SaaS Revenue Rises 44% and Total Revenue Rises
20% in the Fourth Quarter
MONTREAL, June 29,
2023 /CNW/ -- Tecsys Inc. (TSX: TCS), an
industry-leading supply chain management SaaS company, today
announced its results for the fourth quarter and full year of
fiscal year 2023, ended April 30,
2023. All dollar amounts are expressed in Canadian currency
and are prepared in accordance with International Financial
Reporting Standards (IFRS).
"Our solid performance in the fourth quarter closes out a
remarkable year underpinned by strong growth. It's fitting that the
year we celebrate our 40th anniversary in business, we are
reporting just under 40% year over year growth in SaaS revenue and
SaaS bookings, and over 40% year over year growth in RPO," says
Peter Brereton, president and CEO at
Tecsys Inc. "With a supply chain industry in flux and companies
actively sourcing and selecting their next supply chain technology
partner, we enter fiscal 2024 with confidence that our business is
well positioned to seize that opportunity and expand our presence
in a rapidly growing market."
Mark Bentler, chief financial
officer of Tecsys Inc., adds, "This is our first fiscal year where
SaaS revenue represents over half of our recurring revenue.
With a record revenue quarter led by 44% SaaS revenue growth,
we are proud of the transformative effect our SaaS offerings are
having on our business and the value we believe they will create
for our stakeholders. By its recurring nature, growing SaaS
revenue provides greater visibility into future revenue. With
that in mind, we have decided to start providing financial guidance
on several key metrics, which you will see below."
Fourth Quarter Highlights:
- SaaS revenue increased by 44% to $11.1
million, up from $7.7 million
in Q4 2022.
- SaaS subscription bookingsi (measured on an
ARRi basis) decreased by 13% to $3.9 million, compared to $4.5 million in the fourth quarter of fiscal
2022.
- SaaS Remaining Performance Obligation (RPOi)
increased by 47% to $137.7 million at
April 30, 2023, up from $94.0 million at the same time last year.
- Annual Recurring Revenue (ARRi) at April 30, 2023 was up 25% to $78.3 million compared to $62.7 million at April 30,
2022.
- Professional services revenue was up 13% to $14.6 million compared to $12.9 million in Q4 2022.
- Total revenue excluding hardware revenue was $34.3 million, 17% higher than $29.2 million reported for Q4 last year, while
total revenue rose 20% to reach a record $41.2 million.
- Gross margin was 45% for the fourth quarter of fiscal 2023
compared to 44% for the same period in fiscal 2022.
- Total gross profit increased to $18.4
million, up 21% from $15.1
million in Q4 2022.
- Operating expenses increased to $17.0
million, higher by $3.2
million or 23% compared to $13.8
million in Q4 last year.
- Profit from operations was $1.4
million, up from $1.3 million
in Q4 2022.
- Net profit was $0.4 million or
$0.03 per share on a fully diluted
basis in Q4 2023, compared to $2.6
million or $0.17 per share for
the same period in fiscal 2022.
- Adjusted EBITDAii was $2.4
million, up 42% compared to $1.7
million reported in Q4 last year.
Fiscal 2023 Highlights:
- SaaS revenue increased by 39% to $37.5
million, up from $26.9 million
the same period of fiscal 2022.
- SaaS subscription bookingsi (measured on an ARRi basis)
increased to $16.4 million, 38%
higher from $11.9 million in the same
period of fiscal 2022.
- Professional services revenue was up 6% to $55.4 million compared to $52.0 million in the same period of fiscal
2022.
- Total revenue excluding hardware revenue was $128.7 million, 12% higher than $114.5 million reported for the same period of
fiscal 2022, while total revenue reached a record $152.4 million.
- Gross margin was 44% for both fiscal 2023 and fiscal
2022.
- Total gross profit increased to $66.8
million, up 11% from $60.3
million in the same period of fiscal 2022.
- Operating expenses increased to $63.2
million, higher by $8.3
million or 15% compared to $54.9
million in fiscal 2022.
- Profit from operations was $3.6
million, down from $5.4
million in the same period of fiscal 2022.
- Net profit was $2.1 million, or
$0.14 per diluted share in fiscal
2023, compared to a net profit of $4.5
million, or $0.30 per diluted
share, for fiscal 2022.
- Adjusted EBITDAii was $9.5
million, down 6% compared to $10.1
million reported in the same period in fiscal 2022.
Financial Guidance:
Tecsys is presenting financial guidance as follows:
|
FY24 Guidance
|
|
FY25 Guidance
|
Total Revenue
Growth
|
10-15%
|
|
n.a.
|
SaaS Revenue
Growth
|
35-37%
|
|
n.a.
|
Adjusted
EBITDAii Margin
|
6 %
|
|
8-9%
|
On June 29, 2023, the Company
declared a quarterly dividend of $0.075 per share to be paid on August 4, 2023 to shareholders of record on
July 14, 2023.
Pursuant to the Canadian Income Tax Act, dividends paid by the
Company to Canadian residents are considered to be "eligible"
dividends.
i See Key Performance Indicators in Management's
Discussion and Analysis of the 2023 Financial Statements.
ii See Non-IFRS Performance Measures in Management's
Discussion and Analysis of the 2023 Financial Statements.
Fourth Quarter and Full Year Fiscal 2023 Results Conference
Call
Date: June 30, 2023
Time: 8:30am EDT
Phone number: (877) 224-6304 or (416) 620-9188
The call can be replayed until July 7,
2023 by calling:
(800) 558-5253 or (416) 626-4100 (access code: 22027339)
About Tecsys
Since our founding 40 years ago, much has changed in the realm
of supply chain technology. But one thing has remained constant; by
developing dynamic and innovative supply chain solutions, Tecsys
has been equipping organizations for growth and competitive
advantage. Serving healthcare, distribution and converging commerce
industries, and spanning multiple complex, regulated and
high-volume markets, Tecsys delivers 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 the most recently filed annual information form. 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. 2023. 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, gain on remeasurement of lease liability and
recognition of tax credits generated in prior periods. The
exclusion of interest expense, interest income and income taxes
eliminates the impact on earnings derived from non-operational
activities, and the exclusion of depreciation, amortization,
share-based compensation, gain on remeasurement of lease liability
and recognition of tax credits generated in prior periods
eliminates the non-cash impact of these items.
The Company believes that these measures are useful measures of
financial performance without the variation caused by the impacts
of the items described above and that could potentially distort the
analysis of trends in our operating performance. In addition, they
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. Excluding these
items does not imply that they are necessarily non-recurring.
Management believes these non-GAAP financial measures, in addition
to conventional measures prepared in accordance with IFRS, enable
investors to evaluate the Company's operating results, underlying
performance and future prospects in a manner similar to management.
Although EBITDA and Adjusted EBITDA are frequently used by
securities analysts, lenders and others in their evaluation of
companies, they have limitations as an analytical tool, and should
not be considered in isolation, or as a substitute for analysis of
the Company's results as reported under IFRS.
The reconciliation of EBITDA and Adjusted EBITDA to the most
directly comparable IFRS measure is provided below.
|
Year ended April 30,
|
(in thousands of CAD)
|
|
2023
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
Net profit for the
period
|
$
|
2,089
|
$
|
4,478
|
$
|
7,188
|
Adjustments
for:
|
|
|
|
|
|
|
Depreciation of
property and equipment and right-of-use assets
|
|
1,775
|
|
2,162
|
|
2,180
|
Amortization of
deferred development costs
|
|
496
|
|
290
|
|
269
|
Amortization of other
intangible assets
|
|
1,603
|
|
1,612
|
|
1,663
|
Interest
expense
|
|
406
|
|
622
|
|
787
|
Interest
income
|
|
(686)
|
|
(474)
|
|
(174)
|
Income
taxes
|
|
1,624
|
|
946
|
|
3,169
|
EBITDA
|
$
|
7,307
|
$
|
9,636
|
$
|
15,082
|
Adjustments
for:
|
|
|
|
|
|
|
Stock based
compensation
|
|
2,177
|
|
1,684
|
|
1,138
|
Gain on remeasurement
of lease liability
|
|
-
|
|
(573)
|
|
-
|
Recognition of tax
credits generated in prior periods
|
|
-
|
|
(617)
|
|
-
|
Adjusted
EBITDAii
|
$
|
9,484
|
$
|
10,130
|
$
|
16,220
|
Consolidated
Statements of Financial Position
As at April 30, 2023 and April 30, 2022
(In thousands of Canadian dollars)
|
|
April 30, 2023
|
April 30, 2022
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
21,235
|
$
|
23,004
|
Short-term
investments
|
|
15,835
|
|
20,239
|
Accounts
receivable
|
|
22,900
|
|
16,962
|
Work in
progress
|
|
1,734
|
|
1,579
|
Other
receivables
|
|
523
|
|
234
|
Tax
credits
|
|
5,338
|
|
5,224
|
Inventory
|
|
1,034
|
|
806
|
Prepaid
expenses
|
|
8,193
|
|
6,392
|
Total current assets
|
|
76,792
|
|
74,440
|
Non-current assets
|
|
|
|
|
Other long-term
receivables
|
|
363
|
|
192
|
Tax
credits
|
|
5,368
|
|
3,782
|
Property and
equipment
|
|
1,802
|
|
2,064
|
Right-of-use
assets
|
|
1,708
|
|
4,547
|
Contract acquisition
costs
|
|
3,738
|
|
3,177
|
Deferred development
costs
|
|
2,254
|
|
1,870
|
Other intangible
assets
|
|
9,287
|
|
10,301
|
Goodwill
|
|
17,467
|
|
16,863
|
Deferred tax
assets
|
|
8,137
|
|
8,608
|
Total non-current assets
|
|
50,124
|
|
51,404
|
Total assets
|
$
|
126,916
|
$
|
125,844
|
Liabilities
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
21,669
|
$
|
16,971
|
Deferred
revenue
|
|
30,388
|
|
24,689
|
Current portion of
long-term debt
|
|
-
|
|
1,200
|
Lease
obligations
|
|
793
|
|
662
|
Total current liabilities
|
|
52,850
|
|
43,522
|
Non-current liabilities
|
|
|
|
|
Other long-term
accrued liabilities
|
|
253
|
|
-
|
Long-term
debt
|
|
-
|
|
7,200
|
Deferred tax
liabilities
|
|
1,255
|
|
1,258
|
Lease
obligations
|
|
2,120
|
|
5,181
|
Total non-current liabilities
|
|
3,628
|
|
13,639
|
Total liabilities
|
$
|
56,478
|
$
|
57,161
|
Equity
|
|
|
|
|
Share
capital
|
$
|
44,338
|
$
|
43,973
|
Contributed
surplus
|
|
15,285
|
|
13,176
|
Retained
earnings
|
|
10,832
|
|
12,968
|
Accumulated other
comprehensive loss
|
|
(17)
|
|
(1,434)
|
Total equity attributable to the owners of the
Company
|
|
70,438
|
|
68,683
|
Total liabilities and equity
|
$
|
126,916
|
$
|
125,844
|
Consolidated
Statements of Income and Comprehensive Income
For the three and twelve-month periods ended April 30, 2023 and
2022
(In thousands of Canadian dollars, except per share
data)
|
|
Three Months Ended
April 30,
|
Twelve Months Ended
April 30,
|
|
2023
|
2022
|
2023
|
2022
|
Revenue:
|
|
|
|
|
|
|
|
|
SaaS
|
$
|
11,133
|
$
|
7,708
|
$
|
37,476
|
$
|
26,929
|
Maintenance and
Support
|
|
7,992
|
|
8,008
|
|
32,714
|
|
32,698
|
Professional
Services
|
|
14,614
|
|
12,896
|
|
55 353
|
|
52,040
|
License
|
|
529
|
|
558
|
|
3,116
|
|
2,806
|
Hardware
|
|
6,924
|
|
5,118
|
|
23,765
|
|
22,727
|
Total revenue
|
|
41,192
|
|
34,288
|
|
152,424
|
|
137,200
|
Cost of revenue
|
|
22,828
|
|
19,158
|
|
85,615
|
|
76,890
|
Gross profit
|
|
18,364
|
|
15,130
|
|
66,809
|
|
60,310
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
7,778
|
|
6,388
|
|
28,080
|
|
24,294
|
General and
administration
|
|
2,599
|
|
2,652
|
|
11,218
|
|
10,865
|
Research and
development, net of tax credits
|
|
6,597
|
|
4,779
|
|
23,943
|
|
19,775
|
Total operating expenses
|
|
16,974
|
|
13,819
|
|
63,241
|
|
54,934
|
Profit from operations
|
|
1,390
|
|
1,311
|
|
3,568
|
|
5,376
|
Other costs (income)
|
|
189
|
|
(164)
|
|
(145)
|
|
(48)
|
Profit before income taxes
|
|
1,201
|
|
1,475
|
|
3,713
|
|
5,424
|
Income tax expense
|
|
755
|
|
(1,111)
|
|
1,624
|
|
946
|
Net profit
|
$
|
446
|
$
|
2,586
|
$
|
2,089
|
$
|
4,478
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
Effective portion of
changes in fair value on designated revenue hedges
|
|
(521)
|
|
(52)
|
|
(6)
|
|
(693)
|
Exchange differences
on translation of foreign operations
|
|
489
|
|
(375)
|
|
1,423
|
|
(967)
|
Comprehensive income
|
$
|
414
|
$
|
2,159
|
$
|
3,506
|
$
|
2,818
|
Basic earnings per common share
|
|
0.03
|
|
0.18
|
|
0.14
|
|
0.31
|
Diluted earnings per common
share
|
$
|
0.03
|
$
|
0.17
|
$
|
0.14
|
$
|
0.30
|
|
See accompanying notes
to the consolidated financial statements.
|
Consolidated
Statements of Cash Flows
For the three and twelve-month periods ended April 30, 2023 and
2022
(In thousands of Canadian dollars)
|
|
|
Three Months Ended
April 30,
|
Twelve Months Ended
April 30,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net profit
|
|
$
|
446
|
$
|
2,586
|
$
|
2,089
|
$
|
4,478
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
Depreciation of
property and equipment and right-of-use-assets
|
|
|
440
|
|
515
|
|
1,775
|
|
2,162
|
Amortization of
deferred development costs
|
|
|
145
|
|
87
|
|
496
|
|
290
|
Amortization of other
intangible assets
|
|
|
402
|
|
382
|
|
1,603
|
|
1,612
|
Interest expense
(income) and foreign exchange loss
|
|
|
189
|
|
409
|
|
(145)
|
|
525
|
Gain on lease
remeasurement
|
|
|
-
|
|
(573)
|
|
-
|
|
(573)
|
Unrealized foreign
exchange and other
|
|
|
1,336
|
|
(103)
|
|
1,754
|
|
1,117
|
Non-refundable tax
credits
|
|
|
(429)
|
|
(992)
|
|
(2,095)
|
|
(2,332)
|
Stock-based
compensation
|
|
|
455
|
|
340
|
|
2,177
|
|
1,684
|
Income
taxes
|
|
|
124
|
|
(1,455)
|
|
554
|
|
402
|
Net cash from operating
activities excluding changes in non-cash
working capital items related to operations
|
|
|
3,108
|
|
1,196
|
|
8,208
|
|
9,365
|
Accounts
receivable
|
|
|
955
|
|
4,365
|
|
(5,915)
|
|
(270)
|
Work in
progress
|
|
|
208
|
|
(194)
|
|
(151)
|
|
(1,410)
|
Other
receivables
|
|
|
163
|
|
80
|
|
(58)
|
|
219
|
Tax credits
|
|
|
3,239
|
|
2,233
|
|
(114)
|
|
(397)
|
Inventory
|
|
|
268
|
|
142
|
|
(226)
|
|
(186)
|
Prepaid
expenses
|
|
|
21
|
|
330
|
|
(1,452)
|
|
(1,502)
|
Contract acquisition
costs
|
|
|
(190)
|
|
(389)
|
|
(908)
|
|
(499)
|
Accounts payable and
accrued liabilities
|
|
|
1,461
|
|
(757)
|
|
2,663
|
|
(3,076)
|
Deferred
revenue
|
|
|
1,258
|
|
1,352
|
|
5,713
|
|
2,700
|
Changes in non-cash
working capital items related to operations
|
|
|
7,383
|
|
7,162
|
|
(448)
|
|
(4,421)
|
Net cash provided (used in) by operating
activities
|
|
|
10,491
|
|
8,358
|
|
7,760
|
|
4,944
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Repayment of long-term
debt
|
|
|
-
|
|
(300)
|
|
(8,400)
|
|
(1,216)
|
Proceeds from
short-term investments
|
|
|
-
|
|
-
|
|
5,000
|
|
-
|
Payment of lease
obligations
|
|
|
(119)
|
|
(225)
|
|
(689)
|
|
(859)
|
Payment of
dividends
|
|
|
(1,094)
|
|
(1,022)
|
|
(4,225)
|
|
(3,929)
|
Refund of acquired tax
liability
|
|
|
-
|
|
-
|
|
-
|
|
299
|
Interest
paid
|
|
|
(17)
|
|
(178)
|
|
(406)
|
|
(622)
|
Issuance of common
shares on exercise of stock options
|
|
|
185
|
|
-
|
|
297
|
|
1,020
|
Net cash used in financing
activities
|
|
|
(1,045)
|
|
(1,725)
|
|
(8,423)
|
|
(5,307)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Interest
received
|
|
|
211
|
|
57
|
|
686
|
|
175
|
Payments related to
prior business acquisitions
|
|
|
-
|
|
-
|
|
-
|
|
(500)
|
Acquisitions of
property and equipment
|
|
|
(340)
|
|
(19)
|
|
(850)
|
|
(733)
|
Acquisitions of other
intangible assets
|
|
|
-
|
|
(226)
|
|
(62)
|
|
(255)
|
Deferred development
costs
|
|
|
(283)
|
|
(162)
|
|
(880)
|
|
(1,072)
|
Net cash used in investing
activities
|
|
|
(412)
|
|
(350)
|
|
(1,106)
|
|
(2,385)
|
Net increase (decrease)
in cash and cash equivalents during the period
|
|
|
9,034
|
|
6,283
|
|
(1,769)
|
|
(2,748)
|
Cash and cash
equivalents - beginning of period
|
|
|
12,201
|
|
16,721
|
|
23,004
|
|
25,752
|
Cash and cash equivalents - end of
period
|
|
$
|
21,235
|
$
|
23,004
|
$
|
21,235
|
$
|
23,004
|
Consolidated
Statements of Changes in Equity
For the year-ended April 30, 2023 and 2022
(In thousands of Canadian dollars, except number of
shares)
|
|
Share capital
|
|
|
|
|
|
|
|
|
|
Number
|
|
Amount
|
|
Contributed
Surplus
|
|
Accumulated other
comprehensive
income (loss)
|
|
Retained
earnings
|
|
Total
|
Balance, May 1, 2022
|
14,562,895
|
$
|
43,973
|
$
|
13,176
|
$
|
(1,434)
|
$
|
12,968
|
$
|
68,683
|
Net profit
|
-
|
|
-
|
|
-
|
|
-
|
|
2,089
|
|
2,089
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
Effective portion of
changes in fair
value on designated
revenue hedges
|
-
|
|
-
|
|
-
|
|
(6)
|
|
-
|
|
(6)
|
Exchange difference on
translation of
foreign
operations
|
-
|
|
-
|
|
-
|
|
1,423
|
|
-
|
|
1,423
|
Total comprehensive income
|
-
|
|
-
|
|
-
|
|
1,417
|
|
2,089
|
|
3,506
|
Stock-based
Compensation
|
-
|
|
-
|
|
2,177
|
|
-
|
|
-
|
|
2,177
|
Dividends to equity
owners
|
-
|
|
-
|
|
-
|
|
-
|
|
(4,225)
|
|
(4,225)
|
Share options
exercised
|
19,942
|
|
365
|
|
(68)
|
|
-
|
|
-
|
|
297
|
Total transactions with owners of
the
Company
|
19,942
|
$
|
365
|
$
|
2,109
|
$
|
-
|
$
|
(4,225)
|
$
|
(1,751)
|
Balance, April 30, 2023
|
14,582,837
|
$
|
44,338
|
$
|
15,285
|
$
|
(17)
|
$
|
10,832
|
$
|
70,438
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, May 1, 2021
|
14,505,095
|
$
|
42,700
|
$
|
11,745
|
$
|
226
|
$
|
12,419
|
$
|
67,090
|
Net profit
|
-
|
|
-
|
|
-
|
|
-
|
|
4,478
|
|
4,478
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
Effective portion of
changes in fair
value on designated
revenue hedges
|
-
|
|
-
|
|
-
|
|
(693)
|
|
-
|
|
(693)
|
Exchange difference on
translation of
foreign
operations
|
-
|
|
-
|
|
-
|
|
(967)
|
|
-
|
|
(967)
|
Total comprehensive (loss)
income
|
-
|
|
-
|
|
-
|
|
(1,660)
|
|
4,478
|
|
2,818
|
Stock-based
Compensation
|
-
|
|
-
|
|
1,684
|
|
-
|
|
-
|
|
1,684
|
Dividends to equity
owners
|
-
|
|
-
|
|
-
|
|
-
|
|
(3,929)
|
|
(3,929)
|
Share options
exercised
|
57,800
|
|
1,273
|
|
(253)
|
|
-
|
|
-
|
|
1,020
|
Total transactions with owners of
the
Company
|
57,800
|
$
|
1,273
|
$
|
1,431
|
$
|
-
|
$
|
(3,929)
|
$
|
(1,225)
|
Balance, April 30, 2022
|
14,562,895
|
$
|
43,973
|
$
|
13,176
|
$
|
(1,434)
|
$
|
12,968
|
$
|
68,683
|
SOURCE Tecsys Inc.