Press Release

FOR IMMEDIATE RELEASE Ref. #NRE2007-22

TECSYS Operating Earnings Reach $993K in Q2
Generates $1.3M in Cash

MONTREAL, November 27, 2007 — TECSYS Inc. (TSX: TCS), an industry-leading supply chain management software company announced today its results for the second quarter and first half of fiscal year 2008, ended October 31st, 2007. All dollar amounts are expressed in U.S. currency and reported in accordance with Canadian Generally Accepted Accounting Principles (GAAP) and are unaudited.

Highlights of the Second Quarter include:

• Total revenue increased by 29% to $9.7M in Q2 of fiscal 2008 from $7.6M in Q2 of fiscal 2007.
• Product revenue increased by 56% to $4.5M in Q2 of fiscal 2008 from $2.9M in Q2 of fiscal 2007.
• Services revenue increased by 13% to $5.0M in Q2 of fiscal 2008 from $4.4M in Q2 of fiscal 2007.
• Earnings from operations for the second quarter of fiscal 2008 were $993K compared to loss from operations of $644K for the same quarter of last fiscal year.
• EBITDA for Q2 of fiscal 2008 substantially improved to $749K compared to negative EBITDA of $411K for Q2 of fiscal 2007.
• Net earnings for the second quarter of fiscal 2008 were $427K or $0.03 per share after accounting for a foreign exchange loss of $327K and the $263K ABCP provision, compared to net loss of $691K or $0.05 per share for the second quarter of last fiscal year.
• Gross margin percentage increased to 49% in Q2 of fiscal 2008 compared to 36% in Q2 of last fiscal year. Gross margin improvement reflects an increase in gross margins of both products and services compared to the same period in last fiscal year.
• At the end of the quarter, backlog stood at $17.8M, up from $16.0M at the end of Q1 of this fiscal year.
• The Company generated $1.3M in cash from operations during the quarter.
  

The Company has taken a $263K provision against its ABCP holdings and is not accruing any interest against these holdings. This provision was calculated by using discounted cash flows and a combination of liquidity and credit risk factors using the information available to management at this time. The Company’s ABCP holdings are all “Series A” and over 98% continue to be rated as “AAA”, however, due to the continued scarcity of information, management cannot be more precise at this time.”

Midway through the quarter, the Company changed its software license policy resulting in more rapid recognition of license revenue.  In spite of this change, deferred license revenue increased during the quarter from $2.2M to $2.5M.  This change is more fully explained in the MD&A.

Peter Brereton, President and CEO of TECSYS Inc. commented on the results: “Q2 was a great quarter. In spite of strong currency headwinds, we continued to see substantial gains in revenue and earnings with product revenue soaring 56%. We won several key new accounts and continued our growth in the heavy equipment market. The combination of continued investment from our customer base and these new account wins has resulted in the highest quarterly revenue and operating earnings in our company’s history.”

The Company signed four new customers, including:

• A major heavy equipment dealer in the state of Texas
• A manufacturer and distributor of fireplaces and accessories in Ontario
• A major wholesaler of hardware and renovation supplies in the state of Texas
• A large North American wholesaler of periodicals and books

For the six months ended October 31, 2007, revenue increased by 14% to $17.5M compared to $15.4M in the same period of the prior fiscal year. Earnings from operations for the first half of fiscal year 2008 were $1,134K compared to loss from operations of $900K in the same period of the prior fiscal year. After accounting for an exchange loss of $455K, net interest income of $97K and a provision for ABCP holdings of $263K, net earnings for the first half of fiscal year 2008 were $509K or $0.04 per share compared to net loss of $865K or $0.06 per share for the same period of the prior fiscal year.

TECSYS’ Second Quarter, Fiscal 2008 Earnings Conference Call:

Date: November 27, 2007
Time: 4:30 pm
Phone number: 800-734-1279 or 416-620-9810
The call can be replayed by calling 800-558-5253 (access code: 21357447)
or 416-626-4100 (access code: 21357447).

» View the Q2 Financial Statements ( 143 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, 2007. 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).

Copyright © TECSYS Inc. 2007. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.