TECSYS reports flat profits on increased revenues

The supply chain management software company posted a net profit of for $543K in the third quarter of its fiscal year 2016, which ended Jan. 31, up slightly from $467K in the same period of the prior fiscal year.    TECSYS Inc. posted a net profit of for $543K in the third quarter of its fiscal year 2016, which ended Jan. 31, up slightly from $467K in the same period of the prior fiscal year, according to the company’s most recent financial statements. Earnings per share remained flat during the quarter at $0.04 per share.
   Revenues at the supply chain management software company, however, grew 4 percent year-over-year to $15.6 million in Q3 2016.
   TECSYS said it set a quarterly record for recurring revenue on an annualized basis of $25.3 million, a 19 percent increase from the end of Q3 2015.
   Total contract bookings totaled $9.0 million in the third quarter of fiscal 2016, down from $12.0 million the previous year, while backlog grew 23 percent year-over-year to $50.3 million.
   “We were pleased to see that we grew recurring revenue by 19% this quarter as it is a key driver to value creation,” Peter Brereton, president and CEO of TECSYS Inc., said of the results. “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,” added Brereton. “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 [hospital network] in our history during the quarter after signing another marquee name in Q2.”
   Montreal, Quebec-based TECSYS Inc. specializes in supply chain solutions for health systems and hospitals, with over 600 midsize and Fortune 1000 customers in the healthcare, service parts, third-party logistics, and general wholesale high-volume distribution industries.
   The company said during the third quarter it signed a new IDN contract with a U.S. Midwest-based hospital network of 90 to 100 hospitals, about twice the size of the TECSYS’s next largest IDN under contract.
   TECSYS’s board of directors also 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.