,263) (4,489,459)
------------- ------------- ------------- -------------
Interest 328,135 853,669 1,048,521 2,288,096
Other loss
(income) (201,671) 16,646 (174,151) 169,649
------------- ------------- ------------- -------------
Loss from
continuing
operations (876,092) (3,430,929) (3,627,633) (6,947,204)
Earnings from
discontinued
operations - 107,320 - 408,763
------------- ------------- ------------- -------------
Loss and
comprehensive
loss $ (876,092) $ (3,323,609) $ (3,627,633) $ (6,538,441)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Basic and
diluted (loss
per common
share)
Loss from
continuing
operations $ (0.01) $ (0.05) $ (0.05) $ (0.11)
Earnings from
discontinued
operations $ 0.00 $ 0.00 $ 0.00 $ 0.01
------------- ------------- ------------- -------------
Loss and
comprehensive
per common
share $ (0.01) $ (0.05) $ (0.05) $ (0.10)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Weighted
average number
of common
shares 67,772,826 66,914,490 67,827,225 65,733,398
----------------------------------------------------------
INTERIM CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 2008
-------------------------------------------------------------------------
As at As at
December March
31, 2008 31, 2008
-------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 3,062,852 $ 5,033,746
Accounts receivable 3,531,857 3,151,582
Other receivables 510,113 1,034,721
Inventory 67,158 168,948
Prepaid expenses 687,556 649,207
------------- -------------
7,859,536 10,038,204
------------- -------------
Long-term assets
Deferred costs 194,509 201,940
Property and equipment 1,367,499 1,722,276
Intangible assets 5,963,951 7,336,804
Goodwill 4,692,399 4,692,399
------------- -------------
12,218,358 13,953,419
------------- -------------
Total assets $ 20,077,894 $ 23,991,623
------------- -------------
------------- -------------
LIABILITIES
Current liabilities
Borrowing under line of credit $ 1,200,000 $ -
Accounts payable and accrued liabilities 3,512,479 4,048,260
Income taxes payable 1,591,980 1,336,270
Current portion of deferred revenue 3,696,484 4,199,690
Current portion of capital lease obligations 199,441 278,658
------------- -------------
10,200,384 9,862,878
------------- -------------
Long term liabilities
Subordinated debt 4,754,281 5,295,648
Deferred revenue 1,144,212 1,214,110
Capital lease obligations 335,797 438,682
------------- -------------
6,234,290 6,948,440
------------- -------------
Total liabilities 16,434,674 16,811,318
------------- -------------
SHAREHOLDERS' EQUITY
Capital stock, 27,596,692 27,521,485
Contributed surplus 3,282,175 1,459,085
Warrants 1,469,262 3,277,011
Deficit (28,704,909) (25,077,276)
------------- -------------
3,643,220 7,180,305
------------- -------------
Total liabilities and shareholders' equity $ 20,077,894 $ 23,991,623
------------- -------------
------------- -------------
----------------------------
Approved on behalf of the Board of Directors:
"Samer Chebib" Director
------------------------------
"David Atkins" Director
------------------------------
INTERIM CONSOLIDATED STATEMENT OF DEFICIT
FOR THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2008
-------------------------------------------------------------------------
3 months 3 months 9 months 9 months
ending ended ending ended
December December December December
31, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Deficit,
beginning of
the period $(27,828,817) $(15,480,681) $(25,077,276) $(12,265,849)
Loss and
comprehen-
sive loss (876,092) (3,323,609) (3,627,633) (6,538,441)
------------- ------------- ------------- -------------
Deficit, end
of the
period $(28,704,909) $(18,804,290) $(28,704,909) $(18,804,290)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
----------------------------------------------------------
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2008
-------------------------------------------------------------------------
3 months 3 months 9 months 9 months
ending ended ending ended
December December December December
31, 2008 31, 2007 31, 2008 31, 2007
-------------------------------------------------------------------------
Cash Flow from
Operating
Activities
Loss from
continuing
operations (876,092) (3,430,929) (3,627,633) (6,947,204)
Adjustments
for:
Depreciation
and
amortization 689,931 515,011 1,951,351 1,633,926
Amortization of
transaction
costs related
to debt
financing 33,525 134,099 100,574 419,709
Gain on Sale of
Asset - (22,130) - (22,130)
Unrealized
foreign
exchange loss
(gain) 255,125 (14,009) 329,489 (82,450)
Stock based
compensation 25,544 241,100 90,549 512,067
Interest
accretion 101,821 222,899 358,059 616,612
------------- ------------- ------------- -------------
229,854 (2,353,959) (797,611) (3,869,470)
Changes in
non-cash
working
capital
balances
Accounts
receivable (554,722) 1,549,183 (100,008) 551,228
Prepaid
expenses (82,576) 57,282 (38,349) (250,924)
Inventory 10,974 33,174 100,772 (45,893)
Deferred
costs (14,263) 21,707 7,431 425,218
Other
receivables 25,414 - 595,256 79,689
Accounts
payable and
accrued
liabilities (234,765) (624,719) (937,084) (1,230,711)
Deferred
revenue 293,730 (23,379) (573,105) 108,570
------------- ------------- ------------- -------------
Cash flows used
in operating
activities (326,354) (1,340,711) (1,742,698) (4,232,293)
------------- ------------- ------------- -------------
Cash flow from
investing
activities
Purchase of
property and
equipment (47,042) (74,106) (166,742) (529,752)
Proceeds from
sale of
property and
equipment - 258,065 - 258,065
VantageMed
acquisition - - - (13,533,087)
------------- ------------- ------------- -------------
Cash flows used
in investing
activities (47,042) 183,959 (166,742) (13,804,774)
------------- ------------- ------------- -------------
Cash flow from
financing
activities
Increase in
capital stock - - - 8,741,932
Proceeds from
subordinated
debt financing - - - 11,089,812
Repayment of
subordinated
debt financing (500,000) - (1,000,000) -
Repayment of
capital lease
obligations (84,991) (64,500) (261,454) (215,532)
Borrowing
(repayment)
under line of
credit 450,000 1,000,000 1,200,000 (541,733)
------------- ------------- ------------- -------------
Cash flows from
(used in)
financing
activities (134,991) 935,500 (61,454) 19,074,479
------------- ------------- ------------- -------------
Foreign exchange
gains (losses)
on cash held
in foreign
currency 456,796 (30,655) 503,640 (252,099)
Net increase
(decrease) in
cash from
continuing
operations (965,183) (190,597) (2,474,534) 1,289,511
Net increase in
cash from
discontinued
operations - 312,991 - 964,450
------------- ------------- ------------- -------------
Net Increase
(decrease) in
cash during
the period (508,387) 91,739 (1,970,894) 2,001,862
Cash and cash
equivalents,
beginning of
period 3,571,239 3,657,783 5,033,746 1,747,660
------------- ------------- ------------- -------------
Cash and cash
equivalents,
end of period $ 3,062,852 $ 3,749,522 $ 3,062,852 $ 3,749,522
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
----------------------------------------------------------
Non-cash
investing and
financing
activities:
Acquisition
of property
and
equipment
under
capital
lease - $ 258,065 $ 56,265 $ 258,065
Supplemental
cash flow
information:
Interest
paid $ 231,110 $ 655,998 $ 735,696 $ 1,775,908
%SEDAR: 00022709E
