MONTREAL, March 01, 2018 (GLOBE NEWSWIRE) -- TECSYS Inc. (TSX:TCS) an industry-leading supply chain management software company, today announced its results for the third quarter of fiscal year 2018, ended January 31, 2018. The unaudited interim financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). All dollar amounts are expressed in Canadian dollars unless otherwise indicated.
Third Quarter Highlights:
- Total revenue was $17.2 million, 1% lower than $17.4 million for Q3 2017. The weaker U.S. dollar had an unfavorable impact of $0.6 million. Excluding the foreign exchange impact, total revenue would have grown by 2%.
- Proprietary products revenue decreased by $0.6 million to $0.9 million compared to Q3 2017.
- Cloud, maintenance and subscription revenue stayed flat at $6.6 million compared to Q3 2017.
- Professional services revenue was $7.3 million, 6% higher than $6.9 million in Q3 2017.
- Total gross profit margin was 47%, compared to 51% in Q3 2017.
- Operating expenses decreased to $7.3 million, compared to $7.6 million for Q3 2017.
- Profit from operations was $0.8 million, compared to $1.3 million for the same period in fiscal 2017. The weaker U.S. dollar had an unfavorable impact of $0.4 million. Excluding the foreign exchange impact, profit from operations would have been $1.2 million.
- Profit was $0.7 million or $0.06 per share in Q3 2018 compared to $0.9 million or $0.07 per share for Q3 2017.
- EBITDA was $1.3 million, compared to $1.9 million for Q3 2017. The weaker U.S. dollar had an unfavorable impact of $0.4 million. Excluding the foreign exchange impact, EBITDA would have been $1.7 million.
- Total contract value bookings amounted to $12.0 million, compared to $14.6 million for Q3 2017.
- At the end of Q3, backlog stood at $42.0 million.
- Cash and cash equivalents, as well as redeemable long-term investments, totaled $20.7 million at the end of Q3 2018 compared to $13.5 million at the end of Q4 2017.
“In the third quarter of fiscal 2018 we were delighted to add another IDN to our client list as well as expand within our base of hospital networks as we signed additional contracts for point-of-use implementation within our customer base. In constant currency, revenue rose 2% in the quarter, and bookings were strong. We have continued to reduce operating expenses to enable more of our revenue to fall to the bottom line. Even before adjusting for currency, our operating expenses as a percent of revenue continue to drop and our YTD operating earnings are up 32% or 53% after adjusting for currency swings,” said Peter Brereton, President and CEO of TECSYS Inc. “The pipeline looks good, our backlog remains strong, and the fourth quarter is off to a very strong start with the signing of a large new enterprise IDN contract and several base account projects.”
In thousands of dollars except per share amounts
| Results from Operations | Q3 2018 | Q3 2017 | 9 Months Ended January 31, 2018 | 9 Months Ended January 31, 2017 | Trailing 12 Months Ended January 31, 2018 | Trailing 12 Months Ended January 31, 2017 | ||||||||||||
| Total Revenue | $ | 17,227 | $ | 17,385 | $ | 51,810 | $ | 50,000 | $ | 70,257 | $ | 71,144 | ||||||
| Gross Profit | $ | 8,120 | $ | 8,915 | $ | 25,310 | $ | 24,182 | $ | 34,694 | $ | 36,508 | ||||||
| Gross Margin % | 47% | 51% | 49% | 50% | 49% | 51% | ||||||||||||
| Operating Expenses | $ | 7,275 | $ | 7,577 | $ | 22,805 | $ | 22,911 | $ | 26,139 | $ | 31,370 | ||||||
| Op Ex as % of Revenue | 42% | 44% | 44% | 46% | 37% | 44% | ||||||||||||
| Profit from Operations | $ | 845 | $ | 1,338 | $ | 2,505 | $ | 1,901 | $ | 8,555 | $ | 5,138 | ||||||
| EBITDA | $ | 1,312 | $ | 1,941 | $ | 4,183 | $ | 3,690 | $ | 10,857 | $ | 7,527 | ||||||
| EPS | $ | 0.06 | $ | 0.07 | $ | 0.17 | $ | 0.10 | $ | 0.56 | $ | 0.41 | ||||||
| Contract Bookings | $ | 12,024 | $ | 14,590 | $ | 33,369 | $ | 31,526 | $ | 44,471 | $ | 44,590 | ||||||
First Nine Months Highlights:
- Total revenue was $51.8 million, 4% higher than $50.0 million in the first nine months of fiscal 2017. The weaker U.S. dollar had an unfavorable impact of $0.7 million. Excluding the foreign exchange impact, total revenue would have grown at 5%.
- Cloud, maintenance and subscription revenue increased to $20.1 million, 3% higher than $19.4 million in the first nine months of fiscal 2017.
- Professional services revenue was $21.4 million, 9% higher than $19.6 million in the first nine months of fiscal 2017.
- Total gross profit margin was 49%, compared to 50% in the first nine months of fiscal 2017.
- Operating expenses decreased to $22.8 million compared to $22.9 million the first nine months of fiscal 2017.
- Profit from operations was $2.5 million, compared to $1.9 million for the same period in fiscal 2017. The weaker U.S. dollar had an unfavorable impact of $0.4 million. Excluding the foreign exchange impact, profit from operations would have been $2.9 million.
- Profit was $2.1 million or $0.17 per share for the first nine months of fiscal 2018 compared to $1.2 million or $0.10 per share for the first nine months of fiscal 2017.
- EBITDA was $4.2 million, compared to $3.7 million for the first nine months of fiscal 2017. Excluding the foreign exchange impact, EBITDA would have been $4.6 million.
- Total contract value bookings amounted to $33.4 million, compared to $31.5 million for the first nine months of fiscal 2017.
The Company declared a dividend of $0.05 per share, to be paid on April 12, 2018 to shareholders of record at the close of business on March 22, 2018.
Third Quarter 2018 Results Conference Call
Date: March 2, 2018
Time: 8:30 am EST
Phone number: (416) 981-9070 or (800) 698-6127
The call can be replayed until March 9th, 2018 by calling (416) 626-4100 or (800) 558-5253 (access code: 21884079).
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.
Contact
Solutions and General info: info@tecsys.com
Investor Relations: steve.li@tecsys.com, (514) 866-5800 ext. 4120
Media Relations: media@tecsys.com
By phone: (514) 866-0001 or (800) 922-8649
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, 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. 2018. 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, 2018 and April 30, 2017 | ||||||
| (in thousands of Canadian dollars) | ||||||
| January 31, 2018 | April 30, 2017 | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 10,715 | $ | 13,476 | ||
| Accounts receivable | 12,627 | 14,218 | ||||
| Work in progress | 472 | 612 | ||||
| Other receivables | 983 | 370 | ||||
| Tax credits | 5,477 | 3,126 | ||||
| Inventory | 1,427 | 914 | ||||
| Prepaid expenses | 1,811 | 1,899 | ||||
| Total current assets | 33,512 | 34,615 | ||||
| Non-current assets | ||||||
| Long-term investments | 10,007 | - | ||||
| Other long-term receivables | 252 | - | ||||
| Tax credits | 5,179 | 5,407 | ||||
| Property and equipment | 2,899 | 2,444 | ||||
| Deferred development costs | 2,039 | 2,751 | ||||
| Other intangible assets | 1,416 | 1,523 | ||||
| Goodwill | 3,596 | 3,596 | ||||
| Deferred tax assets | 2,494 | 2,201 | ||||
| Total non-current assets | 27,882 | 17,922 | ||||
| Total assets | $ | 61,394 | $ | 52,537 | ||
| Liabilities | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 8,998 | $ | 9,265 | ||
| Current portion of long-term debt | 47 | 69 | ||||
| Deferred revenue | 10,016 | 12,094 | ||||
| Total current liabilities | 19,061 | 21,428 | ||||
| Non-current liabilities | ||||||
| Long-term debt | 88 | 121 | ||||
| Other non-current liabilities | 290 | 277 | ||||
| Total non-current liabilities | 378 | 398 | ||||
| Total liabilities | 19,439 | 21,826 | ||||
| Equity | ||||||
| Share capital | 18,803 | 8,349 | ||||
| Contributed surplus | 9,577 | 9,577 | ||||
| Retained earnings | 13,379 | 13,064 | ||||
| Accumulated other comprehensive income (loss) | 196 | (279 | ) | |||
| Total equity attributable to the owners of the Company | 41,955 | 30,711 | ||||
| Total liabilities and equity | $ | 61,394 | $ | 52,537 | ||
| TECSYS Inc. | |||||||||||||
| Condensed Interim Consolidated Statements of Income and Comprehensive Income | |||||||||||||
| (Unaudited) | |||||||||||||
| Three and nine-month periods ended January 31, 2018 and 2017 | |||||||||||||
| (in thousands of Canadian dollars, except per share data) | |||||||||||||
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | ||||||||||
| January 31, 2018 | January 31, 2017 | January 31, 2018 | January 31, 2017 | ||||||||||
| Revenue: | |||||||||||||
| Proprietary products | $ | 930 | $ | 1,546 | $ | 3,823 | $ | 4,549 | |||||
| Third-party products | 1,943 | 1,663 | 4,912 | 4,661 | |||||||||
| Cloud, maintenance and subscription | 6,569 | 6,606 | 20,105 | 19,443 | |||||||||
| Professional services | 7,332 | 6,917 | 21,360 | 19,558 | |||||||||
| Reimbursable expenses | 453 | 653 | 1,610 | 1,789 | |||||||||
| Total revenue | 17,227 | 17,385 | 51,810 | 50,000 | |||||||||
| Cost of revenue: | |||||||||||||
| Products | 1,766 | 1,511 | 4,498 | 4,124 | |||||||||
| Services | 6,888 | 6,306 | 20,392 | 19,275 | |||||||||
| Reimbursable expenses | 453 | 653 | 1,610 | 1,789 | |||||||||
| Total cost of revenue | 9,107 | 8,470 | 26,500 | 25,188 | |||||||||
| Gross profit | 8,120 | 8,915 | 25,310 | 24,812 | |||||||||
| Operating expenses: | |||||||||||||
| Sales and marketing | 3,327 | 3,672 | 10,811 | 11,027 | |||||||||
| General and administration | 1,591 | 1,454 | 4,778 | 4,513 | |||||||||
| Research and development, net of tax credits | 2,357 | 2,451 | 7,216 | 7,371 | |||||||||
| Total operating expenses | 7,275 | 7,577 | 22,805 | 22,911 | |||||||||
| Profit from operations | 845 | 1,338 | 2,505 | 1,901 | |||||||||
| Net finance (income) costs | (17 | ) | 45 | (84 | ) | 196 | |||||||
| Profit before income taxes | 862 | 1,293 | 2,589 | 1,705 | |||||||||
| Income taxes | 140 | 405 | 442 | 483 | |||||||||
| Profit attributable to the owners of the Company | $ | 722 | $ | 888 | $ | 2,147 | $ | 1,222 | |||||
| Other comprehensive income (loss): | |||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | 335 | 373 | 475 | (488 | ) | ||||||||
| Comprehensive income attributable to the owners of the Company | $ | 1,057 | $ | 1,261 | $ | 2,622 | $ | 734 | |||||
| Basic and diluted earnings per common share | $ | 0.06 | $ | 0.07 | $ | 0.17 | $ | 0.10 | |||||
| TECSYS Inc. | ||||||||
| Condensed Interim Consolidated Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| Nine-month periods ended January 31, 2018 and 2017 | ||||||||
| (in thousands of Canadian dollars) | ||||||||
| Nine Months Ended | Nine Months Ended | |||||||
| January 31, 2018 | January 31, 2017 | |||||||
| Cash flows from (used in) operating activities: | ||||||||
| Profit for the period | $ | 2,147 | $ | 1,222 | ||||
| Adjustments for: | ||||||||
| Depreciation of property and equipment | 562 | 616 | ||||||
| Depreciation of deferred development costs | 856 | 1,007 | ||||||
| Depreciation of other intangible assets | 348 | 368 | ||||||
| Net finance (income) costs | (84 | ) | 196 | |||||
| Unrealized foreign exchange and other | (850 | ) | 142 | |||||
| Non-refundable tax credits | (590 | ) | (685 | ) | ||||
| Income taxes | 323 | 361 | ||||||
| Operating activities excluding changes in non-cash working | ||||||||
| capital items related to operations | 2,712 | 3,227 | ||||||
| Accounts receivable | 1,591 | 3,707 | ||||||
| Work in progress | 140 | (390 | ) | |||||
| Other receivables | (338 | ) | (75 | ) | ||||
| Tax credits | (2,157 | ) | 144 | |||||
| Inventory | (513 | ) | (22 | ) | ||||
| Prepaid expenses | 88 | (188 | ) | |||||
| Accounts payable and accrued liabilities | 277 | (2,158 | ) | |||||
| Deferred revenue | (2,078 | ) | (171 | ) | ||||
| Changes in non-cash working capital items related to operations | (2,990 | ) | 847 | |||||
| Net cash (used in) from operating activities | (278 | ) | 4,074 | |||||
| Cash flows (used in) from financing activities: | ||||||||
| Repayment of long-term debt | (55 | ) | (1,084 | ) | ||||
| Issuance of common shares | 10,454 | - | ||||||
| Payment of dividends | (1,832 | ) | (1,293 | ) | ||||
| Interest paid | (1 | ) | (69 | ) | ||||
| Net cash from (used in) financing activities | 8,566 | (2,446 | ) | |||||
| Cash flows (used in) from investing activities: | ||||||||
| Long-term investments | (10,007 | ) | - | |||||
| Interest received | 173 | 75 | ||||||
| Acquisitions of property and equipment | (830 | ) | (267 | ) | ||||
| Acquisitions of other intangible assets | (241 | ) | (132 | ) | ||||
| Deferred development costs | (144 | ) | (254 | ) | ||||
| Net cash used in investing activities | (11,049 | ) | (578 | ) | ||||
| Net (decrease) increase in cash and cash equivalents during the period | (2,761 | ) | 1,050 | |||||
| Cash and cash equivalents - beginning of period | 13,476 | 9,704 | ||||||
| Cash and cash equivalents - end of period | $ | 10,715 | $ | 10,754 | ||||
| TECSYS Inc. | |||||||||||||||||||||
| Condensed Interim Consolidated Statements of Changes in Equity | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Nine-month periods ended January 31, 2018 and 2017 | |||||||||||||||||||||
| (in thousands of Canadian dollars, except number of shares) | |||||||||||||||||||||
| Share capital | Contributed | Accumulated | Retained | Total | |||||||||||||||||
| Number | Amount | surplus | other comprehensive | earnings | |||||||||||||||||
| (loss) income | |||||||||||||||||||||
| Balance, April 30, 2017 | 12,315,326 | $ | 8,349 | $ | 9,577 | $ | (279 | ) | $ | 13,064 | $ | 30,711 | |||||||||
| Profit for the period | - | - | - | - | 2,147 | 2,147 | |||||||||||||||
| Other comprehensive income for the period: | |||||||||||||||||||||
| Effective portion of changes in fair value on designated revenue hedges | - | - | - | 475 | - | 475 | |||||||||||||||
| Total comprehensive income for the period | - | - | - | 475 | 2,147 | 2,622 | |||||||||||||||
| Common shares issued under bought deal financing | 767,050 | 10,454 | - | - | - | 10,454 | |||||||||||||||
| Dividends to equity owners | - | - | - | - | (1,832 | ) | (1,832 | ) | |||||||||||||
| Total transactions with owners of the Company | 767,050 | 10,454 | - | - | (1,832 | ) | 8,622 | ||||||||||||||
| Balance, January 31, 2018 | 13,082,376 | $ | 18,803 | $ | 9,577 | $ | 196 | $ | 13,379 | $ | 41,955 | ||||||||||
| 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 (loss) income 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 | ||||||||||