Major contract win and acquisition drive 118% increase in Adjusted
EBITDA and provide predictability for sustainable revenue growth
and EBITDA margin expansion going forward MARKHAM, ON, Feb. 28,
2012 /CNW/ - Nightingale Informatix Corporation ("Nightingale" or
the "Company") , an application service provider (ASP) of
electronic medical record (EMR) software and related services,
announces its financial results for the three and nine months ended
December 31, 2011. All results are reported under IFRS and are in
Canadian dollars unless otherwise stated. Q3 Fiscal 2012 Financial
and Operational Summary -- Revenue was $5.1 million, up 16% from
$4.4 million in Q3 F2011, reflecting a significant increase in
software revenue. o Total software revenue (EMR and Practice
Management) was $4.7 million, up 27% from $3.7 million in Q3 F2011.
-- Gross profit was $4.3 million (or 85% of revenue) up from $3.6
million (81% of revenue) in Q3 F2011. -- Operating Expenses,
excluding stock based compensation, depreciation, amortization and
one-time business acquisition, integration and other costs were
$3.5 million compared to $3.2 million in Q3 F2011. -- Adjusted
EBITDA1 was $0.9 million (17% of revenue), up 118% from $0.4
million (9% of revenue) in Q3 F2011. -- Net income was $0.4 million
excluding one-time business acquisition, integration and other
costs and a one-time write-off to interest expense, compared to
$(0.2) million in Q3 F2011. -- Cash from operations was $0.3
million compared to $0.6 million in Q3 F2011. -- Total deferred
revenue was $7.8 million, up from $7.5 million as at March 31,
2011. -- In addition to signing agreements with healthcare
providers to deploy 150 EMR seats2, won a contract with the
Association of Ontario Health Centres (AOHC) to provide Nightingale
on Demand EMR to cover 3,500 healthcare providers across Ontario
over a two-year deployment, representing $9.0 million in revenue
over the first three years, and up to $17.0 million over 10-year
life of the contract. Company signed agreements to deploy
approximately 220 seats in Q3 F2011. -- 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 $2.0 million of recurring revenue on an annual
basis. -- Subsequent to quarter end, appointed Marc Filion to the
Company's Board of Directors. "We hit an inflection point in Q3,
with our significant increase in revenue, which was up 16%
year-over-year and 25% sequentially, driving a substantial
improvement in Adjusted EBITDA for the quarter," said Sam Chebib,
President and CEO of Nightingale. "We signed one of the largest EMR
contracts ever awarded in Canada and completed an acquisition that
strengthens our presence in the U.S. and Quebec EMR markets. Given
the transparency and predictability these transformational events
provide for our financial results, we are confident our growth will
continue over the coming quarters. In addition, we plan to stay
disciplined with our expenses. As a result, we expect revenue
improvements to materially outpace any increase in expenses,
fueling further EBITDA margin expansion going forward." Mr. Chebib
continued: "EMR is our key growth driver, and we are seeing the
market open up. Large enterprises along with small and medium-sized
clinics are increasingly recognizing the value, technology
leadership and cost efficiencies of a cloud-based EMR offering. We
have a web-native solution, and are a leading EMR provider in
Canada. We continue to gain market share, and with our plans to
expand into Quebec, strengthen our position in the U.S. and augment
our organic growth initiatives with strategic acquisitions where
appropriate, we are well positioned to deliver continued long-term
growth." Fiscal 2012 Third Quarter and Year to Date (YTD) Financial
Review Nightingale's Q3 and YTD fiscal 2012 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 Q3 fiscal 2011 YTD 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 www.sedar.com. Revenue
for Q3 fiscal 2012 was $5.1 million, up 16% from $4.4 million for
Q3 fiscal 2011. The year-over-year improvement was driven by
a 27% increase in software revenue ($4.7 million for Q3 fiscal
2012, compared to $3.7 million in Q3 fiscal 2011) which was
predominantly a result of the Company's major EMR contract win with
the AOHC, as the Company recognized part of the revenue related to
the contract in Q3 with the remainder of the revenue to be
recognized over coming quarters. The Company generated 37% of Q3
fiscal 2012 revenue in US dollars. However, foreign exchange
fluctuations had a negligible impact on revenue for the quarter
compared to the year ago quarter. YTD fiscal 2012 revenue was $12.7
million, down 2% from $13.0 million for the same period in fiscal
2011, due to slower enterprise sales in the first half of the
fiscal year. The Company generated 40% of YTD fiscal 2012 revenue
in US dollars. As a result, foreign exchange fluctuations had a
$(0.2) million impact on revenue for the period. Foreign exchange
fluctuations predominantly impact the Company's recurring revenue
results. Recurring revenue(3) for Q3 fiscal 2012 was $2.5 million
(49% of revenue), down in comparison to $2.7 million (60% of
revenue) for Q3 fiscal 2011. YTD fiscal 2012 recurring revenue was
$7.3 million (57% of revenue), down in comparison to $8.2 million
(63% of revenue) for YTD fiscal 2011. These decreases were
predominantly a result of a reduction in Revenue Cycle Management
revenue, as the Company moves away from providing healthcare
services to increasingly focus on being a leading technology
provider. Non-recurring revenue(3) for Q3 fiscal 2012 was $2.6
million, up 50% from $1.7 million for Q3 fiscal 2011, largely
reflecting revenue related to the Company's significant EMR
contract with the AOHC. YTD non-recurring revenue for fiscal 2012
was $5.4 million, up 13% from $4.8 million for YTD fiscal 2011. For
Q3 fiscal 2012, gross margin was 85% ($4.3 million gross profit)
compared to 81% ($3.6 million gross profit) for Q3 fiscal 2011. For
YTD fiscal 2012, gross margin was 83% ($10.5 million gross profit)
compared to 80% ($10.4 million gross profit) for YTD fiscal 2011.
Operating expenses for Q3 fiscal 2012, were $4.0 million, excluding
charges for stock based compensation and depreciation and
amortization, or $3.5 million also excluding one-time business
acquisition, integration and other costs. This is compared to
operating expenses of $3.2 million, excluding charges for stock
based compensation and depreciation and amortization for Q3 fiscal
2011. YTD fiscal 2012 operating expenses were $10.0 million,
excluding charges for stock based compensation and depreciation and
amortization, or $9.5 million also excluding one-time business
acquisition, integration and other costs. This is compared to $9.0
million in operating expenses, excluding charges for stock based
compensation and depreciation and amortization for YTD fiscal 2011.
For Q3 fiscal 2012, adjusted EBITDA was $0.9 million, up 118% from
$0.4 million in Q3 fiscal 2011. For YTD fiscal 2012, adjusted
EBITDA was $1.0 million compared to $1.4 million for YTD fiscal
2011. For Q3 fiscal 2012, net income was $(0.2) million, or $0.4
million excluding one-time business acquisition, integration and
other costs and a one-time write-off to interest expense. This is
compared to $(0.2) million in Q3 fiscal 2011. Net income for YTD
fiscal 2012 was $(0.9) million, or $(0.4) million excluding
one-time costs and one-time write-off, compared to $(0.7) million
for YTD fiscal 2011. Cash and cash equivalents were $3.0 million at
December 31, 2011, 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 December 31, 2011, 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 February 28, 2012. This press
release should be read in conjunction with Nightingale's
Consolidated Financial Statements for the three and nine months
ended December 31, 2011 and the accompanying Management Discussion
and Analysis. Notice of Conference Call Nightingale will host a
conference call on Tuesday, February 28, 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 54208352 prior to the beginning of the call
to ensure participation. The conference call will be archived for
replay until Tuesday, March 6, 2012. To access the archived
conference call, dial 416-849-0833 or 1-855-859-2056 and enter
reference 54208352 #. To listen to the conference call replay on
the internet please visit the Nightingale website shortly after the
call at www.nightingalemd.com. 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. Adjusted EBITDA Adjusted 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 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 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
(dollars are in thousands): Three Three Months Months Nine Months
Nine Months Ended Ended Ended Ended December December 31, 31,
December31, December31, Definition 2011 2010 2011 2010 Loss and $ $
$ $ Comprehensive Loss (190,655) (245,478) (942,780) (668,283)
Adjustments for: Current Tax $ $ $ $ Expense (Benefit) 12,212 -
6,482 (10,520) Other Loss (Income) 8,153 620 (4,554) (14,570)
Interest 150,130 124,192 358,262 523,572 Depreciation and
Amortization 376,816 474,247 1,008,356 1,313,101 Stock-based
Compensation 32,777 50,140 95,989 262,611 Acquisition, Integration
and Other 491,258 - 512,889 - Adjusted $ $ $ $ EBITDA 880,691
403,721 1,034,644 1,405,911 2. Seat Sale "Seat" is defined as a
paying healthcare provider using Nightingale's Electronic Medical
Record. 3. 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. 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 software and systems and related
training, data conversion and installation services. The following
provides a reconciliation of Recurring Revenue and Non-Recurring
Revenue to Revenue (dollars are in thousands): Three Three Nine
Nine Months Months Months Months Ended Ended Ended Ended December
December December December31, 31, 31, 31, Definition 2011 2010 2011
2010 Non-Recurring $ $ $ $ Revenue 2,620,072 1,744,438 5,401,754
4,793,598 Recurring Revenue 2,472,624 2,660,887 7,302,873 8,227,068
Revenue $ 5,092,696 $ 4,405,325 $ 12,704,627 $ 13,020,666 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. CONSOLIDATED STATEMENT OF
OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND NINE MONTHS
ENDED DECEMBER 31, 2011 Three Nine Months Three Months Nine Months
Months Ended Ended Ended Ended December December 31, December 31,
December 31, 31, 2011 2010 2011 2010 Revenue $ 5,092,696 $
4,405,325 $ 12,704,627 $ 13,020,666 Cost of sales 744,254 839,788
2,193,850 2,594,509 Gross profit 4,348,442 3,565,537 10,510,777
10,426,157 Expenses General and administration 967,856 822,336
2,480,839 2,423,109 Sales and marketing 797,378 818,228 2,314,624
2,409,680 Research and development 1,025,006 1,001,221 2,655,974
2,720,219 Client services 1,087,104 1,044,418 3,129,041 3,042,950
Business acquisition, integration and other costs 491,258 - 512,889
- 4,368,602 3,686,203 11,093,367 10,595,958 Operating income (loss)
(20,160) (120,666) (582,590) (169,801) Interest 150,130 124,192
358,262 523,572 Foreign currency gain 8,153 620 (4,554) (14,570)
Loss before tax (178,443) (245,478) (936,298) (678,803) Current tax
expense (benefit) 12,212 - 6,482 (10,520) Loss and $ $ $ $
comprehensive loss (190,655) (245,478) (942,780) (668,283) Basic
and diluted loss per common share Loss and $ $ $ $ comprehensive
loss per common share (0.00) (0.00) (0.01) (0.01) Weighted average
number of common shares 76,310,915 76,310,915 76,310,915 75,649,594
CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2011 December31, 2011
March 31, 2011 ASSETS Current assets Cash and cash equivalents $
2,951,523 $ 4,165,406 Accounts receivable 3,228,519 3,006,073 Other
receivables 84,667 66,868 Inventory 6,056 19,882 Prepaid expenses
533,411 418,072 6,804,176 7,676,301 Long-term assets Deferred costs
188,560 198,401 Property and equipment 457,647 573,928 Intangible
assets 5,740,242 3,273,672 Goodwill 4,792,399 4,692,399 11,178,848
8,738,400 Total assets $ 17,983,024 $ 16,414,701 LIABILITIES
Current liabilities Line of credit $ 850,000 $ 950,000 Accounts
payable and $ $ accrued liabilities 2,665,389 2,323,880 Current
portion of deferred revenue 4,925,052 4,778,811 Current portion of
finance lease obligations 94,440 145,437 Current portion of term
loan 890,925 800,000 9,425,806 8,998,128 Long term liabilities Term
loan 2,566,595 767,857 Convertible debentures 1,901,677 1,820,050
Deferred revenue 2,871,560 2,731,075 Finance lease obligations
62,074 128,130 Income taxes payable 700,350 667,708 8,102,256
6,114,820 Total liabilities 17,528,062 15,112,948 SHAREHOLDERS'
EQUITY Capital stock 29,629,683 29,629,683 Contributed surplus
4,791,642 4,695,653 Equity portion of convertible debentures
269,880 269,880 Warrants 701,452 701,452 Deficit (34,937,695)
(33,994,915) 454,962 1,301,753 Total liabilities and $ $
shareholders' equity 17,983,024 16,414,701 CONSOLIDATED STATEMENT
OF CASH FLOWS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2011
Threemonths Three months Nine months Nine months Ended Ended Ended
Ended Dec 31, Dec 31, 2011 Dec 31, 2010 2011 Dec31,2010 Cash flow
from operating activities Loss from $ $ $ $ operations (190,655)
(245,478) (942,780) (668,283) Adjustments for: Depreciation and
amortization 376,816 474,247 1,008,358 1,313,101 Amortization of
transaction costs related to debt financing 84,177 (2,304) 111,074
41,433 Stock based compensation 32,777 50,140 95,989 262,611
Unrealized foreign exchange (gain) loss (67,282) (40,767) 82,050
60,837 Provision for bad debt 28,038 - 28,038 - Interest accretion
23,121 23,121 69,363 39,537 286,992 258,959 452,092 1,049,236
Changes in non-cash working capital balances Accounts receivable
(566,815) (567,533) (282,366) (631,757) Prepaid expenses 151,891
79,327 (106,207) (16,278) Inventory (1,857) 1,948 13,826 9,221
Deferred costs 36,018 (63,452) 9,841 (54,255) Other receivables
(74,408) 26,204 (17,634) 85,805 Accounts payable and accrued
liabilities 255,604 32,260 228,347 (176,208) Income taxes payable
(21,485) 25,824 32,642 53,049 Deferred revenue 189,209 778,477
286,726 1,548,566 Cash flows provided by operating activities
255,149 572,014 617,267 1,867,379 Cash flow from investing
activities Purchase of property and equipment (124,568) (16,768)
(151,736) (86,083) Capitalized development costs (423,169) (84,054)
(1,418,234) (563,835) Acquisition of assets and liabilities from
Medrium (1,761,880) - (1,761,880) - Cash flows used in investing
activities (2,309,617) (100,822) (3,331,850) (649,918) Cash flow
from financing activities Proceeds from line of credit borrowing
1,350,000 - 2,985,000 - Repayment of line of credit borrowing
(1,175,000) (840,000) (3,085,000) - Proceeds from issuance of
common shares, net of costs - - - 1,243,119 Proceeds from
convertible debt financing (net of costs) - - - 2,017,373 Proceeds
from term loan (net of costs) 3,457,520 - 3,457,520 - Repayment of
term loan (1,266,667) (133,333) (1,666,667) - Repayment of
subordinated debt financing - - - (3,529,910) Repayment of finance
lease obligations (43,501) (100,020) (207,193) (240,079) Cash flows
provided by (used in) financing activities 2,322,352 (1,073,353)
1,483,660 (509,497) Foreign exchange gains (losses) on cash in
foreign currency (7,515) (11,643) 17,040 (92,460) Net increase
(decrease) in cash 260,369 (613,804) (1,213,883) 615,504 Cash and
cash equivalents, beginning of period 2,691,154 3,027,555 4,165,406
1,798,247 Cash and cash equivalents, end of $ $ $ $ period
2,951,523 2,413,751 2,951,523 2,413,751 OVERALL PERFORMANCE,
RESULTS OF OPERATIONS AND FINANCIAL CONDITION QUARTERLY DATA CGAAP
CGAAP CGAAP IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS (1) (1) (1)
Fiscal Fiscal Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Ended Ended
Ended Ended Ended Ended Ended Ended Ended Ended Ended In $ 000's
June March June Sept (Except per Dec31, March31, March31, 30,
Sept30, Dec 31, 31, March31, 30, 30, Dec 31, ShareAmounts) 2009
2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 Recurring Revenue
$3,342 $2,849 $13,096 $2,843 $2,723 $2,661 $2,452 $10,679 $2,463
$2,367 $2,473 Non-Recurring Revenue 1,010 1,324 3,485 1,559 1,491
1,744 1,901 6,695 1,342 1,439 2,620 Revenue 4,352 4,173 16,581
4,402 4,214 4,405 4,353 17,374 3,805 3,807 5,093 Gross Profit 3,314
3,169 12,238 3,533 3,327 3,565 3,737 14,162 3,163 2,999 4,348
Expenses 3,384 3,474 13,693 3,357 3,553 3,686 3,870 14,466 3,500
3,225 4,369 Adjusted EBITDA (Loss) (non-GAAP measure) 593 406 1,203
616 386 404 445 1,851 23 131 881 Operating Income (Loss) for the
Period (70) (306) (1,455) 176 (225) (121) (135) (304) (337) (225)
(20) Loss and Comprehensive Loss (350) (1,524) (3,444) - (422)
(245) (205) (874) (437) (315) (191) Loss and Comprehensive Loss per
Common Share $(0.00) $(0.02) $(0.05) $(0.00) $(0.01) $(0.00)
$(0.00) $(0.01) $(0.00) $(0.00) $(0.00) Weighted Avg. # of Common
Shares 70,535 70,535 70,232 72,809 76,311 76,311 76,311 75,979
76,311 76,311 76,311 Total Assets $14,714 $14,651 $14,651 $16,873
$15,744 $15,218 $16,415 $16,415 $15,521 $15,267 $17,983 Total
Long-Term Liabilities $7,062 $7,918 $7,918 $1,979 $5,185 $5,337
$6,115 $6,115 $5,819 $5,972 $8,102 Total Deferred Revenue $4,928
$5,239 $5,239 $5,805 $6,010 $6,788 $7,510 $7,510 $7,588 $7,607
$7,797 (1) Financial information in this table for periods prior to
April 1, 2010 have not been restated for changes in accounting
policies on adoption of IFRS. Refer to the Company's MD&A filed
on SEDAR at www.sedar.com for a discussion of IFRS and its impact
on the Company's financial statements.
Nightingale Informatix Corporation CONTACT: Michael Ford,
CFONightingale Informatix CorporationTel:
905-307-7870mford@nightingalemd.com Kristen Dickson, Account
ExecutiveThe Equicom GroupTel: 416-815-0700 ext.
273kdickson@equicomgroup.com
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