Fiscal 2009 Financial Review:

Revenue for Q3 fiscal 2009 was $4.6 million, compared to revenue from continuing operations of $3.9 million for Q3 fiscal 2008. The year-over-year increase is largely due to the positive impact of the US dollar exchange rate on the growing base of Recurring Revenues, offset partially by a decrease in Non-Recurring Revenue.
For the three months ended December 31, 2008, the Company generated 83% of its revenue from the US market. With the recent increase in the value of the US dollar relative to the Canadian dollar, the Company estimates that revenue was positively impacted by approximately $700,000 during the current quarter compared to the same quarter of the previous fiscal year, approximately $550,000 during the consecutive quarterly periods and approximately $400,000 during the year to date periods.
During the quarter ended December 31, 2008, Nightingale incurred approximately 52% of its expenses (including costs of goods sold) in the U.S., providing the Company with a natural hedge position. The Company continues to expect that a significant portion of its revenue and expenses will be generated from the U.S., as a result, Nightingale will remain susceptible to currency fluctuations.
Recurring revenue, consisting of support and maintenance, utilization and transaction fees, transcription and billing services was $4.0 million, or 88.8% of total revenue, marking the fourth consecutive quarterly increase in recurring revenues. The increase from the quarter ended September 30, 2008 to the quarter ended December 31, 2008 was largely due to the impact of the improvement in the US dollar as well as an increase in revenue cycle management revenues.
As a result of the steps Nightingale has taken to control costs, total operating expenses were reduced. Total operating expenses for the three and nine months ended December 31, 2008, were $4 million and $12.9 million, respectively. This compares to $5.2 million and $15.2 million for the three and nine months ended December 31, 2007, representing a 23.1% and 15.1% decrease over these respective periods. These decreases in expenses were partially offset by one time expenses in the quarter related to severance and in lieu pay costs associated with the headcount reductions as well as increases in expense associated with the increase in the value of the US dollar.
Net loss was $876,000, or $(0.01) per share, in Q3 fiscal 2009, compared to a net loss from continuing operations of $3.4 million, or $(0.05) per share, in Q3 fiscal 2008. The year-over-year improvement is primarily due to a reduction in operating expenses as well as repayment of debt and subsequent interest expense reductions. The Company remains focused on achieving positive cash flow.