SaaS Revenue Rises 44% and Total Revenue Rises 23% in the
First Quarter
MONTREAL, Sept. 7,
2023 /CNW/ -- Tecsys Inc. (TSX: TCS), an
industry-leading supply chain management SaaS company, today
announced its results for the first quarter fiscal year 2024, ended
July 31, 2023. All dollar amounts are
expressed in Canadian currency and are prepared in accordance with
International Financial Reporting Standards (IFRS).
"We are pleased to kick off fiscal 2024 with robust results, led
by 44% growth in SaaS revenue and record quarterly revenue," says
Peter Brereton, president and CEO at
Tecsys Inc. "Our focus on innovation and customer-centricity has
driven significant gains across key metrics, and we are seeing the
impact of that in our results. This quarter's performance sets a
positive tone for the rest of the year."
Mark Bentler, chief financial
officer of Tecsys Inc., adds, "Our momentum continues with
back-to-back quarters of total revenue growth of 20% or more.
We are seeing positive results in our gross margin, and we've
demonstrated our ability to manage costs while investing in areas
that drive growth. Underpinned by a 36% increase in our SaaS RPO,
we remain well-positioned for the future."
First Quarter Highlights:
- SaaS revenue increased by 44% to $11.5
million, up from $8.0 million
in Q1 2023.
- SaaS subscription bookingsi (measured on an
ARRi basis) decreased by 50% to $1.9 million, compared to $3.9 million in the first quarter of fiscal
2023.
- SaaS Remaining Performance Obligation (RPOi)
increased by 36% to $139.4 million at
July 31, 2023, up from $102.5 million at the same time last year.
- Annual Recurring Revenue (ARRi) at July 31, 2023 was up 20% to $78.3 million compared to $65.1 million at July 31,
2022.
- Professional services revenue was up 9% to $14.9 million compared to $13.6 million in Q1 2023.
- Total revenue excluding hardware revenue was $35.2 million, 16% higher than $30.4 million reported for Q1 last year, while
total revenue rose 23% to reach a record $42.0 million.
- Gross margin was 46% for the first quarter of fiscal 2024
compared to 43% for the same period in fiscal 2023.
- Total gross profit increased to $19.5
million, up 32% from $14.8
million in Q1 2023.
- Operating expenses increased to $17.7
million, higher by $3 million
or 21% compared to $14.7 million in
Q1 last year.
- Profit from operations was $1.8
million, up from $0.1 million
in Q1 2023.
- Net profit was $1.2 million or
$0.08 per share on a fully diluted
basis in Q1 2024, compared to $40
thousand or $0.00 per share
for the same period in fiscal 2023.
- Adjusted EBITDAii was $3.2
million, up 114% compared to $1.5
million reported in Q1 last year.
Financial Guidance:
Tecsys is reiterating previously presented financial guidance as
follows:
|
FY24 Guidance
|
|
FY25 Guidance
|
Total Revenue
Growth
|
10-15%
|
|
n.a.
|
SaaS Revenue
Growth
|
35-37%
|
|
n.a.
|
Adjusted
EBITDAii Margin
|
6 %
|
|
8-9%
|
On September 7, 2023, the Company
declared a quarterly dividend of $0.075 per share to be paid on October 6, 2023 to shareholders of record on
September 22, 2023.
Pursuant to the Canadian Income Tax Act, dividends paid by the
Company to Canadian residents are considered to be "eligible"
dividends.
i See Key Performance Indicators in Management's
Discussion and Analysis of the Q1 2024 Financial Statements.
ii See Non-IFRS Performance Measures in Management's
Discussion and Analysis of the Q1 2024 Financial Statements.
First Quarter Fiscal 2024 Results Conference Call
Date: September 8, 2023
Time: 8:30am EDT
Phone number: (877) 209-9554 or (416) 981-9007
The call can be replayed until September 15,
2023 by calling:
(800) 558-5253 or (416) 626-4144 (access code: 22027896)
About Tecsys
Since our founding 40 years ago, much has changed in the realm
of supply chain technology. But one thing has remained constant; by
developing dynamic and innovative supply chain solutions, Tecsys
has been equipping organizations for growth and competitive
advantage. Serving healthcare, distribution and converging commerce
industries, and spanning multiple complex, regulated and
high-volume markets, Tecsys delivers 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 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. 2023. 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, gain on remeasurement of lease liability and
recognition of tax credits generated in prior periods. The
exclusion of interest expense, interest income and income taxes
eliminates the impact on earnings derived from non-operational
activities, and the exclusion of depreciation, amortization,
share-based compensation, gain on remeasurement of lease liability
and recognition of tax credits generated in prior periods
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-GAAP 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 ended
July 31,
|
Trailing 12 months ended
July 31,
|
(in thousands of CAD)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net profit for the
period
|
$
|
1,171
|
$
|
40
|
$
|
3,220
|
$
|
4,274
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
Depreciation of
property and equipment and right-of-use assets
|
|
384
|
|
430
|
|
1,729
|
|
2,049
|
Amortization of
deferred development costs
|
|
142
|
|
102
|
|
536
|
|
338
|
Amortization of other
intangible assets
|
|
396
|
|
396
|
|
1,603
|
|
1,597
|
Interest
expense
|
|
38
|
|
119
|
|
325
|
|
580
|
Interest
income
|
|
(269)
|
|
(104)
|
|
(851)
|
|
(538)
|
Income
taxes
|
|
859
|
|
25
|
|
2,458
|
|
242
|
EBITDA
|
$
|
2,721
|
$
|
1,008
|
$
|
9,020
|
$
|
8,542
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
Stock based
compensation
|
|
452
|
|
476
|
|
2,153
|
|
1,806
|
Gain on remeasurement
of lease liability
|
|
-
|
|
-
|
|
-
|
|
(573)
|
Recognition of tax
credits generated in prior periods
|
|
-
|
|
-
|
|
-
|
|
(617)
|
Adjusted
EBITDAii
|
$
|
3,173
|
$
|
1,484
|
$
|
11,173
|
$
|
9,158
|
Consolidated
Statements of Financial Position
|
As at July31, 2023
and April 30, 2023
|
(In thousands of
Canadian dollars)
|
|
|
July 31, 2023
|
April 30, 2023
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
15,825
|
$
|
21,235
|
Short-term
investments
|
|
16,046
|
|
15,835
|
Accounts
receivable
|
|
24,648
|
|
22,900
|
Work in
progress
|
|
2,555
|
|
1,734
|
Other
receivables
|
|
2,028
|
|
523
|
Tax
credits
|
|
6,672
|
|
5,338
|
Inventory
|
|
1,874
|
|
1,034
|
Prepaid
expenses
|
|
8,264
|
|
8,193
|
Total current assets
|
|
77,912
|
|
76,792
|
Non-current assets
|
|
|
|
|
Other long-term
receivables
|
|
1,415
|
|
363
|
Tax
credits
|
|
5,545
|
|
5,368
|
Property and
equipment
|
|
1,638
|
|
1,802
|
Right-of-use
assets
|
|
1,575
|
|
1,708
|
Contract acquisition
costs
|
|
3,944
|
|
3,738
|
Deferred development
costs
|
|
2,359
|
|
2,254
|
Other intangible
assets
|
|
8,733
|
|
9,287
|
Goodwill
|
|
17,280
|
|
17,467
|
Deferred tax
assets
|
|
8,132
|
|
8,137
|
Total non-current assets
|
|
50,621
|
|
50,124
|
Total assets
|
$
|
128,533
|
$
|
126,916
|
Liabilities
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
18,001
|
$
|
21,669
|
Deferred
revenue
|
|
31,745
|
|
30,388
|
Lease
obligations
|
|
788
|
|
793
|
Total current liabilities
|
|
50,534
|
|
52,850
|
Non-current liabilities
|
|
|
|
|
Other long-term
liabilities
|
|
-
|
|
253
|
Deferred tax
liabilities
|
|
1,220
|
|
1,255
|
Lease
obligations
|
|
1,910
|
|
2,120
|
Total non-current liabilities
|
|
3,130
|
|
3,628
|
Total liabilities
|
$
|
53,664
|
$
|
56,478
|
Equity
|
|
|
|
|
Share
capital
|
$
|
46,645
|
$
|
44,338
|
Contributed
surplus
|
|
15,193
|
|
15,285
|
Retained
earnings
|
|
10,901
|
|
10,832
|
Accumulated other
comprehensive income (loss)
|
|
2,130
|
|
(17)
|
Total equity attributable to the owners of the
Company
|
|
74,869
|
|
70,438
|
Total liabilities and equity
|
$
|
128,533
|
$
|
126,916
|
Consolidated
Statements of Income and Comprehensive Income
|
For the three-month
periods ended July 31, 2023 and 2022
|
(In thousands of
Canadian dollars, except per share data)
|
|
|
|
|
|
|
July 31, 2023
|
July 31, 2022
|
Revenue:
|
|
|
|
|
SaaS
|
$
|
11,495
|
$
|
8,001
|
Maintenance and
Support
|
|
8,298
|
|
8,268
|
Professional
Services
|
|
14,908
|
|
13,631
|
License
|
|
456
|
|
459
|
Hardware
|
|
6,818
|
|
3,845
|
Total revenue
|
|
41,975
|
|
34,204
|
Cost of revenue
|
|
22,475
|
|
19,446
|
Gross profit
|
|
19,500
|
|
14,758
|
Operating expenses:
|
|
|
|
|
Sales and
marketing
|
|
7,671
|
|
6,250
|
General and
administration
|
|
2,959
|
|
2,734
|
Research and
development, net of tax credits
|
|
7,112
|
|
5,684
|
Total operating expenses
|
|
17,742
|
|
14,668
|
Profit from operations
|
|
1,758
|
|
90
|
Other (income) costs
|
|
(272)
|
|
25
|
Profit before income taxes
|
|
2,030
|
|
65
|
Income tax expense
|
|
859
|
|
25
|
Net profit
|
$
|
1,171
|
$
|
40
|
Other comprehensive
income (loss):
|
|
|
|
|
Effective portion of
changes in fair value on designated revenue hedges
|
|
2,573
|
|
154
|
Exchange differences
on translation of foreign operations
|
|
(426)
|
|
(304)
|
Comprehensive income (loss)
|
$
|
3,318
|
$
|
(110)
|
Basic and diluted earnings per common
share
|
|
0.08
|
|
0.00
|
|
See accompanying notes
to the consolidated financial statements.
|
Consolidated
Statements of Cash Flows
|
For the three-month
periods ended July 31, 2023 and 2022
|
(In thousands of
Canadian dollars)
|
|
|
|
July 31, 2023
|
|
July 31, 2022
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net profit
|
|
$
|
1,171
|
$
|
40
|
Adjustments
for:
|
|
|
|
|
|
Depreciation of
property and equipment and right-of-use-assets
|
|
|
384
|
|
430
|
Amortization of
deferred development costs
|
|
|
142
|
|
102
|
Amortization of other
intangible assets
|
|
|
396
|
|
396
|
Interest expense
(income) and foreign exchange (gain) loss
|
|
|
(272)
|
|
25
|
Unrealized foreign
exchange and other
|
|
|
(1,198)
|
|
(372)
|
Non-refundable tax
credits
|
|
|
(440)
|
|
(421)
|
Stock-based
compensation
|
|
|
452
|
|
476
|
Income
taxes
|
|
|
14
|
|
25
|
Net cash from operating
activities excluding changes in non-cash working capital items
related to operations
|
|
|
649
|
|
701
|
Accounts
receivable
|
|
|
(1,820)
|
|
(543)
|
Work in
progress
|
|
|
(829)
|
|
(954)
|
Other
receivables
|
|
|
(262)
|
|
(335)
|
Tax credits
|
|
|
(1,071)
|
|
(1,048)
|
Inventory
|
|
|
(842)
|
|
(255)
|
Prepaid
expenses
|
|
|
(283)
|
|
(562)
|
Contract acquisition
costs
|
|
|
3
|
|
(253)
|
Accounts payable and
accrued liabilities
|
|
|
(3,799)
|
|
(3,012)
|
Deferred
revenue
|
|
|
1,376
|
|
1,238
|
Changes in non-cash
working capital items related to operations
|
|
|
(7,527)
|
|
(5,724)
|
Net cash used in operating
activities
|
|
|
(6,878)
|
|
(5,023)
|
Cash flows from
financing activities:
|
|
|
|
|
|
Repayment of long-term
debt
|
|
|
-
|
|
(300)
|
Payment of lease
obligations
|
|
|
(199)
|
|
(244)
|
Interest
paid
|
|
|
(38)
|
|
(119)
|
Issuance of common
shares on exercise of stock options
|
|
|
1,763
|
|
62
|
Net cash provided by (used in) financing
activities
|
|
|
1,526
|
|
(601)
|
Cash flows from
investing activities:
|
|
|
|
|
|
Interest
received
|
|
|
269
|
|
104
|
Transfer from
short-term investments
|
|
|
22
|
|
-
|
Acquisitions of
property and equipment
|
|
|
(102)
|
|
(60)
|
Deferred development
costs
|
|
|
(247)
|
|
(209)
|
Net cash used in investing
activities
|
|
|
(58)
|
|
(165)
|
Net decrease in cash
and cash equivalents during the period
|
|
|
(5,410)
|
|
(5,789)
|
Cash and cash
equivalents - beginning of period
|
|
|
21,235
|
|
23,004
|
Cash and cash equivalents - end of
period
|
|
$
|
15,825
|
$
|
17,215
|
|
See accompanying notes
to the consolidated financial statements.
|
Consolidated
Statements of Changes in Equity
|
For the three-month
periods ended July 31, 2023 and 2022
|
(In thousands of
Canadian dollars, except number of shares)
|
|
|
Share capital
|
|
|
|
|
|
|
|
Number
|
Amount
|
Contributed
Surplus
|
Accumulated other
comprehensive
income (loss)
|
Retained earnings
|
|
Total
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, May 1, 2022
|
14,562,895
|
$
|
43,973
|
$
|
13,176
|
$
|
(1,434)
|
$
|
12,968
|
$
|
68,683
|
Net profit
|
-
|
|
-
|
|
-
|
|
-
|
|
40
|
|
40
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
Effective portion of
changes in fair value on designated revenue hedges
|
-
|
|
-
|
|
-
|
|
154
|
|
-
|
|
154
|
Exchange difference on
translation of foreign operations
|
-
|
|
-
|
|
-
|
|
(304)
|
|
-
|
|
(304)
|
Total comprehensive (loss)
income
|
-
|
|
-
|
|
-
|
|
(150)
|
|
40
|
|
(110)
|
Stock-based
Compensation
|
-
|
|
-
|
|
476
|
|
-
|
|
-
|
|
476
|
Dividends to equity
owners
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,020)
|
|
(1,020)
|
Share options
exercised
|
3,994
|
|
76
|
|
(14)
|
|
-
|
|
-
|
|
62
|
Total transactions with owners of the
Company
|
3,994
|
$
|
76
|
$
|
462
|
$
|
-
|
$
|
(1,020)
|
$
|
(482)
|
Balance, July 31, 2022
|
14,566,889
|
$
|
44,049
|
$
|
13,638
|
$
|
(1,584)
|
$
|
11,988
|
$
|
68,091
|
|
See accompanying notes
to the consolidated financial statements.
|
SOURCE Tecsys Inc.