Nightingale reports revenue of $4.4M for third-quarter fiscal 2010

Company reports fourth consecutive quarter of positive EBITDA

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 nine months ended December 31, 2009. All results are reported in Canadian dollars unless otherwise stated.

Q3 and Year to Date Highlights ------------------------------ - The Company achieved its fourth consecutive quarter of positive EBITDA for the quarter ended December 31, 2009. This is the Company's fifth consecutive quarter of EBITDA improvement. EBITDA was a positive $0.6 million for the quarter ended December 31, 2009 compared to a positive $0.2 million for the previous quarter and compared to negative EBITDA of $0.03 million for the quarter ended December 31, 2008. EBITDA was a positive $0.8 million for the nine months ended December 31, 2009 compared to a negative $0.7 million for the nine months ended December 31, 2008. - Revenues for the quarter ended December 31, 2009 were $4.4 million compared to $3.9 million for the previous quarter and compared to $4.6 million for the quarter ended December 31, 2008. Revenues were $12.4 million for the nine months ended December 31, 2009 compared to $13.7 million for the nine months ended December 31, 2008. Recurring revenues decreased 17% in the quarterly year over year periods and decreased 5% in the nine month periods largely the result of attrition in the transcription business and the impact of the US dollar relative to the value of the Canadian dollar. Non-Recurring revenues increased 97% in the quarterly periods and decreased 27% in the nine month periods. - Loss and comprehensive loss decreased to $0.3 million from $0.9 million in the quarterly periods and decreased to $1.9 million from $3.6 million for the nine months ended December 31, 2009. - Expenses for the fiscal quarter ended December 31, 2009 decreased $0.6 million, or 18%, from the quarter ended December 31, 2008 and decreased $2.6 million, or 24%, during the nine month periods. - In December 2009, the Company entered into an exclusive licensing and distribution agreement with a third party that will offer health related services to Canadian patients, through doctors using electronic medical records in their practices. Using Nightingale's innovative patient-centric technology and secure web-based patient portal, physicians will be offered a patient services platform seamlessly integrated with Nightingale On Demand, the Company's EMR.

"We are pleased to report our fourth consecutive quarter of positive EBITDA. This demonstrates our commitment to appropriately scale expenses as we strive to achieve our financial goals," said Sam Chebib, President and CEO of Nightingale. "As we approach the end of fiscal 2010 we are focused on profitable growth."

"We are also happy to report that our sales pipelines have increased significantly as a result of the October 2009 $236 million EMR funding announcement by the Ontario Medical Association and we expect to see some movement through this pipeline in the coming quarters. To address the opportunity in Ontario and more generally in North America, we have increased our spending, particularly on sales and marketing initiatives, as we continue to focus on increasing the number of practitioners on our platform."

Q3 and Year to Date Fiscal 2010 Financial Review ------------------------------------------------

For the three and nine months ended December 31, 2009, revenue was $4.4 million and $12.4 million, respectively. This compares to $4.6 million and $13.7 million for the three and nine months ended December 31, 2008, representing a 4% and 10% decrease over these respective periods. The decrease in the year over year quarterly periods was primarily related to a decrease in revenues from transcription services which was partially offset by an increase in software license revenue related to the Company's licensing of its online patient portal application. In the nine month periods, the decrease was primarily related to a decrease in software revenues as the Company recognized $1 million of license revenue related to a Canadian government agency in the first quarter of last fiscal year.

Recurring Revenue for the three and nine months ended December 31, 2009 was $3.3 million and $10.2 million. This compares to $4 million and $10.8 million for the same periods ended December 31, 2008, representing decreases of 17% and 5%, respectively. In both cases, the decrease in Recurring Revenue was largely the result of lower data management and transcription revenues and the negative impact of foreign exchange.

Non-Recurring Revenue for the three and nine months ended December 31, 2009 was $1 million and $2.2 million. This compares to $0.5 million and $3 million for the three and nine months ended December 31, 2008, representing a 97% increase and a 27% decrease over these respective periods. The increase in Non-Recurring Revenue over the three month periods is primarily the result of the Company's licensing of its online patient portal software in December 2009 as well as an increase in revenues from custom development projects.

Over the three months ended December 31, 2009, the Company generated 65% of its revenue from the US market. With the decrease in the value of the US dollar relative to the Canadian dollar during the year over year three month periods, the Company estimates that revenue was negatively impacted by approximately 9%, or $0.4 million. With the increase in the value of the US dollar relative to the Canadian dollar during the year to date periods, the Company estimates that revenue was positively affected by 1%, or $0.2 million.

For the three and nine month periods ended December 31, 2009, gross profit was $3.3 million, or 76% of revenue and $9.1 million, or 73% revenue, compared to $3.3 million, or 72% of revenue, and $10.1 million, or 73% for the prior year periods. The improvement in gross profit margins during the year over year quarterly periods is primarily associated with the increase in high margin software revenue in those periods.

Expenses for the three and nine month periods ended December 31, 2009, were $2.7 million and $8.3 million. This compares to $3.3 million and $10.8 million for the three and nine month periods ended December 31, 2008, representing an 18% and 24% decrease over the respective periods. This decrease in expense was the result of the Company's strategic plan to improve 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, and increase its current investments, in support of revenue generating activities.

Over the three months ended December 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 positively impacted by approximately 6% or $0.2 million for the three month periods and negatively impacted 1%, or $0.1 million, for the nine month periods, compared to the same periods in the previous year.

EBITDA for the three and nine month periods ended December 31, 2009, was $0.6 million and $0.8 million. This compares to EBITDA losses of $0.03 million and $0.7 million for the three and nine month periods ended December 31, 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 timing of certain license sales as described above.

For the three and nine month periods ended December 31, 2009, loss and comprehensive loss was $0.3 million and $1.9 million. This compares to loss and comprehensive loss of $0.9 million and $3.6 million for the three and nine month periods ended December 31, 2008. The improvement in loss and comprehensive loss in the respective periods can be primarily attributed to cost reductions initiatives as well as the timing of certain license sales as described above. 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.

Cash and cash equivalents were $1.9 million at December 31, 2009, compared to $3.5 million at March 31, 2009. At December 31, 2009, total common shares issued and outstanding were 70,534,543.

The financial statements and MD&A will be available at www.nightingale.md and filed on www.sedar.com on February 26, 2010. This press release should be read in conjunction with Nightingale's Consolidated Financial Statements for the quarter and nine months ended December 31, 2009 and the accompanying Management Discussion and Analysis.