TECSYS Inc.
TSX : TCS

TECSYS Inc.

November 25, 2014 12:21 ET

TECSYS Reports Record Quarterly Revenue, Signs Largest IDN to Date

MONTREAL, QUEBEC--(Marketwired - Nov. 25, 2014) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the second quarter of fiscal year 2015, ended October 31, 2014.

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

Second Quarter Highlights:

  • Revenue grew 16% to $13.5M in Q2 2015 compared to $11.7M in Q2 2014.
  • EBITDA for Q2, 2015 was $1.2M, in line with the $1.2M recorded in Q2 2014.
  • Proprietary products revenue grew 29% to $3.2M on strong demand from the Company's newly acquired Logi-D point-of-use products.
  • Services revenue improved by 10% to $8.1M while services profit margin grew to 37% from 34% in Q2 2014.
  • Profit from operations was $532K in Q2 2015, compared to $748K in Q2 2014. Before acquisition related expenses and amortizations, profit from operations was $621K in Q2, 2015 compared to $748K in Q2, 2014.
  • Recurring revenue on an annualized basis grew to $19.4M, a 19% jump compared to the end of Q2 2014, representing 38% of the last twelve months trailing revenue.
  • Total contract bookings in the quarter totaled $9.3M, over 60% of which came from new and existing healthcare clients.
  • Backlog was $34.7M at the end of Q2 2015 compared to $27.5M at the end of Q2 2014.
  • Cash and cash equivalents totaled $5.1M at the end of Q2 2015 compared to $8.8M at the end of Q4 2014, of which $3.1M was used for the acquisition of Logi-D.
  • Signed one of the largest Hospital Networks (IDN) in the United States with 46 hospitals.
  • Go-lives at 21 customers' sites, most notably: two IDNs, one major service parts operation of a large imaging products manufacturer and a third-party logistics provider for med surg products.

"Signing one of North America's largest IDNs was a notable achievement for us this quarter, and demonstrates the growing acceptance of our solutions and recognition of its quick ROI," said Peter Brereton, President and CEO of TECSYS Inc. "We are now focused on integrating Logi-D's sales and marketing teams and have been actively introducing these new products to our existing and potential customers. Feedback has been positive and we continue to advance a number of opportunities which leverage our expanded product and client portfolio to accelerate growth."

First Half Highlights:

  • Revenue grew 19% to $26.6M in the first half of FY2015, compared to $22.3M in the first half of last fiscal year.
  • EBITDA for the first half of FY 2015 was $2.2M.compared to $1.8M in the first half of FY 2014. EBITDA in the first half of FY 2015 includes a one-time acquisition related expenses of $160K.
  • Profit from operations for the first six months of fiscal 2015 was $1M compared to $0.9M in the same period of fiscal 2014. Before acquisition related expenses and amortizations, profit from operations increased to $1.3M in the first half of FY 2015 from $0.9 in the first half of FY 2014, a 38% increase.
  • Net profit for the first half of fiscal 2015 was $753K or $0.07 per share compared to $688K or $0.06 per share for the same period of the prior fiscal year. Net profit for the first half of FY 2015 includes acquisition related expenses and amortization of $265K.
  • Total contract bookings for the first half of FY2015 totaled $19M, which includes the addition of four new IDNs.

TECSYS also announced that the Company's Board of Directors has declared a quarterly dividend of $0.0225 per share, to be paid on January 6, 2015 to shareholders of record at the close of business on December 16, 2014.

Second Quarter 2015 Results Conference Call

Date: November 25, 2014

Time: 4:30 pm EST

Phone number: 800-381-7839 or 416-981-9030

The call can be replayed by calling 800-558-5253 (access code: 21742734) or 416-626-4100 (access code: 21742734).

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 October 31, 2014 and April 30, 2014
(in thousands of Canadian dollars)
October 31, April 30,
2014 2014
Assets
Current assets
Cash and cash equivalents $ 5,134 $ 8,839
Accounts receivable 8,582 9,076
Work in progress 1,382 524
Other accounts receivable 168 46
Tax credits 4,198 2,704
Inventory 592 293
Prepaid expenses 1,020 1,037
Total current assets 21,076 22,519
Non-current assets
Restricted cash equivalents 40 80
Tax credits 1,500 1,350
Property and equipment 2,537 2,627
Deferred development costs 4,290 4,088
Other intangible assets 2,193 508
Goodwill 3,594 2,239
Deferred tax assets 564 714
Total non-current assets 14,718 11,606
Total assets $ 35,794 $ 34,125
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 6,738 $ 5,406
Current portion of long-term debt 1,079 1,000
Deferred revenue 8,685 8,326
Total current liabilities 16,502 14,732
Non-current liabilities
Long-term debt 2,195 2,500
Other non-current liabilities 356 299
Total non-current liabilities 2,551 2,799
Total liabilities 19,053 17,531
Equity
Share capital 2,253 2,153
Contributed surplus 9,577 9,577
Retained earnings 5,098 4,864
Accumulated other comprehensive loss (187 ) -
Total equity attributable to the owners of the Company 16,741 16,594
Total liabilities and equity $ 35,794 $ 34,125
TECSYS Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three and six-month periods ended October 31, 2014 and 2013
(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,
2014 2013 2014 2013
Revenue:
Proprietary products $ 3,226 $ 2,507 $ 5,305 $ 3,973
Third-party hardware and software products 1,727 1,433 3,505 3,187
Services 8,096 7,345 16,839 14,448
Reimbursable expenses 499 371 911 650
Total revenue 13,548 11,656 26,560 22,258
Cost of revenue:
Products 1,293 1,036 2,622 2,295
Services 5,138 4,879 10,323 9,630
Reimbursable expenses 499 371 911 650
Total cost of revenue 6,930 6,286 13,856 12,575
Gross profit 6,618 5,370 12,704 9,683
Operating expenses:
Sales and marketing 2,935 2,306 5,546 4,249
General and administration 1,521 966 2,948 1,964
Research and development, net of tax credits 1,630 1,350 3,204 2,551
Total operating expenses 6,086 4,622 11,698 8,764
Profit from operations 532 748 1,006 919
Net finance costs 22 68 78 156
Profit before income taxes 510 680 928 763
Income taxes 100 75 175 75
Profit attributable to the owners of the Company $ 410 $ 605 $ 753 $ 688
Other comprehensive loss:
Effective portion of changes in fair value on designated revenue hedges (119 ) - (187 ) -
Comprehensive income attributable to the owners of the Company $ 291 $ 605 $ 566 $ 688
Basic and diluted earnings per common share $ 0.04 $ 0.05 $ 0.07 $ 0.06
TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Six-month periods ended October 31, 2014 and 2013
(in thousands of Canadian dollars)
Six Months Six Months
Ended Ended
October 31, October 31,
2014 2013
Cash flows from (used in) operating activities:
Profit for the period $ 753 $ 688
Adjustments for:
Depreciation of property and equipment 385 365
Depreciation of deferred development costs 603 475
Depreciation of other intangible assets 187 95
Net finance costs 78 156
Unrealized foreign exchange losses, realized foreign exchange gains and other 100 7
Federal non-refundable research and development tax credits (150 ) (150 )
Income taxes 150 75
Operating activities excluding changes in non-cash workingcapital items related to operations
2,106

1,711
Accounts receivable 1,306 (1,880 )
Work in progress (454 ) 256
Other accounts receivable (125 ) (102 )
Tax credits (1,284 ) 586
Inventory 169 176
Prepaid expenses 39 211
Accounts payable and accrued liabilities (103 ) 282
Deferred revenue (178 ) (226 )
Changes in non-cash working capital items related to operations (630 ) (697 )
Net cash from operating activities 1,476 1,014
Cash flows (used in) from financing activities:
Repayment of bank loans (140 ) -
Repayment of loan to related party - (9 )
Repayment of long-term debt (529 ) (500 )
Issuance of common shares - 40
Purchase of common shares for cancellation and related fees - (11 )
Purchase of share options for cancellation (13 ) (7 )
Payment of dividends (519 ) (402 )
Interest paid (71 ) (87 )
Net cash used in financing activities (1,272 ) (976 )
Cash flows (used in) from investing activities:
Restricted cash equivalents 40 40
Interest received 14 25
Acquisitions of property and equipment (101 ) (258 )
Acquisitions of other intangible assets (136 ) (123 )
Deferred development costs (805 ) (905 )
Current and non-current receivables from TECSYS Latin America Inc. 28 42
Business combination, net of cash and cash equivalents acquired (2,949 ) -
Net cash used in investing activities (3,909 ) (1,179 )
Net decrease in cash and cash equivalents during the period (3,705 ) (1,141 )
Cash and cash equivalents - beginning of period 8,839 5,348
Cash and cash equivalents - end of period $ 5,134 $ 4,207
TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Six-month periods ended October 31, 2014 and 2013
(in thousands of Canadian dollars, except number of shares)
Accumulated
other
Share capital Contributed comprehensive Retained
Number Amount surplus loss earnings Total
Balance, April 30, 2014 11,524,421 $ 2,153 $ 9,577 $ - $ 4,864 $ 16,594
Profit for the period - - - - 753 753
Other comprehensive loss for the period:
Effective portion of changes in fair value on designated revenue hedges - - - (187 ) - (187 )
Total comprehensive income for the period - - - (187 ) 753 566
Common shares issued related to purchase of Logi D Holding Inc. 15,625 100 - - - 100
Dividends to equity owners - - - - (519 ) (519 )
Total transactions with owners of the Company 15,625 100 - - (519 ) (419 )
Balance, October 31, 2014 11,540,046 $ 2,253 $ 9,577 $ (187 ) $ 5,098 $ 16,741
Balance, April 30, 2013 11,449,421 $ 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 exercised 25,000 40 - - - 40
Fair value associated with options exercised - 64 - - - 64
Dividends to equity owners - - - - (402 ) (402 )
Total transactions with owners of the Company 25,000 104 (11 ) - (402 ) (309 )
Balance, October 31, 2013 11,474,421 $ 1,852 $ 9,577 $ - $ 4,216 $ 15,645

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