Tecsys inc.
TSX : TCS

Tecsys inc.

September 11, 2014 11:00 ET

TECSYS Reports Fiscal 2015 First Quarter Results, Records 23% Revenue Growth

MONTREAL, QUEBEC--(Marketwired - Sept. 11, 2014) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the first quarter of fiscal year 2015, ended July 31, 2014.

All dollar amounts are expressed in Canadian currency and are prepared in accordance with the International Financial Reporting Standards (IFRS) and are unaudited.

First Quarter Highlights:

  • Revenue grew 23% to $13.0M in Q1 2015 compared to $10.6M in Q1 2014.
  • EBITDA increased by 73% to $1.0M in Q1 2015, compared to $579 K in Q1 2014. EBITDA in Q1 2015 includes a one-time acquisition expense of $134K related to Logi-D.
  • Profit from operations increased to $474K in Q1 2015, compared to $171K in Q1 2014. Before acquisition related expenses and amortizations, profit from operations increased to $650K compared to $171K in Q1, 2014.
  • Net profit increased to $343K or $0.03 per share compared to $83K or $0.01 per share in Q1 2014. Before acquisition related expenses and amortizations, net profit increased to $519K or $0.04 compared to $83K in Q1, 2014.
  • Services revenue improved by 23% to $8.7M while services profit margin expanded to 41% from 33% in Q1 2014.
  • Recurring revenue on an annualized basis grew to $18.6M, a 20% jump compared to the end of Q1 2014, representing 38% of the last twelve months trailing revenue.
  • Total contract bookings in the quarter totaled $9.7M, including $4.7M in total contract value from six new accounts, including three new hospital networks.
  • Go-lives at 17 customers' sites, most notably: one hospital network, one service parts provider and five new hospitals with Logi-D products.
  • Backlog was $33.6M at the end of Q1 2015 compared to $26.3M at the end of Q1 2014.
  • Cash and cash equivalents totaled $5.3M at the end of Q1 2015 compared to $8.8M at the end of Q4 2014.
  • On May 31, 2014, the Company acquired 100% of the issued and outstanding shares of Logi-D Holding Inc, a leading provider of point-of-use technology for supply chain automation servicing hospitals and healthcare organizations.

TECSYS also announced that the Company's Board of Directors has declared a quarterly dividend of $0.0225 per share, to be paid on October 10, 2014 to shareholders of record at the close of business on September 26, 2014.

"This quarter we further extended our leadership in the hospital market, signing three notable new health systems and highlighting the industry's growing demand for our products," said Peter Brereton, President and CEO of TECSYS Inc. "Along with the momentum we have established in the hospital sector, we also booked an additional $4.0M of business in the broader supply chain market. Our services team continues to execute with increased efficiency, reflecting the improvements we made to their organization and capacity over the last two years. With the acquisition of Logi-D completed, we are now working on integrating their products and capitalizing on the new opportunities available to us to accelerate our growth."

First Quarter 2015 Results Conference Call

Date: September 11th, 2014

Time: 4:30 pm EST

Phone number: 800-728-2056 or 416-981-9030

The call can be replayed by calling 800-558-5253 (access code: 21733033) or 416-626-4100 (access code: 21733033).

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 600 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, 2014. 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. 2014. 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, 2014 and April 30, 2014
(in thousands of Canadian dollars)
July 31, April 30,
2014 2014
Assets
Current assets
Cash and cash equivalents $ 5,317 $ 8,839
Accounts receivable 10,214 9,076
Work in progress 307 524
Other accounts receivable 339 46
Tax credits 3,473 2,704
Inventory 708 293
Prepaid expenses 1,289 1,037
Total current assets 21,647 22,519
Non-current assets
Restricted cash equivalents 40 80
Tax credits 1,425 1,350
Property and equipment 2,684 2,627
Deferred development costs 4,189 4,088
Other intangible assets 2,186 508
Goodwill 3,594 2,239
Deferred tax assets 639 714
Total non-current assets 14,757 11,606
Total assets $ 36,404 $ 34,125
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 6,209 $ 5,406
Current portion of long-term debt 1,090 1,000
Deferred revenue 9,588 8,326
Total current liabilities 16,887 14,732
Non-current liabilities
Long-term debt 2,451 2,500
Other non-current liabilities 357 299
Total non-current liabilities 2,808 2,799
Total liabilities 19,695 17,531
Equity
Share capital 2,253 2,153
Contributed surplus 9,577 9,577
Retained earnings 4,947 4,864
Accumulated other comprehensive loss (68 ) -
Total equity attributable to the owners of the Company 16,709 16,594
Total liabilities and equity $ 36,404 $ 34,125
TECSYS Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three-month periods ended July 31, 2014 and 2013
(in thousands of Canadian dollars, except per share data)
Three Months Three Months
Ended Ended
July 31, July 31,
2014 2013
Revenue:
Proprietary products $ 2,079 $ 1,466
Third-party hardware and software products 1,778 1,754
Services 8,743 7,103
Reimbursable expenses 412 279
Total revenue 13,012 10,602
Cost of revenue:
Products 1,329 1,259
Services 5,185 4,751
Reimbursable expenses 412 279
Total cost of revenue 6,926 6,289
Gross profit 6,086 4,313
Operating expenses:
Sales and marketing 2,611 1,943
General and administration 1,427 998
Research and development, net of tax credits 1,574 1,201
Total operating expenses 5,612 4,142
Profit from operations 474 171
Net finance costs 56 88
Profit before income taxes 418 83
Income taxes 75 -
Profit attributable to the owners of the Company $ 343 $ 83
Other comprehensive loss:
Effective portion of changes in fair value on designated revenue hedges (68 ) -
Comprehensive income attributable to the owners of the Company $ 275 $ 83
Basic and diluted earnings per common share $ 0.03 $ 0.01
TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Three-month periods ended July 31, 2014 and 2013
(in thousands of Canadian dollars)
Three Months Three Months
Ended Ended
July 31, July 31,
2014 2013
Cash flows from (used in) operating activities:
Profit for the period $ 343 $ 83
Adjustments for:
Depreciation of property and equipment 183 183
Depreciation of deferred development costs 292 238
Depreciation of other intangible assets 82 48
Net finance costs 56 88
Realized foreign exchange losses, unrealized foreign exchange gains, and other (108 ) (18 )
Federal non-refundable research and development tax credits (75 ) (75 )
Income taxes 75 -
Operating activities excluding changes in non-cash working capital items related to operations 848 547
Accounts receivable (326 ) 420
Work in progress 621 262
Other accounts receivable (269 ) (123 )
Tax credits (559 ) 1,205
Inventory 53 78
Prepaid expenses (230 ) (68 )
Accounts payable and accrued liabilities (577 ) (283 )
Deferred revenue 725 253
Changes in non-cash working capital items related to operations (562 ) 1,744
Net cash from operating activities 286 2,291
Cash flows (used in) from financing activities:
Repayment of bank loans (140 ) -
Repayment of loan to related party - (5 )
Repayment of long-term debt (262 ) (250 )
Issuance of common shares - 40
Purchase of share options for cancellation (7 ) (2 )
Interest paid (37 ) (43 )
Net cash used in financing activities (446 ) (260 )
Cash flows (used in) from investing activities:
Restricted cash equivalents 40 40
Interest received 9 16
Acquisitions of property and equipment (46 ) (33 )
Acquisitions of other intangible assets (24 ) (109 )
Deferred development costs (393 ) (523 )
Current and non-current receivables from TECSYS Latin America Inc. 1 14
Business combination, net of cash and cash equivalents acquired (2,949 ) -
Net cash used in investing activities (3,362 ) (595 )
Net (decrease) increase in cash and cash equivalents during the period (3,522 ) 1,436
Cash and cash equivalents - beginning of period 8,839 5,348
Cash and cash equivalents - end of period $ 5,317 $ 6,784
TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Three-month periods ended July 31, 2014 and 2013
(in thousands of Canadian dollars, except number of shares)
Share capital

Number


Amount

Contributed
surplus

Accumulated
other
comprehensive

loss

Retained
earnings

Total
Balance, April 30, 2014 11,524,421 $2,153 $9,577 $- $4,864 $16,594
Profit for the period - - - - 343 343
Other comprehensive loss for the period:
Effective portion of changes in fair value on designated revenue hedges - - - (68) - (68)
Total comprehensive income for the period - - - (68) 343 275
Common shares issued related to purchase of Logi D Holding Inc. 15,625 100 - - - 100
Dividends to equity owners - - - - (260) (260)
Total transactions with owners of the Company 15,625 100 - - (260) (160)
Balance, July 31, 2014 11,540,046 $2,253 $9,577 $(68) $4,947 $16,709
Balance, April 30, 2013 11,449,421 $1,748 $9,588 $- $3,930 $15,266
Profit and comprehensive income for the period - - - - 83 83
Total comprehensive income for the period - - - - 83 83
Share options exercised 25,000 40 - - - 40
Fair value associated with options exercised - 64 - - - 64
Total transactions with owners of the Company 25,000 104 - - - 104
Balance, July 31, 2013 11,474,421 $1,852 $9,588 $- $4,013 $15,453

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