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Press Release

TECSYS Announces Q2, 2010 Results; EPS Increased to Six Cents Per Share Led by Rising License Revenues

MONTREAL, November 25, 2009—TECSYS Inc. (TSX: TCS), an industry-leading supply chain management software company, announced today its results for the second quarter of fiscal year 2010, ended October 31st, 2009. All dollar amounts are expressed in Canadian currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP) and are unaudited.

Highlights of the Second Quarter include:

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 due to a decrease in hardware sales.
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. Net earnings for the quarter were achieved after accounting for foreign exchange losses of $26K and a share of net loss and amortization of intangible assets of $23K from a company in which TECSYS has an equity interest.
Annualized return-on-equity was equal to 18.7% in Q2, 2010 compared to 16.5% in Q2 of last fiscal year.
At the end of Q2, 2010 annualized recurring revenue in Canadian currency was $13.1M, the same as at the end of Q2, 2009 due to currency fluctuations. However, USD denominated recurring revenue increased by $770K or 14% while CAD denominated recurring revenue was flat. Recurring revenue is principally made-up of annual software maintenance contracts.
At the end of Q2, 2010, backlog stood at $17.9M compared to $18.4M at the end of Q1, 2010.
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.

Peter Brereton, President and CEO of TECSYS Inc., commented on the results: "Major new agreements in our healthcare vertical, particularly in the emergency preparedness sector, drove license revenue substantially, improving our gross margin to 48% and EPS to six cents per share. Complementing this was ten major go-lives in healthcare and high-volume distribution that have contributed positively to our revenue mix and profitability. The revenue decline during the quarter was due to a decrease in hardware sales of $1.1M, and to slower services bookings during past recessionary quarters, resulting in lower services billings. While services bookings have picked up in the second quarter, the billings will only be realized in a few months as projects are completed. Overall, this was a solid quarter, with continued growth of our proprietary software and services business and the highest license revenue this decade, continuing our trend of positive returns."

During the Quarter, the Company signed agreements with existing clients and new customers including:

A hospital supply network in the state of Washington
A major emergency preparedness center in Maryland
A major speciality drug distributor in the U.S.
A heavy equipment dealer in Saskatchewan
A packaged gas and welding supplies distributor in North Carolina
Two Industrial distributors in Ontario
A major private university in the state of Virginia
A leading food distributor in the province of Quebec
Two office supplies distributors in Ontario
A leading supplier of signs and imaging products across Canada
A hardware supplier in Quebec
A construction material supplies distributor in Ontario

Furthermore, TECSYS also deployed its 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.

Highlights of the first half of fiscal year 2010 include:

Earnings from operations for the first half, 2010 increased to $1,113K from $1,037K for the same period in last fiscal year.
Revenue for the first half, 2010 was $19.1M compared to $20.9M for the same period of last fiscal year due to a decrease in hardware sales.
EBITDA for the first half, 2010 was $1,574K compared to $1,675K for the first half of 2009.
Net earnings for the first half of fiscal, 2010 were $854K or $0.07 per share compared to $918K or $0.07 per share for the same period of the prior fiscal year. Net earnings for the first half were achieved after accounting for net interest income of $2K, foreign exchange losses of $194K and a share of net loss and amortization of intangible assets of $49K from a company in which TECSYS has an equity interest.
Annualized return-on-equity was equal to 10.7% in the first half of fiscal 2010 compared to 11.9% for the same period in last fiscal year.

TECSYS' Q2 FY2010 Earnings Conference Call:

Date: November 25, 2009
Time: 4:30 pm
Phone number: 800-379-4140 or 416-620-5690

The call can be replayed by calling 800-558-5253 (access code: 21444001) or 416-626-4100 (access code: 21444001).

View the Q2 FY2010 Financial Statements (PDF, 19K)

About TECSYS

TECSYS is a leading supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include over 500 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high-volume distribution industries. TECSYS' shares are listed on the Toronto Stock Exchange under the ticker symbol TCS.

TECSYS' integrated suite of supply chain execution applications are warehouse-centric and its warehouse management software is complemented by distribution management software, transportation management software and business intelligence solutions that enable customers to seamlessly execute order-to-cash and purchase-to-pay processes without barriers.

Contact

Solutions and general info: info@tecsys.com
Investor relations: investor@tecsys.com
Media relations: media@tecsys.com
By phone: (514) 866-0001 or (800) 922-8649

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 30th, 2011. These documents have been filed with the Canadian securities commissions and are available on this Web site and on SEDAR External Link .

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