NexJ Systems Reports Second Quarter 2022 Results

TORONTO, Aug. 6, 2022 /CNW/ - NexJ Systems Inc. (TSX: NXJ), delivering intelligent customer management software to the financial services industry, today announced financial results for its second quarter ended June 30, 2022.

• The Company continued its planned transition from a perpetual license model to a more predictable subscription license model generating $900K in license and subscription revenue for the first half of the year, an increase of 105% as compared to $438K in the first half of the previous year
• Unbilled contracted subscription license revenue of $982K will be recognized as revenue in future quarters as compared to zero in the first half of the previous year
• $3.40M of revenue for the second quarter as compared to $3.77M in the second quarter of the previous year
• $872K in Adjusted EBITDA loss for the second quarter as compared to $130K in the second quarter of the previous year
• $1.69M of net loss for the second quarter as compared to $179K of net loss in the second quarter of the previous year
• $7.44M in revenue for the six months as compared to $7.70M in the previous year
• $1.28M in Adjusted EBITDA loss for the six months as compared to $226K in the previous year
• $2.25M in net loss for the six months as compared to $462K of net loss in the previous year
• For the first half of the year, approximately $1.9M of expense contributing to the net loss for the same period related to the office lease payments and one time lease termination costs as the Company rationalized its real estate requirements during the quarter and will realize costs savings in excess of $2.2M per year going forward

"As a result of the macro economic conditions during the quarter we experienced a delay in key opportunities impacting our license and subscription revenue which we fully expect to pick up in the second half. Nevertheless, the Company has achieved a growth of 105% in its subscription license revenue year to date over the same period last year," said Paul O'Donnell, CEO of NexJ Systems. "We have prudently managed our financial resources in response to market conditions and we expect to grow our license and subscription revenue this year and stabilize the volatility as we continue our transition to a subscription-based license model"

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 termination costs, deferred share unit expense, restructuring costs, foreign exchange loss (gain), 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.

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.

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 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 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) out ability to successful integrate and manage acquired businesses, offerings and people; (ii) our dependence on a limited number of customers and large project size; (iii) fluctuation in our quarterly operating results; (iv) our dependence on key personnel, and ability to attract and retain talent; (v) our compensation structure; (vi) risks associated with managing large and complex software implementation projects; (vii) uncertainties and assumptions in our sales forecasts, including the extent to which sales proposals are converted into sales; (viii) risks associated with our ability to design, develop, test, market, license and support our software products on a timely basis; (ix) market acceptance of our products and services; * commercial success of products resulting from our investment in research and development; (xi) our success in expanding sales into new international markets; (xii) competition in our industry; (xiii) failure to protect our intellectual property or infringement of intellectual property rights of third parties; (xiv) reliance upon a limited number of third-party software products to develop our products; (xv) defects or disruptions in our products and services; (xvi) currency exchange rate fluctuations; (xvii) lengthy sales cycles for our software; (xviii) general economic conditions; and (xviii) failure to manage our growth successfully.

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, 2021 dated March 8, 2022, 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.

SOURCE NexJ Systems Inc.

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