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- 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") , 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 Summary -- Revenue 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. o 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 Summary -- Revenue was $18.1 million, up 4% from $17.4 million in F2011, reflecting a significant increase in software revenue. o 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 Review Nightingale'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 www.sedar.com. Revenue 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 revenue(2) 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 revenue(2) 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 www.nightingalemd.com and filed on www.sedar.com 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 Call Nightingale 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 www.nightingalemd.com. Non-IFRS Financial Measures The Company internally measures its performance and results of initiatives through a number of measures that are not recognized under IFRS and may not be comparable to similar measures used by other companies. 1. Adjusted EBITDA Adjusted EBITDA is a non-IFRS measure that management believes is a useful measurement to evaluate the performance of the Company. Investors should be cautioned, however, that Adjusted EBITDA should not be construed as an alternative to net earnings as determined in accordance with IFRS. The Company's method of calculating Adjusted EBITDA may differ from the methods used by other companies and, accordingly, it may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is defined as earnings before other loss (income), interest, income taxes, depreciation, amortization, stock-based compensation, and business acquisition, integration and other costs. Management believes it is useful to exclude these items as they are either non-cash expenses, items that cannot be influenced by management in the short term, or items that do not impact core operating performance, and Management uses this information internally for forecasting and budgeting purposes. The following provides a reconciliation of Adjusted EBITDA to Loss and Comprehensive Loss: Quarter Quarter Fiscal Year Fiscal Year Ended Ended Ended Ended March 31, March 31, March 31, March 31, Definition 2012 2011 2012 2011 Loss and $ (285,457) $ (266,013) $ $ (988,551) Comprehensive (1,218,396) Loss Adjustments for: Current Tax $ 12,032 $ (12,888) $ 18,514 $ (23,408) Expense (Benefit) Other Loss (74,954) (35,490) (79,508) (50,060) (Income) Interest 108,247 119,043 466,509 642,615 Depreciation 505,557 578,865 1,513,913 1,891,966 and Amortization Stock-based 19,814 696 115,803 263,307 Compensation Acquisition, - - 512,889 - Integration and Other Adjusted $ 285,239 $ 384,213 $ $ EBITDA 1,329,724 1,735,869 2. Recurring and Non-Recurring Revenue The Company has included recurring revenue and non-recurring revenue measurements since it believes that this information is useful to investors to evaluate its performance. Investors should be cautioned, however, that recurring revenue and non-recurring revenue should not be construed as an alternative to revenue as determined in accordance with IFRS.  Recurring Revenue is comprised of utilization fees, hosting, support and maintenance revenue, data management and transcription services, billing and financial management services and transactional fees.  Non-Recurring Revenue is comprised of revenues generated from sales of perpetual software and systems licenses and related training, data conversion and installation services. The following provides a reconciliation of Recurring Revenue and Non-Recurring Revenue to Revenue: Quarter Quarter Fiscal Year Fiscal Year Ended Ended Ended Ended March March March March Definition 31, 2012 31, 2011 31, 2012 31, 2011 Non-Recurring $ $ $ $ Revenue 2,486,361 1,901,461 7,888,115 6,695,059 Recurring 2,889,396 2,451,968 10,192,269 10,679,036 Revenue Revenue $ $ $ $ 5,375,757 4,353,429 18,080,384 17,374,095 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 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 3,351,479 3,381,836 administration Sales and marketing 3,291,377 3,272,314 Research and 4,433,611 3,773,445 development Client services 4,307,829 4,038,714 Business acquisition, integration and other 512,889 - 15,897,185 14,466,309 Operatingloss (867,583) (419,404) Interest 466,509 642,615 Other financing gain (54,702) - Foreign currency gain (79,508) (50,060) Loss before tax (1,199,882) (1,011,959) Current tax expense 18,514 (23,408) (benefit) Loss andcomprehensive $ $ (988,551) loss (1,218,396) Basic and diluted loss per commonshare Basic and diluted $ (0.02) $ (0.01) loss per common share Weighted average 76,310,915 75,979,348 number of common shares CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2012 and MARCH 31, 2011 March 31, 2012 March 31, 2011 ASSETS Current assets Cash and cash $ 3,199,058 $ 4,165,406 equivalents 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 3,351,187 2,323,880 accrued liabilities Current portion of 4,689,175 4,778,811 deferred revenue Current portion of 122,710 145,437 finance lease obligations Current portion of term 872,813 800,000 loan 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 37,345 128,130 obligations 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 333,808 269,880 convertible debentures Warrants 701,452 701,452 Deficit (35,411,712) (34,193,316) 64,687 1,103,352 Total liabilities and $ 17,204,150 $ 16,216,300 shareholders' equity CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE TWELVE MONTHS ENDED MARCH 31, 2012 and MARCH 31, 2011 March 31, 2012 March 31, 2011 Cash flowfrom operating activities Loss from operations $ (1,218,396) $ (988,551) Adjustments for: Depreciation and 1,513,913 1,891,966 amortization Amortization of 130,313 40,516 transaction costs related to debt financing Stock based compensation 115,803 298,196 Other financing gain (54,702) - Unrealized foreign 12,079 92,438 exchange (gain) loss Provision 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 945,147 (230,832) accrued liabilities Income taxes payable 19,213 (38,232) Deferred revenue (201,263) 2,270,860 Cash flows provided by 1,910,827 3,143,480 operating activities Cash flow from investing activities Purchase of property and (241,177) (168,772) equipment Capitalized development (1,869,120) (638,223) costs Acquisition of assets (1,761,880) - and liabilities from Medrium Cash flows used in (3,872,177) (806,995) investing activities Cash flow from financing activities Proceeds from line of - 950,000 credit borrowing Repayment of line of (280,000) - credit (net of borrowings) Proceeds from issuance - 1,208,231 of common shares (net of costs) Proceeds from - 2,017,372 convertible debt financing (net of costs) Proceeds from term loan 3,374,983 1,871,575 (net of costs) Repayment of term loans (1,886,917) (333,333) Repayment of - (5,250,000) subordinated debt financing Repayment of finance (230,724) (339,448) lease obligations Cash flows provided by 977,342 124,397 financing activities Foreign exchange losses 17,660 (93,723) on cash in foreign currency Net increase (decrease) (966,348) 2,367,159 in cash Cash and cash 4,165,406 1,798,247 equivalents, beginning of period Cash and cash $ 3,199,058 $ 4,165,406 equivalents, end of period OVERALL PERFORMANCE, RESULTS OF OPERATIONS AND FINANCIAL CONDITION QUARTERLY DATA CGAAP IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS (1) Fiscal Fiscal Fiscal Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended In $ 000's (Except per March June Sept Dec March March June Sept Dec March March Share 31, 30, 30, 31, 31, 31, 30, 30, 31, 31, 31, Amounts) 2010 2010 2010 2010 2011 2011 2011 2011 2011 2012 2012 Recurring $13,096 $2,843 $2,723 $2,661 $2,452 $10,679 $2,463 $2,367 $2,473 $2,889 $10,192 Revenue Non-Recurring Revenue 3,485 1,559 1,491 1,744 1,901 6,695 1,342 1,439 2,620 2,486 7,888 Revenue 16,581 4,402 4,214 4,405 4,353 17,374 3,805 3,807 5,093 5,376 18,080 Gross Profit 12,238 3,533 3,336 3,502 3,675 14,047 3,175 2,961 4,384 4,509 15,030 Operating Expenses 13,693 3,357 3,553 3,686 3,870 14,466 3,500 3,225 4,369 4,804 15,897 EBITDA (non-IFRS measure) 1,203 616 395 340 384 1,736 35 93 917 285 1,330 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 Shares 70,232 72,809 76,311 76,311 76,311 75,979 76,311 76,311 76,311 76,311 76,311 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-Term Liabilities $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 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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