Investors

A Word from the CEO

Peter Brereton, President and CEODear Shareholder,

I am pleased to report that Q2 of fiscal 2010 was a solid quarter with continued growth of our proprietary software, enabling us to achieve the highest license revenue in a quarter this decade and improving our returns to shareholders. During the quarter we won major new agreements in our healthcare vertical market, particularly in the emergency preparedness sector where hospitals and emergency sites in Canada and the U.S. have made a proactive effort to be ready with their supply chains for significant events such as the distribution of H1N1 vaccines. We also completed the deployment of ten major go-lives, all of which have contributed positively to our revenue mix and profitability.

While overall revenue was 7% down, primarily attributable to lower third-party products sales and to lower services billings as a result of slower services bookings during past recessionary quarters, our proprietary software revenue increased by $765K in Q2, 2010 compared to Q2, 2009. The improvement in our proprietary software revenue helped us achieve profitability of six cents per share and a gross margin of 48% in Q2, 2010 compared to 43% in Q2, 2009.

Below are the key financial highlights for the quarter:

  • Earnings from operations for the second quarter, 2010 increased to $813K from $771K in Q2, 2009.
  • Revenue was $9.9M in Q2, 2010 compared to $10.7M in Q2, 2009.
  • EBITDA for Q2, 2010 increased to $1,118K from $1,018K for Q2 of last fiscal year.
  • Net earnings for the second quarter, 2010 were $746K or $0.06 per share compared to $644K or $0.05 per share for the second quarter of last fiscal year.
  • Annualized return-on-equity was equal to 18.7% in Q2, 2010 compared to 16.5% in Q2 of last fiscal year.
  • Cash, cash equivalents and other short-term investments amounted to $7.1M at the end of Q2, 2010, compared to $6.0M at the end of Q2, 2009 with no significant long-term debt.

During the quarter, we signed agreements with fourteen existing clients and new customers across our business units, improving our market share and recurring revenue opportunity in the vertical markets we serve. From a services’ perspective, we completed the deployment of our supply chain execution solutions at sixteen customer sites, five of which were in healthcare, five in high-volume distribution for mid-to-large size clients and six in the SMB sector. At the end of the quarter, our annualized recurring revenue was $13.1M and our backlog stood at $17.9M.

We continue to focus on verticals that are receptive to improving their supply chains even during a slower economic period. Moving forward and as the economy returns to growth, we know that some of our verticals will return to health more quickly than others and we will focus our attention where the I.T. spending has returned.

Thank you for your on-going support.

Sincerely,

Peter Brereton
President and CEO

Read Peter Brereton's executive biography on the Management page.