News Column

TECSYS Reports Fiscal 2014 Fourth Quarter and Year-End Financial Results, Doubles Annual Net Profit

July 8, 2014

MONTREAL, QUEBEC--(Marketwired - July 8, 2014) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the fourth quarter and 2014 fiscal year, ended April 30th, 2014.

All dollar amounts are expressed in Canadian currency and are prepared in accordance with the International Financial Reporting Standards (IFRS).

Fourth Quarter Highlights:

-- Revenue increased by 12% to $12.5M in Q4 2014 compared to $11.1M in Q4 2013. -- EBITDA grew by 68% to $1,258K compared to $748K in Q4 2013. -- Profit from Operations increased to $757K in Q4 2014, compared to $256K in Q4 2013. -- Net profit increased to $640K or $0.06 per share, compared to $181K or $0.02 per share in Q4, 2013. -- Services revenue improved by 6% to $7.8M and enhanced services profit margin to 35% from 29% as the professional services organization continued improving their capacity. -- Recurring revenue on an annualized basis grew to $17.6M, a 15% jump compared to the end of Q4 2013, representing 38% of the last twelve months trailing revenue. -- Bookings for the quarter were $9M, including $1.8M in total contract value from six new accounts. -- Go-lives at twelve customers' sites, most notably: one Hospital Network, three service parts operations of which two are in the heavy equipment industry and the other one is in the imaging industry. -- Backlog was a record $29.2M at the end of Q4 2014 compared to $27.2M at the end of Q4 2013. -- Cash and cash equivalents amounted to $8.8M compared to $5.3M at the end of Q4 2013. -- Subsequent to the quarter, the Company acquired Logi-D Holding Inc., a leading provider of point-of-use technology for supply chain automation servicing hospitals and healthcare organizations based in Laval, Quebec for a total purchase price of $3.05M.



TECSYS also announced that the Company's Board of Directors has approved changing the dividend policy from a semi-annual basis to a quarterly basis. To this effect, the Board has declared a quarterly dividend of $0.0225 per share, an increase of 12.5%, to be paid on August 6th, 2014 to shareholders of record on July 22nd, 2014.

"In the fourth quarter we continued building momentum, growing our bottom line through improved services margin and realizing higher proprietary product revenues," said Peter Brereton, President and CEO of TECSYS Inc. "The investments we made in the Company started to show their value this year as we improved operationally, and with the acquisition of Logi-D in the first quarter of 2015, we are in an excellent position to accelerate our growth and extend our leadership in our key markets."

Highlights of the 2014 Fiscal Year:

-- Revenue increased 6% to $46.6M compared to $43.8M for the last fiscal year. Service revenue increased 10% to $30.2M compared to $27.5M in fiscal 2013. Service gross profit margin improved to 35% from 27% last fiscal year. -- Profit from operations was $2.3M for fiscal 2014 compared to $1.3M for fiscal 2013, a 77% improvement. -- EBITDA was $4.1M in fiscal 2014 compared to $3.0M last year. -- Net profit was $1.8M or $0.16 per share for fiscal 2014 compared to $0.9M or $0.08 per share for the same period last year.



Fourth Quarter 2014 Results Conference Call

Date: July 8th, 2014

Time: 4:30 pm EST

Phone number: 800-732-8470 or 416-981-9035

The call can be replayed by calling 800-558-5253 (access code: 21722138) or 416-626-4100 (access code: 21722138).

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 over 600 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.

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, 2013. 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 (C) TECSYS Inc. 2014. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners. TECSYS Inc. Consolidated Statements of Financial Position As at April 30, 2014 and April 30, 2013 (in thousands of Canadian dollars) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- April 30, April 30, 2014 2013 ---------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents $ 8,839 $ 5,348 Accounts receivable 9,076 7,959 Work in progress 524 1,291 Other accounts receivable 46 132 Tax credits 2,704 4,675 Inventory 293 545 Prepaid expenses 1,037 1,153 ---------------------------------------------------------------------------- Total current assets 22,519 21,103 ---------------------------------------------------------------------------- Non-current assets Restricted cash equivalents 80 120 Non-current receivables - 39 Tax credits 1,350 1,219 Property and equipment 2,627 2,928 Deferred development costs 4,088 3,317 Other intangible assets 508 544 Goodwill 2,239 2,239 Deferred tax assets 714 710 ---------------------------------------------------------------------------- Total non-current assets 11,606 11,116 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Total assets $ 34,125 $ 32,219 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities $ 5,406 $ 4,997 Loan payable to related party - 70 Term loan 1,000 1,000 Deferred revenue 8,326 7,161 ---------------------------------------------------------------------------- Total current liabilities 14,732 13,228 ---------------------------------------------------------------------------- Non-current liabilities Term loan 2,500 3,500 Other non-current liabilities 299 225 ---------------------------------------------------------------------------- Total non-current liabilities 2,799 3,725 ---------------------------------------------------------------------------- Total liabilities 17,531 16,953 ---------------------------------------------------------------------------- Equity Share capital 2,153 1,748 Contributed surplus 9,577 9,588 Retained earnings 4,864 3,930 ---------------------------------------------------------------------------- Total equity attributable to the owners of the Company 16,594 15,266 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Total liabilities and equity $ 34,125 $ 32,219 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- TECSYS Inc. Consolidated Statements of Comprehensive Income Three-month periods and years ended April 30, 2014 and 2013 (in thousands of Canadian dollars, except per share data) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Three Months Three Months Year Year Ended Ended Ended Ended April 30, April 30, April 30, April 30, 2014 2013 2014 2013 (unaudited) (unaudited) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Revenue: Software products $ 2,749$ 1,986$ 8,081$ 9,307 Third-party hardware and software products 1,506 1,421 6,833 5,853 Services 7,807 7,376 30,176 27,458 Reimbursable expenses 389 334 1,468 1,141 ---------------------------------------------------------------------------- Total revenue 12,451 11,117 46,558 43,759 ---------------------------------------------------------------------------- Cost of revenue: Products 1,351 1,046 5,112 4,263 Services 5,112 5,232 19,685 20,072 Reimbursable expenses 389 334 1,468 1,141 ---------------------------------------------------------------------------- Total cost of revenue 6,852 6,612 26,265 25,476 ---------------------------------------------------------------------------- Gross profit 5,599 4,505 20,293 18,283 Operating expenses: Sales and marketing 2,406 2,087 8,755 7,796 General and administration 1,080 909 4,050 3,881 Research and development, net of tax credits 1,356 1,253 5,223 5,338 ---------------------------------------------------------------------------- Total operating expenses 4,842 4,249 18,028 17,015 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Profit from operations 757 256 2,265 1,268 ---------------------------------------------------------------------------- Net finance costs 41 5 244 308 ---------------------------------------------------------------------------- Profit before income taxes 716 251 2,021 960 ---------------------------------------------------------------------------- Income taxes 76 70 226 75 ---------------------------------------------------------------------------- Profit attributable to the owners of the Company and comprehensive income for the period $ 640 $ 181 $ 1,795 $ 885 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Basic and diluted earnings per common share $ 0.06$ 0.02$ 0.16$ 0.08 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- TECSYS Inc. Consolidated Statements of Cash Flows Years ended April 30, 2014 and 2013 (in thousands of Canadian dollars) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Year Year Ended Ended April 30, April 30, 2014 2013 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Cash flows from (used in) operating activities: Profit for the year $ 1,795 $ 885 Adjustments for: Depreciation of property and equipment 728 907 Depreciation of deferred development costs 1,045 883 Depreciation of other intangible assets 170 162 Net finance costs 244 308 Realized foreign exchange gains, unrealized foreign exchange losses, and other 122 109 Federal non-refundable research and development tax credits (300) (300) Income taxes 199 75 ---------------------------------------------------------------------------- Operating activities excluding changes in non-cash working capital items related to operations 4,003 3,029 Accounts receivable (1,117) 248 Work in progress 767 (646) Other accounts receivable 53 (41) Tax credits 1,945 (2,647) Inventory 252 151 Prepaid expenses 116 24 Accounts payable and accrued liabilities 516 (751) Deferred revenue 1,165 496 ---------------------------------------------------------------------------- Changes in non-cash working capital items related to operations 3,697 (3,166) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net cash from (used in) operating activities 7,700 (137) ---------------------------------------------------------------------------- Cash flows (used in) from financing activities: Repayment of loan to related party (70) (15) Term loan - 5,000 Repayment of term loan (1,000) (500) Issuance of common shares 130 59 Purchase of common shares for cancellation and related fees (11) (462) Purchase of share options for cancellation (20) (328) Payment of dividends (861) (800) Interest paid (162) (100) ---------------------------------------------------------------------------- Net cash (used in) from financing activities (1,994) 2,854 ---------------------------------------------------------------------------- Cash flows (used in) from investing activities: Restricted cash equivalents 40 40 Interest received 50 46 Acquisitions of property and equipment (427) (685) Acquisitions of other intangible assets (134) (348) Deferred development costs (1,816) (1,686) Current and non-current receivables from TECSYS Latin America Inc. 72 47 ---------------------------------------------------------------------------- Net cash used in investing activities (2,215) (2,586) ---------------------------------------------------------------------------- Net increase in cash and cash equivalents during the year 3,491 131 Cash and cash equivalents - beginning of year 5,348 5,217 ---------------------------------------------------------------------------- Cash and cash equivalents - end of year $ 8,839 $ 5,348 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- TECSYS Inc. Consolidated Statements of Changes in Equity Years ended April 30, 2014 and 2013 (in thousands of Canadian dollars, except number of shares) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Share capital Contributed Retained Total Number Amount surplus earnings ---------------------------------------------------------------------------- Balance, April 30, 2013 11,449,421 $ 1,748$ 9,588$ 3,930$ 15,266 Profit and comprehensive income for the year - - - 1,795 1,795 ---------------------------------------------------------------------------- Total comprehensive income for the year - - - 1,795 1,795 ---------------------------------------------------------------------------- Normal course issuer bid fees for repurchase of common shares - - (11) - (11) Share options exercised 75,000 130 - - 130 Fair value associated with options exercised - 275 - - 275 Dividends to equity owners - - - (861) (861) ---------------------------------------------------------------------------- Total transactions with owners of the Company 75,000 405 (11) (861) (467) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Balance, April 30, 2014 11,524,421 $ 2,153$ 9,577$ 4,864$ 16,594 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Balance, April 30, 2012 11,603,271 $ 1,688$ 10,023$ 3,845$ 15,556 Profit and comprehensive income for the year - - - 885 885 ---------------------------------------------------------------------------- Total comprehensive income for the year - - - 885 885 ---------------------------------------------------------------------------- Repurchase of common shares (187,300) (27) (435) - (462) Share options exercised 33,450 59 - - 59 Fair value associated with options exercised - 28 - - 28 Dividends to equity owners - - - (800) (800) ---------------------------------------------------------------------------- Total transactions with owners of the Company (153,850) 60 (435) (800) (1,175) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Balance, April 30, 2013 11,449,421 $ 1,748$ 9,588$ 3,930$ 15,266 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- FOR FURTHER INFORMATION PLEASE CONTACT: Solutions and general info: info@tecsys.com Investor relations: jbinckly@tmxequicom.com; 416-815-0700 ext. 228 Media relations: media@tecsys.comTECSYS Inc. (514) 866-0001 or (800) 922-8649 Source: Tecsys inc.


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