MARKHAM, ON, Nov. 18 /CNW/ -- MARKHAM, ON, Nov. 18 /CNW/ -
Nightingale Informatix Corporation ("Nightingale" or the "Company")
(TSX-V: NGH), an application service provider (ASP) of electronic
medical record (EMR) software and related services announces its
financial results for the three- and six-month periods ended
September 30, 2010. All results are reported in Canadian dollars
unless otherwise stated. Q2 Fiscal 2011 Summary -- Revenue
was $4.2 million, up from $3.9 million in Q2 F2010, primarily
reflecting a $0.6 million increase in software revenues, which
offset a $0.4 million decrease in transcription revenue and a
negative $0.1 million foreign exchange impact. -- Gross profit
margin was 79%, up from 72% in Q2 F2010 as a result of the
Company's increased focus on generating high-margin software
revenue. -- EBITDA(1 )increased to $0.4 million, compared to $0.2
million in Q2 F2010, reflecting stronger top line and gross margin
results. -- Net loss was $0.5 million, compared to net loss of $0.7
million for Q2 F2010. -- Cash from operations increased to $0.3
million from $0.02 million in Q2 F2010, driven by an improvement in
the Company's bottom line results as well as the timing of
collection of cash on deferred revenue. -- Total deferred revenue
as at September 30, 2010 was $6.0 million compared to $5.0 million
as at September 30, 2009. -- Completed a comprehensive debt
refinancing, which resulted in reduced interest expense starting in
Q2 F2010 compared to previous periods, and increased overall
financial flexibility. -- Signed agreements with healthcare
providers across Canada to deploy more than 200 EMR seats,
including a five-year EMR and practice management agreement with
the AIM Health Group, representing 150 seats. -- Announced plans to
deploy, in partnership with Canadian Patient Access Inc., the
Company's secure patient portal, mypatientaccess.ca, with a
Canadian clinic, making the web-based interactive patient portal
available to parents of more than 10,000 pediatric patients. "We
have seen improved EMR business momentum across Canada during the
first half of fiscal 2011, with Nightingale signing more than 400
new EMR seats," said Sam Chebib, President and CEO of Nightingale.
"Driven by government funding - the key catalyst fueling EMR
adoption at this stage - there is increased interest for our
products in Ontario and Nova Scotia, and we are building a sales
pipeline in Saskatchewan where we are also an approved EMR vendor
under the Saskatchewan Medical Association's program. While these
accomplishments are encouraging, their financial impact will be
evident in the longer term in the form of recurring revenues." Mr.
Chebib continued: "With the improvements in the overall EMR market
environment, we remain optimistic about the long-term opportunities
ahead of us. We are focusing our attention and investments on key
areas of the business that best position us to acquire new
customers and expand our market share, while remaining highly
committed to carefully managing our expenses and cash. In the
near-term, we expect there will be continued fluctuations in our
quarterly results as the EMR market unfolds, with funding being
rolled out to physicians at clinics of varying sizes and customers
choosing either our up-front license or a monthly utilization
payment option. However, we believe the combination of our existing
EMR sales pipeline and the technology leadership of our product
offering positions us to further strengthen our financial results
over the longer term." Q2 and Year-to-date (YTD) Fiscal 2011
Financial Review Revenue was $4.2 million for Q2 F2011, compared to
$3.9 million for Q2 F2010. The improvement is primarily the result
of a $0.6 million increase in software license revenue, which was
partially offset by a $0.4 million decreases in the Company's
lower-margin transcription business, as well as a negative $0.1
million foreign exchange impact (the Company generated 52% of Q2
F2011 revenue in the US), which predominantly affected the
Company's recurring revenue. YTD revenue was $8.6 million, compared
to $8.1 million for the first half of F2010, which reflected a $1.6
million increase in software license revenue, a $0.9 million
decreases in transcription revenue and a negative $0.4 million
foreign exchange impact (the Company generated 52% of revenue in
the US during the first half of F2011). Recurring Revenue(2) was
$2.7 million for Q2 F2011, compared to $3.3 million for Q2 F2010.
The decrease is primarily the result of a reduction in
transcription revenue and the negative foreign exchange impact. For
Q2 F2011, transcription revenue decreased to $0.07 million from
$0.5 million for Q2 F2010. YTD, Recurring Revenue(2 )was $5.6
million, compared to $6.9 million for the first half of F2010.
Recurring revenue generated by Nightingale's core business (which
excludes the Company's transcription revenues and the impact of
foreign exchange) was $2.8 million for Q2 fiscal 2011 and $5.8
million YTD, compared to $2.8 million and $5.9 million,
respectively, for the same periods last year. Non-Recurring
Revenue(2) increased to $1.5 million and $3.0 million for the Q2
and YTD F2011 periods, from $0.6 million and $1.2 million,
respectively, for the same periods last year, primarily due to the
increase in software licensing and professional services revenue
driven by sales of the Company's Nightingale on Demand EMR product.
For Q2 and the YTD F2011 periods, gross profit margin was 79% and
80%, respectively, compared to 72% and 71%, respectively, for the
same periods last year, as the Company continues to increase its
focus on generating a greater proportion of higher margin software
sales in F2011. Operating expenses (excluding stock based
compensation and amortization) were $2.9 million in Q2 F2011,
compared to $2.6 million in Q2 F2010. The increase in expenses
reflects the Company's increased investment in sales and marketing,
which was partially offset by a positive $0.1 million foreign
exchange impact. In Q2 2011, the Company incurred approximately 37%
of its operating expenses in the US, providing a natural hedge
position that offsets some of the negative foreign exchange impact
on the Company's revenue. For YTD F2011, operating expenses were
$5.9 million, compared to $5.6 million for the same period in
F2010. For YTD F2011, the Company incurred approximately 35% of its
expenses in the US, resulting in a positive $0.2 million foreign
exchange impact. EBITDA was $0.4 million and $1.0 million for the
Q2 and YTD F2011 periods, compared to $0.2 million and $0.2
million, respectively for the same periods in F2010. Net loss was
$0.5 million and $0.5 million for the Q2 and YTD F2011 periods,
compared to losses of $0.7 million and $1.6 million, respectively,
for the same periods in F2010. Cash generated from (used in)
operating activities was $0.3 million and $1.3 million for the Q2
and YTD F2011 periods, compared to $0.02 million and ($0.9)
million, respectively for the same periods last year. The increase
reflects both the improvement in the Company's bottom line results,
as well as timing of the collection of cash on deferred revenue.
Cash and cash equivalents were $3.0 million at September 30, 2010,
compared to $1.8 million at March 31, 2010. At September 30,
2010, total common shares issued and outstanding were 76,310,915.
This press release should be read in conjunction with Nightingale's
Consolidated Financial Statements for the quarter ended September
30, 2010 and the accompanying Management Discussion and Analysis.
The financial statements and MD&A will be available at
www.nightingalemd.com and filed on www.sedar.com on November 18,
2010. Notice of Conference Call Nightingale will host a
conference call on Thursday, November 18, 2010 at 8:30 a.m. Eastern
Standard Time. To access the conference call by telephone, dial
(647) 427-7450 or (888) 231-8191. Please connect approximately
fifteen minutes prior to the call, and reference conference ID
24176473 prior to the beginning of the call to ensure
participation. The conference call will be archived for replay
until Thursday, November 25, 2010. To access the archived
conference call, dial 1-800-642-1687 and enter reference 24176473
#. To listen to the conference call replay on the internet please
visit our 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. 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 Quarter Fiscal Quarter Six Months Six
Months Ended Ended Ended Ended September September September
September Definition 30, 2010 30, 2009 30, 2010 30, 2009 Loss and $
(468) $ (726) $ (477) $ (1,570) Comprehensive Loss Adjustments for:
Current Tax Benefit $ (28) $ - $ (11) $ - Other Loss (Income) (4)
(35) (15) (78) Interest 249 253 425 570 Depreciation and 420 553
839 1,121 Amortization Stock-based 217 136 241 161 Compensation
EBITDA $ 386 $ 181 $ 1,002 $ 204 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 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: Fiscal Quarter Fiscal Quarter Six Months Six
Months Ended Ended Ended Ended September September September
September Definition 30, 2010 30, 2009 30, 2010 30, 2009
Non-Recurring $ 1,491 $ 585 $ 3,050 $ 1,152 Revenue Recurring
Revenue 2,723 3,341 5,565 6,904 Revenue $ 4,214 $ 3,926 $ 8,615 $
8,056 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", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or state that certain actions, events or results "may"
,"could", "would", "might" or "will be taken", "occur" or "be
achieved". Forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
Nightingale to be materially different from those expressed or
implied by such forward-looking statements, including but not
limited to: risks related to the speculative nature of the medical
software industry, which is affected by numerous factors beyond
Nightingale's control; the ability of Nightingale to successfully
integrate its acquisitions and any liabilities arising as a result
of such acquisitions, access to capital and agreements with its
Lenders; the existence of present and possible future government
regulation; access to debt or equity financing and agreements with
its Lenders; the significant and increasing competition that exists
in the medical software industry; the early stage of Nightingale's
business; and therefore it is subject to the risks associated with
early stage companies, including uncertainty of revenues, markets
and profitability and the need to raise additional funding.
All material assumptions used in making forward-looking statements
are based on management's knowledge of current business conditions
and expectations of future business conditions and trends. Although
management believes the assumptions used to make such statements
are reasonable at this time, our assumptions may not to be as
anticipated, estimated or intended. Certain material factors or
assumptions applied by management in making forward-looking
statements, include without limitation, factors and assumptions
regarding Nightingale's continued ability to fund its business,
rates of customer defaults, relationships with, and payments to,
lenders, demand for Nightingale's products, as well as
Nightingale's operating cost structure. Although Nightingale has
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. Nightingale
does not undertake to update any forward-looking statements that
are incorporated by reference herein, except in accordance with
applicable securities laws. Further information on Nightingale
Informatix Corporation is available at www.sedar.com. Neither the
TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release. INTERIM CONSOLIDATED STATEMENT OF OPERATIONS AND
COMPREHENSIVE LOSS (Unaudited) FOR THE THREE AND SIX MONTH PERIODS
ENDED SEPTEMBER 30, 2010 3 months 3 months 6 months 6 months ending
ended ending ended September September September September 30, 2010
30, 2009 30, 2010 30, 2009 Revenue $ 4,213,850 $ 3,926,392 $
8,615,340 $ 8,056,611 Cost of sales 886,600 1,107,940 1,754,722
2,301,541 Gross profit 3,327,250 2,818,452 6,860,618 5,755,070
Expenses General and 708,835 606,572 1,484,243 1,372,495
administration Sales and 546,664 312,645 1,178,068 737,066
marketing Research and 755,083 695,326 1,433,347 1,427,474
development Client services 930,767 1,023,216 1,762,771 2,014,310
Stock based 217,029 136,132 240,624 161,482 compensation
Amortization 419,588 552,718 838,854 1,121,288 3,577,966 3,326,609
6,937,907 6,834,115 Operating loss (250,716) (508,157) (77,289)
(1,079,046) Interest, note 248,937 253,273 425,284 569,682 Foreign
currency (4,202) (34,934) (15,190) (78,455) loss (gain) Profit /
(loss) (495,451) (726,496) (487,383) (1,570,272) before tax Current
income (27,593) - (10,521) - tax benefit Loss and $ (467,858) $
(726,496) $ (476,862) $ (1,570,272) comprehensive loss Basic and
diluted $ (0.01) $ (0.01) $ (0.01) $ (0.02) loss per common share
Weighted average 76,310,915 70,534,543 75,649,594 69,931,693 number
of common shares INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) AS
AT SEPTEMBER 30, 2010 and MARCH 31, 2010 As at As at September
March 30, 2010 31, 2010 ASSETS Current assets Cash and cash
equivalents $ 3,027,555 $ 1,798,247 Accounts receivable 2,700,116
2,626,757 Other receivables 74,866 134,459 Inventory 23,435 30,708
Prepaid expenses 549,675 454,070 6,375,647 5,044,241 Long-term
assets Deferred costs 74,188 83,385 Property and equipment 680,184
821,243 Intangible assets 3,895,631 4,010,143 Goodwill 4,692,399
4,692,399 9,342,122 9,607,170 Total assets $ 15,717,769 $
14,651,411 LIABILITIES Current liabilities Line of Credit $ 840,000
$ - Current portion of term loan 733,333 - Accounts payable and
accrued liabilities 2,394,242 2,549,237 Income taxes payable
708,613 705,940 Current portion of deferred revenue 3,958,569
3,488,382 Current portion of capital lease 222,122 296,649
obligations 8,856,879 7,040,208 Long term liabilities Term Loan
1,161,102 - Convertible Debt 1,765,632 - Subordinated debt -
5,250,000 Deferred revenue 2,050,947 1,750,644 Capital lease
obligations 207,466 211,578 5,185,147 7,212,222 Total liabilities
14,042,026 14,252,430 SHAREHOLDERS' EQUITY Capital stock 29,629,683
28,348,960 Contributed surplus 4,704,048 4,501,027 Other paid in
capital 269,880 - Warrants 701,452 701,452 Deficit (33,629,320)
(33,152,458) 1,675,743 398,981 Total liabilities and shareholders'
equity $ 15,717,769 $ 14,651,411 CONSOLIDATED STATEMENT OF CASH
FLOWS (Unaudited) FOR THE THREE AND SIX MONTH PERIODS ENDED
SEPTEMBER 30, 2010 3 months 3 months 6 months 6 months ending ended
Ending Ended September September September September 30, 2010 30,
2009 30, 2010 30, 2009 Cash Flow from Operating Activities Loss and
$ (467,858) $ (726,496) $ (476,862) $ (1,570,272) comprehensive
loss Adjustments for: Depreciation and 419,588 552,718 838,854
1,121,288 amortization Amortization of 43,738 11,694 9,536 45,218
transaction costs related to debt financing Foreign currency 24
(34,934) 101,603 (78,455) loss (gain) Stock based 217,029 136,132
240,624 161,482 compensation Interest 14,414 55,386 49,616 157,005
accretion 227,935 (5,500) 763,371 (163,735) Changes in non-cash
working capital balances Accounts 298,479 407,402 (64,223) 262,742
receivable Prepaid expenses 116,010 62,369 (95,605) (48,880)
Inventory 3,400 6,329 7,272 23,596 Deferred costs 9,197 14,996
9,197 27,340 Other (42,828) (20,264) 59,602 (15,020) receivables
Accounts payable (534,111) (196,598) (181,642) (767,153) and
accrued liabilities Deferred revenue 204,621 (248,288) 770,489
(199,631) Cash flows 282,703 20,446 1,268,462 (880,741) provided by
(used in) operating activities Cash flow from investing activities
Purchase of (13,927) (12,806) (68,315) (29,052) property and
equipment Capitalized (201,490) - (453,876) - development costs
Cash flows used (215,418) (12,806) (522,191) (29,052) in investing
activities Cash flow from financing activities Issuance of (7,001)
- 1,243,119 - common shares (net of costs) Proceeds from 1,887,625
- 1,887,625 - Term Loan (net of costs) Proceeds from 2,017,373 -
2,017,373 - convertible debt financing (net of costs) Repayment of
(5,284,202) - (5,284,202) - subordinated debt financing Borrowing
840,000 - 840,000 - (repayment) under line of credit Repayment of
(71,069) (59,742) (140,059) (136,130) capital lease obligations
Cash flows (617,274) (59,742) 563,855 (136,130) provided by (used
in) financing activities Foreign exchange (29,125) (67,853)
(80,818) (110,348) losses on cash held in foreign currency Net
increase / (579,114) (52,102) 1,229,308 (1,045,923) (decrease) in
cash during the period Cash and cash 3,606,669 2,477,741 1,798,247
3,514,056 equivalents, beginning of period Cash and cash $
3,027,555 $ 2,357,786 $ 3,027,555 $ 2,357,786 equivalents, end of
period OVERALL PERFORMANCE, RESULTS OF OPERATIONS AND FINANCIAL
CONDITION (Unaudited) QUARTERLY DATA Fiscal Fiscal Fiscal Year Q3
Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Ended Ended Ended Ended Ended Ended
Ended Ended Ended Ended Ended In $ 000's (Except per March Dec
March March June Sept Dec March March June Sept Share 31, 31, 31,
31, 30, 30, 31, 31, 31, 30, 30, Amounts) 2008 2008 2009 2009 2009
2009 2009 2010 2010 2010 2010 Recurring $ $ Revenue $13,088 4,045 $
3,746 $14,531 $ 3,564 $ 3,341 $ 3,342 $ 2,849 13,096 $2,843 $2,723
Non-Recurring 585 1,010 Revenue 5,788 511 971 3,934 566 1,324 3,485
1,559 1,491 Revenue 18,876 4,556 4,717 18,465 4,130 3,926 4,352
4,173 16,581 4,401 4,214 Gross Profit 13,706 3,272 3,305 13,410
2,937 2,818 3,314 3,169 12,238 3,533 3,327 Expenses 19,957 4,022
3,962 16,820 3,508 3,327 3,384 3,474 13,693 3,360 3,578 EBITDA
Income (Loss) (3,526) (34) 9 (719) 24 180 593 406 1,203 616 386
Operating Gain / (Loss) for the Period (6,250) (750) (656) (3,410)
(570) (509) (70) (306) (1,455) 173 (251) Loss and Comprehensive
Loss (12,811) (876) (1,004) (4,632) (843) (727) (350) (1,524)
(3,444) (9) (468) Loss and Comprehensive Loss per Common $ $ $ $ $
$ $ $ Share $(0.19) (0.01) (0.01) (0.07) (0.01) (0.01) (0.00)
(0.02) (0.05) $(0.00) $(0.01) Weighted Avg. # of Common Shares
66,228 67,667 67,845 67,845 69,322 70,535 70,535 70,535 70,232
72,809 76,311 Total Assets $23,992 $ $ $17,906 $16,413 $15,170
$14,714 $ $ $16,867 $15,718 20,078 17,906 14,651 14,651 Total Long
Term $ Liabilities $ 6,948 6,234 $ 6,517 $ 6,517 $ 6,309 $ 5,751 $
6,285 $ 7,212 $ 7,212 $ 7,229 $ 5,185 %SEDAR: 00022709E table
cellspacing="0" border="1" class="cnwBorderedTable"tr
valign="top"td align="left"Michael Ford, CFO br/ Nightingale
Informatix Corporationbr/ Tel: 905-307-7870br/ a
href="mailto:mford@nightingalemd.com"mford@nightingalemd.com/a/td
td valign="top" align="left"Kristen Dickson,br/ Account
Executivebr/ The Equicom Groupbr/ Tel: 416-815-0700 ext. 273br/ a
href="mailto:kdickson@equicomgroup.com"kdickson@equicomgroup.com/a/td/tr/table
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