TORONTO, April 29, 2020 /CNW/ - NexJ Systems Inc. (TSX: NXJ), delivering intelligent customer management software to the financial services industry, today announced financial results for its first quarter ended March 31, 2020.
First Quarter Summary
- Cash balance increased by $4.1M to $9.2M at the end of the quarter
- $4.0M of revenue for the first quarter as compared to $4.3M in the first quarter of the previous year
- $1.3M in Adjusted EBITDA loss for the first quarter is a $800K improvement over $2.1M in Adjusted EBITDA loss in the first quarter of the previous year
- $1.3M of net loss for the first quarter is a $1.3M improvement over $2.6M of net loss in the first quarter of the previous year
"As a global business we were alerted to the COVID-19 crisis early in Q1 and took immediate steps to ensure our customers receive the necessary support. Maintaining the customer base will remain a high priority and will serve to protect revenue expectations for 2020," said Paul O'Donnell, CEO. "Recent industry research indicates that managing customer relationships has become the top priority for all businesses and, in wealth management and banking specifically, that digital engagement will play a pivotal role in the current crisis and beyond. With NexJ's continued focus on AI-driven client interaction products, we are well-positioned to take advantage of the opportunity that this represents."
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NexJ Systems Inc.
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First Quarter Financial Results
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(Expressed in thousands of Canadian dollars)
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(Unaudited)
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Quarter ended
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Quarter ended
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March 31, 2020
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March 31, 2019
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Revenue
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$
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$
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License and subscription fees
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24
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409
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Professional services
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1,671
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1,525
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Maintenance and support
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2,286
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2,334
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3,981
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4,268
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Cost of revenue
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1,331
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1,855
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Gross profit
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2,650
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2,413
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Operating Expenses
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Research and development, net
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2,002
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2,731
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Sales and marketing
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787
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766
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General and administrative, net
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1,194
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1,036
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3,983
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4,533
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Adjusted EBITDA
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(1,333)
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(2,120)
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Share-based payment expense
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71
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122
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Depreciation and amortization
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211
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242
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Loss from operations
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(1,615)
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(2,484)
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Foreign exchange loss (gain)
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(373)
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95
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Finance income
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(24)
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(39)
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Finance expense
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36
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38
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Net loss
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(1,254)
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(2,578)
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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, 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 provides Intelligent Customer Management to the financial services industry. Our award-winning CRM is designed to help Wealth Management, Private Banking, Corporate and Commercial Banking, and Insurance firms revolutionize their business. Powered by artificial intelligence, our products help drive productivity, boost client engagement, and increase revenue. With users in over 60 countries, our customers benefit from our deep expertise across financial services verticals, strategic investment in innovation, and commitment to their success.
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, or like us on Facebook.
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 "may", "will", "expect", "anticipate", "aim", "estimate", "intend", "plan", "seek", "believe", "potential", "continue", "is/are likely to", "could", "should", "target", "envision", 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) general economic conditions; (xvii) failure to manage our growth successfully; (xviii) failure to successfully manage and integrate acquisitions; (xix) breach of our security measures and unauthorized access to data; (xx) employee retention and (xxi) litigation, including commercial, product liability, employment, class action and other litigation and claims.
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, 2019 dated March 26, 2020, 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.
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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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March 31, 2020
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December 31, 2019
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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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9,215
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5,123
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Accounts receivable
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992
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5,475
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Prepaid expenses and other assets
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1,879
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1,757
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Total current assets
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12,086
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12,355
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Non-current assets:
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Property and equipment
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969
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969
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Right-of-use assets
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1,608
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1,747
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Goodwill
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1,753
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1,753
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Investments
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284
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260
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Contract costs
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105
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136
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Other assets
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617
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663
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Total non-current assets
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5,336
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5,528
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Total assets
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17,422
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17,883
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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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1,980
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1,969
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Deferred revenue
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7,054
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6,550
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Lease liabilities
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929
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715
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Total current liabilities
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9,963
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9,234
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Non-current liabilities:
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Accrued liabilities
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82
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117
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Deferred revenue
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522
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281
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Lease liability
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1,808
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2,045
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Total non-current liabilities
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2,412
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2,443
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Total liabilities
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12,375
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11,677
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Shareholders' equity:
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Share capital
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82,915
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82,915
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Share purchase loans
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(3,598)
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(3,598)
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Contributed surplus
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8,945
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8,874
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Accumulated other comprehensive income (loss)
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15
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(9)
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Deficit
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(83,230)
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(81,976)
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Total shareholders' equity
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5,047
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6,206
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Total liabilities and shareholders' equity
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17,422
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17,883
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NexJ Systems Inc.
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Statements of Comprehensive 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
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Quarter ended
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March 31, 2020
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March 31, 2019
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Revenue
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$
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$
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License and subscription fees
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24
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409
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Professional services
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1,671
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1,525
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Maintenance and support
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2,286
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2,334
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3,981
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4,268
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Cost of revenue
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1,347
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1,876
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Gross profit
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2,634
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2,392
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Expenses:
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Research and development, net
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2,018
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2,754
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Sales and marketing
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790
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769
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General and administrative, net
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1,441
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1,353
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4,249
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4,876
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Loss from operations
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(1,615)
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(2,484)
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Foreign exchange gain (loss)
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373
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(95)
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Finance income
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24
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39
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Finance expense
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(36)
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(38)
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361
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(94)
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Loss for the period
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(1,254)
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(2,578)
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Other comprehensive income:
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Items that will not be reclassified to profit or loss:
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24
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–
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Unrealized gain on equity securities
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Loss for the period and comprehensive loss
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(1,230)
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(2,578)
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Loss per share
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Basic and diluted
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(0.06)
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(0.13)
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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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20,677
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20,532
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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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Quarter ended
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Quarter ended
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March 31, 2019
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March 31, 2019
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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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(1,254)
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(2,578)
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Adjustments for:
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Depreciation and amortization of property and equipment
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72
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89
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Depreciation of right-of-use assets
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139
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153
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Amortization of contract costs
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31
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33
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Share-based payment expense
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71
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122
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Finance income
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(24)
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(39)
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Finance expense
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36
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38
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Foreign exchange gain
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(102)
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(7)
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Change in non-cash operating working capital:
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Accounts receivable
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4,483
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1,264
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Prepaid expenses and other assets
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(68)
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(116)
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Accounts payable and accrued liabilities
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(26)
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(43)
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Deferred revenue
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739
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2,114
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Net cash flows from operating activities
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4,097
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1,030
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Cash flows used in financing activities:
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Costs of exercise of stock options
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-
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(2)
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Payment of finance lease liability (completed contract)
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-
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(12)
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Payment of finance lease liability (ongoing contract)
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(60)
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-
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Net cash flows used in financing activities
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(60)
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(14)
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Cash flows from (used in) investing activities:
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Purchase of property and equipment
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(71)
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(8)
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Interest received
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24
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39
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Net cash flows from (used in) investing activities
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(47)
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31
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Effects of exchange rates on cash and cash equivalents
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102
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7
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Increase in cash and cash equivalents
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4,092
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1,054
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Cash and cash equivalents, beginning of period
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5,123
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10,951
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Cash and cash equivalents, end of period
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9,215
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12,005
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Supplemental cash flow information:
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Acquisition of property and equipment not yet paid
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1
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80
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SOURCE NexJ Systems Inc.
View original content: http://www.newswire.ca/en/releases/archive/April2020/29/c7588.html
Media Contact: Matthew Bogart, 416-227-3708, matthew.bogart@nexj.comCopyright CNW Group 2020