TECSYS Winning Momentum Continues With Key New Customers and Improved Earnings



    MONTREAL, Sept. 11 /CNW Telbec/ - TECSYS Inc. (TSX: TCS), an
industry-leading supply chain management software company announced today its
results for the first quarter of fiscal year 2008, ended July 31st, 2007. All
dollar amounts are expressed in U.S. currency and reported in accordance with
Canadian Generally Accepted Accounting Principles (GAAP) and are unaudited.

    Highlights of the First Quarter include:

    
    - Revenue was $7.8M in Q1 of fiscal year 2008, the same as Q1 for last
      fiscal year.
    - Deferred license revenue was $2.2M at the end of the first quarter of
      fiscal 2008, up from $1.7M at the end of the fourth quarter of fiscal
      year 2007; an increase of $456K, and up from $1.0M at the end of the
      first quarter of fiscal year 2007; an increase of $1.2M.
    - Earnings from operations for the quarter were $141K compared to loss
      from operations of $256K for the same quarter of last fiscal year.
    - EBITDA for Q1, 2008 substantially improved to $300K compared to $52K
      for Q1, 2007.
    - Net earnings for the quarter were $82K or $0.01 per share after a loss
      on foreign exchange of $128K compared to net loss of $174K or $0.01 per
      share for the first quarter of last fiscal year.
    - Gross margin percentage increased to 44% in Q1 of fiscal year 2008
      compared to 40% in Q1 of last fiscal year. Gross margin improvement
      reflects an increase in gross margins of both products and services
      compared to the same period in last fiscal year.
    - Total operating expenses for the first quarter of fiscal year 2008
      decreased by $81K to $3.3M or 2%, compared to $3.4M for the same
      quarter of last fiscal year.
    - At the end of the quarter, backlog stood at $16.0M, up from $15.5M at
      the end of Q4 of the prior fiscal year.
    

    Peter Brereton, President and CEO of TECSYS Inc. commented on the
results: "Q1 reflects the continued improvement to our financial results that
have seen a major shift to profitability during the last three quarters. Our
EBITDA is up substantially in Q1 of 2008 compared to Q1 of 2007 and we
continued to generate cash. I am particularly pleased with the wins in the
markets where we have focused and it is clearly reflected in the substantial
growth in deferred licence revenue.  The successful deployment of a record
number of key accounts in healthcare, heavy equipment dealers and high volume
distributors that went live on our solutions in this quarter also demonstrates
our success in these market segments."

    The Company signed five new customers, including:

    - A major heavy equipment dealer in the U.S.
    - An import-to-retail distributor in Idaho
    - A leading supplier of packaging products in Alberta
    - A 35-clinic regional healthcare organization in Mississippi
    - A University in Western Canada

    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 about 800
mid-size and Fortune 1000 corporations in healthcare, giftware, office
products, third-party logistics, and general wholesale high-volume
distribution markets. 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, 2007. 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. 2007. All names, trademarks, products, and
    services mentioned are registered or unregistered trademarks of their
    respective owners.


    
    TECSYS Inc.
    Consolidated Balance Sheets
    Prepared in Accordance with Canadian Generally Accepted Accounting
    Principles
    -------------------------------------------------------------------------
    (in thousands of U.S. dollars)

                                                 July 31,           April 30,
                                                    2007                2007

                                              (unaudited)
                                            ---------------------------------
    Assets

    Current assets
    Cash and cash equivalents                      5,920               4,058
    Short-term and other investments                 754               2,509
    Accounts receivable                            6,805               6,242
    Work in progress                                 357                 271
    Other accounts receivable                        177                 169
    Tax credits receivable                         1,240                 983
    Inventory                                        166                 145
    Prepaid expenses                                 775                 500
                                            ---------------------------------
                                                  16,194              14,877

    Restricted cash equivalents
     and other investments                           632                 609
    Long-term receivable                             153                 110
    Long-term investment                             261                 257
    Property and equipment, net                    1,689               1,672
    Intangible assets                              1,312               1,385
    Deferred development costs                       778                 672
    Goodwill                                       2,148               2,068
                                            ---------------------------------
                                                  23,167              21,650
                                            ---------------------------------
                                            ---------------------------------

    Liabilities

    Current liabilities
    Accounts payable and accrued
     liabilities                                   3,954               4,367
    Current portion of long-term debt                100                  97
    Deferred revenue                               4,741               3,420
                                            ---------------------------------
                                                   8,795               7,884

    Shareholders' equity

    Capital stock                                 38,177              38,188

    Contributed surplus                            7,299               7,293

    Accumulated other comprehensive income         3,808               3,279

    Deficit                                      (34,912)            (34,994)
                                            ---------------------------------
                                                  14,372              13,766
                                            ---------------------------------
                                                  23,167              21,650
                                            ---------------------------------
                                            ---------------------------------


    TECSYS Inc.
    Consolidated Statements of Deficit
    Prepared in Accordance with Canadian Generally Accepted Accounting
    Principles
    -------------------------------------------------------------------------
    (in thousands of U.S. dollars)

                                            Three Months        Three Months
                                                   Ended               Ended
                                                 July 31,            July 31,
                                                    2007                2006

                                              (unaudited)         (unaudited)
                                            ---------------------------------
                                            ---------------------------------
    Balance - Beginning of period                (34,994)            (34,440)

    Net earnings (loss) for the period                82                (174)
                                            ---------------------------------

    Balance - End of period                      (34,912)            (34,614)
                                            ---------------------------------
                                            ---------------------------------


    TECSYS Inc.
    Consolidated Statements of Accumulated Other Comprehensive Income
    Prepared in Accordance with Canadian Generally Accepted Accounting
    Principles
    -------------------------------------------------------------------------
    (in thousands of U.S. dollars)

                                            Three Months        Three Months
                                                   Ended               Ended
                                                 July 31,            July 31,
                                                    2007                2006

                                              (unaudited)         (unaudited)
                                            ---------------------------------
                                            ---------------------------------
    Balance - Beginning of period                  3,279               3,085

    Translation adjustment                           529                (110)
                                            ---------------------------------
    Balance - End of period                        3,808               2,975
                                            ---------------------------------
                                            ---------------------------------


    TECSYS Inc.
    Consolidated Statements of Operations
    Prepared in Accordance with Canadian Generally Accepted Accounting
    Principles
    -------------------------------------------------------------------------
    (in thousands of U.S. dollars, except share and per share data)

                                            Three Months        Three Months
                                                   Ended               Ended
                                                 July 31,            July 31,
                                                    2007                2006

                                              (unaudited)         (unaudited)
                                            ---------------------------------
                                            ---------------------------------

    Revenue
    Products                                       2,707               3,021
    Services                                       4,881               4,525
    Reimbursable expenses                            221                 278
                                            ---------------------------------
                                                   7,809               7,824

    Cost of revenue
    Products                                       1,124               1,470
    Services                                       3,036               2,964
    Reimbursable expenses                            221                 278
                                            ---------------------------------
                                                   4,381               4,712
                                            ---------------------------------
    Gross margin                                   3,428               3,112
                                            ---------------------------------

    Operating expenses
    Sales and marketing                            1,261               1,430
    General and administration                       765                 724
    Gross research and development                 1,157               1,187
    Research and development tax credits             (97)               (106)
    Deferred development costs                       (92)               (155)
    Stock-based compensation                          10                  14
    Amortization of property and equipment           124                 132
    Amortization of intangible assets                148                 142
    Amortization of deferred
     development costs                                11                   -
                                            ---------------------------------
                                                   3,287               3,368
                                            ---------------------------------

    Earnings (loss) from operations                  141                (256)

    Interest income                                   78                  77
    Interest expense                                  (3)                (19)
    Foreign exchange (losses) gains                 (128)                 34
    Share of net loss of a company subject
     to significant influence                         (6)                (10)
                                            ---------------------------------
    Net earnings (loss) for the period                82                (174)
                                            ---------------------------------
                                            ---------------------------------

    Weighted average number of common
     shares outstanding
      - basic                                 13,679,127          13,628,423
                                            ---------------------------------
      - diluted                               13,711,871          13,628,423
                                            ---------------------------------
    Basic and diluted net loss per
     common share ( in US dollars )               $ 0.01             $ (0.01)
                                            ---------------------------------
                                            ---------------------------------


    TECSYS Inc.
    Consolidated Statements of Comprehensive Income
    Prepared in Accordance with Canadian Generally Accepted Accounting
    Principles
    -------------------------------------------------------------------------
    (in thousands of U.S. dollars, except share and per share data)

                                            Three Months        Three Months
                                                   Ended               Ended
                                                 July 31,            July 31,
                                                    2007                2006

                                              (unaudited)         (unaudited)
                                            ---------------------------------
                                            ---------------------------------

    Net earnings (loss) for the period                82                (174)

    Other comprehensive income (loss)

      Translation adjustment                         529                (110)
                                            ---------------------------------
    Comprehensive income (loss)                      611                (284)
                                            ---------------------------------


    TECSYS Inc.
    Consolidated Statements of Cash Flows
    Prepared in Accordance with Canadian Generally Accepted Accounting
    Principles
    -------------------------------------------------------------------------
    (in thousands of U.S. dollars)

                                            Three Months        Three Months
                                                   Ended               Ended
                                                 July 31,            July 31,
                                                    2007                2006

                                              (unaudited)         (unaudited)
                                            ---------------------------------
                                            ---------------------------------
    Cash flows from

    Operating activities
    Net earnings (loss) for the period                82                (174)
    Adjustments for
      Amortization of property and equipment         124                 132
      Amortization of intangible assets              148                 142
      Amortization of deferred development
       costs                                          11                   -
      Stock-based compensation                        10                  14
      Unrealized foreign exchange losses
       (gains)                                       102                  (8)
      Deferred development costs                     (92)               (154)
      Share of net loss of a company subject
       to significant influence                        6                  10

    Changes in non-cash working capital
     items related to operations
      Increase in accounts receivable               (334)               (754)
      (Increase) decrease in work in
       progress                                      (35)                 22
      Increase in other accounts
       receivable                                    (10)                 (5)
      Increase in tax credits receivable            (219)               (189)
      (Increase) decrease in inventory               (14)                  9
      (Increase) decrease in prepaid
       expenses                                     (258)                127
      Decrease in accounts payable and
       accrued liabilities                          (617)                (14)
      Increase (decrease) in deferred
       revenue                                     1,150                (395)
                                            ---------------------------------
                                                      54              (1,237)
                                            ---------------------------------

    Financing activities

      Repayment of long-term debt and
       capital lease obligations                       -                  (6)
      Issuance of common shares                        3                   -
      Purchase of common shares for
       cancellation                                   (8)                (66)
                                            ---------------------------------
                                                      (5)                (72)
                                            ---------------------------------

    Investing activities

      Decrease in short-term and other
       investments                                 1,840               1,574
      Acquisitions of property and
       equipment                                     (77)                (32)
      Acquisitions of intangible assets              (23)                  -
      Increase in long-term receivable
       including the current portion                 (30)                (50)
                                            ---------------------------------
                                                   1,710               1,492
                                            ---------------------------------
    Effect of foreign exchange rate
     fluctuations on cash
     and cash equivalents                            103                  (8)
                                            ---------------------------------
    Change in cash and cash equivalents            1,862                 175
    Cash and cash equivalents -
     Beginning of Period                           4,058               1,180

                                            ---------------------------------
    Cash and cash equivalents -
     End of Period                                 5,920               1,355
                                            ---------------------------------
                                            ---------------------------------
    




For further information:

For further information: Solutions and general info: info@tecsys.com;
Investor relations: investor@tecsys.com; Media relations: media@tecsys.com;
TECSYS Inc.: (514) 866-0001, (800) 922-8649

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