NexJ Systems Reports Third Quarter 2022 Results

Ad blocking detected

Thank you for visiting CanadianInsider.com. We have detected you cannot see ads being served on our site due to blocking. Unfortunately, due to the high cost of data, we cannot serve the requested page without the accompanied ads.

If you have installed ad-blocking software, please disable it (sometimes a complete uninstall is necessary). Private browsing Firefox users should be able to disable tracking protection while visiting our website. Visit Mozilla support for more information. If you do not believe you have any ad-blocking software on your browser, you may want to try another browser, computer or internet service provider. Alternatively, you may consider the following if you want an ad-free experience.

Canadian Insider Ultra Club
$432/ year*
Daily Morning INK newsletter
+3 months archive
Canadian Market INK weekly newsletter
+3 months archive
30 publication downloads per month from the PDF store
Top 20 Gold, Top 30 Energy, Top 40 Stock downloads from the PDF store
All benefits of basic registration
No 3rd party display ads
JOIN THE CLUB

* Price is subject to applicable taxes.

Paid subscriptions and memberships are auto-renewing unless cancelled (easily done via the Account Settings Membership Status page after logging in). Once cancelled, a subscription or membership will terminate at the end of the current term.

NexJ Systems Reports Third Quarter 2022 Results

Canada NewsWire

TORONTO, Oct. 28, 2022 /CNW/ - NexJ Systems Inc. (TSX: NXJ), delivering intelligent customer management software to the financial services industry, today announced financial results for its third quarter ended September 30, 2022.

Third Quarter Summary

  • The Company continued its planned transition from a perpetual license model to a more predictable subscription license model generating $1.47M in license and subscription revenue for the first three quarters of the year, an increase of 50% as compared to $977K in the first three quarters of the previous year
  • $4.03M of revenue for the third quarter as compared to $4.04M in the third quarter of the previous year
  • $840K in Adjusted EBITDA loss for the third quarter as compared to Adjusted EBITDA of $370K in the third quarter of the previous year
  • $658K of net loss for the third quarter as compared to $180K of net income in the third quarter of the previous year
  • $11.47M in revenue for the nine months as compared to $11.74M in the previous year
  • $2.12M in Adjusted EBITDA loss for the nine months as compared to Adjusted EBITDA of $596K in the previous year
  • $2.91M in net loss for the nine months as compared to $282K of net loss in the previous year
  • For the first three quarters of the year, approximately $1.9M of expense contributing to the net loss for the same period related to the office lease payments and one time lease termination costs as the Company rationalized its real estate requirements during the second quarter and will realize costs savings in excess of $2.2M per year going forward

On August 29, 2022, the Company and N. Harris Computer Corporation ("Harris") announced the parties have entered into an arrangement agreement by way of a statutory plan of arrangement under the CBCA (the "Acquisition"). Under the terms of the Acquisition, Harris will acquire all of the outstanding common shares on a fully diluted basis of the Company for a cash consideration of $0.55 for each common share of the Company, with the transaction expected to close in November 2022 subject to customary regulatory and shareholder approvals

NexJ Systems Inc.









Third Quarter Financial Results









(Expressed in thousands of Canadian dollars)







(Unaudited)











 Quarter ended September 30, 


 Nine months ended September 30, 



2022


2021


2022


2021










Revenue


$


$


$


$

License and subscription fees


568


539


1,468


977

Professional services


1,529


1,502


4,256


4,560

Maintenance and support


1,933


1,997


5,743


6,203



4,030


4,038


11,467


11,740

Cost of revenue


1,113


920


3,545


2,877

Gross profit


2,917


3,118


7,922


8,863










Operating Expenses









Research and development


1,803


1,329


5,148


4,210

Sales and marketing


547


572


1,623


1,654

General and administrative


1,407


847


3,269


2,403



3,757


2,748


10,040


8,267










Adjusted EBITDA


(840)


370


(2,118)


596










Share-based payment expense


4


10


17


64

Depreciation and amortization


51


229


960


671

Lease termination costs


-


-


467


-

Income (loss from) operations


(895)


131


(3,562)


(139)










Foreign exchange loss (gain)


(233)


(66)


(353)


84

Finance income


(6)


(6)


(38)


(15)

Finance expense


2


23


(262)


74

Net income (loss) for the period


(658)


180


(2,909)


(282)


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 share-based payment expense, depreciation and amortization, lease termination costs, deferred share unit expense, restructuring costs, foreign exchange loss (gain), 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 provides Intelligent Customer Management to the financial services industry. Our award-winning CRM is designed to help Wealth Management, Private Banking, Corporate and Commercial Banking, and Insurance firms revolutionize their business. Powered by artificial intelligence, our products help drive productivity, boost client engagement, and increase revenue. With users in over 60 countries, our customers benefit from our deep expertise across financial services verticals, strategic investment in innovation, and commitment to their success.

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 [email protected], or call 416-222-5611. Join us on LinkedIn, follow us on Twitter, subscribe to our YouTube channel, or like us on Facebook.

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 "may", "will", "expect", "anticipate", "aim", "estimate", "intend", "plan", "seek", "believe", "potential", "continue", "is/are likely to", "could", "should", "target", "envision", 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 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 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) out ability to successful integrate and manage acquired businesses, offerings and people; (ii) our dependence on a limited number of customers and large project size; (iii) fluctuation in our quarterly operating results; (iv) our dependence on key personnel, and ability to attract and retain talent; (v) our compensation structure; (vi) risks associated with managing large and complex software implementation projects; (vii) uncertainties and assumptions in our sales forecasts, including the extent to which sales proposals are converted into sales; (viii) risks associated with our ability to design, develop, test, market, license and support our software products on a timely basis; (ix) market acceptance of our products and services; * commercial success of products resulting from our investment in research and development; (xi) our success in expanding sales into new international markets; (xii) competition in our industry; (xiii) failure to protect our intellectual property or infringement of intellectual property rights of third parties; (xiv) reliance upon a limited number of third-party software products to develop our products; (xv) defects or disruptions in our products and services; (xvi) currency exchange rate fluctuations; (xvii) lengthy sales cycles for our software; (xviii) general economic 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 most recently filed Annual Information Form for the year ended December 31, 2021 dated March 8, 2022, 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)









September 30, 2022


December 31, 2021





Assets





$


$

Current assets:




Cash and cash equivalents

4,511


5,489

Accounts receivable

1,087


5,457

Prepaid expenses and other assets 

852


1,334

Total current assets

6,450


12,280





Non-current assets:




Property and equipment

381


612

Right-of-use assets

245


951

Goodwill 

1,753


1,753

Contract assets

33


88

Total non-current assets

2,412


3,404





Total assets

8,862


15,684





Liabilities and Shareholders' Equity








Current liabilities:




Accounts payable and accrued liabilities 

2,299


2,023

Deferred revenue

3,740


6,592

Lease liabilities 

114


1,152

Total current liabilities

6,153


9,767





Non-current liabilities:




Accrued liabilities

68


62

Deferred revenue

5


328

Lease liabilities

84


83

Total non-current liabilities

157


473





Total liabilities

6,310


10,240





Shareholders' equity:




Share capital 

83,485


83,485

Share purchase loans 

(3,598)


(3,598)

Contributed surplus 

8,752


8,735

Accumulated other comprehensive income

751


751

Deficit

(86,838)


(83,929)

Total shareholders' equity

2,552


5,444





Total liabilities and shareholders' equity

8,862


15,684

 

 

NexJ Systems Inc.








Condensed Interim Statements of Comprehensive Income (Loss)







(Expressed in thousands of Canadian dollars, except per share amounts)







(Unaudited)

















Three months ended September 30,


Nine months ended September 30,


2022


2021


2022


2021









Revenue

$


$


$


$

License and subscription fees

568


539


1,468


977

Professional services

1,529


1,502


4,256


4,560

Maintenance and support

1,933


1,997


5,743


6,203


4,030


4,038


11,467


11,740

Cost of revenue

1,113


919


3,546


2,874

Gross profit

2,917


3,119


7,921


8,866









Expenses:








Research and development

1,803


1,328


5,149


4,223

Sales and marketing

547


573


1,623


1,657

General and administrative

1,462


1,087


4,244


3,125

Lease termination costs

-


-


467


-


3,812


2,988


11,483


9,005









Income (loss) from operations

(895)


131


(3,562)


(139)









Foreign exchange gain (loss)

223


66


353


(84)

Finance income 

6


6


38


15

Finance expense 

(2)


(23)


262


(74)


227


49


653


(143)

















Net income (loss) for the period

(668)


180


(2,909)


(282)









Other comprehensive income (loss):








Items that will not be reclassified to profit or loss:








     Unrealized income (loss) on equity securities

-


6


-


(1)

Income (loss) for the period and








   comprehensive income (loss)

(668)


186


(2,909)


(283)









Earnings (loss) per share








Basic and diluted

(0.03)


0.01


(0.14)


(0.01)









Weighted average number of common shares 








outstanding, in thousands








Basic

21,076


21,067


21,076


21,059

Diluted

21,076


21,105


21,076


21,059

 

NexJ Systems Inc.




Condensed Interim Statements of Cash Flows




(Expressed in thousands of Canadian dollars)




(Unaudited)









Nine month ended


Nine month ended


September 30, 2022


September 30, 2021









Cash flows from (used in) operating activities:

$


$

Loss for the period

(2,909)


(282)

Adjustments for:




Depreciation and amortization of property and equipment

112


156

Depreciation of right-of-use assets

848


515

Changes in contract assets

55


(46)

Share-based payment expense

17


64

Loss on disposal of fixed assets

71


-

Finance income

(38)


(15)

Finance expense

(262)


74

Foreign exchange loss (gain)

(133)


22

Change in non-cash operating working capital:




Accounts receivable

4,370


2,112

Prepaid expenses and other assets

482


184

Accounts payable and accrued liabilities

282


171

Deferred revenue

(3,175)


(1,793)

Net cash flows from (used in) operating activities

(280)


1,162





Cash flows from (used in) financing activities:




Payment of lease liabilities

(910)


(839)

Interest paid

(7)


(4)

Proceeds from exercise of stock options

-


9

Net cash flows used in financing activities

(917)


(834)





Cash flows from (used in) investing activities:




Purchase of property and equipment

(5)


(32)

Proceeds from disposal of fixed assets

53


-

Interest received

38


15

Net cash flows from (used in) investing activities

86


(17)





Effects of exchange rates on cash and cash equivalents

133


(22)





Increase in cash and cash equivalents

(978)


289





Cash and cash equivalents, beginning of period

5,489


5,426





Cash and cash equivalents, end of period

4,511


5,715





Supplemental cash flow information:




Acquisition of property and equipment not yet paid

-


10

 

 

SOURCE NexJ Systems Inc.

Cision View original content: http://www.newswire.ca/en/releases/archive/October2022/28/c6496.html

Copyright CNW Group 2022

Comment On!

140
Upload limit is up to 1mb only
To post messages to your Socail Media account, you must first give authorization from the websites. Select the platform you wish to connect your account to CanadianInsider.com (via Easy Blurb).