Descartes beats consensus!
Descartes Reports Record E-Commerce
Revenues In The Fourth Quarter And In Fiscal
2000
Waterloo, Ontario - Tuesday, March 7, 2000, 7:00 AM EST
37% Sequential License Revenue Growth to $6.6 Million in the
Fourth Quarter
243% Year Over Year Increase in E-Commerce License Revenues to
$12 Million
The Descartes Systems Group Inc. (NASDAQ: DSGX) (TSE: DSG), a
leading supplier of business to business e-commerce solutions for
e-fulfillment, today announced its fiscal 2000 fourth-quarter and
year end results for the period ended January 31, 2000. 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 fourth quarter of fiscal 2000 (Q4 FY00) reached
$12.2 Million up 16% from revenues of $10.5 Million in the third
quarter of this fiscal year (Q3 FY00). License revenues increased
to $6.6 Million in Q4 FY00 up 37% from $4.8 Million in Q3 FY00.
In addition, license revenues from e-commerce, which represented
approximately 80% of license revenues, increased sequentially by
approximately $1.5 Million in Q4 FY00. Gross margins increased to
59% of revenues in Q4 FY00 up from 52% of revenues in Q3 FY00.
Net loss for the quarter was $3.5 million or ($0.09) per share
compared with a net loss of $4 Million or ($0.11) per share in Q3
FY00.
The company had net cash and short term investments at the end of
the quarter of $57 Million.
"We are extremely pleased with our fourth quarter performance,
both financially and in the marketplace." said Peter Schwartz,
Descartes' Chairman and CEO. "We have firmly established our
position as the B2B e-commerce logistics leader. Our innovative
e-fulfillment solutions and our rapidly expanding Global
Logistics Network are enabling customers to, radically improve
customer service, reduce fulfillment costs, and create brand new
businesses and revenue streams around e-fulfillment. We will
continue to move aggressively to capitalise on our first mover
advantage in this market."
Schwartz continued "We are focused on growing our Global
Logistics Network, which serves as an ecosystem around which our
customers build their own communities and participate as part of
a broader federated network. We believe this differentiates
Descartes from other vendors who are simply providing tools to
connect trading partners together, and establish Descartes'
position as a first mover in this new era of internet logistics."
The Company's successful shift to e-commerce in fiscal 2000 was
reflected in the growth in e-commerce license revenues, which
increased 243% to $12 Million in fiscal 2000 over the $3.5
Million recorded in fiscal 1999. Revenues in fiscal 2000 reached
$43.7 Million, a decrease of 10% from revenues of $48.8 Million
in fiscal 1999. License revenues were $18.8 Million in fiscal
2000 down from $23.1 Million in the prior year. Net loss for the
year $21.8 Million or ($0.59) per share compared with a net loss
of $25.9 Million or ($0.79) per share in fiscal 1999.
"In fiscal 2000, we successfully transitioned to an e-commerce
business model," continued Mr Schwartz. "More than 80% of our
license revenues are now e-commerce revenues, where customers are
using our software for B2B and B2C e-commerce. Going forward, we
anticipate rapid growth in a subset of these e-commerce revenues
comprised of recurring subscription and transaction based
revenues, or, as we refer to them Network Revenues. Our
expectation is that Network Revenues will emerge as a significant
portion of our combined license and network revenues this year."
Fourth Quarter Highlights: A Growing Descartes Ecosystem
This quarter, Descartes strengthened its position as a B2B
e-commerce ecosystem provider through key partnerships and
through the expansion of its Global Logistics Network. Fourth
quarter highlights include:
Growth of Global Logistics Network - Descartes' Global Logistics
Network, the community of participants connected via Descartes'
common collaborative logistics infrastructure, continues to
expand rapidly. Webvan, Fosters, Medical Logistics, Inc. as well
as new transportation exchanges are among the customers that have
licensed the rights to Descartes' software, hosted services and
information infrastructure in Q4. The Descartes Global Logistics
Network provides Descartes' customers with automatic access to an
Internet trading community and is designed to create market
efficiencies and enable global economies of scale between
shippers, receivers, carriers, freight forwarders, third party
logistics providers, e-marketplaces, vertical portals, and
transportation exchanges. Descartes' customers can use the
network for private, semi-private and public business processes.
Partnerships - In the fourth quarter Descartes formed a global
strategic alliance with Cap Gemini Group, a leading management in
IT consulting company. Cap Gemini is now providing business
process consulting and systems integration for Descartes'
DeliveryNet solutions. Descartes will also become a partner in
Cap Gemini's Solutions Center for Integrated Supply Chain
Management.
In Q4, Descartes also announced that GERS Retail Systems, the
leading supplier of enterprise-wide solutions for the business to
consumer marketplace, will offer Descartes' wireless routing and
scheduling optimization solutions to enable both its traditional
and e-business customers to achieve greater efficiencies in their
fulfillment operations and reach higher levels of customer
service. The Descartes solutions will be integrated into the GERS
Point-of-Sale system.
Other Highlights
Financial Strength - In January, the Company raised an additional
$47 Million in a bought deal financing, strengthening the balance
sheet for growth.
Recognition - On January 26, 2000, ARC Advisory Group - a leading
e-business analyst firm providing strategic planning and
technology assessment services to leading worldwide companies -
ranked Descartes as the number one e-fulfillment software and
services provider for the transportation market, commanding a
market share of almost 36% in this emerging, fast growing
segment.
Post Period notes
Expanding Footprint - On February 24, 2000 Descartes announced
the acquisition of Pittsburgh based E-Transport, Incorporated a
leading provider of hosted software and logistics exchange
solutions for the multi-modal transportation market. This
acquisition closed on February 29. The acquisition enhances
Descartes' leadership position in e-fulfillment by providing new
hosted transportation software and enabling tools for exchanges.
E-Transport's hosted pricing database solutions are currently
used by over 80% of the global ocean cargo carriers. The
acquisition further expands the reach of Descartes' Global
Logistics Network, creating what the company believes is the
largest Internet logistics network in the world and providing
Descartes customers with automatic access to an Internet trading
community.
About Descartes
Descartes is a leading provider of end-to-end logistics solutions
for B2B e-commerce. Descartes' e-fulfillment software and
exchange solutions enable companies to create high-performance
customer fulfillment networks - aka DeliveryNets(tm). DeliveryNet
solutions empower organizations to deliver reliable, responsive
customer service in a profitable manner and to create innovative
new products and services. DeliveryNet solutions leverage
Descartes' Internet-based Global Logistics Network to integrate
the internal and external logistics and fulfillment processes of
shippers, receivers, carriers, logistics service providers,
e-marketplaces, vertical portals and transportation exchanges.
The result is a global e-fulfillment information infrastructure
that provides cost saving and revenue opportunities for
businesses that need to manage physical product movement.
Descartes products are licensed today by more than 850 companies
in 35 vertical industries and 50 countries worldwide. For more
information about Descartes, visit descartes.com.
CONTACT INFORMATION:
Paul Laufert
Descartes Systems Group
(800) 419-8495 Ext 2265
plaufert@descartes.com
All registered and unregistered trademarks mentioned in this
release are the property of their respective owners.
###
This release contains statements relating to market and customer
dynamics, future operating strategy, revenue and expense growth,
revenue composition 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; dependence on and
increasing use of the Internet and the growth of electronic
commerce, risks associated with acceptance of licensing models
for electronic commerce market, 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$)
--------------------------------------------------------------
January 31, January 31,
2000 1999
--------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 31,149 $ 17,556
Short-term investments 25,835 11,290
Accounts receivable - trade 18,906 19,238
Accounts receivable - other 918 424
Prepaid expenses and
deferred charges 3,707 5,807
--------------------------------------------------------------
80,515 54,315
CAPITAL ASSETS, net 4,921 4,739
INTANGIBLE ASSETS, net 4,923 6,199
--------------------------------------------------------------
$ 90,359 $ 65,253
==============================================================
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness $ - $ 3,134
Accounts payable 3,886 4,101
Accrued liabilities 6,020 6,546
Income taxes payable 41 39
Deferred revenue 4,751 4,262
--------------------------------------------------------------
14,698 18,082
--------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common shares 159,831 110,393
Additional paid-in capital 3,126 3,126
Unearned deferred compensation (390) (627)
Accumulated other comprehensive loss (563) (1,147)
Deficit (86,343) (64,574)
--------------------------------------------------------------
75,661 47,171
--------------------------------------------------------------
$ 90,359 $ 65,253
==============================================================
THE DESCARTES SYSTEMS GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS US GAAP
(in thousands, except share and per share data) (IN US$)
----------------------------------------------------------------
Three Months Ended Year Ended
January 31 January 31
2000 1999 2000 1999
----------------------------------------------------------------
REVENUE
Software licenses $ 6,577 $ 7,533 $ 18,792 $ 23,086
Services 5,461 5,447 22,047 17,366
Hardware 147 1,782 2,826 8,306
----------------------------------------------------------------
Total revenue 12,185 14,762 43,665 48,758
----------------------------------------------------------------
COSTS AND EXPENSES
Cost of software
and hardware 659 1,514 3,978 7,460
Cost of services 4,295 4,545 19,701 15,291
Sales and marketing 4,086 4,745 19,255 13,747
Research and
development 3,942 3,907 15,028 11,318
General and
administration 2,592 1,254 6,792 5,008
Amortization of
intangibles 352 967 1,407 3,509
Write-off of intangibles - - - 16,458
Purchased in-process
research and
development - 498 - 2,765
----------------------------------------------------------------
Total costs
and expenses 15,926 17,430 66,161 75,556
----------------------------------------------------------------
LOSS FROM OPERATIONS (3,741) (2,668) (22,496) (26,798)
OTHER INCOME (EXPENSE)
Interest expense (85) (98) (411) (268)
Interest revenue 325 345 1,138 1,131
----------------------------------------------------------------
240 247 727 863
----------------------------------------------------------------
LOSS BEFORE
INCOME TAXES (3,501) (2,421) (21,769) (25,935)
INCOME TAXES
Current - - - -
Deferred - - - -
----------------------------------------------------------------
- - - -
----------------------------------------------------------------
NET LOSS $ (3,501) $ (2,421) $(21,769) $(25,935)
----------------------------------------------------------------
NET LOSS PER SHARE
BASIC AND DILUTED $ (0.09) $ (0.07) $ (0.59) $ (0.79)
================================================================
WEIGHTED AVERAGE
SHARES
OUTSTANDING BASIC
AND DILUTED 37,556,387 33,314,937 36,711,861 32,932,209
================================================================ |
