MONTREAL, QUEBEC–(Marketwired – Feb. 28, 2017) – TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the third quarter of fiscal year 2017, ended January 31, 2017. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS) and are unaudited.
Third Quarter Highlights:
- Total revenue for Q3 2017 increased to $17.4M, $1.8M or 11% higher, compared to $15.6M for Q3 2016.
- Recurring revenue on an annualized basis was $26.1M up 3% compared to $25.3M in Q3 2016.
- Total gross margin percentage in Q3 2017 was 51%, even with Q3 2016.
- Operating expenses for Q3 2017 increased to $7.6M, higher by $262K or 4%, compared to $7.3M for the same three-month period last fiscal year.
- Profit from operations increased to $1.3M in Q3 2017, up by 122% compared to $604K for Q3 2016.
- EBITDA increased to $1.9M in Q3 2017, 45% higher compared to $1.3M in Q3 2016.
- Net profit increased to $888K, or $0.07 per share, in Q3 2017 compared to $543K, or $0.04 per share, for Q3 2016.
- Total contract value bookings increased to $14.6M in Q3 2017 in comparison to $9.0M for Q3 2016.
- Cash and cash equivalents totalled $10.8M at the end of Q3 2017 compared to $9.7M at the end of fiscal 2016.
“The third quarter of fiscal 2017 showed strong additional sales from our base accounts in healthcare along with two new contracts added by our complex distribution team,” said Peter Brereton, President and CEO of TECSYS Inc. “This momentum drove an 11% increase in revenue, which our continued discipline on operating expenses allowed us to leverage into earnings growth and a 45% increase in EBITDA. While we continue to see some effect from the uncertainty surrounding the Affordable Care Act, we are pleased with the continuing investment from our hospital customers as they expand their utilization of our product suite. We were also successful in winning another government sector project, this time in the UK.”
“We have seen the same positive trends when we look at our progress on a trailing twelve month basis, with a 15% increase in revenue and a 76% increase in EBITDA,” added Berty Ho-Wo-Cheong, VP Finance & Administration and CFO. “We expect further positive results as we continue to penetrate our base accounts and deliver operating leverage.”
TECSYS INC.
| Results from Operations | 3 Months Ended Jan. 31, 2017 |
3 Months Ended Jan. 31, 2016 |
9 Months Ended Jan. 31, 2017 |
9 Months Ended Jan. 31, 2016 |
Trailing 12 Months Ended Jan. 31, 2017 | Trailing 12 Months Ended Jan. 31, 2016 |
|||||
| In thousands of dollars except per share amounts | |||||||||||
| Total Revenue | $17,385 | $15,629 | $50,000 | $46,322 | $71,144 | $62,088 | |||||
| Gross Margin | $8,915 | $7,919 | $24,812 | $23,129 | $36,508 | $30,928 | |||||
| Gross Margin % | 51% | 51% | 50% | 50% | 51% | 50% | |||||
| Operating Expenses | $7,577 | $7,315 | $22,911 | $21,817 | $31,370 | $29,305 | |||||
| Op. Ex. As % of Revenue | 44% | 47% | 46% | 47% | 44% | 47% | |||||
| Profit from Operations | $1,338 | $604 | $1,901 | $1,312 | $5,138 | $1,623 | |||||
| EBITDA | $1,941 | $1,343 | $3,690 | $3,327 | $7,527 | $4,282 | |||||
| EPS | $0.07 | $0.04 | $0.10 | $0.08 | $0.41 | $0.10 | |||||
| Contract Bookings | $14,590 | $9,029 | $31,526 | $29,131 | $44,590 | $45,170 | |||||
First Nine Months Highlights:
- Revenue for the first nine months of fiscal 2017 was $50.0M, up 8% from $46.3M in the first nine months of last fiscal year.
- Profit from operations for the first nine months of fiscal 2017 was $1.9M compared to $1.3M in the same period of fiscal 2016.
- EBITDA for the first nine months of FY 2017 was $3.7M compared to $3.3M in the same period of fiscal 2016.
- Net profit for the first nine months of fiscal 2017 was $1.2M, or $0.10 per share, compared to $979K, or $0.08 per share, for the same period of fiscal 2016.
- Total contract bookings for the first nine months of fiscal 2017 totalled $31.5M, compared to $29.1M for same period of fiscal 2016.
The Company has declared a dividend of $0.045 per share to be paid on April 11, 2017 to shareholders of record at the close of business on March 21, 2017.
Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be “eligible” dividends.
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.
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, 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. |
| Condensed Interim Consolidated Statements of Financial Position |
| (Unaudited) |
| As at January 31, 2017 and April 30, 2016 |
| (in thousands of Canadian dollars) |
| January 31, | April 30, | ||||
| 2017 | 2016 | ||||
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | $ | 10,754 | $ | 9,704 | |
| Accounts receivable | 14,532 | 18,239 | |||
| Work in progress | 903 | 513 | |||
| Other accounts receivable | 652 | 1,393 | |||
| Tax credits | 4,968 | 4,893 | |||
| Inventory | 766 | 744 | |||
| Prepaid expenses | 1,810 | 1,622 | |||
| Total current assets | 34,385 | 37,108 | |||
| Non-current assets | |||||
| Tax credits | 1,588 | 1,483 | |||
| Property and equipment | 2,284 | 2,633 | |||
| Deferred development costs | 3,064 | 3,817 | |||
| Other intangible assets | 1,595 | 1,831 | |||
| Goodwill | 3,596 | 3,596 | |||
| Deferred tax assets | 2,226 | 2,222 | |||
| Total non-current assets | 14,353 | 15,582 | |||
| Total assets | $ | 48,738 | $ | 52,690 | |
| Liabilities | |||||
| Current liabilities | |||||
| Accounts payable and accrued liabilities | $ | 8,272 | $ | 10,399 | |
| Current portion of long-term debt | 1,225 | 1,455 | |||
| Deferred revenue | 11,034 | 11,205 | |||
| Total current liabilities | 20,531 | 23,059 | |||
| Non-current liabilities | |||||
| Long-term debt | 1,035 | 1,889 | |||
| Other non-current liabilities | 285 | 296 | |||
| Total non-current liabilities | 1,320 | 2,185 | |||
| Total liabilities | 21,851 | 25,244 | |||
| Equity | |||||
| Share capital | 8,349 | 8,349 | |||
| Contributed surplus | 9,577 | 9,577 | |||
| Retained earnings | 8,842 | 8,913 | |||
| Accumulated other comprehensive income | 119 | 607 | |||
| Total equity attributable to the owners of the Company | 26,887 | 27,446 | |||
| Total liabilities and equity | $ | 48,738 | $ | 52,690 | |
| TECSYS Inc. |
| Condensed Interim Consolidated Statements of Income and Comprehensive Income |
| (Unaudited) |
| Three and nine-month periods ended January 31, 2017 and 2016 |
| (in thousands of Canadian dollars, except per share data) |
| Three Months Ended January 31, 2017 |
Three Months Ended January 31, 2016 |
Nine Months Ended January 31, 2017 |
Nine Months Ended January 31, 2016 |
|||||||||
| Revenue: | ||||||||||||
| Proprietary products | $ | 2,728 | $ | 2,534 | $ | 8,006 | $ | 7,682 | ||||
| Third-party hardware and software products | 2,192 | 2,173 | 6,193 | 6,329 | ||||||||
| Services | 11,812 | 10,502 | 34,012 | 30,990 | ||||||||
| Reimbursable expenses | 653 | 420 | 1,789 | 1,321 | ||||||||
| Total revenue | 17,385 | 15,629 | 50,000 | 46,322 | ||||||||
| Cost of revenue: | ||||||||||||
| Products | 1,866 | 1,492 | 5,142 | 5,014 | ||||||||
| Services | 5,951 | 5,798 | 18,257 | 16,858 | ||||||||
| Reimbursable expenses | 653 | 420 | 1,789 | 1,321 | ||||||||
| Total cost of revenue | 8,470 | 7,710 | 25,188 | 23,193 | ||||||||
| Gross profit | 8,915 | 7,919 | 24,812 | 23,129 | ||||||||
| Operating expenses: | ||||||||||||
| Sales and marketing | 3,672 | 3,601 | 11,027 | 10,696 | ||||||||
| General and administration | 1,454 | 1,387 | 4,513 | 4,147 | ||||||||
| Research and development, net of tax credits | 2,451 | 2,327 | 7,371 | 6,974 | ||||||||
| Total operating expenses | 7,577 | 7,315 | 22,911 | 21,817 | ||||||||
| Profit from operations | 1,338 | 604 | 1,901 | 1,312 | ||||||||
| Net finance costs (income) | 45 | (49 | ) | 196 | 23 | |||||||
| Profit before income taxes | 1,293 | 653 | 1,705 | 1,289 | ||||||||
| Income taxes | 405 | 110 | 483 | 310 | ||||||||
| Profit attributable to the owners of the Company | $ | 888 | $ | 543 | $ | 1,222 | $ | 979 | ||||
| Other comprehensive income (loss): | ||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | 373 | (247 | ) | (488 | ) | (474 | ) | |||||
| Comprehensive income attributable to the owners of the Company | $ | 1,261 | $ | 296 | $ | 734 | $ | 505 | ||||
| Basic and diluted earnings per common share | $ | 0.07 | $ | 0.04 | $ | 0.10 | $ | 0.08 | ||||
| TECSYS Inc. |
| Condensed Interim Consolidated Statements of Cash Flows |
| (Unaudited) |
| Nine-month periods ended January 31, 2017 and 2016 |
| (in thousands of Canadian dollars) |
| Nine Months | Nine Months | ||||||
| Ended | Ended | ||||||
| January 31, | January 31, | ||||||
| 2017 | 2016 | ||||||
| Cash flows from (used in) operating activities: | |||||||
| Profit for the period | $ | 1,222 | $ | 979 | |||
| Adjustments for: | |||||||
| Depreciation of property and equipment | 616 | 559 | |||||
| Depreciation of deferred development costs | 1,007 | 1,054 | |||||
| Depreciation of other intangible assets | 368 | 371 | |||||
| Gain on disposal of property and equipment | – | (12 | ) | ||||
| Net finance costs | 196 | 23 | |||||
| Unrealized foreign exchange and others | 142 | 532 | |||||
| Non-refundable tax credits | (685 | ) | (225 | ) | |||
| Income taxes | 361 | 225 | |||||
| Operating activities excluding changes in non-cash working capital items related to operations | 3,227 | 3,506 | |||||
| Accounts receivable | 3,707 | (968 | ) | ||||
| Work in progress | (390 | ) | 5 | ||||
| Other accounts receivable | (75 | ) | (440 | ) | |||
| Tax credits | 144 | 1,055 | |||||
| Inventory | (22 | ) | 180 | ||||
| Prepaid expenses | (188 | ) | (387 | ) | |||
| Accounts payable and accrued liabilities | (2,158 | ) | (1,148 | ) | |||
| Deferred revenue | (171 | ) | (383 | ) | |||
| Changes in non-cash working capital items related to operations | 847 | (2,086 | ) | ||||
| Net cash from operating activities | 4,074 | 1,420 | |||||
| Cash flows used in financing activities: | |||||||
| Repayment of long-term debt | (1,084 | ) | (1,086 | ) | |||
| Purchase of share options for cancellation | – | (6 | ) | ||||
| Payment of dividends | (1,293 | ) | (924 | ) | |||
| Interest paid | (69 | ) | (106 | ) | |||
| Net cash used in financing activities | (2,446 | ) | (2,122 | ) | |||
| Cash flows (used in) from investing activities: | |||||||
| Interest received | 75 | 52 | |||||
| Acquisitions of property and equipment | (267 | ) | (506 | ) | |||
| Proceeds on disposal of property and equipment | – | 12 | |||||
| Acquisitions of other intangible assets | (132 | ) | (74 | ) | |||
| Deferred development costs | (254 | ) | (819 | ) | |||
| Net cash used in investing activities | (578 | ) | (1,335 | ) | |||
| Net increase (decrease) in cash and cash equivalents during the period | 1,050 | (2,037 | ) | ||||
| Cash and cash equivalents – beginning of period | 9,704 | 10,815 | |||||
| Cash and cash equivalents – end of period | $ | 10,754 | $ | 8,778 | |||
| TECSYS Inc. |
| Condensed Interim Consolidated Statements of Changes in Equity |
| (Unaudited) |
| Nine-month periods ended January 31, 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 period | – | – | – | – | 1,222 | 1,222 | ||||||||||
| Other comprehensive loss for the period: | ||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | – | – | – | (488 | ) | – | (488 | ) | ||||||||
| Total comprehensive income (loss) for the period | – | – | – | (488 | ) | 1,222 | 734 | |||||||||
| Dividends to equity owners | – | – | – | – | (1,293 | ) | (1,293 | ) | ||||||||
| Total transactions with owners of the Company | – | – | – | – | (1,293 | ) | (1,293 | ) | ||||||||
| Balance, January 31, 2017 | 12,315,326 | $ | 8,349 | $ | 9,577 | $ | 119 | $ | 8,842 | $ | 26,887 | |||||
| Balance, April 30, 2015 | 12,315,326 | $ | 8,349 | $ | 9,577 | $ | 95 | $ | 5,341 | $ | 23,362 | |||||
| Profit for the period | – | – | – | – | 979 | 979 | ||||||||||
| Other comprehensive loss for the period: | ||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | – | – | – | (474 | ) | – | (474 | ) | ||||||||
| Total comprehensive income (loss) for the period | – | – | – | (474 | ) | 979 | 505 | |||||||||
| Dividends to equity owners | – | – | – | – | (924 | ) | (924 | ) | ||||||||
| Total transactions with owners of the Company | – | – | – | – | (924 | ) | (924 | ) | ||||||||
| Balance, January 31, 2016 | 12,315,326 | $ | 8,349 | $ | 9,577 | $ | (379 | ) | $ | 5,396 | $ | 22,943 | ||||
Investor relations: steve.li@tecsys.com,
(514) 866-5800 ext. 4120
Media relations: media@tecsys.com
(514) 866-0001 or (800) 922-8649