Tecsys Reports Financial Results for the Third Quarter of Fiscal 2022 Français
SaaS revenue up 49% year-over-year
MONTREAL, March 2, 2022 /CNW/ -- Tecsys Inc. (TSX: TCS), an industry-leading supply chain management SaaS company, today announced its results for the third quarter of fiscal year 2022, ended January 31, 2022. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).
Third Quarter Highlights:
- SaaS revenue increased by 49% to $7.0 million in Q3 2022, up from $4.7 million in Q3 2021.
- Annual Recurring Revenue (ARRi) at January 31, 2022 was up 17% to $59.5 million compared to $50.8 million at January 31, 2021.
- During Q3 2022, SaaS subscription bookingsi (measured on an ARRi basis) were $2.3 million, up 133% compared to $1.0 million in the third quarter of fiscal 2021.
- Professional services revenue was up 5% to $12.9 million in Q3 2022 compared to $12.3 million in Q3 2021.
- Total revenue was a record $35.4 million, 11% higher than $31.9 million reported for Q3 2021.
- Gross margin was 43% compared to 48% in the prior year quarter, negatively impacted by a weaker US dollar, change in revenue mix and investment in key growth initiatives.
- Total gross profit decreased to $15.2 million, down 1% from $15.4 million in Q3 2021.
- Operating expenses increased to $13.9 million, higher by $1.1 million or 9% compared to $12.8 million in Q3 fiscal 2022 with continuing investment in sales and marketing as well as research and development.
- Profit from operations in Q3 2022 was $1.4 million, down from $2.6 million in Q3 2021.
- Net profit was $0.9 million or $0.06 per share on a fully diluted basis in Q3 2022 compared to a net profit of $1.8 million or $0.12 per share on a fully diluted basis for the same period in fiscal 2021.
- Adjusted EBITDAii was $2.7 million in Q3 2022, down 31% compared to $4.0 million reported in Q3 2021.
- A weaker USD to CAD exchange rate negatively impacted revenue by $1.7 million and Profit from operations and Adjusted EBITDA by $1.6 million compared to the same quarter last year.
"This quarter happened in the middle of a challenging global environment with the Omicron wave hitting many of our customers very hard in late December and January. We were pleased to see the quarter come in strong as the twelfth consecutive quarter of record revenue. We added another hospital network in the quarter and saw strong bookings from our base, as well. This solid growth trajectory is a strong testament to our greatest asset, the people of Tecsys, and our truly adaptable agile solutions helping our customers succeed in a climate where excellence in supply chain execution is a key driver for success," said Peter Brereton, president and CEO of Tecsys, Inc. "Our pipeline continues to swell with new customer opportunities and as the pandemic seems to be finally fading away, Q4 is off to a strong start."
Mark Bentler, chief financial officer of Tecsys Inc., added, "We are pleased with another quarter of solid revenue growth in spite of significant foreign currency headwinds. On a constant currency basis, our third quarter fiscal 2022 revenue grew by about 16% compared to the same period last year, with SaaS revenue once again being a key driver at 56% constant currency growth. We continue to expect a key milestone in the coming quarters with SaaS revenue set to overtake maintenance and support as our leading source of recurring revenue."
3 months ended |
3 months ended |
9 months ended |
9 months ended |
months ended |
months ended |
||||||||
January 31, 2022 |
January 31, 2021 |
January 31, 2022 |
January 31, 2021 |
January 31, 2022 |
January 31, 2021 |
||||||||
Total Revenue |
$ |
35 411 |
$ |
31 942 |
$ |
102 912 |
$ |
90 727 |
$ |
135 286 |
$ |
118 477 |
|
SaaS Revenue |
7 003 |
4 708 |
19 221 |
13 672 |
24 713 |
16 327 |
|||||||
Maintenance and Support |
8 164 |
8 650 |
24 690 |
25 371 |
33 034 |
33 354 |
|||||||
Gross Profit |
15 233 |
15 407 |
45 180 |
44 907 |
60 903 |
57 803 |
|||||||
Gross Margin % |
43% |
48% |
44% |
49% |
45% |
49% |
|||||||
Operating Expenses |
13 883 |
12 777 |
41 115 |
36 857 |
54 207 |
49 159 |
|||||||
Op. Ex. As % of Revenue |
39% |
40% |
40% |
41% |
40% |
41% |
|||||||
Profit from Operations |
1 350 |
2 630 |
4 065 |
8 050 |
6 696 |
8 644 |
|||||||
Adjusted EBITDA |
2 738 |
3 964 |
8 400 |
12 303 |
12 317 |
14 254 |
|||||||
EPS basic |
0.06 |
0.13 |
0.13 |
0.36 |
0.27 |
0.39 |
|||||||
EPS diluted |
0.06 |
0.12 |
0.13 |
0.35 |
0.27 |
0.38 |
|||||||
License Bookings |
515 |
1 172 |
1 862 |
3 537 |
2 614 |
4 925 |
|||||||
SAAS ARR Bookings |
2 315 |
993 |
7 463 |
6 055 |
10 956 |
10 130 |
|||||||
Annual Recurring Revenue |
59 540 |
50 817 |
59 540 |
50 817 |
59 540 |
50 817 |
|||||||
Professional Services Backlog |
29 521 |
37 795 |
29 521 |
37 795 |
29 521 |
37 795 |
Year-to-date performance for first nine months of fiscal 2022:
- SaaS revenue for the nine-month period increased by 41% to $19.2 million, up from $13.7 million in the same period of fiscal 2021.
- SaaS subscription bookingsi (measured on an ARRi basis) were $7.5 million, up 23% compared to $6.1 million the same period of fiscal 2021.
- Professional services revenue for the nine-month period was up 11% to $39.1 million compared to $35. million in the same period of fiscal 2021.
- Total revenue was a record $102.9 million, 13% higher than $90.7 million reported for the same period of fiscal 2021.
- Gross margin was 44% compared to 49% in the same period of fiscal 2021, negatively impacted by a weaker US dollar, revenue mix and investment in key growth initiatives.
- Total gross profit increased to $45.2 million, up 1% from $44.9 million in the same period fiscal 2021.
- Operating expenses increased to $41.1 million, higher by $4.3 million or 12% compared to $36.9 million in the same period of fiscal 2021 with continuing investment in sales and marketing as well as research and development.
- Profit from operations in the first nine months of fiscal 2022 was $4.1 million, down from $8.1 million in the same period of fiscal 2021.
- Net profit was $1.9 million or $0.13 per share on a fully diluted basis in the first nine months of fiscal 2022 compared to a net profit of $5.2 million or $0.35 per share on a fully diluted basis for the same period in fiscal 2021.
- Adjusted EBITDAii was $8.4 million in the first nine months of fiscal 2022, down 32% compared to $12.3 million reported in the same period in fiscal 2021.
- A weaker USD to CAD exchange rate negatively impacted revenue by $6.0 million and Profit from operations and Adjusted EBITDA by $4.6 million compared to the same period last year.
On March 2, 2022, the Company's Board of Directors declared a quarterly dividend of $0.07 per share to be paid on April 14, 2022 to shareholders of record on March 24, 2022.
Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be "eligible" dividends.
Third Quarter of Fiscal 2022 Results Conference Call
Date: March 3, 2022
Time: 8:30 a.m. EST
Phone number: (877) 200-1292 or (416) 620-9188
The call can be replayed until March 10, 2022 by calling:
(416) 626-4100 or (800) 558-5253 (access code: 22015722)
About Tecsys
Tecsys is a global provider of supply chain solutions that equip the borderless enterprise for growth. Organizations thrive when they have the software, technology and expertise to drive operational greatness and deliver on their brand promise. Spanning healthcare, retail, service parts, third-party logistics, and general wholesale high-volume distribution industries, Tecsys delivers dynamic and powerful solutions for warehouse management, distribution and transportation management, supply management at point of use, retail order management, as well as complete financial management and analytics solutions. Tecsys' shares are listed on the Toronto Stock Exchange under the ticker symbol TCS. For more information on Tecsys, visit www.tecsys.com.
Forward Looking Statements
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 30, 2021. 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 © Tecsys Inc. 2022. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.
Non-IFRS Measures
Reconciliation of EBITDA and Adjusted EBITDA
EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation and amortization. Adjusted EBITDA is calculated as EBITDA before stock-based compensation. The Company believes that these measures are commonly used by investors and analysts to measure a company's performance, its ability to service debt and to meet other payment obligations, or as a common valuation measurement.
The EBITDA and Adjusted EBITDA calculation for the three and nine months ended January 31, 2022, and January 31, 2021 derived from IFRS measures in the Company's Consolidated financial statements, is as follows:
Three months ended |
Nine months ended |
|||||
(in thousands of CAD) |
2022 |
2021 |
2022 |
2021 |
||
Profit for the period |
$940 |
$ 1,847 |
$ 1,892 |
$ 5,168 |
||
Adjustments for: |
||||||
Depreciation of property and equipment and right-of-use assets |
551 |
554 |
1,647 |
1,613 |
||
Amortization of deferred development costs |
80 |
48 |
203 |
209 |
||
Amortization of other intangible assets |
408 |
425 |
1,230 |
1,259 |
||
Interest expense |
138 |
158 |
444 |
629 |
||
Interest income |
(337) |
(43) |
(417) |
(156) |
||
Income taxes |
537 |
683 |
2,057 |
2,653 |
||
EBITDA |
$ 2,317 |
$ 3,672 |
$ 7,056 |
$ 11,375 |
||
Adjustments for: |
||||||
Stock based compensation |
421 |
292 |
1,344 |
928 |
||
Adjusted EBITDA |
$ 2,738 |
$ 3,964 |
$ 8,400 |
$ 12,303 |
i See Key Performance Indicators in Management's Discussion and Analysis of the Q3 2022 Financial Statements. |
ii See Non-IFRS Performance Measures in Management's Discussion and Analysis of the Q3 2022 Financial Statements. |
Condensed Interim Consolidated Statements of Financial Position |
||
As at January 31, 2022 and April 30, 2021 |
||
(Unaudited) |
||
(in thousands of Canadian dollars) |
||
January 31, 2022 |
April 30, 2021 |
|
Assets |
||
Current assets |
||
Cash and cash equivalents |
$ 16,721 |
$ 25,752 |
Short-term investments |
20,187 |
20,100 |
Accounts receivable |
21,379 |
16,840 |
Work in progress |
1,394 |
182 |
Other receivables |
351 |
2,034 |
Tax credits |
8,962 |
5,359 |
Inventory |
951 |
628 |
Prepaid expenses |
6,726 |
4,897 |
Total current assets |
76,671 |
75,792 |
Non-current assets |
||
Other long-term receivables |
199 |
303 |
Tax credits |
4,271 |
3,904 |
Property and equipment |
2,310 |
2,682 |
Right-of-use assets |
6,565 |
7,245 |
Contract acquisition costs |
2,788 |
2,678 |
Deferred development costs |
1,796 |
1,088 |
Other intangible assets |
10,766 |
12,194 |
Goodwill |
17,187 |
17,417 |
Deferred tax assets |
6,008 |
6,006 |
Total non-current assets |
51,890 |
53,517 |
Total assets |
$ 128,561 |
$ 129,309 |
Liabilities |
||
Current liabilities |
||
Accounts payable and accrued liabilities |
$ 19,355 |
$ 19,417 |
Deferred revenue |
23,368 |
22,044 |
Current portion of long-term debt |
1,200 |
1,216 |
Other current liabilities |
- |
500 |
Lease obligations |
816 |
848 |
Total current liabilities |
44,739 |
44,025 |
Non-current liabilities |
||
Long-term debt |
7,500 |
8,400 |
Deferred tax liabilities |
1,447 |
1,499 |
Lease obligations |
7,669 |
8,295 |
Total non-current liabilities |
16,616 |
18,194 |
Total liabilities |
61,355 |
62,219 |
Equity |
||
Share capital |
43,973 |
42,700 |
Contributed surplus |
12,836 |
11,745 |
Retained earnings |
11,404 |
12,419 |
Accumulated other comprehensive (loss) income |
(1,007) |
226 |
Total equity attributable to the owners of the Company |
67,206 |
67,090 |
Total liabilities and equity |
$ 128,561 |
$ 129,309 |
Condensed Interim Consolidated Statements of Income and Comprehensive Income |
|||||
For the three and nine-month periods ended January 31, 2022 and 2021 |
|||||
(Unaudited) |
|||||
(in thousands of Canadian dollars, except per share data) |
|||||
Three months |
Three months |
Nine months |
Nine months |
||
Revenue: |
|||||
SaaS |
$ 7,003 |
$ 4,708 |
$ 19,221 |
$ 13,672 |
|
Maintenance and Support |
8,164 |
8,650 |
24,690 |
25,371 |
|
Professional Services |
12,942 |
12,314 |
39,144 |
35,355 |
|
License |
915 |
1,190 |
2,248 |
3,895 |
|
Hardware |
6,387 |
5,080 |
17,609 |
12,434 |
|
Total revenue |
35,411 |
31,942 |
102,912 |
90,727 |
|
Cost of revenue |
20,178 |
16,535 |
57,732 |
45,820 |
|
Gross profit |
15,233 |
15,407 |
45,180 |
44,907 |
|
Operating expenses: |
|||||
Sales and marketing |
6,202 |
5,074 |
17,906 |
15,336 |
|
General and administration |
2,553 |
2,648 |
8,213 |
7,969 |
|
Research and development, net of tax credits |
5,128 |
5,055 |
14,996 |
13,552 |
|
Total operating expenses |
13,883 |
12,777 |
41,115 |
36,857 |
|
Profit from operations |
1,350 |
2,630 |
4,065 |
8,050 |
|
Net finance (income) costs |
(127) |
100 |
116 |
229 |
|
Profit before income taxes |
1,477 |
2,530 |
3,949 |
7,821 |
|
Income tax expense |
537 |
683 |
2,057 |
2,653 |
|
Net profit, attributable to the owners of the Company |
$ 940 |
$ 1,847 |
$ 1,892 |
$ 5,168 |
|
Other comprehensive income: Effective portion of changes in fair value on designated revenue |
(516) |
(431) |
(641) |
223 |
|
Exchange differences on translation of foreign operations |
(107) |
111 |
(592) |
519 |
|
Comprehensive income attributable to the owners of the Company |
$ 317 |
$ 1,527 |
$ 659 |
$ 5,910 |
|
Basic earnings per common share |
$ 0.06 |
$ 0.13 |
$ 0.13 |
$ 0.36 |
|
Diluted earnings per common share |
$ 0.06 |
$ 0.12 |
$ 0.13 |
$ 0.35 |
|
Condensed Interim Consolidated Statements of Cash Flows |
||||
For the three and nine-month periods ended January 31, 2022 and 2021 |
||||
(Unaudited) |
||||
(in thousands of Canadian dollars) |
||||
Three months |
Three months |
Nine months |
Nine months |
|
Cash flows from operating activities: |
||||
Profit for the period |
$ 940 |
$ 1,847 |
$ 1,892 |
$ 5,168 |
Adjustments for: |
||||
Depreciation of property and equipment and right-of-use-assets |
551 |
554 |
1,647 |
1,613 |
Amortization of deferred development costs |
80 |
48 |
203 |
209 |
Amortization of other intangible assets |
408 |
425 |
1,230 |
1,259 |
Net finance costs |
(127) |
100 |
116 |
229 |
Unrealized foreign exchange and other |
292 |
(474) |
1,220 |
(946) |
Non-refundable tax credits |
(608) |
(333) |
(1,340) |
(1,003) |
Stock-based compensation |
421 |
292 |
1,344 |
928 |
Income taxes |
484 |
486 |
1,857 |
2,330 |
Net cash from operating activities excluding changes in non-cash |
2,441 |
2,945 |
8,169 |
9,787 |
Accounts receivable |
(1,920) |
8,031 |
(4,635) |
3,068 |
Work in progress |
606 |
829 |
(1,216) |
288 |
Other receivables |
67 |
(9) |
139 |
(87) |
Tax credits |
(809) |
(907) |
(2,630) |
(2,565) |
Inventory |
(263) |
(295) |
(328) |
(315) |
Prepaid expenses |
(924) |
(271) |
(1,832) |
(877) |
Contract acquisition costs |
(12) |
85 |
(110) |
(264) |
Accounts payable and accrued liabilities |
2,269 |
2,400 |
(2,414) |
(508) |
Deferred revenue |
(593) |
(1,110) |
1,348 |
2,468 |
Changes in non-cash working capital items related to operations |
(1,579) |
8,753 |
(11,678) |
1,208 |
Net cash from operating activities |
862 |
11,698 |
(3,509) |
10,995 |
Cash flows from (used in) financing activities: |
||||
Repayment of long-term debt |
(300) |
(303) |
(916) |
(903) |
Payment of lease obligations |
(179) |
(209) |
(634) |
(696) |
Payment of dividends |
(1,018) |
(937) |
(2,907) |
(2,667) |
Refund (payment) of acquired tax liability |
299 |
- |
299 |
(2,191) |
Common shares issued on exercise of stock options |
- |
776 |
1,020 |
812 |
Interest paid |
(138) |
(169) |
(444) |
(488) |
Net cash used in financing activities |
(1,336) |
(842) |
(3,582) |
(6,133) |
Cash flows from (used in) investing activities: |
||||
Purchase of short-term investments |
- |
- |
- |
(10,000) |
Interest received |
38 |
43 |
118 |
156 |
Payments related to prior business acquisitions |
(500) |
(1,468) |
(500) |
(1,468) |
Acquisitions of property and equipment |
(85) |
(274) |
(619) |
(777) |
Acquisitions of other intangible assets |
(7) |
(39) |
(29) |
(560) |
Deferred development costs |
(229) |
(43) |
(910) |
(203) |
Net cash used in investing activities |
(783) |
(1,781) |
(1,940) |
(12,852) |
Net increase (decrease) in cash and cash equivalents during the period |
(1,257) |
9,075 |
(9,031) |
(7,990) |
Cash and cash equivalents - beginning of period |
17,978 |
10,463 |
25,752 |
27,528 |
Cash and cash equivalents - end of period |
$ 16,721 |
$ 19,538 |
$ 16,721 |
$ 19,538 |
Condensed Interim Consolidated Statements of Changes in Equity |
|||||||
For the nine-month periods ended January 31, 2022 and 2021 |
|||||||
(Unaudited) |
|||||||
(in thousands of Canadian dollars, except number of shares) |
|||||||
Share capital |
|||||||
Number |
Amount |
Contributed |
Accumulated |
Retained |
Total |
||
Balance, April 30, 2021 |
14,505,095 |
42,700 |
11,745 |
226 |
12,419 |
67,090 |
|
Net profit |
- |
- |
- |
- |
1,892 |
1,892 |
|
Other comprehensive |
- |
- |
- |
(641) |
- |
(641) |
|
Exchange difference on translation of foreign operations |
- |
- |
- |
(592) |
- |
(592) |
|
Total comprehensive (loss) |
- |
- |
- |
(1,233) |
1,892 |
659 |
|
Stock-based |
- |
- |
1,344 |
- |
- |
1,344 |
|
Dividends to equity |
- |
- |
- |
- |
(2,907) |
(2,907) |
|
Share Options exercised |
57,800 |
1,273 |
(253) |
- |
- |
1,020 |
|
Total transactions with |
57,800 |
1,273 |
1,091 |
- |
(2,907) |
(543) |
|
Balance, January 31, 2022 |
14,562,895 |
$ 43,973 |
$ 12,836 |
$ (1,007) |
$ 11,404 |
$ 67,206 |
|
Balance, April 30, 2020 |
14,416,543 |
$ 40,901 |
$ 10,964 |
$ 416 |
$ 8,838 |
$ 61,119 |
|
Net profit |
- |
- |
- |
- |
5,168 |
5,168 |
|
Other comprehensive |
|||||||
Effective portion |
- |
- |
- |
223 |
- |
223 |
|
Exchange difference |
- |
- |
- |
519 |
- |
519 |
|
Total comprehensive |
- |
- |
- |
742 |
5,168 |
5,910 |
|
Stock-based Compensation |
- |
- |
928 |
- |
- |
928 |
|
Dividends to equity owners |
- |
- |
- |
- |
(2,667) |
(2,667) |
|
Share options exercised |
48,552 |
1,050 |
(238) |
- |
- |
812 |
|
Total transactions with |
48,552 |
1,050 |
690 |
- |
(2,667) |
(927) |
|
Balance, January 31, 2021 |
14,465,095 |
$ 41,951 |
$ 11,654 |
$ 1,158 |
$ 11,339 |
$ 66,102 |
SOURCE Tecsys Inc.

For further information: Public Relations: Adam Polka [email protected]; General Information: [email protected]; Investor Relations: [email protected]; By Phone: (514) 866-0001 or (800) 922-8649
Share this article