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NexJ Systems Reports Third Quarter Fiscal 2014 Results


News provided by

NexJ Systems Inc.

Oct 30, 2014, 16:01 ET

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TORONTO, Oct. 30, 2014 /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, 2014.

Financial Highlights for Q3 2014

  • Third quarter revenue was $5.2 million, a difference of 21% Y/Y
  • Adjusted EBITDA (as defined below) was a loss of $3.2 million or $0.16 per share (basic and diluted) for the quarter ended September 30, 2014 as compared to an adjusted EBITDA loss of $3.9 million or $0.19 per share (basic and diluted) for the comparative period in 2013
  • Net loss was $3.4 million or $0.17 per share (basic and diluted) for the quarter ended September 30, 2014, as compared to a net loss of $3.8 million or $0.19 per share (basic and diluted) for the comparative period in 2013

Financial Highlights Year-to-Date 2014

  • Nine month revenue was $19.5 million, a difference of 2% Y/Y
  • Adjusted EBITDA (as defined below) was a loss of $7.4 million or $0.36 per share (basic and diluted) for the nine months ended September 30, 2014 as compared to an adjusted EBITDA loss of $14.6 million or $0.72 per share (basic and diluted) for the comparative period in 2013
  • Net loss was $7.8 million or $0.38 per share (basic and diluted) for the nine months ended September 30, 2014, as compared to a net loss of $15.7 million or $0.77 per share (basic and diluted) for the comparative period in 2013

"We are very pleased with new bookings.  Our first corporate banking contract in Asia-Pacific opens new markets for us," said William M. Tatham, Chief Executive Officer of NexJ.  "We also believe our new contract in healthcare signifies the start of the commercialization phase for NexJ Health."

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 6, 2014 and can be accessed by dialing 416-849-0833 (Toronto local) or toll free at 1-855-859-2056 and using password 22642438.

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, 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

September 30,

Nine months ended

September 30,

2014

2013

2014

2013


(in thousands of dollars,

except percentages)

(in thousands of dollars,

except percentages)






Total revenue

$5,215

$6,623

$19,495

19,935






Net loss

(3,377)

(3,779)

(7,789)

(15,668)

Add back:





Share-based payment expense

80

137

254

582

Depreciation and amortization

510

470

1,357

1,366

Lease-exit charges, net

—

—

(625)

—

Earn-out expense (recovery)

—

(745)

—

(310)

Foreign exchange loss (gain)

(398)

80

(455)

(246)

Finance income

(53)

(90)

(204)

(336)

Finance Cost

50

—

89

—






Adjusted EBITDA

(3,188)

(3,927)

(7,373)

(14,612)

Adjusted EBITDA margin

(61%)

(59%)

(38%)

(73%)

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, Europe and Asia Pacific. 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 may contain words considered forward-looking statements or information under applicable securities laws. These statements are based on NexJ'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. NexJ's assumptions, although considered reasonable by the company at the date of this press release, may prove to be inaccurate and consequently its actual results could differ materially from the expectations set out herein. For additional information with respect to risks and other factors which could occur, see NexJ's securities filings with the OSC and other securities regulators. NexJ securities filings are available on www.sedar.com.  Unless otherwise required by applicable securities laws, NexJ 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)
















September 30, 2014


December 31, 2013






Assets






$


$

Current assets:




Cash and cash equivalents

20,310


29,293


Accounts receivable

6,706


7,246


Prepaid expenses and other assets 

1,578


1,727


Total current assets

28,594


38,266






Non-current assets:





Property and equipment

2,666


3,014


Intangible assets 

1,916


1,643


Goodwill 

4,504


3,640


Other assets 

260


260

Total non-current assets

9,346


8,557






Total assets

37,940


46,823






Liabilities and Shareholders' Equity









Current liabilities:





Accounts payable and accrued liabilities 

4,594


4,677


Deferred revenue

4,105


5,021


Provisions

119


572


Contingent consideration

641


-

Total current liabilities

9,459


10,270






Non-current liabilities:





Accrued liabilities

451


596


Provisions

264


742


Deferred revenue

-


212


Deferred tax liability

16


-

Total non-current liabilities

731


1,550






Total liabilities

10,190


11,820






Shareholders' equity:





Share capital 

83,300


83,018


Share purchase loans 

(3,622)


(3,622)


Contributed surplus 

5,769


5,515


Deficit

(57,697)


(49,908)

Total shareholders' equity

27,750


35,003











Total liabilities and shareholders' equity

37,940


46,823

NexJ Systems Inc.

Condensed Interim Consolidated Statements of Comprehensive Loss

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

(Unaudited)












Three Months ended September,


Six Months ended September,


2014

2013


2014

2013







Revenue:

$

$


$

$


License and subscription fees

639

336


2,207

961


Professional services

3,405

4,757


13,118

14,514


Maintenance and support

1,171

1,530


4,170

4,460



5,215

6,623


19,495

19,935








Expenses*:






Professional service costs

2,710

3,573


9,567

11,893


Research and development, net

2,378

3,326


7,522

10,756


Sales and marketing

1,595

1,412


4,886

6,519


General and administrative, net

2,310

2,101


5,879

7,017



8,993

10,412


27,854

36,185








Loss from operations:

(3,778)

(3,789)


(8,359)

(16,250)









Foreign exchange gain (loss)

398

(80)


455

246


Finance income 

53

90


204

336


Finance costs

50

-


89

-



401

10


570

582








Loss before income taxes

(3,377)

(3,779)


(7,789)

(15,668)









Income taxes

-

-


-

-








Net Loss and comprehensive loss 

(3,377)

(3,779)


(7,789)

(15,668)








Loss per share:






Basic and diluted

(0.17)

(0.19)


(0.38)

(0.77)















Weighted average number of common shares


outstanding:






Basic and diluted

20,458

20,378


20,385

20,372















*Share-based payment expense has been


included in expenses as follows:




Professional service costs

39

59


120

184


Research and development, net

25

5


42

140


Sales and marketing

6

34


43

124


General and administrative, net

10

39


49

134










80

137


254

582

NexJ Systems Inc.



Condensed Interim Consolidated Statements of Cash Flows

(Expressed in thousands of Canadian dollars)

(Unaudited)







Nine Months ended September 30, 2014 and 2013






2014


2013





Cash flows from (used in) operating activities:

$


$


Loss for the period:

(7,789)


(15,668)


Adjustments for:





Depreciation and amortization

1,357


1,366



Share-based payment expense

254


582



Finance income

(204)


(336)



Finance costs

89


-



Foreign exchange gain (loss)

(310)


(190)


Change in non-cash operating working capital:



Accounts receivable

582


675



Prepaid expenses and other assets

303


(874)



Income taxes receivable

-


146



Accounts payable and accrued liabilities and provisions

(1,419)


(2,863)



Deferred revenue

(1,308)


(1,036)

Net cash flows used in operating activities

(8,445)


(18,198)







Cash flows from (used in) financing activities:



Repurchase of common shares

(218)


-



Repayment of bank indebtedness

(66)


-



Repayment of loan

(496)


-



Exercise of employee stock options

-


25



Interest paid

(3)


-

Net cash flows from (used in) financing activities

(783)


25







Cash flows from (used in) investing activities:



Purchase of property and equipment

(269)


(332)



Interest received

204


336

Net cash flows from (used in) investing activities

(65)


4








Effects of exchange rates on cash and cash equivalents

310


190









Decrease in cash and cash equivalents

(8,983)


(17,979)







Cash and cash equivalents, beginning of period

29,293


46,263







Cash and cash equivalents, end of period

20,310


28,284







Supplemental cash flow information:



Acquisition of property and equipment not yet paid for

13


-

SOURCE: NexJ Systems Inc.

For further information: Matthew Bogart, Senior Director, Corporate Communications, NexJ Systems Inc., 416-227-3708, [email protected]

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