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Press release from CNW Group

NexJ Systems Reports First Quarter Fiscal 2012 Results

Tuesday, May 08, 2012

NexJ Systems Reports First Quarter Fiscal 2012 Results16:01 EDT Tuesday, May 08, 2012TORONTO, May 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 first quarter ended March 31, 2012.Recent HighlightsSelected by a leading Canadian bank as their global CRM solution for wealth management.Teamed with Beth Israel Deaconess Medical Center, a Harvard Medical School affiliate, to transform the doctor-patient interaction through integration with NexJ's Connected Wellness Platform.Selected by a major Canadian education institution for a wellness related initiative.Recognized by CEB TowerGroup, an industry analyst firm specializing in financial services, as best in class for Workflow Management and Advisor Experience.Q1 2012 Financial ResultsFirst quarter revenue of $6.1 million is a 21% decrease from $7.7 million in the comparative period in 2011.Adjusted EBITDA (as defined below) was a loss of $3.8 million or $0.19 per share (basic and diluted) for the quarter ended March 31, 2012 as compared to an adjusted EBITDA loss of $0.8 million or $0.06 per share (basic and diluted) for the comparative period in 2011.Net loss was $4.5 million or $0.23 per share (basic and diluted) for the quarter ended March 31, 2012, as compared to a net loss of $2.4 million or $0.16 per share (basic and diluted) for the comparative period in 2011."With two significant contracts signed in the first quarter we have achieved a record level of deferred revenue and positioned the company for continued growth this year," said William M. Tatham, Chief Executive Officer of NexJ.  "We see significant activity in the market across our target verticals and are pursuing several opportunities which will advance the business."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 May 15, 2012 and can be accessed by dialing 416-849-0833 (Toronto local) or toll free at 1-855-859-2056 and using password 74116531.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 March 31,20122011 (in thousands of dollars, except percentages)   Total revenue $ 6,136$ 7,745   Net loss(4,508)(2,426)Add back:  Share-based payment expense 370954Depreciation 289182Foreign exchange loss 168515Finance income (156)(43)Finance costs 11   Adjusted EBITDA (3,836)(817)Adjusted EBITDA margin (62%)(10%)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.Condensed Interim Statements of Financial Position(Expressed in thousands of Canadian dollars)(Unaudited) March 31, December 31, 2012 2011AssetsCurrent assets: Cash and cash equivalents $ 54,265 $ 56,218 Short-term investments - 4,068 Accounts receivable  13,586 4,128 Investment and other tax credits receivable 2,885 2,801 Prepaid expenses and other assets 763 1,323 Total current assets 71,499 68,538Non-current assets: Property and equipment  4,462 4,596 Other assets  260 260 Total non-current assets 4,722 4,856Total assets $ 76,221 $ 73,394Liabilities and Shareholders' EquityCurrent liabilities: Accounts payable and accrued liabilities $ 5,726 $ 4,805 Current portion of obligations under capital leases  24 41 Deferred revenue 6,767 2,097 Total current liabilities 12,517 6,943Non-current liabilities: Accrued liabilities 612 1,053 Deferred revenue  1,076 - Total non-current liabilities 1,688 1,053Total liabilities 14,205 7,996Shareholders' equity: Share capital 80,691 79,831 Share purchase loans (3,698) (3,803) Contributed surplus 4,195 4,034 Deficit (19,172) (14,664) Total shareholders' equity 62,016 65,398    Total liabilities and shareholders' equity $ 76,221 $ 73,394      NEXJ SYSTEMS INC.Condensed Interim Statements of Comprehensive Loss(Expressed in thousands of Canadian dollars)(Unaudited) Three months ended        March 31, 2012 2011Revenue: License fees $ 649 $ 3,736 Professional services 4,303 3,501 Maintenance and support 1,184 508 6,136 7,745Expenses*: Professional service costs 2,679 2,181 Research and development, net 3,712 3,352 Sales and marketing 2,062 2,245 General and administrative 2,178 1,920 10,631 9,698   Loss from operations (4,495) (1,953)   Foreign exchange loss (168) (515)Finance income 156 43Finance costs (1) (1) (13) (473)   Loss before income taxes (4,508) (2,426)   Income taxes - -   Loss and comprehensive loss for the period $ (4,508) $ (2,426)   Loss per share: Basic and diluted  $ (0.23) $ (0.16)    *Share-based payment expense has been included in expenses as follows:   Professional service costs $ 63 $ 116 Research and development, net 114 221 Sales and marketing 78 360 General and administrative 115 257 $ 370 $ 954  NEXJ SYSTEMS INC.Condensed Interim Statements of Cash Flows(Expressed in thousands of Canadian dollars)(Unaudited) Three months ended          March 31, 2012 2011Cash flows from operating activities: Loss for the period $ (4,508) $ (2,426) Adjustments for:  Depreciation and amortization 289 182  Share-based payment expense 370 954  Finance income (156) (43)  Finance costs 1 1  Foreign exchange loss 122 343 Change in non-cash operating working capital:  Accounts receivable (9,458) 1,766  Prepaid expenses and other assets 560 (252)  Investment tax and other credits receivable (84) (400)  Accounts payable and accrued liabilities 338 (877)  Deferred revenue 5,746 (2,554) Net cash flows used in operating activities (6,780) (3,306)Cash flows from financing activities: Obligations under capital leases (17) (17) Exercise of employee stock options 16 9 Exercise of agent stock options 635 - Repayment of share purchase loans 105 - Financing costs - (553) Interest paid (1) (1) Net cash flows from (used in) financing activities 738 (562)Cash flows from investing activities: Purchase of property and equipment (13) (177) Redemption of short-term investments 3,986 4,823 Interest received 156 43 Decrease in other long-term assets - 56 Net cash flows from investing activities 4,129 4,745   Effects of exchange rate changes on cash and cash equivalents (40) (96)Increase (decrease) in cash and cash equivalents (1,953) 781Cash and cash equivalents, beginning of period 56,218 23,942Cash and cash equivalents, end of period $ 54,265 $ 24,723Supplemental cash flow information: Acquisition of property and equipment not yet paid for $ 142 $ 205 For further information: MEDIA CONTACT: MATTHEW BOGART 416-222-5611 matt.bogart@nexj.com