Descartes Announces Second Quarter 2002 Financial Results In Line With Preliminary Estimates.Business Editors WATERLOO Waterloo, town, Belgium Waterloo (vä`tərlō), commune (1991 pop. 27,860), Walloon Brabant prov., central Belgium, near Brussels. The battle of Waterloo (see Waterloo campaign) was fought just south of there on June 18, 1815. , Ontario--(BUSINESS WIRE)--Aug. 21, 2001 The Descartes Systems Group Inc., (Nasdaq:DSGX DSGX Dynamic Sound Generator Xtra (Sony) DSGX Dynamic Sound Generator Extra ), (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :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 collaborative logistics management Logistics Management is that part of Supply Chain Management that plans, implements, and controls the efficient, effective, forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet technology, announced today its final results for the fiscal 2002 second quarter ended July 31, 2001. All dollar amounts are expressed in US currency and are reported 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 (US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Total revenues were $19.8 million, representing an increase of 35% over revenues of $14.6 million in the second quarter of fiscal 2001. License and network revenues were $16.8 million, representing an increase of 49% over license and network revenues of $11.2 million in the year-ago quarter. Network revenues, which consist of 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. subscription and transaction-based fees, were $8.9 million or 53% of total license and network revenues in the quarter, representing an increase of 64% over network revenues of $5.4 million in the same period last year. The company reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $0.12 per share for the quarter, excluding acquisition-related expenses, purchased in-process research and development and deferred compensation, but including a special bad debt charge of $3.5 million, or $0.07 per share. Excluding this special charge would reduce the operating loss to $0.05 per share, compared with an operating loss of $0.02 per share in the year-ago quarter. Descartes reported a net loss of $0.39 per share for the quarter, compared with a net loss of $0.10 in the year-ago quarter. "Our results are in line with our preliminary announcement," said Peter Schwartz, Chairman and 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. at Descartes. "We have reacted quickly and decisively to address this difficult environment. We are now a more focused and competitive organization." "The strength of the balance sheet combined with reduced expenses, improved efficiency and increased productivity across the organization, will serve us well in this weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. economic
environment," said Colley Clarke, Executive Vice President, Finance
and CFO See Chief Financial Officer. at Descartes.
The company had cash and short-term investments at the end of the quarter of $216 million. For the six months ended July 31, 2001, total revenues were $43.2 million, representing an increase of 53% over revenues of $28.2 million in the six months ended July 31, 2000. For the six months ended July 31, 2001, license and network revenues were $37.3 million, representing an increase of 86% over license and network revenues of $20.1 million in the six months ended July 31, 2000. As previously announced, there will be a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. in the third quarter, which principally relates to a reduction in the company's workforce and the consolidation of some operations. The charge is expected to be approximately $3-$4 million. Achievements in the second quarter of fiscal 2002 include: Strategic Acquisitions During the quarter, Descartes completed the acquisitions of Centricity, Inc., a leading provider of ground transportation management and optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. solutions, and TranSettlements, a leading provider of logistics network messaging services for the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. ground transportation industry. The addition of Centricity's technology and industry experts will position Descartes as the leader for transportation optimization solutions, offering the world's broadest set of applications and services and one of the most experienced group of industry experts dedicated to the development of next generation solutions across all modes of transportation. TranSettlements brings to the Descartes Global Logistics Services Network 85 of the top 100 less-than-truckload (LTL LTL - Linear Temporal Logic ) carriers, long-haul carriers, and private fleets, facilitating logistics activities for the supply chains of Fortune 1000 companies. With the addition of TranSettlements, the Descartes Global Logistics Services Network now processes approximately 70% of ground transportation messaging in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Significant Customer Wins New customer wins announced in the quarter included China Shipping Group, one of the fastest growing ocean carriers in the industry, which selected Descartes' leading WebSimon(TM) rate management services for ocean shipping. China Shipping Group is using WebSimon to ensure consistency of pricing across its organization, providing its sales and customer service personnel with quick and easy access to all of the information required to provide customers with the best shipping plan at the best price. SYLVANIA LIGHTING SERVICES (SLS (Selective Laser Sintering) See laser sintering and 3D printing. ), part of the Siemens family of companies, selected Descartes' routing & scheduling solution to optimize the delivery of its lighting management services. SLS provides energy management programs for indoor and outdoor lighting systems as well as preventive maintenance The routine checking of hardware that is performed by a field engineer on a regularly scheduled basis. See remedial maintenance. preventive maintenance - (PM) To bring down a machine for inspection or test purposes. See provocative maintenance, scratch monkey. for major retailers and supermarket chains, office buildings, warehouses, government buildings, and many other facilities. Descartes' leading routing and scheduling technology will enable the organization to improve field service technician productivity through more optimized routes and schedules and more efficient workload balancing for an average of 15,000 customer stops per month that are made nationwide. Conference Call Company management will discuss second quarter results and expectations for the third quarter of fiscal 2002 in an audio Webcast at 8:30 am EST EST electroshock therapy. EST abbr. electroshock therapy . The live Webcast, slide presentation and supplementary information to accompany the call can be accessed at http://www.descartes.com/investors. RealPlayer 7 must be installed on your machine and can be downloaded free from this site. For those unable to participate on the Webcast, a taped re-broadcast will be available to listeners upon completion of the conference call until midnight on Tuesday, August 28. To access the re-broadcast, please 800-408-3053 or 416-695-5800, reservation number 876639. About Descartes Descartes Systems Group (Nasdaq:DSGX)(TSE:DSG) is a leading provider of network-based collaborative logistics management technology. Descartes offers more than 30 network-based applications and services and a worldwide supply chain infrastructure built to facilitate highly efficient trading partner collaboration. The Descartes Global Logistics Services Network connects thousands of companies globally from a range of industries, including automotive, chemical, consumer packaged goods Noun 1. packaged goods - groceries that are packaged for sale foodstuff, grocery - (usually plural) consumer goods sold by a grocer plural, plural form - the form of a word that is used to denote more than one , financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , healthcare, high tech, postal, retail, telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , and transportation and logistics. Established in 1981, Descartes is headquartered in 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. , Canada with offices and distributors located throughout the Americas, EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. and Asia-Pacific. For more information about Descartes, visit www.descartes.com. All registered and unregistered trademarks mentioned in this release are the property of their respective owners. This press 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. , including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's expected operating performance, management of expenses, the amount of the Company's expected restructuring charge in the third quarter, expectations as to acquired companies, performance of the Company's solutions, and the Company's ability to adapt to changing market conditions and to compete. These statements are neither promises nor guarantees, but are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, including without limitation: the Company's ability to successfully implement cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. measures, improve efficiencies and maximize productivity, the timing and successful completion of acquisitions; the Company's limited operating history and its history of losses; uncertainty and unanticipated delays in closing customer orders; the Company's dependence on an emerging market characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by rapid technological change; the acceptance of the Company's revenue models in the Company's market and among its potential customers; management of growth; the integration of recent and potential future acquisitions; significant fluctuations of quarterly operating results; and international sales and interest and exchange rate fluctuations. A more detailed discussion of these and other important risk factors can be found 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: "Risk Factors" 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. , including the Company's Annual Information Form dated June 19, 2001 and MD&A in the FY2001 Annual Report. Readers should not place undue reliance on any such forward-looking statements in this press release, which are current only as of the date when made. Readers should not expect that these forward-looking statements will be updated or supplemented as a result of changing circumstances or otherwise, and Descartes disavows and disclaims any obligation to do so.
THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(US dollars in thousands, except per share amounts; US GAAP;
unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
2001 2000 2001 2000
---------------------------------------------------------------
REVENUES
License and network 16,730 11,201 37,246 20,047
Service and maintenance 3,032 3,409 5,909 8,124
---------------------------------------------------------------
19,762 14,610 43,155 28,171
---------------------------------------------------------------
COSTS AND EXPENSES
Cost of license
and network 4,017 2,237 7,981 3,974
Cost of service
and maintenance 2,791 2,781 5,450 6,541
Sales and marketing 10,541 5,657 17,196 10,252
Research and development 7,163 3,616 12,297 8,089
General
and administrative 3,475 1,971 5,800 3,686
Amortization
of intangibles 8,098 3,559 14,959 5,986
Write-down of
non-controlling
equity investments - - 9,783 -
Purchased in-process
research and development 4,500 - 4,500 19,033
---------------------------------------------------------------
40,585 19,821 77,966 57,561
---------------------------------------------------------------
LOSS FROM OPERATIONS (20,823) (5,211) (34,811) (29,390)
---------------------------------------------------------------
OTHER INCOME (EXPENSE)
Interest expense (1,245) (444) (2,463) (508)
Investment income 2,537 1,301 5,550 2,042
---------------------------------------------------------------
1,292 857 3,087 1,534
---------------------------------------------------------------
LOSS BEFORE
INCOME TAXES (19,531) (4,354) (31,724) (27,856)
---------------------------------------------------------------
INCOME TAXES (32) (166) (158) (166)
---------------------------------------------------------------
LOSS (19,563) (4,520) (31,882) (28,022)
---------------------------------------------------------------
LOSS PER SHARE
Basic and diluted (0.39) (0.10) (0.64) (0.66)
---------------------------------------------------------------
WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic and diluted
(thousands) 50,231 43,322 49,534 42,592
---------------------------------------------------------------
OPERATING PROFIT (LOSS) Excluding acquisition- related expenses,
deferred compensation and write-down of non-controlling equity
investments (6,185) (902) (1,712) (2,885)
Special bad debt
reserve (3,500) - (3,500) -
---------------------------------------------------------------
NET OPERATING PROFIT
(LOSS) (2,685) (902) 1,788 (2,885)
---------------------------------------------------------------
OPERATING PROFIT
(LOSS) PER SHARE - BASIC
AND DILUTED
Excluding acquisition-
related expenses,
deferred compensation
and write-down of
non-controlling equity
investments (0.12) (0.02) (0.03) (0.07)
Special bad debt
reserve (0.07) - (0.07) -
---------------------------------------------------------------
NET OPERATING PROFIT
(LOSS) PER SHARE BASIC (0.05) (0.02) 0.04 (0.07)
AND FULLY DILUTED
---------------------------------------------------------------
WEIGHTED AVERAGE SHARES
OUTSTANDING - 50,231 43,322 50,988 42,592
FULLY DILUTED (thousands)
---------------------------------------------------------------
THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED BALANCE SHEETS
(US dollars in thousands; US GAAP; unaudited)
July 31, January 31,
2001 2001
---------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents 57,722 62,938
Short-term investments 30,079 168,987
Accounts receivable
Trade 21,002 21,388
Other 7,777 4,500
Prepaid expenses and other 3,057 1,796
---------------------------------------------------------------
119,637 259,609
---------------------------------------------------------------
CAPITAL ASSETS 8,868 7,145
LONG-TERM INVESTMENTS
Debt instruments 127,863 -
Non-controlling equity investments 3,250 11,800
INTANGIBLE ASSETS 156,516 119,295
DEFERRED CHARGES 2,748 3,115
---------------------------------------------------------------
418,882 400,964
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 4,001 1,833
Accrued liabilities 8,868 10,988
Deferred revenue 9,996 12,653
---------------------------------------------------------------
22,865 25,474
CONVERTIBLE DEBENTURES 75,000 75,000
---------------------------------------------------------------
97,865 100,474
---------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common shares 468,131 415,676
Issued - 52,137,467
(January 31, 2001 - 48,803,064)
Additional paid-in capital 5,201 4,074
Unearned deferred compensation (1,310) (1,101)
Accumulated other comprehensive loss (1,155) (190)
Accumulated deficit (149,850) (117,969)
---------------------------------------------------------------
321,017 300,490
---------------------------------------------------------------
418,882 400,964
---------------------------------------------------------------
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