TECSYS Reports Financial Results for First Quarter of Fiscal 2017

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MONTREAL, QUEBEC–(Marketwired – Sept. 8, 2016) – TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the first quarter of fiscal year 2017, ended July 31, 2016. 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:

  • Total revenue for Q1 2017 increased to $16.1M, $1.2M or 8% higher, compared to $14.9M for Q1 2016.
  • Total gross margin percentage in Q1 2017 was 47% compared to 50% in Q1 2016.
  • Operating expenses for Q1 2017 increased to $7.4M, higher by $150K or 2%, compared to $7.2M for the same three-month period last fiscal year.
  • EBITDA of $814K in Q1 2017 compared to $831K in Q1 2016.
  • R&D capitalization was nil compared to $399K in Q1 2016.
  • Net profit of $128K, or $0.01 per share, in Q1 2017 compared to $69K, or $0.01 per share, for Q1 2016.
  • Total contract value bookings amounted to $6.0M in Q1 2017 in comparison to $6.7M for Q1 2016.
  • Cash and cash equivalents totaled $13.5M at the end of Q1 2017 compared to $9.7M at the end of Q4 2016.
Results from Operations Q1 2017 Q1 2016 Trailing 12 months ended
July 31, 2016		 Trailing 12 months ended
July 31, 2015
In thousands of dollars except per share amounts
Total Revenue $16,097 $14,931 $68,632 $59,203
Gross Margin $7,606 $7,420 $35,011 $28,907
Gross Margin % 47% 50% 51% 49%
Operating Expenses $7,363 $7,213 $30,426 $27,227
Op. Ex. As % of Revenue 46% 48% 44% 46%
Profit from Operations $243 $207 $4,585 $1,680
EBITDA $814 $831 $7,147 $4,229
EPS $0.01 $0.01 $0.39 $0.11
Contract Bookings $6,016 $6,687 $41,524 $44,018

“While our first quarter is perennially slow and this year was no exception, we were pleased with the progress we made on a number of fronts. On a same treatment basis, profit would have increased by approximately $450K over last year. We increased revenue and profit while continuing to take a disciplined approach to our operating expenses resulting in a small increase in Profit from Operations in spite of the end of our R&D capitalization. Our Q4 of fiscal 2016 marked the end of the multi-year rewrite of our legacy systems into a modern web architecture and hence, the end of our capitalization program.” said Peter Brereton, President and CEO of TECSYS Inc. “We signed two new accounts in the quarter including a key account in the heavy equipment market and had a number of successful go-lives in the quarter ranging from hospitals to 3PL’s and heavy equipment dealers and covering a range of geographies including the U.S., Canada, Mexico and the U.K. Looking forward, we are confident we are on track to meet our growth targets. With solid bookings and a solid sales pipeline, we expect continued progress through the rest of the year.”

The Company has declared a dividend of $0.03 per share to be paid on October 7, 2016 to shareholders of record at the close of business on September 23, 2016.

First Quarter 2017 Results Conference Call

Date: September 8, 2016
Time: 4:30 pm EST
Phone number: (416) 981-9080 or (800) 698-5833
The call can be replayed by calling (416) 626-4100 or (800) 558-5253 (access code: 21817164).

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, 2016. 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. 2016. 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, 2016 and April 30, 2016
(in thousands of Canadian dollars)
July 31, April 30,
2016 2016
Assets
Current assets
Cash and cash equivalents $ 13,506 $ 9,704
Accounts receivable 12,694 18,239
Work in progress 1,175 513
Other accounts receivable 757 1,393
Tax credits 3,358 4,893
Inventory 835 744
Prepaid expenses 1,633 1,622
Total current assets 33,958 37,108
Non-current assets
Tax credits 1,558 1,483
Property and equipment 2,526 2,633
Deferred development costs 3,469 3,817
Other intangible assets 1,754 1,831
Goodwill 3,596 3,596
Deferred tax assets 2,226 2,222
Total non-current assets 15,129 15,582
Total assets $ 49,087 $ 52,690
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 8,269 $ 10,399
Current portion of long-term debt 1,465 1,455
Deferred revenue 11,059 11,205
Total current liabilities 20,793 23,059
Non-current liabilities
Long-term debt 1,520 1,889
Other non-current liabilities 294 296
Total non-current liabilities 1,814 $ 2,185
Total liabilities 22,607 $ 25,244
Equity
Share capital 8,349 8,349
Contributed surplus 9,577 9,577
Retained earnings 8,672 8,913
Accumulated other comprehensive (loss) income (118 ) 607
Total equity attributable to the owners of the Company 26,480 27,446
Total liabilities and equity $ 49,087 $ 52,690
TECSYS Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three month periods ended July 31, 2016 and 2015
(in thousands of Canadian dollars, except per share data)
Three Months Three Months
Ended Ended
July 31, July 31,
2016 2015
Revenue:
Proprietary products $ 2,356 $ 2,148
Third-party hardware and software products 2,170 2,064
Services 11,019 10,316
Reimbursable expenses 552 403
Total revenue 16,097 14,931
Cost of revenue:
Products 1,698 1,608
Services 6,241 5,500
Reimbursable expenses 552 403
Total cost of revenue 8,491 7,511
Gross profit 7,606 7,420
Operating expenses:
Sales and marketing 3,586 3,592
General and administration 1,340 1,369
Research and development, net of tax credits 2,437 2,252
Total operating expenses 7,363 7,213
Profit from operations 243 207
Net finance costs 96 40
Profit before income taxes 147 167
Income taxes 19 98
Profit attributable to the owners of the Company $ 128 $ 69
Other comprehensive loss:
Effective portion of changes in fair value on designated revenue hedges (725 ) (583 )
Comprehensive loss attributable to the owners of the Company $ (597 ) $ (514 )
Basic and diluted earnings per common share $ 0.01 $ 0.01
TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Three-month periods ended July 31, 2016 and 2015
(in thousands of Canadian dollars)
Three Months Three Months
Ended Ended
July 31, July 31,
2016 2015
Cash flows from (used in) operating activities:
Profit for the period $ 128 $ 69
Adjustments for:
Depreciation of property and equipment 201 187
Depreciation of deferred development costs 348 337
Depreciation of other intangible assets 125 118
Gain on disposal of property and equipment – (12 )
Net finance costs 96 40
Unrealized foreign exchange and others 195 340
Non-refundable tax credits (215 ) (75 )
Income taxes 19 75
Operating activities excluding changes in non-cash working capital items related to operations 897 1,079
Accounts receivable 5,545 814
Work in progress (662 ) (460 )
Other accounts receivable (106 ) (286 )
Tax credits 1,656 2,000
Inventory (91 ) 21
Prepaid expenses (11 ) (225 )
Accounts payable and accrued liabilities (2,786 ) (1,859 )
Deferred revenue (146 ) 957
Changes in non-cash working capital items related to operations 3,399 962
Net cash from operating activities 4,296 2,041
Cash flows used in financing activities:
Repayment of long-term debt (359 ) (367 )
Interest paid (26 ) (40 )
Net cash used in financing activities (385 ) (407 )
Cash flows (used in) from investing activities:
Interest received 33 18
Acquisitions of property and equipment (94 ) (150 )
Proceeds on disposal of property and equipment – 12
Acquisitions of other intangible assets (48 ) (34 )
Deferred development costs – (399 )
Net cash used in investing activities (109 ) (553 )
Net increase in cash and cash equivalents during the period 3,802 1,081
Cash and cash equivalents – beginning of period 9,704 10,815
Cash and cash equivalents – end of period $ 13,506 $ 11,896
TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Three-month periods ended July 31, 2016 and 2015
(in thousands of Canadian dollars, except number of shares)
Share capital
Number Amount Contributed
surplus		 Accumulated
other
comprehensive
income
(loss)		 Retained
earnings		 Total
Balance, April 30, 2016 12,315,326 $ 8,349 $ 9,577 $ 607 $ 8,913 $ 27,446
Profit for the period – – – – 128 128
Other comprehensive loss for the period:
Effective portion of changes in fair value on designated revenue hedges – – – (725 ) – (725 )
Total comprehensive income (loss) for the period – – – (725 ) 128 (597 )
Dividends to equity owners – – – – (369 ) (369 )
Total transactions with owners of the Company – – – – (369 ) (369 )
Balance, July 31, 2016 12,315,326 $ 8,349 $ 9,577 $ (118 ) $ 8,672 $ 26,480
Balance, April 30, 2015 12,315,326 $ 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 (loss) for the period – – – (583 ) 69 (514 )
Dividends to equity owners – – – – (308 ) (308 )
Total transactions with owners of the Company – – – – (308 ) (308 )
Balance, July 31, 2015 12,315,326 $ 8,349 $ 9,577 $ (488 ) $ 5,102 $ 22,540
Solutions and general info: [email protected]
Investor relations: [email protected],
(514) 866-5800 ext. 4120
Media relations: [email protected]

TECSYS Inc.
(514) 866-0001 or (800) 922-8649