MONTREAL, February 25, 2010—TECSYS Inc. (TSX: TCS), an industry-leading supply chain management software company, announced today its results for the third quarter of fiscal year 2010, ended January 31st, 2010. All dollar amounts are expressed in Canadian currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP) and are unaudited.
Highlights of the Third Quarter include:
- Revenue was $8.8M in Q3, 2010 compared to $9.6M in Q3, 2009; the reduction was primarily due to the weakening of the U.S. Dollar which impacted revenue by $750K.
- Gross margin increased to 44% in Q3, 2010 from 42% in Q3, 2009
- Earnings from operations for Q3, 2010 were $142K compared to $329K in Q3, 2009.
- EBITDA for Q3, 2010 was $458K compared to $480K for Q3 of last fiscal year.
- Net earnings for the third quarter, 2010 were $62K or $0.00 per share compared to $97K or $0.01 per share for the third quarter of last fiscal year. Net earnings for the quarter were achieved after accounting for interest expense of $6K, foreign exchange losses of $27K and a share of net loss and amortization of intangible assets of $47K from a company in which TECSYS has an equity interest.
- Annualized return-on-equity was equal to 1.5% in Q3, 2010 compared to 2.5% in Q3 of last fiscal year.
- At the end of Q3, 2010 annualized recurring revenue in Canadian currency was $13.2M compared to $13.4M at the end of Q3, 2009; this drop is due to currency fluctuations. USD denominated recurring revenue increased by $672K or 12% while CAD denominated recurring revenue was flat. Recurring revenue is principally made-up of annual software maintenance contracts.
- At the end of Q3, 2010, backlog stood at $17.8M compared to $17.9M at the end of Q2, 2010.
- During the quarter, the Company generated $617K cash from operations. Cash, cash equivalents and other short-term investments amounted to $7.5M at the end of Q3, 2010, the same as at the end of Q3, 2009 with no significant long-term debt.
Peter Brereton, President and CEO of TECSYS Inc., commented on the results: “The success of our vertical strategy continues to benefit the business with YTD proprietary product sales being up 11% and demand for customization services and third party products being down resulting in higher gross margins and a more scalable business. With more than 50% of our revenue generated in the United States, Q3 was significantly impacted by the weaker U.S. Dollar and by the slower than usual decision making. Prospects and clients are taking extra time in this tight economy to finalize their decisions, but our pipeline is significantly more active than it has been since 2008. Our client base continued to invest in our solutions and services, culminating in a number of new agreements and our services’ organization completed fifteen go-lives during the quarter.”
During the quarter, the Company signed a number of agreements with existing clients and new customers including:
- Three healthcare products distributors
- Three import-to-retail distributors
- One major third party logistics services provider to a major healthcare products manufacturer
- An ecommerce site for tropical retail goods and services
- Five office products distributors
- Eight industrial distributors
Furthermore, TECSYS also deployed its supply chain execution solutions at fifteen customer sites, three of which were in healthcare, five in high-volume distribution for mid to large size clients and seven in the SMB sector.
Year-to-date, fiscal 2010 Highlights include:
- Revenue for the first nine months, 2010 was $27.9M compared to $30.6M for the same period of last fiscal year due to a decrease in hardware sales. However, the Company’s proprietary product revenue in the first nine months, 2010 increased by $479K or 11% compared to the same period in last year.
- Earnings from operations for the first nine months, 2010 were $1,255K compared to $1,366K for the same period in last fiscal year.
- EBITDA for the first nine months, 2010 was $2,032K compared to $2,155K for the same period in 2009.
- Net earnings for the first nine months, 2010 were $916K or $0.07 per share compared to $1,015K or $0.08 per share for the same period of the prior fiscal year. Net earnings for the first nine months were achieved after accounting for net interest expense of $4K, foreign exchange losses of $221K and a share of net loss and amortization of intangible assets of $96K from a company in which TECSYS has an equity interest.
- Annualized return-on-equity was equal to 7.6% in the first nine months of fiscal 2010 compared to 8.7% for the same period in last fiscal year.
TECSYS’ Q3 FY2010 Earnings Conference Call:
Date: February 25, 2009
Time: 4:30 pm
Phone number: 800-926-9761 or 416-981-9007
The call can be replayed by calling 800-558-5253 (access code: 21460321) or 416-626-4100 (access code: 21460321).
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 over 500 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high-volume distribution industries. TECSYS’ shares are listed on the Toronto Stock Exchange under the ticker symbol TCS.