Descartes Reports Second Quarter Fiscal Year 2003 Results; Focused Execution Drives Improvement in Financial Results.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)--Aug. 22, 2002 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 logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. solutions, today announced its financial results for the second quarter of fiscal year 2003 (Q2FY03) ended July July: see month. 31, 2002. Amounts are in U.S. dollars and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). results are 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 (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 ). During the quarter, the Company focused on key initiatives to improve financial performance. These initiatives included a corporate 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). to reduce operating costs operating costs npl → gastos mpl operacionales , a focused program to improve collections and continued momentum in customer sign-ups. "We are pleased with our results this quarter. The initiatives that we have undertaken will enable us to better service our customers and more efficiently operate our business," said Peter Schwartz Schwartz is a Canadian spices brand. It is also a common surname and may refer to:
Financial Summary Three Month Performance: For the period ended July 31, 2002, total revenues were $18 million. Network-Based Logistics revenues represented $10.6 million, software license revenues were $4.8 million and service revenues were $2.6 million. In Q2FY03, the Company reported an adjusted loss of $3.3 million, or 6 cents per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share(1). In the same period last year, the Company reported $20 million in revenues and an adjusted loss of $2.7 million or 5 cents per basic and diluted share. On a U.S. GAAP basis, the Company's loss was $18.5 million, or 35 cents per basic and diluted share this quarter compared to a loss of $19.6 million, or 39 cents per basic and diluted share for the same quarter last year(2). Six Month Performance: For the six month period ended July 31, 2002, the Company reported revenues of $35 million. Network-Based Logistics revenues represented $20.5 million, software license revenues were $9.3 million and service revenues contributed $5.0 million. In the six months ended July 31, 2002, the Company reported an adjusted loss of $7.7 million or 15 cents per basic and diluted share compared with revenues of $43 million and an adjusted profit of $1.8 million or 4 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. in the same six month period in fiscal 20021. On a U.S. GAAP basis, the Company's loss was $24.6 million, or 47 cents per basic and diluted share, for the six month period, compared with $31.9 million, or 64 cents per basic and diluted share for the same period of the last prior year(2). "We have successfully completed key initiatives to reduce operating costs, improve collections and drive revenue. We remain confident that these efforts will set the stage for a return to profitability on an adjusted basis in the third quarter of this fiscal year(3)," said Manuel Manuel may refer to:
The Pietra Brewery opened in 1996 with a desire to develop a modern and innovative project for the future of Corsica. It is the only Corsican brewery. , co-chief executive officer and president, Descartes Systems Group. Financial Highlights During the quarter, focused initiatives resulted in improvement in the Company's balance sheet. Key items include: Improvement in Collections During the second quarter, the Company focused on accelerating collections resulting in the collection of $21.2 million, and improving the number of receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSOs) from 97 to 82 days, before the impact of a special reserve for doubtful accounts of $2.9 million. After the effect of the special reserve for doubtful accounts, DSOs for the Company were 67 days at quarter end. Success in Cost Reduction Initiatives Descartes, in the second quarter, focused on the reduction of operating costs. Important initiatives included the closing of certain redundant Repetitive. See redundancy. facilities and related assets, and a streamlining of its global workforce. The total charge for these initiatives, including the reserve for doubtful accounts, is anticipated to be $11 million, of which $10.1 million has been incurred in the second quarter. The balance will be incurred over the course of the third and fourth quarters of fiscal year 2003. Upon the completion of the restructuring initiatives, Descartes anticipates the total resultant This article is about the resultant of polynomials. For the result of adding two or more vectors, see Parallelogram rule. For the technique in organ building, see Resultant (organ). In mathematics, the resultant of two monic polynomials operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. savings to be $16 million on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis. Operational Highlights Pietra continued, "During the quarter, the company completed 105 customer sign-ups with more than 40 percent of new business coming from existing customers. Up selling satisfied customers continues to be one of the Company's greatest opportunities." Customer Sign-ups -- Descartes Fleetwise Monitor(TM) - a browser-based application that provides clear visibility into order fulfillment progress including access to real-time information about scheduled deliveries and exceptions enabling customer service representatives to proactively respond to potential delivery delays. -- MobileLink: Commerce(TM) - a wireless application for real-time event management and financial settlement in delivery operations enabling route drivers to capture signatures for proof-of-delivery, settle payment for goods and print invoices on demand at point-of-delivery. Product Innovation Descartes continues its commitment to be at the forefront of technological advancement A gift of money or property made by a person while alive to his or her child or other legally recognized heir, the value of which the person intends to be deducted from the child's or heir's eventual share in the estate after the giver's death. . In the quarter Descartes introduced two new products: -- Descartes Fleetwise Monitor(TM) - a browser-based application that provides clear visibility into order fulfillment progress including access to real-time information about scheduled deliveries and exceptions enabling customer service representatives to proactively respond to potential delivery delays. -- MobileLink: Commerce(TM) - a wireless application for real-time event management and financial settlement in delivery operations enabling route drivers to capture signatures for proof-of-delivery, settle payment for goods and print invoices on demand at point-of-delivery. Post Period Developments On August 1 2002, Descartes announced an offering to purchase for cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. up to U.S.$51,428,571 aggregate principal amount of its 5.50% Convertible Unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. Subordinated Debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before due June June: see month. 30, 2005. The offer will be open for acceptance until 5 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT on September September: see month. 6, 2002, unless extended or withdrawn. Conference Call Company management will discuss these results and its business outlook in a live conference call and audio Web cast with the financial community at 8:00 a.m. EDT today, August 22, 2002. The live webcast, slide presentation and supplementary information to accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. the call can be accessed at www.descartes.com/investors. Replays will also be available in two formats immediately following the completion of the conference call. A telephone replay will be accessible until midnight EDT on August 24, 2002 by dialing 1-800-408-3053 or 416-695-5800 and quoting reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 1240184. An archived replay of the audio 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 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. In over 60 countries Descartes' leading logistics solutions drive operational efficiency, enhance customer responsiveness responsiveness Medtalk The ability to respond to a stimulus. See Airway responsiveness. and improve precision in purchasing for global organizations. For more information, visit www.descartes.com. All registered and unregistered trademarks mentioned in this release are the property of their respective owners. (1) Reference should be made to the "Supplemental Financial Information" table in this release, which provides reconciliation between earnings (loss) as prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by U.S. (GAAP) and the adjusted earnings (loss). (2) Excluding goodwill amortization recorded in the period ended July 31, 2001, which ceased under recently adopted Business Combinations Standards SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 141 and 142, the loss for the comparative period was $13.6 million or 27 cents per basic and diluted share. For the six months ended July 31, 2001, excluding goodwill amortization, loss was $20.5 million, or 41 cents per basic and diluted per share. (3) Profitability on an adjusted basis for the third quarter of fiscal 2003 to be calculated on a basis consistent with adjusted earning(loss) referred to in footnote Text that appears at the bottom of a page that adds explanation. It is often used to give credit to the source of information. When accumulated and printed at the end of a document, they are called "endnotes." 1 above. 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, future business strategies and opportunities, 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, success in closing customer orders, ability to control expenses, realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of operating cost reductions resulting from the above-referenced cost reduction initiatives and integration of acquisitions. 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. statements should be considered in light of these factors.
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,
2002 2001 2002 2001
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REVENUES
License and
network 15,376 16,730 29,812 37,247
Service and
maintenance 2,652 3,032 5,040 5,908
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18,028 19,762 34,852 43,155
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COSTS AND EXPENSES
Cost of license
and network 4,956 4,017 9,809 7,981
Cost of service
and maintenance 2,981 2,791 6,007 5,451
Sales and
marketing 10,497 10,541 17,111 17,196
Research and
development 3,977 7,163 9,801 12,297
General and
administrative 4,837 3,475 6,739 5,800
Amortization of
goodwill - 5,921 - 11,393
Amortization of
intangibles 2,480 2,177 4,960 3,565
Write-down of
long-term
investments - - - 9,783
Purchased
in-process
research and
development - 4,500 - 4,500
Restructuring cost 7,759 - 7,247 -
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37,487 40,585 61,674 77,966
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LOSS FROM
OPERATIONS (19,459) (20,823) (26,822) (34,811)
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OTHER INCOME
(EXPENSE)
Interest expense (1,125) (1,245) (2,311) (2,463)
Investment income 2,160 2,537 3,746 5,550
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1,035 1,292 1,435 3,087
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LOSS BEFORE INCOME
TAXES AND
EXTRAORDINARY ITEM (18,424) (19,531) (25,387) (31,724)
INCOME TAXES (63) (32) 433 (158)
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LOSS BEFORE
EXTRAORDINARY
ITEM (18,487) (19,563) (24,954) (31,882)
EXTRAORDINARY ITEM
Gain on purchase
of convertible
debentures - - 385 -
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LOSS (18,487) (19,563) (24,569) (31,882)
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LOSS PER SHARE
BEFORE
EXTRAORDINARY ITEM
Basic and diluted (0.35) (0.39) (0.47) (0.64)
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LOSS PER SHARE
AFTER
EXTRAORDINARY ITEM
Basic and diluted (0.35) (0.39) (0.47) (0.64)
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WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic and diluted
(thousands) 52,241 50,231 52,239 49,534
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SUPPLEMENTAL FINANCIAL INFORMATION
ADJUSTED EARNINGS (LOSS)
(US dollars in thousands, except per share amounts; unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
2002 2001 2002 2001
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LOSS AS REPORTED
UNDER US GAAP (18,487) (19,563) (24,569) (31,882)
Adjustments:
Amortization of
goodwill (1) - 5,921 - 11,393
Amortization of
intangibles (1) 2,480 2,177 4,960 3,565
Write-down of
long-term
investments (1) - - - 9,783
Purchased
in-process
research and
development (1) - 4,500 - 4,500
Amortization of
deferred
compensation (1) 77 780 153 929
Restructuring
cost (2) 7,759 - 7,247 -
Special reserve
for doubtful
accounts (2) 2,907 3,500 2,907 3,500
Gain on purchase
of convertible
debentures (2) - - (385) -
Arbitration award
and related
costs (2) 1,970 - 1,970 -
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EARNINGS (LOSS) AS
ADJUSTED (3) (3,294) (2,685) (7,717) 1,788
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EARNINGS (LOSS)
PER SHARE AS
ADJUSTED
Basic and diluted (0.06) (0.05) (0.15) 0.04
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WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic (thousands) 52,241 50,231 52,239 49,534
Diluted
(thousands) 52,241 50,231 52,239 50,988
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Notes: (1) Earnings (loss) as prescribed by US GAAP have been adjusted by these items as they represent acquisition-related charges which vary substantially from period to period due to the Company's acquisition activities as well as its 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. assessments. (2) Earnings (loss) as prescribed by US GAAP have been adjusted by these items as they represent one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. and non-recurring charges or gains. (3) Adjusted earnings (loss) do not have any standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning prescribed by US GAAP and are therefore unlikely to be comparable to similar measures presented by other companies.
THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED BALANCE SHEETS
(US dollars in thousands; US GAAP; unaudited)
July 31, January 31,
2002 2002
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ASSETS
CURRENT ASSETS
Cash and cash equivalents 106,809 36,101
Marketable debt securities 34,878 82,485
Accounts receivable
Trade 13,450 18,434
Other 4,643 7,540
Prepaid expenses and other 3,150 4,220
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162,930 148,780
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MARKETABLE DEBT SECURITIES 45,331 82,444
CAPITAL ASSETS 10,120 10,261
LONG-TERM INVESTMENTS 3,250 3,250
GOODWILL 103,927 103,456
INTANGIBLE ASSETS 33,002 37,967
DEFERRED CHARGES 1,977 2,364
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360,537 388,522
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LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 3,750 3,376
Accrued liabilities 11,774 10,428
Deferred revenue 4,461 5,616
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19,985 19,420
CONVERTIBLE DEBENTURES 72,000 73,500
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91,985 92,920
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SHAREHOLDERS' EQUITY
Common shares
Issued - 52,241,265
(January 31, 2002 -
52,229,333) 468,651 468,445
Additional paid-in capital 5,201 5,201
Unearned deferred
compensation (1,004) (1,157)
Accumulated other
comprehensive loss (1,019) (200)
Accumulated deficit (203,277) (176,687)
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268,552 295,602
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360,537 388,522
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THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(US dollars in thousands, US GAAP, unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
2002 2001 2002 2001
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OPERATING
ACTIVITIES
Loss (18,487) (19,563) (24,569) (31,882)
Adjustments to
reconcile loss to
cash provided by
(used in)
operating
activities:
Bad debt charge 2,907 3,500 2,907 3,500
Depreciation 561 776 1,593 1,532
Amortization 2,480 8,098 4,960 14,958
Write-down of
long-term
investments - - - 9,783
Purchased
in-process
research and
development - 4,500 - 4,500
Restructuring cost 4,988 - 4,476 -
Amortization of
convertible
debenture costs 170 184 387 367
Amortization of
deferred
compensation 77 780 153 929
Gain on purchase
of convertible
debentures - - (385) -
Changes in
operating assets
and liabilities:
Accounts
receivable
Trade 1,715 724 1,047 (1,499)
Other 2,984 1,014 2,356 (68)
Prepaid expenses
and other 707 3 721 (1,156)
Accounts payable 1,091 (3,182) (18) (175)
Accrued
liabilities 748 (1,604) (1,866) (3,625)
Deferred revenue (525) (854) (837) (2,870)
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(584) (5,624) (9,075) (5,706)
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INVESTING
ACTIVITIES
Short-term
marketable debt
securities, net
change 38,681 2,285 47,607 138,908
Long-term
marketable debt
securities, net
change 14,904 (127,863) 37,113 (127,863)
Additions to
capital assets (1,386) (447) (2,231) (2,627)
Long-term
investments - - - (1,833)
Acquisition of
subsidiaries, net
of cash acquired (569) (8,236) (569) (8,311)
--------------------------------------------------------------------
51,630 (134,261) 81,920 (1,726)
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FINANCING
ACTIVITIES
Short-term
marketable debt
securities, net
change - - (1,069) -
Acquisition of
subsidiaries, net
of cash acquired - 2,110 207 2,216
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- 2,110 (862) 2,216
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Increase
(decrease) in cash
and cash
equivalents 51,046 (137,775) 71,983 (5,216)
Cash and cash
equivalents at
beginning of
period 55,763 195,497 34,826 62,938
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Cash and cash
equivalents at end
of period 106,809 57,722 106,809 57,722
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Supplemental
disclosure of cash
flow information:
Cash paid during
the period for
interest 1,980 2,092 1,997 2,096
Cash paid during
the period for
income taxes 2 32 6 32
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