Mr. Sam Chebib reports

NIGHTINGALE REPORTS FIRST QUARTER FISCAL 2015 RESULTS

Nightingale Informatix Corp. has released its financial results for the quarter ended June 30, 2014.

First quarter fiscal 2015 financial and operational summary

• Revenue was $3.7-million, down 1 per cent compared with $3.8-million in the first quarter of fiscal 2014, and down 7 per cent from $4-million in the fourth quarter of fiscal 2014. The variance from fiscal 2014 primarily reflects a decrease in non-recurring revenues, partially offset by a 9-per-cent increase in recurring revenues.
• Gross profit was $3.3-million, or 88 per cent of revenue, compared with $3.3-million, or 89 per cent of revenue, in the first quarter of fiscal 2014 and $3.6-million, or 90 per cent of revenue, in the fourth quarter of fiscal 2014.
• Operating expenses, excluding stock-based compensation and depreciation and amortization costs, were $2.9-million, compared with $3.2-million in the first quarter of fiscal 2014 and $3.2-million in the fourth quarter of fiscal 2014. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $300,000, 9 per cent of revenue, an increase of 19 per cent from $100,000, or 3 per cent of revenue, in the first quarter of fiscal 2014 and down from $400,000, or 10 per cent of revenue, in the fourth quarter of fiscal 2014.
• Net loss was $100,000, compared with a net loss of $800,000 in the first quarter of fiscal 2014 and a net loss of $600,000 in the fourth quarter of fiscal 2014.
• Cash provided by operations was $1.6-million, compared with cash provided by operations of $200,000 in the first quarter of fiscal 2014.
• Total deferred revenue was $5.5-million, up from $4.8-million at March 31, 2014.
• In May, 2014, the company announced the promotion of Jamie Cappelli to executive vice-president of operations, and in July, 2014, the company announced the appointment of Ray Payette as chief technology officer.
• In July, 2014, the company unveiled its next-generation cloud-based EHR (electronic health record) -- Nightingale EHR (Nexia).
• In August, 2014, the company announced a commitment for an investment of $3.5-million in the form of a subordinated term loan to finance sales and marketing programs to capitalize on its next-generation Nexia product.

"We are at the tail end of our transition phase. Nexia, our next-generation product, has started to attract the attention of buying organizations and we are very encouraged by the rate of growth of our pipeline," said Sam Chebib, president and chief executive officer. "We have started to shift our investment from product development towards sales and marketing, the result of which will start to become evident in the next few financial periods."

Fiscal 2015 first quarter financial review

The company's results are prepared in accordance with international financial reporting standards (IFRS) and are in Canadian dollars unless otherwise stated.

Revenue for the first quarter of fiscal 2015 was $3.7-million, a decrease of $76,966 from $3.8-million for the first quarter of fiscal 2014. This decrease was primarily due to a decrease in non-recurring revenues, partially offset by a 9-per-cent increase in recurring revenues.

Recurring revenue for the first quarter of fiscal 2015 was $2.8-million (77 per cent of revenue), an increase of $200,000, or 9 per cent, from $2.6-million (69 per cent of revenue) in the first quarter of fiscal 2014. The increase in recurring revenue in the first quarter was primarily the result of an increase in revenues from the company's Nightingale On Demand and Nightingale EHR (Nexia) products.

For the first quarter of fiscal 2015, gross margin was 88 per cent ($3.3-million gross profit), compared with 89 per cent ($3.3-million gross profit) for the first quarter of fiscal 2014.

Operating expenses for the first quarter of fiscal 2015 decreased 7 per cent to $2.9-million (79 per cent of revenue), excluding charges for stock-based compensation and depreciation and amortization, compared with operating expenses of $3.2-million (85 per cent of revenue), excluding charges for stock-based compensation and depreciation and amortization, for the first quarter of fiscal 2014.

For the first quarter of fiscal 2015, adjusted EBITDA was $300,000 (9 per cent of revenue), compared with $100,000 (3 per cent of revenue) in the first quarter of fiscal 2014.

The effects of fluctuations in the rate of exchange between the U.S. dollar and Canadian dollar on first quarter fiscal 2015 EBITDA were negligible. The $100,000 gain from foreign currency in the first quarter of fiscal 2015 is predominantly the result of the remeasurement of the company's term loans (denominated in U.S. dollars) into Canadian dollars.

Included in the net loss for the first quarter of fiscal 2015 is a financial gain of $30,000. The financial gain is related to a change in valuation of a derivative asset that is embedded in the company's Series B convertible debentures.

For the first quarter of fiscal 2015, net loss was $61,732, compared with a net loss of $800,000 in the first quarter of fiscal 2014.

Cash and cash equivalents on June 30, 2014, were $200,000, a decrease of $400,000, or 71 per cent, from March 31, 2014.

At June 30, 2014, total common shares issued and outstanding were 94,758,915.

The company's financial statements and MD&A (management's discussion and analysis) will be available on the Nightingale website and will be filed on SEDAR on Aug. 27, 2014. This press release should be read in conjunction with Nightingale's consolidated financial statements and the accompanying MD&A for the year ended March 31, 2014.

Notice of conference call

Nightingale will host a conference call on Thursday, Aug. 28, 2014, at 8:30 a.m. ET. To access the conference call by telephone, dial 888-231-8191 (or 647-427-7450 for international). Please connect approximately 15 minutes prior to the call and use conference ID 93452990 prior to the beginning of the call to ensure participation. The conference call will be archived for replay until Thursday, Sept. 4, 2014. To access the archived conference call, dial 416-849-0833 or 855-859-2056 and enter code 93452990 followed by the pound sign. To listen to the conference call replay on the Internet, please visit the Nightingale website shortly after the call.

              CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS 
                     AND COMPREHENSIVE INCOME AND LOSS

                                          Quarter ended         Quarter ended
                                          June 30, 2014         June 30, 2013

Revenue                                   $   3,692,215         $   3,769,181
Cost of sales                                   438,229               430,820
Gross profit                                  3,253,986             3,338,361
Expenses
General and administration                      785,700               793,193
Sales and marketing                             613,287               658,037
Research and development                        752,453             1,045,510
Client services                               1,178,933             1,121,115
                                              3,330,373             3,617,855
Operating (loss)                                (76,387)             (279,494)
Interest                                         94,368               187,758
Other finance (gain) loss                       (29,483)                1,633
Foreign currency (gain) loss                    (92,048)              308,561
(Loss) before tax                               (49,224)             (777,446)
Current tax expense                              12,508                 2,183
(Loss) and comprehensive (loss)                 (61,732)             (779,629)
Basic and diluted (loss) per share
Basic and diluted (loss) per share        $       (0.00)        $       (0.01)

We seek Safe Harbor.