NexJ Systems Reports Second Quarter 2017 Results

TORONTO, July 27, 2017 /CNW/ - NexJ Systems Inc. (TSX: NXJ), a provider of enterprise customer management solutions to the financial services industry, today announced financial results for its second quarter ended June 30, 2017.

Highlights

  • $15.6 M in revenue for the six month period represents 3% growth over the same period in the prior year
  • $910K in Adjusted EBITDA for the six month period is a 130% improvement over Adjusted EBITDA of $396K for the comparative period
  • $88K of net loss for the six month period is a $2.6M improvement over the net loss of $2.7M for the comparative period
  • $6.7M of revenue for the second quarter represents a 4% decrease from the same period in the prior year
  • $177K in Adjusted EBITDA for the second quarter is a 55% improvement over the Adjusted EBITDA of $114K for the comparative period
  • $415K of net loss for the second quarter is a $298K improvement over the net loss of $713K for the comparative period

"Revenue for the quarter and year-to-date is consistent with the revenue generated in the comparative periods last year", said William M. Tatham, Chief Executive Officer of NexJ. "We are excited about the initial reception to our new artificial intelligence related product offerings."

Conference Call Information
NexJ will be hosting an earnings report conference call today at 5:00 p.m. ET. The call can be accessed via webcast or by phone by dialing 647-427-7450 (Toronto local or international) or 1-888-231-8191 (North America Toll Free). Investors should dial in approximately 10 minutes before the teleconference is scheduled to begin.

A replay of the call will be available beginning today at 8:00 p.m. ET through 11:59 p.m. on August 3, 2017 and can be accessed by dialing 416-849-0833 (Toronto local) or toll free at 1-855-859-2056 and using password 54304729.

NexJ Systems Inc.






Second Quarter Financial Results






(Expressed in thousands of Canadian dollars)





(Unaudited)







 Quarter ended June 30, 


 Six months ended June 30, 


2017

2016


2017

2016







Revenue:

$

$


$

$


License fees

1,387

422


4,570

1,489


Professional services

3,385

4,788


7,071

9,909


Maintenance and support

1,964

1,790


3,911

3,690


6,736

7,000


15,552

15,088

Expenses:







Professional services

2,700

2,937


5,618

6,062


Research and development, net

1,855

1,767


3,703

3,882


Sales and marketing

1,059

1,025


2,398

2,159


General and administrative, net

945

1,157


2,923

2,589


6,559

6,886


14,642

14,692







Adjusted EBITDA

177

114


910

396








Loss from discontinued operation

-

-


-

252


Impairment of loan receivable

-

353


-

994


Share-based payment expense

53

241


148

591


Depreciation and amortization

234

218


466

430


Deferred share unit expense

200

-


200

-

Income (loss) from operations

(310)

(698)


96

(1,871)








Foreign exchange loss

121

32


219

905


Finance income

(16)

(17)


(35)

(35)

Net loss

(415)

(713)


(88)

(2,741)

 

Non-IFRS Measures
This news release includes certain measures that have not been prepared in accordance with International Financial Reporting Standards ("IFRS") such as Adjusted EBITDA and Adjusted EBITDA margin which are used to evaluate the Company's operating performance as a complement to results provided in accordance with IFRS.  The Company believes that Adjusted EBITDA and Adjusted EBITDA margin are useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and the other items listed below.

The term "Adjusted EBITDA" refers to net income (loss) before adjusting for loss from discontinued operation, share-based payment expense, depreciation and amortization, impairment charge on non-financial assets, impairment of loan receivable and shared services, deferred share unit expense, foreign exchange gain (loss), finance income, finance costs, and income taxes.  "Adjusted EBITDA margin" refers to the percentage that Adjusted EBITDA for any period represents as a portion of total revenue for that period.  

The term Adjusted EBITDA and Adjusted EBITDA margin are not measures recognized by IFRS and do not have standardized meanings prescribed by IFRS.  Therefore, Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similar measures presented by other issuers.  Investors are cautioned that Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an alternative to net income (loss) as determined in accordance with IFRS.

About NexJ Systems Inc.
NexJ Systems provides enterprise customer management solutions to the financial services industry. Our solutions include industry-specific customer relationship management (CRM) for multi-channel engagement and collaboration; customer process management (CPM) for client onboarding and KYC; and customer data management (CDM) to deliver a holistic view of customers across line of business and regional data silos. Our solutions integrate information from multiple systems into a unified view to help firms better understand and share information about their customers to increase loyalty, drive cross-sell and improve the customer experience.

Based in Toronto, NexJ has clients throughout North America, Asia Pacific and in Europe. For more information about NexJ visit www.nexj.com, e-mail info@nexj.com, or call 416-222-5611. Join us on LinkedIn, follow us on Twitter, subscribe to our YouTube channel, like us on Facebook or hang out with us on Google+.

NexJ Forward-looking Statement
Certain statements in this press release, including statements about the financial conditions, and results of operations and earnings, may contain words such as "could", "expects", "may", "should", "will", "anticipates", "believes", "intends", "estimates", "targets", "plans", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities laws.  These statements are based on the Company's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which the Company operates.  These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different.  The Company's assumptions, although considered reasonable by the Company at the date of this press release, may provide to be inaccurate and consequently the Company's actual results could differ materially from the expectations set out herein.

Actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following: (i) the future performance, financial and otherwise, of NexJ; (ii) the ability of NexJ to protect, maintain and enforce its intellectual property rights; (iii) the acceptance by the Company's customers and the marketplace of new technologies and solutions; (iv) the Company's growth and profitability prospects; (v) the estimated size and growth prospects of the CRM market; (vi) the Company's competitive position in the CRM market and its ability to take advantage of future opportunities in this market; (vii) the Company's ability to attract new customers and develop and maintain existing customers; and (viii) the demand for the Company's product and the extent of deployment of the company's products in the CRM marketplace.  Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances.

The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) our dependence on a limited number of customers and large project size; (ii) fluctuation in our quarterly operating results; (iii) our dependence on key personnel and our compensation structure; (iv) risks associated with managing large and complex software implementation projects; (v) uncertainties and assumptions in our sales forecasts, including the extent to which sales proposals are converted into sales; (vi) risks associated with our ability to design, develop, test, market, license and support our software products on a timely basis; (vii) market acceptance of our products and services; (viii) commercial success of products resulting from our investment in research and development; (ix) our success in expanding sales into new international markets; * competition in our industry; (xi) failure to protect our intellectual property or infringement of intellectual property rights of third parties; (xii) reliance upon a limited number of third-party software products to develop our products; (xiii) defects or disruptions in our products and services; (xiv) currency exchange rate fluctuations; (xv) lengthy sales cycles for our software; (xvi) global financial market conditions; (xvii) failure to manage our growth successfully; and (xiii) failure to successfully manage and integrate acquisitions.

For additional information with respect to risks and other factors which could occur, see the Company's most recently filed Annual Information Form for the year ended December 31, 2016 dated February 15, 2017, and other securities filings with the Canadian securities regulators available on www.sedar.com.  Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

NexJ Systems Inc.




Condensed Interim Consolidated Statements of Financial Position

(Expressed in thousands of Canadian dollars)




(Unaudited)









June 30, 2017


December 31, 2016





Assets





$


$

Current assets:





Cash and cash equivalents

12,793


14,678


Accounts receivable

11,448


12,573


Prepaid expenses and other assets

1,624


1,094

Total current assets

25,865


28,345





Non-current assets:





Property and equipment

1,764


1,965


Goodwill

1,753


1,753


Other assets

260


260

Total non-current assets

3,777


3,978





Total assets

29,642


32,323





Liabilities and Shareholders' Equity








Current liabilities:





Accounts payable and accrued liabilities

4,668


5,871


Deferred revenue

5,495


7,137


Provisions

112


224


Current portion of finance lease liability

148


148

Total current liabilities

10,423


13,380





Non-current liabilities:





Accrued liabilities

-


1,259


Finance lease liability

87


160


Deferred revenue

54


-

Total non-current liabilities

141


1,419





Total liabilities

10,564


14,799





Shareholders' equity:





Share capital

82,740


82,648


Share purchase loans

(3,622)


(3,622)


Contributed surplus

8,689


7,139


Deficit

(68,729)


(68,641)

Total shareholders' equity

19,078


17,524









Total liabilities and shareholders' equity

29,642


32,323

 

NexJ Systems Inc.






Condensed Interim Consolidated Statements of Comprehensive Loss





(Expressed in thousands of Canadian dollars, except per share amounts)





(Unaudited)



















Quarter ended June 30,


Six months ended June 30,


2017

2016


2017

2016













Revenue:

$

$


$

$


License fees

1,387

422


4,570

1,489


Professional services

3,385

4,788


7,071

9,909


Maintenance and support

1,964

1,790


3,911

3,690


6,736

7,000


15,552

15,088







Expenses:







Professional services

2,717

3,004


5,653

6,230


Research and development, net

1,879

1,848


3,760

4,077


Sales and marketing

1,062

1,038


2,407

2,189


General and administrative, net

1,388

1,455


3,636

3,217


Impairment of loan receivable

-

353


-

994


7,046

7,698


15,456

16,707







Income (loss) from operations:

(310)

(698)


96

(1,619)








Foreign exchange loss

(121)

(32)


(219)

(905)


Finance income

16

17


35

35


(105)

(15)


(184)

(870)













Loss from continuing operations:

(415)

(713)


(88)

(2,489)

Loss from discontinued operation:

-

-


-

(252)







Loss for the period and comprehensive loss:

(415)

(713)


(88)

(2,741)







Loss per share:







Basic and diluted from continuing operations

(0.02)

(0.04)


(0.00)

(0.13)


Basic and diluted from discontinued operation

-

-


-

(0.01)


Basic and diluted

(0.02)

(0.04)


(0.00)

(0.14)







Weighted average number of 






common shares outstanding, in thousands:







Basic and diluted

20,202

20,275


20,128

20,287

 

NexJ Systems Inc.




Condensed Interim Consolidated Statements of Cash Flows




(Expressed in thousands of Canadian dollars)




(Unaudited)









Six months ended June 30,


2017


2016









Cash flows from (used in) operating activities:

$


$


Loss for the period

(88)


(2,741)


Adjustments for:






Impairment of loan receivable

-


994



Depreciation and amortization

466


430



Share-based payment expense

148


591



Deferred share unit expense

200


-



Finance income

(35)


(35)



Foreign exchange loss (gain)

(48)


251



Loss from discontinued operation

-


252


Change in non-cash operating working capital:






Accounts receivable

1,125


273



Prepaid expenses and other assets

(530)


(548)



Accounts payable and accrued liabilities and provisions

(1,214)


(770)



Deferred revenue

(1,588)


(656)


(1,564)


(1,959)

Net cash flows used in discontinued operation

-


(270)

Net cash flows used in operating activities

(1,564)


(2,229)





Cash flows from (used in) financing activities:






Repurchase of common shares

(279)


(159)



Proceeds from exercise of stock options

112


144



Payment of finance lease liability

(73)


(62)

Net cash flows used in financing activities

(240)


(77)





Cash flows from (used in) investing activities:






Purchase of property and equipment

(164)


(103)



Advances to NexJ Health Inc.

-


(994)



Distribution, net of cash

-


(40)



Interest received

35


35

Net cash flows used in investing activities

(129)


(1,102)







Effects of exchange rates on cash and cash equivalents

48


(251)







Decrease in cash and cash equivalents

(1,885)


(3,659)





Cash and cash equivalents, beginning of period

14,678


14,699





Cash and cash equivalents, end of period

12,793


11,040





Supplemental cash flow information:






Acquisition of property and equipment not yet paid

101


30



Acquisition of property and equipment under finance lease

-


444

 


SOURCE NexJ Systems Inc.

For further information: Media Contact: Matthew Bogart, 416-227-3708, matthew.bogart@nexj.com

RELATED LINKS
www.nexj.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890