MONTREAL, QUEBEC–(Marketwired – July 6, 2017) – TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the fourth quarter and full year of fiscal year 2017, ended April 30, 2017. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).
“The fourth quarter of fiscal 2017 delivered strong results in revenue, profit, EBITDA and continued trends in controlling operating costs; it was the second-best quarterly revenue in the company’s history,” said Peter Brereton, President and CEO of TECSYS Inc. “Q4 was up 6% over the prior quarter and caps off a year that sets the stage for continued growth.”
“During the fourth quarter, the Company recognized $4.6 million of prior year federal non-refundable R&D tax credits which reduced gross R&D expenditures by a corresponding amount. This is as a result of the Company’s increased probability that these tax credits will be used in the future to reduce cash taxes” said Berty Ho, outgoing CFO of TECSYS Inc.
Fourth Quarter Highlights:
- Total revenue was $18.4 million, 13% lower than $21.1 million for Q4 2016.
- Proprietary products revenue decreased to $3.9 million, compared to $5.9 million for Q4 2016.
- Services revenue decreased to $11.2 million, compared to $11.5 million in Q4 2016.
- Total gross profit margin of 51% compared to 55% in Q4 2016.
- Operating expenses decreased to $3.3 million, compared to $8.5 million for the same three-month period last year. Excluding the tax credits recognition of $4.6 million mentioned above, operating expenses were $7.9 million compared to $8.5 million.
- Profit from operations of $6.0 million in Q4 2017 in comparison to $3.2 million for the same period in fiscal 2016. Excluding the tax credits recognition mentioned above, profit from operations was $1.4 million.
- EBITDA was $6.7 million, compared to $3.8 million for the fourth quarter of 2016. Excluding the tax credit recognition mentioned above and $460,000 of unusual charges including severance and related legal costs, EBITDA was $2.5 million.
- Profit of $4.8 million or $0.39 per share in Q4 2017 compared to $3.8 million or $0.31 per share for Q4 2016.
- Total contract value bookings amounted to $11.1 million, in comparison to $13.1 million for Q4 2016.
“We were pleased to sign two significant hospital networks in the fourth quarter and see the average size of our new hospital contracts climb by approximately 50% for the full year of Fiscal 2017 compared to the prior year. While we experienced a slowing in new contract signing from the U.S. healthcare sector as a result of uncertainty around health insurance legislation, we continued to expand our clinical logistics solutions and increased penetration in our current customers,” added Mr. Brereton. “We completed some restructuring of management and sales in the fourth quarter to prepare the company for the next phase of growth. These one-time costs reduced EBITDA by $460,000.”
| Results from Operations | 3 Months Ended Apr. 30 2017 |
3 Months Ended Apr. 30 2016 |
12 Months Ended Apr. 30, 2017 |
12 Months Ended Apr. 30, 2016 |
| In thousands of dollars except per share amounts | ||||
| Total Revenue | $18,447 | $21,144 | $68,447 | $67,466 |
| Gross Margin | $9,384 | $11,696 | $34,196 | $34,825 |
| Gross Margin % | 51% | 55% | 50% | 52% |
| Operating Expenses | $3,334 | $8,459 | $26,245 | $30,276 |
| Op. Ex. As % of Revenue | 18% | 40% | 38% | 45% |
| Profit from Operations | $6,050 | $3,237 | $7,951 | $4,549 |
| EBITDA | $6,674 | $3,837 | $10,364 | $7,164 |
| EPS | $0.39 | $0.31 | $0.49 | $0.39 |
| Contract Bookings | $11,102 | $13,064 | $42,628 | $42,195 |
Fiscal 2017 Highlights:
- Revenue for fiscal 2017 was $68.4 million, up 1% from $67.5 million in the previous fiscal year.
- Total gross profit margin reached 50% compared to 52% in fiscal 2016.
- Operating expenses decreased to $26.2 million, compared to $30.3 million in the previous fiscal year, partially as a result of an increase in tax credits. Excluding the tax credits recognition of $4.6 million mentioned above, operating expenses were $30.8 million.
- EBITDA for the year was $10.4 million, compared to $7.2 million in fiscal 2016. Excluding the tax credit recognition mentioned above, EBITDA was $5.8 million.
- Profit from operations of $8.0 million in fiscal 2017 in comparison to $4.5 million in fiscal 2016. Excluding the tax credits recognition mentioned above, profit from operations was $3.4 million.
- Net profit for fiscal 2017 was $6.0 million, or $0.49 per share, compared to $4.8 million, or $0.39 per share, for fiscal 2016.
- Total contract bookings for fiscal 2017 totalled $42.6 million, compared to $42.2 million for fiscal 2016.
- Recurring revenue at the end of fiscal 2017 was $26.9 million or 39% of total revenue, up from $25.0 million or 37% in fiscal 2016.
- Cash and cash equivalents totalled $13.5 million at the end of fiscal 2017 compared to $9.7 million at the end of fiscal 2016.
The Board of Directors has appointed Brian Cosgrove as the new CFO effective immediately, replacing Berty Ho, who will be taking on a new role within the business.
The Company has declared a dividend of $0.045 per share to be paid on August 4, 2017 to shareholders of record at the close of business on July 21, 2017.
Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be “eligible” dividends.
Subsequent to our fiscal year-end, the Company announced the closing of an offering of 1,000,000 common shares of the Corporation as well as an additional 100,050 common shares issued as a result of the exercise in full by the underwriters of their over-allotment option at a price of $15.00 per share, for gross proceeds of $16,500,750. The 2017 Offering includes a treasury offering of 767,050 Offered Shares by the Corporation for gross proceeds of $11,505,750.
| Fourth Quarter and Full Year 2017 Results Conference Call |
| Date: July 7, 2017 Time: 8:30 am EDT |
| Phone number: (416) 981-9091 or (800) 694-7044 |
| The call can be replayed until July 14, 2017 by calling (416) 626-4100 or (800) 558-5253 (access code: 21853999). |
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, 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 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. 2017. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.
| TECSYS Inc. | ||||||
| Consolidated Statements of Financial Position | ||||||
| As at April 30, 2017 and April 30, 2016 | ||||||
| (in thousands of Canadian dollars) | ||||||
| April 30, | April 30, | |||||
| 2017 | 2016 | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 13,476 | $ | 9,704 | ||
| Accounts receivable | 14,218 | 18,239 | ||||
| Work in progress | 612 | 513 | ||||
| Other accounts receivable | 370 | 1,393 | ||||
| Tax credits | 3,126 | 4,893 | ||||
| Inventory | 914 | 744 | ||||
| Prepaid expenses | 1,899 | 1,622 | ||||
| Total current assets | 34,615 | 37,108 | ||||
| Non-current assets | ||||||
| Tax credits | 5,407 | 1,483 | ||||
| Property and equipment | 2,444 | 2,633 | ||||
| Deferred development costs | 2,751 | 3,817 | ||||
| Other intangible assets | 1,523 | 1,831 | ||||
| Goodwill | 3,596 | 3,596 | ||||
| Deferred tax assets | 2,201 | 2,222 | ||||
| Total non-current assets | 17,922 | 15,582 | ||||
| Total assets | $ | 52,537 | $ | 52,690 | ||
| Liabilities | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 9,265 | $ | 10,399 | ||
| Current portion of long-term debt | 69 | 1,455 | ||||
| Deferred revenue | 12,094 | 11,205 | ||||
| Total current liabilities | 21,428 | 23,059 | ||||
| Non-current liabilities | ||||||
| Long-term debt | 121 | 1,889 | ||||
| Other non-current liabilities | 277 | 296 | ||||
| Total non-current liabilities | 398 | 2,185 | ||||
| Total liabilities | 21,826 | 25,244 | ||||
| Equity | ||||||
| Share capital | 8,349 | 8,349 | ||||
| Contributed surplus | 9,577 | 9,577 | ||||
| Retained earnings | 13,064 | 8,913 | ||||
| Accumulated other comprehensive (loss) income | (279 | ) | 607 | |||
| Total equity attributable to the owners of the Company | 30,711 | 27,446 | ||||
| Total liabilities and equity | $ | 52,537 | $ | 52,690 | ||
| TECSYS Inc. | |||||||||||||||
| Consolidated Statements of Income and Comprehensive Income | |||||||||||||||
| Three month periods and years ended April 30, 2017 and 2016 | |||||||||||||||
| (in thousands of Canadian dollars, except per share data) | |||||||||||||||
| Three Months Ended April 30, 2017 (unaudited) |
Three Months Ended April 30, 2016 (unaudited) |
Year Ended April 30, 2017 |
Year Ended April 30, 2016 |
||||||||||||
| Revenue: | |||||||||||||||
| Proprietary products | $ | 3,908 | $ | 5,941 | $ | 11,914 | $ | 13,623 | |||||||
| Third-party hardware and software products | 2,659 | 3,092 | 8,852 | 9,421 | |||||||||||
| Services | 11,195 | 11,489 | 45,207 | 42,479 | |||||||||||
| Reimbursable expenses | 685 | 622 | 2,474 | 1,943 | |||||||||||
| Total revenue | 18,447 | 21,144 | 68,447 | 67,466 | |||||||||||
| Cost of revenue: | |||||||||||||||
| Products | 1,986 | 3,184 | 7,128 | 8,198 | |||||||||||
| Services | 6,392 | 5,642 | 24,649 | 22,500 | |||||||||||
| Reimbursable expenses | 685 | 622 | 2,474 | 1,943 | |||||||||||
| Total cost of revenue | 9,063 | 9,448 | 34,251 | 32,641 | |||||||||||
| Gross profit | 9,384 | 11,696 | 34,196 | 34,825 | |||||||||||
| Operating expenses: | |||||||||||||||
| Sales and marketing | 4,104 | 4,256 | 15,131 | 14,952 | |||||||||||
| General and administration | 1,350 | 1,839 | 5,863 | 5,986 | |||||||||||
| Research and development, net of tax credits | (2,120 | ) | 2,364 | 5,251 | 9,338 | ||||||||||
| Total operating expenses | 3,334 | 8,459 | 26,245 | 30,276 | |||||||||||
| Profit from operations | 6,050 | 3,237 | 7,951 | 4,549 | |||||||||||
| Net finance (income) costs | (7 | ) | 123 | 189 | 146 | ||||||||||
| Profit before income taxes | 6,057 | 3,114 | 7,762 | 4,403 | |||||||||||
| Income tax expense (recovery) | 1,281 | (711 | ) | 1,764 | (401 | ) | |||||||||
| Profit attributable to the owners of the Company | $ | 4,776 | $ | 3,825 | $ | 5,998 | $ | 4,804 | |||||||
| Other comprehensive (loss) income: | |||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | (398 | ) | 986 | (886 | ) | 512 | |||||||||
| Comprehensive income attributable to the owners of the Company | $ | 4,378 | $ | 4,811 | $ | 5,112 | $ | 5,316 | |||||||
| Basic and diluted earnings per common share | $ | 0.39 | $ | 0.31 | $ | 0.49 | $ | 0.39 | |||||||
| TECSYS Inc. | |||||||
| Consolidated Statements of Cash Flows | |||||||
| Years ended April 30, 2017 and 2016 | |||||||
| (in thousands of Canadian dollars) | |||||||
| Year | Year | ||||||
| Ended | Ended | ||||||
| April 30, | April 30, | ||||||
| 2017 | 2016 | ||||||
| Cash flows from (used in) operating activities: | |||||||
| Profit for the year | $ | 5,998 | $ | 4,804 | |||
| Adjustments for: | |||||||
| Depreciation of property and equipment | 819 | 794 | |||||
| Depreciation of deferred development costs | 1,319 | 1,418 | |||||
| Depreciation of other intangible assets | 486 | 478 | |||||
| Net finance costs | 189 | 146 | |||||
| Unrealized foreign exchange and others | 649 | (690 | ) | ||||
| Non-refundable tax credits | (5,551 | ) | (868 | ) | |||
| Income taxes | 1,332 | (508 | ) | ||||
| Operating activities excluding changes in non-cash working capital items related to operations | 5,241 | 5,574 | |||||
| Accounts receivable | 4,021 | (5,669 | ) | ||||
| Work in progress | (99 | ) | 191 | ||||
| Other accounts receivable | (35 | ) | (118 | ) | |||
| Tax credits | 2,091 | 531 | |||||
| Inventory | (170 | ) | 315 | ||||
| Prepaid expenses | (277 | ) | (228 | ) | |||
| Accounts payable and accrued liabilities | (1,852 | ) | 1,917 | ||||
| Deferred revenue | 889 | 1,107 | |||||
| Changes in non-cash working capital items related to operations | 4,568 | (1,954 | ) | ||||
| Net cash from operating activities | 9,809 | 3,620 | |||||
| Cash flows used in financing activities: | |||||||
| Repayment of long-term debt | (3,154 | ) | (1,445 | ) | |||
| Purchase of share options for cancellation | – | (6 | ) | ||||
| Payment of dividends | (1,847 | ) | (1,232 | ) | |||
| Interest paid | (81 | ) | (136 | ) | |||
| Net cash used in financing activities | (5,082 | ) | (2,819 | ) | |||
| Cash flows from (used in) investing activities: | |||||||
| Interest received | 103 | 65 | |||||
| Acquisitions of property and equipment | (630 | ) | (988 | ) | |||
| Proceeds on disposal of property and equipment | 3 | 23 | |||||
| Acquisitions of other intangible assets | (178 | ) | (125 | ) | |||
| Deferred development costs | (253 | ) | (887 | ) | |||
| Net cash used in investing activities | (955 | ) | (1,912 | ) | |||
| Net increase (decrease) in cash and cash equivalents during the year | 3,772 | (1,111 | ) | ||||
| Cash and cash equivalents – beginning of year | 9,704 | 10,815 | |||||
| Cash and cash equivalents – end of year | $ | 13,476 | $ | 9,704 | |||
| TECSYS Inc. | ||||||||||||||||
| Consolidated Statements of Changes in Equity | ||||||||||||||||
| Years ended April 30, 2017 and 2016 | ||||||||||||||||
| (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 year | – | – | – | – | 5,998 | 5,998 | ||||||||||
| Other comprehensive loss for the year: | ||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | – | – | – | (886 | ) | – | (886 | ) | ||||||||
| Total comprehensive (loss) income for the year | – | – | – | (886 | ) | 5,998 | 5,112 | |||||||||
| Dividends to equity owners | – | – | – | – | (1,847 | ) | (1,847 | ) | ||||||||
| Total transactions with owners of the Company | – | – | – | – | (1,847 | ) | (1,847 | ) | ||||||||
| Balance, April 30, 2017 | 12,315,326 | $ | 8,349 | $ | 9,577 | $ | (279 | ) | $ | 13,064 | $ | 30,711 | ||||
| Balance, April 30, 2015 | 12,315,326 | $ | 8,349 | $ | 9,577 | $ | 95 | $ | 5,341 | $ | 23,362 | |||||
| Profit for the year | – | – | – | – | 4,804 | 4,804 | ||||||||||
| Other comprehensive income for the year: | ||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | – | – | – | 512 | – | 512 | ||||||||||
| Total comprehensive income for the year | – | – | – | 512 | 4,804 | 5,316 | ||||||||||
| Dividends to equity owners | – | – | – | – | (1,232 | ) | (1,232 | ) | ||||||||
| Total transactions with owners of the Company | – | – | – | – | (1,232 | ) | (1,232 | ) | ||||||||
| Balance, April 30, 2016 | 12,315,326 | $ | 8,349 | $ | 9,577 | $ | 607 | $ | 8,913 | $ | 27,446 | |||||
Investor relations: steve.li@tecsys.com
(514) 866-5800 ext. 4120
Media relations: media@tecsys.com
TECSYS Inc.
(514) 866-0001 or (800) 922-8649