Investing in TECSYS

About TECSYS

TECSYS Today

• Founded in 1983, and headquartered in Montreal, Canada
• Leading provider of supply chain management software for distribution, warehousing and transportation logistics operations
• FY2008 revenue: US $38.8 million
• Over 500 customers, several thousand sites in 20 countries
• Offices in Montreal, Toronto, Chicago, London (UK), and Caracas, Venezuela
• Publicly traded on the TSX since 1998 (TSX: TCS)

Our Mission

"To deliver the highest value to our clients, with unparalleled industry solutions that are based on our advanced, proven technologies and feature-rich enterprise suite of applications."

Our Business

TECSYS is a leading supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics solutions. The Company's customers include mid-size and Fortune 1000 corporations in the healthcare, heavy equipment, import-to-retail, industrial distribution, third-party logistics, and high-volume distribution industries. Click here for further details. TECSYS has built its business and its reputation through a single-minded focus on distribution operations and by developing robust products and leading expertise over 25 years in business.

The Company employs a seasoned team of supply chain management experts who differentiate TECSYS and who have extensive experience deploying TECSYS’ technology in high-volume distribution environments. TECSYS has some 1000 customers, all with a strong distribution focus, and thousands of installed sites in high-volume transaction environments in North America, Europe and Latin America.

Our Market

The worldwide market for Supply Chain Execution (SCE) is expected to grow at a compounded annual growth rate (CAGR) of 9.9% over the next five years. The market was $4.6 billion in 2006 and is forecasted to be over $7.4 billion in 2011, according to a new “study” by ARC Advisory Group.

• TECSYS Target Market (726 Kb)

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Competitive Advantages

People & Expertise

• More than 75% of TECSYS staff have 10 to 25 years of experience in distribution operations.
• TECSYS staff have deep and unique expertise in the vertical markets the Company serves.
• TECSYS staff are customer & people-oriented; very high on customers’ decision-making.

Technology

• TECSYS’ technology is integrated—a strong competitive advantage, also providing high ROI to customers.
• TECSYS applications respond effectively to customer business requirements—moving goods efficiently, tracking products and orders, and providing unprecedented visibility into customers’ supply chains.
• TECSYS products are very user-friendly.

Focus

• TECSYS solutions are specific to client needs in specific market segments.
• TECSYS focuses on a repeat business model, from product, expertise and execution points of view, that enables: cost reduction, improved ROI, increased depth of expertise, and enhanced competitive advantage.

Agility

TECSYS’ infrastructure is nimble and flexible, enabling the Company to:

• Move quickly and efficiently;
• Beat the competition in responsiveness.

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Performance

"We have captured a record number of new accounts that helped drive 36% growth in Q4’s revenue compared to last year. We continue to execute our plan by focusing on profitable vertical markets while rigorously managing our cost structure, resulting in strong operating profits. Looking at the full fiscal year, in spite of a $1,048K expense related to the ABCP fiasco, and a loss on exchange of $500K, we ended the year with net income of $1,255K and are pleased with these results."

Peter Brereton, President and CEO
TECSYS Inc.

• Q3 Details FY2008
• Q2 Details FY2008
• Q1 Details FY2008
• FY2008 Annual Report (3,681 Kb)
• Most Recent Investor Presentation (1,819 Kb)

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Conclusions

Market Opportunity

North American and European markets for TECSYS’ products are very optimistic—growth of the supply chain execution (SCE) market is forecasted at 9.9% CAGR in the next four years.
(Source: Arc Advisory Group, August, 2007).

Focus

TECSYS is focused on select growth vertical markets where it has a unique value proposition and where the Company is achieving sustainable success. Currently, these include healthcare, heavy equipment, import-to-retail, industrial distribution and high-volume distribution industries. In some of its select verticals, TECSYS has achieved leading market position such as in warehouse management for the Caterpillar Dealer market segment where it has gained 15% market share in North America.

• TECSYS Target Market (726 Kb)

Competitive Advantage

• Expertise: TECSYS has the in-depth, unique expertise of professional experts in warehouse management and distribution to provide expert advise to solve customer problems and differentiate its offering in the competitive landscape
• Technology: TECSYS’ technology is an enabling platform for solving customer problems in distribution; its rich capabilities for certain vertical applications, its flexibility and ease-of-use substantially increase the winning advantage against its competitors.

Performance

TECSYS’ revenue grew to US $38.8 million in FY2008 from US $17 million in FY2004 (21% CAGR).

$ ooo's Except for ROE & EPS
KPI	2008	2007
Revenue	38,807	31,040
EBITDA	3,210	446
EPS	0.09	(0.04)
Backlog	19,100	15,500
% ROE	8.7	(4)
Cash from operations	2,706	722

Customer Base

TECSYS’ customer base is the heart of its value proposition—it is an exceptional group of Fortune 100 companies in healthcare, as well as innovative leaders in distribution and global providers of third party logistics. With a backlog of US $19.1 million at the end of Q4/2008, TECSYS’ customer base is a major asset of repeat and sustainable business.

Liquidity

TECSYS is virtually debt free. Its cash position is strong and growing.

Stock

TECSYS stock is undervalued. As of March 31st, 2008, it was trading at approximately 0.4 x EV*; comparable companies are trading at 1.5 x EV* on the average.

* EV = Enterprise Value.

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