MONTREAL, Feb. 27 /CNW Telbec/ - TECSYS Inc. (TSX: TCS), an industry-leading Supply Chain Management software company announced today its financial results for the third quarter of fiscal year 2007 ended January 31st, 2007. All dollar amounts are expressed in U.S. currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP) with a reconciliation to the United States GAAP, and are unaudited. All comparable figures for the prior periods have been restated as per TECSYS' August 15th, 2006 press release.
Highlights for the third quarter include:
- Total Gross margin increased to 40%, up from 35% in the comparable
quarter of last year
- EBITDA was $679K, up from $41K in the comparable quarter of the prior
year
- Earnings from operations were $256K, up from a loss of $6K in the
comparable quarter of last year
- Cash from operations amounted to $730K, up from $532K in the comparable
quarter of last year
- Net Earnings were $436K or 3 cents per share
- Revenue was $7.9 million, down from $9.5 million in the comparable
quarter of last year, due mainly to lower third party products, but up
by 4% over the prior quarter.
- Backlog amounted to $14.2M, up from $13.9 at the end of the prior
quarter.
- The Company signed four new customers that include:
- Wagner Equipment Co., a major Caterpillar(R) dealer based in Denver,
Colorado
- Two distributors of industrial gases & equipment in the U.S.
- A New York-based import to retail distributor
- The Company also signed a number of product upgrades and its services'
organization has successfully completed the deployment of its solutions
in a number of accounts during the quarter, one of which is Floors-2-
Go, the largest Floor Covering Retailer in the U.K.
Peter Brereton, President and CEO of TECSYS Inc. commented on the results:
"We made significant progress during the quarter on a number of fronts.
Operating and net income improved substantially. We have generated $730K cash
from operations, bringing our cash position to $4.6M and eliminated our long
term debt with a final repayment of $412K. We also reduced our DSO (Day's
Sales Outstanding) substantially to 74 days from 88 days at the end of this
year's 2nd quarter. Our customers continue to invest in our products and
services and we won some great new accounts during the quarter as well. In
summary, this was a solid quarter, and we remain committed to continuing the
transformation of TECSYS with a focus on profitability and growth."
Revenue in the third quarter of fiscal 2007 decreased by 17% to
$7.9M compared to $9.5M in the same period of fiscal year 2006. Earnings from
operations for the reporting quarter were $256K compared to net loss from
operations of $6K for the same period in the previous fiscal year. Net
earnings for the quarter were $436K or $0.03 per share compared to net loss of
$222K or $0.2 per share for the same period in last fiscal year.
For the nine months ended January 31st, 2007, revenue decreased 12% to
$23.2M compared to $26.4M in the same period of the prior fiscal year. Loss
from operations for the first nine months of fiscal 2007 was $644K and
includes two major elements: $234K restructuring charges that took effect in
the second quarter, and $380K due to the continuing strengthening of the
Canadian dollar of approximately 6% compared to the same period of last fiscal
year. Earnings from operations for the comparable period in fiscal year 2006
were $115K. After accounting for an exchange gain of $163K, net interest
income of $113K and a net share of loss and amortization of intangible assets
of $61K from a company in which TECSYS has an equity interest, net loss for
the nine months of fiscal year 2007 was $429K or $0.03 per share compared to
net loss of $174K or $0.01 per share for the same period in the previous
fiscal year.
TECSYS also announced that it has received a favourable ruling from the
Ministere du Revenu du Quebec confirming that its common shares are eligible
as valid shares for the SME Growth Stock Plan. The common shares of TECSYS
have been included on the list of the Autorite des Marches Financiers (AMF) of
corporations eligible for the SME Growth Stock Plan.
As a result of being on the AMF list, an individual that has withdrawn
shares qualifying under the SME Growth Stock Plan from such plan, can acquire
common shares of TECSYS Inc. on the secondary market to include it in the SME
Growth Stock Plan to replace such withdrawn shares.
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 800
mid-size and Fortune 1000 corporations in healthcare, giftware, office
products, third-party logistics, and general wholesale high-volume
distribution markets. 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, 2006. 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).
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 U.S. dollars)
January 31, April 30,
2007 2006
(unaudited)
----------------------------------------
----------------------------------------
Assets
Current assets
Cash and cash equivalents 609 1,180
Short-term and other investments 3,434 5,159
Accounts receivable 6,501 7,134
Other accounts receivable 93 88
Tax credits receivable 1,815 1,362
Inventory 179 147
Prepaid expenses 572 599
----------------------------------------
13,203 15,669
Restricted cash equivalents
and other investments 572 602
Long-term receivable 120 -
Property, plant and equipment, net 1,690 2,010
Intangible assets 1,445 1,945
Long-term investments 245 321
Goodwill 1,941 2,042
Deferred development costs 543 265
----------------------------------------
19,759 22,854
----------------------------------------
----------------------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 3,898 4,910
Current portion of long-term debt 91 527
Deferred revenue 2,754 3,247
----------------------------------------
6,743 8,684
Other long-term liabilities - 100
----------------------------------------
6,743 8,784
----------------------------------------
Shareholders' Equity
Capital stock 38,188 38,256
Contributed surplus 7,255 7,169
Cumulative translation adjustment 2,442 3,085
Deficit (34,869) (34,440)
----------------------------------------
13,016 14,070
----------------------------------------
19,759 22,854
----------------------------------------
----------------------------------------
TECSYS Inc.
Consolidated Statements of Deficit
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
-------------------------------------------------------------------------
(in thousands of U.S. dollars)
Nine Months Ended Nine Months Ended
January 31, January 31,
2007 2006
(restated - note 1)
(unaudited) (unaudited)
----------------------------------------
----------------------------------------
Balance - Beginning of period (34,440) (32,835)
Net loss for the period (429) (174)
----------------------------------------
Balance - End of period (34,869) (33,009)
----------------------------------------
----------------------------------------
TECSYS Inc.
Consolidated Statements of Operations
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
-------------------------------------------------------------------------
(in thousands of U.S. dollars, except share and per share data)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
January 31, January 31, January 31, January 31,
2007 2006 2007 2006
(restated (restated
- note 1) - note 1)
(unaudited) (unaudited) (unaudited) (unaudited)
-----------------------------------------------
-----------------------------------------------
Revenue
Products 3,335 4,316 9,261 11,021
Services 4,350 4,915 13,271 14,815
Reimbursable expenses 205 255 749 612
----------------------- -----------------------
7,890 9,486 23,281 26,448
Cost of revenue
Products 1,561 2,471 4,438 5,738
Services 2,983 3,439 9,108 9,889
Reimbursable expenses 205 255 749 612
----------------------- -----------------------
4,749 6,165 14,295 16,239
----------------------- -----------------------
Gross margin 3,141 3,321 8,986 10,209
----------------------- -----------------------
Operating expenses
Sales & marketing 1,137 1,605 3,926 4,573
General & administration 672 708 1,961 2,186
Gross research & development 972 1,177 3,208 3,276
Research & development
tax credits (97) (144) (249) (544)
Deferred development costs (72) (60) (301) (60)
Stock-based compensation - 36 19 105
Amortization of property,
plant and equipment 134 151 404 427
Amortization of
intangible assets 139 145 428 422
Restructuring charges - (291) 234 (291)
----------------------- -----------------------
2,885 3,327 9,630 10,094
----------------------- -----------------------
Earnings (loss) from
operations 256 (6) (644) 115
Interest income 45 44 147 129
Interest expense (5) (11) (34) (42)
Foreign exchange gains (losses) 193 (230) 163 (357)
Share of net loss and
amortization of intangible
assets of a company subject
to significant influence (53) (19) (61) (19)
----------------------- -----------------------
Earnings (loss) for
the period 436 (222) (429) (174)
----------------------- -----------------------
Weighted average number
of common shares
outstanding
- basic 13,686,798 13,762,084 13,646,652 13,820,843
----------------------- -----------------------
- diluted 13,687,568 13,762,084 13,646,652 13,820,843
----------------------- -----------------------
----------------------- -----------------------
Basic and diluted net
earnings (loss) per
common share
(in US dollars) $ 0.03 $ (0.02) $ (0.03) $ (0.01)
----------------------- -----------------------
----------------------- -----------------------
TECSYS Inc.
Consolidated Statements of Cash Flows
Prepared in Accordance with Canadian Generally Accepted Accounting
Principles
-------------------------------------------------------------------------
(in thousands of U.S. dollars)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
January 31, January 31, January 31, January 31,
2007 2006 2007 2006
(restated (restated
- note 1) - note 1)
(unaudited) (unaudited) (unaudited) (unaudited)
-----------------------------------------------
-----------------------------------------------
Cash flows from
Operating activities
Net earnings (loss) for
the period 436 (222) (429) (174)
Adjustments for
Amortization of property,
plant and equipment 134 151 404 427
Amortization of intangible
assets 139 145 428 422
Stock-based compensation - 36 19 105
Unrealized foreign exchange
losses (gains) (72) 24 (85) 46
Restructuring charges - (366) - (366)
Deferred development costs (72) (60) (301) (60)
Share of net loss and
amortization of intangible
assets of a company subject
to significant influence 53 19 61 19
Changes in non-cash working
capital items related to
operations
Decrease (increase) in
accounts receivable 537 161 205 (341)
Increase in other
accounts receivable (2) (40) (9) (30)
Increase in tax credits
receivable (201) (313) (544) (675)
Increase in inventory - (140) (44) (57)
Decrease (increase) in
prepaid expenses (65) 135 2 279
Increase in long-term
receivable (42) - (124) -
Increase (decrease) in
accounts payable and
accrued liabilities (10) 877 (934) 498
Increase (decrease) in
deferred revenue (105) 125 (307) 163
-----------------------------------------------
730 532 (1,658) 256
-----------------------------------------------
Financing activities
Repayment of long-term debt
and capital lease
obligations (412) (6) (425) (43)
Issuance of common shares - - 86 -
Purchase of common shares
for cancellation (21) (120) (87) (308)
-----------------------------------------------
(433) (126) (426) (351)
-----------------------------------------------
Investing activities
Decrease (increase) in
short-term and other
investments (813) (792) 1,834 (336)
Acquisitions of property,
plant and equipment (34) (89) (176) (214)
Acquisitions of intangible
assets (6) (10) (8) (29)
Long-term investments - (376) - (376)
-----------------------------------------------
Effect of foreign exchange
rate fluctuations on cash
and cash equivalents (127) (6) 137) 5
-----------------------------------------------
Change in cash and cash
equivalents (683) (867) (571) (1,045)
Cash and cash equivalents -
Beginning of Period 1,292 876 1,180 1,054
-----------------------------------------------
Cash and cash equivalents -
End of Period 609 9 609 9
-----------------------------------------------
-----------------------------------------------
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