Business
TECSYS Enhances its Standard Software Maintenance Policy Resulting in Positive Revenue Recognition Impact
TECSYS Enhances its Standard Software Maintenance Policy Resulting in Positive Revenue Recognition Impact.
About this update from Tecsys Inc.
[{"type":"text","content":"\n\n\n\nMONTREAL, Sept. 14 /CNW Telbec/ - TECSYS Inc. (TSX: TCS), an\nindustry-leading supply chain management software company announced today that\nthe Company's board of directors has approved an important enhancement to the\nCompany's software license and maintenance agreement. New customers licensing\nTECSYS' software will now purchase annual maintenance on an optional rather\nthan mandatory basis. This change provides TECSYS' customers with more\nflexibility and enables TECSYS to recognize license revenue upon conclusion of\nan agreement and shipment of the software compared to recognizing license\nrevenue rateably over the support period generally over a period of twelve\nmonths; all according to TECSYS' published policy for revenue recognition (see\nTECSYS' 2007 annual report at www.tecsys.com).\n\n\n"There is no change to the customer service and support that we offer to\nour customers, stated Peter Brereton, President and CEO of TECSYS Inc. We\nneeded more flexibility for our sales organization to compete on a level\nplaying field with our competitors in the supply chain management software\nindustry. Although virtually all of our clients opt for our on-going annual\nmaintenance, we wanted to provide them with options. We estimate a net\npositive impact of approximately $900,000 in net earnings in fiscal year 2008\ncompared to subsequent years or $0.07 cents per share based on the current\nnumber of outstanding common shares of approximately 13.4 million shares. This\nis because revenue on most new license sales will be recognized in the current\nquarter while some deferred license revenue from previous sales continues to\nbe recognized over twelve months."\n\n\nAt the end Q1 of fiscal year 2008, deferred revenue amounted to $2.2M up\nfrom $1.7M at the end of the fourth quarter and $1.0M at the end of the first\nquarter of fiscal year 2007; an increase of $456K and $1.2M respectively.\nDeferred revenue is generally license revenue that is not recognized\nimmediately but amortized over a period of twelve months from the date of\nsigning the agreement with the customer.\n\n\nAbout TECSYS\n\n\n------------\n\n\nTECSYS is a leading supply chain management software provider that\ndelivers powerful enterprise distribution, warehouse and transportation\nlogistics software solutions. The company's customers include a...