Revenue up 93% year-to-date, cash balance increases to $63 million
Toronto, August 11, 2011 — NexJ Systems Inc., (“NexJ” or the “Company”) (TSX: NXJ), a leading provider of enterprise private cloud software, delivering customer relationship management (CRM) solutions for the financial services, insurance and healthcare industries, today announced unaudited financial results for its second quarter ended June 30, 2011.
Total revenue for the second quarter of fiscal 2011 was $7.7 million, up 42% compared to $5.4 million for the same period of the prior fiscal year. Adjusted EBITDA decreased to a loss of $0.9 million compared to income of $0.5 million in the same period in 2010. Net loss of $1.5 million or $0.8 per share (basic and diluted), increased by $2.0 million compared to earnings of $0.5 million or $0.04 per share (basic and diluted), for the same period in 2010.
Total revenue for six months ended June 30, 2011 was $15.4 million, up 93% compared to the $8.0 million for the same period of the prior fiscal year. Adjusted EBITDA decreased to a loss of $1.7 million compared to a loss of $0.9 million in the same period in 2010. Net loss of $3.9 million or $0.24 per share (basic and diluted), increased by $2.8 million compared to a loss of $1.1 million or $0.09 per share (basic and diluted), for the same period in 2010.
“In the first half of 2011 NexJ made significant advancements in the business that contributed to the 93% growth in revenue year-to-date and furthered our ability to deliver on our objectives for the coming years,” said William M. Tatham, NexJ’s Chief Executive Officer. “We continue to see strong demand for our industry leading technology within the financial services and insurance markets. Following on our recent initial entrance in the health market we are also now responding to opportunities in this area which we believe will positively impact our results in the medium and long term.”
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 June 21, 2011 and can be accessed by dialing 416-849-0833 and using password 77819713.
Financial Statements for the period are available for download.
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 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.
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. NexJ’s next-generation, people-centered software combines industry-specific functionality with information from multiple applications and data stores to provide comprehensive knowledge of the individual.
NexJ was founded by an executive management team with extensive experience in the successful design and delivery of large-scale, integrated, enterprise software solutions. For more information about NexJ Systems call 416-222-5611, e-mail info@nexj.com, or visit www.nexj.com.
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; (x) 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 dated June 14, 2011 for the three months ended March 31, 2011 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.