Descartes Reports Results for Second Quarter of Fiscal Year 2004.Business Editors/High-Tech Writers 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)--Sept. 4, 2003 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 trusted provider of supply chain services, today announced financial results for the second quarter of its 2004 fiscal year (Q2FY04) which ended on July July: see month. 31, 2003. Amounts are in U.S. dollars 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 U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). (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 ). Q2FY04 total revenues were $15.2 million, down 16 percent when compared with total revenues in the second quarter last fiscal year of $18.0 million. Gross margins grew to 69 percent in the quarter, up from 56 percent in the same quarter a year ago. "We are pleased with our performance this quarter, which was in line with the guidance we previously provided. Descartes' financial position remains strong and we believe we are well-positioned for future growth," said Manuel Manuel may refer to:
Added Pietra, "Working with complementary technology companies, Descartes is extending and solidifying so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. its distribution channels and accelerating marketing and sales initiatives of its services on a global basis. With key alliance initiatives, continued management of expenses and building of an even stronger services portfolio, Descartes continues to move forward with a positive outlook for the future." The loss for Q2FY04 was $14.7 million, or $0.29 per share, compared to a loss of $18.5 million, or $0.35 per share, for the same quarter last year. Descartes completed the quarter with $77 million 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 . Cash usage in the quarter included payments for completion of the previously announced purchase of its Common Shares and Debentures. Today, Descartes also announced that Peter J. Schwartz is resigning as a director and chairman of the board of Descartes to pursue other opportunities. Descartes' board of directors and management wish him well in his future endeavors. Dr. Stephen Watt, who was initially appointed a director in 2001, has been appointed chairman of the board and Manuel Pietra, Descartes' chief executive office and president, has been appointed to the board of directors. HIGHLIGHTS OF THE SECOND QUARTER Customer Sign-ups: Q2FY04 saw 151 total sign-ups. Demonstrating Descartes' ability to leverage its installed base, approximately 60 percent of these sign-ups represent services sold to existing customers. Some of the sign-ups during the quarter included Best Buy, Four Star Dairy, Hartford Distributors, Mitsubishi, and Shibusawa Warehouse Co. Ltd. Innovation in Services: Descartes continues its commitment to be at the forefront of technological advancement. During the quarter Descartes announced: -- Live RFID (Radio Frequency IDentification) A data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. Field Tests - Evaluating the impact and business benefits of applying RFID (radio frequency identification See RFID. ) technology to the retail sector, Descartes is participating in live RFID field tests as part of the Supply Chain Network(C) Project being conducted by the Supply Chain Development Association. -- Descartes Roadshow(TM) in Double-byte - Targeted to both new and existing customers, Descartes Roadshow now supports two key double-byte languages, simplified Chinese and Korean, with additional Asian languages, such as traditional Chinese and Japanese, planned for the future. Alliances with Industry Leaders: During Q2FY04, Descartes sought to accelerate the deployment of its services worldwide by establishing alliances with respected industry leaders. Extending Descartes' distribution channels and expanding marketing and sales initiatives, some of the alliances Descartes announced include: -- Due North in the Northern United Kingdom providing Descartes Routing and Scheduling(TM) on the services model, -- Nextel Communications Nextel Communications, styled NEXTEL, (Former NASDAQ: NXTL) which is now known as the Sprint Nextel Corporation was a telecommunications firm based in the United States. Known for providing a nation-wide mobile communications system. 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. offering Descartes MobileLink(TM) applications for real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. fleet management, -- Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. Metinfo in Asia offering the Descartes Automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. Manifest manifest 1) adj., adv. completely obvious or evident. 2) n. a written list of goods in a shipment. MANIFEST, com. law. A written instrument containing a true account of the cargo of a ship or commercial vessel. 2. Service(TM) to help companies comply with the U.S. Customs Service Container Security Initiative The Container Security Initiative (CSI) was launched in 2002 by the U.S. Bureau of Customs and Border Protection (CBP), an agency of the Department of Homeland Security. Its purpose was to increase security for container cargo shipped to the United States. , and -- T-Systems driving marketing and sales efforts of Descartes' logistics services in Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. as well as other key parts of Europe. Common Share and Debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. Purchases: As previously announced during Q2FY04, Descartes purchased for cancellation 11,578,000 of its outstanding Common Shares. The purchase price for the Common Shares was CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $3.20 per share. After cancellation of the purchased Common Shares, Descartes has 40,653,711 Common Shares outstanding. In addition, through a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Descartes, Descartes purchased $45 million of the face value of its debentures at a price of $950 per $1,000 principal amount of debentures, plus accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. and unpaid interest. Cost Reduction Initiatives: Descartes undertook its previously announced initiatives to reduce costs across the organization through the consolidation of its network infrastructure and the streamlining of its global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. , resulting in 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. of $12.5 million in Q2FY04. BUSINESS OUTLOOK For the third quarter ending October 31, 2003 (Q3FY04), Descartes expects to achieve total revenues in the range of $15.5 to $16.5 million and to report a loss per share, on a U.S. GAAP basis, of $0.10 to $0.12. This expectation includes a restructuring charge in Q3FY04 of approximately $2.0 million. The amount of the restructuring charge in the quarter is dependent on various factors including the timing of certain actions related to Descartes' 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). activities. CONFERENCE CALL Descartes' management will discuss these results in a live conference call and audio Web cast with the financial community at 8:00 a.m. ET today, September 4, 2003. The live audio Web cast and slide presentation to accompany the call can be accessed at www.descartes.com/investors. Replays will also be available in two formats shortly after 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 1-888-203-1112 or 719-457-0820 and quoting reservation number 153951. An archived replay of the Web cast will also be available through the Descartes Web site at www.descartes.com/investors. About Descartes The Descartes Systems Group Inc. (Nasdaq:DSGX) (TSX:DSG) is a trusted provider of supply chain services. Helping companies reduce costs, save time, and enhance customer satisfaction, Descartes' integrated suite of services provide connectivity and document exchange, route planning and 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. . Enabling distribution-sensitive companies in industries such as retail, 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 , manufacturing, transportation, 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. , and distribution to 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. Statements in this release, other than historical performance, include 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. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future financial performance made under the 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. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements include statements regarding Descartes' revenue and profit expectations, expense, cost of revenue expectations, expectations surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. the demand for Descartes' products and the market opportunity for those products, expectations surrounding the success of Descartes' alliance relationships, marketing and distribution initiatives, expectations surrounding Descartes' streamlining initiatives, expectations as to customer acceptance and continued use of Descartes' solutions, and expectations as to Descartes' pricing and revenue model. These statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from expectations; in particular, the successful implementation and market acceptance of Descartes' pricing and revenue model, demand for network-based logistics solutions and logistics software solutions, timing and size of restructuring charges, success in closing customer orders, ability to control expenses, realization of operating cost reductions resulting from cost reduction initiatives, integration of acquisitions and consolidation of operations. For further information regarding risks and uncertainties associated with Descartes' business, please refer to Descartes' 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. . Any forward-looking statements should be considered in light of these factors.
THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED BALANCE SHEETS
(US dollars in thousands; US GAAP; unaudited)
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July 31, January 31,
2003 2003
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ASSETS
CURRENT ASSETS
Cash and cash equivalents 24,658 21,195
Marketable securities 5,195 8,521
Accounts receivable
Trade 15,095 14,036
Other 2,246 2,819
Prepaid expenses and other 4,458 3,020
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51,652 49,591
MARKETABLE SECURITIES 46,925 144,386
CAPITAL ASSETS 11,991 12,151
LONG-TERM INVESTMENTS 3,300 3,300
GOODWILL 17,703 17,603
INTANGIBLE ASSETS 10,890 13,606
DEFERRED CHARGES 963 1,638
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143,424 242,275
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 998 3,964
Accrued liabilities 8,186 8,673
Deferred revenue 2,549 2,923
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11,733 15,560
CONVERTIBLE DEBENTURES 26,995 71,995
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38,728 87,555
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SHAREHOLDERS' EQUITY
Common shares
Authorized - Unlimited
Issued - 40,653,711 (January 31, 2003
- 52,224,511) 441,407 468,618
Additional paid-in capital 5,030 5,201
Unearned deferred compensation (418) (690)
Accumulated other comprehensive loss (696) (1,506)
Accumulated deficit (340,627) (316,903)
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104,696 154,720
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143,424 242,275
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THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(US dollars in thousands, except per share amounts;
US GAAP; unaudited)
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Three Months Ended Six Months Ended
July 31, July 31,
2003 2002 2003 2002
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REVENUES 15,219 18,028 29,406 34,852
COST OF REVENUES 4,690 7,937 9,470 15,816
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GROSS PROFIT 10,529 10,091 19,936 19,036
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EXPENSES
Sales and marketing 6,840 10,497 13,835 17,111
Research and development 2,067 3,977 4,187 9,801
General and administrative 2,669 4,837 6,402 6,739
Amortization of intangible assets 1,355 2,480 2,713 4,960
Restructuring cost 12,526 7,759 16,129 7,247
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25,457 29,550 43,266 45,858
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LOSS FROM OPERATIONS (14,928) (19,459) (23,330) (26,822)
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OTHER INCOME (EXPENSE)
Interest expense (1,047) (1,125) (2,172) (2,311)
Investment income 379 2,160 898 3,746
Gain on purchase of
convertible debentures 904 - 904 385
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236 1,035 (370) 1,820
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LOSS BEFORE INCOME TAXES (14,692) (18,424) (23,700) (25,002)
INCOME TAX RECOVERY
(EXPENSE) - CURRENT (14) (63) (24) 433
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LOSS (14,706) (18,487) (23,724) (24,569)
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LOSS PER SHARE
Basic and diluted (0.29) (0.35) (0.46) (0.47)
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WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted (thousands) 50,470 52,241 51,335 52,239
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THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(US dollars in thousands; US GAAP; unaudited)
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Three Months Ended Six Months Ended
July 31, July 31,
2003 2002 2003 2002
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OPERATING ACTIVITIES
Loss (14,706) (18,487) (23,724) (24,569)
Adjustments to reconcile loss to
cash provided by (used in)
operating activities:
Bad debt charge - 2,907 - 2,907
Depreciation 578 561 1,153 1,593
Amortization of
intangible assets 1,355 2,480 2,713 4,960
Restructuring cost 6,009 4,988 5,485 4,476
Amortization of convertible
debenture costs 154 170 323 387
Amortization of deferred
compensation 36 77 101 153
Gain on purchase of convertible
debentures (904) - (904) (385)
Changes in operating assets
and liabilities:
Accounts receivable
Trade (901) 1,715 (1,059) 1,047
Other (386) 2,984 573 2,356
Prepaid expenses and other (831) 707 (1,438) 721
Deferred charges 30 - (470) -
Accounts payable (1,289) 1,091 (2,966) (18)
Accrued liabilities (3,959) 748 (3,498) (1,866)
Deferred revenue (177) (525) (374) (837)
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Cash used in operating activities (14,991) (584) (24,085) (9,075)
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INVESTING ACTIVITIES
Short-term marketable securities,
net change (5,195) 38,681 3,326 47,607
Long-term marketable securities,
net change 100,076 14,904 97,461 37,113
Additions to capital assets (1,031) (1,386) (2,654) (2,231)
Acquisition of subsidiaries,
net of cash acquired (100) (569) (100) (569)
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Cash provided by investing
activities 93,750 51,630 98,033 81,920
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FINANCING ACTIVITIES
Purchase of convertible
debentures, including
purchase costs (43,274) - (43,274) (1,069)
Purchase of common shares,
including purchase costs (27,228) - (27,228) -
Issuance of common
shares for cash - - 17 207
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Cash used in financing activities (70,502) - (70,485) (862)
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Increase in cash and cash
equivalents 8,257 51,046 3,463 71,983
Cash and cash equivalents at
beginning of period 16,401 55,763 21,195 34,826
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Cash and cash equivalents at
end of period 24,658 106,809 24,658 106,809
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