NexJ Systems Reports First Quarter Fiscal 2015 Results

TORONTO, April 30, 2015 /CNW/ - NexJ Systems Inc. (TSX: NXJ), a provider of cloud-based software, delivering enterprise solutions for the financial services, insurance, and healthcare industries, today announced financial results for its first quarter ended March 31, 2015.

Financial Highlights for Q1 2015

• Financial Services revenue was $6.22 million, up 12% Y/Y
• Healthcare revenue was $0.12 million compared to $1.74 million for the comparative period in 2014
• First quarter revenue was $6.34 million, down 13% Y/Y
• Adjusted EBITDA (as defined below) loss of $2.12 million or $(0.10) per share (basic and diluted) for the quarter ended March 31, 2015 improved compared to an adjusted EBITDA loss of $2.27 million or $(0.11) per share (basic and diluted) for the comparative period in 2014
• Net loss of $1.66 million or $(0.08) per share (basic and diluted) for the quarter ended March 31, 2015, improved compared to a net loss of $1.89 million or $(0.09) per share (basic and diluted) for the comparative period in 2014

"Growth in our Financial Services segment is the result of the introduction of new products and our successful entry into the Corporate Banking, Commercial Banking and Capital Markets verticals," said William M. Tatham, Chief Executive Officer of NexJ.  "In our Healthcare segment, new bookings and deferred revenue continue to grow as we further develop our commercialization efforts."

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 May 7, 2015 and can be accessed by dialing 416-849-0833 (Toronto local) or toll free at 1-855-859-2056 and using password 27588864.

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 share-based payment expense, depreciation and amortization, lease-exit charges, net, contingent consideration adjustment, earn-out expense (recovery), 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.

The following table reconciles Adjusted EBITDA to net income (loss):

	Three months ended March 31,
	2015	2014
	(in thousands of dollars, except percentages)
Total revenue	$ 6,343	$ 7,305
Net loss	(1,662)	(1,886)
Add back:
Share-based payment expense	81	131
Depreciation and amortization	529	404
Lease-exit charges, net	—	(625)
Contingent consideration adjustment	(398)	—
Foreign exchange gain	(626)	(212)
Finance income	(40)	(83)
Adjusted EBITDA	(2,116)	(2,271)
Adjusted EBITDA margin	(33%)	(31%)

About NexJ Systems Inc.
NexJ is a provider of cloud-based software, delivering enterprise solutions for the financial services, insurance and healthcare industries. Our next-generation, people-centered software combines industry-specific functionality with information from multiple applications and data stores to provide comprehensive knowledge of the individual. 

Based in Toronto, NexJ has clients throughout North America and in Europe. For more information about NexJ visit www.nexj.com, e-mail [email protected], 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; * risks associated with expansion into healthcare and other new industry verticals; (xi) competition in our industry; (xii) failure to protect our intellectual property or infringement of intellectual property rights of third parties; (xiii) reliance upon a limited number of third-party software products to develop our products; (xiv) defects or disruptions in our products and services; (xv) currency exchange rate fluctuations; (xvi) lengthy sales cycles for our software; (xvii) global financial market conditions; (xviii) failure to manage our growth successfully; and (xix) 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, 2014 dated February 19, 2015, 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)
		March 31, 2015		December 31, 2014
Assets
		$		$
Current assets:
	Cash and cash equivalents	16,455		18,298
	Accounts receivable	6,650		7,853
	Prepaid expenses and other assets	1,536		1,448
Total current assets		24,641		27,599
Non-current assets:
	Property and equipment	2,296		2,472
	Intangible assets	1,415		1,756
	Goodwill	2,617		2,617
	Other assets	260		260
Total non-current assets		6,588		7,105
Total assets		31,229		34,704
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable and accrued liabilities	3,699		4,619
	Deferred revenue	4,359		4,726
	Provisions	117		121
	Contingent consideration	280		678
Total current liabilities		8,455		10,144
Non-current liabilities:
	Accrued liabilities	453		391
	Provisions	205		234
	Deferred tax liability	16		16
	Deferred revenue	-		238
Total non-current liabilities		674		879
Total liabilities		9,129		11,023
Shareholders' equity:
	Share capital	83,306		83,306
	Share purchase loans	(3,622)		(3,622)
	Contributed surplus	5,864		5,783
	Deficit	(63,448)		(61,786)
Total shareholders' equity		22,100		23,681
Total liabilities and shareholders' equity		31,229		34,704

NexJ Systems Inc.
Condensed Interim Consolidated Statements of Comprehensive Loss
(Expressed in thousands of Canadian dollars, except per share amounts)
(Unaudited)
Three Months ended March 31, 2015 and 2014
		2015		2014
Revenue:		$		$
	License and subscription fees	1,137		291
	Professional services	3,986		5,502
	Maintenance and support	1,220		1,512
		6,343		7,305
Expenses*:
	Professional services	2,881		3,775
	Research and development, net	2,430		2,675
	Sales and marketing	1,559		1,560
	General and administrative, net	2,199		1,476
	Contingent consideration adjustment	(398)		-
		8,671		9,486
Loss from operations:		(2,328)		(2,181)
	Foreign exchange gain	626		212
	Finance income	40		83
		666		295
Loss before income taxes		(1,662)		(1,886)
	Income taxes	-		-
Net Loss and comprehensive loss		(1,662)		(1,886)
Loss per share:
	Basic and diluted	(0.08)		(0.09)
Weighted average number of common shares
outstanding:
	Basic and diluted	20,459		20,280
*Share-based payment expense has been included
in expenses as follows:
	Professional services	27		45
	Research and development, net	33		50
	Sales and marketing	6		14
	General and administrative, net	15		22
		81		131

NexJ Systems Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in thousands of Canadian dollars)
(Unaudited)
Three Months ended March 31, 2015 and 2014
			2015		2014
Cash flows from (used in) operating activities:			$		$
	Loss for the period:		(1,662)		(1,886)
	Adjustments for:
		Depreciation and amortization	529		404
		Share-based payment expense	81		131
		Finance income	(40)		(83)
		Foreign exchange gain	(448)		(67)
		Contingent consideration adjustment	(398)		-
	Change in non-cash operating working capital:
		Accounts receivable	1,204		1,980
		Prepaid expenses and other assets	(88)		622
		Accounts payable and accrued liabilities and provisions	(905)		(1,661)
		Deferred revenue	(604)		(1,355)
	Net cash flows used in operating activities		(2,331)		(1,915)
Cash flows from (used in) financing activities:
		Repurchase of common shares	-		(115)
Net cash flows used in financing activities			-		(115)
Cash flows from (used in) investing activities:
		Purchase of property and equipment	-		(1)
		Interest received	40		83
Net cash flows from investing activities			40		82
	Effects of exchange rates on cash and cash equivalents		448		67
		Decrease in cash and cash equivalents	(1,843)		(1,881)
Cash and cash equivalents, beginning of period			18,298		29,293
Cash and cash equivalents, end of period			16,455		27,412
Supplemental cash flow information:
		Acquisition of property and equipment not yet paid for	13		-

SOURCE NexJ Systems Inc.

Media Contact: Matthew Bogart, 416-227-3708, [email protected]