Company Announcements

Tecsys Reports Financial Results for the First Quarter of Fiscal 2025

SaaS subscription bookings up 57%, SaaS RPO climbs 40%

MONTREAL , Sept. 5, 2024 /CNW/ -- Tecsys Inc. (TSX: TCS), an industry-leading supply chain management SaaS company, today announced its results for the first quarter of fiscal 2025, ended July 31, 2024. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).

"We kicked off fiscal 2025 with solid momentum, setting a positive tone for the year ahead," said Peter Brereton, president and CEO at Tecsys. "Our continued SaaS performance is supported by the strength of our team and the impact of our partners, together driving growth in a highly engaged market. The supply chain market is on the move, and we like our competitive position. We are confident in our ability to build on this strong start."

Mark Bentler, chief financial officer of Tecsys Inc., added, "Our Q1 fiscal 2025 financial performance showcases 57% SaaS bookings growth, 40% SaaS RPO growth and 33% SaaS revenue growth compared to the same quarter last year and we are pleased that our underlying SaaS margins continue to trend positively." 

First Quarter Highlights:

  • SaaS revenue increased by 33% to $15.3 million, up from $11.5 million in Q1 2024.
  • SaaS subscription bookingsi (measured on an ARRi basis) increased by 57% to $3.0 million, compared to $1.9 million in the first quarter of fiscal 2024.
  • SaaS Remaining Performance Obligation (RPOi) increased by 40% to $194.9 million at July 31, 2024, up from $139.4 million at the same time last year.
  • Total revenue increased to $42.3 million compared to $42.0 million in Q1 2024.
  • Net profit was $0.8 million or $0.05 per share on a fully diluted basis in Q1 2025, compared to $1.2 million or $0.08 per share for the same period in fiscal 2024.
  • Adjusted EBITDAii was $2.6 million compared to $3.2 million reported in Q1 last year.
  • In the first quarter of fiscal 2025, Tecsys acquired 59,600 of its outstanding common shares for approximately $2.2 million as part of its ongoing Normal Course Issuer Bid.

Financial Guidance:

Tecsys is reiterating previously presented financial guidance as follows:


FY25 Guidance


FY26 Guidance

Total Revenue Growth

7-9%


n.a.

SaaS Revenue Growth

30-32%


n.a.

Adjusted EBITDAii Margin

8-9%


10-11%

On September 5, 2024, the Company declared a quarterly dividend of $0.08 per share to be paid on October 4, 2024 to shareholders of record on September 20, 2024.

Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be "eligible" dividends.

Q1 2025 Financial Results Conference Call
Date: September 6, 2024
Time: 8:30 a.m. ET
Phone number: 800-836-8184 or 646-357-8785
The call can be replayed until September 13, 2024, by calling:
888-660-6345 or 646-517-4150 (access code: 81086#)

i See Key Performance Indicators in Management's Discussion and Analysis of the Q1 2025 Financial Statements.

ii See Non-IFRS Performance Measures in Management's Discussion and Analysis of the Q1 2025 Financial Statements.

About Tecsys

Tecsys is a global provider of advanced supply chain solutions. With a commitment to innovation and customer success, the company equips organizations with the essential software, technology and expertise needed for operational excellence and competitive advantage. Its cloud solutions serve a diverse range of industries, including healthcare, distribution and converging commerce, across multiple complex, regulated and high-volume markets. Built on the Itopia® low-code application platform, Tecsys' offerings include enterprise resource planning, warehouse management, consolidated service management, distribution and transportation management, supply management at the point of use and order management solutions. Tecsys provides critical data insights and control across the supply chain, ensuring that organizations are agile, responsive and scalable.

Tecsys is publicly traded on the Toronto Stock Exchange under the ticker symbol TCS. For more about Tecsys and its solutions, please 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 the most recently filed annual information form. These documents have been filed with the Canadian securities commissions and are available on our website (www.tecsys.com) and on SEDAR+ (www.sedarplus.ca).

Copyright © Tecsys Inc. 2024. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.

Non-IFRS Measures

Reconciliation of EBITDA and Adjusted EBITDA

EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation and amortization. Adjusted EBITDA is calculated as EBITDA before stock-based compensation and restructuring costs. The exclusion of interest expense, interest income, income taxes and restructuring costs eliminates the impact on earnings derived from non-operational activities and non-recurring items, and the exclusion of depreciation, amortization and stock-based compensation eliminates the non-cash impact of these items.

The Company believes that these measures are useful measures of financial performance without the variation caused by the impacts of the items described above and that could potentially distort the analysis of trends in our operating performance. In addition, they 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. Excluding these items does not imply that they are necessarily non-recurring. Management believes these non-IFRS financial measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company's operating results, underlying performance and future prospects in a manner similar to management. Although EBITDA and Adjusted EBITDA are frequently used by securities analysts, lenders and others in their evaluation of companies, they have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of the Company's results as reported under IFRS.

The reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable IFRS measure is provided below.


       Three months

         Trailing 12 months


       ended July 31,

            ended July 31,

(in thousands of CAD)


2024


2023


2024


2023










Net profit for the period

$

798

$

1,171

$

1,476

$

3,220

Adjustments for:









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


371


384


1,464


1,729

Amortization of deferred development costs


197


142


638


536

Amortization of other intangible assets


334


396


1,431


1,603

Interest expense


25


38


150


325

Interest income


(217)


(269)


(963)


(851)

Income taxes


436


859


218


2,458

EBITDA

$

1,944

$

2,721

$

4,414

$

9,020

Adjustments for:









Stock based compensation


647


452


2,496


2,153

Restructuring costs


-


-


2,122


-

Adjusted EBITDAii

$

2,591

$

3,173

$

9,032

$

11,173

 

Condensed Interim Consolidated Statements of Financial Position
(Unaudited)

(In thousands of Canadian dollars)




July 31, 2024


April 30, 2024

Assets





Current assets





Cash and cash equivalents

$

10,705

$

18,856

Short-term investments


16,358


16,713

Accounts receivable


19,691


22,090

Work in progress


6,739


4,248

Other receivables


449


134

Tax credits


7,708


6,422

Inventory


2,073


1,359

Prepaid expenses and other


8,294


9,143

Total current assets


72,017


78,965

Non-current assets





Other long-term receivables and assets


552


421

Tax credits


4,914


4,737

Property and equipment


1,319


1,372

Right-of-use assets


1,147


1,251

Contract acquisition costs


4,466


4,478

Deferred development costs


2,938


2,683

Other intangible assets


7,450


7,703

Goodwill


17,470


17,363

Deferred tax assets


9,073


9,073

Total non-current assets


49,329


49,081

Total assets

$

121,346

$

128,046

Liabilities





Current liabilities





Accounts payable and accrued liabilities


18,153


20,030

Deferred revenue


33,261


36,211

Lease obligations


826


812

Total current liabilities


52,240


57,053

Non-current liabilities





Other long-term accrued liabilities


339


496

Deferred tax liabilities


840


826

Lease obligations


1,094


1,302

Total non-current liabilities


2,273


2,624

Total liabilities

$

54,513

$

59,677

Equity





Share capital

$

52,394

$

52,256

Contributed surplus


7,992


9,417

Retained earnings


7,735


8,121

Accumulated other comprehensive loss


(1,288)


(1,425)

Total equity attributable to the owners of the Company


66,833


68,369

Total liabilities and equity

$

121,346

$

128,046

 

Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited)

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



Three Months Ended July 31,



2024

2023

Revenue:





SaaS

$

15,314

$

11,495

Maintenance and Support


8,715


8,298

Professional Services


13,387


14,908

License


861


456

Hardware


3,999


6,818

Total revenue


42,276


41,975

Cost of revenue


22,548


22,475

Gross profit


19,728


19,500

Operating expenses:





Sales and marketing


8,352


7,671

General and administration


2,978


2,959

Research and development, net of tax credits


7,331


7,112

Total operating expenses


18,661


17,742

Profit from operations


1,067


1,758

Other income


167


272

Profit before income taxes


1,234


2,030

Income tax expense


436


859

Net profit

$

798

$

1,171

Other comprehensive income (loss):





Effective portion of changes in fair value on designated revenue hedges


(20)


2,573

Exchange differences on translation of foreign operations


157


(426)

Comprehensive income

$

935

$

3,318

Basic and diluted earnings per common share

$

0.05

$

0.08

 

Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)

(In thousands of Canadian dollars)



Three Months Ended July 31,





2024


2023

Cash flows from operating activities:





Net profit

$

798

$

1,171

Adjustments for:





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


371


384

Amortization of deferred development costs


197


142

Amortization of other intangible assets


334


396

Interest (income) expense and foreign exchange (gain) loss


(167)


(272)

Unrealized foreign exchange and other


(123)


(1,198)

Non-refundable tax credits


(429)


(440)

Stock-based compensation


647


452

Income taxes


3


14

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


1,631


649

Accounts receivable


2,434


(1,820)

Work in progress


(2,486)


(829)

Other receivables and assets


(520)


(262)

Tax credits


(1,034)


(1,071)

Inventory


(714)


(842)

Prepaid expenses


903


(283)

Contract acquisition costs


(39)


3

Accounts payable and accrued liabilities


(3,119)


(3,566)

Deferred revenue


(2,961)


1,376

Changes in non-cash working capital items related to operations


(7,536)


(7,294)

Net cash used in operating activities


(5,905)


(6,645)

Cash flows from financing activities:





Payment of lease obligations


(198)


(199)

Interest paid


(25)


(38)

Issuance of common shares on exercise of stock options


277


1,763

Shares repurchased and cancelled


(2,211)


-

Net cash (used in) provided by financing activities


(2,157)


1,526

Cash flows from investing activities:





Interest received


24


36

Transfers from short-term investments


548


22

Acquisitions of property and equipment


(209)


(102)

Deferred development costs


(452)


(247)

Net cash used in investing activities


(89)


(291)

Net decrease in cash and cash equivalents during the period


(8,151)


(5,410)

Cash and cash equivalents - beginning of period


18,856


21,235

Cash and cash equivalents - end of period

$

10,705

$

15,825

 

Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)

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



Share capital


Contributed
Surplus

 

Accumulated other
comprehensive
(loss) income

Retained
earnings


Total


Number


Amount



Balance, May 1, 2024

14,840,150

$

52,256

$

9,417

$

(1,425)

$

8,121

$

68,369

Net profit

-


-


-


-


798


798

Other comprehensive (loss) income:

-


-


-


-


-


-

Effective portion of changes in fair value on designated revenue hedges

-


-


-


(20)


-


(20)

Exchange difference on translation of foreign operations

-


-


-


157


-


157

Total comprehensive income

-


-


-


137


798


935

Shares repurchased and cancelled

(59,600)


(210)


(2,001)


-


-


(2,211)

Stock-based Compensation

-


-


647


-


-


647

Dividends to equity owners

-


-


-


-


(1,184)


(1,184)

Share options exercised

12,537


348


(71)


-


-


277

Total transactions with owners of the Company

(47,063)

$

138


(1,425)

$

-

$

(1,184)

$

(2,471)

Balance, July 31, 2024

14,793,087

$

52,394


7,992

$

(1,288)

$

7,735

$

66,833













Balance, May 1, 2023

14,582,837

$

44,338


15,285

$

(17)

$

10,832

$

70,438

Net profit

-


-


-


-


1,171


1,171

Other comprehensive income:











-

Effective portion of changes in fair value on designated revenue hedges

-


-


-


2,573


-


2,573

Exchange difference on translation of foreign operations

-


-


-


(426)


-


(426)

Total comprehensive income

-


-


-


2,147


1,171


3,318

Stock-based Compensation

-


-


452


-


-


452

Dividends to equity owners

-


-


-


-


(1,102)


(1,102)

Share options exercised

111,306


2,307


(544)


-


-


1,763

Total transactions with owners of the Company

111,306

$

2,307


(92)

$

-

$

(1,102)

$

1,113

Balance, July 31, 2023

14,694,143

$

46,645


15,193

$

2,130

$

10,901

$

74,869

 

SOURCE Tecsys Inc.