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TECSYS Reports Financial Results for Second Quarter of Fiscal 2018

Rising Profits Leads to Rising Dividend

MONTREAL, QUEBEC -- (Marketwired) -- 11/30/17 -- TECSYS Inc. (TSX: TCS), an industry-leading supply chain management software company, today announced its results for the second quarter of fiscal year 2018, ended October 31, 2017. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS) and are unaudited.

Second Quarter Highlights:


--  Total revenue was $18.1 million, 9% higher than $16.5 million for Q2
    2017.
--  Proprietary products revenue decreased 8% to $1.6 million, compared to
    Q2 2017.
--  Cloud, maintenance and subscription revenue increased to $6.4 million,
    4% higher than $6.2 million for Q2 2017.
--  Professional services revenue was $7.9 million, 22% higher than $6.5
    million in Q2 2017.
--  Total gross profit margin was 52%, compared to 50% in Q2 2017.
--  Operating expenses decreased to $7.8 million, compared to $8.0 million
    for Q2 2017.
--  Profit from operations was $1.6 million, compared to $320,000 for the
    same period in fiscal 2017.
--  Profit was $1.4 million or $0.10 per share in Q2 2018 compared to
    $206,000 or $0.02 per share for Q2 2017.
--  EBITDA was $2.2 million, compared to $935,000 for Q2 2017.
--  Total contract value bookings amounted to $11.5 million, compared to
    $10.9 million for Q2 2017.
--  Cash and cash equivalents, as well as redeemable long-term investments,
    totaled $22.5 million at the end of Q2 2018 compared to $13.5M at the
    end of Q4 2017.

"In the second quarter of fiscal 2018, solid bookings and revenue growth combined with flat to declining expenses led to a surge in profitability." said Peter Brereton, President and CEO of TECSYS Inc. "The quarter was also a validation of our strategy to deploy one common technology platform that is robust and versatile into two diverse sectors where each has a different sales cycle and is affected differently by external events. In the quarter, our complex distribution business achieved solid growth in terms of both new contract and base account sales and added accounts in floor finishing products, heavy equipment and MRO. Our healthcare business continued to be constrained in the quarter by uncertainty around U.S. healthcare legislation, however this situation seems to be improving based on orders signed early in the third quarter. Our pipeline and general business activity in healthcare remains strong. The board has approved an increase of the quarterly dividend of 11% to $0.05."


----------------------------------------------------------------------------
                                                          Trailing  Trailing
                                                                12        12
                                      6 months  6 months    months    months
                                         ended     ended     ended     ended
Results from                          Oct. 31,  Oct. 31,  Oct. 31,  Oct. 31,
Operations         Q2 2018   Q2 2017      2017      2016      2017      2016
----------------------------------------------------------------------------
In thousands of dollars except per share amounts
----------------------------------------------------------------------------
Total Revenue      $18,072   $16,518   $34,583   $32,615   $70,415   $69,388
----------------------------------------------------------------------------
Gross Margin        $9,438    $8,291   $17,190   $15,897   $35,489   $35,512
----------------------------------------------------------------------------
Gross Margin %         52%       50%       50%       49%       50%       51%
----------------------------------------------------------------------------
Operating
 Expenses           $7,843    $7,971   $15,530   $15,334   $26,441   $31,108
----------------------------------------------------------------------------
Op. Ex. As % of
 Revenue               43%       48%       45%       47%       38%       45%
----------------------------------------------------------------------------
Profit from
 Operations         $1,595      $320    $1,660      $563    $9,048    $4,404
----------------------------------------------------------------------------
EBITDA              $2,184      $935    $2,871    $1,749   $11,486    $6,929
----------------------------------------------------------------------------
EPS                  $0.10     $0.02     $0.11     $0.03     $0.57     $0.38
----------------------------------------------------------------------------
Contract Bookings  $11,453   $10,920   $21,345   $16,936   $47,037   $39,029
----------------------------------------------------------------------------

First Half Fiscal 2018 Highlights:


--  Total revenue was $34.6 million, 6% higher than $32.6 million for H1
    2017.
--  Proprietary products revenue decreased 4% to $2.9 million, compared to
    H1 2017.
--  Cloud, maintenance and subscription revenue increased to $13.5 million,
    5% higher than $12.8 million for H1 2017.
--  Professional services revenue was $14.0 million, 11% higher than $12.6
    million in H1 2017.
--  Total gross profit margin was 50%, compared to 49% in H1 2017.
--  Operating expenses were flat year-over-year at $15.5 million, compared
    to $15.3 million for H1 2017.
--  Profit from operations was $1.7 million, compared to $563,000 for the
    same period in fiscal 2017.
--  Profit was $1.4 million or $0.11 per share for H1 2018 compared to
    $334,000 or $0.03 per share for H1 2017.
--  EBITDA was $2.9 million, compared to $1.7 million for H1 2017.
--  Total contract value bookings amounted to $21.3 million, compared to
    $16.9 million for H1 2017.

The Company has declared a dividend of $0.05 per share to be paid on January 11, 2018 to shareholders of record at the close of business on December 21, 2017.


Second Quarter 2018 Results Conference Call
Date: December 1, 2017 Time: 8:30 am EST
Phone number: (416) 359-3126 or (800) 672-2065
The call can be replayed until December 8, 2017 by calling (416) 626-4100 or
(800) 558-5253 (access code: 21862899).

About TECSYS

TECSYS provides transformative supply chain solutions that equip our customers to succeed in a rapidly-changing omni-channel world. TECSYS solutions are built on a true enterprise supply chain platform, and include warehouse management, distribution, transportation management, supply management at point-of-use as well as complete financial management and analytics solutions. Customers running on TECSYS' Supply Chain Platform are confident knowing they can execute, day in and day out, regardless of business fluctuations or changes in technology, they can adapt and scale to any business needs or size, and they can expand and collaborate with customers, suppliers and partners as one borderless enterprise. From demand planning to demand fulfillment, TECSYS puts power into the hands of both front-line workers and back office planners, and unshackles business leaders so they can see and manage their supply chains like never before.

TECSYS is the market leader in supply chain solutions for health systems and hospitals. Over 600 mid-size and Fortune 1000 customers trust their supply chains to TECSYS in the healthcare, service parts, third-party logistics, and general wholesale high-volume distribution industries. TECSYS' shares are listed on the Toronto Stock Exchange under the ticker symbol TCS.

The statements in this news release relating to matters that are not historical fact are forward looking statements that are based on management's beliefs and assumptions. Such statements are not guarantees of future performance and are subject to a number of uncertainties, including but not limited to future economic conditions, the markets that TECSYS Inc. serves, the actions of competitors, major new technological trends, and other factors beyond the control of TECSYS Inc., which could cause actual results to differ materially from such statements. More information about the risks and uncertainties associated with TECSYS Inc.'s business can be found in the MD&A section of the Company's annual report and annual information form for the fiscal year ended April 30th, 2017. These documents have been filed with the Canadian securities commissions and are available on our website (www.tecsys.com) and on SEDAR (www.sedar.com).

Copyright © TECSYS Inc. 2017. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.



TECSYS Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
As at October 31, 2017 and April 30, 2017
(in thousands of Canadian dollars)

------------------------------------------------------------------
------------------------------------------------------------------
                                    October 31,         April 30,
                                           2017              2017
------------------------------------------------------------------

Assets

Current assets
  Cash and cash equivalents      $       12 458   $        13 476
  Accounts receivable                    11 347            14 218
  Work in progress                          525               612
  Other receivables                         705               370
  Tax credits                             4 562             3 126
  Inventory                                 875               914
  Prepaid expenses                        1 659             1 899
------------------------------------------------------------------
Total current assets                     32 131            34 615
------------------------------------------------------------------

Non-current assets
  Long-term investments                  10 007                 -
  Other long-term receivables               249                 -
  Tax credits                             5 252             5 407
  Property and equipment                  2 292             2 444
  Deferred development costs              2 224             2 751
  Other intangible assets                 1 415             1 523
  Goodwill                                3 596             3 596
  Deferred tax assets                     2 402             2 201
------------------------------------------------------------------
Total non-current assets                 27 437            17 922
------------------------------------------------------------------

------------------------------------------------------------------
Total assets                     $       59 568   $        52 537
------------------------------------------------------------------
------------------------------------------------------------------

Liabilities

Current liabilities
  Accounts payable and accrued
   liabilities                   $        8 348   $         9 265
  Current portion of long-term
   debt                                      55                69
  Deferred revenue                        9 259            12 094
------------------------------------------------------------------
Total current liabilities                17 662            21 428
------------------------------------------------------------------

Non-current liabilities
  Long-term debt                             98               121
  Other non-current liabilities             256               277
------------------------------------------------------------------
Total non-current liabilities               354               398
------------------------------------------------------------------
Total liabilities                        18 016            21 826
------------------------------------------------------------------

Equity

  Share capital                          18 803             8 349
  Contributed surplus                     9 577             9 577
  Retained earnings                      13 311            13 064
  Accumulated other
   comprehensive loss                      (139)             (279)
------------------------------------------------------------------
Total equity attributable to
 the owners of the Company               41 552            30 711
------------------------------------------------------------------

------------------------------------------------------------------
Total liabilities and equity     $       59 568   $        52 537
------------------------------------------------------------------
------------------------------------------------------------------


TECSYS Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive
 Income
(Unaudited)
Three and six-month periods ended October 31, 2017 and 2016
(in thousands of Canadian dollars, except per share data)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                          Three         Three
                         Months        Months     Six Months     Six Months
                          Ended         Ended          Ended          Ended
                        October       October
                            31,           31,    October 31,    October 31,
                           2017          2016           2017           2016
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Revenue:
 Proprietary
  products            $   1 645   $     1 779   $      2 893   $      3 003
 Third-party
  products                1 447         1 505          2 969          2 998
 Cloud, maintenance
  and subscription        6 446         6 193         13 536         12 837
 Professional
  services                7 884         6 457         14 028         12 641
 Reimbursable
  expenses                  650           584          1 157          1 136
----------------------------------------------------------------------------
Total revenue            18 072        16 518         34 583         32 615
----------------------------------------------------------------------------

Cost of revenue:
 Products                 1 372         1 350          2 732          2 613
 Services                 6 612         6 293         13 504         12 969
 Reimbursable
  expenses                  650           584          1 157          1 136
----------------------------------------------------------------------------
Total cost of
 revenue                  8 634         8 227         17 393         16 718
----------------------------------------------------------------------------

Gross profit              9 438         8 291         17 190         15 897

Operating expenses:
 Sales and marketing      3 851         3 769          7 484          7 355
 General and
  administration          1 611         1 719          3 187          3 059
 Research and
  development, net
  of tax credits          2 381         2 483          4 859          4 920
----------------------------------------------------------------------------
Total operating
 expenses                 7 843         7 971         15 530         15 334
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Profit from
 operations               1 595           320          1 660            563
----------------------------------------------------------------------------

Net finance (income)
 costs                      (33)           55            (67)           151

----------------------------------------------------------------------------
Profit before income
 taxes                    1 628           265          1 727            412
----------------------------------------------------------------------------

Income taxes                272            59            302             78

----------------------------------------------------------------------------

Profit attributable
 to the owners of
 the Company          $   1 356   $       206   $      1 425   $        334
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Other comprehensive
 (loss) income:
 Effective portion
  of changes in fair
  value on
  designated revenue
  hedges                   (655)         (136)           140           (861)
----------------------------------------------------------------------------

Comprehensive income
 (loss) attributable
 to the owners of
 the Company          $     701   $        70   $      1 565   $       (527)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Basic and diluted
 earnings per common
 share                $    0,10   $      0,02   $       0,11   $       0,03
----------------------------------------------------------------------------
----------------------------------------------------------------------------


TECSYS Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
Six-month periods ended October 31, 2017 and 2016
(in thousands of Canadian dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                              Six Months         Six Months
                                                   Ended              Ended
                                             October 31,        October 31,
                                                    2017               2016
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Cash flows from (used in) operating
 activities:
Profit for the period                   $          1 425   $            334
Adjustments for:
  Depreciation of property and
   equipment                                         405                413
  Depreciation of deferred development
   costs                                             599                683
  Depreciation of other intangible
   assets                                            235                247
  Net finance (income) costs                         (67)               151
  Unrealized foreign exchange and
   other                                            (556)               575
  Non-refundable tax credits                        (368)              (457)
  Income taxes                                       210                 78
----------------------------------------------------------------------------
  Operating activities excluding
   changes in non-cash working capital
   items related to operations                     1 883              2 024

  Accounts receivable                              2 871              4 735
  Work in progress                                    87             (1 331)
  Other receivables                                 (327)              (598)
  Tax credits                                     (1 329)               934
  Inventory                                           39               (164)
  Prepaid expenses                                   240                204
  Accounts payable and accrued
   liabilities                                      (522)            (1 839)
  Deferred revenue                                (2 835)              (395)
----------------------------------------------------------------------------
  Changes in non-cash working capital
   items related to operations                    (1 776)             1 546
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Net cash from operating activities                   107              3 570
----------------------------------------------------------------------------

Cash flows (used in) from financing
 activities:
  Repayment of long-term debt                        (37)              (717)
  Issuance of common shares                       10 454                  -
  Payment of dividends                            (1 178)              (739)
  Interest paid                                       (1)               (49)
----------------------------------------------------------------------------
Net cash from (used in) financing
 activities                                        9 238             (1 505)
----------------------------------------------------------------------------

Cash flows (used in) from investing
 activities:
  Long-term investments                          (10 007)                 -
  Interest received                                   96                 55
  Acquisitions of property and
   equipment                                        (253)              (233)
  Acquisitions of other intangible
   assets                                           (127)               (90)
  Deferred development costs                         (72)               (27)
----------------------------------------------------------------------------
Net cash used in investing activities            (10 363)              (295)
----------------------------------------------------------------------------

Net (decrease) increase in cash and
 cash equivalents during the period               (1 018)             1 770

Cash and cash equivalents - beginning
 of period                                        13 476              9 704

----------------------------------------------------------------------------
Cash and cash equivalents - end of
 period                                 $         12 458   $         11 474
----------------------------------------------------------------------------
----------------------------------------------------------------------------


TECSYS Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
Six-month periods ended October 31, 2017 and 2016
(in thousands of Canadian dollars, except number of shares)

------------------------------------------------------------------------
------------------------------------------------------------------------

                                     Share capital
                                                             Contributed
                                    Number         Amount        surplus

------------------------------------------------------------------------
Balance, April 30, 2017         12 315 326  $       8 349  $       9 577

 Profit for the period                   -              -              -
 Other comprehensive income
  for the period:
  Effective portion of
   changes in fair value on
   designated revenue hedges             -              -              -
------------------------------------------------------------------------
Total comprehensive income
 for the period                          -              -              -
------------------------------------------------------------------------

 Common shares issued under
  bought deal financing            767 050         10 454              -
 Dividends to equity owners              -              -              -
------------------------------------------------------------------------
Total transactions with
 owners of the Company             767 050         10 454              -
------------------------------------------------------------------------

------------------------------------------------------------------------
Balance, October 31, 2017       13 082 376  $      18 803  $       9 577
------------------------------------------------------------------------
------------------------------------------------------------------------


Balance, April 30, 2016         12 315 326  $       8 349  $       9 577

 Profit for the period                   -              -              -
 Other comprehensive loss for
  the period:
  Effective portion of
   changes in fair value on
   designated revenue hedges             -              -              -
------------------------------------------------------------------------
Total comprehensive (loss)
 income for the period                   -              -              -
------------------------------------------------------------------------

 Dividends to equity owners              -              -              -
------------------------------------------------------------------------
Total transactions with
 owners of the Company                   -              -              -
------------------------------------------------------------------------

------------------------------------------------------------------------
Balance, October 31, 2016       12 315 326  $       8 349  $       9 577
------------------------------------------------------------------------
------------------------------------------------------------------------



----------------------------------------------------------------------------
----------------------------------------------------------------------------


                                  Accumulated
                                        other
                                comprehensive       Retained
                                (loss) income       earnings          Total

----------------------------------------------------------------------------
Balance, April 30, 2017        $         (279)  $     13 064   $     30 711

 Profit for the period                      -          1 425          1 425
 Other comprehensive income
  for the period:
  Effective portion of
   changes in fair value on
   designated revenue hedges              140              -            140
----------------------------------------------------------------------------
Total comprehensive income
 for the period                           140          1 425          1 565
----------------------------------------------------------------------------

 Common shares issued under
  bought deal financing                     -              -         10 454
 Dividends to equity owners                 -         (1 178)        (1 178)
----------------------------------------------------------------------------
Total transactions with
 owners of the Company                      -         (1 178)         9 276
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Balance, October 31, 2017      $         (139)  $     13 311   $     41 552
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Balance, April 30, 2016        $          607   $      8 913   $     27 446

 Profit for the period                      -            334            334
 Other comprehensive loss for
  the period:
  Effective portion of
   changes in fair value on
   designated revenue hedges             (861)             -           (861)
----------------------------------------------------------------------------
Total comprehensive (loss)
 income for the period                   (861)           334           (527)
----------------------------------------------------------------------------

 Dividends to equity owners                 -           (739)          (739)
----------------------------------------------------------------------------
Total transactions with
 owners of the Company                      -           (739)          (739)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Balance, October 31, 2016      $         (254)  $      8 508   $     26 180
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Contacts:
Solutions and general info: info@tecsys.com
Investor relations: steve.li@tecsys.com
(514) 866-5800 ext. 4120
Media relations: media@tecsys.com
(514) 866-0001 or (800) 922-8649

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