TORONTO, July 26, 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 second quarter ended June
30, 2018.
Financial Summary
- $10.9M of revenue for the six month period is down from $15.6M
in the same period in the prior year
- $2.5M in Adjusted EBITDA loss for the six month period is down from $910K of Adjusted EBITDA reported in the same period in the prior year
- $2.9M of net loss for the six month period is up from $88K of
net loss reported in the same period in the prior year
- $5.0M of revenue for the second quarter is down from $6.7M in
the second quarter last year
- $1.4M in Adjusted EBITDA loss for the second quarter is down from $177K of Adjusted EBITDA reported in the second quarter last year
- $1.9M of net loss for the second quarter is down from $415K of
net loss reported in the second quarter last year
- $13.7M of cash and cash equivalents at quarter end
As a specialized vendor solving complex problems for the world's largest financial services firms, the company continues to be
susceptible to extended sales cycles and revenue volatility. However, in addition to focusing on expanding the addressable
market, winning high profile accounts remains a key part of the strategy as it delivers strong growth opportunities and long-term
customer retention.
"Although, the second quarter was challenging, I am encouraged by our current sales activity and continue to see improvements
in our lead generation and pipeline development", said Paul O'Donnell, CEO, NexJ Systems Inc. "We
are accelerating our efforts to drive additional business functionality into our product offerings through the application of
augmented intelligence and I am encouraged by the response from our customers and prospects on this front."
Conference Call Information
NexJ will be hosting an earnings report conference call on July 26, 2018 at 5:00 p.m. ET. The call can be accessed via webcast or by phone by
dialing 1-888-390-0605 (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 July 26,
2018 at 8:00 p.m. ET through 11:59 p.m. on August 2, 2018 and can be accessed by dialing
toll-free at 1-888-390-0541 and using password 996953.
NexJ Systems Inc.
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Second Quarter Financial Results
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(Expressed in thousands of Canadian dollars)
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(Unaudited)
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Quarter ended June 30,
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Six months ended June 30,
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2018
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2017
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2018
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2017
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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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422
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1,387
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1,102
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4,570
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Professional services
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2,453
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3,385
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5,479
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7,071
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Maintenance and support
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2,167
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1,964
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4,361
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3,911
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5,042
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6,736
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10,942
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15,552
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Expenses:
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Professional services
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1,977
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2,700
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4,361
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5,618
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Research and development, net
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2,446
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1,855
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4,519
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3,703
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Sales and marketing
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951
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1,059
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1,873
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2,398
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General and administrative, net
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1,048
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945
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2,647
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2,923
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6,422
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6,559
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13,400
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14,642
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Adjusted EBITDA
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(1,380)
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177
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(2,458)
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910
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Share-based payment expense
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46
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53
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89
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148
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Depreciation and amortization
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94
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234
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192
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466
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Lease-exit charges, net
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-
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-
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103
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-
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Deferred share unit expense
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225
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200
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225
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200
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Restructuring costs
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331
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-
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331
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-
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Income (loss) from operations
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(2,076)
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(310)
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(3,398)
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96
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Foreign exchange loss (gain)
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(110)
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121
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(410)
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219
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Finance income
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(38)
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(16)
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(77)
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(35)
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Net loss
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(1,928)
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(415)
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(2,911)
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(88)
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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 share-based payment expense, depreciation and
amortization, lease-exit charges, net, deferred share unit expense, restructuring costs, 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 solutions 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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Condensed Interim Statements of Financial Position
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(Expressed in thousands of Canadian dollars)
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(Unaudited)
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June 30, 2018
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December 31, 2017
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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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13,689
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14,784
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Accounts receivable
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4,468
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5,028
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Prepaid expenses and other assets
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1,591
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1,901
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Total current assets
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19,748
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21,713
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Non-current assets:
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Property and equipment
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1,257
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1,374
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Goodwill
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1,753
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1,753
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Contract costs
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146
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-
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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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3,416
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3,387
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Total assets
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23,164
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25,100
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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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3,327
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3,356
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Deferred revenue
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5,228
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4,601
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Provisions
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52
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-
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Current portion of finance lease liability
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86
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148
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Total current liabilities
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8,693
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8,105
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Non-current liabilities
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Provisions
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38
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-
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Finance lease liability
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-
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12
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Deferred revenue
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58
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68
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Total non-current liabilities
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96
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80
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Total liabilities
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8,789
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8,185
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Shareholders' equity:
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Share capital
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82,365
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82,445
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Share purchase loans
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(3,598)
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(3,622)
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Contributed surplus
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8,916
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8,663
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Deficit
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(73,308)
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(70,571)
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Total shareholders' equity
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14,375
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16,915
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Total liabilities and shareholders' equity
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23,164
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25,100
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NexJ Systems Inc.
Condensed Interim Statements of Comprehensive Loss
(Expressed in thousands of Canadian dollars, except per share amounts)
(Unaudited)
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Quarter ended June 30,
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Six months ended June 30,
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2018
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2017
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2018
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2017
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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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422
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1,387
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1,102
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4,570
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Professional services
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2,453
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3,385
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5,479
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7,071
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Maintenance and support
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2,167
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1,964
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4,361
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3,911
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5,042
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6,736
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10,942
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15,552
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Expenses:
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Professional services
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1,977
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2,717
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4,364
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5,653
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Research and development,
net
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2,450
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1,879
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4,529
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3,760
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Sales and marketing
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952
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1,062
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1,875
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2,407
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General and administrative, net
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1,408
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1,388
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3,241
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3,636
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Restructuring costs
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331
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-
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331
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|
-
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|
7,118
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7,046
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|
14,340
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|
15,456
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|
|
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Income (loss) from operations
|
(2,076)
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|
(310)
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|
(3,398)
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|
96
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|
|
|
|
|
|
|
|
|
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Foreign exchange gain (loss)
|
110
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|
(121)
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|
410
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|
(219)
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Finance income
|
38
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|
16
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|
77
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|
35
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|
|
148
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(105)
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|
487
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(184)
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Loss for the period and comprehensive loss
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(1,928)
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(415)
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(2,911)
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(88)
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|
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Loss per share:
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Basic and Diluted
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(0.09)
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(0.02)
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(0.14)
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(0.00)
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Weighted average number of common shares
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outstanding, in thousands:
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Basic and Diluted
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20,535
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20,202
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20,534
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20,128
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NexJ Systems Inc.
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Condensed Interim Statements of Cash Flows
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(Expressed in thousands of Canadian dollars)
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(Unaudited)
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Six months ended
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Six months ended
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June 30, 2018
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June 30, 2017
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Cash flows from (used in) operating activities:
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$
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$
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Loss for the period
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(2,911)
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(88)
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Adjustments for:
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Depreciation and amortization
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192
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466
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Amortization of contract costs
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36
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-
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Share-based payment expense
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89
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|
148
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Deferred share unit expense
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225
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|
200
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|
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Finance income
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(77)
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(35)
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Foreign exchange gain
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(135)
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|
(48)
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Change in non-cash operating working capital:
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Accounts receivable
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560
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1,125
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Prepaid expenses and other assets
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310
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(530)
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Accounts payable and accrued liabilities and provisions
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17
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(1,214)
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Deferred revenue
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617
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(1,588)
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Net cash flows used in operating activities
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(1,077)
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(1,564)
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Cash flows from (used in) financing activities:
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Proceeds from repayment of share repurchase loans
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24
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-
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Repurchase of common shares
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(117)
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(279)
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Proceeds (costs) from exercise of stock options
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(24)
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|
112
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Payment of finance lease liability
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(74)
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(73)
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Net cash flows used in financing activities
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(191)
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|
(240)
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|
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Cash flows from (used in) investing activities:
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Purchase of property and equipment
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(39)
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(164)
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Interest received
|
77
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|
35
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Net cash flows from (used in) investing activities
|
38
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|
(129)
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|
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|
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Effects of exchange rates on cash and cash equivalents
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135
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|
48
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|
|
|
|
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Decrease in cash and cash equivalents
|
(1,095)
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|
(1,885)
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|
|
|
|
|
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Cash and cash equivalents, beginning of year
|
14,784
|
|
14,678
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|
|
|
|
|
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Cash and cash equivalents, end of year
|
13,689
|
|
12,793
|
|
|
|
|
|
|
Supplemental cash flow information:
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|
|
|
|
Acquisition of property and equipment not yet paid
|
36
|
|
101
|
|
|
|
|
|
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SOURCE NexJ Systems Inc.
View original content: http://www.newswire.ca/en/releases/archive/July2018/26/c5655.html