Press Release

FOR IMMEDIATE RELEASE Ref. #NRE2006-22

TECSYS Inc. Announces its Financial Results for Q2, 2007 — Implements Major Restructuring

MONTREAL, November 28, 2006 — TECSYS Inc. (TSX: TCS), an industry-leading Supply Chain Management (SCM) software company announced today its financial results for the second quarter of fiscal year 2007 ending October 31st, 2006. All dollar amounts are expressed in U.S. currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP) with a reconciliation to the United States GAAP and are unaudited. All comparable figures for the prior periods have been restated as per TECSYS' August 15th, 2006 press release.

Highlights of the second quarter include:

• TECSYS signed 5 new clients for its products and services including:
  • The largest real wood and laminate flooring retailer in the U.K.
  • A New York based supplier of fulfilment and distribution services for the healthcare and consumer products industries.
  • A manufacturer/distributor of a complete line of industrial, medical and speciality gases throughout the state of Texas and Mexico.
  • A manufacturer and marketer of unique diagnostics and medical products in the U.S.
  • An importer of high quality bicycles and accessories in the province of Quebec.
• The Company also signed a number of product upgrades and its services organization has successfully completed the deployment of its solutions in a number of accounts during the quarter.

Revenue in the second quarter of fiscal 2007 decreased by 17% to $7.6M compared to $9.2M in the same period of fiscal 2006. Loss from operations was $644K for the reporting quarter and includes two major elements: $234K restructuring charges and approximately $162K due to the continuing strengthening of the Canadian dollar of approximately 6% compared to the same period of last fiscal year. Earnings from operations for the comparable period in fiscal year 2006 were $62K. After accounting for an exchange loss of $64K, net interest income of $15K and a net gain of $2K from a company in which TECSYS has an equity interest, net loss for the quarter was $691K or $0.05 per share compared to net earnings of $27K or $0.00 per share for the same period in the previous fiscal year.

“We have made a significant change in our approach to the business” commented Peter Brereton, President and CEO of TECSYS Inc. “Although our core business has remained steady, our recent acquisitions have proven to require substantial re-engineering and right sizing.

We have:

• integrated our new account sales teams from all of our business units
• exited the markets that were not proving profitable
• reduced our workforce by more than 10%

Our restructuring initiatives will enable us to streamline business operations and focus on the markets that show growth and profitability. In combination with the changes made earlier this year, our operating costs have been reduced by $3.3M annually compared to our costs in the first half of this fiscal year. Our sales pipeline continues to be strong, and we continue to invest prudently in R&D, however, it was clearly time to get our business model in line with our revenues. This has been completed, and we look forward to improved operating results.”

For the six months ended October 31, 2006, revenue decreased 9% to $15.4M compared to $17.0M in the same period of the prior fiscal year. Loss from operations for the first half was $900K and includes two major elements: $234K restructuring charges and $393K due to the continuing strengthening of the Canadian dollar of approximately 8% compared to the same period of last fiscal year. Earnings from operations for the comparable period in fiscal year 2006 were $121K. After accounting for an exchange loss of $30K, net interest income of $73K and a net loss of $8K from a company in which TECSYS has an equity interest, net loss for the first half of fiscal year 2007 was $865K or $0.06 per share compared to net earnings of $48K or $0.00 per share for the same period in the previous fiscal year.

 

» View the Q2 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.