Descartes Announces Fourth Quarter Financial Results.WATERLOO, Ontario Coordinates: Waterloo is a city in Ontario, Canada. It is the smallest of the three cities in the Regional Municipality of Waterloo, and is adjacent to the larger city of Kitchener. -- The Descartes Systems Group Inc. (Nasdaq:DSGX DSGX Dynamic Sound Generator Xtra (Sony) DSGX Dynamic Sound Generator Extra ) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :DSG DSG Direct Shift Gearbox (Audi) DSG Dosage DSG Deputy Secretary General DSG Dressing DSG Designate DSG Desmoglein DSG Duke Student Government (Duke University) ), a leading provider of on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front technology and services that help distribution and logistics sensitive organizations deliver, today announced its financial results for the fourth quarter (Q4FY05) and fiscal year ended January January: see month. 31, 2005 (FY05). All financial results referenced are determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) and are in United States currency. As described in more detail below, key financial highlights for Q4FY05 include: --Total expenses $1.8 million lower than the previous quarter (Q3FY05) and significantly lower than total expenses of $33.8 million two quarters ago (Q2FY05); --Loss reduced by $1.8 million from Q3FY05 and reduced by $21.7 million from Q2FY05; --Generated positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $1.2 million. EBITDA is a non-GAAP financial measure described in more detail below; --Significant reduction in days-sales-outstanding (DSOs) to 58 days, down from 68 days in Q3FY05 and down from 82 days in Q2FY05; and --A $2.4 million increase in cash, cash equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has since the end of Q3FY05. Q4FY05 and FY05 Financial Results Total revenues for Q4FY05 were $11.0 million, unchanged from Q3FY05 and compared to $11.1 million in Q2FY05 and $14.4 million in the fourth quarter of the previous fiscal year (Q4FY04). Total expenses for Q4FY05 were $12.0 million, down $1.8 million from Q3FY05, and down significantly from $33.8 million in Q2FY05 and $24.9 million in Q4FY04. This reduction in expenses is principally a consequence of Descartes' Q2FY05 restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). initiative started in May 2004. The loss per share for Q4FY05 was ($0.02), improved from ($0.07) in Q3FY05, ($0.56) in Q2FY05 and ($0.26) in Q4FY04. Descartes reported positive EBITDA in Q4FY05 of $1.2 million, compared to an EBITDA loss of ($0.7) million in Q3FY05, ($20.7) million in Q2FY05 and ($8.0) million in Q4FY04. EBITDA is a non-GAAP financial measure (described in more detail below) referenced to show Descartes' progress in aligning a·lign v. a·ligned, a·lign·ing, a·ligns v.tr. 1. To arrange in a line or so as to be parallel: align the tops of a row of pictures; aligned the car with the curb. its operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. to its visible and recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenues. Descartes' aggregate cash, cash equivalents and marketable securities at the end of Q4FY05 were $48.8 million, up $2.4 million from the position at the end of Q3FY05. Cash generated by the business was used to pay $0.7 million of interest on Descartes' outstanding convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. and $0.5 million for restructuring activities. Descartes' DSOs for Q4FY05 were 58 days, down 10 days from 68 days in Q3FY05, down 24 days compared to 82 days in Q2FY05, and down from 81 days in Q4FY04. For FY05, total revenues were $46.4 million compared to $59.8 million in FY04. Total expenses were $101.7 million, including $18.2 million in goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges, compared to total expenses of $98.3 million in FY04. The loss per share for FY05 was ($1.36) compared to a loss per share of ($0.84) in FY04. "Our success in aligning operating expenses with visible and recurring revenues is a reflection of the support we receive from our customers, the results our customers achieve in using our products and the hard work of our dedicated employees," commented Brandon Brandon, city, Canada Brandon, city (1991 pop. 38,567), SW Man., Canada, on the Assiniboine River. The business center of the wheat-raising area of SW Manitoba, Brandon has an extensive trade in farm products and machinery. Nussey, Descartes' CFO See Chief Financial Officer. . "We will continue to manage and operate consistent with this performance within our services business model, while maintaining the flexibility to take advantage of appropriate growth opportunities." "We are now operating with the results of our customers foremost in our mind," commented Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism Mesher, Descartes' CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "By integrating our products to a common architecture, adopting a services-based go-to-market strategy, and having our most valuable intellectual resources interfacing with customers, we are demonstrating our commitment to helping customers deliver." Organizational Update Descartes also announced the appointment of Vincent Ho as Vice-President vice president or vice-pres·i·dent n. Abbr. VP 1. An officer ranking next below a president, usually empowered to assume the president's duties under conditions such as absence, illness, or death. 2. and General Manager for Asia Pacific. In his role, Mr. Ho Mr. Ho is a one shot short manga, drawn by Akira Toriyama, featuring a Yamcha-like character as the protagonist. It's story is similar to Dragon Ball's Red Ribbon Army Saga. , a software industry veteran who has had senior roles for companies including Dun & Bradstreet Brad·street , Anne Dudley 1612-1672. English-born colonial poet who wrote several collections of verse, including The Tenth Muse Lately Sprung Up in America (1650). Software and Apropos Software, will be primarily responsible for leading Descartes' regional sales and business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets in the Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). region - particularly in Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. , Japan and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. . Conference Call Company management will discuss these results, business prospects, and future expectations in a live conference call and audio Web cast with the financial community at 8 a.m. ET today, March 3, 2005. Interested parties may listen to the audio Web cast via the Descartes Web site at http://www.descartes.com. Replays of the conference call will be available in two formats immediately following the completion of the conference call. A telephone replay will be accessible for 24 hours Adv. 1. for 24 hours - without stopping; "she worked around the clock" around the clock, round the clock by dialing 888-203-1112 or 719-457-0820 and quoting reservation number 1932043. An archived replay of the Web cast will also be available through the Descartes Web site at http://www.descartes.com/investors. About Descartes The Descartes Systems Group Inc. (Nasdaq:DSGX) (TSX:DSG) is a leading provider of on-demand technology and services that help distribution and logistics sensitive organizations deliver. By enabling companies to efficiently and effectively manage the delivery of goods, Descartes' products and services help reduce costs, save time and enhance customer satisfaction. Descartes delivers trading partner connectivity and document exchange, route planning, wireless dispatch A dispatch or dispatches can refer to:
Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. solutions for industries such as retail, consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and , manufacturing, transportation, distribution and third-party logistics A third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or "third party" logistics services to companies for part, or sometimes all of their supply chain management function. . These solutions help customers optimize optimize - optimisation and gain real-time control Real-time control is a popular term for a certain class of digital controllers. For effective digital control, it is critical that sample time be constant. Real-time control achieves nearly constant sample time. See also
All registered and unregistered trademarks mentioned in this release are the property of their respective owners. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that relate to financial results (including generating EBITDA) and condition and use of cash, positioning of Descartes to deliver results, and other matters that may constitute forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Descartes to differ materially from the anticipated results, performance or achievements implied by such forward-looking statements. Such factors include, but are not limited to, the ability to continue to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. operating expenses to visible and recurring revenues; the ability to achieve additional cost reductions on a timely basis; the ability to attract and retain key personnel; variances in our revenues from quarter to quarter; departures of key customers; global economic, market and political conditions; and other factors discussed in the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: , "Certain Factors That May Affect Future Results" in documents filed with the Securities and Exchange Commission, the Ontario Securities Commission The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. and other securities commissions across Canada Across Canada was an afternoon program that formerly aired on The Weather Network. The segment ran from early 1999 until mid 2002. The show ran from 3:00PM ET until 7:00 PM ET. . Reconciliation of Non-GAAP Financial Measure EBITDA We prepare and release quarterly unaudited and annual audited financial statements prepared in accordance with GAAP. We also disclose and discuss certain non-GAAP financial information, used to evaluate our performance, in this and other earnings releases and investor conference calls. We believe that current shareholders and potential investors in our company use non-GAAP financial measures, such as EBITDA, in making investment decisions about our company. One key non-GAAP financial measure is EBITDA. The term "EBITDA" refers to a financial measure that is defined as earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Operations for Q4FY05, Q3FY05, Q2FY05 and Q4FY04, which we believe is the most directly comparable GAAP measure.
(USD in millions) Quarter Quarter Quarter Quarter
ended ended ended ended
Jan. 31, Oct. 31, July 31, Jan. 31,
2005 2005 2004 2004
Loss (as reported on
Consolidated Statements
of Operations) (1.0) (2.7) (22.7) (10.6)
Adjustments to reconcile to
EBITDA:
Interest expense, net 0.3 0.3 0.4 0.3
Income tax expense 0.1 0.1 0.1 0.2
Depreciation expense 0.7 0.5 0.5 0.8
Amortization of intangible
assets and deferred
compensation 1.1 1.1 1.0 1.3
---------------------------------------------------------------------
EBITDA 1.2 (0.7) (20.7) (8.0)
---------------------------------------------------------------------
---------------------------------------------------------------------
THE DESCARTES SYSTEMS GROUP INC.
Consolidated Balance Sheets
(US dollars in thousands; US GAAP)
----------- -----------
January 31, January 31,
2005 2004
----------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents 17,220 13,187
Marketable securities 31,534 34,586
Accounts receivable
Trade 7,097 12,986
Other 1,008 3,501
Prepaid expenses and other 1,325 3,045
----------- -----------
58,184 67,305
MARKETABLE SECURITIES - 17,279
CAPITAL ASSETS 6,966 13,452
LONG-TERM INVESTMENT 3,300 3,300
GOODWILL - 18,038
INTANGIBLE ASSETS 4,122 8,264
DEFERRED CHARGES & OTHER ASSETS - 1,021
----------- -----------
72,572 128,659
----------- -----------
----------- -----------
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 1,805 4,743
Accrued liabilities 5,429 3,609
Deferred revenue 2,605 2,860
Convertible debentures 26,995 -
----------- -----------
36,834 11,212
CONVERTIBLE DEBENTURES - 26,995
----------- -----------
36,834 38,207
----------- -----------
SHAREHOLDERS' EQUITY
Common shares - unlimited shares
authorized; shares issued and
outstanding 40,705,811 and 40,705,811 364,907 364,907
Additional paid-in capital 81,658 81,667
Unearned deferred compensation (193) (339)
Accumulated other comprehensive income
(loss) 93 (387)
Accumulated deficit (410,727) (355,396)
----------- -----------
35,738 90,452
----------- -----------
----------- -----------
72,572 128,659
----------- -----------
----------- -----------
THE DESCARTES SYSTEMS GROUP INC.
Consolidated Statements of Operations
(US dollars in thousands, except per share amounts; US GAAP;
quarterly data unaudited)
-------------------------------------------
Three Months Ended Twelve Months Ended
January 31, January 31,
2005 2004 2005 2004
-------------------------------------------
REVENUES 11,029 14,353 46,395 59,785
COST OF REVENUES 4,985 5,130 21,053 19,387
-------------------------------------------
GROSS MARGIN 6,044 9,223 25,342 40,398
-------------------------------------------
EXPENSES
Sales and marketing 2,065 10,782 18,172 31,843
Research and development 1,683 2,917 10,419 9,402
General and
Administrative 1,960 3,283 14,125 12,365
Amortization of
intangible assets 1,006 1,313 4,142 5,339
Impairment of goodwill 100 - 18,238 -
Restructuring cost and
asset impairment (214) 1,018 14,050 18,784
-------------------------------------------
6,600 19,313 79,146 77,733
-------------------------------------------
LOSS FROM OPERATIONS (556) (10,090) (53,804) (37,335)
-------------------------------------------
OTHER INCOME (EXPENSE)
Interest expense (419) (415) (1,718) (3,020)
Investment income 111 171 516 1,245
Gain on purchase of
convertible debentures - - - 904
-------------------------------------------
(308) (244) (1,202) (871)
-------------------------------------------
LOSS BEFORE INCOME TAXES (864) (10,334) (55,006) (38,206)
INCOME TAX EXPENSE -
CURRENT 95 241 325 287
-------------------------------------------
LOSS (959) (10,575) (55,331) (38,493)
-------------------------------------------
-------------------------------------------
LOSS PER SHARE
Basic and diluted (0.02) (0.26) (1.36) (0.84)
-------------------------------------------
-------------------------------------------
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic and diluted
(thousands) 40,706 40,655 40,706 45,951
-------------------------------------------
-------------------------------------------
THE DESCARTES SYSTEMS GROUP INC.
Consolidated Statements of Cash Flows
(US dollars in thousands; US GAAP; quarterly data unaudited)
-------------------------------------------
Three Months Ended Twelve Months Ended
January 31, January 31,
2005 2004 2005 2004
-------------------------------------------
OPERATING ACTIVITIES
Loss (959) (10,575) (55,331) (38,493)
Adjustments to reconcile
loss to cash provided by
(used in) operating
activities:
Depreciation 666 794 2,328 2,782
Amortization of
intangible assets 1,006 1,313 4,142 5,339
Impairment of goodwill 100 - 18,238 -
Write-off of redundant
Assets - - 5,770 -
Amortization of
convertible debenture
costs 64 65 256 451
Amortization of deferred
compensation 34 35 137 171
Gain on purchase of
convertible debentures - - - (904)
Changes in operating
assets and liabilities:
Accounts receivable
Trade 1,238 341 5,889 1,050
Other 941 (838) 2,493 (682)
Prepaid expenses and
deferred charges 810 608 1,997 (616)
Accounts payable (1,231) 3,217 (2,938) 779
Accrued liabilities (445) 1,562 2,236 (2,446)
Deferred revenue 343 860 (255) (63)
-------------------------------------------
Cash provided by (used in)
operating activities 2,567 (2,618) (15,038) (32,632)
-------------------------------------------
INVESTING ACTIVITIES
Maturities of marketable
securities 4,113 - 26,365 132,029
Sale of marketable
Securities - - 8,198 -
Purchase of marketable
securities (2,095) (29,583) (14,232) (30,987)
Additions to capital
assets (68) (1,905) (1,060) (5,744)
Acquisition of
subsidiaries,net of
cash acquired (100) - (200) (335)
-------------------------------------------
Cash provided by (used in)
investing activities 1,850 (31,488) 19,071 94,963
-------------------------------------------
FINANCING ACTIVITIES
Purchase of convertible
debentures, including
purchase costs - - - (43,274)
Purchase of common
shares, including
purchase costs - - - (27,228)
Issuance of common shares
for cash - 146 - 163
-------------------------------------------
Cash provided by (used in)
financing activities - 146 - (70,339)
-------------------------------------------
Increase (decrease) in
cash and cash
equivalents 4,417 (33,960) 4,033 (8,008)
Cash and cash equivalents
at beginning of period 12,803 47,147 13,187 21,195
-------------------------------------------
Cash and cash equivalents
at end of period 17,220 13,187 17,220 13,187
-------------------------------------------
-------------------------------------------
The Descartes Systems Group Inc. (TSX:DSG) (NASDAQ:DSGX) |
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