MONTREAL, QUEBEC — (Marketwired) — 12/01/16 — TECSYS Inc. (TSX: TCS), an industry-leading supply chain management software company, today announced its results for the second quarter of fiscal year 2017, ended October 31, 2016. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS) and are unaudited.
Second Quarter Highlights:
“In the second quarter of fiscal 2017, we continued to grow our account base with four new customer contracts signed, including two complex distribution customers, one healthcare organization, and one large hospital network,” said Peter Brereton, President and CEO of TECSYS Inc. “Our strategy to grow the complex distribution channel is proving successful with the total contract value signed in the first half of fiscal 2017 already higher than the total amount signed in all of fiscal year 2016”.
“New account sales did very well during the quarter with total new account bookings up 50% for the quarter and 30% for the first six months. We experienced some delays in base account upgrades which we believe is attributable to the uncertainty of the U.S. election. Since then, business is coming back to normal and we are optimistic we will be able to execute our strong pipeline in the back-half of our fiscal year.
We were pleased to see our recurring revenues rise by 15% over Q2 of last year. We believe we are entering a new phase in the business with the re-write of our software platform behind us and the heavy ramp up in sales & marketing yielding results and beginning to normalize as a percentage of the business model. With this in mind, the board has decided to increase the dividend by 50% as outlined below. We believe this brings projected dividend payout into the 30-35% of projected free cash flow range.” added Mr. Brereton.
Berty Ho-Wo-Cheong, Vice President, Finance & Administration and CFO commented “If we compare the operating expenses during the quarter to the previous year–s quarter, we had three significant cost items worth mentioning. First our September user conference, which is held every 18 months, incurred net expenses of approximately $250,000. Second, R&D capitalization during the second quarter was $27K against $280,000 in the second quarter of fiscal 2016. Third, we had an exceptional legal expense that accounted for about $416,000 compared to $162,000 for the same period last year. With a decision rendered in our favour in September, we look forward to potentially recouping a substantial portion of our legal expenses. Adjusting for these costs for both periods, our Profit from Operations in the quarter would have been $959,000 against $383,000 for the same period of last year. We believe that the exceptional legal fees and the R&D capitalization are now behind us.
First Half Highlights:
The Company has declared a dividend of $0.045 per share to be paid on January 12, 2017 to shareholders of record at the close of business on December 22, 2016.
Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be “eligible” dividends.
About TECSYS
TECSYS provides transformative supply chain solutions that equip our customers to succeed in a rapidly- changing omni-channel world. TECSYS solutions are built on a true enterprise supply chain platform, and include warehouse management, distribution and transportation management, as well as complete financial management and analytics. Customers running on TECSYS– Supply Chain Platform are confident knowing they can execute, day in and day out, regardless of business fluctuations or changes in technology, they can adapt and scale to any business needs or size, and they can expand and collaborate with customers, suppliers and partners as one borderless enterprise. From demand planning to demand fulfillment, TECSYS puts power into the hands of both front line workers and back office planners, and unshackles business leaders so they can see and manage their supply chains like never before.
TECSYS is the market leader in supply chain solutions for health systems and hospitals. Over 600 mid-size and Fortune 1000 customers trust their supply chains to TECSYS in the healthcare, service parts, 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, 2016. These documents have been filed with the Canadian securities commissions and are available on our website () and on SEDAR ().
Copyright © TECSYS Inc. 2016. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.
Contacts:
Solutions and general info:
Investor relations:
(514) 866-5800 ext. 4120
Media relations:
TECSYS Inc.
(514) 866-0001 or (800) 922-8649
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