35% Increase in Quarterly Income Before Income Taxes Helps Drive Record Operating Results
WATERLOO, Ontario — September 10, 2009 —Descartes Systems Group, a global on-demand software-as-a-service (SaaS) logistics solutions provider, announced financial results for its fiscal 2010 second quarter (Q2FY10) ended July 31, 2009. All financial results referenced are unaudited, in United States (US) currency and, unless otherwise indicated, are determined in accordance with US Generally Accepted Accounting Principles (GAAP).
Key financial highlights for Descartes in Q2FY10 included:
- Revenues of $18.6 million, up $1.5 million or 9% from $17.1 million in the second quarter of last fiscal year (Q2FY09) and up $1.2 million or 7% from $17.4 million in the previous quarter (Q1FY10).;
- Gross margin of 68%, up from 64% in Q2FY09 and compared to 70% in Q1FY10;
- Income before income taxes of $2.7 million, up 35% from $2.0 million in Q2FY09 and up $0.9 million or 50% from Q1FY10. Commencing with Descartes’ Q1FY10, GAAP changed to require that acquisition-related costs (including legal, accounting, investment banking and valuation specialist fees) be expensed in the period incurred (“Acquisition Accounting Changes”). Previously, GAAP required that these expenses be capitalized as part of the purchase price for a completed business combination and were generally recorded as part of goodwill. Because of this change, Q2FY10 and Q1FY10 include an additional $0.2 million and $0.3 million, respectively, in acquisition-related costs compared to prior quarters where Descartes was not required to expense such costs in the period incurred;
- Net income of $0.8 million, compared to $1.4 million in Q2FY09 and $2.2 million in Q1FY10. Net income in Q2FY10 and Q2FY09 each included net non-cash deferred income tax expenses as tax losses were applied to taxable income in the amounts of $1.6 million and $0.5 million, respectively. Net income in Q1FY10 included a non-cash, net deferred income tax recovery of $0.7 million;
- Earnings per share on a diluted basis of $0.02, compared to $0.03 in Q2FY09 and $0.04 in Q1FY10. Income before income taxes, per share on a diluted basis for Q2FY10 was $0.05, up from $0.04 in Q2FY09 and up from $0.03 in Q1FY10;
- Days sales outstanding of 48 days, down 2 days from 50 days in Q2FY09, and down from 49 days last quarter;
- Record Adjusted Net Income of $5.2 million, up 27% from $4.1 million in Q2FY09 and up 11% from $4.7 million in Q1FY10. Adjusted Net Income as a percentage of revenues was 28% this quarter, up from 24% in Q2FY09 and up from 27% in Q1FY10. Adjusted Net Income per share on a diluted basis for Q2FY10 was $0.10, up from $0.08 in Q2FY09 and up from $0.09 in Q1FY10.
View full press release with financial tables at http://www.descartes.com/company/investors/