TORONTO, Nov. 6, 2013 /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 third quarter ended September 30, 2013.
Financial Highlights for Q3 2013
- Third quarter revenue was $6.6 million, a 9% increase Y/Y
- Adjusted EBITDA (as defined below) was a loss of $3.9 million or $0.19 per share (basic and diluted) for the quarter ended September 30, 2013 as compared to an adjusted EBITDA loss of $3.8 million or $0.19 per share (basic and diluted) for the comparative period in 2012
- Net loss was $3.8 million or $0.19 per share (basic and diluted) for the quarter ended September 30, 2013, as compared to a net loss of $4.6 million or $0.23 per share (basic and diluted) for the comparative period in 2012
Financial Highlights Year-to-Date 2013
- Nine month revenue was $19.9 million, a 3% increase Y/Y
- Adjusted EBITDA (as defined below) was a loss of $14.6 million or $0.72 per share (basic and diluted) for the nine months ended September 30, 2013 as compared to an adjusted EBITDA loss of $10.6 million or $0.54 per share (basic and diluted) for the comparative period in 2012
- Net loss was $15.7 million or $0.77 per share (basic and diluted) for the nine months ended September 30, 2013, as compared to a net loss of $12.2 million or $0.62 per share (basic and diluted) for the comparative period in 2012
"NexJ has won business with several new and existing customers in recent months which we are confident will result in increasing revenue for the Company in the coming quarters. We have also completed the restructuring of the Company, reducing our cost by more than $7 Million on an annualized basis," said William M. Tatham, Chief Executive Officer of NexJ. "In addition to increasing revenue and decreasing cost, our strategic investments in healthcare are approaching completion which will enable us to pursue broader market opportunities and stimulate growth."
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 November 13, 2013 and can be accessed by dialing 416-849-0833 (Toronto local) or toll free at 1-855-859-2056 and using password 75326141.
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, earn-out expense (recovery), finance income, finance costs, foreign exchange gain/loss, depreciation and amortization 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
| Nine months ended
|(in thousands of dollars, except percentages)||(in thousands of dollars, except percentages)|
|Share-based payment expense||137||107||582||832|
|Depreciation and amortization||470||278||1,366||850|
|Earn-out expense (recovery)||(745)||—||(310)||—|
|Foreign exchange loss (gain)||80||547||(246)||415|
|Adjusted EBITDA margin||(59%)||(63%)||(73%)||(55%)|
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.
NexJ is named as Canada's fastest growing company in the 24th Annual PROFIT 200 ranking by PROFIT Magazine, and ranks in the top 5 of the Deloitte Technology Fast 50™ for the third consecutive year. 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, including the business acquired from Broadstreet.
For additional information with respect to risks and other factors which could occur, see the Company's Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2012 dated March 6, 2013, 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)|
|September 30, 2013||December 31, 2012|
|Cash and cash equivalents||28,284||46,263|
|Income taxes receivable||-||146|
|Prepaid expenses and other assets||1,866||992|
|Total current assets||38,988||56,914|
|Property and equipment||3,402||3,869|
|Total non-current assets||9,135||10,169|
|Liabilities and Shareholders' Equity|
|Accounts payable and accrued liabilities||4,794||7,318|
|Total current liabilities||9,399||12,387|
|Total non-current liabilities||586||1,497|
|Share purchase loans||(3,622)||(3,622)|
|Total shareholders' equity||38,138||53,199|
|Total liabilities and shareholders' equity||48,123||67,083|
|NexJ Systems Inc.|
|Condensed Interim Consolidated Statements of Comprehensive Loss|
|(Expressed in thousands of Canadian dollars, except per share amounts)|
|Three Months ended September||Nine Months ended September|
|Net license reseller fees||53||-||103||-|
|Maintenance and support||1,530||1,319||4,460||3,776|
|Professional service costs||3,573||2,401||11,893||7,638|
|Research and development, net||3,326||3,865||10,756||11,223|
|Sales and marketing||1,412||1,912||6,519||6,139|
|General and administrative||2,101||2,125||7,017||6,621|
|Loss from operations:||(3,789)||(4,221)||(16,250)||(12,284)|
|Foreign exchange gain (loss)||(80)||(547)||246||(415)|
|Loss before income taxes||(3,779)||(4,614)||(15,668)||(12,249)|
|Net Loss and comprehensive loss||(3,779)||(4,614)||(15,668)||(12,249)|
|Loss per share:|
|Basic and diluted||(0.19)||(0.23)||(0.77)||(0.62)|
| Weighted average number of common shares
|Basic and diluted||20,378||19,814||20,372||19,814|
| *Share-based payment expense has been
included in expenses as follows:
|Professional service costs||59||54||184||181|
|Research and development, net||5||85||140||307|
|Sales and marketing||34||(122)||124||44|
|General and administrative||39||90||134||300|
|NexJ Systems Inc.|
|Condensed Interim Consolidated Statements of Cash Flows|
|(Expressed in thousands of Canadian dollars)|
|Nine Months ended September 30, 2013 and 2012|
|Cash flows from (used in) operating activities:||$||$|
|Loss for the period:||(15,668)||(12,249)|
|Depreciation and amortization||1,366||850|
|Share-based payment expense||582||832|
|Foreign exchange loss (gain)||(190)||198|
|Change in non-cash operating working capital:|
|Prepaid expenses and other assets||(874)||2,857|
|Income tax receivable||146||-|
|Accounts payable and accrued liabilities and provisions||(2,863)||(876)|
|Net cash flows used in operating activities||(18,198)||(8,875)|
|Cash flows from (used in) financing activities:|
|Obligations under capital leases||-||(41)|
|Exercise of employee stock options||25||47|
|Exercise of agent stock options||-||635|
|Repayment of share purchase loans||-||143|
|Net cash flows from financing activities||25||782|
|Cash flows from (used in) investing activities:|
|Purchase of property and equipment||(332)||(275)|
|Redemption of short-term investments||-||4,005|
|Net cash flows from investing activities||4||4,182|
|Effects of exchange rates on cash and cash equivalents||190||(135)|
|Decrease in cash and cash equivalents||(17,979)||(4,046)|
|Cash and cash equivalents, beginning of period||46,263||56,218|
|Cash and cash equivalents, end of period||28,284||52,172|
|Supplemental cash flow information:|
|Acquisition of property and equipment not yet paid for||-||51|
SOURCE: NexJ Systems Inc.
For further information:
Media Contact: Matthew Bogart