Tecsys inc.
TSX : TCS

Tecsys inc.

March 01, 2012 13:18 ET

TECSYS Reports 14% Revenue Growth in Q3, 2012

MONTREAL, QUEBEC--(Marketwire - March 1, 2012) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, announced today its results for the third quarter of fiscal year 2012, ended January 31, 2012. All dollar amounts are expressed in Canadian currency and are prepared in accordance with the International Financial Reporting Standards (IFRS) and are unaudited.

Highlights of the Third Quarter include:

  • Revenue increased 14% to $10.6M in Q3, 2012 from $9.3M in Q3, 2011. Q3, 2012 revenue excludes $769,000 in license fees booked during the quarter of which most will be recognized rateably over the next year.
  • Backlog increased 18% to $24.6M at the end of Q3, 2012 from $20.8M at the end of Q3, 2011.
  • Profit from operations for the third quarter, 2012 was $378K compared to $445K in Q3, 2011.
  • Net profit for the quarter was $305K or $0.03 per share compared to $778K or $0.07 per share for the third quarter of last fiscal year. EBITDA for Q3, 2012 was $755K compared to $1,144K in Q3 of last fiscal year. The comparable quarter of last year included a revaluation of the fair value of asset backed commercial paper which increased net profit by $302K.
  • At the end of Q3, 2012 annualized recurring revenue in Canadian currency increased 6% to $14.8M from $14M at the end of Q3, 2011. Annualized recurring revenue at the end of Q3, 2012 represented 40% of the Company's revenue for the last 12 months.
  • Cash from operations amounted to $1.7M for the third quarter, 2012 up from $1.5M for the same quarter of the prior year.
  • Cash, cash equivalents and other short-term investments amounted to $5.0M at the end of Q3, 2012, compared to $7.3M at the end of fiscal 2011 with no long-term debt.

TECSYS also announced today that the Company's Board of Directors has declared a semi-annual dividend of $0.03/share, to be paid on March 30th, 2012 to shareholders of record on March 16, 2012.

Peter Brereton, President and CEO of TECSYS Inc., commented on the results: "Q3 was a good quarter from a number of perspectives; we grew our revenue for both products and services, improved our recurring revenue, continued to strengthen our human resources infrastructure and following quarter end we announced five exciting products at a major industry show. The revenue growth reflects the improved market conditions we have experienced in recent months. It also reflects the resurgence of the heavy equipment service parts market which resulted in two of our new account wins in the quarter. Furthermore, our customer base invested significantly in our products and services and our services' organization accelerated the deployment of our software, completing the go-lives of nineteen customer sites. Service excellence remains a core part of our culture and we have increased our headcount, particularly in services, to continue to meet the needs of our growing customer base."

During the quarter, the Company won the business of eight new clients, including:

  • A healthcare products and services supplier in the U.S.
  • Two major heavy equipment dealers in the U.S.
  • A promotional products manufacturer and distributor in Canada
  • A U.S.-based importer of packaged food ingredients
  • An arts and crafts distributor in the U.S.
  • Two industrial distributors in Canada

Highlights of the first Nine Months of fiscal year 2012 include:

  • Revenue for the first nine months, 2012 increased 6% to $28.7M compared to $27.2 for the same period of last fiscal year.
  • Profit from operations for the first nine months, 2012 was $720K compared to $870K for the same period of last fiscal year.
  • Net profit for the first nine months, 2012 was $584K or $0.05 per share compared to $1,079K or $0.09 per share for the same period of the prior fiscal year. EBITDA for the first nine months, 2012 was $1,802K compared to $2,117K for the same period in 2011. The comparable nine-month period of last year included a revaluation of the fair value of asset backed commercial paper which increased net profit by $302K.

TECSYS' Third Quarter 2012 Earnings Conference Call:

Subject: Third Quarter FY2012 Results Conference Call

Date: March 1, 2012

Time: 4:30 pm

Phone number: 800-269-0310 or 416-359-3126

The call can be replayed by calling 800-558-5253 (access code: 21580804) or 416-626-4100 (access code: 21580804).

Related link: Mobility and Point-Of-Use Innovations Driving TECSYS' WMS Well Beyond the Current Competitive Landscape (http://www.tecsys.com/company/news/2012/nr201201.shtml)

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 more than 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, 2011. 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.
Condensed Interim Consolidated Statements of Financial Position (Unaudited)
As at January 31, 2012, April 30, 2011 and May 1, 2010 (in thousands of Canadian dollars)
January 31, April 30, May 1,
2012 2011 2010
Assets
Current assets
Cash and cash equivalents$4,460$6,404$7,256
Short-term and other investments 525 850 850
Asset-backed commercial paper - 3,584 -
Accounts receivable 8,074 6,860 7,346
Work in progress 436 45 66
Other accounts receivable and derivatives 405 303 425
Tax credits 3,087 1,737 1,914
Inventory 797 180 171
Prepaid expenses 1,248 850 879
Total current assets 19,032 20,813 18,907
Non-current assets
Restricted cash equivalents and other investments 200 200 200
Asset-backed commercial paper - - 3,514
Non-current receivables 15 23 48
Tax credits 1,123 1,123 930
Investment in equity-accounted associate 205 220 211
Property and equipment 2,911 2,268 2,395
Deferred development costs 2,422 2,448 1,991
Other intangible assets 352 288 364
Goodwill 2,239 2,239 2,239
Deferred tax assets 609 609 595
Total non-current assets 10,076 9,418 12,487
Total assets$29,108$30,231$31,394
Liabilities
Current liabilities
Bank advances$-$3,720$3,951
Accounts payable and accrued liabilities 6,949 4,114 4,890
Loans payable 88 107 249
Provisions - - 415
Deferred revenue 6,608 6,344 5,827
Total current liabilities 13,645 14,285 15,332
Equity
Share capital 1,683 1,467 1,386
Contributed surplus 10,059 10,993 12,103
Retained earnings 3,721 3,486 2,573
Total equity attributable to the owners of the Company 15,463 15,946 16,062
Total liabilities and equity$29,108$30,231$31,394
TECSYS Inc.
Condensed Interim Consolidated Statements of Comprehensive Income (Unaudited)
Three and nine-month periods ended January 31, 2012 and 2011
(in thousands of Canadian dollars, except per share data)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
January 31, January 31, January 31, January 31,
2012 2011 2012 2011
Revenue:
Products$4,202 $3,609 $10,050 $9,943
Services 6,177 5,477 18,021 16,555
Reimbursable expenses 216 213 626 666
Total revenue 10,595 9,299 28,697 27,164
Cost of revenue:
Products 1,673 1,641 3,860 4,075
Services 4,127 3,553 11,669 10,710
Reimbursable expenses 216 213 626 666
Total cost of revenue 6,016 5,407 16,155 15,451
Gross profit 4,579 3,892 12,542 11,713
Operating expenses:
Sales and marketing 1,820 1,391 4,894 4,637
General and administration 1,051 955 3,043 2,728
Research and development, net of tax credits 1,333 1,101 3,888 3,478
Other (3) - (3) -
Total operating expenses 4,201 3,447 11,822 10,843
Profit from operations 378 445 720 870
Finance income 6 317 22 325
Finance costs (57) 29 (143) (32)
Net finance (costs) income (51) 346 (121) 293
Share of net loss of equity-accounted associate (22) (13) (15) (61)
Profit before income taxes 305 778 584 1,102
Income taxes - - - 23
Profit attributable to the owners of the Company and comprehensive income for the period$305 $778 $584 $1,079
Basic and diluted earnings per common share$0.03 $0.07 $0.05 $0.09
TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Three and nine-month periods ended January 31, 2012 and 2011
(in thousands of Canadian dollars)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
January 31, January 31, January 31, January 31,
2012 2011 2012 2011
Cash flows from operating activities:
Profit for the period$305 $778 $584 $1,079
Adjustments for:
Depreciation of property and equipment 202 212 557 475
Depreciation of other intangible assets 31 30 86 107
Depreciation of deferred development costs 216 150 571 424
Share-based compensation - 13 40 43
Net finance costs (income) 51 (346) 121 (293)
Realized foreign exchange gains (losses) and others (102) 10 110 29
Share of net loss of equity-accounted associate 22 13 15 61
Operating activities excluding changes in non-cash working capital items related to operations
725

860

2,084

1,925
Accounts receivable (623) (954) (1,214) (1,143)
Work in progress (216) 156 (391) (86)
Other accounts receivable (271) 109 (272) 255
Tax credits (473) 1,138 (1,350) 401
Inventory (632) (6) (617) (27)
Prepaid expenses (249) (68) (398) (42)
Accounts payable and accrued liabilities 2,526 419 2,540 978
Provisions - (415) - (415)
Deferred revenue 909 296 264 (256)
Changes in non-cash working capital items related to operations 971 675 (1,438) (335)
Net cash from operating activities 1,696 1,535 646 1,590
Cash flows from financing activities:
Bank advances - (6) (3,720) (8)
Repayment of loans (2) (142) (19) (142)
Issuance of common shares - 77 190 104
Purchase of common shares for cancellation (341) (630) (398) (876)
Purchase of share options for cancellation (2) - (339) -
Payment of dividends - - (349) (305)
Interest paid (3) (13) (14) (25)
Net cash used in financing activities (348) (714) (4,649) (1,252)
Cash flows from investing activities:
Short-term and other investments - - 325 -
Interest received 6 15 22 23
Proceeds from asset-backed commercial paper - 10 3,584 19
Acquisitions of property and equipment (864) (105) (1,200) (800)
Proceeds on disposal of property and equipment 3 - 3 -
Acquisitions of other intangible assets (45) (13) (150) (24)
Deferred development costs (161) (222) (545) (743)
Non-current receivables including the current portionfrom a related party
1

17

20

53
Net cash (used in) from investing activities (1,060) (298) 2,059 (1,472)
Net increase (decrease) in cash and cash equivalents during the period 288 523 (1,944) (1,134)
Cash and cash equivalents - beginning of period 4,172 5,599 6,404 7,256
Cash and cash equivalents - end of period$4,460 $6,122 $4,460 $6,122
TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Nine-month periods ended January 31, 2012 and 2011
(in thousands of Canadian dollars, except number of shares)
Share capital Contributed Retained Total
Number Amount surplus earnings
Balance, April 30, 2011 11,678,671 $1,467 $10,993 $3,486 $15,946
Profit and comprehensive income for the period - - - 584 584
Total comprehensive income for the period - - - 584 584
Repurchase of common shares (176,900) (22) (376) - (398)
Repurchase of share options - - (279) - (279)
Share options exercised 114,400 190 - - 190
Fair value associated with options exercised - 48 - - 48
Fair value of share options transferred to liabilities - - (319) - (319)
Share-based compensation - - 40 - 40
Dividends to equity owners - - - (349) (349)
Total transactions with owners of the Company (62,500) 216 (934) (349) (1,067)
Balance, January 31, 2012 11,616,171 $1,683 $10,059 3,721 $15,463
Balance, May 1, 2010 12,225,306 $1,386 $12,103 $2,573 $16,062
Profit and comprehensive income for the period - - - 1,079 1,079
Total comprehensive income for the period - - - 1,079 1,079
Repurchase of common shares (456,553) (52) (824) - (876)
Stock options exercised 73,718 104 - - 104
Fair value associated with options exercised - 47 (47) - -
Share-based compensation - - 43 - 43
Dividends to equity owners - - - (305) (305)
Total transactions with owners of the Company (382,835) 99 (828) (305) (1,034)
Balance, January 31, 2011 11,842,471 $1,485 $11,275 $3,347 $16,107

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