Nightingale Informatix announces financial results for the quarter and six months ended September 30, 2009

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 and six months ended September 30, 2009. All results are reported in Canadian dollars unless otherwise stated.

Q2 and Year to Date Highlights ------------------------------ - The Company achieved its third consecutive quarter of positive EBITDA for the quarter ended September 30, 2009. EBITDA was a positive $0.2 million for the quarter ended September 30, 2009 compared to an EBITDA loss of $0.5 million for the fiscal quarter ended September 30, 2008. EBITDA was a positive $0.2 million for the six months ended September 30, 2009 compared to a negative $0.7 million for the six months ended September 30, 2008. - Revenues for the quarter ended September 30, 2009 were $3.9 million compared to $4.2 million for the year ago quarter. Revenues were $8.1 million for the six months ended September 30, 2009 compared to $9.2 million for the six months ended September 30, 2008. Recurring revenues decreased 3% in the quarterly periods and increased 2% in the six month periods. Non-Recurring revenues increased 28% in the quarterly periods and decreased $1.3 million in the six month periods. - Loss and comprehensive loss decreased to $0.7 million from $1.6 million in the quarterly periods and decreased to $1.6 million from $2.8 million for the six months ended September 30, 2008. - Expenses for the fiscal quarter ended September 30, 2009 decreased $0.9 million, or 22%, from the same quarter last fiscal year and decreased $2 million, or 23%, during the six month periods. - In July 2009, the Company amended its debt financing agreements and extended the term of its subordinated debt through July 2012. - In July 2009, the Company was selected to provide its web-based OntarioMD Certified Nightingale On Demand EMR to the North Burlington Medical Centre, where the application will be used by more than 30 full and part-time physicians providing family practice, pediatrics and walk-in (urgent care) medical services with over 75,000 patients visits per year. - In August 2009, the Company entered into an agreement with a Canadian research assistance agency whereby the Company will be reimbursed up to $0.5 million for certain research and development activities in support of the Company's US EMR product. - In October 2009, the Ontario Medical Association (OMA) announced $236M in funding to advance the adoption of EMRs among practice-based family physicians and specialists in the province.

"We are pleased to report our third consecutive quarter of positive EBITDA. We demonstrated further improvement in our EBITDA and financial performance including positive generation of cash from operations in the second quarter," said Sam Chebib, President and CEO of Nightingale.

"We believe that the long anticipated October 2009 announcement by the Ontario Medical Association was a significant milestone in the efforts to advance adoption of EMRs among practice-based physicians and specialists in Ontario. We are excited to be a part of this movement in Ontario and will continue to focus on increasing the number of practioners on our platform with the funding acting as a catalyst to our efforts."

Q2 and Year to Date Fiscal 2010 Financial Review ------------------------------------------------

For the three and six months ended September 30, 2009, revenue was $3.9 million and $8.1 million, respectively. This compares to $4.2 million and $9.2 million for the three and six months ended September 30, 2008, representing an 8% and 12% decrease over these respective periods. These decreases were due largely to decreases in Non-Recurring Revenues over the same periods last fiscal year. Revenues were also negatively affected during the periods by the delay of EMR buying decisions in anticipation of government funding announcements. The Ontario government announced a $235 million subsidy program on October 29, 2009.

Recurring Revenue for the three and six months ended September 30, 2009 was $3.3 million and $6.9 million. This compares to $3.4 million and $6.7 million for the same periods ended September 30, 2008, representing a 3% decrease and a 2% increase over these respective periods. The decrease in Recurring Revenue from the year ago quarter was largely the result of lower data management and transcription revenues, which were partially offset by the increase in the value of the US dollar relative to the Canadian dollar. The increase in Recurring Revenue from the six month period last fiscal year was primarily the result of an increase in billing and financial management revenues as a large customer was fully implemented and transactional fees, which were partially offset by lower data management and transcription revenues. The increase in the value of the US dollar relative to the Canadian dollar also had a positive impact on Recurring Revenue, versus the six month period last fiscal year.

Non-Recurring Revenue for the three and six months ended September 30, 2009 was $0.6 million and $1.2 million. This compares to $0.8 million, or 19% of revenue and $2.5 million for the three and six months ended September 30, 2008, representing a 28% and a 53% decrease over these respective periods. The decrease in Non-Recurring Revenue over the three month periods is primarily the result of a decrease in custom development revenues. The decrease in Non-Recurring Revenue over the six month periods is primarily the result of a decrease in software revenue, as the Company recognized $1 million of license revenue related to a Canadian government agency in the first quarter of last fiscal year. Revenues were also negatively affected during the periods by the delay of EMR buying decisions in anticipation of government funding announcements. The Ontario government announced a $235 million subsidy program on October 29, 2009.

Over the three months ended September 30, 2009, the Company generated 74% of its revenue from the US market. With the increase in the value of the US dollar relative to the Canadian dollar during the three and six month periods, the Company estimates that revenue was positively impacted by approximately 4% or $0.2 million for the three month period and 7%, or $0.6 million, for the six month period, compared to the same periods of the previous fiscal year.

For the three and six month periods ended September 30, 2009, gross profit was $2.8 million, or 72% of revenue and $5.8 million, or 71% revenue, compared to $3.2 million, or 75% of revenue and $6.8 million, or 74% for the prior year periods. The decrease in gross profit margins can be primarily associated with a decrease in higher margin Non-Recurring revenue over the respective periods.

Expenses for the three and six month periods ended September 30, 2009, were $3.3 million and $6.8 million. This compares to $4.3 million and $8.8 million for the three and six month periods ended September 30, 2008, representing a 22% and 23% decrease over the respective periods. This decrease in expense was the result of the Company's strategic plan to accelerate profitability and the implementation of several cost reduction measures throughout fiscal year 2009. Although the Company is focused on prudent expense management as it seeks to achieve profitability, the Company may continue to make select investments in support of revenue generating activities.

Over the three months ended September 2009, approximately 44% of the Company's expenses were incurred in the US, providing the Company with a natural hedge position that has offset some of the effects on revenue of the increase in value of the US dollar versus last fiscal year. The Company estimates that expenses were negatively impacted by approximately 2% or $0.1 million for the three month period and 4%, or $0.3 million, for the six month period, compared to the same periods in the previous year.

EBITDA for each of the three and six month periods ended September 30, 2009, was $0.2 million. This compares to EBITDA losses of $0.5 million and $0.7 million for the three and six month periods ended September 30, 2008. The Company has been focused on achieving profitability and has implemented several cost reduction initiatives, particularly in the third quarter of last fiscal year. This improvement in EBITDA is a reflection of these initiatives as well as the strengthening of the US dollar compared to the same periods last fiscal year.

For the three and six month periods ended September 30, 2009, loss and comprehensive loss was $0.7 million and $1.6 million. This compares to loss and comprehensive loss of $1.5 million and $2.8 million for the three and six month periods ended September 30, 2008. The improvement in loss and comprehensive loss in the respective periods can be primarily attributed to cost reductions initiatives as well as the strengthening of the US dollar compared to the same respective periods last fiscal year. Going forward, the Company's financial results will continue to be impacted by changes in the rate of exchange between the US Dollar and the Canadian Dollar. The improvement in loss and comprehensive loss over the respective periods was partially offset by a decrease in Non-Recurring Revenues.

Cash and cash equivalents were $2.4 million at September 30, 2009, compared to $3.5 million at March 31, 2009. At September 30, 2009, total common shares issued and outstanding were 70,534,543.