MONTREAL, QUEBEC–(Marketwired – Nov. 30, 2017) – TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the second quarter of fiscal year 2018, ended October 31, 2017. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS) and are unaudited.
Second Quarter Highlights:
- Total revenue was .1 million, 9% higher than .5 million for Q2 2017.
- Proprietary products revenue decreased 8% to .6 million, compared to Q2 2017.
- Cloud, maintenance and subscription revenue increased to .4 million, 4% higher than .2 million for Q2 2017.
- Professional services revenue was .9 million, 22% higher than .5 million in Q2 2017.
- Total gross profit margin was 52%, compared to 50% in Q2 2017.
- Operating expenses decreased to .8 million, compared to .0 million for Q2 2017.
- Profit from operations was .6 million, compared to 0,000 for the same period in fiscal 2017.
- Profit was .4 million or {$content}.10 per share in Q2 2018 compared to 6,000 or {$content}.02 per share for Q2 2017.
- EBITDA was .2 million, compared to 5,000 for Q2 2017.
- Total contract value bookings amounted to .5 million, compared to .9 million for Q2 2017.
- Cash and cash equivalents, as well as redeemable long-term investments, totaled .5 million at the end of Q2 2018 compared to .5M at the end of Q4 2017.
“In the second quarter of fiscal 2018, solid bookings and revenue growth combined with flat to declining expenses led to a surge in profitability.” said Peter Brereton, President and CEO of TECSYS Inc. “The quarter was also a validation of our strategy to deploy one common technology platform that is robust and versatile into two diverse sectors where each has a different sales cycle and is affected differently by external events. In the quarter, our complex distribution business achieved solid growth in terms of both new contract and base account sales and added accounts in floor finishing products, heavy equipment and MRO. Our healthcare business continued to be constrained in the quarter by uncertainty around U.S. healthcare legislation, however this situation seems to be improving based on orders signed early in the third quarter. Our pipeline and general business activity in healthcare remains strong. The board has approved an increase of the quarterly dividend of 11% to {$content}.05.”
| Results from Operations |
Q2 2018 | Q2 2017 | 6 months ended Oct. 31, 2017 |
6 months ended Oct. 31, 2016 |
Trailing 12 months ended Oct. 31, 2017 |
Trailing 12 months ended Oct. 31, 2016 |
|||||
| In thousands of dollars except per share amounts | |||||||||||
| Total Revenue | ,072 | ,518 | ,583 | ,615 | ,415 | ,388 | |||||
| Gross Margin | ,438 | ,291 | ,190 | ,897 | ,489 | ,512 | |||||
| Gross Margin % | 52% | 50% | 50% | 49% | 50% | 51% | |||||
| Operating Expenses | ,843 | ,971 | ,530 | ,334 | ,441 | ,108 | |||||
| Op. Ex. As % of Revenue | 43% | 48% | 45% | 47% | 38% | 45% | |||||
| Profit from Operations | ,595 | 0 | ,660 | 3 | ,048 | ,404 | |||||
| EBITDA | ,184 | 5 | ,871 | ,749 | ,486 | ,929 | |||||
| EPS | {$content}.10 | {$content}.02 | {$content}.11 | {$content}.03 | {$content}.57 | {$content}.38 | |||||
| Contract Bookings | ,453 | ,920 | ,345 | ,936 | ,037 | ,029 | |||||
First Half Fiscal 2018 Highlights:
- Total revenue was .6 million, 6% higher than .6 million for H1 2017.
- Proprietary products revenue decreased 4% to .9 million, compared to H1 2017.
- Cloud, maintenance and subscription revenue increased to .5 million, 5% higher than .8 million for H1 2017.
- Professional services revenue was .0 million, 11% higher than .6 million in H1 2017.
- Total gross profit margin was 50%, compared to 49% in H1 2017.
- Operating expenses were flat year-over-year at .5 million, compared to .3 million for H1 2017.
- Profit from operations was .7 million, compared to 3,000 for the same period in fiscal 2017.
- Profit was .4 million or {$content}.11 per share for H1 2018 compared to 4,000 or {$content}.03 per share for H1 2017.
- EBITDA was .9 million, compared to .7 million for H1 2017.
- Total contract value bookings amounted to .3 million, compared to .9 million for H1 2017.
The Company has declared a dividend of {$content}.05 per share to be paid on January 11, 2018 to shareholders of record at the close of business on December 21, 2017.
| Second Quarter 2018 Results Conference Call |
| Date: December 1, 2017 Time: 8:30 am EST |
| Phone number: (416) 359-3126 or (800) 672-2065 |
| The call can be replayed until December 8, 2017 by calling (416) 626-4100 or (800) 558-5253 (access code: 21862899). |
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, 2017. 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. | |||||||
| Condensed Interim Consolidated Statements of Financial Position | |||||||
| (Unaudited) | |||||||
| As at October 31, 2017 and April 30, 2017 | |||||||
| (in thousands of Canadian dollars) | |||||||
| October 31, | April 30, | ||||||
| 2017 | 2017 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 12 458 | $ | 13 476 | |||
| Accounts receivable | 11 347 | 14 218 | |||||
| Work in progress | 525 | 612 | |||||
| Other receivables | 705 | 370 | |||||
| Tax credits | 4 562 | 3 126 | |||||
| Inventory | 875 | 914 | |||||
| Prepaid expenses | 1 659 | 1 899 | |||||
| Total current assets | 32 131 | 34 615 | |||||
| Non-current assets | |||||||
| Long-term investments | 10 007 | – | |||||
| Other long-term receivables | 249 | – | |||||
| Tax credits | 5 252 | 5 407 | |||||
| Property and equipment | 2 292 | 2 444 | |||||
| Deferred development costs | 2 224 | 2 751 | |||||
| Other intangible assets | 1 415 | 1 523 | |||||
| Goodwill | 3 596 | 3 596 | |||||
| Deferred tax assets | 2 402 | 2 201 | |||||
| Total non-current assets | 27 437 | 17 922 | |||||
| Total assets | $ | 59 568 | $ | 52 537 | |||
| Liabilities | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued liabilities | $ | 8 348 | $ | 9 265 | |||
| Current portion of long-term debt | 55 | 69 | |||||
| Deferred revenue | 9 259 | 12 094 | |||||
| Total current liabilities | 17 662 | 21 428 | |||||
| Non-current liabilities | |||||||
| Long-term debt | 98 | 121 | |||||
| Other non-current liabilities | 256 | 277 | |||||
| Total non-current liabilities | 354 | 398 | |||||
| Total liabilities | 18 016 | 21 826 | |||||
| Equity | |||||||
| Share capital | 18 803 | 8 349 | |||||
| Contributed surplus | 9 577 | 9 577 | |||||
| Retained earnings | 13 311 | 13 064 | |||||
| Accumulated other comprehensive loss | (139 | ) | (279 | ) | |||
| Total equity attributable to the owners of the Company | 41 552 | 30 711 | |||||
| Total liabilities and equity | $ | 59 568 | $ | 52 537 | |||
| TECSYS Inc. | |||||||||||||
| Condensed Interim Consolidated Statements of Income and Comprehensive Income | |||||||||||||
| (Unaudited) | |||||||||||||
| Three and six-month periods ended October 31, 2017 and 2016 | |||||||||||||
| (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, | ||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||
| Revenue: | |||||||||||||
| Proprietary products | $ | 1 645 | $ | 1 779 | $ | 2 893 | $ | 3 003 | |||||
| Third-party products | 1 447 | 1 505 | 2 969 | 2 998 | |||||||||
| Cloud, maintenance and subscription | 6 446 | 6 193 | 13 536 | 12 837 | |||||||||
| Professional services | 7 884 | 6 457 | 14 028 | 12 641 | |||||||||
| Reimbursable expenses | 650 | 584 | 1 157 | 1 136 | |||||||||
| Total revenue | 18 072 | 16 518 | 34 583 | 32 615 | |||||||||
| Cost of revenue: | |||||||||||||
| Products | 1 372 | 1 350 | 2 732 | 2 613 | |||||||||
| Services | 6 612 | 6 293 | 13 504 | 12 969 | |||||||||
| Reimbursable expenses | 650 | 584 | 1 157 | 1 136 | |||||||||
| Total cost of revenue | 8 634 | 8 227 | 17 393 | 16 718 | |||||||||
| Gross profit | 9 438 | 8 291 | 17 190 | 15 897 | |||||||||
| Operating expenses: | |||||||||||||
| Sales and marketing | 3 851 | 3 769 | 7 484 | 7 355 | |||||||||
| General and administration | 1 611 | 1 719 | 3 187 | 3 059 | |||||||||
| Research and development, net of tax credits | 2 381 | 2 483 | 4 859 | 4 920 | |||||||||
| Total operating expenses | 7 843 | 7 971 | 15 530 | 15 334 | |||||||||
| Profit from operations | 1 595 | 320 | 1 660 | 563 | |||||||||
| Net finance (income) costs | (33 | ) | 55 | (67 | ) | 151 | |||||||
| Profit before income taxes | 1 628 | 265 | 1 727 | 412 | |||||||||
| Income taxes | 272 | 59 | 302 | 78 | |||||||||
| Profit attributable to the owners of the Company | $ | 1 356 | $ | 206 | $ | 1 425 | $ | 334 | |||||
| Other comprehensive (loss) income: | |||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | (655 | ) | (136 | ) | 140 | (861 | ) | ||||||
| Comprehensive income (loss) attributable to the owners of the Company | $ | 701 | $ | 70 | $ | 1 565 | $ | (527 | ) | ||||
| Basic and diluted earnings per common share | $ | 0,10 | $ | 0,02 | $ | 0,11 | $ | 0,03 | |||||
| TECSYS Inc. | |||||||
| Condensed Interim Consolidated Statements of Cash Flows | |||||||
| (Unaudited) | |||||||
| Six-month periods ended October 31, 2017 and 2016 | |||||||
| (in thousands of Canadian dollars) | |||||||
| Six Months | Six Months | ||||||
| Ended | Ended | ||||||
| October 31, | October 31, | ||||||
| 2017 | 2016 | ||||||
| Cash flows from (used in) operating activities: | |||||||
| Profit for the period | $ | 1 425 | $ | 334 | |||
| Adjustments for: | |||||||
| Depreciation of property and equipment | 405 | 413 | |||||
| Depreciation of deferred development costs | 599 | 683 | |||||
| Depreciation of other intangible assets | 235 | 247 | |||||
| Net finance (income) costs | (67 | ) | 151 | ||||
| Unrealized foreign exchange and other | (556 | ) | 575 | ||||
| Non-refundable tax credits | (368 | ) | (457 | ) | |||
| Income taxes | 210 | 78 | |||||
| Operating activities excluding changes in non-cash working capital items related to operations | 1 883 | 2 024 | |||||
| Accounts receivable | 2 871 | 4 735 | |||||
| Work in progress | 87 | (1 331 | ) | ||||
| Other receivables | (327 | ) | (598 | ) | |||
| Tax credits | (1 329 | ) | 934 | ||||
| Inventory | 39 | (164 | ) | ||||
| Prepaid expenses | 240 | 204 | |||||
| Accounts payable and accrued liabilities | (522 | ) | (1 839 | ) | |||
| Deferred revenue | (2 835 | ) | (395 | ) | |||
| Changes in non-cash working capital items related to operations | (1 776 | ) | 1 546 | ||||
| Net cash from operating activities | 107 | 3 570 | |||||
| Cash flows (used in) from financing activities: | |||||||
| Repayment of long-term debt | (37 | ) | (717 | ) | |||
| Issuance of common shares | 10 454 | – | |||||
| Payment of dividends | (1 178 | ) | (739 | ) | |||
| Interest paid | (1 | ) | (49 | ) | |||
| Net cash from (used in) financing activities | 9 238 | (1 505 | ) | ||||
| Cash flows (used in) from investing activities: | |||||||
| Long-term investments | (10 007 | ) | – | ||||
| Interest received | 96 | 55 | |||||
| Acquisitions of property and equipment | (253 | ) | (233 | ) | |||
| Acquisitions of other intangible assets | (127 | ) | (90 | ) | |||
| Deferred development costs | (72 | ) | (27 | ) | |||
| Net cash used in investing activities | (10 363 | ) | (295 | ) | |||
| Net (decrease) increase in cash and cash equivalents during the period | (1 018 | ) | 1 770 | ||||
| Cash and cash equivalents – beginning of period | 13 476 | 9 704 | |||||
| Cash and cash equivalents – end of period | $ | 12 458 | $ | 11 474 | |||
| TECSYS Inc. | |||
| Condensed Interim Consolidated Statements of Changes in Equity | |||
| (Unaudited) | |||
| Six-month periods ended October 31, 2017 and 2016 | |||
| (in thousands of Canadian dollars, except number of shares) | |||
| Share capital | |||||||||||||||||
| Number | Amount | Contributed surplus |
Accumulated other comprehensive (loss) income |
Retained earnings |
Total | ||||||||||||
| Balance, April 30, 2017 | 12 315 326 | $ | 8 349 | $ | 9 577 | $ | (279 | ) | $ | 13 064 | $ | 30 711 | |||||
| Profit for the period | – | – | – | – | 1 425 | 1 425 | |||||||||||
| Other comprehensive income for the period: | |||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | – | – | – | 140 | – | 140 | |||||||||||
| Total comprehensive income for the period | – | – | – | 140 | 1 425 | 1 565 | |||||||||||
| Common shares issued under bought deal financing | 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 | |||||
| Balance, April 30, 2016 | 12 315 326 | $ | 8 349 | $ | 9 577 | $ | 607 | $ | 8 913 | $ | 27 446 | ||||||
| Profit for the period | – | – | – | – | 334 | 334 | |||||||||||
| Other comprehensive loss for the period: | |||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | – | – | – | (861 | ) | – | (861 | ) | |||||||||
| Total comprehensive (loss) income for the period | – | – | – | (861 | ) | 334 | (527 | ) | |||||||||
| Dividends to equity owners | – | – | – | – | (739 | ) | (739 | ) | |||||||||
| Total transactions with owners of the Company | – | – | – | – | (739 | ) | (739 | ) | |||||||||
| Balance, October 31, 2016 | 12 315 326 | $ | 8 349 | $ | 9 577 | $ | (254 | ) | $ | 8 508 | $ | 26 180 | |||||
Investor relations: steve.li@tecsys.com
(514) 866-5800 ext. 4120
Media relations: media@tecsys.com
(514) 866-0001 or (800) 922-8649