Tecsys Reports Financial Results for Fourth Quarter and Full Year Fiscal 2020
Record SaaS Bookings, Record Revenue Drive Strong Performance Across All Segments.
Montreal July 8, 2020 — Tecsys Inc. (TSX: TCS), an industry-leading supply chain management software company, today announced its results for the fourth quarter and full year of fiscal year 2020, ended April 30, 2020. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).
Fourth Quarter Highlights:
- Total revenue was a record $27.7 million, 20% higher than $23.2 million reported for Q4 2019.
- In the fourth quarter of 2020, SaaS subscription bookingsi (measured on an Annual Recurring Revenue (ARRi) basis) were a record $4.1 million, up 356% compared to $0.9 million reported for Q4 2019.
- Cloud, Maintenance and Subscription Revenue increased 14% year-over-year to $10.6 million in Q4 2020 from $9.4 million in Q4 2019. The increase was primarily driven by SaaS.
- Total ARRi at April 30, 2020 was $48.1 million, up 26% compared to $38.3 million at April 30, 2019 and up 13% from $42.5 million at January 31, 2020.
- During Q4 2020, the Company signed eight new accounts with a total contract value of $25.4 million compared to nine new accounts with a total contract value of $6.7 million in Q4 2019.
- Professional services revenue was $10.8 million, 20% higher than $9.0 million reported for Q4 2019. Professional services bookingsiin Q4 2020 increased 127% or $11.6 million to $20.7 million from $9.1 million in Q4 2019. Sequentially, professional services bookingsiis also up 60% from Q3 2020.
- Total gross profit increased to $12.9 million, up 18% from $10.9 million reported for Q4 2019.
- Total gross profit margin declined slightly to 46% in Q4 2020 compared to 47% reported in Q4 2019. Operating expenses increased to $12.3 million, higher by $0.6 million or 5% compared to $11.7 million in Q4 2019. Profit from operations was $0.6 million, compared to a loss of $0.8 million reported for Q4 2019.
- Net Profit was $0.4 million or $0.03 per share in Q4 2020 compared to $0.1 million or $0.01 per share reported for the same period in fiscal 2019.
- Adjusted EBITDAii was $2.0 million in Q4 2020 compared to $0.7 million reported for Q4 2019.
“Fiscal 2020 was another exciting year for Tecsys,” said Peter Brereton, president and CEO of Tecsys Inc. “The rapid shift to SaaS has proven to be a tremendous value creator for our company. Against almost all internal metrics we are meeting, or exceeding, our goals. In fiscal 2020, we signed 34 new accounts with a total contract value of $52.7 million compared to 23 new accounts with a total contract value of $15.4 million in fiscal 2019. This is an increase of 242%. On the healthcare front, fiscal 2020 was another strong year. We added 6 new hospital networks. We are confident that the ongoing expansion of our product suite and growing global reach should help us to continue to attain strong bookings going forward.”
“On March 11, 2020, the COVID-19 outbreak was declared a global pandemic,” continued Brereton. “Tecsys is well-equipped to uphold comprehensive support and services for its end-to-end supply chain execution software through its multi-tiered customer care and support teams. Employees are now working remotely and supporting Tecsys’ customers and partners. Work that was historically done both on site and remotely is now supported remotely by our employees. To date, Tecsys’ ability to continue to progress sales cycles, sign new orders and execute project implementations has not been affected adversely by the pivot to remote work. While Tecsys anticipates that some client projects may be postponed or delayed during the pandemic, other client projects are starting up. Based on current activity and considering the Corporation’s significant project backlog, Tecsys believes that this outbreak is not having any material adverse impact on its operating results. Moreover, Tecsys is not currently experiencing or anticipating any material credit losses as a result of the pandemic. In short, we are weathering these unprecedented challenges very well indeed.”
Mark Bentler, chief financial officer of Tecsys Inc., added, “Our transition from perpetual license revenues to SaaS which helps us to deliver a more robust, predictable recurring revenue stream accelerated through fiscal 2020. This pace of transition continues to exceed our own internal forecasts. In fiscal 2020, SaaS subscription bookings comprised approximately 77% of our software product bookings compared to 33% in fiscal 2019. Even adjusting for the currency tailwind we enjoyed during the year, all KPI’s were very strong.”
Fiscal 2020 Highlights:
- Revenue for fiscal 2020 was $104.9 million, up 37% from $76.4 million reported for the previous fiscal year. Organic revenue growth (adjusting for acquisitions) was 14%.
- SaaS subscription bookingsi(measured on an ARRibasis) were $8.8 million in fiscal 2020, up 486% compared to $1.5 million in fiscal 2019.
- Total gross profit increased to $50.3 million, up $12.9 million or 34% in fiscal 2020 compared to $37.4 million in fiscal 2019.
- Total gross profit margin declined slightly to 48% compared to 49% reported for fiscal 2019.
- Operating expenses are $45.6 million, an increase of 16% compared to $39.2 million reported for the previous fiscal year. The majority of the increase is attributable to the acquisitions of Tecsys A/S (formerly known as PCSYS A/S) and OrderDynamics, which contributed $5.6 million of the increase.
- Profit from operations was $4.7 million compared to a loss from operations of $1.8 million reported for fiscal 2019.
- Net profit for fiscal 2020 was $2.3 million, or $0.18 per share, compared to a loss of $0.7 million or ($0.06) per share, for fiscal 2019.
- Adjusted EBITDAiifor the year was $10.3 million, up 267% compared to $2.8 million reported for fiscal 2019.
- Total contract bookingsifor fiscal 2020 were $112.7 million, up 78% from $63.2 million in fiscal 2019. The increase was comprised of organic bookings growth of as well as increased bookings from acquisitions.
The Company has declared a quarterly dividend of $0.06 per share to be paid on August 7, 2020 to shareholders of record at the close of business on July 24, 2020. Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be “eligible” dividends.
iSee Key Performance Indicators in Management’s Discussion and Analysis of the 2020 Financial Statements.
iiSee Non-IFRS Performance Measure in Management’s Discussion and Analysis of the 2020 Financial Statements.
For financial tables click here
Fourth Quarter 2020 Results Conference Call Date: July 9 2020
Time: 8:30 a.m. EDT
Phone number: (800)768-9711 or (416) 981-9013
The call can be replayed until July 16, 2020 by calling (800) 558-5253 or (416) 626-4100 (access code: 21965143).
Tecsys is a global provider of supply chain solutions that equip the borderless enterprise for growth. Organizations thrive when they have the software, technology and expertise to drive operational greatness and deliver on their brand promise. Spanning healthcare, retail, service parts, third-party logistics, and general wholesale high-volume distribution industries, Tecsys delivers dynamic and powerful solutions for warehouse management, distribution and transportation management, supply management at point of use, retail order management, as well as complete financial management and analytics solutions.
Tecsys’ shares are listed on the Toronto Stock Exchange under the ticker symbol TCS. For more information on Tecsys, visit www.tecsys.com.
Forward Looking Statements
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, 2020. 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. 2020. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.