Nightingale revenue decreases 14% to $3.8 million for first quarter 2012

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 quarter ended June 30, 2011. This is the Company's first set of consolidated financial statements prepared under International Financial Reporting Standards (IFRS). All results are reported in IFRS and in Canadian dollars unless otherwise stated.

Q1 Fiscal 2012 Financial and Operational Summary

• Revenue was $3.8 million, compared to $4.4 million in Q1 F2011, primarily reflecting a decrease in software license revenue.
  • Total software revenue (EMR and Practice Management) was $3.3 million compared to $3.6 million in Q1 F2011.
• Gross profit was $3.2 million, or 83% of revenue, compared to $3.5 million, or 80% of revenue, in Q1 F2011.
• Expenses were $3.5 million compared to $3.4 million in Q1 F2011.
• EBITDA was $0.02 million compared to $0.6 million in Q1 F2011.
• Net loss was $0.4 million compared to $0.0001 million in Q1 F2011.
• Cash from operations was $(0.1) million compared to $1.0 million in Q1 F2011.
• Cash and cash equivalents was $3.5 million compared to $4.2 million as at March 31, 2011.
• Total deferred revenue was $7.6 million up from $7.5 million as at March 31, 2011.
• Signed agreements with healthcare providers to deploy more than 90 EMR seats down from approximately 200 seats in Q1 F2011.
• Subsequent to quarter end, received U.S. certification for Nightingale On Demand V10.0 as a Complete EHR by the Certification Commission for Health Information Technology (CCHIT®). This expands the Company's market opportunity, as now eligible Nightingale customers in the U.S. qualify for up to US$44,000 in funding incentives.
• Subsequent to quarter end, received ISO 13485:2003 certification, further demonstrating the Company's commitment to providing its EMR customers with high-quality products, service and support.  ISO certification is becoming a requirement to qualify for future funding initiatives in some jurisdictions.

"Despite robust EMR buying activity with small to medium clinics, our Q1 results were lower than expected as we had fewer enterprise sales," said Sam Chebib, President and CEO of Nightingale. "We have seen larger-scale EMR RFPs emerge, which led to delays in enterprise purchasing decisions in the quarter. We are focused on these opportunities accordingly, and our pipeline is building nicely. There continues to be potential for EMR sales to fluctuate quarter-to-quarter. However, we are committed to returning to the positive performance trends we have previously demonstrated, and we believe we remain on track with our long-term growth plans. The fundamentals of the EMR market and our business are strong. We are a leader in Canada, and with the recent certification of our EMR offering in the U.S., we have expanded our overall addressable market."

Fiscal 2012 First Quarter Financial Review

Nightingale's Q1 fiscal 2011 results are the Company's first set of consolidated financial statements prepared under IFRS. For more detailed information regarding the Company's transition to IFRS, including a reconciliation of the Company's Q1 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 Q1 fiscal 2012 was $3.8 million, down 14% from $4.4 million for Q1 fiscal 2011. The year-over-year decrease was the result of declines in revenue from the Company's software and revenue cycle management businesses. In addition, total revenues were negatively impacted by $0.1 million related to foreign exchange (the Company generated 45% of Q1 fiscal 2012 revenue in the US) which predominantly affected the Company's recurring revenue results.

Recurring Revenue for Q1 fiscal 2012 was $2.5 million (65% of revenue), down in comparison to $2.8 million (65% of revenue) for Q1 fiscal 2011 predominantly as a result of a decrease in revenue cycle management revenue. Non-Recurring Revenue for Q1 fiscal 2012 was $1.3 million compared to $1.6 million for Q1 fiscal 2011, with the year-over-year decrease primarily due to a decline in EMR software license sales.

For Q1 fiscal 2012, gross margin was 83% ($3.2 million gross profit) compared to 80% ($3.5 million gross profit) for Q1 fiscal 2010. The year-over-year margin increase is a function of product mix, as the Company generated a greater proportion of higher margin EMR revenue in Q1 fiscal 2012.

Operating expenses for Q1 fiscal 2012 were $3.5 million compared to $3.4 million for Q1 fiscal 2011. The year-over-year change was primarily the result of Nightingale's increased investments in research and development, as well as EMR implementation and customer training to support its long-term growth initiatives. These increases in investments were partially offset by a positive $0.07 million foreign exchange impact, as the Company generated 34% of fiscal 2011 operating expenses in U.S. dollars.

For Q1 fiscal 2012, EBITDA was $0.02 million compared to $0.6 million in Q1 fiscal 2011, and net loss for Q1 fiscal 2012 was $0.4 million compared to a net loss of $687 in Q1 fiscal 2011.

Cash and cash equivalents decreased to $3.5 million at June 30, 2011, down 15% from $4.2 million at March 31, 2011, primarily as a result of the Company's increased investment in its long-term strategic growth initiatives.

At June 30, 2011, total common shares issued and outstanding were 76,310,915.