MONTREAL, QUEBEC--(Marketwire - July 7, 2011) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, announced today its results for the fourth quarter and 2011 fiscal year ended April 30th, 2011. The results of the 2011 fiscal year are audited. All dollar amounts are expressed in Canadian currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP).
Highlights of the Fourth Quarter include:
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At the end of Q4, 2011, annualized recurring revenue was $14.0M, or 39% of 2011 fiscal year revenue compared to $13.1M, or 36% of 2010 fiscal year revenue. Recurring revenue is principally made-up of annual software maintenance contracts.
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Revenue was $8.5M in Q4 of fiscal 2011 compared to $8.8M in Q4 of fiscal 2010; the slight decline is primarily due to the impact of the stronger Canadian dollar against the U.S. dollar.
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Earnings from operations in Q4, 2011 were $652K compared to $851K for the same quarter of last year. During the quarter federal non-refundable tax credits of $300K were booked, compared to $1.4M in the corresponding quarter of last fiscal year.
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EBITDA was $1.1M in Q4, 2011 compared to $1.3M for Q4 of last year.
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Net earnings for Q4, 2011 were $469K or basic net earnings of $0.04 per share compared to $1,266K or basic net earnings of $0.10 per share in Q4, 2010. In Q4, 2011, income tax expensed amounted to $219K compared to an income tax recovery of $453K in Q4 of last fiscal year.
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At the end of the fourth quarter, 2011, backlog was $21.0M compared to $20.8M at the end of Q3, 2011 and $18.3M at the end of Q4, 2010.
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During the quarter, the Company generated $1.1M cash from operations compared to $1.4M for the corresponding quarter of fiscal 2010.
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Cash and cash equivalents, as well as short-term and other investments at the end of Q4, 2011 amounted to $7.3M compared to $8.1M at the end of Q4, 2010, with no long-term debt. Shortly after year-end, on May 17, 2011, the Company sold all of its Asset-Backed Commercial Paper (ABCP) holdings for total cash proceeds of $3.6 million and concurrently repaid and terminated the credit facility. As a result, this has improved the Company's working capital by $3.6M.
Peter Brereton, President and CEO of TECSYS Inc., commented on the results: "Our recurring revenue and backlog reached an all-time high; $14M and $21M respectively. We continue to move into larger accounts and this quarter highlights the growing backlog which is now beginning to convert to services, with services revenue rising by 10%. Gross margin percentage increased to 48% in Q4, 2011 compared to 45% in Q4 of 2010. We also saw a great win in the wine and spirits business as our market presence in warehousing grows. Our EBITDA continues to be strong as we continue to shift into more of a pure vertical play, and we are pleased to have been able to return almost $2M to shareholders this year in the form of share buybacks and dividends. Moving forward, our sales pipeline and market position are solid and we are in a unique position to take advantage of the opportunities ahead, particularly in the healthcare supply chain."
During the quarter, the Company signed twenty five agreements with new and existing clients including:
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Six customers in healthcare
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Nine customers in industrial and import-to-retail distribution
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Nine customers in general high-volume distribution
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One customer in third party logistics
Furthermore, the Company completed the deployment of its software for the go-lives of a number of customer sites across all of the Company's vertical markets during the quarter.
Highlights of the 2011 Fiscal Year include:
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Revenue for fiscal 2011 was $35.7M compared to $36.8M for last fiscal year. The stronger Canadian dollar accounted for $1.0M in lower revenue in 2011.
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Earnings from operations for the year were $1.4M compared to $2.1M for the same period last year, primarily due to the federal non-refundable tax credits outlined earlier in this press release under the fourth quarter highlights.
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EBITDA was $3.1M in 2011 compared to $3.3M in fiscal 2010.
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Net earnings for the year were $1.4M or basic earnings per share $0.12 compared to $2.2M or basic earnings per share of $0.18 for 2010, primarily due to the federal non-refundable tax credits and income taxes outlined earlier in this press release under the fourth quarter highlights.
TECSYS' Q4 FY2011 Earnings Conference Call:
| Date: | July 7, 2011 |
| Time: | 4:30 pm EDT |
| Phone number: | 888-225-2703 or 416-981-9070 |
The call can be replayed by calling 800-558-5253 (access code: 21531023) or 416-626-4100 (access code: 21531023).
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 about 500 mid-size and Fortune 1000 corporations in healthcare, 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, 2010. 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 © TECSYS Inc. 2011. 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) | ||
| April 30, | April 30, | |
| 2011 | 2010 | |
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | 6,404 | 7,256 |
| Short-term and other investments | 850 | 850 |
| Asset-backed commercial paper | 3,584 | - |
| Accounts receivable | 6,860 | 7,346 |
| Work in progress | 45 | 66 |
| Other accounts receivable | 303 | 425 |
| Tax credits receivable | 1,737 | 1,914 |
| Inventory | 180 | 171 |
| Prepaid expenses | 850 | 879 |
| Future tax assets | 78 | 142 |
| 20,891 | 19,049 | |
| Restricted cash equivalents and other investments | 200 | 200 |
| Asset-backed commercial paper | - | 3,514 |
| Long-term receivables | 23 | 48 |
| Investment tax credits | 1,123 | 930 |
| Long-term investment | 220 | 211 |
| Property and equipment | 2,333 | 2,472 |
| Intangible assets | 476 | 623 |
| Deferred development costs | 2,448 | 1,991 |
| Future tax assets | 531 | 453 |
| Goodwill | 2,804 | 2,804 |
| 31,049 | 32,295 | |
| Liabilities | ||
| Current liabilities | ||
| Bank advances | 3,720 | 3,951 |
| Accounts payable and accrued liabilities | 4,114 | 5,305 |
| Current portion of long-term debt | 107 | 249 |
| Deferred revenue | 6,344 | 5,827 |
| 14,285 | 15,332 | |
| Shareholders' equity | ||
| Capital stock | 1,467 | 1,386 |
| Contributed surplus | 10,865 | 11,931 |
| Retained earnings | 4,432 | 3,646 |
| 16,764 | 16,963 | |
| 31,049 | 32,295 | |
| TECSYS Inc. | |||||||||
| Consolidated Statements of Earnings and Comprehensive Earnings | |||||||||
| Prepared in Accordance with Canadian Generally Accepted Accounting Principles | |||||||||
| (in thousands of Canadian dollars, except share and per share data) | |||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||
| April 30, | April 30, | April 30, | April 30, | ||||||
| 2011 | 2010 | 2011 | 2010 | ||||||
| (unaudited) | (unaudited) | ||||||||
| Revenue | |||||||||
| Products | 2,516 | 3,467 | 12,459 | 13,333 | |||||
| Services | 5,732 | 5,197 | 22,287 | 22,437 | |||||
| Reimbursable expenses | 242 | 183 | 908 | 1,002 | |||||
| 8,490 | 8,847 | 35,654 | 36,772 | ||||||
| Cost of revenue | |||||||||
| Products | 706 | 1,050 | 4,745 | 4,585 | |||||
| Services | 3,469 | 3,637 | 13,864 | 14,418 | |||||
| Reimbursable expenses | 242 | 183 | 908 | 1,002 | |||||
| 4,417 | 4,870 | 19,517 | 20,005 | ||||||
| Gross margin | 4,073 | 3,977 | 16,137 | 16,767 | |||||
| Operating expenses | |||||||||
| Sales and marketing | 1,523 | 1,635 | 6,086 | 5,902 | |||||
| General and administration | 869 | 834 | 3,517 | 3,578 | |||||
| Gross research and development | 1,466 | 1,719 | 5,906 | 6,333 | |||||
| Research and development tax credits | (497 | ) | (1,403 | ) | (1,260 | ) | (2,012 | ) | |
| Deferred development costs capitalized | (304 | ) | (255 | ) | (1,047 | ) | (876 | ) | |
| Stock-based compensation | 18 | 57 | 98 | 149 | |||||
| Amortization of property and equipment | 144 | 149 | 633 | 550 | |||||
| (Gain) loss on disposal of property and equipment | (13 | ) | 153 | (13 | ) | 153 | |||
| Amortization of intangible assets | 49 | 105 | 210 | 480 | |||||
| Amortization of deferred development costs | 166 | 132 | 590 | 404 | |||||
| 3,421 | 3,126 | 14,720 | 14,661 | ||||||
| Earnings from operations | 652 | 851 | 1,417 | 2,106 | |||||
| Interest income | 3 | 23 | 26 | 37 | |||||
| Interest expense | (6 | ) | (88 | ) | (3 | ) | (106 | ) | |
| Foreign exchange (losses) gains | (31 | ) | 10 | (66 | ) | (211 | ) | ||
| Changes in fair value of asset-backed commercial paper | - | - | 302 | - | |||||
| Share of net earnings (loss) and amortization of intangible assets of a company subject to significant influence | 70 | 17 | 9 | (79 | ) | ||||
| Earnings before income taxes | 688 | 813 | 1,685 | 1,747 | |||||
| Income tax expense (recovery) | 219 | (453 | ) | 242 | (435 | ) | |||
| Net earnings and comprehensive earnings for the period | 469 | 1,266 | 1,443 | 2,182 | |||||
| Weighted average number of common shares outstanding | |||||||||
| - basic | 11,765,442 | 12,261,372 | 12,055,715 | 12,362,504 | |||||
| - diluted | 11,916,935 | 12,485,254 | 12,204,084 | 12,550,420 | |||||
| Basic net earnings per common share | $ 0.04 | $ 0.10 | $ 0.12 | $ 0.18 | |||||
| Diluted net earnings per common share | $ 0.04 | $ 0.10 | $ 0.12 | $ 0.17 | |||||
| TECSYS Inc. | |||||||||
| Consolidated Statements of Cash Flows | |||||||||
| Prepared in Accordance with Canadian Generally Accepted Accounting Principles | |||||||||
| (in thousands of Canadian dollars) | |||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||
| April 30, | April 30, | April 30, | April 30, | ||||||
| 2011 | 2010 | 2011 | 2010 | ||||||
| (unaudited) | (unaudited) | ||||||||
| Cash flows from | |||||||||
| Operating activities | |||||||||
| Net earnings for the period | 469 | 1,266 | 1,443 | 2,182 | |||||
| Adjustments for | |||||||||
| Amortization of property and equipment | 144 | 149 | 633 | 550 | |||||
| Amortization of intangible assets | 49 | 105 | 210 | 480 | |||||
| Amortization of deferred development costs | 166 | 132 | 590 | 404 | |||||
| Stock-based compensation | 18 | 57 | 98 | 149 | |||||
| (Gain) loss on disposal of property and equipment | (13 | ) | 153 | (13 | ) | 153 | |||
| Changes in fair value of asset-backed commercial paper | - | - | (302 | ) | - | ||||
| Unrealized foreign exchange gains | (155 | ) | (60 | ) | (119 | ) | (43 | ) | |
| Deferred development costs | (304 | ) | (255 | ) | (1,047 | ) | (876 | ) | |
| Share of net (earnings) loss and amortization of intangible assets of a company subject to significant influence | (70 | ) | (17 | ) | (9 | ) | 79 | ||
| Federal non-refundable research and development tax credits | (300 | ) | (1,428 | ) | (300 | ) | (1,428 | ) | |
| Income taxes | 211 | (452 | ) | 211 | (452 | ) | |||
| 215 | (350 | ) | 1,395 | 1,198 | |||||
| Changes in non-cash working capital items related to operations | |||||||||
| Decrease in accounts receivable | 1,629 | 699 | 486 | 1,961 | |||||
| Decrease in work in progress | 107 | 34 | 21 | 237 | |||||
| (Increase) decrease in other accounts receivable | (51 | ) | (274 | ) | 204 | (271 | ) | ||
| (Increase) decrease in tax credits receivable | (342 | ) | 831 | 59 | (23 | ) | |||
| Decrease (increase) in inventory | 18 | 36 | (9 | ) | 48 | ||||
| Decrease (increase) in prepaid expenses | 71 | (76 | ) | 29 | (211 | ) | |||
| (Decrease) increase in accounts payable and accrued liabilities | (1,353 | ) | 786 | (790 | ) | (249 | ) | ||
| Increase (decrease) in deferred revenue | 773 | (277 | ) | 517 | (422 | ) | |||
| 1,067 | 1,409 | 1,912 | 2,268 | ||||||
| Financing activities | |||||||||
| Repayment of bank advances | (223 | ) | (18 | ) | (231 | ) | (49 | ) | |
| Purchase price adjustments on acquisition applied against long-term debt | - | 19 | - | 36 | |||||
| Repayment of long-term debt | - | (20 | ) | (142 | ) | (20 | ) | ||
| Issuance of common shares | - | - | 104 | - | |||||
| Purchase of common shares for cancellation | (311 | ) | (191 | ) | (1,187 | ) | (580 | ) | |
| Payment of dividends | (352 | ) | (308 | ) | (657 | ) | (618 | ) | |
| (886 | ) | (518 | ) | (2,113 | ) | (1,231 | ) | ||
| Investing activities | |||||||||
| Decrease in short-term and other investments and restricted cash equivalents and other investments | - | 215 | - | 14 | |||||
| Interest and principal received on asset-backed commercial paper | 213 | 1 | 232 | 125 | |||||
| Acquisitions of property and equipment | (95 | ) | (1,002 | ) | (895 | ) | (1,313 | ) | |
| Proceeds on disposal of property and equipment | 13 | 20 | 13 | 20 | |||||
| Acquisitions of intangible assets | (39 | ) | (132 | ) | (63 | ) | (173 | ) | |
| Decrease in goodwill related to the Streamline acquisition | - | 25 | - | 25 | |||||
| Decrease in long-term receivables including the current portion from a related party | 9 | 14 | 62 | 11 | |||||
| 101 | (859 | ) | (651 | ) | (1,291 | ) | |||
| Increase (decrease) in cash and cash equivalents | 282 | 32 | (852 | ) | (254 | ) | |||
| Cash and cash equivalents - beginning of period | 6,122 | 7,224 | 7,256 | 7,510 | |||||
| Cash and cash equivalents - end of period | 6,404 | 7,256 | 6,404 | 7,256 | |||||
| TECSYS Inc. | ||||||||||
| Consolidated Statements of Shareholders' Equity | ||||||||||
| Prepared in Accordance with Canadian Generally Accepted Accounting Principles | ||||||||||
| (in thousands of Canadian dollars, except number of shares) | ||||||||||
| Capital stock | Contributed | Retained | Total | |||||||
| Number | Amount | surplus | earnings | |||||||
| Balance, April 30, 2010 | 12,225,306 | 1,386 | 11,931 | 3,646 | 16,963 | |||||
| Repurchase of common shares | (620,353 | ) | (70 | ) | (1,117 | ) | - | (1,187 | ) | |
| Stock options exercised | 73,718 | 104 | - | - | 104 | |||||
| Fair value associated with options exercised | - | 47 | (47 | ) | - | - | ||||
| Stock-based compensation | - | - | 98 | - | 98 | |||||
| Net earnings for the year | - | - | - | 1,443 | 1,443 | |||||
| Dividends | - | - | - | (657 | ) | (657 | ) | |||
| Balance, April 30, 2011 | 11,678,671 | 1,467 | 10,865 | 4,432 | 16,764 | |||||
| Capital stock | Contributed | Retained | Total | |||||||
| Number | Amount | surplus | earnings | |||||||
| Balance, April 30, 2009 | 12,525,884 | 1,420 | 12,328 | 2,082 | 15,830 | |||||
| Repurchase of common shares | (300,859 | ) | (34 | ) | (546 | ) | - | (580 | ) | |
| Stock options exercised | 281 | - | - | - | - | |||||
| Stock-based compensation | - | - | 149 | - | 149 | |||||
| Net earnings for the year | - | - | - | 2,182 | 2,182 | |||||
| Dividends | - | - | - | (618 | ) | (618 | ) | |||
| Balance, April 30, 2010 | 12,225,306 | 1,386 | 11,931 | 3,646 | 16,963 | |||||
Contact Information:
Investor relations: investor@tecsys.com
Media relations: media@tecsys.com
TECSYS Inc.
(514) 866-0001 or (800) 922-8649