TECSYS Reports Financial Results for First Quarter Fiscal 2018
Record quarterly contract bookings achieved for a Q1
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MONTREAL, QUEBEC -- (Marketwired) -- 09/07/17 -- TECSYS Inc. (TSX: TCS), an industry-leading supply chain management software company, today announced its results for the first quarter of fiscal year 2018, ended July 31, 2017. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS) and are unaudited.
"The first quarter of our fiscal year covers the summer months and is typically our slowest quarter. This year however we experienced increased sales activity in the quarter resulting in a record level of contract bookings for a first quarter. Included in the new bookings is a contract from a provincial liquor board, the fourth to choose TECSYS for its SCM needs and another from one of our largest existing customers for additional distribution centre deployment," said Peter Brereton, President and CEO of TECSYS Inc. "The continued adoption of TECSYS solutions as the standardized platform for our customers and entire sectors is a testament to both the agility and reliability of our software. Today's rapidly evolving supply chain requires agile solutions that the old monolithic systems struggle to provide."
"In order to provide more clarity to our investors, beginning this quarter we have regrouped cloud, maintenance and subscription revenue on a separate line on the Consolidated Statements of Income and Comprehensive Income. This revenue stream, which is mostly recurring in nature, grew by 7% in the quarter," said Brian Cosgrove, the Chief Financial Officer of TECSYS Inc.
First Quarter Highlights:
-- Total revenue was $16.5 million, 3% higher than $16.1 million for Q1
2017.
-- Proprietary products revenue remained flat at $1.2 million, compared to
Q1 2017.
-- Cloud, maintenance and subscription revenue increased to $7.1 million,
7% higher than $6.6 million for Q1 2017.
-- Professional services revenue was $6.1 million, compared to $6.2 million
in Q1 2017.
-- Total gross profit margin was flat at 47% compared to Q1 2017.
-- Operating expenses increased to $7.7 million, compared to $7.4 million
for Q1 2017.
-- Profit from operations was $65,000, compared to $243,000 for the same
period in fiscal 2017.
-- Profit was $69,000 or $0.01 per share in Q1 2018 compared to $128,000 or
$0.01 per share for Q1 2017.
-- EBITDA was $687,000, compared to $814,000 for Q1 2017.
-- Total contract value bookings amounted to $9.9 million, a 64% increase
over $6.0 million for Q1 2017.
-- Cash and cash equivalents totaled $23.2M at the end of Q1 2018 compared
to $13.5M at the end of Q4 2017.
"The strong bookings are expected to translate into revenue growth in future quarters. In the meantime, we experienced increasing operating costs and lower profits in the quarter as we incurred sales commission expenses and applied additional resources to ensure a successful launch of a new point-of-use healthcare solution," added Mr. Brereton. "The solution is now live at a large U.S. hospital network and will serve as a model for further implementations in fiscal 2018."
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3 Months 3 Months Trailing 12 Trailing 12
Results from Ended July 31 Ended July 31 Months Ended Months Ended
Operations 2017 2016 July 31, 2017 July 31, 2016
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In thousands of dollars except per share amounts
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Total Revenue $16,511 $16,097 $68,861 $68,632
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Gross Margin $7,752 $7,606 $34,342 $35,011
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Gross Margin % 47% 47% 50% 51%
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Operating Expenses $7,687 $7,363 $26,569 $30,426
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Op. Ex. As % of
Revenue 47% 46% 39% 44%
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Profit from
Operations $65 $243 $7,773 $4,585
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EBITDA $687 $814 $10,237 $7,147
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EPS $0.01 $0.01 $0.49 $0.39
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Contract Bookings $9,892 $6,016 $46,504 $41,524
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The Company has declared a dividend of $0.045 per share to be paid on October 6, 2017 to shareholders of record at the close of business on September 22, 2017.
Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be "eligible" dividends.
First Quarter 2018 Results Conference Call Date: September 7, 2017 Time: 4:30 pm EST Phone number: (416) 981-9070 or (800) 672-8406 The call can be replayed until July 14, 2017 by calling (416) 626-4100 or (800) 558-5253 (access code: 21857756).
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 July 31, 2017 and April 30, 2017
(in thousands of Canadian dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
July 31, April 30,
2017 2017
----------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 23,246 $ 13,476
Accounts receivable 11,738 14,218
Work in progress 695 612
Other receivables 1,359 370
Tax credits 3,973 3,126
Inventory 1,033 914
Prepaid expenses 1,823 1,899
----------------------------------------------------------------------------
Total current assets 43,867 34,615
----------------------------------------------------------------------------
Non-current assets
Other long-term receivables 276 -
Tax credits 5,437 5,407
Property and equipment 2,329 2,444
Deferred development costs 2,521 2,751
Other intangible assets 1,447 1,523
Goodwill 3,596 3,596
Deferred tax assets 2,194 2,201
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Total non-current assets 17,800 17,922
----------------------------------------------------------------------------
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Total assets $ 61,667 $ 52,537
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Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 7,931 $ 9,265
Current portion of long-term debt 61 69
Deferred revenue 11,860 12,094
----------------------------------------------------------------------------
Total current liabilities 19,852 21,428
----------------------------------------------------------------------------
Non-current liabilities
Long-term debt 110 121
Other non-current liabilities 265 277
----------------------------------------------------------------------------
Total non-current liabilities 375 398
----------------------------------------------------------------------------
Total liabilities 20,227 21,826
----------------------------------------------------------------------------
Equity
Share capital 18,803 8,349
Contributed surplus 9,577 9,577
Retained earnings 12,544 13,064
Accumulated other comprehensive income (loss) 516 (279)
----------------------------------------------------------------------------
Total equity attributable to the owners of the
Company 41,440 30,711
----------------------------------------------------------------------------
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Total liabilities and equity $ 61,667 $ 52,537
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TECSYS Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive
Income
(Unaudited)
Three month periods ended July 31, 2017 and 2016
(in thousands of Canadian dollars, except per share data)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Three Months
Ended Ended
July 31, July 31,
2017 2016
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue:
Proprietary products $ 1,248 $ 1,224
Third-party products 1,522 1,493
Cloud, maintenance and subscription 7,090 6,644
Professional services 6,144 6,184
Reimbursable expenses 507 552
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Total revenue 16,511 16,097
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Cost of revenue:
Products 1,360 1,263
Services 6,892 6,676
Reimbursable expenses 507 552
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Total cost of revenue 8,759 8,491
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Gross profit 7,752 7,606
Operating expenses:
Sales and marketing 3,633 3,586
General and administration 1,576 1,340
Research and development, net of tax
credits 2,478 2,437
----------------------------------------------------------------------------
Total operating expenses 7,687 7,363
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Profit from operations 65 243
----------------------------------------------------------------------------
Net finance (income) costs (34) 96
----------------------------------------------------------------------------
Profit before income taxes 99 147
----------------------------------------------------------------------------
Income taxes 30 19
----------------------------------------------------------------------------
Profit attributable to the owners of the
Company $ 69 $ 128
----------------------------------------------------------------------------
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Other comprehensive income (loss):
Effective portion of changes in fair
value on designated revenue hedges 795 (725)
----------------------------------------------------------------------------
Comprehensive income (loss) attributable
to the owners of the Company $ 864 $ (597)
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Basic and diluted earnings per common
share $ 0.01 $ 0.01
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TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Three-month periods ended July 31, 2017 and 2016
(in thousands of Canadian dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Three Months
Ended Ended
July 31, July 31,
2017 2016
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flows from (used in) operating
activities:
Profit for the period $ 69 $ 128
Adjustments for:
Depreciation of property and equipment 203 201
Depreciation of deferred development costs 302 348
Depreciation of other intangible assets 118 125
Net finance (income) costs (34) 96
Unrealized foreign exchange and other (823) 195
Non-refundable tax credits (189) (215)
Income taxes - 19
----------------------------------------------------------------------------
Operating activities excluding changes in
non-cash working capital items related to
operations (354) 897
Accounts receivable 2,480 5,545
Work in progress (83) (662)
Other receivables (354) (106)
Tax credits (688) 1,656
Inventory (119) (91)
Prepaid expenses 77 (11)
Accounts payable and accrued liabilities (1,223) (2,786)
Deferred revenue (234) (146)
----------------------------------------------------------------------------
Changes in non-cash working capital items
related to operations (144) 3,399
----------------------------------------------------------------------------
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Net cash (used in) from operating activities (498) 4,296
----------------------------------------------------------------------------
Cash flows (used in) from financing
activities:
Repayment of long-term debt (19) (359)
Issuance of common shares 10,454 -
Interest paid (1) (26)
----------------------------------------------------------------------------
Net cash from (used in) financing activities 10,434 (385)
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Cash flows from (used in) investing
activities:
Interest received 36 33
Acquisitions of property and equipment (88) (94)
Acquisitions of other intangible assets (42) (48)
Deferred development costs (72) -
----------------------------------------------------------------------------
Net cash used in investing activities (166) (109)
----------------------------------------------------------------------------
Net increase in cash and cash equivalents
during the period 9,770 3,802
Cash and cash equivalents - beginning of
period 13,476 9,704
----------------------------------------------------------------------------
Cash and cash equivalents - end of period $ 23,246 $ 13,506
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Three-month periods ended July 31, 2017 and 2016
(in thousands of Canadian dollars, except number of shares)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Share capital
Contributed
Number Amount surplus
----------------------------------------------------------------------------
Balance, April 30, 2017 12,315,326 $ 8,349 $ 9,577
Profit for the period - - -
Other comprehensive income for
the period:
Effective portion of changes
in fair value on designated
revenue hedges - - -
----------------------------------------------------------------------------
Total comprehensive income for
the period - - -
----------------------------------------------------------------------------
Common shares issued under
bought deal financing 767,050 10,454 -
Dividends to equity owners - - -
----------------------------------------------------------------------------
Total transactions with owners of
the Company 767,050 10,454 -
----------------------------------------------------------------------------
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Balance, July 31, 2017 13,082,376 $ 18,803 $ 9,577
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance, April 30, 2016 12,315,326 $ 8,349 $ 9,577
Profit for the period - - -
Other comprehensive loss for
the period:
Effective portion of changes
in fair value on designated
revenue hedges - - -
----------------------------------------------------------------------------
Total comprehensive (loss) income
for the period - - -
----------------------------------------------------------------------------
Dividends to equity owners - - -
----------------------------------------------------------------------------
Total transactions with owners of
the Company - - -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance, July 31, 2016 12,315,326 $ 8,349 $ 9,577
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Accumulated
other
comprehensive Retained
(loss) income earnings Total
----------------------------------------------------------------------------
Balance, April 30, 2017 $ (279) $ 13,064 $ 30,711
Profit for the period - 69 69
Other comprehensive income for
the period:
Effective portion of changes
in fair value on designated
revenue hedges 795 - 795
----------------------------------------------------------------------------
Total comprehensive income for
the period 795 69 864
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Common shares issued under
bought deal financing - - 10,454
Dividends to equity owners - (589) (589)
----------------------------------------------------------------------------
Total transactions with owners of
the Company - (589) 9,865
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Balance, July 31, 2017 $ 516 $ 12,544 $ 41,440
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Balance, April 30, 2016 $ 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 (loss) income
for the period (725) 128 (597)
----------------------------------------------------------------------------
Dividends to equity owners - (369) (369)
----------------------------------------------------------------------------
Total transactions with owners of
the Company - (369) (369)
----------------------------------------------------------------------------
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Balance, July 31, 2016 $ (118) $ 8,672 $ 26,480
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Contacts: 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
Source: TECSYS Inc.
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