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____________________
2008 Year End Results
Descartes Reports Fiscal 2008 Fourth Quarter and Year End
Financial Results
18 Percent Increase in Quarterly Revenues Over Last Year
Drives Strong Operational Performance and Record Net Income
WATERLOO - Descartes Systems Group, announced financial results for its fiscal 2008 fourth quarter (Q4FY08) and year (FY08) ended January 31, 2008. All financial results referenced are in United States (US) currency and, unless otherwise indicated, are determined in accordance with US Generally Accepted Accounting Principles (GAAP).
Q4FY08 Financial Results
As described in more detail below, key financial highlights for
Descartes in Q4FY08 included:
* Revenues of $16.0 million, up $2.4 million or 18% from the fourth
quarter of last fiscal year (Q4FY07) and up $0.5 million or 3%
from $15.5 million in the previous quarter (Q3FY08). Services
revenues in the quarter were $14.4 million, up $2.8 million or
24% from $11.6 million in Q4FY07 and compared to $14.5 million in
Q3FY08;
* Net income of $17.9 million, up $16.7 million from $1.2 million in
Q4FY07 and up $16.2 million from $1.7 million in Q3FY08. Net income
in the quarter included a non-cash, deferred income tax recovery of
$16.0 million as Descartes recorded a deferred tax asset for prior
period tax losses that are anticipated to be applied against
taxable income earned in future periods. Excluding this non-cash,
deferred income tax recovery, net income in the quarter was
$1.9 million, up 58% from Q4FY07 and up 12% from Q3FY08;
* Earnings per share on a diluted basis of $0.33, up from $0.03 in
Q4FY07 and Q3FY08. Excluding the $16.0 million non-cash, deferred
income tax recovery, earnings per share on a diluted basis for
Q4FY08 were $0.04;
* Record EBITDA of $3.8 million, up 15% from $3.3 million in Q4FY07
and up from $3.7 million in Q3FY08. EBITDA as a percentage of
revenues was 24% this quarter, consistent with Q4FY07 and Q3FY08.
Q4FY08 is the eighth consecutive quarter that EBITDA, as a
percentage of revenues, has exceeded 20%.
Total revenues of $16.0 million in Q4FY08 were comprised of $14.4
million in services revenues and $1.6 million in license revenues. As a
percentage of total revenues, services revenues were 90%, compared to
85% in Q4FY07 and 94% in Q3FY08, with the balance of the revenues in
each period being license revenues.
Geographically, $8.7 million of revenues (55%) were generated in the
Americas, excluding Canada, $4.2 million (26%) in Europe, Middle East
and Africa ("EMEA"), $2.6 million (16%) in Canada, and $0.5 million
(3%) in the Asia Pacific region.
"Our prudent management in light of a deteriorating US dollar and
difficult global economy, coupled with our careful attention to our
operating model and acquisition integration strategy, resulted in a
positive impact to our bottom line," said Stephanie Ratza, CFO at
Descartes. "Our core business continues to perform well. We have a
solid balance sheet with a healthy cash position, and we are generating
cash from operations. We believe that we have an excellent platform to
continue to execute on our consolidation strategy."
"We continue to deliver value for our customers through our Global
Logistics Network and value-added services," said Art Mesher,
Descartes' CEO. "Our customer focused methodology and
software-as-a-service business model is consistently providing positive
results for our customers, which has contributed to our own positive
results."
FY08 Financial Results
As described in more detail below, key financial highlights for
Descartes in FY08 included the following:
* Revenues of $59.0 million, up $7.0 million or 13% from $52.0 million
in Descartes' fiscal year ended January 31, 2007 (FY07);
* Services revenues of $54.6 million, an increase of $7.8 million or
17% from $46.8 million in FY07;
* Net income of $22.4 million, up by $18.4 million from $4.0 million
in FY07. Net income in FY08 included a non-cash, deferred income
tax recovery of $16.0 million as Descartes recorded a deferred tax
asset for prior period tax losses that are anticipated to be
applied against taxable income earned in future periods. Excluding
this non-cash, deferred income tax recovery, net income in FY08
was $6.4 million, up $2.4 million or 60% from FY07;
* Earnings per share on a diluted basis of $0.43, up from $0.09 per
share in FY07. Excluding the $16.0 million non-cash, deferred
income tax recovery, earnings per share on a diluted basis for FY08
were $0.12; and
* EBITDA of $13.8 million, an increase of $2.3 million or 20% from
EBITDA of $11.5 million in FY07. EBITDA as a percentage of revenues
was 23% in FY08 compared to 22% in FY07. EBITDA is a non-GAAP
financial measure provided as a complement to the GAAP financial
measures in this release.
Cash Position at January 31, 2008
As at January 31, 2008, we had $44.1 million in cash and cash
equivalents, none of which was held in asset-backed commercial paper
(ABCP). As at January 31, 2007, we had $19.4 million in cash and cash
equivalents, and $2.5 million in marketable securities.
Q4FY08 Acquisitions
RouteView Technologies
On December 20, 2007, Descartes acquired RouteView, a provider of
technology solutions in a recurring revenue model to help small- and
medium-sized organizations manage their delivery operations.
RouteView's map-based routing software combines with wireless, GPS and
automated call-out technology to help numerous customers, particularly
in the home delivery and distribution industries, with a comprehensive
delivery management solution. The purchase price for this acquisition
was approximately $3.0 million in cash, plus up to an additional $0.5
million in cash if certain sales targets are met by RouteView in the
first year post-acquisition.
Pacific Coast Tariff Bureau (PCTB)
On January 9, 2008, Descartes acquired PCTB for approximately $2.1
million in cash. For over 60 years, PCTB has provided tariff and
contract publishing services to leading ocean carriers, non-vessel
operating common carriers (NVOCCs) and shippers to help them comply
with US regulations for domestic and foreign shipping trades. PCTB also
provides technology solutions to its customers to help them manage
ocean contracts and apply the correct freight rates to bills of lading
for ocean shipments.
Mobitrac
On January 10, 2008, Descartes acquired the fleet management business
formerly known as Mobitrac ("Mobitrac") from privately-held Fluensee,
Inc. for approximately $0.7 million in cash. The Mobitrac business
includes a software-as-a-service routing and scheduling technology.
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