TECSYS Inc.
TSX : TCS

TECSYS Inc.

September 09, 2008 11:05 ET

TECSYS Announces 23% Revenue Growth & Declares Dividend

MONTREAL, QUEBEC--(Marketwire - Sept. 9, 2008) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company announced today its results for the first quarter of fiscal year 2009, ended July 31st, 2008. All dollar amounts are expressed in Canadian currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP) and are unaudited. Effective May 1st, 2008 the Company's financial reporting is expressed in Canadian currency instead of the US currency which was the Company's reporting currency in the past.

Highlights of the First Quarter include:

- Revenue increased by 23% to $10.2M in Q1 of fiscal 2009 from $8.3M in Q1 of fiscal 2008.

- Earnings from operations for the first quarter of fiscal 2009 increased to $266K compared to $148K for Q1 of fiscal year 2008.

- EBITDA for Q1 of fiscal 2009 increased to $656K compared to $313K for Q1 of last fiscal year.

- Net earnings for the first quarter of fiscal 2009 were $274K or $0.02 per share, compared to $77K or $0.01 per share for the first quarter of last fiscal year.

- At the end of the quarter, backlog stood at $19.0M, up from $17.1M at the end of Q1 of last fiscal year.

- Annualized return-on-equity was equal to 7.1% in Q1 of fiscal 2009 compared to 2.0% in Q1 of last fiscal year.

TECSYS also announced today that the Company's Board of Directors has declared a $0.02/share dividend, to be paid on October 7, 2008 to shareholders of record on September 23, 2008.

Peter Brereton, President and CEO of TECSYS Inc. commented on the results: "With eleven go-lives and five new accounts, Q1 reflects strong revenue growth and improved earnings. While continuing our focused business development initiatives in healthcare and high-volume distribution, the quarter saw us break further into the industrial gas and supplies vertical market with the win of a major new customer and the strategic go-live of a showcase account."

During the quarter, the Company signed a number of agreements with existing customers and won five new accounts including:

- A loyalty-programs company in Canada

- A major industrial gas and welding supplies distributor in the US

- An import-to-retail distributor in Canada

- An industrial distributor in Ohio

- A marine and industrial supplies distributor in Ontario


TECSYS' First Quarter 2009 Earnings Conference Call:

Date: September 9, 2008

Time: 4:30 pm

Phone number: 800-215-1640 or 416-620-2013

The call can be replayed by calling 800-558-5253 (access code: 21392225) or 416-626-4100 (access code: 21392225).

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)
July 31, April 30,
2008 2008
(unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Assets

Current assets
Cash and cash equivalents 5,496 5,693
Accounts receivable 9,396 9,233
Work in progress 786 443
Other accounts receivable 139 204
Tax credits receivable 1,390 1,279
Inventory 224 216
Prepaid expenses 799 847
-------------------------------------------------------------------------
18,230 17,915

Restricted cash equivalents and other investments 695 672
Asset-backed commercial paper 4,052 4,045
Long-term receivables 125 165
Long-term investment 351 350
Property and equipment, net 1,744 1,713
Intangible assets, net 1,364 1,480
Deferred development costs, net 1,029 933
Goodwill 2,829 2,829
-------------------------------------------------------------------------
30,419 30,102
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Liabilities

Current liabilities
Bank advances 4,000 4,003
Accounts payable and accrued liabilities 5,772 5,589
Current portion of long-term debt 207 207
Deferred revenue 4,653 4,830
-------------------------------------------------------------------------
14,632 14,629

Long-term debt 200 200
-------------------------------------------------------------------------
14,832 14,829
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Shareholders' equity

Capital stock 1,473 1,444
Contributed surplus 12,837 12,826

Retained earnings 1,277 1,003
-------------------------------------------------------------------------
15,587 15,273
-------------------------------------------------------------------------
30,419 30,102
-------------------------------------------------------------------------
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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
Ended Ended
July 31, July 31,
2008 2007

(unaudited) (unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Revenue
Products 4,445 2,893
Services 5,549 5,218
Reimbursable expenses 243 236
-------------------------------------------------------------------------
10,237 8,347

Cost of revenue
Products 2,285 1,201
Services 3,689 3,248
Reimbursable expenses 243 236
-------------------------------------------------------------------------
6,217 4,685
-------------------------------------------------------------------------
Gross margin 4,020 3,662
-------------------------------------------------------------------------

Operating expenses
Sales and marketing 1,580 1,346
General and administration 807 818
Gross research and development 1,244 1,238
Research and development tax credits (137) (104)
Deferred development costs (132) (97)
Stock-based compensation 30 10
Amortization of property and equipment 132 133
Amortization of intangible assets 193 158
Amortization of deferred development costs 37 12
-------------------------------------------------------------------------
3,754 3,514
-------------------------------------------------------------------------

Earnings from operations 266 148

Interest income 21 82
Interest expense (26) (3)
Foreign exchange gains (losses) 12 (143)
Share of net earnings (loss) and amortization
of intangible assets of a company subject to
significant influence 1 (7)
-------------------------------------------------------------------------
Net earnings for the period 274 77
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Weighted average number of common shares
outstanding
- basic 13,006,383 13,679,127
-------------------------------------------------------------------------
- diluted 13,090,031 13,711,871
-------------------------------------------------------------------------
Basic and diluted net earnings per common share $0.02 $0.01
-------------------------------------------------------------------------
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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
Ended Ended
July 31, July 31,
2008 2007

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

Operating activities
Net earnings for the period 274 77
Adjustments for
Amortization of property and equipment 132 133
Amortization of intangible assets 193 158
Amortization of deferred development costs 37 12
Stock-based compensation 30 10
Unrealized foreign exchange losses 128 109
Deferred development costs (132) (97)
Share of net loss (earnings) and amortization
of intangible assets of a company subject to
significant influence (1) 7
-------------------------------------------------------------------------
661 409
Changes in non-cash working capital items related
to operations
Increase in accounts receivable (163) (344)

Increase in work in progress (343) (80)
Decrease (increase) in other accounts receivable 66 (10)
Increase in tax credits receivable (111) (234)
Increase in inventory (8) (16)
Decrease (increase) in prepaid expenses 48 (273)
Decrease in long-term receivables 29 -
Increase (decrease) in accounts payable and
accrued liabilities 45 (688)
(Decrease) increase in deferred revenue (177) 1,268
-------------------------------------------------------------------------
47 32
-------------------------------------------------------------------------
Financing activities

Bank advances (3) -
Issuance of common shares 20 4
Purchase of common shares for cancellation (10) (9)
-------------------------------------------------------------------------
7 (5)
-------------------------------------------------------------------------
Investing activities
(Increase) decrease in short-term and other
investments (23) 1,931
Acquisitions of property and equipment (163) (83)
Acquisitions of intangible assets (77) (25)
Decrease (increase) in long-term receivables
including the current portion from a related party 12 (32)
-------------------------------------------------------------------------
(251) 1,791
-------------------------------------------------------------------------
Variation in cash and cash equivalents (197) 1,818
Cash and cash equivalents - beginning of period 5,693 4,491

-------------------------------------------------------------------------
Cash and cash equivalents - end of period 5,496 6,309
-------------------------------------------------------------------------
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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)
Capital stock Contributed Retained Total
Number Amount surplus earnings
(deficit)
--------------------------------------------------------------------------
Balance, April 30, 2008 13,003,684 1,444 12,826 1,003 15,273
Repurchase of common shares (6,100) (1) (9) (10)
Stock options exercised 12,500 20 20
Fair value associated with
options exercised 10 (10) -
Stock-based compensation 30 30
Net earnings for the period 274 274
--------------------------------------------------------------------------
Balance, July 31, 2008 13,010,084 1,473 12,837 1,277 15,587
--------------------------------------------------------------------------
--------------------------------------------------------------------------


Capital stock 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 (5,900) (24) 15 (9)
Stock options exercised 3,000 4 4
Fair value associated with
options exercised 2 (2) -
Stock-based compensation 10 10
Net earnings for the period 77 77
--------------------------------------------------------------------------
Balance, July 31, 2007 13,675,397 56,115 11,065 (51,864) 15,316
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