Press Release

FOR IMMEDIATE RELEASE Ref. #NRE2007-13

TECSYS Signs Seven New Customers in Fourth Quarter
Generates Cash of $2.6M

MONTREAL, July 5, 2007 — TECSYS Inc. (TSX: TCS), an industry-leading supply chain management software company announced today its results for the fourth quarter and full fiscal year 2007, ended April 30th, 2007. Results for the full 2007 fiscal year are audited. All dollar amounts are expressed in U.S. currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP).

Highlights for the fourth quarter include:

• The Company signed seven new customers, including:
  
  • ROE Logistics, a Montreal-based global provider of logistics services.
  • Two major Caterpillar® dealers in the U.S.
  • One import-to-retail distributor and a giftware manufacturer/distributor in Ontario.
  • Terrace Supply Company, a distributor of welding equipment and supplies in Illinois.
  • telent plc, a leading provider of technology services in the U.K.
• Revenue increased 5% or $396K to $7.8M in fiscal 2007 compared to $7.4M for the same quarter of the last fiscal year. Deferred license revenue increased to $1.725M at the end of the fourth quarter from $1.221M at the end of the third quarter; an increase of 41%.
• Earnings from operations for the quarter were $46K compared to loss from operations of $1.3M for the same quarter of last fiscal year.
• EBITDA for Q4, 2007 improved to $126K compared to negative EBITDA of $1.154M for Q4, 2006.
• Gross margin percentage increased to 38% in Q4 of fiscal year 2007 compared to 32% in Q4 of last fiscal year. Gross margin improvement for the quarter includes a substantial increase in Services’ gross margin to 36% in 2007 from 13% in 2006.
• Total operating expenses for the fourth quarter of fiscal year 2007 decreased by $698K or 19% to $2.9 million, compared to $3.6 million for the same quarter of last fiscal year.
• Net loss for the quarter was $125K ($0.01 per share) compared to net loss of $1.4M ($0.10 per share) for the fourth quarter of last fiscal year.
• At the end of the quarter, backlog stood at $15.5M, up from $14.9M at the end of Q4 of the prior fiscal year.
• The Company’s cash position increased by $2.6M during the quarter.

Peter Brereton, President and CEO of TECSYS Inc. commented on the results: “We believe that the positive returns in the second half of the year demonstrate clearly that our strategy is working. In the second half, after completing a major realignment in our business, both from a market focus and operational standpoint, we have generated operating earnings of $302K and $2.7 million in cash. We ended the year in good shape, with a clear focus on winning markets, a solid sales pipeline, a couple of quarters of solid earnings from operations and substantial cash generated.”

Financial highlights for the full fiscal year include:

• Revenue for fiscal year 2007 was $31.0M compared to $33.8M for last fiscal year. Deferred license revenue increased to $1.725M at the end of fiscal year 2007 from $946K at the end of fiscal year 2006, an 82% increase.
• For fiscal year 2007, EBITDA improved to $446K compared to negative EBITDA of $556K for last fiscal year.
• Gross margin increased to 38% in 2007 compared to 37% in 2006. Gross margin improvement for the year includes a substantial increase in Services’ gross margin to 33% in 2007 from 29% in 2006.
• Total operating expenses decreased by 8% in fiscal year 2007 compared to last fiscal year.
• Net loss for the year amounted to $554K or $0.04 per share, compared to a net loss of $1.6M or $0.12 per share for last fiscal year.
• Net loss for the first half of fiscal year 2007 was $865K. Following strategic restructuring, the Company became profitable in the second half with net earnings of $311K.
• After re-payment of the final $425K of long term debt and capital lease obligations, cash amounted to $7.2M at the end of fiscal 2007 compared to $6.9M at the end of last fiscal year.
• DSO (Days Sales Outstanding) was reduced to 76 days at the end of fiscal year 2007 compared to 87 days at the end of last fiscal year.

Loss from operations for fiscal year 2007 was $598K and includes $234K in restructuring charges that took effect in the second quarter. Loss from operations for fiscal year 2006 was $1.2M. After accounting for an exchange loss of $95K, net interest income of $173K and a share of net loss of $34K from a company in which TECSYS has an equity interest, net loss for fiscal year 2007 was $554K or $0.04 per share compared to a net loss of $1.6M or $0.12 per share for last fiscal year.

» View the Q4 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
Media relations: media@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. 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, 2006. These documents have been filed with the Canadian securities commissions and are available on our website (www.tecsys.com) and on SEDAR (www.sedar.com).

All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.