Record Quarterly and Annual Operating Performance

WATERLOO - Descartes Systems Group , a global on-demand software-as-a-service (SaaS) logistics solutions provider, announced financial results for its fiscal 2009 fourth quarter (Q4FY09) and year (FY09) ended January 31, 2009. 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).

Q4FY09 Financial Results

As described in more detail below, key financial highlights for Descartes in Q4FY09 included:

-- Revenues of $15.7 million, down $0.3 million or 2% from $16.0 million in the fourth quarter of last fiscal year (Q4FY08) and down $1.3 million or 8% from $17.0 million in the previous quarter (Q3FY09). Currency Adjusted revenues for Q4FY09, compared to Q4FY08, were up 6% to $16.9 million. Currency Adjusted revenues for Q4FY09, compared to Q3FY09, were $16.4 million. "Currency Adjusted" revenues is a non-GAAP financial measure that we use solely for comparing revenues from two different periods without the impact of foreign exchange. A definition and reconciliation of Currency Adjusted revenues to revenues in accordance with GAAP is provided later in this release;

-- Income before income taxes of $2.6 million, up 30% from Q4FY08 and compared to $2.7 million in Q3FY09;

-- Net income of $15.7 million, down $2.2 million from $17.9 million in Q4FY08 and up $13.4 million from $2.3 million in Q3FY09. Net income in Q4FY09 and Q4FY08 included non-cash, deferred income tax recoveries of $13.1 million and $16.0 million, respectively, 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;

-- Earnings per share on a diluted basis of $0.29, down from $0.33 in Q4FY08 and up from $0.04 in Q3FY09. Income before income taxes, per share on a diluted basis for Q4FY09 was $0.05, compared to $0.04 in Q4FY08 and $0.05 in Q3FY09;

-- Days sales outstanding of 50 days, down 9 days from 59 days in Q4FY08, and compared to 47 days last quarter;

-- Record EBITDA of $4.5 million, up 18% from $3.8 million in Q4FY08 and up 2% from $4.4 million in Q3FY09. EBITDA as a percentage of revenues was 29% this quarter, up from 24% in Q4FY08 and 26% in Q3FY09.

* Net income and earnings per share on a diluted basis were positively impacted by non-cash, deferred income tax recoveries of $13.1 million, $0.4 million and $16.0 million in Q4FY09, Q3FY09 and Q4FY08, respectively. Net income and earnings per share on a diluted basis were also impacted by the following: (1) non-cash deferred income tax expenses as tax losses were applied to taxable income in the amounts of $0.8 million in Q3FY09 and $0.5 million in each of Q2FY09 and Q1FY09; and (2) contingent acquisition consideration expense of $0.3 million in Q2FY09 and $0.5 million in each of Q1FY09 and Q4FY08.

Total revenues of $15.7 million in Q4FY09 were comprised of $14.4 million in services revenues and $1.3 million in license revenues. As a percentage of total revenues, services revenues were 92%, compared to 90% in Q4FY08 and unchanged from Q3FY09, with the balance of the revenues in each period being license revenues.

Geographically, $10.0 million of revenues (64%) were generated in the Americas, excluding Canada, $3.5 million (22%) in Europe, Middle East and Africa ("EMEA"), $1.8 million (12%) in Canada, and $0.4 million (2%) in the Asia Pacific region.

"In these unprecedented times, our diligent attention to our operating model has delivered positive results," said Stephanie Ratza, CFO at Descartes. "We maintain a solid balance sheet with a healthy cash position and will continue to closely monitor our operations while we execute on our consolidation strategy."

"There is a new immediacy for our customers; the world has changed and our customers need to change with it. We have and will continue to work with our customers to provide solutions that allow them to save money now and help them comply with regulatory requirements for shipments through our Global Logistics Network and value-added services," said Art Mesher, Descartes' CEO. "Our mission is to make the world a better place through logistics by helping our customers and community of trading partners improve the productivity and performance of logistics."