TECSYS Inc.
TSX : TCS

TECSYS Inc.

November 26, 2013 12:45 ET

TECSYS Reports Record Quarter; 21% Growth in License Fees

MONTREAL, QUEBEC--(Marketwired - Nov. 26, 2013) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, announced today its results for the second quarter of fiscal year 2014, ended October 31st, 2013. All dollar amounts are expressed in Canadian currency and are prepared in accordance with the International Financial Reporting Standards (IFRS) and are unaudited.

Overall highlights for the Second Quarter:

  • Proprietary license revenue increased by 21% compared to last year.
  • Services continued to achieve progressive growth, 5% in Q2, 2014 compared to last year, with a notable return on the investments made in infrastructure.
  • Signed forty-seven new contracts; forty with existing customers and seven with new clients. Major highlights of the quarter included winning the business of a leading health system in the U.S., and expanding business with a fortune 100 healthcare provider into their Canadian operations.
  • Deployed supply chain execution solutions at twelve customers in Canada and the United States, eight of which are major customers.
  • Hosted the Company's user conference with the highest customer attendance to date, and introduced new products that have attracted significant interest for upgrades.

Financial Highlights for the Second Quarter:

  • Revenue increased by 8% to $11.7M in Q2, 2014, the highest in a decade, compared to $10.7M in Q2, 2013.
  • Profit from operations increased to $748K in Q2, 2014 compared to $428K in Q2, 2013.
  • EBITDA for Q2, 2014 increased to $1,181K compared to $613K for Q2 of last fiscal year, a 93% increase.
  • Net profit for Q2, 2014 increased substantially to $605K or $0.05 per share, compared to $122K or $0.01 per share for Q2 of last fiscal year.
  • Annualized recurring revenue increased to $16.3M, the highest to date, at the end of Q2, 2014, compared to $15.5M at the end of Q2, 2013. Recurring revenue for Q2, 2014 represented 37% of revenue for the last twelve months.
  • Backlog at the end of Q2, 2014, reached a historical high of $27.5M compared to $25.5M at the end of Q2, 2013.
  • Cash generated from operating activities prior to changes in non-cash working capital amounted to $1,164K in Q2, 2014 compared to $934K in Q2, 2013.
  • Cash and cash equivalents amounted to $4.2M at the end of Q2, 2014 compared to $6.8M at the end of Q1, 2014.

Peter Brereton, President and CEO of TECSYS Inc., commented on the results: "The quarter marked a new set of highs in recent years for revenue, backlog and recurring revenue, and a solid performance in all of our financial metrics. Overall total bookings increased by 39% compared to last year's 2nd quarter, and we continued to improve services revenue and margins by leveraging our expanded infrastructure and delivering a significant number of go lives to our major account customer base. Our leadership in health systems was further reinforced; we won the business of a major health system, the fifth customer in as many quarters in this market. We are pleased with these achievements and with the opportunities moving forward."

First Half Financial Summary:

  • Revenue for the first half, 2014 remained at $22.3M compared to the first half of last fiscal year.
  • Q1, 2013 included a major customer base contract which contributed significantly to the Company's 28% revenue growth compared to Q1, 2012 as well as making a noteworthy contribution to product revenue, profit from operations and net earnings.
  • Profit from operations for the first half, 2014 was $919K compared to $1,476K for the same period in last year.
  • EBITDA for the first half, 2014 was $1,760K compared to $2,246K for the first half of 2013.
  • Net profit for the first half of fiscal, 2014 was $688K or $0.06 per share compared to $1,247K or $0.11 per share for the same period of the prior fiscal year.

TECSYS' Second Quarter 2014 Results Conference Call:

Date: November 26, 2013
Time: 4:30 p.m. EST
Phone number: 800-732-5617 or 416-620-9188
The call can be replayed by calling 800-558-5253 (access code: 21689032) or 416-626-4100 (access code: 21689032).

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, 2013. 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. 2013. 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 October 31, 2013 and April 30, 2013
(in thousands of Canadian dollars)
October 31, April 30,
2013 2013
Assets
Current assets
Cash and cash equivalents$4,207$5,348
Accounts receivable 9,839 7,959
Work in progress 1,035 1,291
Other accounts receivable 217 132
Tax credits 4,089 4,675
Inventory 369 545
Prepaid expenses 942 1,153
Total current assets 20,698 21,103
Non-current assets
Restricted cash equivalents and other investments 80 120
Non-current receivables 14 39
Tax credits 1,369 1,219
Property and equipment 2,821 2,928
Deferred development costs 3,747 3,317
Other intangible assets 572 544
Goodwill 2,239 2,239
Deferred tax assets 637 710
Total non-current assets 11,479 11,116
Total assets$32,177$32,219
Liabilities
Current liabilities
Accounts payable and accrued liabilities$5,273$4,997
Loans payable 61 70
Term loan 1,000 1,000
Deferred revenue 6,935 7,161
Total current liabilities 13,269 13,228
Non-current liabilities
Term loan 3,000 3,500
Other non-current liabilities 263 225
Total non-current liabilities 3,263 3,725
Total liabilities 16,532 16,953
Equity
Share capital 1,852 1,748
Contributed surplus 9,577 9,588
Retained earnings 4,216 3,930
Total equity attributable to the owners of the Company 15,645 15,266
Total liabilities and equity$32,177$32,219
TECSYS Inc.
Condensed Interim Consolidated Statements of Comprehensive Income
(Unaudited)
Three and six-month periods ended October 31, 2013 and 2012
(in thousands of Canadian dollars, except per share data)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2013 2012 2013 2012
Revenue:
Software products$2,507$2,069$3,973$5,352
Third-party hardware and software products 1,433 1,482 3,187 2,686
Services 7,345 6,989 14,448 13,669
Reimbursable expenses 371 208 650 551
Total revenue 11,656 10,748 22,258 22,258
Cost of revenue:
Products 1,036 1,099 2,295 2,027
Services 4,879 4,900 9,630 9,719
Reimbursable expenses 371 208 650 551
Total cost of revenue 6,286 6,207 12,575 12,297
Gross profit 5,370 4,541 9,683 9,961
Operating expenses:
Sales and marketing 2,306 1,718 4,249 3,636
General and administration 966 988 1,964 2,102
Research and development, net of tax credits 1,350 1,407 2,551 2,747
Total operating expenses 4,622 4,113 8,764 8,485
Profit from operations 748 428 919 1,476
Net finance costs 68 300 156 211
Profit before income taxes 680 128 763 1,265
Income taxes 75 6 75 18
Profit attributable to the owners of the Company and comprehensive income for the period$605$122$688$1,247
Basic and diluted earnings per common share$0.05$0.01$0.06$0.11
TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Six-month periods ended October 31, 2013 and 2012
(in thousands of Canadian dollars)
Six Months Six Months
Ended Ended
October 31, October 31,
2013 2012
Cash flows from (used in) operating activities:
Profit for the period$688 $1,247
Adjustments for:
Depreciation of property and equipment 365 502
Depreciation of deferred development costs 475 410
Depreciation of other intangible assets 95 76
Net finance costs 156 211
Realized foreign exchange gains and other 7 129
Federal non-refundable research and development tax credits (150) (150)
Income taxes 75 (19)
Operating activities excluding changes in non-cash working capital items related to operations 1,711 2,406
Accounts receivable (1,880) 766
Work in progress 256 (1,248)
Other accounts receivable (102) (85)
Tax credits 586 (1,223)
Inventory 176 11
Prepaid expenses 211 129
Accounts payable and accrued liabilities 282 (675)
Deferred revenue (226) (96)
Changes in non-cash working capital items related to operations (697) (2,421)
Net cash from (used in) operating activities 1,014 (15)
Cash flows (used in) from financing activities:
Repayment of loans (9) (6)
Term loan - 5,000
Repayment of term loan (500) -
Issuance of common shares 40 48
Purchase of common shares for cancellation and related fees (11) (462)
Purchase of share options for cancellation (7) (81)
Payment of dividends (402) (400)
Interest paid (87) (7)
Net cash (used in) from financing activities (976) 4,092
Cash flows (used in) from investing activities:
Restricted cash equivalents and other investments 40 40
Interest received 25 14
Acquisitions of property and equipment (258) (576)
Acquisitions of other intangible assets (123) (107)
Deferred development costs (905) (709)
Current and non-current receivables from TECSYS Latin America Inc. 42 31
Net cash used in investing activities (1,179) (1,307)
Net (decrease) increase in cash and cash equivalents during the period (1,141) 2,770
Cash and cash equivalents - beginning of period 5,348 5,217
Cash and cash equivalents - end of period$4,207 $7,987
TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Six-month periods ended October 31, 2013 and 2012
(in thousands of Canadian dollars, except number of shares)
Share capital
Number Amount Contributed
surplus
Retained
earnings
Total
Balance, April 30, 201311,449,421 $1,748 $9,588 $3,930 $15,266
Profit and comprehensive income for the period- - - 688 688
Total comprehensive income for the period- - - 688 688
Normal course issuer bid fees for repurchase of common shares- - (11) - (11)
Share options exercised25,000 40 - - 40
Fair value associated with options exercised- 64 - - 64
Dividends to equity owners- - - (402) (402)
Total transactions with owners of the Company25,000 104 (11) (402) (309)
Balance, October 31, 201311,474,421 $1,852 $9,577 $4,216 $15,645
Balance, April 30, 201211,603,271 $1,688 $10,023 $3,845 $15,556
Profit and comprehensive income for the period- - - 1,247 1,247
Total comprehensive income for the period- - - 1,247 1,247
Repurchase of common shares(187,300) (27) (435) - (462)
Share options exercised25,950 48 - - 48
Fair value associated with options exercised- 14 - - 14
Dividends to equity owners- - - (400) (400)
Total transactions with owners of the Company(161,350) 35 (435) (400) (800)
Balance, October 31, 201211,441,921 $1,723 $9,588 $4,692 $16,003

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