TECSYS Inc.
TSX : TCS

TECSYS Inc.

September 10, 2015 10:49 ET

TECSYS Reports Fiscal 2016 First Quarter Financial Results, Records 15% Revenue Growth, 24% Recurring Revenue Growth

MONTREAL, QUEBEC--(Marketwired - Sept. 10, 2015) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the first quarter of fiscal year 2016, ended July 31, 2015.

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:

  • Revenue grew 15% to $14.9M in Q1 2016 compared to $13.0M in Q1 2015.
  • Proprietary products revenue grew 3% to $2.1M.
  • Services revenue improved by 18% to $10.3M.
  • Gross margin in Q1 2016 reached 50% compared to 47% in Q1 2015, owing to improved gross margin from services of 47%, up from 41% in Q1 2015.
  • Recurring revenue on an annualized basis grew to $23.0M, a 24% improvement compared to the end of Q1 2015, representing 39% of the last 12 months trailing revenue.
  • EBITDA was $0.8M for Q1 2016, compared to $1.0M recorded in Q1 2015.
  • Profit from operations was $207K in Q1 2016, compared to $474K in Q1 2015.
  • Total contract bookings in the first quarter totaled $6.7M, compared to $9.7M in the prior year period.
  • Backlog grew to $44.8M at the end of Q1 2016 from $33.6M at the end of Q1 2015, a 33% increase.
  • Net cash from operating activities amounted to $2.0M in Q1 2016 compared to $286K in Q1 2015.
  • Cash and cash equivalents totaled $11.9M at the end of Q1 2016 compared to $10.8M at the end of Q4 2015.
  • Signed 2 new Hospital Networks (IDNs) in the United States including one that distributes to several smaller IDNs.

"Our team continues to make great progress capitalizing on our strong order backlog and sales pipeline, resulting in progressive revenue expansion and gross margin improvement," said Peter Brereton, President and CEO of TECSYS Inc. "We signed two new IDNs in the quarter, further evidence of the positive response we've seen from our clients to the value proposition our robust platform affords them. In response to this continued market momentum, we have significantly increased our investment in sales, marketing, and R&D in order to capitalize on the opportunity we see in this space. We are in an excellent position within our core markets and see a great opportunity to grow our business and continue to deliver solid results."

TECSYS also announced that the Company's Board of Directors has declared a quarterly dividend of $0.025 per share, to be paid on October 9, 2015 to shareholders of record at the close of business on September 25, 2015.

First Quarter 2016 Results Conference Call

Date: September 10, 2015
Time: 4:30 pm EST
Phone number: 800-728-2059 or 416-981-9030

The call can be replayed by calling 800-558-5253 (access code: 21775872) or 416-626-4100 (access code: 21775872).

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, 2015. 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. 2015. 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, 2015 and April 30, 2015
(in thousands of Canadian dollars)
July 31, April 30,
2015 2015
Assets
Current assets
Cash and cash equivalents$11,896 $10,815
Accounts receivable 11,756 12,570
Work in progress 1,164 704
Other accounts receivable 504 434
Tax credits 3,369 5,369
Inventory 1,038 1,059
Prepaid expenses 1,619 1,394
Total current assets 31,346 32,345
Non-current assets
Tax credits 1,613 1,538
Property and equipment 2,439 2,526
Deferred development costs 4,410 4,348
Other intangible assets 2,100 2,184
Goodwill 3,596 3,596
Deferred tax assets 776 840
Total non-current assets 14,934 15,032
Total assets$46,280 $47,377
Liabilities
Current liabilities
Accounts payable and accrued liabilities$7,957 $8,817
Current portion of long-term debt 1,470 1,456
Deferred revenue 11,055 10,098
Total current liabilities 20,482 20,371
Non-current liabilities
Long-term debt 2,952 3,333
Other non-current liabilities 306 311
Total non-current liabilities 3,258 3,644
Total liabilities 23,740 24,015
Equity
Share capital 8,349 8,349
Contributed surplus 9,577 9,577
Retained earnings 5,102 5,341
Accumulated other comprehensive (loss) income (488) 95
Total equity attributable to the owners of the Company 22,540 23,362
Total liabilities and equity$46,280 $47,377
TECSYS Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three month periods ended July 31, 2015 and 2014
(in thousands of Canadian dollars, except per share data)
Three Months Three Months
Ended Ended
July 31, July 31,
2015 2014
Revenue:
Proprietary products$2,148 $2,079
Third-party hardware and software products 2,064 1,778
Services 10,316 8,743
Reimbursable expenses 403 412
Total revenue 14,931 13,012
Cost of revenue:
Products 1,608 1,329
Services 5,500 5,185
Reimbursable expenses 403 412
Total cost of revenue 7,511 6,926
Gross profit 7,420 6,086
Operating expenses:
Sales and marketing 3,592 2,611
General and administration 1,369 1,427
Research and development, net of tax credits 2,252 1,574
Total operating expenses 7,213 5,612
Profit from operations 207 474
Net finance costs 40 56
Profit before income taxes 167 418
Income taxes 98 75
Profit attributable to the owners of the Company$69 $343
Other comprehensive loss:
Effective portion of changes in fair value on designated revenue hedges (583) (68)
Comprehensive (loss) income attributable to the owners of the Company$(514)$275
Basic and diluted earnings per common share$0.01 $0.03
TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Thee-month periods ended July 31, 2015 and 2014
(in thousands of Canadian dollars)
Three Months Three Months
Ended Ended
July 31, July 31,
2015 2014
Cash flows from (used in) operating activities:
Profit for the period$69 $343
Adjustments for:
Depreciation of property and equipment 187 183
Depreciation of deferred development costs 337 292
Depreciation of other intangible assets 118 82
Gain on disposal of property and equipment (12) -
Net finance costs 40 56
Unrealized foreign exchange and others 340 (108)
Federal non-refundable research and development tax credits (75) (75)
Income taxes 75 75
Operating activities excluding changes in non-cash working capital items related to operations 1,079 848
Accounts receivable 814 (326)
Work in progress (460) 621
Other accounts receivable (286) (269)
Tax credits 2,000 (559)
Inventory 21 53
Prepaid expenses (225) (230)
Accounts payable and accrued liabilities (1,859) (577)
Deferred revenue 957 725
Changes in non-cash working capital items related to operations 962 (562)
Net cash from operating activities 2,041 286
Cash flows used in financing activities:
Repayment of bank loans - (140)
Repayment of long-term debt (367) (262)
Purchase of share options for cancellation - (7)
Interest paid (40) (37)
Net cash used in financing activities (407) (446)
Cash flows (used in) from investing activities:
Restricted cash equivalents - 40
Interest received 18 9
Acquisitions of property and equipment (150) (46)
Proceeds on disposal of property and equipment 12 -
Acquisitions of other intangible assets (34) (24)
Deferred development costs (399) (393)
Receivables from TECSYS Latin America Inc. - 1
Business combination, net of cash and cash equivalents acquired - (2,949)
Net cash used in investing activities (553) (3,362)
Net increase (decrease) in cash and cash equivalents during the period 1,081 (3,522)
Cash and cash equivalents - beginning of period 10,815 8,839
Cash and cash equivalents - end of period$11,896 $5,317
TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Three-month periods ended July 31, 2015 and 2014
(in thousands of Canadian dollars, except number of shares)
Share capitalContributedAccumulated Retained Total
NumberAmountsurplusother comprehensive earnings
income (loss)
Balance, April 30, 201512,315,326$ 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 for the period---(583)69 (514)
Dividends to equity owners---- (308)(308)
Total transactions with owners of the Company---- (308)(308)
Balance, July 31, 201512,315,326$ 8,349$ 9,577$ (488)$ 5,102 $ 22,540
Balance, April 30, 201411,524,421$ 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.15,625100-- - 100
Dividends to equity owners---- (260)(260)
Total transactions with owners of the Company15,625100-- (260)(160)
Balance, July 31, 201411,540,046$ 2,253$ 9,577$ (68)$ 4,947 $ 16,709

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