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TECSYS Reports 14% Revenue Growth in Q3, 2012

(March 01, 2012)

MONTREAL, QUEBEC -- (Marketwire) -- 03/01/12 -- TECSYS Inc. (TSX:TCS), an industry-leading supply chain management software company, announced today its results for the third quarter of fiscal year 2012, ended January 31, 2012. All dollar amounts are expressed in Canadian currency and are prepared in accordance with the International Financial Reporting Standards (IFRS) and are unaudited.

Highlights of the Third Quarter include:

-- Revenue increased 14% to $10.6M in Q3, 2012 from $9.3M in Q3, 2011. Q3, 2012 revenue excludes $769,000 in license fees booked during the quarter of which most will be recognized rateably over the next year. -- Backlog increased 18% to $24.6M at the end of Q3, 2012 from $20.8M at the end of Q3, 2011. -- Profit from operations for the third quarter, 2012 was $378K compared to $445K in Q3, 2011. -- Net profit for the quarter was $305K or $0.03 per share compared to $778K or $0.07 per share for the third quarter of last fiscal year. EBITDA for Q3, 2012 was $755K compared to $1,144K in Q3 of last fiscal year. The comparable quarter of last year included a revaluation of the fair value of asset backed commercial paper which increased net profit by $302K. -- At the end of Q3, 2012 annualized recurring revenue in Canadian currency increased 6% to $14.8M from $14M at the end of Q3, 2011. Annualized recurring revenue at the end of Q3, 2012 represented 40% of the Company's revenue for the last 12 months. -- Cash from operations amounted to $1.7M for the third quarter, 2012 up from $1.5M for the same quarter of the prior year. -- Cash, cash equivalents and other short-term investments amounted to $5.0M at the end of Q3, 2012, compared to $7.3M at the end of fiscal 2011 with no long-term debt.

TECSYS also announced today that the Company's Board of Directors has declared a semi-annual dividend of $0.03/share, to be paid on March 30th, 2012 to shareholders of record on March 16, 2012.


Peter Brereton, President and CEO of TECSYS Inc., commented on the results: "Q3 was a good quarter from a number of perspectives; we grew our revenue for both products and services, improved our recurring revenue, continued to strengthen our human resources infrastructure and following quarter end we announced five exciting products at a major industry show. The revenue growth reflects the improved market conditions we have experienced in recent months. It also reflects the resurgence of the heavy equipment service parts market which resulted in two of our new account wins in the quarter. Furthermore, our customer base invested significantly in our products and services and our services' organization accelerated the deployment of our software, completing the go-lives of nineteen customer sites. Service excellence remains a core part of our culture and we have increased our headcount, particularly in services, to continue to meet the needs of our growing customer base."

During the quarter, the Company won the business of eight new clients, including:

-- A healthcare products and services supplier in the U.S. -- Two major heavy equipment dealers in the U.S. -- A promotional products manufacturer and distributor in Canada -- A U.S.-based importer of packaged food ingredients -- An arts and crafts distributor in the U.S. -- Two industrial distributors in Canada

Highlights of the first Nine Months of fiscal year 2012 include:

-- Revenue for the first nine months, 2012 increased 6% to $28.7M compared to $27.2 for the same period of last fiscal year. -- Profit from operations for the first nine months, 2012 was $720K compared to $870K for the same period of last fiscal year. -- Net profit for the first nine months, 2012 was $584K or $0.05 per share compared to $1,079K or $0.09 per share for the same period of the prior fiscal year. EBITDA for the first nine months, 2012 was $1,802K compared to $2,117K for the same period in 2011. The comparable nine-month period of last year included a revaluation of the fair value of asset backed commercial paper which increased net profit by $302K.

TECSYS' Third Quarter 2012 Earnings Conference Call:

Subject: Third Quarter FY2012 Results Conference Call

Date: March 1, 2012

Time: 4:30 pm

Phone number: 800-269-0310 or 416-359-3126

The call can be replayed by calling 800-558-5253 (access code: 21580804) or 416-626-4100 (access code: 21580804).

Related link: Mobility and Point-Of-Use Innovations Driving TECSYS' WMS Well Beyond the Current Competitive Landscape (http://www.tecsys.com/company/news/2012/nr201201.shtml)

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 more than 500 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, 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, 2011. 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. 2011. 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, 2012, April 30, 2011 and May 1, 2010 (in thousands of Canadian dollars) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- January 31, April 30, May 1, 2012 2011 2010 ---------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents $ 4,460 $ 6,404 $ 7,256 Short-term and other investments 525 850 850 Asset-backed commercial paper - 3,584 - Accounts receivable 8,074 6,860 7,346 Work in progress 436 45 66 Other accounts receivable and derivatives 405 303 425 Tax credits 3,087 1,737 1,914 Inventory 797 180 171 Prepaid expenses 1,248 850 879 ---------------------------------------------------------------------------- Total current assets 19,032 20,813 18,907 ---------------------------------------------------------------------------- Non-current assets Restricted cash equivalents and other investments 200 200 200 Asset-backed commercial paper - - 3,514 Non-current receivables 15 23 48 Tax credits 1,123 1,123 930 Investment in equity-accounted associate 205 220 211 Property and equipment 2,911 2,268 2,395 Deferred development costs 2,422 2,448 1,991 Other intangible assets 352 288 364 Goodwill 2,239 2,239 2,239 Deferred tax assets 609 609 595 ---------------------------------------------------------------------------- Total non-current assets 10,076 9,418 12,487 ---------------------------------------------------------------------------- Total assets $ 29,108 $ 30,231 $ 31,394 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Liabilities Current liabilities Bank advances $ - $ 3,720 $ 3,951 Accounts payable and accrued liabilities 6,949 4,114 4,890 Loans payable 88 107 249 Provisions - - 415 Deferred revenue 6,608 6,344 5,827 ---------------------------------------------------------------------------- Total current liabilities 13,645 14,285 15,332 ---------------------------------------------------------------------------- Equity Share capital 1,683 1,467 1,386 Contributed surplus 10,059 10,993 12,103 Retained earnings 3,721 3,486 2,573 ---------------------------------------------------------------------------- Total equity attributable to the owners of the Company 15,463 15,946 16,062 ---------------------------------------------------------------------------- Total liabilities and equity $ 29,108 $ 30,231 $ 31,394 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- TECSYS Inc. Condensed Interim Consolidated Statements of Comprehensive Income (Unaudited) Three and nine-month periods ended January 31, 2012 and 2011 (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, 2012 2011 2012 2011 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Revenue: Products $ 4,202 $ 3,609 $ 10,050 $ 9,943 Services 6,177 5,477 18,021 16,555 Reimbursable expenses 216 213 626 666 ---------------------------------------------------------------------------- Total revenue 10,595 9,299 28,697 27,164 ---------------------------------------------------------------------------- Cost of revenue: Products 1,673 1,641 3,860 4,075 Services 4,127 3,553 11,669 10,710 Reimbursable expenses 216 213 626 666 ---------------------------------------------------------------------------- Total cost of revenue 6,016 5,407 16,155 15,451 ---------------------------------------------------------------------------- Gross profit 4,579 3,892 12,542 11,713 Operating expenses: Sales and marketing 1,820 1,391 4,894 4,637 General and administration 1,051 955 3,043 2,728 Research and development, net of tax credits 1,333 1,101 3,888 3,478 Other (3) - (3) - ---------------------------------------------------------------------------- Total operating expenses 4,201 3,447 11,822 10,843 ---------------------------------------------------------------------------- Profit from operations 378 445 720 870 ---------------------------------------------------------------------------- Finance income 6 317 22 325 Finance costs (57) 29 (143) (32) ---------------------------------------------------------------------------- Net finance (costs) income (51) 346 (121) 293 Share of net loss of equity- accounted associate (22) (13) (15) (61) ---------------------------------------------------------------------------- Profit before income taxes 305 778 584 1,102 ---------------------------------------------------------------------------- Income taxes - - - 23 ---------------------------------------------------------------------------- Profit attributable to the owners of the Company and comprehensive income for the period $ 305 $ 778 $ 584 $ 1,079 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Basic and diluted earnings per common share $ 0.03 $ 0.07 $ 0.05 $ 0.09 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- TECSYS Inc. Condensed Interim Consolidated Statements of Cash Flows (Unaudited) Three and nine-month periods ended January 31, 2012 and 2011 (in thousands of Canadian dollars) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Three Three Months Months Nine Months Nine Months Ended Ended Ended Ended January 31, January 31, January 31, January 31, 2012 2011 2012 2011 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Cash flows from operating activities: Profit for the period $ 305 $ 778 $ 584 $ 1,079 Adjustments for: Depreciation of property and equipment 202 212 557 475 Depreciation of other intangible assets 31 30 86 107 Depreciation of deferred development costs 216 150 571 424 Share-based compensation - 13 40 43 Net finance costs (income) 51 (346) 121 (293) Realized foreign exchange gains (losses) and others (102) 10 110 29 Share of net loss of equity- accounted associate 22 13 15 61 ---------------------------------------------------------------------------- Operating activities excluding changes in non-cash working capital items related to operations 725 860 2,084 1,925 Accounts receivable (623) (954) (1,214) (1,143) Work in progress (216) 156 (391) (86) Other accounts receivable (271) 109 (272) 255 Tax credits (473) 1,138 (1,350) 401 Inventory (632) (6) (617) (27) Prepaid expenses (249) (68) (398) (42) Accounts payable and accrued liabilities 2,526 419 2,540 978 Provisions - (415) - (415) Deferred revenue 909 296 264 (256) ---------------------------------------------------------------------------- Changes in non- cash working capital items related to operations 971 675 (1,438) (335) ---------------------------------------------------------------------------- Net cash from operating activities 1,696 1,535 646 1,590 ---------------------------------------------------------------------------- Cash flows from financing activities: Bank advances - (6) (3,720) (8) Repayment of loans (2) (142) (19) (142) Issuance of common shares - 77 190 104 Purchase of common shares for cancellation (341) (630) (398) (876) Purchase of share options for cancellation (2) - (339) - Payment of dividends - - (349) (305) Interest paid (3) (13) (14) (25) ---------------------------------------------------------------------------- Net cash used in financing activities (348) (714) (4,649) (1,252) ---------------------------------------------------------------------------- Cash flows from investing activities: Short-term and other investments - - 325 - Interest received 6 15 22 23 Proceeds from asset-backed commercial paper - 10 3,584 19 Acquisitions of property and equipment (864) (105) (1,200) (800) Proceeds on disposal of property and equipment 3 - 3 - Acquisitions of other intangible assets (45) (13) (150) (24) Deferred development costs (161) (222) (545) (743) Non-current receivables including the current portionfrom a related party 1 17 20 53 ---------------------------------------------------------------------------- Net cash (used in) from investing activities (1,060) (298) 2,059 (1,472) ---------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents during the period 288 523 (1,944) (1,134) Cash and cash equivalents - beginning of period 4,172 5,599 6,404 7,256 ---------------------------------------------------------------------------- Cash and cash equivalents - end of period $ 4,460 $ 6,122 $ 4,460 $ 6,122 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- TECSYS Inc. Condensed Interim Consolidated Statements of Changes in Equity (Unaudited) Nine-month periods ended January 31, 2012 and 2011 (in thousands of Canadian dollars, except number of shares) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Share capital Contributed Retained Total Number Amount surplus earnings ---------------------------------------------------------------------------- Balance, April 30, 2011 11,678,671 $ 1,467 $ 10,993 $ 3,486 $ 15,946 Profit and comprehensive income for the period - - - 584 584 ---------------------------------------------------------------------------- Total comprehensive income for the period - - - 584 584 ---------------------------------------------------------------------------- Repurchase of common shares (176,900) (22) (376) - (398) Repurchase of share options - - (279) - (279) Share options exercised 114,400 190 - - 190 Fair value associated with options exercised - 48 - - 48 Fair value of share options transferred to liabilities - - (319) - (319) Share-based compensation - - 40 - 40 Dividends to equity owners - - - (349) (349) ---------------------------------------------------------------------------- Total transactions with owners of the Company (62,500) 216 (934) (349) (1,067) ---------------------------------------------------------------------------- Balance, January 31, 2012 11,616,171 $ 1,683 $ 10,059 3,721 $ 15,463 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Balance, May 1, 2010 12,225,306 $ 1,386 $ 12,103 $ 2,573 $ 16,062 Profit and comprehensive income for the period - - - 1,079 1,079 ---------------------------------------------------------------------------- Total comprehensive income for the period - - - 1,079 1,079 ---------------------------------------------------------------------------- Repurchase of common shares (456,553) (52) (824) - (876) Stock options exercised 73,718 104 - - 104 Fair value associated with options exercised - 47 (47) - - Share-based compensation - - 43 - 43 Dividends to equity owners - - - (305) (305) ---------------------------------------------------------------------------- Total transactions with owners of the Company (382,835) 99 (828) (305) (1,034) ---------------------------------------------------------------------------- Balance, January 31, 2011 11,842,471 $ 1,485 $ 11,275 $ 3,347 $ 16,107 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

Contacts:
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


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