TECSYS Inc.

to Texas fourth quarter and fiscal year 2022 results conference call. Please note that the complete annual and fourth quarter report, including MD&A and financial statements, were filed on CDAR after market closed yesterday. All dollar amounts are expressed in Canadian currency and are prepared in accordance with international financial reporting standards. Some of the statements in this conference call, including this question and answer period, may include forward-looking statements that are based on management's beliefs and assumptions. Actual results may differ materially from such statements. I would like to remind everyone that this call is being recorded on Thursday, June 30, 2022, at 8.30 a.m. Eastern Time. I would now like to turn the call over to Mr. Peter Barreton, Chief Executive Officer at Texas. Please go right ahead, sir.

Thank you. Good morning, everyone. Joining me today is Mark Butler, our Chief Financial Officer. We appreciate you joining us for today's call. As most of you have likely seen in the results issued last night, fiscal year 2022 was a transformational year underscored by strong organic growth. Amid ongoing global crises from the end wave of COVID, to labor shortages and to war, supply chains have been in the eye of the storm. I believe strongly that what we do empowers our customers to set new benchmarks for success by driving excellence through their supply chains. This is not a new belief. For decades, Texas has been advocating that the supply chain is a strategic lever for competitive differentiation. But never in the history of this company has the world been so ready to invest in supply chains. I'd like to take a moment to summarize the key events of fiscal 22 and the results of operations. Mark will then walk us through the financial results in more detail. And finally, I'll comment on our outlook followed by a Q&A session. First, I'd like to highlight that our Q4 SaaS bookings were the highest quarterly SaaS bookings in our history. And this naturally adds to the continued positive impact of our growing SaaS customer base. We've also seen continued momentum in existing customers migrating to our SaaS offering. Indeed, the pace at which our SaaS business has expanded is a healthy blend of new accounts, expansion of existing SaaS customers, and some base accounts choosing to renew their engagement with Texas and convert to SaaS. Our SaaS approach has strengthened the quality of our revenue streams and it is making it easier for both new and existing clients to buy our software solutions. We have a strong pipeline and our SaaS revenue growth is fantastic, solidifying our thesis for value creation. Full year SaaS revenue was up 47% on a constant currency basis. It is a milestone year for Texas in that all but one new major account and every major account upgrade has been a SaaS deal. Overall, 91% of software bookings were SaaS in fiscal 22 versus 82% last year. In the fourth quarter of fiscal 22, SaaS revenue represented 49% of total cloud maintenance and subscription revenue. up from 40% at the same time last year. We see this as a strong endorsement of our SaaS offering and more holistically of our sustained value to our customers. I also want to take the opportunity to highlight our strengthening partner ecosystem. We committed to investing in developing a world-class strategic alliance program and we've seen excellent momentum on this front in the form of co-marketing, accreditation tools and training and supporting resources. All of this is translating into positive new SaaS account acquisitions and expansions, with 50% of new logos in fiscal 22 having been partner influence, a significant jump from 22% just two years ago. Our customer base continues to expand across verticals. Throughout the year, we have secured several meaningful add-on bookings as platform rollouts expand across the customer base. Some notable wins announced this year include Australian retail chain Politix, distributor American Woodmark, and McLeod Health in South Carolina. We have also added household brands in the healthcare space, automotive industry, apparel and footwear industry, and we continue to expand our relationship with one of the world's largest cosmetic retailers. The accelerated market opportunity has been most prominent in the healthcare sector. where we have seen significant new opportunities for us to win new business with both new and existing customers. Texas proved to be the best supply chain solution available to that market, and our SAS approach has made it easier than ever for healthcare systems to buy and deploy efficiently and effectively. We are pleased that we have capitalized on this market opportunity in fiscal year 22, with SAS conversions and new logos, including eight new health systems or IDNs, including the two that joined us in the fourth quarter. I'd like to take just a minute to talk about what adding eight new IDNs really means. Because of how well developed our end-to-end offering is in the healthcare market, there is greatest value to our customers to invest in our broader suite of solutions. As a result, our healthcare customers tend to represent a substantial lifetime value, whatever that first engagement looks like, from the warehouse to the OR suite. What sets us apart from the competition is that we can uniquely deliver value exactly where an IDN is struggling the most, and then expand on that value progressively through our relationship with that customer. So these eight newly signed IDNs are our first touchpoint, but they represent so much more. Between them, there are about 50 hospitals, more than 400 OR suites, and over 12,000 hospital beds. Collectively, they spend over $3.8 billion on medical and surgical supplies annually and over a billion dollars in pharmacy supplies. And we have proven solutions that control and optimize that spend. When we welcome a new IDN into the Texas fold, we start to collaborate with that IDN's leadership to deliver the full value of our end-to-end supply chain platform, selling into other areas of their logistics operation over time. Those eight IDNs that signed on with Texas in fiscal 22 will continue to show their value as long as we continue to deliver ours, as we have with longtime partners like Mercy Health, Parkview Health, Orlando Health, and others. Looking at this from an overall perspective, with our new bookings this fiscal year, our total health care customers alone now provide care at roughly 100,000 beds and record over $170 billion in total revenue. To put that in perspective, that's twice the revenue of FedEx and more than half of the total healthcare spend across all of Canada. With every dollar that moves through these health systems, there is a business case for optimization and supply chain sits at the very center of that discussion. Retail has been undergoing a bit of a renaissance where digital shopping and in-person shopping have converged into this new blended commerce model where consumers expect to be able to shop anywhere and get their purchases how they choose. Traditional retailers are ill-equipped with legacy technologies to effectively orchestrate that blended commerce model, and this is driving investment in new software that is capable of handling this level of complexity. The complex distribution market remains a consistent source of base account revenue with positive momentum towards SaaS conversions. In addition to a national US government organization, New bookings have underscored our competitive stance with third-party logistics providers, the automotive industry, electrical distributors, as well as traditional distribution organizations. All three sectors are contributing to our performance this year, spanning expansions and renewals by existing customers and new account growth. The pro services slowdown that we witnessed in the third quarter has continued in the fourth quarter, and we expect it to continue into the first quarter. Many projects were impacted by Omicron as executive staff and supply chain staff were hit in large numbers. That is over, but it takes a while for these projects to ramp back up. We are also seeing more of our project work being carried out by our partners. This is what is enabling our SAS revenue to grow at over 40%, while our PS revenue grows at a much slower rate. We are pleased with this development and see it as the beginning of a shift that will lead to a higher margin mix for our business. Mark will now provide further details on our financial results for the fourth quarter and the fiscal year.

Thank you, Peter.