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TECSYS Announces Q2, 2010 Results
(Marketwire (Canada) Via Acquire Media NewsEdge) MONTREAL, QUEBEC--(Marketwire - Nov. 25, 2009) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, announced today its results for the second quarter of fiscal year 2010, ended October 31st, 2009. All dollar amounts are expressed in Canadian currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP) and are unaudited.
Highlights of the Second Quarter include:
- Earnings from operations for the second quarter, 2010 increased to $813K from $771K in Q2, 2009.
- Revenue was $9.9M in Q2, 2010 compared to $10.7M in Q2, 2009 due to a decrease in hardware sales.
- EBITDA for Q2, 2010 increased to $1,118K from $1,018K for Q2 of last fiscal year.
- Net earnings for the second quarter, 2010 were $746K or $0.06 per share compared to $644K or $0.05 per share for the second quarter of last fiscal year. Net earnings for the quarter were achieved after accounting for foreign exchange losses of $26K and a share of net loss and amortization of intangible assets of $23K from a company in which TECSYS has an equity interest.
- Annualized return-on-equity was equal to 18.7% in Q2, 2010 compared to 16.5% in Q2 of last fiscal year.
- At the end of Q2, 2010 annualized recurring revenue in Canadian currency was $13.1M, the same as at the end of Q2, 2009 due to currency fluctuations. However, USD denominated recurring revenue increased by $770K or 14% while CAD denominated recurring revenue was flat. Recurring revenue is principally made-up of annual software maintenance contracts.
- At the end of Q2, 2010, backlog stood at $17.9M compared to $18.4M at the end of Q1, 2010.
- Cash, cash equivalents and other short-term investments amounted to $7.1M at the end of Q2, 2010, compared to $6.0M at the end of Q2, 2009 with no significant long-term debt.
Peter Brereton, President and CEO of TECSYS Inc., commented on the results: "Major new agreements in our healthcare vertical, particularly in the emergency preparedness sector, drove license revenue substantially, improving our gross margin to 48% and EPS to six cents per share. Complementing this was ten major go-lives in healthcare and high-volume distribution that have contributed positively to our revenue mix and profitability. The revenue decline during the quarter was due to a decrease in hardware sales of $1.1M, and to slower services bookings during past recessionary quarters, resulting in lower services billings. While services bookings have picked up in the second quarter, the billings will only be realized in a few months as projects are completed. Overall, this was a solid quarter, with continued growth of our proprietary software and services business and the highest license revenue this decade, continuing our trend of positive returns."
During the quarter, the Company signed agreements with existing clients and new customers including:
- A hospital supply network in the state of Washington
- A major emergency preparedness center in Maryland
- A major speciality drug distributor in the U.S.
- A heavy equipment dealer in Saskatchewan
- A packaged gas and welding supplies distributor in North Carolina
- Two Industrial distributors in Ontario
- A major private university in the state of Virginia
- A leading food distributor in the province of Quebec
- Two office supplies distributors in Ontario
- A leading supplier of signs and imaging products across Canada
- A hardware supplier in Quebec
- A construction material supplies distributor in Ontario
Furthermore, TECSYS also deployed its supply chain execution solutions at sixteen customer sites, five of which were in healthcare, five in high-volume distribution for mid to large size clients and six in the SMB sector.
Highlights of the first half of fiscal year 2010 include:
- Earnings from operations for the first half, 2010 increased to $1,113K from $1,037K for the same period in last fiscal year.
- Revenue for the first half, 2010 was $19.1M compared to $20.9M for the same period of last fiscal year due to a decrease in hardware sales.
- EBITDA for the first half, 2010 was $1,574K compared to $1,675K for the first half of 2009.
- Net earnings for the first half of fiscal, 2010 were $854K or $0.07 per share compared to $918K or $0.07 per share for the same period of the prior fiscal year. Net earnings for the first half were achieved after accounting for net interest income of $2K, foreign exchange losses of $194K and a share of net loss and amortization of intangible assets of $49K from a company in which TECSYS has an equity interest.
- Annualized return-on-equity was equal to 10.7% in the first half of fiscal 2010 compared to 11.9% for the same period in last fiscal year.
TECSYS' Second Quarter 2010 Earnings Conference Call:
Subject: Second Quarter FY2010 Results Conference Call
Date: November 25, 2009
Time: 4:30 pm
Phone number: 800-379-4140 or 416-620-5690
The call can be replayed by calling 800-558-5253 (access code: 21444001) or 416-626-4100 (access code: 21444001).
About TECSYS
TECSYS is a leading supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, 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, 2009. 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 (C) TECSYS Inc. 2009. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.
TECSYS Inc.
Consolidated Balance Sheets
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
-------------------------------------------------------------------------
(in thousands of Canadian dollars)
October 31, April 30,
2009 2009
(unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents 6,790 7,510
Short-term and other investments 325 325
Accounts receivable 9,265 9,307
Work in progress 231 303
Other accounts receivable 240 198
Tax credits receivable 1,999 1,536
Inventory 210 219
Prepaid expenses 836 668
-------------------------------------------------------------------------
19,896 20,066
Restricted cash equivalents and other
investments 940 739
Asset-backed commercial paper 3,505 3,535
Long-term receivables 101 77
Long-term investment 241 290
Property and equipment 1,413 1,481
Intangible assets 722 930
Deferred development costs 1,730 1,519
Goodwill 2,829 2,829
-------------------------------------------------------------------------
31,377 31,466
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities
Current liabilities
Bank advances 3,978 4,000
Accounts payable and accrued liabilities 4,411 5,154
Current portion of long-term debt 133 133
Deferred revenue 6,610 6,249
-------------------------------------------------------------------------
15,132 15,536
Long-term debt 100 100
-------------------------------------------------------------------------
15,232 15,636
-------------------------------------------------------------------------
Shareholders' equity
Capital stock 1,402 1,420
Contributed surplus 12,117 12,328
Retained earnings 2,626 2,082
-------------------------------------------------------------------------
16,145 15,830
-------------------------------------------------------------------------
-------------------------------------------------------------------------
31,377 31,466
-------------------------------------------------------------------------
-------------------------------------------------------------------------
TECSYS Inc.
Consolidated Statements of Earnings and Comprehensive Earnings
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
--------------------------------------------------------------------------
(in thousands of Canadian
dollars, except share
and per share data)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Revenue
Products 4,146 4,517 7,092 8,962
Services 5,509 5,893 11,500 11,442
Reimbursable expenses 272 301 533 544
--------------------------------------------------------------------------
9,927 10,711 19,125 20,948
Cost of revenue
Products 1,234 2,056 2,332 4,341
Services 3,686 3,744 7,299 7,433
Reimbursable expenses 272 301 533 544
--------------------------------------------------------------------------
5,192 6,101 10,164 12,318
--------------------------------------------------------------------------
Gross margin 4,735 4,610 8,961 8,630
--------------------------------------------------------------------------
Operating expenses
Sales and marketing 1,506 1,582 2,891 3,162
General and administration 861 908 1,938 1,715
Gross research and
development 1,600 1,371 3,025 2,615
Research and development
tax credits (202) (152) (347) (289)
Deferred development costs (214) (249) (392) (381)
Stock-based compensation 32 32 60 62
Amortization of property
and equipment 127 133 248 265
Amortization of intangible
assets 122 177 244 370
Amortization of deferred
development costs 90 37 181 74
--------------------------------------------------------------------------
3,922 3,839 7,848 7,593
--------------------------------------------------------------------------
Earnings from operations 813 771 1,113 1,037
Interest income 6 17 12 38
Interest expense (6) (29) (10) (55)
Foreign exchange (losses) (26) (89) (194) (77)
Share of net loss and
amortization of intangible
assets of a company subject
to significant influence (23) (26) (49) (25)
--------------------------------------------------------------------------
Earnings before income taxes 764 644 872 918
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Income taxes 18 - 18 -
--------------------------------------------------------------------------
Net earnings and
comprehensive earnings for
the period 746 644 854 918
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Weighted average number of
common shares outstanding
- basic 12,377,124 12,827,687 12,422,122 12,917,035
--------------------------------------------------------------------------
- diluted 12,567,082 12,827,975 12,573,990 12,944,070
--------------------------------------------------------------------------
Basic and diluted net
earnings per common
share $0.06 $0.05 $0.07 $0.07
--------------------------------------------------------------------------
--------------------------------------------------------------------------
TECSYS Inc.
Consolidated Statements of Cash Flows
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
--------------------------------------------------------------------------
(in thousands of Canadian dollars)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Cash flows from
Operating activities
Net earnings for the
period 746 644 854 918
Adjustments for
Amortization of property
and equipment 127 133 248 265
Amortization of intangible
assets 122 177 244 370
Amortization of deferred
development costs 90 37 181 74
Stock-based compensation 32 32 60 62
Unrealized foreign exchange
losses (gains) 335 915 (120) 1,043
Deferred development costs (214) (249) (392) (381)
Share of net loss and
amortization of intangible
assets of a company subject
to significant influence 23 26 49 25
--------------------------------------------------------------------------
1,261 1,715 1,124 2,376
Changes in non-cash working
capital items related to
operations
(Increase) decrease in
accounts receivable (657) (1,381) 42 (1,544)
Decrease (increase) in work
in progress 17 74 72 (269)
Decrease (increase) in
other accounts receivable 6 (2) 8 64
Increase in tax credits
receivable (373) (318) (463) (429)
(Increase) decrease in
inventory (5) (4) 9 (12)
Decrease (increase) in
prepaid expenses 238 (107) (168) (59)
Decrease in long-term
receivables - 29 - 58
(Decrease) increase in
accounts payable and
accrued liabilities (375) 396 (743) 441
(Decrease) increase in
deferred revenue (312) 798 361 621
--------------------------------------------------------------------------
(200) 1,200 242 1,247
--------------------------------------------------------------------------
Financing activities
Bank advances (22) - (22) (3)
Purchase price adjustments
on acquisition applied
against long-term debt - (41) - (41)
Issuance of common shares - - - 20
Purchase of common shares
for cancellation (31) (366) (289) (376)
Dividends paid on common
shares (310) (255) (310) (255)
--------------------------------------------------------------------------
(363) (662) (621) (655)
--------------------------------------------------------------------------
Investing activities
Increase in short-term
and other investments
and restricted cash
equivalents and other
investments (201) - (201) (23)
Interest and principal
received on asset-backed
commercial paper 8 - 95 -
Acquisitions of property
and equipment (45) (43) (180) (206)
Proceeds on disposal of
property and equipment - 8 - 8
Acquisitions of
intangible assets (19) (8) (36) (85)
Proceeds on disposal of
intangible assets - 7 - 7
(Increase) decrease in
long-term receivables
including the current
portion from a related
party (40) 12 (19) 24
--------------------------------------------------------------------------
(297) (24) (341) (275)
--------------------------------------------------------------------------
Variation in cash and
cash equivalents (860) 514 (720) 317
Cash and cash equivalents
- beginning of period 7,650 5,496 7,510 5,693
--------------------------------------------------------------------------
Cash and cash equivalents
- end of period 6,790 6,010 6,790 6,010
--------------------------------------------------------------------------
--------------------------------------------------------------------------
TECSYS Inc.
Consolidated Statements of Shareholders' Equity
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
--------------------------------------------------------------------------
(in thousands of Canadian dollars, except number of shares)
(unaudited)
Common shares Contributed Retained Total
Number Amount surplus earnings
--------------------------------------------------------------------------
Balance, April
30, 2009 12,525,884 1,420 12,328 2,082 15,830
Repurchase of
common shares (157,340) (18) (271) - (289)
Stock options
exercised 281 - - - -
Stock-based
compensation - - 60 - 60
Net earnings for
the period - - - 854 854
Dividends (310) (310)
--------------------------------------------------------------------------
Balance, October
31, 2009 12,368,825 1,402 12,117 2,626 16,145
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Common shares Contributed Retained Total
Number Amount surplus earnings
--------------------------------------------------------------------------
Balance, April
30, 2008 13,003,684 1,444 12,826 1,003 15,273
Repurchase of
common shares (270,300) (30) (346) - (376)
Stock options
exercised 12,500 20 - - 20
Fair value
associated with
options exercised - 10 (10) - -
Stock-based
compensation - - 62 - 62
Net earnings for
the period - - - 918 918
Dividends - - - (255) (255)
--------------------------------------------------------------------------
Balance, October
31, 2008 12,745,884 1,444 12,532 1,666 15,642
--------------------------------------------------------------------------
--------------------------------------------------------------------------
FOR FURTHER INFORMATION PLEASE CONTACT:
TECSYS Inc.
Solutions and general info: info@tecsys.com
Investor relations: investor@tecsys.com
Media relations: media@tecsys.com
514-866-0001 or 800-922-8649
Source: TECSYS Inc.
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