Mr. Peter Brereton reports

TECSYS REPORTS RECORD REVENUE FOR THE FOURTH QUARTER AND FULL YEAR FISCAL 2023

TECSYS Inc. has released its results for the fourth quarter and full year of fiscal year 2023 ended April 30, 2023. All dollar amounts are prepared in accordance with international financial reporting standards (IFRS).

"Our solid performance in the fourth quarter closes out a remarkable year underpinned by strong growth. It's fitting that the year we celebrate our 40th anniversary in business, we are reporting just under 40-per-cent year-over-year growth in [software-as-a-service] revenue and SaaS bookings, and over 40-per-cent year-over-year growth in [remaining performance obligation]," said Peter Brereton, president and chief executive officer at TECSYS. "With a supply chain industry in flux and companies actively sourcing and selecting their next supply chain technology partner, we enter fiscal 2024 with confidence that our business is well positioned to seize that opportunity and expand our presence in a rapidly growing market."

Mark Bentler, chief financial officer of TECSYS, added: "This is our first fiscal year where SaaS revenue represents over half of our recurring revenue. With a record revenue quarter led by 44-per-cent SaaS revenue growth, we are proud of the transformative effect our SaaS offerings are having on our business and the value we believe they will create for our stakeholders. By its recurring nature, growing SaaS revenue provides greater visibility into future revenue. With that in mind, we have decided to start providing financial guidance on several key metrics, which you will see below."

Fourth quarter highlights:

• SaaS revenue increased by 44 per cent to $11.1-million, up from $7.7-million in Q4 2022.
• SaaS subscription bookings (i) (measured on an annual recurring revenue (i) basis) decreased by 13 per cent to $3.9-million, compared with $4.5-million in the fourth quarter of fiscal 2022.
• SaaS remaining performance obligation (i) increased by 47 per cent to $137.7-million at April 30, 2023, up from $94.0-million at the same time last year.
• Annual recurring revenue (i) at April 30, 2023, was up 25 per cent to $78.3-million compared with $62.7-million at April 30, 2022.
• Professional service revenue was up 13 per cent to $14.6-million compared with $12.9-million in Q4 2022.
• Total revenue excluding hardware revenue was $34.3-million, 17 per cent higher than $29.2-million reported for Q4 last year, while total revenue rose 20 per cent to reach a record $41.2-million.
• Gross margin was 45 per cent for the fourth quarter of fiscal 2023 compared with 44 per cent for the same period in fiscal 2022.
• Total gross profit increased to $18.4-million, up 21 per cent from $15.1-million in Q4 2022.
• Operating expenses increased to $17.0-million, higher by $3.2-million or 23 per cent compared with $13.8-million in Q4 last year.
• Profit from operations was $1.4-million, up from $1.3-million in Q4 2022.
• Net profit was $400,000 or three cents per share on a fully diluted basis in Q4 2023, compared with $2.6-million or 17 cents per share for the same period in fiscal 2022.
• Adjusted earnings before interest, taxes, depreciation and amortization (ii) were $2.4-million, up 42 per cent compared with $1.7-million reported in Q4 last year.

Fiscal 2023 highlights:

• SaaS revenue increased by 39 per cent to $37.5-million, up from $26.9-million in the same period of fiscal 2022.
• SaaS subscription bookings (i) (measured on an ARR (i) basis) increased to $16.4-million, 38 per cent higher from $11.9-million in the same period of fiscal 2022.
• Professional service revenue was up 6 per cent to $55.4-million compared with $52.0-million in the same period of fiscal 2022.
• Total revenue excluding hardware revenue was $128.7-million, 12 per cent higher than $114.5-million reported for the same period of fiscal 2022, while total revenue reached a record $152.4-million.
• Gross margin was 44 per cent for both fiscal 2023 and fiscal 2022.
• Total gross profit increased to $66.8-million, up 11 per cent from $60.3-million in the same period of fiscal 2022.
• Operating expenses increased to $63.2-million, higher by $8.3-million or 15 per cent compared with $54.9-million in fiscal 2022.
• Profit from operations was $3.6-million, down from $5.4-million in the same period of fiscal 2022.
• Net profit was $2.1-million, or 14 cents per diluted share, in fiscal 2023, compared with a net profit of $4.5-million, or 30 cents per diluted share, for fiscal 2022.
• Adjusted EBITDA (ii) was $9.5-million, down 6 per cent compared with $10.1-million reported in the same period in fiscal 2022.

Financial guidance

TECSYS is presenting financial guidance.

                        FINANCIAL GUIDANCE

                            FY 2024 guidance   FY 2025 guidance

Total revenue growth                  10%-15%               n.a.         
SaaS revenue growth                   35%-37%               n.a.         
Adjusted EBITDA (ii) margin                6%              8%-9%         

On June 29, 2023, the company declared a quarterly dividend of 7.5 cents per share to be paid on Aug. 4, 2023, to shareholders of record on July 14, 2023.

Pursuant to the Canadian Income Tax Act, dividends paid by the company to Canadian residents are considered to be eligible dividends.

(i) See key performance indicators in management's discussion and analysis of the 2023 financial statements.

(ii) See non-IFRS performance measures in management's discussion and analysis of the 2023 financial statements.

Fourth quarter and full-year fiscal 2023 results conference call

Date:  June 30, 2023

Time:  8:30 a.m. EDT

Phone number:  877-224-6304 or 416-620-9188

The call can be replayed until July 7, 2023, by calling 800-558-5253 or 416-626-4100 (access code: 22027339).

About TECSYS Inc.

Since its founding 40 years ago, much has changed in the realm of supply chain technology. One thing has remained constant: By developing dynamic and innovative supply chain solutions, TECSYS has been equipping organizations for growth and competitive advantage. Serving health care, distribution and converging commerce industries and spanning multiple complex, regulated and high-volume markets, TECSYS delivers warehouse management, distribution and transportation management, supply management at point of use, and retail order management, as well as complete financial management and analytics solutions.

TECSYS's shares are listed on the Toronto Stock Exchange under the ticker symbol TCS.

We seek Safe Harbor.