Descartes Reports Record Operating Performance

Descartes Systems Group, a global on-demand software-as-a-service (SaaS) logistics solutions provider, announced financial results for its fiscal 2009 second quarter ended July 31, 2008, including a 20% increase in revenues.

Financial highlights for Descartes in the second quarter fiscal 2009 included revenues of $17.1 million, up $2.8 million or 20% from $14.3 million in the second quarter of fiscal 2008 and up $0.8 million or 5% from $16.3 million in the previous quarter.

Income before income taxes of $2.0 million, was up 11% from $1.8 million in the same period a year earlier and was also up 25% from $1.6 million in prior quarter.

Net income of $1.4 million, compared to net income of $1.7 million in second-quarter 2008 and up from $1.1 million in the first quarter of fiscal 2009. Descartes recorded a $0.5 million deferred income tax expense in each of the two quarters in fiscal 2009 as existing tax losses were applied to taxable income. No comparable deferred income tax expense was taken in fiscal 2008, including.

EBITDA of $4.1 million was up 21% from $3.4 million in the fiscal 2008 quarter and up $0.3 million, or 8%, from $3.8 million in fiscal first quarter of 2009. EBITDA as a percentage of revenues was 24% this quarter, compared to 24% a year earlier and 23% in first-quarter 2009.

The following table summarizes Descartes’ results in the categories specified below over the past 5 fiscal quarters (unaudited, dollar amounts in millions, except diluted earnings per share amounts, EBITDA as a % of revenues and DSOs):

Total revenues of $17.1 million in the fiscal second quarter were comprised of $16.0 million in services revenues and $1.1 million in license revenues. As a percentage of total revenues, services revenues were 94%, compared to 94% in the prior-year quarter and 91% in first quarter of fiscal 2009, with the balance of the revenues in each period being license revenues.

Geographically, $10.0 million of revenues (59%) were generated in the Americas, excluding Canada, $4.3 million (25%) in Europe, Middle East and Africa (EMEA), $2.4 million (14%) in Canada, and $0.4 million (2%) in the Asia Pacific region.

“We’re pleased with another quarter of positive operating results, highlighted by growth in revenues and income before income taxes, increased cash flow from operations and reduced DSOs,” said Stephanie Ratza, CFO at Descartes. “We continue to believe that our solid balance sheet and healthy cash position provide an excellent platform for our consolidation strategy.”

“Our record operating results are a consequence of our customers’ successes,” said Arthur Mesher, CEO at Descartes. “Our customers have recently faced a new world order comprised of higher fuel costs, tighter customer delivery expectations and increased regulatory requirements. In response, we’ve adjusted our implementation methodology to accelerate the speed at which customers achieve results using our solutions. We’re proud that we’ve been able to show our customers our immediate relevance to helping them save money, focus on core operations and comply with government and industry standards.”

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