The Descartes Systems Group Inc. (TSX:DSG) (Nasdaq:DSGX) announced
its financial results for its fiscal 2023 second quarter
(
Q2FY23). 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).
“Descartes had a very successful quarter helping
customers navigate the complexities of global supply chains and
logistics,” said Edward J. Ryan, Descartes’ CEO. “Geopolitical
events, energy supplies and costs, and economic uncertainty have
combined to present novel challenges for supply chain participants
to manage. Our Global Logistics Network (GLN) is designed to help
these shippers, carriers and logistics services providers connect
and collaborate to plan and execute shipments in an efficient and
sustainable manner. We’re pleased that we’ve been able to help so
many existing and new customers improve their businesses and supply
chains.”
Q2FY23 Financial Results
As described in more detail below, key financial
highlights for Descartes’ Q2FY23 included:
- Revenues of $123.0 million, up 18%
from $104.6 million in the second quarter of fiscal 2022
(Q2FY22) and up 6% from $116.4 million in the
previous quarter (Q1FY23);
- Revenues were comprised of services revenues of $109.4 million
(89% of total revenues), professional services and other revenues
of $10.3 million (8% of total revenues) and license revenues of
$3.3 million (3% of total revenues). Services revenues were up 17%
from $93.5 million in Q2FY22 and up 6% from $102.8 million in
Q1FY23;
- Cash provided by operating activities of $46.4 million,
consistent with $46.4 million in Q2FY22 and up 5% from $44.4
million in Q1FY23. In Q2FY23, Descartes paid $10.5 million in
contingent consideration in respect of previously completed
acquisitions of which $5.3 million was accounted for as cash used
in operating activities in Q2FY23;
- Income from operations of $31.5 million, up 21% from $26.1
million in Q2FY22 and up 3% from $30.6 million in Q1FY23;
- Net income of $22.9 million, down from $23.2 million in Q2FY22
and down from $23.1 million in Q1FY23. Net income as a percentage
of revenue was 19%, compared to 22% in Q2FY22 and 20% in
Q1FY23;
- Earnings per share on a diluted basis of $0.27, consistent with
$0.27 in both Q2FY22 and Q1FY23, respectively; and
- Adjusted EBITDA of $54.0 million, up 18% from $45.9 million in
Q2FY22 and up 5% from $51.2 million in Q1FY23. Adjusted EBITDA as a
percentage of revenues was 44%, consistent with 44% in both Q2FY22
and Q1FY23, respectively.
Adjusted EBITDA and Adjusted EBITDA as a
percentage of revenues are non-GAAP financial measures provided as
a complement to financial results presented in accordance with
GAAP. We define Adjusted EBITDA as earnings before interest, taxes,
depreciation, amortization, stock-based compensation (for which we
include related fees and taxes) and other charges (for which we
include restructuring charges and acquisition-related expenses).
These items are considered by management to be outside Descartes'
ongoing operational results. We define Adjusted EBITDA as a
percentage of revenues as the quotient, expressed as a percentage,
from dividing Adjusted EBITDA for a period by revenues for the
corresponding period. A reconciliation of Adjusted EBITDA and
Adjusted EBITDA as a percentage of revenues to net income
determined in accordance with GAAP is provided later in this
release.
The following table summarizes Descartes' results in the
categories specified below over the past 5 fiscal quarters
(unaudited; dollar amounts, other than per share amounts, in
millions):
|
Q2FY23 |
Q1FY23 |
Q4FY22 |
Q3FY22 |
Q2FY22 |
Revenues |
123.0 |
116.4 |
112.4 |
108.9 |
104.6 |
Services revenues |
109.4 |
102.8 |
99.5 |
97.2 |
93.5 |
Gross margin |
77% |
76% |
76% |
76% |
76% |
Cash provided by operating
activities |
46.4 |
44.4 |
45.5 |
43.3 |
46.4 |
Income from operations |
31.5 |
30.6 |
26.0 |
27.8 |
26.1 |
Net income |
22.9 |
23.1 |
19.2 |
25.5 |
23.2 |
Net income as a % of
revenues |
19% |
20% |
17% |
23% |
22% |
Earnings per diluted share |
0.27 |
0.27 |
0.22 |
0.30 |
0.27 |
Adjusted EBITDA |
54.0 |
51.2 |
50.1 |
48.2 |
45.9 |
Adjusted EBITDA as a % of
revenues |
44% |
44% |
45% |
44% |
44% |
Year-to-Date Financial Results
As described in more detail below, key financial
highlights for Descartes’ six-month period ended July 31, 2022
(1HFY23) included:
- Revenues of $239.4 million, up 18%
from $203.4 million in the same period a year ago
(1HFY22);
- Revenues were comprised of services
revenues of $212.2 million (89% of total revenues), professional
services and other revenues of $21.6 million (9% of total revenues)
and license revenues of $5.6 million (2% of total revenues).
Services revenues were up 17% from $181.8 million in 1HFY22;
- Cash provided by operating
activities of $90.8 million, up 4% from $87.3 million in 1HFY22. In
1HFY23, Descartes paid $10.5 million in contingent consideration in
respect of previously completed acquisitions of which $5.3 million
was accounted for as cash used in operating activities in
1HFY23;
- Income from operations of $62.1 million, up 25% from $49.5
million in 1HFY22;
- Net income of $46.0 million, up 11% from $41.6 million in
1HFY22. Net income as a percentage of revenues was 19%, compared to
20% in 1HFY22;
- Earnings per share on a diluted basis of $0.53, up 10% from
$0.48 in 1HFY22; and
- Adjusted EBITDA of $105.2 million, up 20% from $87.4 million in
1HFY22. Adjusted EBITDA as a percentage of revenues was 44%,
compared to 43% in 1HFY22.
The following table summarizes Descartes’
results in the categories specified below over 1HFY23 and 1HFY22
(unaudited, dollar amounts in millions):
|
1HFY23 |
1HFY22 |
Revenues |
239.4 |
203.4 |
Services revenues |
212.2 |
181.8 |
Gross margin |
76% |
76% |
Cash provided by operating
activities |
90.8 |
87.3 |
Income from operations |
62.1 |
49.5 |
Net income |
46.0 |
41.6 |
Net income as a % of
revenues |
19% |
20% |
Earnings per diluted share |
0.53 |
0.48 |
Adjusted EBITDA |
105.2 |
87.4 |
Adjusted EBITDA as a % of
revenues |
44% |
43% |
Cash Position
At July 31, 2022, Descartes had $189.0 million
in cash. Cash decreased by $22.8 million in Q2FY23 and decreased
$24.4 million in 1HFY23. The table set forth below provides a
summary of cash flows for Q2FY23 and 1HFY23 in millions of
dollars:
|
Q2FY23 |
|
1HFY23 |
|
Cash provided by operating activities |
46.4 |
|
90.8 |
|
Additions to property and equipment |
(1.8 |
) |
(3.4 |
) |
Acquisitions of subsidiaries, net of cash acquired |
(61.1 |
) |
(104.0 |
) |
Payment of debt issuance costs |
- |
|
(0.1 |
) |
Issuances of common shares, net of issuance costs |
0.1 |
|
0.5 |
|
Payment of contingent consideration |
(5.2 |
) |
(5.2 |
) |
Effect of foreign exchange rate on cash |
(1.2 |
) |
(3.0 |
) |
Net change in cash |
(22.8 |
) |
(24.4 |
) |
Cash, beginning of period |
211.8 |
|
213.4 |
|
Cash, end of period |
189.0 |
|
189.0 |
|
Acquisition of XPS
On June 3, 2022, Descartes acquired all of the
shares of XPS Technologies, LLC (“XPS”), a provider of ecommerce
multi-carrier parcel shipping solutions. The purchase price for the
acquisition was approximately $61.1 million, net of cash acquired,
which was funded from cash on hand, plus potential
performance-based contingent consideration of up to $75.0 million
based on XPS achieving revenue-based targets over the first two
years post-acquisition.
Normal-course issuer bid (NCIB)
On June 7, 2022, Descartes announced a NCIB,
commencing June 10, 2022, to purchase up to approximately 7.4
million common shares in the open market for cancellation. Under
the NCIB, Descartes is permitted to repurchase for cancellation, at
its discretion on or before June 9, 2023, up to 10% of the “public
float” (calculated in accordance with the rules of the TSX) of
Descartes’ issued and outstanding common shares. Any purchases
under the NCIB will be subject to the terms and limitations
applicable to such NCIB, and will be made through the facilities of
the TSX, Nasdaq, other designated exchanges and/or alternative
Canadian trading systems, or by such other means as may be
permitted by the Ontario Securities Commission or other applicable
Canadian Securities Administrators. No common shares have yet been
purchased pursuant to the NCIB.
Short-form base shelf
prospectusOn July 15, 2022, we filed the 2022 Base Shelf
Prospectus, allowing us to offer and issue an unlimited quantity of
the following securities during the 25-month period following
thereafter: (i) common shares; (ii) preferred shares; (iii) senior
or subordinated unsecured debt securities; (iv) subscription
receipts; (v) warrants; and (vi) securities comprised of more than
one of the aforementioned common shares, preferred shares, debt
securities, subscription receipts and/ or warrants offered together
as a unit. These securities may be offered separately or together,
in separate series, in amounts, at prices and on terms to be set
forth in one or more shelf prospectus supplements. No securities
have yet been sold pursuant to the 2022 Base Shelf Prospectus.
Conference CallMembers of
Descartes' executive management team will host a conference call to
discuss the company's financial results at 5:30 p.m. ET on
Wednesday, September 7. Designated numbers are +1 866 455 3403 for
North America and +1 647 484 8332 for international, using Passcode
96484241#.
The company will simultaneously conduct an audio webcast on the
Descartes website at
www.descartes.com/descartes/investor-relations. Phone conference
dial-in or webcast log-in is required approximately 10 minutes
beforehand.
Replays of the conference call will be available until September
14, 2022, at the following address:
https://onlinexperiences.com/Launch/QReg/ShowUUID=363B9D23-BDC9-437F-8BDC-42CA9C002737&LangLocaleID=1033
using Passcode: EV00136656. An archived replay of the webcast will
be available at www.descartes.com/descartes/investor-relations.
About Descartes
Descartes (Nasdaq:DSGX) (TSX:DSG) is the global
leader in providing on-demand, software-as-a-service solutions
focused on improving the productivity, performance and security of
logistics-intensive businesses. Customers use our modular,
software-as-a-service solutions to route, schedule, track and
measure delivery resources; plan, allocate and execute shipments;
rate, audit and pay transportation invoices; access global trade
data; file customs and security documents for imports and exports;
and complete numerous other logistics processes by participating in
the world's largest, collaborative multimodal logistics community.
Our headquarters are in Waterloo, Ontario, Canada and we have
offices and partners around the world. Learn more
at www.descartes.com, and connect with us
on LinkedIn and Twitter.
Descartes Investor Contact:
Laurie McCauley +1-519-746-6114 x202358 investor@descartes.com
Safe Harbor Statement This
release may contain forward-looking information within the meaning
of applicable securities laws ("forward-looking statements") that
relates to Descartes' expectations concerning future revenues and
earnings, and our projections for any future reductions in expenses
or growth in margins and generation of cash; our assessment of the
current and future potential impact of the war in Ukraine and the
COVID-19 pandemic on our business, results of operations and
financial condition; continued growth and acquisitions including
our assessment of any increased opportunity for our products and
services as a result of trends in the logistics and supply chain
industries; rate of profitable growth; demand for Descartes'
solutions; growth of Descartes' Global Logistics Network (“GLN”);
customer buying patterns; customer expectations of Descartes;
development of the GLN and the benefits thereof to customers; and
other matters. These forward-looking statements are based on
certain assumptions including the following: global shipment
volumes continuing at levels generally consistent with those
experienced historically; the current war in Ukraine and the
COVID-19 pandemic not having a material negative impact on shipment
volumes or on the demand for the products and services of Descartes
by its customers and the ability of those customers to continue to
pay for those products and services; countries continuing to
implement and enforce existing and additional customs and security
regulations relating to the provision of electronic information for
imports and exports; countries continuing to implement and enforce
existing and additional trade restrictions and sanctioned party
lists with respect to doing business with certain countries,
organizations, entities and individuals; Descartes' continued
operation of a secure and reliable business network; the stability
of general economic and market conditions, currency exchange rates,
and interest rates; equity and debt markets continuing to provide
Descartes with access to capital; Descartes' continued ability to
identify and source attractive and executable business combination
opportunities; Descartes' ability to develop solutions that keep
pace with the continuing changes in technology, and our continued
compliance with third party intellectual property rights. These
assumptions may prove to be inaccurate. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or
achievements of Descartes, or developments in Descartes' business
or industry, to differ materially from the anticipated results,
performance or achievements or developments expressed or implied by
such forward-looking statements. Such factors include, but are not
limited to, Descartes' ability to successfully identify and execute
on acquisitions and to integrate acquired businesses and assets,
and to predict expenses associated with and revenues from
acquisitions; the impact of network failures, information security
breaches or other cyber-security threats; disruptions in the
movement of freight and a decline in shipment volumes including as
a result of contagious illness outbreaks; a deterioration of
general economic conditions or instability in the financial markets
accompanied by a decrease in spending by our customers; the ability
to attract and retain key personnel and the ability to manage the
departure of key personnel and the transition of our executive
management team; changes in trade or transportation regulations
that currently require customers to use services such as those
offered by Descartes; changes in customer behaviour and
expectations; Descartes’ ability to successfully design and develop
enhancements to our products and solutions; departures of key
customers; the impact of foreign currency exchange rates;
Descartes' ability to retain or obtain sufficient capital in
addition to its debt facility to execute on its business strategy,
including its acquisition strategy; disruptions in the movement of
freight; the potential for future goodwill or intangible asset
impairment as a result of other-than-temporary decreases in
Descartes' market capitalization; and other factors and assumptions
discussed in the section entitled, "Certain Factors That May Affect
Future Results" in documents filed with the Securities and Exchange
Commission, the Ontario Securities Commission and other securities
commissions across Canada, including Descartes' most recently filed
Management's Discussion and Analysis. If any such risks actually
occur, they could materially adversely affect our business,
financial condition or results of operations. In that case, the
trading price of our common shares could decline, perhaps
materially. Readers are cautioned not to place undue reliance upon
any such forward-looking statements, which speak only as of the
date made. Forward-looking statements are provided for the purpose
of providing information about management's current expectations
and plans relating to the future. Readers are cautioned that such
information may not be appropriate for other purposes. We do not
undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
to reflect any change in our expectations or any change in events,
conditions or circumstances on which any such statement is based,
except as required by law.
Reconciliation of Non-GAAP Financial
Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of
revenues
We prepare and release quarterly unaudited and
annual audited financial statements prepared in accordance with
GAAP. We also disclose and discuss certain non-GAAP financial
information, used to evaluate our performance, in this and other
earnings releases and investor conference calls as a complement to
results provided in accordance with GAAP. We believe that current
shareholders and potential investors in our company use non-GAAP
financial measures, such as Adjusted EBITDA and Adjusted EBITDA as
a percentage of revenues, in making investment decisions about our
company and measuring our operational results.
The term “Adjusted EBITDA” refers to a financial
measure that we define as earnings before certain charges that
management considers to be non-operating expenses and which consist
of interest, taxes, depreciation, amortization, stock-based
compensation (for which we include related fees and taxes) and
other charges (for which we include restructuring charges and
acquisition-related expenses). Adjusted EBITDA as a percentage of
revenues divides Adjusted EBITDA for a period by the revenues for
the corresponding period and expresses the quotient as a
percentage.
Management considers these non-operating
expenses to be outside the scope of Descartes’ ongoing operations
and the related expenses are not used by management to measure
operations. Accordingly, these expenses are excluded from Adjusted
EBITDA, which we reference to both measure our operations and as a
basis of comparison of our operations from period-to-period.
Management believes that investors and financial analysts measure
our business on the same basis, and we are providing the Adjusted
EBITDA financial metric to assist in this evaluation and to provide
a higher level of transparency into how we measure our own
business. However, Adjusted EBITDA and Adjusted EBITDA as a
percentage of revenues are non-GAAP financial measures and may not
be comparable to similarly titled measures reported by other
companies. Adjusted EBITDA and Adjusted EBITDA as a percentage of
revenues should not be construed as a substitute for net income
determined in accordance with GAAP or other non-GAAP measures that
may be used by other companies, such as EBITDA. The use of Adjusted
EBITDA and Adjusted EBITDA as a percentage of revenues does have
limitations. In particular, we have completed six acquisitions
since the beginning of fiscal 2022 and may complete additional
acquisitions in the future that will result in acquisition-related
expenses and restructuring charges. As these acquisition-related
expenses and restructuring charges may continue as we pursue our
consolidation strategy, some investors may consider these charges
and expenses as a recurring part of operations rather than expenses
that are not part of operations.
The table below reconciles Adjusted EBITDA and
Adjusted EBITDA as a percentage of revenues to net income reported
in our unaudited Consolidated Statements of Operations for Q2FY23,
Q1FY23, Q4FY22, Q3FY22, and Q2FY22, which we believe is the most
directly comparable GAAP measure.
(US dollars in millions) |
Q2FY23 |
|
Q1FY23 |
|
Q4FY22 |
|
Q3FY22 |
|
Q2FY22 |
|
Net income, as reported on Consolidated Statements
of Operations |
22.9 |
|
23.1 |
|
19.2 |
|
25.5 |
|
23.2 |
|
Adjustments to reconcile to
Adjusted EBITDA: |
|
|
|
|
|
Interest expense |
0.3 |
|
0.3 |
|
0.3 |
|
0.3 |
|
0.3 |
|
Investment income |
(0.5 |
) |
(0.2 |
) |
(0.1 |
) |
(0.1 |
) |
(0.1 |
) |
Income tax expense |
8.8 |
|
7.4 |
|
6.7 |
|
2.1 |
|
2.7 |
|
Depreciation expense |
1.3 |
|
1.2 |
|
1.3 |
|
1.3 |
|
1.3 |
|
Amortization of intangible assets |
16.1 |
|
15.1 |
|
15.0 |
|
15.4 |
|
15.0 |
|
Stock-based compensation and related taxes |
3.8 |
|
2.9 |
|
2.9 |
|
3.0 |
|
3.1 |
|
Other charges |
1.3 |
|
1.4 |
|
4.8 |
|
0.7 |
|
0.4 |
|
Adjusted EBITDA |
54.0 |
|
51.2 |
|
50.1 |
|
48.2 |
|
45.9 |
|
|
|
|
|
|
|
Revenues |
123.0 |
|
116.4 |
|
112.4 |
|
108.9 |
|
104.6 |
|
Net income as % of
revenues |
19% |
|
20% |
|
17% |
|
23% |
|
22% |
|
Adjusted EBITDA as % of revenues |
44% |
|
44% |
|
45% |
|
44% |
|
44% |
|
|
|
|
|
|
|
The table below reconciles Adjusted EBITDA and
Adjusted EBITDA as a percentage of revenues to net income reported
in our unaudited Consolidated Statements of Operations for 1HFY23
and 1HFY22, which we believe is the most directly comparable GAAP
measure.
(US dollars in millions) |
1HFY23 |
|
1HFY22 |
|
Net income, as reported on Consolidated Statements
of Operations |
46.0 |
|
41.6 |
|
Adjustments to reconcile to
Adjusted EBITDA: |
|
|
Interest expense |
0.6 |
|
0.5 |
|
Investment income |
(0.6 |
) |
(0.1 |
) |
Income tax expense |
16.1 |
|
7.5 |
|
Depreciation expense |
2.5 |
|
2.5 |
|
Amortization of intangible assets |
31.1 |
|
28.8 |
|
Stock-based compensation and related taxes |
6.7 |
|
5.7 |
|
Other charges |
2.8 |
|
0.9 |
|
Adjusted EBITDA |
105.2 |
|
87.4 |
|
|
|
|
Revenues |
239.4 |
|
203.4 |
|
Net income as % of revenues |
19% |
|
20% |
|
Adjusted EBITDA as % of revenues |
44% |
|
43% |
|
The Descartes Systems Group
Inc.Condensed Consolidated Balance
Sheets(US dollars in thousands; US GAAP;
Unaudited)
|
July 31, |
|
January 31, |
|
|
2022 |
|
2022(Audited) |
|
ASSETS |
|
|
CURRENT ASSETS |
|
|
Cash |
189,030 |
|
213,437 |
|
Accounts receivable (net) |
|
|
Trade |
48,913 |
|
41,705 |
|
Other |
11,420 |
|
14,075 |
|
Prepaid expenses and other |
20,664 |
|
21,974 |
|
Inventory |
814 |
|
868 |
|
|
270,841 |
|
292,059 |
|
OTHER LONG-TERM
ASSETS |
19,262 |
|
18,652 |
|
PROPERTY AND
EQUIPMENT, NET |
11,400 |
|
10,817 |
|
RIGHT-OF-USE
ASSETS |
8,089 |
|
10,571 |
|
DEFERRED INCOME
TAXES |
12,777 |
|
14,962 |
|
INTANGIBLE ASSETS,
NET |
252,565 |
|
229,609 |
|
GOODWILL |
671,802 |
|
608,761 |
|
|
1,246,736 |
|
1,185,431 |
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY |
|
|
CURRENT
LIABILITIES |
|
|
|
Accounts payable |
9,837 |
|
10,566 |
|
Accrued liabilities |
71,416 |
|
56,442 |
|
Lease obligations |
3,604 |
|
4,029 |
|
Income taxes payable |
4,449 |
|
5,616 |
|
Deferred revenue |
66,547 |
|
56,780 |
|
|
155,853 |
|
133,433 |
|
LONG-TERM DEBT |
- |
|
- |
|
LEASE
OBLIGATIONS |
5,094 |
|
7,382 |
|
DEFERRED REVENUE |
1,746 |
|
1,920 |
|
INCOME TAXES
PAYABLE |
8,303 |
|
7,354 |
|
DEFERRED INCOME
TAXES |
37,301 |
|
35,523 |
|
|
208,297 |
|
185,612 |
|
|
|
|
SHAREHOLDERS’
EQUITY |
|
|
Common shares – unlimited shares authorized; Shares issued and
outstanding totaled 84,788,547 at July 31, 2022 (January 31, 2022 –
84,756,210) |
537,003 |
|
536,297 |
|
Additional paid-in
capital |
479,620 |
|
473,303 |
|
Accumulated other
comprehensive income (loss) |
(26,813 |
) |
(12,393 |
) |
Retained
earnings |
48,629 |
|
2,612 |
|
|
1,038,439 |
|
999,819 |
|
|
1,246,736 |
|
1,185,431 |
|
The Descartes Systems Group
Inc.Consolidated Statements of
Operations(US dollars in thousands, except per share and
weighted average share amounts; US GAAP; Unaudited)
|
Three Months Ended |
|
|
Six Months Ended |
|
|
July 31, |
|
July 31, |
|
|
July 31, |
|
July 31, |
|
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
REVENUES |
123,011 |
|
104,570 |
|
|
239,406 |
|
203,408 |
|
COST OF
REVENUES |
28,919 |
|
25,470 |
|
|
56,742 |
|
49,319 |
|
GROSS
MARGIN |
94,092 |
|
79,100 |
|
|
182,664 |
|
154,089 |
|
EXPENSES |
|
|
|
|
|
Sales and marketing |
14,315 |
|
11,328 |
|
|
27,551 |
|
22,339 |
|
Research and development |
18,155 |
|
15,473 |
|
|
34,724 |
|
30,692 |
|
General and administrative |
12,700 |
|
10,855 |
|
|
24,342 |
|
21,861 |
|
Other charges |
1,289 |
|
414 |
|
|
2,771 |
|
934 |
|
Amortization of intangible assets |
16,086 |
|
14,911 |
|
|
31,134 |
|
28,746 |
|
|
62,545 |
|
52,981 |
|
|
120,522 |
|
104,572 |
|
INCOME FROM
OPERATIONS |
31,547 |
|
26,119 |
|
|
62,142 |
|
49,517 |
|
INTEREST
EXPENSE |
(284 |
) |
(272 |
) |
|
(562 |
) |
(549 |
) |
INVESTMENT
INCOME |
461 |
|
61 |
|
|
614 |
|
124 |
|
INCOME BEFORE INCOME
TAXES |
31,724 |
|
25,908 |
|
|
62,194 |
|
49,092 |
|
INCOME TAX EXPENSE
(RECOVERY) |
|
|
|
|
|
Current |
7,498 |
|
4,732 |
|
|
12,339 |
|
6,866 |
|
Deferred |
1,324 |
|
(2,000 |
) |
|
3,838 |
|
629 |
|
|
8,822 |
|
2,732 |
|
|
16,177 |
|
7,495 |
|
NET INCOME |
22,902 |
|
23,176 |
|
|
46,017 |
|
41,597 |
|
EARNINGS PER
SHARE |
|
|
|
|
|
Basic |
0.27 |
|
0.27 |
|
|
0.54 |
|
0.49 |
|
Diluted |
0.27 |
|
0.27 |
|
|
0.53 |
|
0.48 |
|
WEIGHTED AVERAGE SHARES
OUTSTANDING (thousands) |
|
|
|
|
|
Basic |
84,783 |
|
84,566 |
|
|
84,774 |
|
84,534 |
|
Diluted |
86,338 |
|
86,128 |
|
|
86,344 |
|
86,066 |
|
The Descartes Systems Group
Inc.Condensed Consolidated Statements of Cash
Flows(US dollars in thousands; US GAAP; Unaudited)
|
Three Months Ended |
|
|
Six Months Ended |
|
|
July 31, |
|
July 31, |
|
|
July 31, |
|
July 31, |
|
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
OPERATING
ACTIVITIES |
|
|
|
|
|
Net income |
22,902 |
|
23,176 |
|
|
46,017 |
|
41,597 |
|
Adjustments to reconcile net
income to cash provided by operating activities: |
|
|
|
|
|
Depreciation |
1,301 |
|
1,287 |
|
|
2,546 |
|
2,502 |
|
Amortization of intangible assets |
16,086 |
|
14,911 |
|
|
31,134 |
|
28,746 |
|
Stock-based compensation expense |
3,736 |
|
3,015 |
|
|
6,523 |
|
5,167 |
|
Other non-cash operating activities |
68 |
|
281 |
|
|
51 |
|
557 |
|
Deferred tax (recovery) expense |
1,324 |
|
(2,000 |
) |
|
3,838 |
|
629 |
|
Changes in operating assets and liabilities |
982 |
|
5,704 |
|
|
722 |
|
8,082 |
|
Cash provided by operating
activities |
46,399 |
|
46,374 |
|
|
90,831 |
|
87,280 |
|
INVESTING
ACTIVITIES |
|
|
|
|
|
Additions to property and equipment |
(1,786 |
) |
(941 |
) |
|
(3,422 |
) |
(2,596 |
) |
Acquisition of subsidiaries, net of cash acquired |
(61,096 |
) |
(54,418 |
) |
|
(103,988 |
) |
(90,278 |
) |
Cash used in investing
activities |
(62,882 |
) |
(55,359 |
) |
|
(107,410 |
) |
(92,874 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
|
Credit facility and other debt repayments |
- |
|
(1,068 |
) |
|
- |
|
(1,068 |
) |
Payment of debt issuance costs |
- |
|
- |
|
|
(66 |
) |
(60 |
) |
Issuance of common shares for cash, net of issuance costs |
111 |
|
850 |
|
|
499 |
|
1,497 |
|
Payment of contingent consideration |
(5,215 |
) |
- |
|
|
(5,215 |
) |
- |
|
Cash (used in) provided by
financing activities |
(5,104 |
) |
(218 |
) |
|
(4,782 |
) |
369 |
|
Effect of foreign exchange rate
changes on cash |
(1,162 |
) |
(576 |
) |
|
(3,046 |
) |
(78 |
) |
Decrease in
cash |
(22,749 |
) |
(9,779 |
) |
|
(24,407 |
) |
(5,303 |
) |
Cash, beginning of
period |
211,779 |
|
138,137 |
|
|
213,437 |
|
133,661 |
|
Cash, end of
period |
189,030 |
|
128,358 |
|
|
189,030 |
|
128,358 |
|
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