TECSYS Inc.
TSX : TCS

TECSYS Inc.

November 25, 2008 15:13 ET

TECSYS Posts 9% Revenue Growth & Five Cents EPS

MONTREAL, QUEBEC--(Marketwire - Nov. 25, 2008) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company announced today its results for the second quarter and first half of fiscal year 2009, ended October 31st, 2008. All dollar amounts are expressed in Canadian currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP), and are unaudited.

Highlights of the Second Quarter include:

- Revenue increased 9% to $10.7M in Q2 of fiscal 2009 from $9.8M in Q2 of fiscal 2008.

- Earnings from operations for Q2, 2009 were $771K compared to $970K for Q2, 2008.

- EBITDA increased 37% to $1,018K in Q2, 2009 compared to $741K for Q2, 2008.

- Net earnings increased to $644K or $0.05 per share in Q2, 2009 compared to $414K or $0.03 per share for the same period of the prior fiscal year.

- Annualized return-on-equity was equal to 16.5% in Q2 of fiscal 2009 compared to 10.9% in Q2 of last fiscal year.

- At the end of Q2, 2009 annualized recurring revenue stood at $13.1M. Recurring revenue is principally made up of annual software maintenance contracts.

- At the end of Q2, 2009 backlog stood at $20.1M up from $16.9M at the end of Q2 of last fiscal year.

- The Company generated $1.2M in cash from operations during the quarter.

- The Company ended the quarter with cash and cash equivalents of $6.75M and no significant long term debt.

Peter Brereton, President and CEO of TECSYS Inc. commented on the results: "We are pleased to report continued growth in both revenue and earnings, particularly in this business climate. Revenue growth was attained through a mix of contributions from Streamline; a company we acquired last November, as well as new and existing customers, and a significant number of go lives during the quarter. We remain optimistic about our business development initiatives in key verticals with our differentiated offerings while continuing to closely manage our spending in light of the changing landscape."

The Company signed seven new customers, including:

- A major University in the U.S.

- Five industrial distributors in Canada

- A third party logistics provider in Canada

Furthermore, TECSYS also signed a substantial number of business contracts with existing customers and deployed its solutions at a number of customers in healthcare, import to retail, parts distribution, and general high volume distribution sectors in Canada and the U.S.

Highlights of the first half of fiscal year 2009 include:

- Revenue for the first half of fiscal 2009 increased 15% to $20.9M from $18.2M in the same period of last fiscal year.

- Earnings from operations for the first half of fiscal 2009 were $1,037K compared to $1,118K for the same period in last fiscal year.

- EBITDA increased 59% to $1,675K in the first half, 2009 compared to $1,054K for the first half of 2008.

- Net earnings for the first half of fiscal 2009 increased to $918K or $0.07 per share compared to $491K or $0.04 per share for the same period of the prior fiscal year.

- Annualized return-on-equity was equal to 11.9% in the first half of fiscal 2009 compared to 6.5% for the same period in last fiscal year.



TECSYS' Second Quarter, Fiscal 2009 Earnings Conference Call:

Date: November 25, 2008
Time: 4:30 pm
Phone number: 888-633-8405 or 416-641-6665
The call can be replayed by calling: 800-558-5253 (access code: 21400266)
or 416-626-4100 (access code: 21400266).


About TECSYS

TECSYS is a leading supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include over 500 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high-volume distribution industries. TECSYS' shares are listed on the Toronto Stock Exchange under the ticker symbol TCS.

The statements in this news release relating to matters that are not historical fact are forward looking statements that are based on management's beliefs and assumptions. Such statements are not guarantees of future performance and are subject to a number of uncertainties, including but not limited to future economic conditions, the markets that TECSYS Inc. serves, the actions of competitors, major new technological trends, and other factors beyond the control of TECSYS Inc., which could cause actual results to differ materially from such statements. More information about the risks and uncertainties associated with TECSYS Inc.'s business can be found in the MD&A section of the Company's annual report and annual information form for the fiscal year ended April 30th, 2008. These documents have been filed with the Canadian securities commissions and are available on our website (www.tecsys.com) and on SEDAR (www.sedar.com).

Copyright (C) TECSYS Inc. 2008. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.



TECSYS Inc.
Consolidated Balance Sheets
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
-------------------------------------------------------------------------
(in thousands of Canadian dollars)

October 31, April 30,
2008 2008
(unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Assets
Current assets
Cash and cash equivalents 6,010 5,693
Accounts receivable 10,777 9,233
Work in progress 712 443
Other accounts receivable 151 204
Tax credits receivable 1,708 1,279
Inventory 228 216
Prepaid expenses 906 847
-------------------------------------------------------------------------
20,492 17,915

Restricted cash equivalents and other investments 695 672
Asset-backed commercial paper 4,045 4,045
Long-term receivables 99 165
Long-term investment 325 350
Property and equipment, net 1,650 1,713
Intangible assets, net 1,183 1,480
Deferred development costs, net 1,240 933
Goodwill 2,829 2,829
-------------------------------------------------------------------------
32,558 30,102
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Liabilities

Current liabilities
Bank advances 4,000 4,003
Accounts payable and accrued liabilities 7,099 5,589
Current portion of long-term debt 166 207
Deferred revenue 5,451 4,830
-------------------------------------------------------------------------
16,716 14,629

Long-term debt 200 200
-------------------------------------------------------------------------

16,916 14,829
-------------------------------------------------------------------------


Shareholders' equity

Capital stock 1,444 1,444
Contributed surplus 12,532 12,826

Retained earnings 1,666 1,003
-------------------------------------------------------------------------
15,642 15,273
-------------------------------------------------------------------------

-------------------------------------------------------------------------
32,558 30,102
-------------------------------------------------------------------------
-------------------------------------------------------------------------



TECSYS Inc.
Consolidated Statements of Earnings
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
-------------------------------------------------------------------------
(in thousands of Canadian dollars, except share and per share data)

Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2008 2007 2008 2007

(unaudited) (unaudited) (unaudited) (unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Revenue
Products 4,517 4,550 8,962 7,443
Services 5,893 5,058 11,442 10,276
Reimbursable expenses 301 238 544 474
-------------------------------------------------------------------------
10,711 9,846 20,948 18,193
Cost of revenue
Products 2,056 1,672 4,341 2,873
Services 3,744 3,106 7,433 6,354
Reimbursable expenses 301 238 544 474
-------------------------------------------------------------------------
6,101 5,016 12,318 9,701
-------------------------------------------------------------------------
Gross margin 4,610 4,830 8,630 8,492
-------------------------------------------------------------------------

Operating expenses
Sales and marketing 1,582 1,569 3,162 2,915
General and
administration 908 820 1,715 1,638
Gross research and
development 1,371 1,291 2,615 2,529
Research and
development tax
credits (152) (112) (289) (216)
Deferred development
costs (249) (58) (381) (155)
Stock-based
compensation 32 11 62 21
Amortization of
property and
equipment 133 143 265 276
Amortization of
intangible assets 177 158 370 316
Amortization of
deferred development
costs 37 38 74 50
-------------------------------------------------------------------------
3,839 3,860 7,593 7,374
-------------------------------------------------------------------------

Earnings from
operations 771 970 1,037 1,118

Interest income 17 25 38 107
Interest expense (29) (1) (55) (4)
Foreign exchange
losses (89) (333) (77) (476)
Changes in fair
value of
asset-backed
commercial paper - (250) - (250)
Share of net
earnings (loss)
and amortization
of intangible
assets of a
company subject
to significant
influence (26) 3 (25) (4)
-------------------------------------------------------------------------
Net earnings for
the period 644 414 918 491
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Weighted average
number of common
shares outstanding
- basic 12,827,687 13,478,076 12,917,035 13,578,602
-------------------------------------------------------------------------
- diluted 12,827,975 13,495,069 12,944,070 13,603,391
-------------------------------------------------------------------------
Basic and diluted
net earnings per
common share $0.05 $0.03 $0.07 $0.04
-------------------------------------------------------------------------
-------------------------------------------------------------------------



TECSYS Inc.
Consolidated Statements of Cash Flows
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
-------------------------------------------------------------------------
(in thousands of Canadian dollars)

Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2008 2007 2008 2007

(unaudited) (unaudited) (unaudited) (unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash flows from

Operating
activities
Net earnings for the
period 644 414 918 491
Adjustments for
Amortization of
property and
equipment 133 143 265 276
Amortization of
intangible assets 177 158 370 316
Amortization of
deferred development
costs 37 38 74 50
Stock-based
compensation 32 11 62 21
Changes in fair
value of
asset-backed
commercial paper - 250 - 250
Unrealized foreign
exchange losses
(gains) 915 (223) 1,043 (114)
Deferred development
costs (249) (58) (381) (155)
Share of net loss
(earnings) and
amortization of
intangible assets
of a company subject
to significant
influence 26 (3) 25 4
-------------------------------------------------------------------------
1,715 730 2,376 1,139
Changes in non-cash
working capital items
related to operations
Increase in accounts
receivable (1,381) (182) (1,544) (526)
Decrease (increase)
in work in progress 74 (119) (269) (199)
(Increase) decrease
in other accounts
receivable (2) 19 64 9
Increase in tax
credits receivable (318) (250) (429) (484)
Increase in inventory (4) (57) (12) (73)
(Increase) decrease
in prepaid expenses (107) 35 (59) (238)
Decrease in long-term
receivables 29 - 58 -
Increase in accounts
payable and accrued
liabilities 396 974 441 286
Increase in deferred
revenue 798 159 621 1,427
-------------------------------------------------------------------------
1,200 1,309 1,247 1,341
-------------------------------------------------------------------------
Financing activities

Bank advances - 2,000 (3) 2,000
Repayment of
long-term debt (41) - (41) -
Issuance of common
shares - - 20 4
Purchase of common
shares for
cancellation (366) (562) (376) (571)
Dividends paid on
common shares (255) - (255) -
-------------------------------------------------------------------------
(662) 1,438 (655) 1,433
-------------------------------------------------------------------------
Investing activities
Increase in
short-term and
other investments - (4,366) (23) (2,435)
Acquisitions of
property and
equipment (43) (134) (206) (217)
Proceeds on disposal
of property and
equipment 8 - 8 -
Acquisitions of
intangible assets (8) - (85) (25)
Proceeds on disposal
of intangible assets 7 - 7 -
Decrease (increase)
in long-term
receivables
including the
current portion
from a related party 12 (2) 24 (34)
-------------------------------------------------------------------------
(24) (4,502) (275) (2,711)
-------------------------------------------------------------------------
Variation in cash and
cash equivalents 514 (1,755) 317 63
Cash and cash
equivalents - beginning
of period 5,496 6,309 5,693 4,491

-------------------------------------------------------------------------
Cash and cash
equivalents - end of
period 6,010 4,554 6,010 4,554
-------------------------------------------------------------------------
-------------------------------------------------------------------------



TECSYS Inc.
Consolidated Statements of Changes in Shareholders' Equity
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
-------------------------------------------------------------------------
(in thousands of Canadian dollars, except number of shares)
(unaudited)

Common Shares Contributed Retained Total
Number Amount surplus earnings

-------------------------------------------------------------------------
Balance,
April 30, 2008 13,003,684 1,444 12,826 1,003 15,273

Repurchase of
common shares (270,300) (30) (346) - (376)

Stock options
exercised 12,500 20 - - 20

Fair value
associated with
options exercised - 10 (10) - -

Stock-based
compensation - - 62 - 62

Net earnings for
the period - - - 918 918

Dividends - - - (255) (255)

-------------------------------------------------------------------------
Balance,
October 31, 2008 12,745,884 1,444 12,532 1,666 15,642
-------------------------------------------------------------------------
-------------------------------------------------------------------------



Common Shares Contributed Retained Total
Number Amount surplus earnings
(deficit)
-------------------------------------------------------------------------
Balance, April 30,
2007 13,678,297 56,133 11,042 (51,941) 15,234

Repurchase of
common shares (401,200) (1,646) 1,075 - (571)

Stock options
exercised 3,000 4 - - 4

Fair value
associated with
options exercised - 2 (2) - -

Stock-based
compensation - - 21 - 21

Net earnings for
the period - - - 491 491

-------------------------------------------------------------------------
Balance, October
31, 2007 13,280,097 54,493 12,136 (51,450) 15,179
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-------------------------------------------------------------------------


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