Record breaking contract bookings of $16.2 million, highest in Company history
MONTREAL, Nov. 29, 2018 (GLOBE NEWSWIRE) — TECSYS Inc. (TSX: TCS) an industry-leading supply chain management software company, today announced its results for the second quarter of fiscal year 2019, ended October 31, 2018. The unaudited interim financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). All dollar amounts are expressed in Canadian dollars unless otherwise indicated.
Second Quarter Highlights:
- Total revenue was $18.2 million, in line with $18.1 million for Q2 2018.
- Proprietary products revenue increased 50% to $2.5 million from $1.6 million in Q2 2018.
- Cloud, maintenance and subscription revenue was $6.8 million, a 6% increase from $6.4 million in Q2 2018.
- Professional services revenue was $6.9 million compared with $7.9 million in Q2 2018 which included $1.0 million of deferred professional services revenue due to termination of a contract and its associated future obligations.
- Total gross profit margin was 52%, even with 52% in Q2 2018.
- Operating expenses were $8.7 million, compared to $7.8 million for Q2 2018.
- Profit from operations was $0.8 million compared to $1.6 million for the same period in fiscal 2018.
- EBITDA was $1.4 million, compared to $2.2 million for Q2 2018.
- Total contract value bookings amounted to $16.2 million, up 41% compared to $11.5 million for the same period in fiscal 2018.
- Backlog grew to $51.7 million, compared to $42.4 million at the end of Q2 2018.
- Cash and cash equivalents, as well as redeemable short-term and long-term investments, totaled $21.7 million at the end of Q2 fiscal 2019, compared to $23.5 million at the end of Q4 2018.
“We have achieved record quarterly bookings driven by healthcare base accounts which grew 196% YoY,” said Peter Brereton, President and CEO of Tecsys Inc. “We are off to a good start with our recent acquisition, OrderDynamics. The OrderDynamics platform processed $40M worth of orders during black Friday week, an impressive 144% increase over last year. Our pipeline remains strong and we will focus on capitalizing on our strong market position by growing our sales team and investing in marketing as we look to the second half of the year.”
In thousands of dollars except per share amounts:
| Results from Operations | Q2 2019 | Q2 2018 | 6 months ended Oct. 31, 2018 |
6 months ended Oct. 31, 2017 |
Trailing 12 months ended Oct. 31, 2018 |
Trailing 12 months ended Oct. 31, 2017 |
||||||
| Total Revenue | $18,184 | $18,072 | $34,466 | $34,583 | $70,602 | $70,415 | ||||||
| Gross Margin | $9,510 | $9,438 | $17,373 | $17,190 | $34,779 | $35,489 | ||||||
| Gross Margin % | 52 | % | 52 | % | 50 | % | 50 | % | 49 | % | 50 | % |
| Operating Expenses | $8,686 | $7,843 | $16,368 | $15,530 | $31,459 | $26,441 | * | |||||
| Op. Ex. As % of Revenue | 48 | % | 43 | % | 47 | % | 45 | % | 45 | % | 38 | % |
| Profit from Operations | $824 | $1,595 | $726 | $1,660 | $3,320 | $9,048 | * | |||||
| EBITDA | $1,422 | $2,184 | 1,958 | $2,871 | 5,577 | $11,486 | * | |||||
| EPS | $0.05 | $0.10 | $0.05 | $0.11 | $0.24 | $0.57 | * | |||||
| Contract Bookings | $16,226 | $11,453 | $26,865 | $21,345 | $53,620 | $47,037 | ||||||
| Backlog | $51,657 | $42,350 | ||||||||||
* Recognized $4.6 million of Canadian federal non-refundable R&D tax credit
“The comparison of FY19 Q2 Operating Profit and EBITDA to prior year results is challenging given the impact of (a) $1.0 million of deferred professional services revenue recognized in FY18 Q2 resulting from the contract termination in that prior period and (b) costs related to the acquisition of OrderDynamics and stock-based compensation expenses of $0.2 million recognized in the current period. That said, we are pleased with FY19 Q2 profitability and will continue to invest in sales and marketing and research and development to take advantage of market opportunity” said Mark J. Bentler, Chief Financial Officer.
First Half Fiscal 2019 Highlights:
- Total revenue was $34.5 million, in line with $34.6 million for H2 2018.
- Proprietary products revenue increased 31% to $3.8 million, compared to $2.9 million for H2 2018.
- Cloud, maintenance and subscription revenue was $13.8 million, compared with $13.5 million for Q2 2018.
- Professional services revenue was $13.0 million, compared with $14.0 million in H2 2018.
- Total gross profit margin was even with H2 2018 at 50%.
- Operating expenses were $16.4 million, compared to $15.5 million for Q2 2018.
- Profit from operations was $0.7 million, compared to $1.7 million for the same period in fiscal 2018.
- Profit was $0.6 million or $0.05 per share compared with $1.4 million or $0.11 per share in H2 2018.
- EBITDA was $2.0 million, compared to $2.9 million for H2 2018.
- Total contract value bookings increased 26% to $26.9 million, compared to $21.3 million for H2 2018.
The Company has increased its dividend to $0.055 per share to be paid on January 11, 2019 to shareholders of record at the close of business on December 21, 2018.
Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be “eligible” dividends.
Second Quarter 2019 Results Conference Call
Date: November 30, 2018
Time: 8:30 am EST
Phone number: (416) 981-9070 or (888) 224-3715
The call can be replayed until December 7th, 2018 by calling (416) 626-4100 or (800) 558 5253 (access code: 21900462).
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, supply management at point-of-use, as well as complete financial management and analytics solutions. 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 need 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.
Contact
Solutions and General info: [email protected]
Investor Relations: [email protected], (514) 866-5800 ext. 4120
Media Relations: [email protected]
By phone: (514) 866-0001 or (800) 922-8649
Forward Looking Statements
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, 2018. 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. 2018. 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 | ||||||||
| As at October 31, 2018 and April 30, 2018 | ||||||||
| (in thousands of Canadian dollars) | ||||||||
| October 31, | April 30, | |||||||
| 2018 | 2018 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 11,708 | $ | 13,496 | ||||
| Short-term investment | 10,007 | – | ||||||
| Accounts receivable | 13,485 | 13,939 | ||||||
| Work in progress | 900 | 617 | ||||||
| Other receivables | 430 | 535 | ||||||
| Tax credits | 4,964 | 3,391 | ||||||
| Inventory | 878 | 1,145 | ||||||
| Prepaid expenses | 2,664 | 1,829 | ||||||
| Total current assets | 45,036 | 34,952 | ||||||
| Non-current assets | ||||||||
| Long-term investments | – | 10,007 | ||||||
| Other long-term receivables | 208 | 215 | ||||||
| Tax credits | 4,978 | 4,840 | ||||||
| Property and equipment | 2,759 | 3,091 | ||||||
| Deferred development costs | 1,357 | 1,850 | ||||||
| Other intangible assets | 1,164 | 1,342 | ||||||
| Goodwill | 3,596 | 3,596 | ||||||
| Deferred tax assets | 3,595 | 3,524 | ||||||
| Total non-current assets | 17,657 | 28,465 | ||||||
| Total assets | $ | 62,693 | $ | 63,417 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 8,269 | $ | 9,087 | ||||
| Current portion of long-term debt | 47 | 47 | ||||||
| Deferred revenue | 11,894 | 10,774 | ||||||
| Total current liabilities | 20,210 | 19,908 | ||||||
| Non-current liabilities | ||||||||
| Long-term debt | 51 | 74 | ||||||
| Other non-current liabilities | 294 | 300 | ||||||
| Total non-current liabilities | 345 | 374 | ||||||
| Total liabilities | 20,555 | 20,282 | ||||||
| Contingencies and commitments | ||||||||
| Equity | ||||||||
| Share capital | 19,144 | 19,144 | ||||||
| Contributed surplus | 9,694 | 9,577 | ||||||
| Retained earnings | 13,407 | 14,527 | ||||||
| Accumulated other comprehensive income (loss) | (107 | ) | (113 | ) | ||||
| Total equity attributable to the owners of the Company | 42,138 | 43,135 | ||||||
| Total liabilities and equity | $ | 62,693 | $ | 63,417 | ||||
| See accompanying notes to the unaudited condensed interim consolidated financial statements. | ||||||||
| TECSYS Inc. | |||||||||||||||||
| Condensed Interim Consolidated Statements of Income and Comprehensive Income | |||||||||||||||||
| Three and six-month periods ended October 31, 2018 and 2017 | |||||||||||||||||
| (in thousands of Canadian dollars, except per share data) | |||||||||||||||||
| Six Months | Six Months | Three Months | Three Months | ||||||||||||||
| Ended | Ended | Ended | Ended | ||||||||||||||
| October 31, | October 31, | October, | October, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Revenue: | |||||||||||||||||
| Proprietary products | $ | 3,786 | $ | 2,893 | $ | 2,461 | $ | 1,645 | |||||||||
| Third-party products | 2,812 | 2,969 | 1,356 | 1,447 | |||||||||||||
| Cloud, maintenance and subscription | 13,827 | 13,536 | 6,836 | 6,446 | |||||||||||||
| Professional services | 12,998 | 14,028 | 6,931 | 7,884 | |||||||||||||
| Reimbursable expenses | 1,043 | 1,157 | 600 | 650 | |||||||||||||
| Total revenue | 34,466 | 34,583 | 18,184 | 18,072 | |||||||||||||
| Cost of revenue: | |||||||||||||||||
| Products | 2,644 | 2,732 | 1,369 | 1,372 | |||||||||||||
| Services | 13,685 | 13,504 | 6,705 | 6,612 | |||||||||||||
| Reimbursable expenses | 1,043 | 1,157 | 600 | 650 | |||||||||||||
| Total cost of revenue | 17,372 | 17,393 | 8,674 | 8,634 | |||||||||||||
| Gross profit | 17,094 | 17,190 | 9,510 | 9,438 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Sales and marketing | 7,534 | 7,484 | 4,100 | 3,851 | |||||||||||||
| General and administration | 3,511 | 3,187 | 1,931 | 1,611 | |||||||||||||
| Research and development, net of tax credits | 5,323 | 4,859 | 2,655 | 2,381 | |||||||||||||
| Total operating expenses | 16,368 | 15,530 | 8,686 | 7,843 | |||||||||||||
| Profit from operations | 726 | 1,660 | 824 | 1,595 | |||||||||||||
| Net finance (income) | (141 | ) | (67 | ) | (49 | ) | (33 | ) | |||||||||
| Profit before income taxes | 867 | 1,727 | 873 | 1,628 | |||||||||||||
| Income taxes expense | 258 | 302 | 277 | 272 | |||||||||||||
| Profit attributable to the owners of the Company | $ | 609 | $ | 1,425 | $ | 596 | $ | 1,356 | |||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | 6 | 140 | (44 | ) | (655 | ) | |||||||||||
| Comprehensive income attributable to the owners of the Company | $ | 615 | $ | 1,565 | $ | 552 | $ | 701 | |||||||||
| Basic and diluted earnings per common share | $ | 0.05 | $ | 0.11 | $ | 0.05 | $ | 0.10 | |||||||||
| See accompanying notes to the unaudited condensed interim consolidated financial statements. | |||||||||||||||||
| TECSYS Inc. | |||||||||||||
| Condensed Interim Consolidated Statements of Cash Flows | |||||||||||||
| Three and six-month periods ended October 31, 2018 and 2017 | |||||||||||||
| (in thousands of Canadian dollars) | |||||||||||||
| Six Months | Six Months | Three Months | Three Months | ||||||||||
| Ended | Ended | Ended | Ended | ||||||||||
| October 31, | October 31, | October 31, | October 31, | ||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Cash flows from (used in) operating activities: | |||||||||||||
| Profit for the year | $ | 609 | $ | 1,356 | $ | 596 | $ | 1,356 | |||||
| Adjustments for: | |||||||||||||
| Depreciation of property and equipment | 435 | 202 | 212 | 202 | |||||||||
| Depreciation of deferred development costs | 558 | 297 | 280 | 297 | |||||||||
| Depreciation of other intangible assets | 243 | 117 | 121 | 117 | |||||||||
| Net finance (income) | (141 | ) | (33 | ) | (49 | ) | (33 | ) | |||||
| Unrealized foreign exchange and other | 29 | 266 | (113 | ) | 266 | ||||||||
| Non-refundable tax credit | (475 | ) | (179 | ) | (248 | ) | (179 | ) | |||||
| Stock-based compensation | 117 | – | 117 | – | |||||||||
| Income taxes | 265 | 210 | 265 | 210 | |||||||||
| Operating activities excluding changes in non-cash working capital items related to operations | 1,640 | 2,236 | 1,181 | 2,236 | |||||||||
| Accounts receivable | 454 | 391 | (915 | ) | 391 | ||||||||
| Work in progress | (283 | ) | 170 | 374 | 170 | ||||||||
| Other receivable | 78 | 27 | 262 | 27 | |||||||||
| Tax credits | (1,417 | ) | (641 | ) | (740 | ) | (641 | ) | |||||
| Inventory | 267 | 158 | 44 | 158 | |||||||||
| Prepaid expenses | (429 | ) | 164 | (18 | ) | 164 | |||||||
| Accounts payable and accrued liabilities | (818 | ) | 702 | 35 | 702 | ||||||||
| Deferred revenue | 139 | (2,601 | ) | (1,518 | ) | (2,601 | ) | ||||||
| Changes in non-cash working capital items related to operations | (2,009 | ) | (1,630 | ) | (2,476 | ) | (1,630 | ) | |||||
| Net cash (used in) from operating activities | (369 | ) | 606 | (1,295 | ) | 606 | |||||||
| Cash flows (used in) financing activities: | |||||||||||||
| Repayment of long-term debt | (23 | ) | (18 | ) | (11 | ) | (18 | ) | |||||
| Issuance of common shares | – | (1 | ) | – | (1 | ) | |||||||
| Payment of dividends | (1,308 | ) | (1,178 | ) | (1,308 | ) | (1,178 | ) | |||||
| Interest paid | – | – | – | – | |||||||||
| Net cash (used in) from financing activities | (1,331 | ) | (1,197 | ) | (1,319 | ) | (1,197 | ) | |||||
| Cash flows (used in) investing activities: | |||||||||||||
| Long-term investments | – | (10,007 | ) | – | (10,007 | ) | |||||||
| Interest received | 145 | 60 | 64 | 60 | |||||||||
| Acquisitions of property and equipment | (103 | ) | (165 | ) | (66 | ) | (165 | ) | |||||
| Acquisitions of other intangible assets | (65 | ) | (85 | ) | (48 | ) | (85 | ) | |||||
| Deferred development costs | (65 | ) | – | (10 | ) | – | |||||||
| Net cash (used in) investing activities | (88 | ) | (10,197 | ) | (60 | ) | (10,197 | ) | |||||
| Net decrease in cash and cash equivalents during the year | (2,674 | ) | (10,788 | ) | (2,674 | ) | (10,788 | ) | |||||
| Cash and cash equivalents – beginning of year | 14,382 | 23,246 | 14,382 | 23,246 | |||||||||
| Cash and cash equivalents – end of year | 11,708 | 12,458 | $ | 11,708 | $ | 12,458 | |||||||
| See accompanying notes to the consolidated financial statements. | |||||||||||||
| TECSYS Inc. | ||||||||||||||||
| Condensed Interim Consolidated Statements of Changes in Equity | ||||||||||||||||
| Six-Month periods ended October 31, 2018 and 2017 | ||||||||||||||||
| (in thousands of Canadian dollars, except number of shares) | ||||||||||||||||
| Share capital | Contributed | Accumulated | Retained | Total | ||||||||||||
| Number | Amount | surplus | other comprehensive | earnings | ||||||||||||
| income (loss) | ||||||||||||||||
| Balance, April 30, 2018 | 13,082,376 | $ | 19,144 | $ | 9,577 | $ | (113 | ) | $ | 14,527 | $ | 43,135 | ||||
| Adjustment on initial application of IFRS 15 | – | – | – | – | (421 | ) | (421 | ) | ||||||||
| 13,082,376 | 19,144 | 9,577 | (113 | ) | 14,106 | 42,714 | ||||||||||
| Profit for the year | – | – | – | – | 609 | 609 | ||||||||||
| Other comprehensive income for the year: | ||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | – | – | – | 6 | – | 6 | ||||||||||
| Total comprehensive income for the year | – | – | – | 6 | 609 | 615 | ||||||||||
| Dividends to equity owners | (1,308 | ) | (1,308 | ) | ||||||||||||
| Stock based compensation | – | – | 117 | – | – | 117 | ||||||||||
| Total transactions with owners of the Company | – | – | 117 | – | (1,308 | ) | (1,191 | ) | ||||||||
| Balance, October 31, 2018 | 13,082,376 | $ | 19,144 | $ | 9,694 | $ | (107 | ) | $ | 13,407 | $ | 42,138 | ||||
| Balance, April 30, 2017 | 12,315,326 | $ | 8,349 | $ | 9,577 | $ | (279 | ) | $ | 13,064 | $ | 30,711 | ||||
| Profit for the year | – | – | – | – | 1,425 | 1,425 | ||||||||||
| Other comprehensive loss for the year: | ||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | – | – | – | 140 | – | 140 | ||||||||||
| Total comprehensive income (loss) for the year | – | – | – | 140 | 1,425 | 1,565 | ||||||||||
| Common shares issued under bought deal financing, net of taxes of $306 | 767,050 | 10,454 | – | – | – | 10,454 | ||||||||||
| Dividends to equity owners | – | – | – | – | (1,178 | ) | (1,178 | ) | ||||||||
| Total transactions with owners of the Company | 767,050 | 10,454 | – | – | (1,178 | ) | 9,276 | |||||||||
| Balance, October 31, 2017 | 13,082,376 | $ | 18,803 | $ | 9,577 | $ | (139 | ) | $ | 13,311 | $ | 41,552 | ||||
| See accompanying notes to the consolidated financial statements. | ||||||||||||||||
