MONTREAL, QUEBEC--(Marketwired - March 1, 2016) - TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, today announced its results for the third quarter of fiscal year 2016, ended January 31^st, 2016. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS) and are unaudited.

Third Quarter Highlights:

• Recurring revenue on an annualized basis grew to $25.3M, a 19% improvement compared to the end of Q3 2015, representing 41% of the last 12 months trailing revenue.
• Revenue grew 4% to $15.6M in Q3 2016 compared to $15.0M in Q3 2015.
• Proprietary products revenue declined 24% to $2.5M compared to $3.3M in Q3 2015.
• Services revenue improved by 25% to $10.5M compared to $8.4M in Q3 2015. Gross margin on services improved to 45% compared to 35% in Q3 2015.
• Gross margin in Q3 2016 improved to 51% compared to 47% in Q3 2015.
• Operating expenses continued to be flat for the third consecutive quarter at $7.3M.
• EBITDA grew 4% to $1.3M for Q3 2016. EBITDA margin remained flat at 9% compared to Q3 2015.
• Profit from operations was $604K in Q3 2016, compared to $630K in Q3 2015.
• Net profit for Q3 2016 was $543K, or $0.04 per share, compared to $467K, or $0.04 per share, for the same period of the prior fiscal year.
• Total contract bookings totaled $9.0M in Q3 2016, compared to $12.0M in Q3 2015.
• Backlog grew to $50.3M at the end of Q3 2016 from $40.8M at the end of Q3 2015, a 23% increase.
• Cash and cash equivalents totaled $8.8M at the end of Q3 2016 compared to $10.8M at the end of Q4 2015. Long-term debt was reduced by $1.1M during the first nine months of fiscal 2016.
• Signed one new IDN contract and one community hospital. The IDN is a large, U.S. Midwest-based hospital network of 90 to 100 hospitals, about twice the size of the Company's next largest IDN under contract. The community hospital signed during the quarter is a not-for-profit hospital located in Ohio.

"We were pleased to see that we grew recurring revenue by 19% this quarter as it is a key driver to value creation," said Peter Brereton, President and CEO of TECSYS Inc. "Our services revenue grew by 25% primarily as a result of the strong backlog at the beginning of the quarter. We were also able to leverage our services organization, improving gross margin to 45% compared to 35% in the corresponding quarter of last year. While this was not a high growth quarter from a revenue standpoint, we were in the final stages of a product build cycle for which we have firm orders for our next generation product line."

"We have significantly ramped up our investment in Sales & Marketing over the last 18 months. We are satisfied with the progress being made with the larger team and expect to see this starting to impact our top line in the coming months. Our backlog hit a new record and we have signed our largest IDN in our history during the quarter after signing another marquee name in Q2. This type of client represents great opportunity for further expansion of the business relationship," Mr. Brereton added.

Highlights of the first nine months:

• Revenue for the first nine months of fiscal 2016 was $46.3M, up 12% from $41.5M in the first nine months of last fiscal year.
• EBITDA for the first nine months of fiscal 2016 was $3.3M, compared to $3.4M for the same period of the last fiscal year.
• Profit from operations for the first nine months of fiscal 2016 was $1.3M compared to $1.6M in the same period of fiscal 2015.
• Net profit for the first nine months of fiscal 2016 was $979K, or $0.08 per share, compared to $1.2M, or $0.11 per share, for the same period of the prior fiscal year.
• Total contract bookings for the first nine months of fiscal 2016 totaled $29.1M, which includes nine new accounts signed by the Company with a total contract value of $6.1 million.

TECSYS also announced that the Company's Board of Directors has declared a quarterly dividend of $0.025 per share, to be paid on April 12, 2016 to shareholders of record at the close of business on March 22, 2016.

Third Quarter 2016 Results Conference Call

Date: March 2, 2016

Time: 8:30 am EST

Phone number: 416-359-3130 or 800-670-5957

The call can be replayed by calling 800-558-5253 or 416-626-4100 (access code: 21806779).

About TECSYS

TECSYS provides transformative supply chain solutions that equip our customers to succeed in a rapidly-changing omni-channel world. TECSYS solutions are built on a true enterprise supply chain platform, and include warehouse management, distribution and transportation management, as well as complete financial management and analytics. Customers running on TECSYS' Supply Chain Platform are confident knowing they can execute, day in and day out, regardless of business fluctuations or changes in technology, they can adapt and scale to any business needs or size, and they can expand and collaborate with customers, suppliers and partners as one borderless enterprise. From demand planning to demand fulfillment, TECSYS puts power into the hands of both front line workers and back office planners, and unshackles business leaders so they can see and manage their supply chains like never before.

TECSYS is the market leader in supply chain solutions for health systems and hospitals. Over 600 mid-size and Fortune 1000 customers trust their supply chains to TECSYS in the healthcare, service parts, third-party logistics, and general wholesale high-volume distribution industries. TECSYS' shares are listed on the Toronto Stock Exchange under the ticker symbol TCS.

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, 2015. 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. 2016. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.

TECSYS Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
As at January 31, 2016 and April 30, 2015
(in thousands of Canadian dollars)
			January 31,			April 30,
			2016			2015
Assets
Current assets
	Cash and cash equivalents	$	8,778		$	10,815
	Accounts receivable		13,538			12,570
	Work in progress		699			704
	Other accounts receivable		658			434
	Tax credits		4,314			5,369
	Inventory		879			1,059
	Prepaid expenses		1,781			1,394
Total current assets			30,647			32,345
Non-current assets
	Tax credits		1,763			1,538
	Property and equipment		2,423			2,526
	Deferred development costs		4,113			4,348
	Other intangible assets		1,887			2,184
	Goodwill		3,596			3,596
	Deferred tax assets		636			840
Total non-current assets			14,418			15,032
Total assets		$	45,065		$	47,377
Liabilities
Current liabilities
	Accounts payable and accrued liabilities	$	8,406		$	8,817
	Current portion of long-term debt		1,438			1,456
	Deferred revenue		9,715			10,098
Total current liabilities			19,559			20,371
Non-current liabilities
	Long-term debt		2,265			3,333
	Other non-current liabilities		298			311
Total non-current liabilities			2,563			3,644
Total liabilities			22,122			24,015
Equity
	Share capital		8,349			8,349
	Contributed surplus		9,577			9,577
	Retained earnings		5,396			5,341
	Accumulated other comprehensive (loss) income		(379	)		95
Total equity attributable to the owners of the Company			22,943			23,362
Total liabilities and equity		$	45,065		$	47,377

TECSYS Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three and nine-month periods ended January 31, 2016 and 2015
(in thousands of Canadian dollars, except per share data)
			Three Months			Three Months			Nine Months			Nine Months
			Ended			Ended			Ended			Ended
			January 31,			January 31,			January 31,			January 31,
			2016			2015			2016			2015
Revenue:
	Proprietary products	$	2,534		$	3,336		$	7,682		$	8,641
	Third-party hardware and software products		2,173			2,798			6,329			6,303
	Services		10,502			8,415			30,990			25,254
	Reimbursable expenses		420			409			1,321			1,320
Total revenue			15,629			14,958			46,322			41,518
Cost of revenue:
	Products		1,492			2,011			5,014			4,633
	Services		5,798			5,468			16,858			15,791
	Reimbursable expenses		420			409			1,321			1,320
Total cost of revenue			7,710			7,888			23,193			21,744
Gross profit			7,919			7,070			23,129			19,774
Operating expenses:
	Sales and marketing		3,601			3,230			10,696			8,776
	General and administration		1,387			1,340			4,147			4,288
	Research and development, net of tax credits		2,327			1,870			6,974			5,074
Total operating expenses			7,315			6,440			21,817			18,138
Profit from operations			604			630			1,312			1,636
Net finance (income) costs			(49	)		28			23			106
Profit before income taxes			653			602			1,289			1,530
Income taxes			110			135			310			310
Profit attributable to the owners of the Company		$	543		$	467		$	979		$	1,220
Other comprehensive loss:
	Effective portion of changes in fair value on designated revenue hedges		(247	)		(460	)		(474	)		(647	)
Comprehensive income attributable to the owners of the Company		$	296		$	7		$	505		$	573
Basic and diluted earnings per common share		$	0.04		$	0.04		$	0.08		$	0.11

TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Nine-month periods ended January 31, 2016 and 2015
(in thousands of Canadian dollars)
			Nine Months			Nine Months
			Ended			Ended
			January 31,			January 31,
			2016			2015
Cash flows from (used in) operating activities:
Profit for the period		$	979		$	1,220
Adjustments for:
	Depreciation of property and equipment		559			557
	Depreciation of deferred development costs		1,054			962
	Depreciation of other intangible assets		371			316
	Gain on disposal of property and equipment		(12	)		-
	Net finance costs		23			106
	Unrealized foreign exchange and others		532			936
	Federal non-refundable research and development tax credits		(225	)		(225	)
	Income taxes		225			225
	Operating activities excluding changes in non-cash working capital items related to operations		3,506			4,097
	Accounts receivable		(968	)		(3,085	)
	Work in progress		5			(792	)
	Other accounts receivable		(440	)		(236	)
	Tax credits		1,055			(1,874	)
	Inventory		180			(163	)
	Prepaid expenses		(387	)		(127	)
	Accounts payable and accrued liabilities		(1,148	)		1,733
	Deferred revenue		(383	)		293
	Changes in non-cash working capital items related to operations		(2,086	)		(4,251	)
Net cash from (used in) operating activities			1,420			(154	)
Cash flows (used in) from financing activities:
	Repayment of bank loans		-			(140	)
	Repayment of long-term debt		(1,086	)		(795	)
	Long-term debt		-			50
	Purchase of share options for cancellation		(6	)		(13	)
	Payment of dividends		(924	)		(779	)
	Interest paid		(106	)		(99	)
Net cash used in financing activities			(2,122	)		(1,776	)
Cash flows (used in) from investing activities:
	Restricted cash equivalents		-			40
	Interest received		52			18
	Acquisitions of property and equipment		(506	)		(219	)
	Proceeds on disposal of property and equipment		12			-
	Acquisitions of other intangible assets		(74	)		(255	)
	Deferred development costs		(819	)		(1,147	)
	Receivables from TECSYS Latin America Inc.		-			26
	Business combination, net of cash and cash equivalents acquired		-			(2,949	)
Net cash used in investing activities			(1,335	)		(4,486	)
Net decrease in cash and cash equivalents during the period			(2,037	)		(6,416	)
Cash and cash equivalents - beginning of period			10,815			8,839
Cash and cash equivalents - end of period		$	8,778		$	2,423

TECSYS Inc.

Condensed Interim Consolidated Statements of Changes in Equity

(Unaudited)

Nine-month periods ended January 31, 2016 and 2015

(in thousands of Canadian dollars, except number of shares)

								Accumulated
			Share capital			Contributed		other			Retained			Total
			Number	Amount		surplus		comprehensive			earnings
								income (loss)
Balance, April 30, 2015			12,315,326	$	8,349	$	9,577	$	95		$	5,341		$	23,362
	Profit for the period		-		-		-		-			979			979
	Other comprehensive loss for the period:
		Effective portion of changes in fair value on designated revenue hedges	-		-		-		(474	)		-			(474	)
Total comprehensive income for the period			-		-		-		(474	)		979			505
	Dividends to equity owners		-		-		-		-			(924	)		(924	)
Total transactions with owners of the Company			-		-		-		-			(924	)		(924	)
Balance, January 31, 2016			12,315,326	$	8,349	$	9,577	$	(379	)	$	5,396		$	22,943
Balance, April 30, 2014			11,524,421	$	2,153	$	9,577	$	-		$	4,864		$	16,594
	Profit for the period		-		-		-		-			1,220			1,220
	Other comprehensive loss for the period:
		Effective portion of changes in fair value on designated revenue hedges	-		-		-		(647	)		-			(647	)
Total comprehensive income for the period			-		-		-		(647	)		1,220			573
	Common shares issued related to purchase of Logi D Holding Inc.		15,625		100		-		-			-			100
	Dividends to equity owners		-		-		-		-			(779	)		(779	)
Total transactions with owners of the Company			15,625		100		-		-			(779	)		(679	)
Balance, January 31, 2015			11,540,046	$	2,253	$	9,577	$	(647	)	$	5,305		$	16,488