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Classified in: Transportation, Science and technology, Business, Covid-19 virus
Subjects: ERN, CCA

Tecsys Reports Financial Results for Fourth Quarter and Full Year Fiscal 2020


Record SaaS Bookings, Record Revenue Drive Strong Performance Across All Segments

MONTREAL, July 8, 2020 /CNW/ -- Tecsys Inc. (TSX: TCS), an industry-leading supply chain management software company, today announced its results for the fourth quarter and full year of fiscal year 2020, ended April 30, 2020. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).

Fourth Quarter Highlights:

"Fiscal 2020 was another exciting year for Tecsys," said Peter Brereton, president and CEO of Tecsys Inc. "The rapid shift to SaaS has proven to be a tremendous value creator for our company. Against almost all internal metrics we are meeting, or exceeding, our goals. In fiscal 2020, we signed 34 new accounts with a total contract value of $52.7 million compared to 23 new accounts with a total contract value of $15.4 million in fiscal 2020. This is an increase of 242%. On the healthcare front, fiscal 2020 was another strong year. We added 6 new hospital networks. We are confident that the ongoing expansion of our product suite and growing global reach should help us to continue to attain strong bookings going forward."

"On March 11, 2020, the COVID-19 outbreak was declared a global pandemic," continued Brereton. "Tecsys is well-equipped to uphold comprehensive support and services for its end-to-end supply chain execution software through its multi-tiered customer care and support teams. Employees are now working remotely and supporting Tecsys' customers and partners. Work that was historically done both on site and remotely is now supported remotely by our employees. To date, Tecsys' ability to continue to progress sales cycles, sign new orders and execute project implementations has not been affected adversely by the pivot to remote work. While Tecsys anticipates that some client projects may be postponed or delayed during the pandemic, other client projects are starting up. Based on current activity and considering the Corporation's significant project backlog, Tecsys believes that this outbreak is not having any material adverse impact on its operating results. Moreover, Tecsys is not currently experiencing or anticipating any material credit losses as a result of the pandemic. In short, we are weathering these unprecedented challenges very well indeed."

Mark Bentler, chief financial officer of Tecsys Inc., added, "Our transition from perpetual license revenues to SaaS which helps us to deliver a more robust, predictable recurring revenue stream accelerated through fiscal 2020. This pace of transition continues to exceed our own internal forecasts. In fiscal 2020, SaaS subscription bookings comprised approximately 77% of our software product bookings compared to 33% in fiscal 2019.  Even adjusting for the currency tailwind we enjoyed during the year, all KPI's were very strong."

Fiscal 2020 Highlights:

 

Results from operations







Trailing 12


Trailing 12


3 months ended


3 months ended



months ended


months ended


April 30, 2020


April 30, 2019



April 30, 2020


April 30, 2019











Total Revenue

$

27,750

$

23,191


$

104,855

$

76,449

Cloud, Maintenance and Subscription Revenue


10,638


9,360



41,058


31,282

Gross Profit


12,896


10,909



50,318


37,441

Gross Margin %


46%


47%



48%


49%

Operating Expenses


12,302


11,746



45,610


39,239

Op. Ex. As % of Revenue


44%


51%



43%


51%

Profit from Operations


594


(837)



4,708


(1,798)

Adjusted EBITDA 1


1,951


684



10,271


2,776

EPS


0.03


0.01



0.18


(0.06)











Bookings


40,885


19,248



112,683


63,211

   License Bookings


1,388


1,239



4,718


5,928

   SAAS ARR Bookings


4,075


917



8,758


1,530











Backlog


120,351


76,563



120,351


76,563

   Annual Recurring Revenue


48,140


38,276



48,140


38,276

   Professional Services Backlog


34,965


24,478



34,965


24,478



i

See Key Performance Indicators in Management's Discussion and Analysis of the 2020 Financial Statements.

ii

See Non-IFRS Performance Measure in Management's Discussion and Analysis of the 2020 Financial Statements.

Fourth Quarter 2020 Results Conference Call Date: July 9 2020
Time: 8:30 a.m. EDT
Phone number: (800)768-9711 or (416) 981-9013
The call can be replayed until July 16, 2020 by calling (800) 558-5253 or (416) 626-4100 (access code: 21965143).

About Tecsys
Tecsys is a global provider of supply chain solutions that equip the borderless enterprise for growth. Organizations thrive when they have the software, technology and expertise to drive operational greatness and deliver on their brand promise. Spanning healthcare, retail, service parts, third-party logistics, and general wholesale high-volume distribution industries, Tecsys delivers dynamic and powerful solutions for warehouse management, distribution and transportation management, supply management at point of use, retail order management, as well as complete financial management and analytics solutions.

Tecsys' shares are listed on the Toronto Stock Exchange under the ticker symbol TCS. For more information on Tecsys, visit www.tecsys.com.

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, 2020. 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. 2020. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.

Non-IFRS Measure
Reconciliation of EBITDA and adjusted EBITDA
The terms and definitions of the non-GAAP measures used below and a reconciliation of the non-GAAP measures to the most directly comparable GAAP measure are provided below. These non-GAAP measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation.

EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation and amortization. Adjusted EBITDA is calculated as EBITDA before acquisition related costs, fair value adjustment on contingent consideration, stock-based compensation and restructuring costs. The Company believes that these measures are commonly used by investors and analysts to measure a company's performance, its ability to service debt and to meet other payment obligations, or as a common valuation measurement.

The EBITDA and Adjusted EBITDA calculation for fiscal 2020, 2019 and 2018 derived from IFRS measures in the Company's Consolidated financial statements, is as follows:






2020

2019

2018

Profit (loss) for the period

$            2,346

$           (741)

$          3,949

Adjustments for:




    Depreciation of property and equipment and right-of-use assets

2,004

879

760

Amortization of deferred development costs

536

949

1,118

Amortization of other intangible assets

1,530

995

462

Interest expense

1,080

196

4

Interest income

(74)

(197)

(259)

Income taxes

1,234

(1,018)

456

EBITDA

$           8,656

$           1,063

$        6,490

Adjustments for:




    Acquisition related costs

-

1,347

-

Stock based compensation

1,024

366

-

Fair value adjustment on contingent consideration earnout ? Tecsys A/S

171

-

-

Restructuring costs

420

-

-

Adjusted EBITDA

$           10,271

$           2,776

$           6,490

 

Tecsys Inc

Consolidated Statements of Financial Position

(in thousands of Canadian dollars)



April 30, 2020

April 30, 2019

Assets





Current assets






Cash and cash equivalents


$

27,528

$

14,913

Short-term investments



10,000


-

Accounts receivable



18,434


14,986

Work in progress



837


811

Other receivables



1,633


392

Tax credits



4,162


3,493

Inventory



634


673

Prepaid expenses



3,778


2,687

Total current assets

67,006

37,955

Non-current assets






   Other long-term receivables



350


278

Tax credits



4,624


5,260

Property and equipment



2,823


2,714

Right-of-use assets



8,234


-

Contract acquisition costs



2,324


536

Deferred development costs



1,103


1,064

Other intangible assets



13,401


14,706

Goodwill



17,540


17,456

Deferred tax assets



7,028


5,476

Total non-current assets

57,427

47,490




Total assets

$

124,433

$

85,445

Liabilities






Current liabilities






Accounts payable and accrued liabilities


$

19,933

$

11,633

Deferred revenue



16,163


14,252

Current portion of long-term debt



1,231


1,022

Other current liabilities



4,670


4,111

Lease obligations



922


-

Total current liabilities

42,919

31,018

Non-current liabilities






Long-term debt



9,600


10,827

Other non-current liabilities



-


2,333

Deferred tax liabilities



1,638


1,769

Lease obligations



9,157


-

Total non-current liabilities

20,395

14,929

Total liabilities

63,314

45,947

Contingencies and other commitments






Equity






Share capital



40,901


19,144

Contributed surplus



10,964


9,943

Retained earnings



8,838


10,618

Accumulated other comprehensive income (loss)



416


(207)

Total equity attributable to the owners of the Company

61,119

39,498




Total liabilities and equity

$

124,433

$

85,445


 

Tecsys Inc

Consolidated Statements of Income (loss) and Comprehensive Income (loss)

Three and twelve months periods ended April 30, 2020 and 2019

(in thousands of Canadian dollars, except per share data)




Three months 


Three months 


Twelve months 


Twelve months 



Ended


Ended


Ended


Ended



April 30, 2020


April 30, 2019


April 30, 2020


April 30, 2019

Revenue:









     Proprietary products

$

1,694

$

1,606

$

5,384

$

6,948

     Third-party products


4,244


2,694


15,885


6,822

     Cloud, maintenance and subscription


10,638


9,360


41,058


31,282

     Professional services


10,823


9,002


40,616


29,338

     Reimbursable expenses


351


529


1,912


2,059

Total revenue


27,750


23,191


104,855


76,449

Cost of revenue:









     Products


3,493


2,377


12,780


6,036

     Services


11,010


9,376


39,845


30,913

     Reimbursable expenses


351


529


1,912


2,059

Total cost of revenue


14,854


12,282


54,537


39,008

Gross profit


12,896


10,909


50,318


37,441

Operating expenses:









     Sales and marketing


5,368


5,058


20,134


17,204

     General and administration


2,637


2,836


9,821


9,354

     Research and development, net of tax credits


4,297


3,852


15,235


12,681

     Restructuring costs


-


-


420


-

Total operating expenses


12,302


11,746


45,610


39,239










Profit (loss) from operations


594


(837)


4,708


(1,798)

Net finance costs (income)


145


102


1,128


(39)

Profit (loss) before income taxes


449


(939)


3,580


(1,759)

Income tax expense (benefit)


74


(1,018)


1,234


(1,018)

Profit (loss) attributable to the owners of the Company

$

375

$

79

$

2,346

$

(741)

Other comprehensive income (loss) :









Effective portion of changes in fair value on designated revenue hedges


627


(142)


696


(14)

Exchange differences on translation of foreign operations


198


(80)


(73)


(80)

Comprehensive income (loss) attributable to the owners of the Company

$

1,200

$

(143)

$

2,969

$

(835)

Basic and diluted earnings (loss) per common share

$

0.03

$

0.01

$

0.18

$

(0.06)

 

Tecsys Inc

Consolidated Statements of Cash Flows

Three and twelve months periods ended April 30, 2020 and 2019

(in thousands of Canadian dollars)




Three months 


Three months 


Twelve months 


Twelve months 



Ended


Ended


Ended


Ended



April 30,2020


April 30, 2019


April 30, 2020


April 30, 2019

Cash flows from operating activities:









Profit (loss) for the period

$

375

$

79

$

2,346

$

(741)

Adjustments for:









     Depreciation of property and equipment and right-of-use-assets


542


230


2,005


879

     Amortization of deferred development costs


119


172


536


949

     Amortization of other intangible assets


398


493


1,530


995

     Net finance costs (income)


145


102


1,128


(39)

     Unrealized foreign exchange and other


352


507


(245)


275

     Non-refundable tax credits


(355)


(226)


(1,398)


(902)

     Stock-based compensation


214


107


1,024


366

     Income taxes


(406)


(1,182)


399


(1,182)

     Net cash from operating activities excluding changes in non-cash working capital items related to operations


1,384


282


7,325


600

     Accounts receivable


(1,910)


1,674


(3,434)


1,749

     Work in progress


(161)


546


(27)


(129)

     Other receivables


(11)


(46)


(315)


109

     Tax credits


1,797


1,960


103


(212)

     Inventory


175


98


38


476

     Prepaid expenses and contract acquisition costs  


(1,417)


(211)


(2,877)


(595)

     Accounts payable and accrued liabilities


5,169


(434)


7,285


795

     Deferred revenue


1,120


92


1,908


1,307

     Changes in non-cash working capital items related to operations


4,762


3,679


2,681


3,500










Net cash from operating activities


6,146


3,961


10,006


4,100

Cash flows from financing activities:









     Repayment of long-term debt


(308)


(237)


(1,018)


(272)

     Issuance of long-term debt


-


-


-


12,000

     Payment of lease obligations 


(262)


-


(993)


-

     Issuance of common shares


21,719


-


21,719


-

     Payment of dividends


(785)


(719)


(3,009)


(2,747)

     Issuance of common shares on exercise of stock options


12


-


12


-

     Interest paid 


(139)


(115)


(854)


(115)

Net cash from (used in) financing activities


20,237


(1,071)


15,857


8,866










Cash flows from investing activities  : 









     Purchase of short-term investments


(10,000)


-


(10,000)


-

     Decrease in long-term investments


-


7


-


10,007

     Decrease in restricted cash


-


12,000


-


-

     Interest received


11


25


74


197

     Acquisitions of property and equipment


(231)


(134)


(934)


(403)

     Acquisitions of other intangible assets


(42)


(68)


(196)


(160)

     Deferred development costs


(70)


(76)


(575)


(163)

     Business acquisitions


(471)


(11,147)


(1,617)


(21,027)

Net cash used in (from) investing activities


(10,803)


607


(13,248)


(11,549)

Net increase in cash and cash equivalents during the period


15,580


3,497


12,615


1,417

Cash and cash equivalents - beginning of period


11,948


11,416


14,913


13,496

Cash and cash equivalents - end of period

$

27,528

$

14,913

$

27,528

$

14,913










Supplemental cash flow information:









     Purchase of property and equipment included in accounts payable and accrued liabilities

$

133

$

-

$

133

$

-

     Right-of-use assets additions

$

863

$

-

$

863

$

-

     Deferred tax asset recognized in share capital related to transaction fees

$

449

$

-

$

449

$

-

     Transaction costs included in accounts payable and accrued liabilities related to issuance of common shares

$

426

$

-

$

426

$

-

 

Tecsys Inc

Consolidated Statements of Changes in Equity

(in thousands of Canadian dollars, except number of shares)



 

 

 

Share capital


 

 

Contributed

surplus


 

 

Accumulated other
comprehensive income
(loss)


 

 

Retained earnings


 

 

 

Total



Number


Amount










Note











Balance, April 30, 2019


13,082,376

$

19,144

$

9,943

$

(207)

$

10,618

$

39,498

 

Adjustment on initial application of IFRS 16


-


-


-


-


(1,117)


(1,117)

Adjusted balance, May 1, 2019


13,082,376


19,144


9,943


(207)


9,501


38,381

 

Profit for the year


-


-


-


-


2,346


2,346

Other comprehensive income (loss) for the year:













Effective portion of changes in fair value on designated revenue hedges


-


-


-


696


-


696

Exchange difference on translation of foreign operations


-


-


-


(73)


-


(73)

Stock-based compensation


-


-


1,024


-


-


1,024

Total comprehensive income for the year


-


-


1,024


623


2,346


3,993

 Dividends to equity owners


-


-


-


-


(3,009)


(3,009)

 Share options exercised


834


15


(3)


-


-


12

 Common shares issued under bought deal financing, net of share issue costs of $1,707 and deferred taxes of $449


1,333,333


21,742


-


-


-


21,742

Total transaction with owners of the Company


1,334,167


21,757


(3)


-


(3,009)


18,745














Balance, April 30, 2020


14,416,543

$

40,901

$

10,964

$

416

$

8,838

$

61,119














Balance, May 1, 2018


13,082,376


19,144


9,577


(113)


14,106


42,714

 

Loss for the year


-


-


-


-


(741)


(741)

Other comprehensive income (loss) for the year:













Effective portion of changes in fair value on designated revenue hedges


-


-


-


(14)


-


(14)

Exchange difference on translation of foreign operations


-


-


-


(80)


-


(80)

   Stock-based compensation






366


-


-


366

Total comprehensive income (loss) for the year


-


-


366


(94)


(741)


(469)

Dividends to equity owners


-


-


-


-


(2,747)


(2,747)

Total transaction with owners of the Company


-


-


-


-


(2,747)


(2,747)

Balance, April 30, 2019


13,082,376

$

19,144

$

9,943

$

(207)

$

10,618

$

39,498

 

SOURCE Tecsys Inc.


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