(Applies to: DSGX ERICY RIMM)
(DSG) Descartes Reports Record E-Commerce Revenues in Third Quarter;
Revenues Reach $10.5 Million E-Commerce Revenues exceed 80% Of License
Revenues
WATERLOO, Ontario, Nov 30, 1999 (BUSINESS WIRE) -- The Descartes
Systems Group Inc. (NASDAQ:DSGX), (TSE:DSG), a leading provider of
business-to-business e-commerce solutions, today announced its fiscal
2000 third-quarter results for the period ended October 31, 1999. All
dollar amounts are expressed in US currency and are reported in
accordance with United States generally accepted accounting principles
(US GAAP).
Revenues for the third quarter of fiscal 2000 (Q3 FY00) reached $10.5
Million up 7% from revenues of $9.8 Million in the second quarter of
this fiscal year (Q2 FY00). License revenues increased to $4.8 Million
in Q3 FY00 up 27% from $3.8 Million in Q2 FY00. In addition, license
revenues from e-commerce increased to over 80% of license revenues in
Q3 FY00 up from 60% of license revenues in Q2 FY00. Gross margins
increased to 52% of revenues in Q3 FY00 from 38% of revenues in Q2
FY00. Net loss for the quarter was $4 million or ($0.11) per share
compared with a net loss of $6.5 Million or ($0.18) per share in Q2
FY00.
The company had net cash and marketable securities at the end of the
quarter of $14.9 Million.
"We are pleased to report on our success in the B2B e-Commerce
marketplace this quarter," said Peter Schwartz, Descartes' Chairman and
CEO. "Our continued growth in e-commerce revenue and our momentum in
emerging e-fulfillment areas like home delivery and Internet-empowered
third-party logistics evidence that we are doing a good job of
executing on this exploding market opportunity."
"Increased sales activity among e-business start-ups and companies
undergoing e-business transformations validates our leading position in
Internet fulfillment," continued Mr. Schwartz. "We are excited to
announce we are building DeliveryNets with new customers such as
Peapod, the largest U.S. Internet home grocer; Virtual Supply
Logistics, an innovative e-business retail fulfillment company in
Australia (see press release today); and TNT, a global provider of
express and logistics services."
"At the moment, there is a lot of attention on Internet trade such as
e-procurement and online marketplaces. We view the success of Internet
trade as a strong leading indicator for an equally powerful Internet
logistics market - logistics follows trade. We feel that with our early
wins, together with our innovative success-based pricing strategy, we
are well positioned to capitalize on this market demand." Schwartz
concluded.
Third Quarter Events
At Descartes' e-business launch on September 8 in Boston, the company
introduced a portfolio of new e-business solutions, called
DeliveryNets, in response to the market's demand for high-performance
customer fulfillment networks. Descartes announced four
industry-tailored DeliveryNet solutions for each of the direct store
delivery and consumer packaged goods industry; the field service
management industry; the home delivery and consumer direct industry;
and the third party logistics and transportation industry. At the
e-business launch, top executives from Descartes customers spoke on how
they were using DeliveryNet solutions to:
-- Create new e-businesses that offer Internet-based fulfillment
optimization services.
-- Create new, hosted outsourcing offerings to provide virtual
logistics services.
-- Optimize the final frontier of the supply chain - delivering
groceries and other products directly to consumers' homes.
-- Transform collaborative business processes between the retailer,
the manufacturer and the distributor to grow sales and increase
product availability for consumers.
In October, Descartes customers, prospects and partners met in
Atlanta for Momentum 99, Descartes' annual user conference. The
conference, which had record-breaking attendance and partner support,
focused on how companies can use DeliveryNets to lower fulfilment
costs, increase customer satisfaction and create new revenue-generating
products and services.
A highlight of the user conference was the presentation of The Alliance
Award for Excellence in Customer Fulfillment to Ericsson, a
world-leading supplier in the telecommunications and data
communications industry. Presented by Don Tapscott -- Chairman of the
Alliance for Converging Technologies and noted author of bestsellers
THE DIGITAL ECONOMY and PARADIGM SHIFT -- the Alliance Award recognized
Ericsson's commitment to customer satisfaction through the successful
deployment of Descartes' DeliveryNet solution to create a
high-performance customer fulfillment network that lowered lead times
by 72 percent.
More Third Quarter Highlights
Descartes announced new partnerships in the third quarter with
PeopleSoft, Research in Motion and Sun Microsystems. Other third
quarter highlights included the first successful deployment of
DeliveryNet at Buffalo Rock, one of the United States' largest
privately owned Pepsi distributors, and the implementation of
Descartes' Scan-Based Trading reconciliation application at Flowers
Bakeries to manage its Pay on Scan program for a large mass merchandise
retailer.
New product highlights for the third-party logistics and transportation
industry included the successful implementation of Descartes' wireless
routing application running on the RIM Inter@active(tm) Pager from
Research In Motion at G.O.D., and the announcement of Collaborative
Logistics Exchange, a product that enables customers to create their
own Internet-based freight exchanges. This sector also saw increased
momentum around e-Frame, Descartes' e-business framework that is used
to connect internal organizations and trading partners in a
zero-latency-messaging environment that also provides real-time supply
chain visibility, exception notification and performance monitoring.
Descartes continued to enhance its leadership position in the home
delivery and consumer direct market with the release of its
customer-centric Web-based scheduling application. Descartes'
Self-Service Available to Promise-Delivery (ATP-D) application gives
customers the ability to interactively schedule the delivery time
window of their choice using their Web browser while the system
simultaneously cost-optimizes delivery routes and resources.
Descartes was recognised as a 1999 Canadian Technology Fast 50 Company,
an annual ranking by Deloitte & Touche of the 50 fastest growing
technology companies in Canada. Rankings are based on the percentage of
growth in revenues from 1994 - 1998 (five-year periods). Descartes'
increase in revenue of 1247 % over 5 years resulted in a Number 21
ranking overall in the Canadian Technology Fast 50 for 1999.
About Descartes
Descartes develops e-business solutions for customer fulfillment
networks. Descartes' industry-specific, prepackaged solution portfolios
and its componentized applications enable companies to create
high-performance customer fulfillment networks - aka DeliveryNets(tm).
These solutions empower organizations to deliver reliable, responsive
customer service in a profitable manner and to create innovative new
products and services. Descartes products are used today by more than
850 companies in 35 vertical industries and 50 countries worldwide. For
more information about Descartes, visit descartes.com.
This release contains statements relating to market and customer
dynamics, future operating strategy, revenue and expense growth,
expectations as to timing and closing of customer orders, and other
matters that constitute forward-looking statements that involve risks
and uncertainties. The Company's actual results may differ from the
results discussed in the forward-looking statements. Factors that may
cause such a difference include, but are not limited to: risks
associated with uncertainty and unanticipated delays in closing
customer orders; uncertainty associated with the shift from enterprise
applications to e-business markets; competition or consolidation within
the industry; management of growth; the Company's dependence on certain
industries, markets and clients; the Company's dependence on key
personnel, proprietary technology and a limited number of products;
acquisitions; software defects; the ability to enhance current products
and to introduce new products in a timely fashion at competitive
prices; third party claims of infringement; reliance on third party
licenses; limited profitability; lengthy sales and implementation
cycles and increasing size of orders; and the potential volatility of
share prices; potential fluctuations in quarterly results; the need to
enhance management systems; currency risk; and international sales; and
other factors discussed in the section entitled, "Risk Factors" in
documents filed with the Securities and Exchange Commission, the
Ontario Securities Commission and other securities commissions across
Canada.
THE DESCARTES SYSTEMS GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS US GAAP
(in thousands) (IN US$)
----------------------------------------------------------------
October 31, October 31,
1999 1998
----------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,425 $ 12,520
Short-term investments 8,472 4,723
Accounts receivable - trade 17,299 15,976
Accounts receivable - other 666 330
Prepaid expenses and deferred charges 4,394 4,913
---------------------------------------------------------------
37,257 38,462
CAPITAL ASSETS, net 5,078 4,528
INTANGIBLE ASSETS, net 5,275 7,540
---------------------------------------------------------------
$ 47,609 $ 50,530
---------------------------------------------------------------
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness $ - $ 720
Accounts payable 4,281 7,962
Accrued liabilities 6,030 8,067
Income taxes payable 40 38
Deferred revenue 4,635 4,164
---------------------------------------------------------------
14,986 20,951
---------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common shares 113,470 92,511
Additional paid-in capital 3,126 2,473
Unearned deferred compensation (449) (1,813)
Accumulated other comprehensive loss (682) (1,439)
Deficit (82,842) (62,153)
----------------------------------------------------------------
32,623 29,579
----------------------------------------------------------------
$ 47,609 $ 50,530
----------------------------------------------------------------
THE DESCARTES SYSTEMS GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data) US GAAP
(IN US$)
Three Months Ended Nine Months Ended
October 31 October 31
1999 1998 1999 1998
-----------------------------------------------------------------
REVENUE
Software licenses $ 4,787 $ 5,586 $ 12,215 $ 15,553
Services 5,264 4,628 16,586 11,919
Hardware 420 2,289 2,679 6,524
---------------------------------------------------------------
Total revenue 10,471 12,503 31,480 33,996
---------------------------------------------------------------
COSTS AND EXPENSES
Cost of software and hardware 675 2,223 3,319 5,946
Cost of services 4,393 3,861 15,406 10,746
Sales and marketing 4,074 3,428 15,169 9,002
Research and development 3,664 2,742 11,086 7,411
General and administration 1,444 1,007 4,200 3,754
Amortization of intangibles 352 548 1,055 2,542
Write-off of intangibles - 16,458 - 16,458
Purchased in-process research
and development - 328 - 2,267
---------------------------------------------------------------
Total costs and expenses 14,602 30,595 50,235 58,126
---------------------------------------------------------------
LOSS FROM OPERATIONS (4,131) (18,092) (18,755) (24,130)
OTHER INCOME, NET 136 82 487 616
---------------------------------------------------------------
LOSS BEFORE INCOME TAXES (3,995) (18,010) (18,268) (23,514)
INCOME TAXES
Current - - - -
Deferred - - - -
---------------------------------------------------------------
- - - -
---------------------------------------------------------------
NET LOSS $(3,995) $(18,010)$(18,268)$(23,514)
---------------------------------------------------------------
NET LOSS PER SHARE
BASIC AND DILUTED $ (0.11) $ (0.54) $ (0.50) $ (0.72)
---------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED 36,453,779 33,242,423 36,428,610 32,803,231
---------------------------------------------------------------
NOTE TO EDITORS: The Name Inter@active(TM) should appear with an "at"
sign between 'Inter' and 'active'. This symbol may not transmit
properly in all systems.
Copyright (C) 1999 Business Wire. All rights reserved.
Distributed via COMTEX.
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CONTACT: Descartes Systems Group
Paul Laufert, 800/419-8495 ext. 2265
Investor@descartes.com
WEB PAGE: businesswire.com
GEOGRAPHY: MASSACHUSETTS INTERNATIONAL CANADA
INDUSTRY CODE: E-COMMERCE
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