TECSYS Inc.
TSX : TCS

TECSYS Inc.

February 26, 2015 12:40 ET

TECSYS Reports Record Revenue in the Third Quarter of Fiscal 2015

MONTREAL, QUEBEC--(Marketwired - Feb. 26, 2015) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the third quarter of fiscal year 2015, ended January 31, 2015.

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

Third Quarter Highlights:

  • Revenue grew sequentially for the sixth consecutive quarter reaching a new record.
  • Revenue grew 26% to $15.0M in Q3, 2015 compared to $11.9M in Q3, 2014.
  • EBITDA reached $1.3M, representing 22% growth in Q3, 2015 compared to $1.1M in Q3, 2014.
  • Proprietary products revenue grew 145% to $3.3M on strong demand from the healthcare market and the Company's newly acquired Logi-D point-of-use products.
  • Services revenue improved by 6% to $8.4M, compared to $7.9M in Q3 2014.
  • Profit from operations was $630K in Q3, 2015, compared to $589K in Q3, 2014. Before acquisition related amortization costs, profit from operations was $693K in Q3, 2015 compared to $598K in Q3, 2014.
  • Recurring revenue on an annualized basis grew to $21.4M, a 25% improvement compared to the end of Q3, 2014, representing 40% of the last 12 months trailing revenue.
  • Total contract bookings in the third quarter totaled $12.0M, compared to $4.1M in the third quarter of fiscal 2014.
  • Backlog grew to $40.8M at the end of Q3, 2015 compared to $27.4M at the end of Q3, 2014.
  • Cash and cash equivalents totaled $2.4M at the end of Q3, 2015 compared to $8.8M at the end of Q4, 2014.
  • Signed an additional Hospital Network (IDN) in the United States.
  • Go-lives at 27 customers' sites, most notably: a significant hospital network in Florida, two heavy equipment dealers in the U.S., a third-party logistics provider in Canada and 11 hospitals with Logi-D products.

"Demand for our innovative product offering remains strong, which resulted in record quarterly revenue and contract bookings," said Peter Brereton, President and CEO of TECSYS Inc. "We are strategically investing to strengthen our sales team, increase deployment efficiency and enhance our customer experience. We added another hospital network to our customer base and signed a significant agreement with an existing hospital client to expand into the OR. We are confident we are taking the appropriate steps to continue to see strong growth."

Highlights of the First Nine Months

  • Revenue for the first nine months of fiscal 2015 was $41.5M, up 22% from $34.1M in the first nine months of last fiscal year.
  • EBITDA increased to $3.4M, representing 22% growth in the first nine months of fiscal 2015 compared to $2.8M for the same period of fiscal 2014.
  • Profit from operations for the first nine months of fiscal 2015 was $1.6M compared to $1.5M in the same period of fiscal 2014. Before acquisition related expenses and amortizations, profit from operations increased to $2.0M in the first nine months of FY 2015 from $1.5M in first nine months of FY 2014, a 30% increase.
  • Net profit for the first nine months of fiscal 2015 was $1.2M, or $0.11 per share, compared to $1.2M, or $0.10 per share, for the same period of the prior fiscal year. Before acquisition related expenses and amortizations, net profit was $1.5 M or $0.13 per share.
  • Total contract bookings for the first nine months of fiscal 2015 totaled $31.0M, which includes the addition of five new IDN's. This compares to $14.9M for the first nine months of fiscal 2014.

TECSYS also announced that the Company's Board of Directors has declared a quarterly dividend of $0.0225 per share, to be paid on April 9, 2015 to shareholders of record at the close of business on March 19, 2015.

Third Quarter FY2015 Results Conference Call

Date: February 26, 2015
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: 21762575) or 416-626-4100 (access code: 21762575).

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. 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 January 31, 2015 and April 30, 2014
(in thousands of Canadian dollars)
January 31, April 30,
2015 2014
Assets
Current assets
Cash and cash equivalents$2,423 $8,839
Accounts receivable 12,973 9,076
Work in progress 1,720 524
Other accounts receivable 280 46
Tax credits 4,788 2,704
Inventory 924 293
Prepaid expenses 1,186 1,037
Total current assets 24,294 22,519
Non-current assets
Restricted cash equivalents 40 80
Tax credits 1,575 1,350
Property and equipment 2,483 2,627
Deferred development costs 4,273 4,088
Other intangible assets 2,183 508
Goodwill 3,594 2,239
Deferred tax assets 489 714
Total non-current assets 14,637 11,606
Total assets$38,931 $34,125
Liabilities
Current liabilities
Accounts payable and accrued liabilities$9,878 $5,406
Current portion of long-term debt 1,068 1,000
Deferred revenue 9,156 8,326
Total current liabilities 20,102 14,732
Non-current liabilities
Long-term debt 1,990 2,500
Other non-current liabilities 351 299
Total non-current liabilities 2,341 2,799
Total liabilities 22,443 17,531
Equity
Share capital 2,253 2,153
Contributed surplus 9,577 9,577
Retained earnings 5,305 4,864
Accumulated other comprehensive loss (647) -
Total equity attributable to the owners of the Company 16,488 16,594
Total liabilities and equity$38,931 $34,125
TECSYS Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three and nine-month periods ended January 31, 2015 and 2014
(in thousands of Canadian dollars, except per share data)






Three Months
Ended
January 31,
2015






Three Months
Ended
January 31,
2014



Nine Months
Ended
January 31,
2015






Nine Months
Ended
January 31,
2014
Revenue:
Proprietary products$3,336 $1,359$8,641 $5,332
Third-party hardware and software products 2,798 2,140 6,303 5,327
Services 8,415 7,921 25,254 22,369
Reimbursable expenses 409 429 1,320 1,079
Total revenue 14,958 11,849 41,518 34,107
Cost of revenue:
Products 2,011 1,466 4,633 3,761
Services 5,468 4,943 15,791 14,573
Reimbursable expenses 409 429 1,320 1,079
Total cost of revenue 7,888 6,838 21,744 19,413
Gross profit 7,070 5,011 19,774 14,694
Operating expenses:
Sales and marketing 3,230 2,100 8,776 6,349
General and administration 1,340 1,006 4,288 2,970
Research and development, net of tax credits 1,870 1,316 5,074 3,867
Total operating expenses 6,440 4,422 18,138 13,186
Profit from operations 630 589 1,636 1,508
Net finance costs 28 47 106 203
Profit before income taxes 602 542 1,530 1,305
Income taxes 135 75 310 150
Profit attributable to the owners of the Company$467 $467$1,220 $1,155
Other comprehensive loss:
Effective portion of changes in fair value on designated revenue hedges (460) - (647) -
Comprehensive income attributable to the owners of the Company$7 $467$573 $1,155
Basic and diluted earnings per common share$0.04 $0.04$0.11 $0.10
TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Nine-month periods ended January 31, 2015 and 2014
(in thousands of Canadian dollars)
Nine Months
Ended
January 31,
2015
Nine Months
Ended
January 31,
2014
Cash flows from (used in) operating activities:
Profit for the period$1,220 $1,155
Adjustments for:
Depreciation of property and equipment 557 552
Depreciation of deferred development costs 962 741
Depreciation of other intangible assets 316 124
Net finance costs 106 203
Unrealized foreign exchange losses, realized foreign exchange gains and other 936 423
Federal non-refundable research and development tax credits (225) (225)
Income taxes 225 150
Operating activities excluding changes in non-cash working capital items related to operations
4,097

3,123
Accounts receivable (3,085) (1,347)
Work in progress (792) 953
Other accounts receivable (236) (29)
Tax credits (1,874) (9)
Inventory (127) 93
Prepaid expenses (163) (1)
Accounts payable and accrued liabilities 1,733 299
Deferred revenue 293 420
Changes in non-cash working capital items related to operations (4,251) 379
Net cash (used in) from operating activities (154) 3,502
Cash flows (used in) from financing activities:
Repayment of bank loans (140) -
Repayment of loan to related party - (12)
Repayment of long-term debt (795) (750)
Long-term debt 50 -
Issuance of common shares - 40
Purchase of common shares for cancellation and related fees - (11)
Purchase of share options for cancellation (13) (15)
Payment of dividends (779) (402)
Interest paid (99) (127)
Net cash used in financing activities (1,776) (1,277)
Cash flows (used in) from investing activities:
Restricted cash equivalents 40 40
Interest received 18 31
Acquisitions of property and equipment (219) (360)
Acquisitions of other intangible assets (255) (125)
Deferred development costs (1,147) (1,318)
Current and non-current receivables from TECSYS Latin America Inc. 26 55
Business combination, net of cash and cash equivalents acquired (2,949) -
Net cash used in investing activities (4,486) (1,677)
Net (decrease) increase in cash and cash equivalents during the period (6,416) 548
Cash and cash equivalents - beginning of period 8,839 5,348
Cash and cash equivalents - end of period$2,423 $5,896
TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Nine-month periods ended January 31, 2015 and 2014
(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, 201411,524,421$2,153$9,577 $- $4,864 $16,594
Profit for the period- - - - 1,220 1,220
Other comprehensive loss for the period:
Effective portion of changes in fair value on designated revenue hedges- - - (647) - (647)
Total comprehensive income for the period- - - (647) 1,220 573
Common shares issued related to purchase of Logi D Holding Inc.15,625 100 - - - 100
Dividends to equity owners- - - - (779) (779)
Total transactions with owners of the Company15,625 100 - - (779) (679)
Balance, January 31, 201511,540,046$2,253$9,577 $(647)$5,305 $16,488
Balance, April 30, 201311,449,421$1,748$9,588 $- $3,930 $15,266
Profit and comprehensive income for the period- - - - 1,155 1,155
Total comprehensive income for the period- - - - 1,155 1,155
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, January 31, 201411,474,421$1,852$9,577 $- $4,683 $16,112

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