Press Release

FOR IMMEDIATE RELEASE Ref. #NRE2006-17

TECSYS Inc. Announces Q1 2007 Results, Releases an Industry's First Product

MONTREAL, September 12, 2006—TECSYS Inc. (TSX: TCS), an industry-leading Supply Chain Management (SCM) software company, announced today its financial results for the first quarter of fiscal 2007 ending July 31, 2006. All dollar amounts are expressed in U.S. currency and are reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP), with a reconciliation to United States GAAP and are unaudited. All comparable figures for fiscal 2006 have been restated as per TECSYS' August 15th, 2006 press release.

Financial highlights for the reporting quarter include:

• Revenue for the quarter was $7.8 million, equal to the first quarter of fiscal 2006, 39% of this revenue came from products and 58% from services.
• Product revenue increased 8% to $3 million compared to the same period in fiscal 2006. Services revenue was $4.5 million compared to $4.9 million for the same period in fiscal 2006..
• License revenue of $375,000 that had been booked in prior quarters was recognized during the first quarter of fiscal 2007, while a portion of license revenue amounting to $516,000, booked during the same quarter was deferred and will be recognized in future quarters.
• Net loss for the quarter was $174,000 or $0.01 per share compared with a net earnings of $21,000 or $0.00 per share for the same period in fiscal 2006. Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) for the reporting quarter amounted to $52,000 compared to $264,000 for the same period in fiscal 2006.
• At the end of the first quarter of fiscal 2007, backlog was $14.2 million, while annualized recurring revenue increased to $8.9 million compared to $8.7 million at the end of the previous quarter.

"We began the quarter with the release of our new sales order desk that can be adapted to meet the needs of each user without programming. This exciting technology provides us with the basis for expanding our license and subscription sales offering, to continue to build our recurring revenue," commented Peter Brereton, President and Co-CEO of TECSYS. "We continued to streamline operations and reduce cost. During the quarter, we took steps to reduce our annualized operating costs by over one million dollars. While some benefits will be seen almost immediately, the full benefits of this cost reduction will be seen by the fourth quarter of this fiscal year."

Other key activities for the quarter:

Major activities during the quarter include winning contracts with healthcare and import-to-retail distributors and a number of go lives:

Healthcare:

• A major agreement signed with a regional health services authority in central Canada, the pilot of which was signed in the last quarter of fiscal 2006. The Company also signed a US-based third party logistics provider for the healthcare industry, the application of which will be hosted by TECSYS.

Import-to-retail:

• Signed a new import-to-retail distributor of home decor products.
• Signed, upgraded and deployed five customers in home decor, house wares and publishing industries.

Third-Party Logistics (3PL):

• Signed an agreement with an existing 3PL client to proceed with three additional California-based facilities. This world-wide 3PL leader has traditionally used TECSYS solutions only in Canada. The new agreement represents a significant next step in this relationship, as TECSYS continues to work with this 3PL leader to become more of a global partner for them.

Transportation:

• Reached an agreement with a large Canadian greeting card company to implement our Transportation Management solution for all of their outbound transportation needs.

Major new product release:

At the beginning of the quarter TECSYS released version 7.5 of its flagship product the EliteSeries. EliteSeries 7.5 is the industry's first sales order desk based on pure service-oriented architecture (SOA), handling sales quotations, orders and EDI processing in an environment that can be adapted for the needs of each user without programming. EliteSeries 7.5 offers optimum visibility and automation for the customer's order desk. It is designed for application service provider (ASP) deployment, allowing for licence or subscription sales; expanding TECSYS' ASP offering and enabling the Company to continue to build its recurring revenue.

» View the Q1 Financial Statements (83 Kb)

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 about 800 mid-size and Fortune 1000 corporations in healthcare, giftware, office products, third-party logistics, and general wholesale high-volume distribution markets. TECSYS’ shares are listed on the Toronto Stock Exchange under the ticker symbol TCS.

Contact

Solutions and general info: info@tecsys.com
Investor relations: investor@tecsys.com
TECSYS Inc.
(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. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.