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Press release from CNW Group

NexJ Systems Reports Fourth Quarter and Full Year 2011 Results

Thursday, March 08, 2012

NexJ Systems Reports Fourth Quarter and Full Year 2011 Results16:14 EST Thursday, March 08, 2012TORONTO, March 8, 2012 /CNW/ - NexJ Systems Inc., (TSX: NXJ), a leading provider of next-generation enterprise customer relationship management solutions (CRM), today announced financial results for its fourth quarter and full year ended December 31, 2011.Fiscal Year 2011 HighlightsRevenue growth of 34% to $30.2 million in fiscal 2011, from $22.5 million in fiscal 2010.Adjusted EBITDA (as defined below) was a loss of $5.9 million for the year ended December 31, 2011 as compared to income of $0.4 million for the 2010 fiscal year.Net loss was $7.5 million or $0.42 per share (basic and diluted) for the year ended December 31, 2011 as compared to net loss of $1.9 million or $0.14 per share (basic and diluted) in 2010.Completed an initial public offering ("IPO") on Toronto Stock Exchange ("TSX") of 4,850,000 common shares at a price of $9.00 per share resulting in gross proceeds to NexJ of $43.7 million.Ranked the sixth fastest growing company in North America on Deloitte's 2011 Technology Fast 500™ and fourth in Canada on the Deloitte Technology Fast 50™Went in to production with five customers; and secured two new customers with a third closed subsequent to year end.Appointed Tom Predovic as SVP Technology to oversee product management and application development for all of NexJ's solutions and Eric Gombrich as Senior Vice President & General Manager Health Solutions Group.Launched NexJ Contact 4.1, introducing one of the most advanced portal frameworks with rich functionality for service level management, computer telephony integration and advanced contact import.Q4 2011 Financial ResultsRevenue decreased 15% from $8.6 million in the fourth quarter of 2010 to $7.3 million in the fourth quarter of 2011.Adjusted EBITDA (as defined below) was a loss of $2.3 million in the fourth quarter of 2011 from income of $1.1 million for the same period in 2010.Net loss was $3.0 million or $0.15 per share (basic and diluted) for the period ended December 31, 2011, up from a net loss of $9 thousand or $0.00 per share (basic and diluted) in the period ended December 31, 2010."In 2011 NexJ delivered on our growth objectives while also making the investments in people, programs and products that will allow us to continue our aggressive pursuit of the significant opportunity before us," said William M. Tatham, Chief Executive Officer of NexJ.  "We are encouraged with the level of activity we are currently experiencing across our target vertical markets and believe our differentiated offerings in combination with the additional reference accounts gained in 2011 will allow us to sustain our growth in 2012."NexJ will be hosting an earnings report conference call today 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 today at 8:00 p.m. ET through 11:59 p.m. on March 15, 2012 and can be accessed by dialing 416-849-0833 (Toronto local) or toll free at 1-855-859-2056 and using password 53084596.Non-IFRS MeasuresThis 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 is 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 deducting share-based payment expense, finance income, finance costs, foreign exchange gain/loss, depreciation 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.The following table reconciles Adjusted EBITDA to net income (loss): Three months ended December 31, Year Ended December 31,20112010 20112010 (in thousands of dollars, except percentages)(Unaudited) (in thousands of dollars, except percentages)(Unaudited)      Total revenue $7,296$8,627 $ 30,249$ 22,531      Net loss (2,977)(9) (7,543)(1,869)Add back:     Share-based payment expense 358536 2,0121,374Depreciation and amortization 282205 847530Foreign exchange loss (gain) 187434 (788)483Finance income (178)(78) (418)(131)Finance costs 12 78      Adjusted EBITDA (2,327)1,090 (5,883)395Adjusted EBITDA margin (32%)13% (19%)2%About NexJ Systems Inc.NexJ is a leading provider of enterprise private cloud software, delivering customer relationship management (CRM) solutions for financial services, insurance, and healthcare.  Our next-generation, people-centered software combines industry-specific functionality with information from multiple applications and data stores to provide comprehensive knowledge of the individual.  Organizations use this knowledge to provide superior sales and service by enabling proactive interactions that influence behavior.NexJ Forward-looking StatementCertain 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; * risks associated with expansion into healthcare and other new industry verticals; (xi) competition in our industry; (xii) failure to protect our intellectual property or infringement of intellectual property rights of third parties; (xiii) reliance upon a limited number of third-party software products to develop our products; (xiv) defects or disruptions in our products and services; (xv) currency exchange rate fluctuations; (xvi) lengthy sales cycles for our software; (xvii) global financial market 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 Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2011 dated March 8, 2012, 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,December 31,January 1, 2011  2010  2010Assets       Current assets:       Cash and cash equivalents $56,218  $23,942  $34 Short-term investments  4,068   5,070  3,597 Accounts receivable 4,128 6,491 1,000 Investment and other tax credits receivable  2,801 4,063 3,822 Prepaid expenses and other assets  1,323 433 459 Total current assets  68,538 39,999 8,912Non-current assets:       Property and equipment 4,596 1,858 631 Other assets 260 307 260 Total non-current assets  4,856 2,165 891Total assets $73,394  $42,164 $9,803Liabilities and Shareholders' Equity      Current liabilities:       Accounts payable and accrued liabilities $4,805  $4,286  $1,787 Current portion of obligations undercapital leases 41 67 63 Deferred revenue  2,097 5,727 831 Total current liabilities  6,943 10,080 2,681Non-current liabilities:       Accrued liabilities  1,053 1,513 1,414 Obligations under capital leases - 41 108 Total non-current liabilities  1,053 1,554 1,522Total liabilities  7,996 11,634 4,203Shareholders' equity:       Share capital  79,831 35,455 10,372 Share purchase loans  (3,803) - - Contributed surplus  4,034 2,196 480 Deficit  (14,664) (7,121) (5,252)Total shareholders' equity  65,398 30,530 5,600Total liabilities and shareholders' equity $73,394  $42,164  $9,803NEXJ SYSTEMS INC. Statements of Comprehensive Loss(Expressed in thousands of Canadian dollars, except per share amounts)(Unaudited)   Three-month periods ended Year ended December 31,December 31, 2011  2010  2011  2010Revenue:     License fees $1,460  $4,510 $8,542  $9,314 Professional services  4,663 3,606 18,259 11,179 Maintenance and support  1,173 511 3,448 2,038   7,296 8,627 30,249   22,531Expenses*:         Professional service costs  2,715 1,663  10,007 4,975 Research and development, net  3,478 2,797 13,364 8,493 Sales and marketing  1,895 1,962 7,812   5,718 General and administrative  2,175 1,856 7,808 4,854   10,263 8,278 38,991 24,040Loss from operations  (2,967) 349  (8,742) (1,509)Foreign exchange gain (loss) (187) (434) 788 (483)Finance income  178 78   418 131Finance costs  (1) (2) (7) (8)  (10) (358) 1,199   (360)Loss before income taxes  (2,977) (9) (7,543) (1,869)Income taxes  - - - -Loss and comprehensiveloss for the period $(2,977)$(9)$(7,543)$(1,869)Loss per share:         Basic and diluted $(0.15)$(0.00)$(0.42)$(0.14)Weighted average number of common sharesoutstanding:         Basic and diluted  19,661 14,217   17,751   13,123*Share-based payment expense hasbeen included in expenses as follows:         Professional service costs $71  $166  $293  $426 Research and development, net  126 161 535 412 Sales and marketing  82 102 595 261 General and administrative  79 107 589 275  $358  $536  $2,012  $1,374NEXJ SYSTEMS INC.Statements of Cash Flows(Expressed in thousands of Canadian dollars)(Unaudited)   Year ended December 31, 20112010Cash flows from operating activities:     Loss for the year $(7,543)$(1,869) Adjustments for:      Depreciation and amortization  847 530  Share-based payment expense  2,012 1,374  Finance income  (418) (131)  Finance costs  7 8  Foreign exchange loss (gain) (714) 436 Change in non-cash operating working capital:      Accounts receivable  2,363 (5,491)  Investment tax credits receivable  1,262 (241)  Prepaid expenses and other assets  (890) 26  Accounts payable and accrued liabilities  (334) 2,497  Deferred revenue  (3,630) 4,896 Net cash flows used in operating activities  (7,038) 2,035Cash flows from financing activities:     Repayment of obligations under capital leases  (67) (63) Proceeds from exercise of employee stock options  34   22 Proceeds from exercise of agent stock options  564   - Proceeds from repayment of share purchase loans  39  - Issuance of common shares  43,650 26,694 Financing costs  (3,888) (1,291) Interest paid  (7) (8) Net cash flows from financing activities  40,325 25,354Cash flows from investing activities:     Purchase of property and equipment  (3,192) (1,656) Redemption (purchase) of short-term investments  1,136   (1,635) Interest received  418 131 Decrease (increase) in other assets  47   (47) Net cash flows from investing activities  (1,591) (3,207)Effects of exchange rates on cash and cash equivalents  580 (274)Increase in cash and cash equivalents  32,276 23,908Cash and cash equivalents, beginning of period  23,942 34Cash and cash equivalents, end of period $56,218  $23,942Supplemental cash flow information:     Acquisition of property and equipment not yet paid for $393  $101  For further information: Media Contact: Matthew Bogart 416-222-5611 matt.bogart@nexj.com