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Company reports 46% year-over-year revenue growth and material profitability for the quarter MARKHAM, ON, Aug. 15, 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 quarter ended June 30, 2012. Q1 Fiscal 2013 Financial and Operational Summary -- Revenue was $5.6 million, up 46% compared to $3.8 million in Q1 F2012, primarily reflecting an increase in revenue from the Company's software business. Revenue was up 3% from $5.4 million in Q4 F2012. o Total software revenue (EMR and Practice Management) was $5.5 million, up 64% from $3.3 million in Q1 F2012 and up 9% from $5.0 million in Q4 F2012. -- Gross profit was $4.9 million, or 89% of revenue, compared to $3.2 million, or 83% of revenue, in Q1 F2012 and $4.5 million, or 84% of revenue, in Q4 F2012. -- Operating Expenses, excluding stock based compensation, depreciation, amortization and one-time business acquisition, integration and other one-time costs were $4.0 million compared to $3.1 million in Q1 F2012 and $4.3 million in Q4 F2012. -- Adjusted EBITDA1 was $0.9 million, 16% of revenue, up from $0.03 million in Q1 F2012 and $0.3 million in Q4 F2012, or 8% of revenue. -- Net income was $0.25 million compared to a net loss of $0.42 million in Q1 F2012 and a net loss of $0.29 million in Q4 F2012. -- Cash used in operations was $0.4 million compared to $0.1 million in Q1 F2012. -- Total deferred revenue was $7.5 million up from $7.3 million as at March 31, 2012. "Fiscal 2013 is off to a strong start," said Sam Chebib, President and CEO of Nightingale. "As a result of our EMR market share gains, we generated a material year-over-year increase in revenue and Adjusted EBITDA, and we achieved solid profitability in the quarter. After exiting the Revenue Cycle Management service business, this is our first quarter as a software "pure-play", and our strong results for the quarter validate our strategy. We have a robust EMR deployment pipeline, we are seeing increasing demand with physicians and new opportunities are emerging with peripheral healthcare practitioners and markets. As a result, we are confident our revenue growth and year-over-year improvements in Adjusted EBITDA will continue." Fiscal 2013 First Quarter Financial Review The Company's results are prepared in accordance with International Financial Reporting Standards (IFRS) and in Canadian dollars unless otherwise stated. Revenue for Q1 F2013 was $5.6 million, an increase of $1.8 million, or 46%, from $3.8 million for Q1 F2012. The year-over-year improvement reflects a $2.1 million increase in revenue from the Company's software business, which grew to $5.5 million in Q1 F2013 primarily as a result of the Company's major contract win in Q3 F2012. The strengthening in revenue from Nightingale's software business was partially offset by a decrease in revenue from the Company's Revenue Cycle Management services business, which is no longer a strategic focus for Nightingale. Recurring Revenue(2) for Q1 F2013 was $2.7 million (49% of revenue), an increase of $0.2 million, or 10%, from $2.5 million (65% of revenue) in Q1 F2012, predominantly as a result of the acquisition of the Medrium business in Q3 F2012. Non-Recurring Revenue(2) for Q1 F2013 was $2.9 million, an increase of $1.5 million, or 113%, from $1.3 million for Q1 F2012, primarily as a result of the Company's major contract win. For Q1 F2013, gross margin was 89% ($4.9 million gross profit) compared to 83% ($3.2 million gross profit) for Q1 F2012. The year-over-year increase was a function of product mix, as the Company has moved away from providing lower margin healthcare services to increasingly focus on being a leading technology provider. Operating expenses for Q1 F2013 increased 30% to $4.1 million (73% of revenue) excluding charges for stock based compensation and depreciation and amortization, or 28% to $4.0 million (72% of revenue) also excluding one-time business acquisition, integration and other one-time costs, compared to operating expenses of $3.1 million (83% of revenue) excluding charges for stock based compensation and depreciation and amortization for Q1 F2012. Sequentially, operating expenses were down 5% from $4.3 million in Q4 F2012. For Q1 F2013, Adjusted EBITDA was $0.9 million (16% of revenue), compared to $0.03 million (1% of revenue) in Q1 F2012. For Q1 F2013, net income was $0.25 million, or $0.30 million excluding one-time business acquisition, integration and other costs. This is compared to a net loss of $0.42 million in Q1 F2012. Cash and cash equivalents were $1.4 million at June 30, 2012, down from $3.2 million at March 31, 2012, primarily as a result of the Company's increased investments in its long-term strategic growth initiatives. Current assets remained flat at $6.2 million from March 31, 2012 to June 30, 2012. At June 30, 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 August 15, 2012.  This press release should be read in conjunction with Nightingale's Consolidated Financial Statements and the accompanying Management Discussion and Analysis for the quarter ended June 30, 2012. Notice of Conference Call Nightingale will host a conference call on Wednesday, August 15, 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 17543339 prior to the beginning of the call to ensure participation. The conference call will be archived for replay until Wednesday, August 22, 2012. To access the archived conference call, dial 416-849-0833 or 1-855-859-2056 and enter reference 17543339#. 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: Three Months Three Months Ended Ended Definition June 30, 2012 June 30, 2011 Loss and Comprehensive Income $ 249,637 $ (425,170) (Loss) Adjustments for: Current Tax Expense (Benefit) $ 13,480 $ (6,198) Other Loss (Income) 68,171 (8,924) Interest 93,214 114,930 Depreciation and Amortization 374,877 320,437 Stock-Based Compensation 66,423 39,915 Acquisition, Integration and 49,971 - Other Adjusted EBITDA $ 915,773 $ 34,990 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: Three Months Three Months Ended Ended Definition June 30, 2012 June 30, 2011 Non-Recurring Revenue $ 2,856,388 $ 1,342,310 Recurring Revenue 2,704,729 2,462,890 Revenue $ 5,561,117 $ 3,805,200 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. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME AND LOSS FOR THE THREE MONTHS ENDED JUNE 30, 2012 Unaudited (Canadian Dollars) Three Months Three Months Ended Ended June 30,2012 June 30, 2011 Revenue $ 5,561,117 $ 3,805,200 Cost of sales 620,671 630,393 Gross profit 4,940,446 3,174,807 Expenses General and administration 864,502 727,156 Sales and marketing 1,056,375 810,868 Research and development 1,522,606 946,997 Client services 1,022,490 1,015,148 Business acquisition, 49,971 - integration and other 4,515,944 3,500,169 Operating income (loss) 424,502 (325,362) Interest 93,214 114,930 Foreign currency loss (gain) 68,171 (8,924) Income (Loss) before tax 263,117 (431,368) Current tax expense (benefit) 13,480 (6,198) Income (Loss) and $ 249,637 $ (425,170) comprehensive income (loss) Basic and diluted income (loss) per common share Basic and diluted income $ 0.00 $ (0.01) (loss) per common share Weighted average number of 76,310,915 76,310,915 common shares   CONDENSED CONSOLIDATED BALANCE SHEET AS AT JUNE 30, 2012 Unaudited (Canadian Dollars) June 30, 2012 March 31, 2012 ASSETS Current assets Cash and cash $ 1,422,130 $ 3,199,058 equivalents Accounts receivable 3,990,144 2,267,854 Other receivables 91,705 103,513 Prepaid expenses 675,714 581,593 6,179,693 6,152,018 Long-term assets Property and equipment 719,120 450,989 Intangible assets 6,270,538 5,808,744 Goodwill 4,792,399 4,792,399 11,782,057 11,052,132 Total assets $ 17,961,750 $ 17,204,150 LIABILITIES Current liabilities Line of credit 670,000 $ 670,000 Accounts payable and 3,767,721 3,351,187 accrued liabilities Current portion of 4,908,908 4,689,175 deferred revenue Current portion of 99,331 122,710 finance lease obligations Current portion of 890,838 872,813 term loan 10,336,798 9,705,885 Long term liabilities Term loan 2,110,195 2,287,608 Convertible debentures 1,829,464 1,802,256 Deferred revenue 2,569,945 2,619,448 Finance lease 33,494 37,345 obligations Income taxes payable 701,107 686,921 7,244,205 7,433,578 Total liabilities 17,581,003 17,139,463 SHAREHOLDERS' EQUITY Capital stock 29,629,683 29,629,683 Contributed surplus 4,877,879 4,811,456 Equity portion of 333,808 333,808 convertible debentures Warrants 701,452 701,452 Deficit (35,162,075) (35,411,712) 380,747 64,687 Total liabilities and $ 17,961,750 $ 17,204,150 shareholders' equity CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED JUNE 30, 2012 Unaudited (Canadian Dollars) Three Months Three Months Ended Ended June 30, 2012 June 30, 2011 Cash flow from operating activities Income (Loss) from $ 249,637 $ (425,170) operations Adjustments for: Depreciation and 374,876 320,438 amortization Charge to bad debt expense 15,326 - Amortization of 11,595 13,131 transaction costs related to debt financing Stock based compensation 66,423 39,915 Unrealized foreign 116,559 (24,762) exchange (gain) loss Interest accretion 23,121 23,121 857,535 (53,327) Changes in non-cash working capital balances Accounts receivable (1,760,592) 421,075 Prepaid expenses (94,121) (97,528) Inventory - 2,233 Other receivables 9,990 15,617 Accounts payable and 375,229 (362,711) accrued liabilities Income taxes payable 14,186 (3,512) Deferred revenue 170,230 78,153 Cash flows provided by (427,541) (126,147) (used in) operating activities Cash flow from investing activities Purchase of property and (339,403) (20,844) equipment Acquisition of intangible (765,398) (191,769) assets Cash flows used in (1,104,801) (212,613) investing activities Cash flow from financing activities Proceeds from line of - 960,000 credit borrowing Repayment of line of - (950,000) credit borrowing Repayment of term loan (218,749) (200,000) Repayment of capital lease (27,230) (85,793) obligations Cash flows provided by (245,979) (275,793) (used in) financing activities Foreign exchange losses on 1,393 (2,649) cash in foreign currency Net increase (decrease) in (1,776,928) (617,202) cash Cash and cash equivalents, 3,199,058 4,165,406 beginning of period Cash and cash equivalents, $ 1,422,130 $ 3,548,204 end of period OVERALL PERFORMANCE, RESULTS OF OPERATIONS AND FINANCIAL CONDITION Fiscal Fiscal Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 In $ 000's Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended (Except per June Sept March March June Sept March March June Share 30, 30, Dec 31, 31, 31, 30, 30, Dec 31, 31, 31, 30, Amounts) 2010 2010 2010 2011 2011 2011 2011 2011 2012 2012 2012 Recurring Revenue $2,843 $2,723 $2,661 $2,452 $10,679 $2,463 $2,367 $2,473 $2,889 $10,192 $ 2,705 Non-Recurring Revenue 1,559 1,491 1,744 1,901 6,695 1,342 1,439 2,620 2,486 7,888 2,856 Revenue 4,402 4,214 4,405 4,353 17,374 3,805 3,807 5,093 5,376 18,080 5,561 Gross Profit 3,533 3,336 3,502 3,675 14,047 3,175 2,961 4,384 4,509 15,030 4,940 Operating Expenses 3,357 3,553 3,686 3,870 14,466 3,500 3,225 4,369 4,804 15,897 4,516 EBITDA (non-IFRS measure) 616 395 340 384 1,736 35 93 917 231 1,330 916 Operating Income (Loss) for the Period 176 (216) (184) (195) (419) (325) (263) 16 (295) (868) 425 Income (Loss) and Comprehensive Income (Loss) (1) (413) (309) (266) (989) (425) (353) (155) (285) (1,218) 250 Income (Loss) and Comprehensive Income (Loss) per Common Share $(0.00) $(0.01) $(0.00) $(0.00) $(0.01) $(0.00) $(0.00) $(0.00) $(0.01) $(0.02) $0.00 Weighted Avg. # of Common Shares 72,809 76,311 76,311 76,311 75,979 76,311 76,311 76,311 76,311 76,311 76,311 Total Assets $16,789 $15,669 $15,080 $16,216 $16,216 $15,334 $15,042 $17,794 $17,204 $17,204 $17,962 Total Long-Term Liabilities $1,979 $5,185 $5,337 $6,115 $6,115 $5,819 $5,972 $8,102 $7,434 $7,434 $7,244 Total Deferred Revenue $5,805 $6,010 $6,788 $7,510 $7,510 $7,588 $7,607 $7,797 $7,309 $7,309 $7,479     Nightingale Informatix Corporation CONTACT: Michael Ford, CFONightingale Informatix CorporationTel: 905-307-7870mford@nightingalemd.com Kristen Dickson, Senior Account ExecutiveTMX EquicomTel: 416-815-0700 ext. 273kdickson@equicomgroup.com

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