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.
|
|
|
|
|
|
Fourth Quarter
Financial Results
|
|
|
|
|
|
(Expressed in
thousands of Canadian dollars)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Quarter ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Revenue:
|
$
|
$
|
|
$
|
$
|
|
License
fees
|
659
|
2,367
|
|
5,786
|
5,821
|
|
Professional
services
|
3,314
|
5,234
|
|
13,494
|
20,087
|
|
Maintenance and
support
|
2,274
|
1,975
|
|
8,222
|
7,613
|
|
6,247
|
9,576
|
|
27,502
|
33,521
|
Expenses:
|
|
|
|
|
|
|
Professional
services
|
2,401
|
2,626
|
|
10,461
|
11,594
|
|
Research and
development, net
|
1,895
|
1,727
|
|
7,337
|
7,388
|
|
Sales and
marketing
|
1,053
|
1,484
|
|
4,167
|
4,828
|
|
General and
administrative, net
|
1,390
|
1,691
|
|
5,510
|
5,522
|
|
6,739
|
7,528
|
|
27,475
|
29,332
|
|
|
|
|
|
|
Adjusted
EBITDA
|
(492)
|
2,048
|
|
27
|
4,189
|
|
|
|
|
|
|
|
Loss from
discontinued operation
|
-
|
-
|
|
-
|
252
|
|
Impairment of loan
receivable and
|
|
|
|
|
|
|
|
shared
services
|
-
|
170
|
|
-
|
1,630
|
|
Share-based payment
expense
|
30
|
146
|
|
217
|
923
|
|
Depreciation and
amortization
|
225
|
213
|
|
920
|
857
|
|
Deferred share unit
expense
|
-
|
-
|
|
200
|
-
|
Income (loss) from
operations
|
(747)
|
1,519
|
|
(1,310)
|
527
|
|
|
|
|
|
|
|
Foreign exchange loss
(gain)
|
(21)
|
(404)
|
|
715
|
270
|
|
Finance
income
|
(37)
|
(27)
|
|
(95)
|
(77)
|
Net income
(loss)
|
(689)
|
1,950
|
|
(1,930)
|
334
|
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.
|
|
|
|
Statements of
Financial Position
|
|
|
|
(Expressed in
thousands of Canadian dollars)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
|
|
Assets
|
|
|
|
|
$
|
|
$
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
14,784
|
|
14,678
|
|
Accounts
receivable
|
5,028
|
|
12,573
|
|
Prepaid expenses and
other assets
|
1,901
|
|
1,094
|
Total current
assets
|
21,713
|
|
28,345
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
Property and
equipment
|
1,374
|
|
1,965
|
|
Goodwill
|
1,753
|
|
1,753
|
|
Other
assets
|
260
|
|
260
|
Total non-current
assets
|
3,387
|
|
3,978
|
|
|
|
|
Total
assets
|
25,100
|
|
32,323
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
3,356
|
|
5,871
|
|
Deferred
revenue
|
4,601
|
|
7,137
|
|
Provisions
|
-
|
|
224
|
|
Current portion of
finance lease liability
|
148
|
|
148
|
Total current
liabilities
|
8,105
|
|
13,380
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
Accrued
liabilities
|
-
|
|
1,259
|
|
Finance lease
liability
|
12
|
|
160
|
|
Deferred
revenue
|
68
|
|
-
|
Total non-current
liabilities
|
80
|
|
1,419
|
|
|
|
|
Total
liabilities
|
8,185
|
|
14,799
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Share
capital
|
82,445
|
|
82,648
|
|
Share purchase
loans
|
(3,622)
|
|
(3,622)
|
|
Contributed
surplus
|
8,663
|
|
7,139
|
|
Deficit
|
(70,571)
|
|
(68,641)
|
Total shareholders'
equity
|
16,915
|
|
17,524
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
25,100
|
|
32,323
|
NexJ Systems
Inc.
|
|
|
|
|
|
Statements of
Comprehensive Income (loss)
|
|
|
|
|
|
(Expressed in
thousands of Canadian dollars, except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
December 31,
|
|
Year ended December
31,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
$
|
$
|
|
$
|
$
|
|
License
fees
|
659
|
2,367
|
|
5,786
|
5,821
|
|
Professional
services
|
3,314
|
5,234
|
|
13,494
|
20,087
|
|
Maintenance and
support
|
2,274
|
1,975
|
|
8,222
|
7,613
|
|
6,247
|
9,576
|
|
27,502
|
33,521
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
Professional
services
|
2,408
|
2,664
|
|
10,517
|
11,850
|
|
Research and
development, net
|
1,904
|
1,774
|
|
7,418
|
7,693
|
|
Sales and
marketing
|
1,055
|
1,492
|
|
4,180
|
4,876
|
|
General and
administrative, net
|
1,627
|
1,957
|
|
6,697
|
6,693
|
|
Impairment of loan
receivable and shared services
|
-
|
170
|
|
-
|
1,630
|
|
6,994
|
8,057
|
|
28,812
|
32,742
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
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:
|
|
|
|
|
|
|
Basic from continuing
operations
|
(0.03)
|
0.10
|
|
(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
|
|
Diluted
|
(0.03)
|
0.09
|
|
(0.09)
|
0.02
|
|
|
|
|
|
|
Weighted average
number of common shares
|
|
|
|
|
|
|
outstanding, in
thousands:
|
|
|
|
|
|
|
Basic
|
20,570
|
20,048
|
|
20,364
|
20,206
|
|
Diluted
|
20,570
|
20,761
|
|
20,364
|
20,697
|
NexJ Systems
Inc.
|
|
|
|
Statements of Cash
Flows
|
|
|
|
(Expressed in
thousands of Canadian dollars)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Year ended December
31,
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Cash flows from
(used in) operating activities:
|
$
|
|
$
|
|
Net Income
(Loss)
|
(1,930)
|
|
334
|
|
Adjustments
for:
|
|
|
|
|
Impairment of loan
receivable and shared services
|
-
|
|
1,630
|
|
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
|
|
(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
|
Net cash flows
from continuing operations
|
1,015
|
|
2,924
|
Net cash flows
used in discontinued operation
|
-
|
|
(270)
|
Net cash flows
from operating activities
|
1,015
|
|
2,654
|
|
|
|
|
Cash flows from
(used in) financing activities:
|
|
|
|
|
Repurchase of common
shares
|
(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)
|
|
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.