TORONTO, Feb. 21, 2018 /CNW/ - NexJ Systems Inc. (TSX: NXJ), a provider of intelligent customer management solutions
to the financial services industry, today announced financial results for its fourth quarter ended December 31, 2017.
Highlights
- $27.5M in revenue for the year represents an 18% decrease from prior year
- $27K in Adjusted EBITDA for the year from Adjusted EBITDA of $4.2M for the prior year
- $1.9M of net loss for the year from the net income of $334K for
the prior year
- $6.2M of revenue for the fourth quarter represents a 35% decrease from the same period in the
prior year
- $492K in Adjusted EBITDA loss for the fourth quarter from the Adjusted EBITDA of $2M for the same period in the prior year
- $689K of net loss for the fourth quarter from the net income of $2M for the same period in the prior year
"Our growth objectives were impacted by extended sales cycles. We are pleased to have signed and started the project at
Emirates National Bank of Dubai which demonstrates further momentum in corporate and commercial
banking", said William M. Tatham, Chief Executive Officer of NexJ. "We look forward to our newly
appointed President, Paul O'Donnell, accelerating our future organic growth and OEM/Partner
distribution."
Conference Call Information
NexJ will be hosting an earnings report conference call on February 21, 2018 at
5:00 p.m. ET. The call can be accessed via webcast or by phone by dialing 647-427-7450 (Toronto local or international)
or 1-888-231-8191 (North America Toll Free). Investors should dial in approximately 10 minutes before the teleconference is
scheduled to begin.
A replay of the call will be available beginning on February 21, 2018 at 8:00
p.m. ET through 11:59 p.m. on February 28, 2018 and can be accessed by dialing 416-849-0833
(Toronto local) or toll-free at 1-855-859-2056 and using password 4649409.
NexJ Systems Inc.
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Fourth Quarter Financial Results
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(Expressed in thousands of Canadian dollars)
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(Unaudited)
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Quarter ended December 31,
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Year ended December 31,
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2017
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2016
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2017
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2016
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Revenue:
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$
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$
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$
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$
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License fees
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659
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2,367
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5,786
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5,821
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Professional services
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3,314
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5,234
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13,494
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20,087
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Maintenance and support
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2,274
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1,975
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8,222
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7,613
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6,247
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9,576
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27,502
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33,521
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Expenses:
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Professional services
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2,401
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2,626
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10,461
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11,594
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Research and development, net
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1,895
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1,727
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7,337
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7,388
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Sales and marketing
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1,053
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1,484
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4,167
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4,828
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General and administrative, net
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1,390
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1,691
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5,510
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5,522
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6,739
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7,528
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27,475
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29,332
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Adjusted EBITDA
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(492)
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2,048
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27
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4,189
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Loss from discontinued operation
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-
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-
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-
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252
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Impairment of loan receivable and
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shared
services
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-
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170
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-
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1,630
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Share-based payment expense
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30
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146
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217
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923
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Depreciation and amortization
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225
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213
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920
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857
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Deferred share unit expense
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-
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-
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200
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-
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Income (loss) from operations
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(747)
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1,519
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(1,310)
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527
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Foreign exchange loss (gain)
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(21)
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(404)
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715
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270
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Finance income
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(37)
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(27)
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(95)
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(77)
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Net income (loss)
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(689)
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1,950
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(1,930)
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334
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Non-IFRS Measures
This news release includes certain measures that have not been prepared in accordance with International Financial
Reporting Standards ("IFRS") such as Adjusted EBITDA and Adjusted EBITDA margin which are used to evaluate the Company's
operating performance as a complement to results provided in accordance with IFRS. The Company believes that Adjusted
EBITDA and Adjusted EBITDA margin are useful supplemental information as it provides an indication of the results generated by
the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also
prior to taking into consideration asset depreciation and the other items listed below.
The term "Adjusted EBITDA" refers to net income (loss) before adjusting for loss from discontinued operation, share-based
payment expense, depreciation and amortization, impairment charge on non-financial assets, impairment of loan receivable and
shared services, deferred share unit expense, foreign exchange gain (loss), finance income, finance costs, and income taxes.
"Adjusted EBITDA margin" refers to the percentage that Adjusted EBITDA for any period represents as a portion of total
revenue for that period.
The term Adjusted EBITDA and Adjusted EBITDA margin are not measures recognized by IFRS and do not have standardized meanings
prescribed by IFRS. Therefore, Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similar measures
presented by other issuers. Investors are cautioned that Adjusted EBITDA and Adjusted EBITDA margin should not be construed
as an alternative to net income (loss) as determined in accordance with IFRS.
About NexJ Systems Inc.
NexJ Systems is a provider of Intelligent Customer Management products for the financial services industry.
Individually, NexJ's award winning products use artificial intelligence to improve customer service and increase advisor and
banker productivity. Together, the Intelligent Customer Management suite delivers a continuously-learning, cognitive
application that recommends the right intelligence-augmented actions for users to deliver personalized customer service at scale
and grow their business.
Based in Toronto, NexJ has clients throughout North America,
Asia Pacific and in Europe. For more information about NexJ
visit www.nexj.com, e-mail info@nexj.com, or call 416-222-5611. Join us on LinkedIn, follow us on Twitter, subscribe to our YouTube channel, like us on Facebook or hang out with us on Google+.
NexJ Forward-looking Statement
Certain statements in this press release, including statements about the financial conditions, and results of operations and
earnings, may contain words such as "could", "expects", "may", "should", "will", "anticipates", "believes", "intends",
"estimates", "targets", "plans", "envisions", "seeks" and other similar language and are considered forward-looking statements or
information under applicable securities laws. These statements are based on the Company's current expectations, estimates,
forecasts and projections about the operating environment, economies and markets in which the Company operates. These
statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome
may be materially different. The Company's assumptions, although considered reasonable by the Company at the date of this
press release, may provide to be inaccurate and consequently the Company's actual results could differ materially from the
expectations set out herein.
Actual results or events could differ materially from those contemplated in forward-looking statements as a result of the
following: (i) the future performance, financial and otherwise, of NexJ; (ii) the ability of NexJ to protect, maintain and
enforce its intellectual property rights; (iii) the acceptance by the Company's customers and the marketplace of new technologies
and solutions; (iv) the Company's growth and profitability prospects; (v) the estimated size and growth prospects of the CRM
market; (vi) the Company's competitive position in the CRM market and its ability to take advantage of future opportunities in
this market; (vii) the Company's ability to attract new customers and develop and maintain existing customers; and (viii) the
demand for the Company's product and the extent of deployment of the company's products in the CRM marketplace.
Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or
circumstances.
The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) our dependence on
a limited number of customers and large project size; (ii) fluctuation in our quarterly operating results; (iii) our dependence
on key personnel and our compensation structure; (iv) risks associated with managing large and complex software implementation
projects; (v) uncertainties and assumptions in our sales forecasts, including the extent to which sales proposals are converted
into sales; (vi) risks associated with our ability to design, develop, test, market, license and support our software products on
a timely basis; (vii) market acceptance of our products and services; (viii) commercial success of products resulting from our
investment in research and development; (ix) our success in expanding sales into new international markets; * competition in our
industry; (xi) failure to protect our intellectual property or infringement of intellectual property rights of third parties;
(xii) reliance upon a limited number of third-party software products to develop our products; (xiii) defects or disruptions in
our products and services; (xiv) currency exchange rate fluctuations; (xv) lengthy sales cycles for our software; (xvi) global
financial market conditions; (xvii) failure to manage our growth successfully; and (xiii) failure to successfully manage and
integrate acquisitions.
For additional information with respect to risks and other factors which could occur, see the Company's most recently filed
Annual Information Form for the year ended December 31, 2017 dated February
21, 2018, and other securities filings with the Canadian securities regulators available on www.sedar.com. Unless otherwise required by applicable securities laws, the Company
disclaims any intention or obligations to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
NexJ Systems Inc.
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Statements of Financial Position
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(Expressed in thousands of Canadian dollars)
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(Unaudited)
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December 31, 2017
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December 31, 2016
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Assets
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$
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$
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Current assets:
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Cash and cash equivalents
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14,784
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14,678
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Accounts receivable
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5,028
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12,573
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Prepaid expenses and other assets
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1,901
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1,094
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Total current assets
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21,713
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28,345
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Non-current assets:
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Property and equipment
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1,374
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1,965
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Goodwill
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1,753
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1,753
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Other assets
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260
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260
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Total non-current assets
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3,387
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3,978
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Total assets
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25,100
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32,323
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Liabilities and Shareholders' Equity
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Current liabilities:
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Accounts payable and accrued liabilities
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3,356
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5,871
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Deferred revenue
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4,601
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7,137
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Provisions
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-
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224
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Current portion of finance lease liability
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148
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148
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Total current liabilities
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8,105
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13,380
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Non-current liabilities:
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Accrued liabilities
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-
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1,259
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Finance lease liability
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12
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160
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Deferred revenue
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68
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-
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Total non-current liabilities
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80
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1,419
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Total liabilities
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8,185
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14,799
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Shareholders' equity:
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Share capital
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82,445
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82,648
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Share purchase loans
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(3,622)
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(3,622)
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Contributed surplus
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8,663
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7,139
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Deficit
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(70,571)
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(68,641)
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Total shareholders' equity
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16,915
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17,524
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Total liabilities and shareholders' equity
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25,100
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32,323
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NexJ Systems Inc.
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Statements of Comprehensive Income (loss)
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(Expressed in thousands of Canadian dollars, except per share
amounts)
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(Unaudited)
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Quarter ended December 31,
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Year ended December 31,
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2017
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2016
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2017
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2016
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Revenue:
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$
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$
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$
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$
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License fees
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659
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2,367
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|
5,786
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5,821
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|
Professional services
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3,314
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5,234
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|
13,494
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20,087
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Maintenance and support
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2,274
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1,975
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8,222
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7,613
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6,247
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9,576
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27,502
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33,521
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Expenses:
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Professional services
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2,408
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2,664
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|
10,517
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11,850
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Research and development, net
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1,904
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1,774
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|
7,418
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7,693
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Sales and marketing
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1,055
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1,492
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|
4,180
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4,876
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General and administrative, net
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1,627
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1,957
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6,697
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6,693
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Impairment of loan receivable and shared services
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-
|
170
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|
-
|
1,630
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|
6,994
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8,057
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|
28,812
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32,742
|
|
|
|
|
|
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Income (loss) from operations
|
(747)
|
1,519
|
|
(1,310)
|
779
|
|
|
|
|
|
|
|
Foreign exchange gain (loss)
|
21
|
404
|
|
(715)
|
(270)
|
|
Finance income
|
37
|
27
|
|
95
|
77
|
|
58
|
431
|
|
(620)
|
(193)
|
|
|
|
|
|
|
|
|
|
|
|
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Income (loss) from continuing operations
|
(689)
|
1,950
|
|
(1,930)
|
586
|
Loss from discontinued operation
|
-
|
-
|
|
-
|
(252)
|
|
|
|
|
|
|
Income (loss) for the period and
|
|
|
|
|
|
|
comprehensive income (loss)
|
(689)
|
1,950
|
|
(1,930)
|
334
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
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|
Basic from continuing operations
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(0.03)
|
0.10
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|
(0.09)
|
0.03
|
|
Diluted from continuing operations
|
(0.03)
|
0.09
|
|
-
|
(0.01)
|
|
Basic and diluted from discontinued operation
|
-
|
-
|
|
(0.09)
|
0.02
|
|
Basic
|
(0.03)
|
0.10
|
|
(0.09)
|
0.02
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|
Diluted
|
(0.03)
|
0.09
|
|
(0.09)
|
0.02
|
|
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Weighted average number of common shares
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|
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outstanding, in thousands:
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Basic
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20,570
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20,048
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20,364
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20,206
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Diluted
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20,570
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20,761
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20,364
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20,697
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NexJ Systems Inc.
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Statements of Cash Flows
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(Expressed in thousands of Canadian dollars)
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(Unaudited)
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Year ended December 31,
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2017
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2016
|
|
|
|
|
|
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Cash flows from (used in) operating activities:
|
$
|
|
$
|
|
Net Income (Loss)
|
(1,930)
|
|
334
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|
Adjustments for:
|
|
|
|
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Impairment of loan receivable and shared services
|
-
|
|
1,630
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|
Depreciation and amortization
|
920
|
|
857
|
|
Share-based payment expense
|
217
|
|
923
|
|
Deferred share unit expense
|
200
|
|
-
|
|
Finance income
|
(95)
|
|
(77)
|
|
Foreign exchange loss
|
6
|
|
164
|
|
Loss from discontinued operation
|
-
|
|
252
|
|
Change in non-cash operating working capital:
|
|
|
|
|
Accounts receivable
|
7,545
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|
(4,225)
|
|
Prepaid expenses and other assets
|
(807)
|
|
(130)
|
|
Accounts payable and accrued liabilities and provisions
|
(2,573)
|
|
765
|
|
Deferred revenue
|
(2,468)
|
|
2,431
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Net cash flows from continuing operations
|
1,015
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|
2,924
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Net cash flows used in discontinued operation
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-
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|
(270)
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Net cash flows from operating activities
|
1,015
|
|
2,654
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|
|
|
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Cash flows from (used in) financing activities:
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|
|
|
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Repurchase of common shares
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(633)
|
|
(689)
|
|
Proceeds from exercise of stock options
|
76
|
|
166
|
|
Payment of finance lease liability
|
(148)
|
|
(136)
|
Net cash flows used in financing activities
|
(705)
|
|
(659)
|
|
|
|
|
Cash flows from (used in) investing activities:
|
|
|
|
|
Purchase of property and equipment
|
(293)
|
|
(259)
|
|
Advances to NexJ Health Inc.
|
-
|
|
(1,630)
|
|
Distribution, net of cash
|
-
|
|
(40)
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|
Interest received
|
95
|
|
77
|
Net cash flows used in investing activities
|
(198)
|
|
(1,852)
|
|
|
|
|
|
Effects of exchange rates on cash and cash equivalents
|
(6)
|
|
(164)
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
106
|
|
(21)
|
|
|
|
|
Cash and cash equivalents, beginning of year
|
14,678
|
|
14,699
|
|
|
|
|
Cash and cash equivalents, end of year
|
14,784
|
|
14,678
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
Acquisition of property and equipment not yet paid
|
36
|
|
57
|
|
Acquisition of property and equipment under finance lease
|
-
|
|
444
|
SOURCE NexJ Systems Inc.
View original content: http://www.newswire.ca/en/releases/archive/February2018/21/c6448.html