TECSYS Reports Financial Results for First Quarter of Fiscal 2017

MONTREAL, QUEBEC--(Marketwired - Sept. 8, 2016) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the first quarter of fiscal year 2017, ended July 31, 2016. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS) and are unaudited.

First Quarter Highlights:

• Total revenue for Q1 2017 increased to $16.1M, $1.2M or 8% higher, compared to $14.9M for Q1 2016.
• Total gross margin percentage in Q1 2017 was 47% compared to 50% in Q1 2016.
• Operating expenses for Q1 2017 increased to $7.4M, higher by $150K or 2%, compared to $7.2M for the same three-month period last fiscal year.
• EBITDA of $814K in Q1 2017 compared to $831K in Q1 2016.
• R&D capitalization was nil compared to $399K in Q1 2016.
• Net profit of $128K, or $0.01 per share, in Q1 2017 compared to $69K, or $0.01 per share, for Q1 2016.
• Total contract value bookings amounted to $6.0M in Q1 2017 in comparison to $6.7M for Q1 2016.
• Cash and cash equivalents totaled $13.5M at the end of Q1 2017 compared to $9.7M at the end of Q4 2016.

Results from Operations	Q1 2017	Q1 2016	Trailing 12 months ended July 31, 2016	Trailing 12 months ended July 31, 2015
In thousands of dollars except per share amounts
Total Revenue	$16,097	$14,931	$68,632	$59,203
Gross Margin	$7,606	$7,420	$35,011	$28,907
Gross Margin %	47%	50%	51%	49%
Operating Expenses	$7,363	$7,213	$30,426	$27,227
Op. Ex. As % of Revenue	46%	48%	44%	46%
Profit from Operations	$243	$207	$4,585	$1,680
EBITDA	$814	$831	$7,147	$4,229
EPS	$0.01	$0.01	$0.39	$0.11
Contract Bookings	$6,016	$6,687	$41,524	$44,018

"While our first quarter is perennially slow and this year was no exception, we were pleased with the progress we made on a number of fronts. On a same treatment basis, profit would have increased by approximately $450K over last year. We increased revenue and profit while continuing to take a disciplined approach to our operating expenses resulting in a small increase in Profit from Operations in spite of the end of our R&D capitalization. Our Q4 of fiscal 2016 marked the end of the multi-year rewrite of our legacy systems into a modern web architecture and hence, the end of our capitalization program." said Peter Brereton, President and CEO of TECSYS Inc. "We signed two new accounts in the quarter including a key account in the heavy equipment market and had a number of successful go-lives in the quarter ranging from hospitals to 3PL's and heavy equipment dealers and covering a range of geographies including the U.S., Canada, Mexico and the U.K. Looking forward, we are confident we are on track to meet our growth targets. With solid bookings and a solid sales pipeline, we expect continued progress through the rest of the year."

The Company has declared a dividend of $0.03 per share to be paid on October 7, 2016 to shareholders of record at the close of business on September 23, 2016.

First Quarter 2017 Results Conference Call

Date: September 8, 2016

Time: 4:30 pm EST

Phone number: (416) 981-9080 or (800) 698-5833

The call can be replayed by calling (416) 626-4100 or (800) 558-5253 (access code: 21817164).

About TECSYS

TECSYS provides transformative supply chain solutions that equip our customers to succeed in a rapidly-changing omni-channel world. TECSYS solutions are built on a true enterprise supply chain platform, and include warehouse management, distribution and transportation management, as well as complete financial management and analytics. Customers running on TECSYS' Supply Chain Platform are confident knowing they can execute, day in and day out, regardless of business fluctuations or changes in technology, they can adapt and scale to any business needs or size, and they can expand and collaborate with customers, suppliers and partners as one borderless enterprise. From demand planning to demand fulfillment, TECSYS puts power into the hands of both front line workers and back office planners, and unshackles business leaders so they can see and manage their supply chains like never before.

TECSYS is the market leader in supply chain solutions for health systems and hospitals. Over 600 mid-size and Fortune 1000 customers trust their supply chains to TECSYS in the healthcare, service parts, 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, 2016. 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. 2016. 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 July 31, 2016 and April 30, 2016
(in thousands of Canadian dollars)
			July 31,			April 30,
			2016			2016
Assets
Current assets
	Cash and cash equivalents	$	13,506		$	9,704
	Accounts receivable		12,694			18,239
	Work in progress		1,175			513
	Other accounts receivable		757			1,393
	Tax credits		3,358			4,893
	Inventory		835			744
	Prepaid expenses		1,633			1,622
Total current assets			33,958			37,108
Non-current assets
	Tax credits		1,558			1,483
	Property and equipment		2,526			2,633
	Deferred development costs		3,469			3,817
	Other intangible assets		1,754			1,831
	Goodwill		3,596			3,596
	Deferred tax assets		2,226			2,222
Total non-current assets			15,129			15,582
Total assets		$	49,087		$	52,690
Liabilities
Current liabilities
	Accounts payable and accrued liabilities	$	8,269		$	10,399
	Current portion of long-term debt		1,465			1,455
	Deferred revenue		11,059			11,205
Total current liabilities			20,793			23,059
Non-current liabilities
	Long-term debt		1,520			1,889
	Other non-current liabilities		294			296
Total non-current liabilities			1,814		$	2,185
Total liabilities			22,607		$	25,244
Equity
	Share capital		8,349			8,349
	Contributed surplus		9,577			9,577
	Retained earnings		8,672			8,913
	Accumulated other comprehensive (loss) income		(118	)		607
Total equity attributable to the owners of the Company			26,480			27,446
Total liabilities and equity		$	49,087		$	52,690

TECSYS Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three month periods ended July 31, 2016 and 2015
(in thousands of Canadian dollars, except per share data)
			Three Months			Three Months
			Ended			Ended
			July 31,			July 31,
			2016			2015
Revenue:
	Proprietary products	$	2,356		$	2,148
	Third-party hardware and software products		2,170			2,064
	Services		11,019			10,316
	Reimbursable expenses		552			403
Total revenue			16,097			14,931
Cost of revenue:
	Products		1,698			1,608
	Services		6,241			5,500
	Reimbursable expenses		552			403
Total cost of revenue			8,491			7,511
Gross profit			7,606			7,420
Operating expenses:
	Sales and marketing		3,586			3,592
	General and administration		1,340			1,369
	Research and development, net of tax credits		2,437			2,252
Total operating expenses			7,363			7,213
Profit from operations			243			207
Net finance costs			96			40
Profit before income taxes			147			167
Income taxes			19			98
Profit attributable to the owners of the Company		$	128		$	69
Other comprehensive loss:
	Effective portion of changes in fair value on designated revenue hedges		(725	)		(583	)
Comprehensive loss attributable to the owners of the Company		$	(597	)	$	(514	)
Basic and diluted earnings per common share		$	0.01		$	0.01

TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Three-month periods ended July 31, 2016 and 2015
(in thousands of Canadian dollars)
			Three Months			Three Months
			Ended			Ended
			July 31,			July 31,
			2016			2015
Cash flows from (used in) operating activities:
Profit for the period		$	128		$	69
Adjustments for:
	Depreciation of property and equipment		201			187
	Depreciation of deferred development costs		348			337
	Depreciation of other intangible assets		125			118
	Gain on disposal of property and equipment		-			(12	)
	Net finance costs		96			40
	Unrealized foreign exchange and others		195			340
	Non-refundable tax credits		(215	)		(75	)
	Income taxes		19			75
	Operating activities excluding changes in non-cash working capital items related to operations		897			1,079
	Accounts receivable		5,545			814
	Work in progress		(662	)		(460	)
	Other accounts receivable		(106	)		(286	)
	Tax credits		1,656			2,000
	Inventory		(91	)		21
	Prepaid expenses		(11	)		(225	)
	Accounts payable and accrued liabilities		(2,786	)		(1,859	)
	Deferred revenue		(146	)		957
	Changes in non-cash working capital items related to operations		3,399			962
Net cash from operating activities			4,296			2,041
Cash flows used in financing activities:
	Repayment of long-term debt		(359	)		(367	)
	Interest paid		(26	)		(40	)
Net cash used in financing activities			(385	)		(407	)
Cash flows (used in) from investing activities:
	Interest received		33			18
	Acquisitions of property and equipment		(94	)		(150	)
	Proceeds on disposal of property and equipment		-			12
	Acquisitions of other intangible assets		(48	)		(34	)
	Deferred development costs		-			(399	)
Net cash used in investing activities			(109	)		(553	)
Net increase in cash and cash equivalents during the period			3,802			1,081
Cash and cash equivalents - beginning of period			9,704			10,815
Cash and cash equivalents - end of period		$	13,506		$	11,896

TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Three-month periods ended July 31, 2016 and 2015
(in thousands of Canadian dollars, except number of shares)
			Share capital
			Number	Amount	Contributed surplus	Accumulated other comprehensive income (loss)		Retained earnings		Total
Balance, April 30, 2016			12,315,326	$ 8,349	$ 9,577	$ 607		$ 8,913		$ 27,446
	Profit for the period		-	-	-	-		128		128
	Other comprehensive loss for the period:
		Effective portion of changes in fair value on designated revenue hedges	-	-	-	(725	)	-		(725	)
Total comprehensive income (loss) for the period			-	-	-	(725	)	128		(597	)
	Dividends to equity owners		-	-	-	-		(369	)	(369	)
Total transactions with owners of the Company			-	-	-	-		(369	)	(369	)
Balance, July 31, 2016			12,315,326	$ 8,349	$ 9,577	$ (118	)	$ 8,672		$ 26,480
Balance, April 30, 2015			12,315,326	$ 8,349	$ 9,577	$ 95		$ 5,341		$ 23,362
	Profit for the period		-	-	-	-		69		69
	Other comprehensive loss for the period:
		Effective portion of changes in fair value on designated revenue hedges	-	-	-	(583	)	-		(583	)
Total comprehensive income (loss) for the period			-	-	-	(583	)	69		(514	)
	Dividends to equity owners		-	-	-	-		(308	)	(308	)
Total transactions with owners of the Company			-	-	-	-		(308	)	(308	)
Balance, July 31, 2015			12,315,326	$ 8,349	$ 9,577	$ (488	)	$ 5,102		$ 22,540