TMCnet News

NexJ Systems Reports Second Quarter 2021 Results
[July 29, 2021]

NexJ Systems Reports Second Quarter 2021 Results


TORONTO, July 29, 2021 /CNW/ - NexJ Systems Inc. (TSX: NXJ), delivering intelligent customer management software to the financial services industry, today announced financial results for its second quarter ended June 30, 2021.

First Quarter Summary

  • $3.8M of revenue for the second quarter as compared to $4.3M in the second quarter of the previous year
  • $130K in Adjusted EBITDA profit for the second quarter as compared to $582K in the second quarter of the previous year
  • $179K of net loss for the second quarter as compared to $1.2M of net loss in the second quarter of the previous year
  • Generated new subscription license revenue from our relationship with a leading US brokerage firm by delivering new technology that seamlessly supports multiple deployment options including public, private and hybrid clouds
  • Delivered our new reporting and dashboarding platform to a multi-national European headquartered wealth management firm
  • Entered the rapidly expanding RIA market through our eco-system partnership, driving more new customers onto our cloud service adding to our subscription license revenue in the past three months
  • Building on our partnership with IBM, our products were released on IBM Cloud for Financial Services, designed to help address financial services institutions regulatory compliance, security and resiliency requirements

"New client acquisition and the shifting revenue mix to new subscription-based product revenue within our client base and our partner ecosystem is contributing towards higher recurring revenue," said Paul O'Donnell, CEO of NexJ, "The journey we began in 2019 is beginning to have a positive impact and while our recognized revenue is lower than last year at this time our subscription license revenue and software contract backlog continues to grow."





NexJ Systems Inc.









Second Quarter Financial Results









(Expressed in thousands of Canadian dollars)









(Unaudited)











 Quarter ended June 30, 


 Six months ended June 30, 



2021


2020


2021


2020










Revenue


$


$


$


$

License and subscription fees


395


26


438


50

Professional services


1,258


1,972


3,058


3,643

Maintenance and support


2,113


2,289


4,206


4,575



3,766


4,287


7,702


8,268

Cost of revenue


894


872


1,957


2,203

Gross profit


2,872


3,415


5,745


6,065










Operating Expenses









Research and development


1,486


1,341


2,881


3,343

Sales and marketing


517


566


1,082


1,353

General and administrative


739


926


1,556


2,120



2,742


2,833


5,519


6,816










Adjusted EBITDA


130


582


226


(751)










Share-based payment expense


17


58


54


129

Depreciation and amortization


224


222


442


433

Deferred share unit expense


-


275


-


275

Restructuring costs


-


960


-


960

Loss from operations


(111)


(933)


(270)


(2,548)










Foreign exchange loss (gain)


50


239


150


(134)

Finance income


(6)


(19)


(9)


(43)

Finance expense


24


34


51


70

Net loss for the period


(179)


(1,187)


(462)


(2,441)


Non-IFRS Measures

This news release includes certain measures that have not been prepared in accordance with International Financial Reporting Standards ("IFRS") such as Adjusted EBITDA and Adjusted EBITDA margin which are used to evaluate the Company's operating performance as a complement to results provided in accordance with IFRS. The Company believes that Adjusted EBITDA and Adjusted EBITDA margin are useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and the other items listed below.

The term "Adjusted EBITDA" refers to net income (loss) before adjusting for share-based payment expense, depreciation and amortization, deferred share unit expense, restructuring costs, foreign exchange gain (loss), finance income, finance costs, and income taxes. "Adjusted EBITDA margin" refers to the percentage that Adjusted EBITDA for any period represents as a portion of total revenue for that period.

The term Adjusted EBITDA and Adjusted EBITDA margin are not measures recognized by IFRS and do not have standardized meanings prescribed by IFRS. Therefore, Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similar measures presented by other issuers. Investors are cautioned that Adjusted EBITDA and Adjusted

EBITDA margin should not be construed as an alternative to net income (loss) as determined in accordance with IFRS.

About NexJ Systems Inc.

NexJ Systems provides Intelligent Customer Management to the financial services industry. Our award-winning CRM is designed to help Wealth Management, Private Banking, Corporate and Commercial Banking, and Insurance firms revolutionize their business. Powered by artificial intelligence, our products help drive productivity, boost client engagement, and increase revenue. With users in over 60 countries, our customers benefit from our deep expertise across financial services verticals, strategic investment in innovation, and commitment to their success.

Based in Toronto, NexJ has clients throughout North America, Asia Pacific and in Europe. For more information about NexJ visit www.nexj.com, e-mail info@nexj.com, or call 416-222-5611. Join us on LinkedIn, follow us on Twitter, subscribe to our YouTube channel, or like us on Facebook.

NexJ Forward-looking Statement
Certain statements in this press release, including statements about the financial conditions, and results of operations and earnings, may contain words such as "may", "will", "expect", "anticipate", "aim", "estimate", "intend", "plan", "seek", "believe", "potential", "continue", "is/are likely to", "could", "should", "target", "envision", and other similar language and are considered forward-looking statements or information under applicable securities laws. These statements are based on the Company's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which the Company operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. The Company's assumptions, although considered reasonable by the Company at the date of this press release, may provide to be inaccurate and consequently the Company's actual results could differ materially from the expectations set out herein.

Actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following: (i) the future performance, financial and otherwise, of NexJ; (ii) the ability of NexJ to protect, maintain and enforce its intellectual property rights; (iii) the acceptance by the Company's customers and the marketplace of new technologies and solutions; (iv) the Company's growth and profitability prospects; (v) the estimated size and growth prospects of the CRM market; (vi) the Company's competitive position in the CRM market and its ability to take advantage of future opportunities in this market; (vii) the Company's ability to attract new customers and develop and maintain existing customers; and (viii) the demand for the Company's product and the extent of deployment of the company's products in the CRM marketplace. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances.

The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) our dependence on a limited number of customers and large project size; (ii) fluctuation in our quarterly operating results; (iii) our dependence on key personnel and our compensation structure; (iv) risks associated with managing large and complex software implementation projects; (v) uncertainties and assumptions in our sales forecasts, including the extent to which sales proposals are converted into sales; (vi) risks associated with our ability to design, develop, test, market, license and support our software products on a timely basis; (vii) market acceptance of our products and services; (viii) commercial success of products resulting from our investment in research and development; (ix) our success in expanding sales into new international markets; * competition in our industry; (xi) failure to protect our intellectual property or infringement of intellectual property rights of third parties; (xii) reliance upon a limited number of third-party software products to develop our products; (xiii) defects or disruptions in our products and services; (xiv) currency exchange rate fluctuations; (xv) lengthy sales cycles for our software; (xvi) general economic conditions; (xvii) failure to manage our growth successfully; (xviii) failure to successfully manage and integrate acquisitions; (xix) breach of our security measures and unauthorized access to data; (xx) employee retention and (xxi) litigation, including commercial, product liability, employment, class action and other litigation and claims.

For additional information with respect to risks and other factors which could occur, see the Company's most recently filed Annual Information Form for the year ended December 31, 2020 dated February 18, 2021, and other securities filings with the Canadian securities regulators available on www.sedar.com.  Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

  NexJ Systems Inc.




Condensed Interim Statements of Financial Position




  (Expressed in thousands of Canadian dollars)




  (Unaudited)









June 30, 2021


December 31, 2020





Assets





$


$

Current assets:




Cash and cash equivalents

6,378


5,426

Accounts receivable

898


3,546

Prepaid expenses and other assets 

1,034


1,320

Total current assets

8,310


10,292





Non-current assets:




Property and equipment

692


768

Right-of-use assets

1,170


1,280

Goodwill 

1,753


1,753

Investments

248


255

Contract costs

70


51

Other assets 

333


403

Total non-current assets

4,266


4,510





Total assets

12,576


14,802





Liabilities and Shareholders' Equity








Current liabilities:




Accounts payable and accrued liabilities 

1,860


1,874

Deferred revenue

4,231


5,374

Lease liabilities 

1,095


967

Total current liabilities

7,186


8,215





Non-current liabilities:




Accrued liabilities

77


101

Deferred revenue

-


346

Lease liabilities

666


1,078

Total non-current liabilities

743


1,525





Total liabilities

7,929


9,740





Shareholders' equity:




Share capital 

83,471


83,471

Share purchase loans 

(3,598)


(3,598)

Contributed surplus 

8,718


8,664

Accumulated other comprehensive loss

(21)


(14)

Deficit

(83,923)


(83,461)

Total shareholders' equity

4,647


5,062





Total liabilities and shareholders' equity

12,576


14,802

 

NexJ Systems Inc.


Condensed Interim Statements of Comprehensive Loss


(Expressed in thousands of Canadian dollars, except per share amounts


(Unaudited)





Three months ended June 30,


Six months ended June 30,


2021


2020


2021


2020









Revenue

$


$


$


$

License and subscription fees

395


26


438


50

Professional services

1,258


1,972


3,058


3,643

Maintenance and support

2,113


2,289


4,206


4,575


3,766


4,287


7,702


8,268

Cost of revenue

887


877


1,955


2,224

Gross profit

2,879


3,410


5,747


6,044









Expenses:








Research and development

1,492


1,353


2,895


3,371

Sales and marketing

518


568


1,084


1,358

General and administrative

980


1,462


2,038


2,903

Restructuring costs

-


960


-


960


2,990


4,343


6,017


8,592









Loss from operations

(111)


(933)


(270)


(2,548)









Foreign exchange gain (loss)

(50)


(239)


(150)


134

Finance income 

6


19


9


43

Finance expense 

(24)


(34)


(51)


(70)


(68)


(254)


(192)


107

















Net loss for the period

(179)


(1,187)


(462)


(2,441)









Other comprehensive income (loss):








Items that will not be reclassified to profit or loss:








     Unrealized gain (loss) on equity securities

(4)


(12)


(7)


12

Loss for the period and comprehensive loss

(183)


(1,199)


(469)


(2,429)









Loss per share








Basic and diluted

(0.01)


(0.06)


(0.02)


(0.12)









Weighted average number of common shares 








outstanding, in thousands








Basic and diluted

21,055


20,664


21,055


20,670

 

NexJ Systems Inc.




Condensed Interim Statements of Cash Flows




(Expressed in thousands of Canadian dollars)




(Unaudited)









Six months ended


Six months ended


June 30, 2021


June 30, 2020









Cash flows from (used in) operating activities:

$


$

Loss for the period

(462)


(2,441)

Adjustments for:




Depreciation and amortization of property and equipment

108


148

Depreciation of right-of-use assets

334


285

Changes in contract costs

(19)


61

Share-based payment expense

54


129

Deferred share unit expense

-


218

Finance income

(9)


(43)

Finance expense

51


70

Foreign exchange loss

81


31

Change in non-cash operating working capital:




Accounts receivable

2,648


4,448

Prepaid expenses and other assets

362


21

Accounts payable and accrued liabilities

(38)


1,107

Deferred revenue

(1,494)


(1,146)

Net cash flows from operating activities

1,616


2,888





Cash flows used in financing activities:




Payment of lease liabilities

(557)


(323)

Interest paid

(3)


-

Net cash flows used in financing activities

(560)


(323)





Cash flows from (used in) investing activities:




Purchase of property and equipment

(32)


(84)

Interest received

9


43

Net cash flows used in investing activities

(23)


(41)





Effects of exchange rates on cash and cash equivalents

(81)


(31)





Increase in cash and cash equivalents

952


2,493





Cash and cash equivalents, beginning of period

5,426


5,123





Cash and cash equivalents, end of period

6,378


7,616

 

SOURCE NexJ Systems Inc.


[ Back To TMCnet.com's Homepage ]