AGM 2022

Sep 8, 2022

Hello, and welcome to the annual meeting of shareholders for Tecsys Inc. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer, and use of same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the corporation that you first obtained all required consents for the disclosure, recording, transfer, and use of such personal information from all appropriate persons before your disclosure. At the end of the meeting, we'll have a question and answer session. Shareholders and/or proxy holders can submit questions or comments at any time by clicking the Q&A tab. It is now my pleasure to turn over today's meeting to Mr. Dave Brereton, Chairman of the Board, Tecsys Incorporated. Mr. Brereton, the floor is yours. Good morning, ladies and gentlemen. Welcome to the 2022 annual meeting of shareholders of Tecsys. My name is Dave Brereton, and I'm Executive Chairman of the Board of Tecsys. Allow me to proceed with the introductions. With me today are Peter Brereton, President and CEO, and Mark Bentler, CFO and Secretary of Tecsys. The directors of Tecsys are also with us virtually today. According to the bylaws of the corporation, I am authorized to act as chairman of the meeting, and Mark Bentler, in his capacity as the secretary of the corporation, will act as secretary of the meeting. As this meeting is held in a virtual format with attendance via live webcast, we think it is necessary to set out a few rules for the orderly conduct of the meeting. Questions in respect of a motion can be submitted by any registered shareholder or duly appointed proxy holder. Click the question icon at the top of the voting platform page, type in your question in the text box at the bottom of the messaging screen, and then click the send button. Our moderator will view the questions and send to review for the chairman to address them during the meeting. When asking a question, please indicate your name, which entity you represent, if any, and confirm that you are a registered shareholder or a duly appointed proxy holder. Questions will only be addressed during the question period at the end of the meeting, provided the questions regarding procedural matters or directly related to the motions before the meeting may be addressed during the meeting. Voting can be completed at any time from now until the end of the formal business of the meeting. If you have already voted and do not wish to change your vote, you do not need to vote again during the online meeting. If you vote again online, your vote will revoke the proxy you previously submitted. For those who have not yet voted, we encourage you to log on to the platform and vote. We will now proceed with the formal portion of today's meeting. To expedite the formal part of the meeting, I will move and second all motions. The next slide is the agenda. In today's meeting, I would like us first to deal with all the procedural matters and close the annual meeting of the shareholders. Following that, Peter Brereton will make his remarks on the last fiscal year. Then Mark Bentler will present the financial highlights of that year. Later today, after the market close, we will be releasing Q1 fiscal 2023 results for the quarter ending July 31, 2022. Tomorrow at 8:30 A.M. Eastern Time, Peter and Mark will be conducting an earnings call to discuss the results of first quarter of fiscal 2023. We invite you to attend that call tomorrow morning, and separate dial-in instructions for the call are being provided later in the presentation. The earnings call dial-in instructions have also been posted on SEDAR. Slide 3. Forward-looking statements. The statements in this presentation relate 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. such as 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. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners. Slide four. Nomination of scrutineers. With the consent of the meeting, I have designated as scrutineers Pina Pacifico and Theresa De Luca, employees of Computershare Investment Services, registrar and transfer agent of Tecsys Inc. Notice of meeting. The secretary has submitted a copy of the notice of this meeting as sent to the shareholders and the accompanying material, as well as the affidavit of a transfer officer of Computershare, confirming that the notice of the meeting and proxy form were duly sent to shareholders of record on July 22, 2022. These documents will be filed with the recordings of this meeting. Next slide six. Report of the scrutineers. The scrutineers have submitted the report showing that the quorum has been reached, and they confirm that 84.6% of the holders of the outstanding common shares of the corporation are present or represented at this meeting. Therefore, I declare this meeting duly called and constituted to deal with any matters appearing on the agenda. The secretary will file the report of the scrutineers with the results of this meeting. Next slide, resolution for an exemption from the reading of the minutes of the last meeting. Unless there is any objection, I will dispense with the reading of the minutes of the last meeting of shareholders held on September 9th, 2021. I direct that the minutes of the last meeting of shareholders be taken as read and approved, and signed as accurate. Copies of the minutes are available with Tecsys corporate secretary. Receiving of the financial statements and the auditor's report thereon. The next order of business on the agenda is the presentation of the financial statements for the fiscal year ended April 30th, 2022, and the auditor's report thereon. A copy of the annual report containing such financial statements and the auditor's report thereon has been sent to every shareholder of record on July 22nd, 2022, who requested a copy in accordance with the applicable regulatory requirements, and copies are available with Tecsys Corporate Secretary and on SEDAR. Consequently, I ask the secretary to produce the annual report and file it with the records of this meeting. Now to slide 9, the election of the directors. The next order of business on the agenda is the election of directors. The management of Tecsys has proposed in the management information circular, 7 nominees for the shareholders to consider today. The directors appointed at this meeting will serve as directors of Tecsys until the next annual meeting of shareholders or until their successors are appointed. The proposed nominees are Dave Brereton, Peter Brereton, Vernon Lobo, Steve Sasser, David Booth, Rani Hublou, and Kathleen Miller. Are there other nominations? If you have a nomination, please type the name in the instant messaging service of the virtual interface. Since there are no other nominations, I move and second a motion to close the nomination period. I now also move and second a motion to nominate the following persons as directors of Tecsys Inc. Dave Brereton, Peter Brereton, Vernon Lobo, Steve Sasser, David Booth, Rani Hublou, and Kathleen Miller. Unless there are any questions, I will move to the next item of business. Slide 10, the appointment of the auditors. We shall now proceed with the appointment of auditors for the ensuing year and with authorizing the directors to fix the auditors' remuneration. The audit committee of the board of directors of Tecsys has approved, subject to shareholder confirmation, the appointment of KPMG LLP Chartered Professional Accountants as the auditors of Tecsys. I move and second that KPMG LLP Chartered Professional Accountants be appointed auditors of Tecsys until the next annual meeting of shareholders. Unless there are any questions, I will move to the next item of business. Now the vote. Slide 11. As we mentioned, voting today will be conducted by electronic ballot for registered shareholder or duly appointed proxy holders. The polls are open. All registered holders and proxy holders who have properly logged in with their control numbers or invitation code and wish to vote will be able to see on the screen all motions being brought forth at this meeting. Please register your votes by accessing the voting page and selecting the for or against buttons next to the name of each proposed director, and selecting the for or withhold buttons next to the resolution with respect to the appointment of KPMG LLP Chartered Professional Accountants as Tecsys' auditors. No question has been submitted on the voting procedure. We will provide registered shareholders and duly appointed proxy holders approximately 10 more seconds to complete the electronic ballots. Once the electronic balloting closes, the voting page will disappear, and your votes will automatically be submitted. I have been advised by the scrutineers that based on the preliminary results received by the scrutineers, the proxies deposited for the meeting have been voted in favor of the resolutions. Each of these have been elected as directors of Tecsys to serve until the next annual meeting of shareholders, or until their successors are elected or appointed. The resolution appointing KPMG LLP Chartered Professional Accountants as the auditors of Tecsys, and authorizing the directors to fix the auditors' remuneration has been approved. I would ask the scrutineers compile the final report regarding the results of voting on all business matters. The results of the poll will be included with the minutes of this meeting, and the results of the voting will be announced in a press release in accordance with the policies of the TSX and filed on SEDAR. Termination of the shareholders' meeting. We have now completed all procedural matters. I would like us now to terminate the annual meeting of shareholders, and then we will continue with the other presentations. I move and second that this meeting now terminate. As there is no further business to come before the meeting, I declare the formal part of the meeting to be concluded. I will now turn the meeting over to Peter Brereton, the CEO of Tecsys, for the presentation of his remarks on fiscal year 2022. Thanks, Dave. Continuing on in the slide deck, we have a message. Sorry, I just got a message here. No, I think I'm fine. Dave, are you hearing me okay? I'm hearing you fine. Yep. Okay, perfect. In terms of slide 14, this has to do with our overall positioning in the market in terms of the supply chain and what we do. Just a reminder to our shareholders, this is what we do. We clarify uncertainty in the supply chain, and we equip supply chain greatness. I've got a slide coming up in a couple of moments here that explains what our platform does. In essence, we are both a supply chain-focused ERP and a warehouse management solution as well as transportation management. We really cover everything in the supply chain from one end to the other. Hence our messaging is, hey, we equip supply chain greatness. Our customers are specialists in a wide variety of fields, some in healthcare, some in wine and spirits, some in hard goods and fashion goods and so on. Our mission is to provide them that platform to make sure they can operate a top-notch, competitive, efficient supply chain. Moving on to slide 15. We've been in business a very long time, and last 11 years, we've been named by Gartner in their Magic Quadrant for warehouse management and warehouse execution. We actually moved up this year. For the last 10 years, we've been shown as a visionary, slowly moving up the visionary section of the quadrant. This year, for the first time, we moved above the midline in their quadrant, for those of you that have seen that quadrant. Obviously our goal is to continue to move up that segment of the quadrant until we are eventually in the Leaders Quadrant. We'll see how that goes. We're pleased with that promotion above that middle line, which is the execution axis. From the standpoint of the healthcare, we continue to see that a number of our healthcare customers are in Gartner's top 25 Supply Chain Masters list. Sorry, I'm trying to control this cough. For those of you that have had COVID, you know how this goes. I had COVID a couple of weeks ago, and this cough shows up whenever I start to talk, which unfortunately is fairly often. On slide 16, we are seeing an end-to-end. You see an end-to-end picture here of the platform we bring. We provide software that manages demand planning, which is predicting what our customers need to buy and when they need to buy it. Then the actual purchasing process, procurement, and inventory, the physical components, warehousing and transportation. Of course, when you keep buying this inventory, you do eventually have to get rid of it. Sorry. Our commercial customers move that out through e-commerce, where our healthcare customers move that out through point of use. Could be operating room, cath lab, nursing station. They get rid of it at point of use. All of that platform is, of course, surrounded by financial management, analytics, and in the case of third-party logistics companies, we also offer third-party billing. That's the platform we bring to market. It's a SaaS platform. It operates in the cloud. Other than our retail group, which focuses on supply chain and distributed order management and OMS for retailers, this platform all operates in the AWS public cloud. In the case of retail, that market, we focus on the Microsoft platform. That resides in the Microsoft cloud. The retail marketplace is reluctant to run on the Amazon platform, hence we run that component on the Microsoft platform. If you move to the next slide 16, you will see here the breakdown of our key markets. Currently, complex distribution or converging distribution is 60% of our annual recurring revenue. Healthcare is 40%. Right now, healthcare is the most rapidly growing piece. You'll see when we get to the slide in a few minutes, healthcare is a market that we absolutely lead in. At the same time, it's much more contained in size. We anticipate that healthcare will continue to lead our growth for the next few years, but that ultimately, complex distribution will probably reemerge as a leader for us as we become more saturated in healthcare. We'll see how that goes. You can see the variety of clients here. On the distribution side, you've got everyone from Canon, Honda, Nissan, a number of Caterpillar dealers, etc. You've got Ubisoft and Red Wing in there. On the healthcare side, a wide variety of hospitals, mainly in the U.S. We do a few in Canada, but that market is predominantly, for us, a U.S.-based market. If you move on to slide 18, just a brief talk about integrity. We try to operate a business which is very much based on respect, respecting our customers, the world around us, and our colleagues. That is not only for us a moral commitment, we also think it's frankly good for business. We are recognized by our customers as a key partner of theirs. We need to run a safe, conservative business. They are, after all, operating in the cloud at this point. If the cloud goes down, they are down. If we fail in any way, we directly impact them. We pursue a relationship with these customers based on customers for life and try to maintain a very open and transparent relationship with them. In terms of the world around us, we continue to give back to the community. Most of our giving is focused on youth, predominantly in Canada, although to some extent in rest of world, but the vast majority of it is more local and focused on youth organizations that are helping our youth deal with the complex world that we find ourselves in and assisting them to grow into the kind of positive impact adults that we all want our youth to grow into. In terms of our colleagues, we operate very much on the basis of treating everyone with respect, from entry-level students that join us right out of school to more senior staff. We focus on a culture of respect. We believe it results in a more productive environment and also results in lower churn. It also supports diversity, and if you look at our mix of staff, a much more diverse workforce than much of the software industry. For instance, our R&D team, about 180 people in R&D, I think the last numbers I saw, we were running sort of 34%-35% women in R&D, which I recognize it's not 50%, but it's still considerably higher by quite a degree than the bulk of the software companies around us. We're very proud of that, the impact of that type of environment and what it's allowed us to do with our workforce. If you move on to slide 19, this is just sort of a different way of looking at the same issues. When we talk about ESG, certainly in the last couple of years, a lot of the focus has been more on the E of ESG. We are, to be quite blunt, we are struggling to score ourselves on that point. We're not a high carbon footprint company. We're a pure software play. Over the last couple of years, of course, we've gone to pretty much a work-from-home. We're now a remote-first company. You're looking at a very small percentage of the workforce, I would say less than 5% of the workforce that is commuting into work on a regular basis. That has further reduced our carbon footprint. Our travel to customers is also way down. Much more work is done remotely. We've seen a pretty rapidly reducing carbon footprint. At the same time, it's hard to put a precise number on it. We're working on that. We believe there's opportunities to score our projects with our customers, that most of our projects with our customers have a very substantial impact on reducing carbon footprint as we bring about supply chain efficiency and dramatically reduce the number of deliveries and so on made to various local warehouses and so on. We continue to work on that. It needs some more work to get more precise. We published this year a complete report on our ESG efforts and intend to become more precise and intentional about that as we move forward. As you look at the next slide, you will see how that breaks out across the various elements within our board. That's slide 20. You can see we've got elements. The full board of directors is involved in, for instance, strategic planning, looking at the competitive environment and so on, but we now have a dedicated governance and nominating committee. We've got a compensation committee, which is also, of course, managed by independent directors, and an audit committee, which is also, of course, run and staffed by independent directors. We are continuing to move forward in the area of governance. We expect to see continued improvements in this over time. You can see our board is increasingly diverse, and we have a commitment to continue that effort to increase the diversity of our board. The next few slides, starting on slide 20, just walk you through a few different kind of fun stories about, across our different vertical markets that we serve. This particular slide 21, is those Sanford Health. As you can see there, 46 hospitals in 26 states. Some of those are very large hospitals, some of them are very small regional hospitals. We have been working with Sanford for a number of years to, as they say here, root out operational inefficiencies and really dramatically improve both the cost, the quality, and outcome of running their surgical centers. You can see in the quote from Susan Pfeiffer there, they're using the data that we've generated over time to guide progressive optimization of their preference cards. They are far ahead of their own internal targets. Nearly $4 million in one-time inventory savings, optimization across disciplines, gains in labor and productivity, et cetera. It's just been a huge win for them. It is reducing time spent in surgery. It is reducing post-op infection and, of course, driving significant cost gains. Great win there. Next slide 22. A completely different kind of story. American Woodmark, 10,000 employees, one of the nation's largest cabinet manufacturers, a huge supplier to some of the big retailers that sell cabinets. They're currently running us in their central distribution facility, but they are progressively rolling this out across their entire network. They are finding it is optimizing their flexibility and visibility and scalability, and so on as they roll it out. Great process there and providing solid benefits to them. Slide 23, Red Wing Shoes. This is a manufacturer and retailer, so they make their own shoes and sell their own shoes. Over 525 Red Wing Shoes retail stores. In this case, we rolled out our order management solution to manage omnichannel, so you can buy online, pick up in store, endless aisle capability in the stores, et cetera. It has been a huge win for Red Wing Shoes. They were in the process of selecting an order management solution when the pandemic hit, and suddenly the business in their stores plummeted. We accelerated the rollout with them, got it fully deployed, and it was a huge boost to them during the pandemic. As the pandemic has sort of wound down, there's obviously still a lot of COVID around, but the stores are back open again. They are seeing a good mix of omnichannel fulfillment through both their stores and direct ship to consumer. As they say here, they're more agile in their online order fulfillment, and they've been a good partner for us, and I think we've been a great partner for them. The last story here, slide, what are we at, 24. Werner Electric. Big electrical distributor, 28,000 items. You can see their customers, 30% contractors, 30% industrial, and 20% are maintenance and repair operators. This has, again, been a great success for them. They implemented the WMS. They've now got very high order accuracy, substantial improvement in how they handle spools of wire. That's one of the challenges for electrical companies is managing these very expensive spools and what you cut off these spools. If somebody orders 120 ft of wire, which spool do you take it from to maximize what's left on the spool for future orders and all that kind of thing. They've rolled that out. They've seen huge efficiency gains. They have struggled with staffing as they've seen cost of labor rise significantly. Supply chain challenges as well. The platform has been of help to them. If you look at global reach on slide 25, we continue to see increasingly global revenue. The Australian market continues to be a nice growing market for us. Western Europe continues to do well. Still a small piece of our overall business, very much centered out of Denmark, of course, because of the acquisition we made a few years ago, but continuing to see some nice growth there. You can see annual recurring revenue up to CAD 63 million, based on trailing 12 months as of April 30th. Slide 26. You've probably seen this slide before. Just a reminder, the healthcare market in the U.S. is about a $600 million annual recurring revenue opportunity. We currently have about 15% of the names in that market, which represents about CAD 92 million opportunity in terms of ARR within our base accounts. Not to mention, of course, the rest of that market that we haven't yet won. This is a rapidly moving market. It is a very large market relative to our size. When you figure that currently we're doing 60-some million in annual recurring revenue, this is a very large TAM for us. At the same time, we recognize it's not unlimited. We won't win 100% of these accounts. We believe we can probably, over time, win 50% of these accounts, and get to a much higher penetration rate. Exciting market. We are the leader. There's nobody else that's a direct competitor to us in this market. We see this as a prime driver of shareholder gains over the next few years. If you look at slide 27, this is the brand owner and retail convergence market that is driving opportunity in complex distribution. This market is finally now really waking up again. It's interesting, we did good business in this market in fiscal 2022. As we sit here today in September of 2022, we're seeing this market really come to life. They're kind of moving out of crisis mode. Their containers are starting to arrive again. The backup in the ports is starting to subside. Supply chain challenges are still there, but they're abating somewhat. These companies are starting to shift and look at their platforms and say, "Okay, we're still all running the platforms we put in in time for Y2K. This is getting pretty old. Doesn't really fit today's world. It's not agile enough. It's not resistant to ransomware enough. It's time for a new platform." We're seeing a very high level of activity in this market. This is a much larger market if you look across North America where the healthcare market is $600 million of ARR total addressable market. This is more of a $6 billion total addressable market. In healthcare, we're the leader. In this market, we're a competitor. Pretty sizable market opportunity there. Slide 28, this just walks you through the growth of our annual recurring revenue over the last few years. You can see from $26 million in 2018 to $62.7 million in 2022. Some nice growth there. As I said earlier, 40% of that is healthcare, 60% consumer or complex distribution, and we've seen 17% year-over-year constant currency growth at Q4. If you look at slide 29, this just talks about net retention rate. This bounces around a little bit. This is looking at existing customers, what is their annual recurring revenue at the end of this year versus the end of last year? You've obviously got some customers that leave us, not very often. Our gross retention rate tends to be in the mid-90s, so you're looking at sort of 20-25 years average life with us. There are occasional ones who do leave us. You've got the others that are expanding with us, adding users, shifting over to SaaS, et cetera, that drives that net retention rate up to where it is. If you look at slide 30, here you see the growth in SaaS revenue and total recurring revenue. This sort of breaks out the two, and you can see that fiscal 2022 here ending with CAD 26.9 million of SaaS revenue. This is, of course, by far the most rapidly growing piece of the business. We continue to see some pretty exciting results in that area and look to continue the trend. I mean, this is the piece that obviously drives massive shareholder value, drives up the Remaining Performance Obligation number that continues to drive great value for shareholders. My last slide 31, the dividend payment history. We continue to increase the dividend on a relatively steady basis. It's obviously a pretty small payout in terms of percentage versus the share price. We continue to see this as an important recognition of our patient long-term shareholders that continue to invest in us and believe in us and have stayed with us through the years. Our intention at this point is certainly to continue gradually increasing this dividend over time. We're proud to be a rapidly growing tech company in Canada that actually makes money and pays dividends. That just sort of underscores that point. That's it for me. I will turn it over to Mark Bentler, our CFO, to walk you through 2022 in a little bit more detail. Thanks, Peter. I'm on slide 32, and I'll go ahead and go to slide 33 for the agenda for my section. I'm going to be speaking a little bit about the financial statements in the context of growth and what we've seen happen in our fiscal 2022. We'll talk a little bit about the balance sheet and free cash flow, the financial strength of the business. Then finally, we'll take a quick peek at stock performance against the benchmark. On slide number 34, this slide is about revenue and overall revenue growth, and you can see that in our fiscal year ended April 30th, 2022, which seems like quite a while ago. In fact, we'll talk a little bit later in the presentation here about our Q1 fiscal 2023 earnings call, which is happening tomorrow. We're releasing new numbers for our quarter end of July 31st, later after hours today. This is all looking back to our fiscal year ended April 30th, 2022, where we reported total revenue growth of 11% against some currency headwinds. If you normalize for a constant currency, that growth was actually about 16%. Good solid growth and, as Peter has alluded to previously, driven by really growth in our recurring SaaS revenue business. Looking ahead, going to the next slide 35. A picture here of our SaaS transformation history. What this slide looks at is a trend from 2018 fiscal year to the most recently completed fiscal year in 2022. The red bars are our old legacy maintenance and support revenue business. The light blue bars are our SaaS revenue. You can see that our maintenance and support business, both of these are recurring revenue streams, of course. You can see that our maintenance and support business is sort of moderating and flattening out, while all our SaaS business, where all our new sales are happening, is growing, and growing quite significantly. In fact, in this fiscal 2022, that SaaS revenue growth was 41%. Quite proud of that. The other thing that you'll see happening over this timeline is the percentage of our recurring revenue is becoming more and more predominant in our P&L. Recurring revenue as a proportion of our total revenue. We exclude hardware from that calculation just to remove some sort of lumpiness and get to the underlying trend. Back in 2018, that recurring revenue was just over 42% of our total revenue, ex hardware. That's grown in fiscal 2022, being just over 52% of our total revenue, excluding hardware. Really solid growth in here, growth that's driven from SaaS, and driving up recurring revenue in our overall P&L. Moving to slide 36, strong and growing SaaS backlog. This slide shows our SaaS backlog, which is essentially the value of all of our contracted SaaS revenue that hasn't been recorded yet. By way of example, if we sell a CAD 1 million SaaS contract that's got a 5-year term, it's going to recognize eventually CAD 5 million worth of revenue over 5 years. That 5 million would be called backlog the day we sign that contract. This CAD 94 million backlog number at the end of our fiscal 2022 was contracted SaaS revenue that is going to be recognized over the future contract terms of that SaaS. It's a good way to see how much future SaaS revenue and how much future SaaS revenue growth is going to show up in our prospective P&L. On the back of solid bookings in fiscal 2022, we've seen that backlog grow this year by 43%. Moving on to slide 37, another important part of our business, because it does support our growth of SaaS. When we sell these SaaS platforms, we need to implement them, and that's where our professional services comes into play to implement those platforms for our customers. We saw good growth there in fiscal 2022 as well, where professional services revenue grew by 9%, up to CAD 52 million for that fiscal year. Moving on to slide 38. Peter spoke a little bit about the regional distribution of our revenue, so I won't spend much time here. You can see that USA is the big driver of our overall revenue. About 65% of our revenue is U.S.-based, which also tends to mean that it's U.S. dollar based, which subjects us to some currency impacts as exchange rates move around, in particular between the Canadian and the U.S. dollar. About 65% of our business is U.S. That's grown a little bit over the last number of years. You can see it here, going from 57.6% a couple of years ago to 65% now. Some of that growth is driven by the fact that healthcare sales are leading growth for us right now, and substantially all of that business is U.S.-based business. Good growth there and a good proportion of our overall regional revenue there. We still have about 14% of our revenue in international other markets outside of U.S. and Canada. The lion's share of that is in Europe, but also rest of world. Moving on to slide 39, just to look at headcount and what we've been doing there in the last fiscal year. We've been doing quite a bit of hiring, another 10% of growth in headcount during our fiscal year 2022. You can see where that headcount is adding. We've added to sales and marketing headcount really right across the board. The big numerical increases are really in our R&D organization and our professional services and customer support and cloud operations services parts of our business. Moving on to slide 40, just to talk a second about profit and loss from operations and Adjusted EBITDA. You can see from this slide that in 2022, we had, again, solid profit, but down a bit from fiscal 2021. Those of you who have been around for a while heard us last year talking about fiscal 2021 and the positive impacts of foreign exchange in that year. That's turned into a negative comp this year, so our profitability, if I look at Adjusted EBITDA in that context, was CAD 10.1 million in the current year compared to just over CAD 16 million last year. We had a negative impact in the current year from foreign exchange, which accounts for about CAD 5.2 million of decline in Adjusted EBITDA in 2022 compared to 2021. That was a big driver in the decline in profit. We also continued to invest for growth. We're investing there in sales and marketing and global services for capacity and in R&D as we continue to take advantage of what we see as a very important market opportunity ahead of us. Finally, one other headwind that we faced in 2022 versus 2021 was our shift to SaaS, where we saw a year-on-year decline of in excess of CAD 2 million in license revenue between those two years. Of course, when you have license revenue, you typically recognize it as soon as you sign it. You ship the license, and you recognize the revenue, and a substantial portion of that falls down to the bottom line. Differentiate that to SaaS, where when you sign the deal, it goes into your backlog, like the slide I showed before with the CAD 94 million of backlog, and then it gets recognized prospectively into revenue and profit in subsequent periods. That sort of shift impact has had an impact in our comp 2022 compared to 2021. We're happy with this outcome in 2022. Again, we consider this solid profit and especially as we continue to invest for growth. Moving on to slide 41, just a quick look at the balance sheet. We continue to have solid cash position and strong liquidity. We've got about CAD 43 million in cash and cash equivalents, including short-term investments. If you take out our debt from that, our long-term and current portion of long-term debt, we're still about CAD 33+ million of net cash. So quite a bit of liquidity. Strong cash position, which is important for us as we look at opportunities in the future. Moving on to slide number 42. Positive free cash flow from the business during the period, with continued investment for growth, and that's important. Our expectation is to continue to grow the business, continue to invest cash flow from operations in growing the business. On the other hand, we do want to run a business that's generating a positive cash. Finally, slide 43, just a historical look at our stock price performance. This is compared against the S&P/TSX Composite Index. That comp index was up by, you can see, about 1.3 times, in this time horizon, so five years from the end of 2017 to the end of 2022. During that same period of time, our stock price was up by 2.5 times. A good solid return against that comp. You can see it spiked up last year as markets became fairly exuberant, and technology stocks in particular kind of spiked up and now have come back down to the levels that we're seeing today. Still really what we consider a very positive multi-year long-term hold return for our shareholders. That concludes my comments on fiscal 2022. I will just draw your attention on slide number 44 to our Q1 2023 results are being released, like I said, after hours, after market closes today. We invite you to join our conference call, where Peter and I will be going through those results tomorrow morning at 8:30 A.M. The phone numbers to dial in there are available online on SEDAR, and also here on the screen. With that, I will turn the call back over to Dave to lead us through the Q&A. Thank you, Mark. Thank you, Peter. We now go to slide 45, the Q&A. I ask that all attendees who would like to ask a question use the instant messaging feature of the virtual interface to do so. We will answer as many questions as time permits. When asking your question, please state your name, the entity you represent, if any, and confirm you are a registered shareholder or a duly appointed proxyholder. Please limit your questions to topics relating to today's subject matter, and keep your questions short and to the point. We will now give attendees a moment to type in their questions. For each question we answer, we will summarize the question, read out loud the name of the person who asked such question, and if applicable, the entity such person represents. We would like to remind you that questions which were already answered or that are redundant or repetitive will not be published or answered. Hello, Dave. I'm confirming there are no questions. Okay, we confirm that we've not received any more questions from shareholders. This is all for today. Thank you to everyone who has attended our virtual meeting, and I would now welcome you to enjoy the virtual sandwiches at the back of the virtual room. This is the end of the meeting. Thank you very much. That concludes the conference call. Thank you for your participation. You may now disconnect your line.