Lower Losses for Some, Profits for Others

Descartes Systems Group, SSA Global Technologies report earnings

Descartes Systems Group, SSA Global Technologies report earnings

Birmingham, AL  September 4, 2003  Two solution providers have announced their latest quarterly results, with reports in from Descartes Systems Group and SSA Global Technologies.

Waterloo, Ontario-based Descartes, a provider of supply chain services, announced financial results for the second quarter of its 2004 fiscal year, which ended on July 31, providing figures in U.S. dollars and in accordance with U.S. generally accepted accounting principles (GAAP).

Total revenues for the quarter were $15.2 million, down 16 percent when compared with $18.0 million in total revenues for the second quarter of last fiscal year. Gross margins grew to 69 percent in the quarter, up from 56 percent in the same quarter a year ago.

The loss for the latest quarter was $14.7 million, or $0.29 per share, compared to a loss of $18.5 million, or $0.35 per share, for the same quarter last year.

Descartes completed the quarter with $77 million in cash, cash equivalents and marketable securities. Cash usage in the quarter included payments for completion of the previously announced purchase of its common shares and debentures.

"We are pleased with our performance this quarter, which was in line with the guidance we previously provided," said Manuel Pietra, Descartes' CEO and president. "Descartes' financial position remains strong and we believe we are well-positioned for future growth. Focused on our strategic goals, we are committed to maintaining operational excellence and delivering customer and shareholder value."

Descartes also announced that Peter Schwartz is resigning as a director and chairman of the board of Descartes to pursue other opportunities. Dr. Stephen Watt, who was initially appointed a director in 2001, has been appointed chairman of the board and Pietra has been appointed to the board of directors.

The quarter saw 151 total customer sign-ups for Descartes, with approximately 60 percent of these sign-ups representing services sold to existing customers. Some of the sign-ups during the quarter included Best Buy, Four Star Dairy, Hartford Distributors, Mitsubishi and Shibusawa Warehouse Co.

Meanwhile, Chicago-based SSA Global Technologies, a provider of extended enterprise solutions and services, announced financial results for the company's fourth quarter and fiscal year ended July 31. SSA GT said the results are subject to audit and do not include the recent Baan acquisition.

For the quarter ended July 31, the company reported total revenue of $85.2 million, an increase of 19 percent over the fourth quarter of fiscal year 2002. Software license revenues were $29.9 million, up 41 percent over the prior year quarter and representing 35 percent of total revenue in the quarter. Fourth quarter earnings before interest, taxes, amortization (EBITA) were $22.1 million, or 26 percent of total revenue. Cash-on-hand as of quarter's end was $65 million.

Total revenues for the year were $285.4 million, an increase of 50 percent from 2002. Earnings before interest, taxes and amortization (EBITA) were $65.5 million, which represents 23 percent of total revenue. For the year, software license fees represented 33 percent of total revenues, with the remaining 67 percent coming from maintenance and services.

During fiscal year 2003, SSA GT closed several acquisitions of notable companies in a bid to become the largest provider of enterprise software to the manufacturing sector. The company now claims more than 16,000 customers worldwide.

The provider's acquisitions included:

  • December 20, 2002  Infinium Software deepened SSA GT's reach into the process manufacturing space with financial and human resources applications, while broadening capabilities into gaming, hospitality and healthcare industries.

  • June 19, 2003  Ironside Technologies' sell-side and buy-side e-commerce solutions extended SSA GT's existing product portfolio and became components of its customer relationship and supplier relationship strategies.

  • July 18, 2003  Baan gives SSA GT a deeper global presence. Both SSA GT and Baan customers can consider taking advantage of extension solutions in areas such as logistics, supply chain management, customer relationship management, corporate performance management and enterprise integration.

  • July 22, 2003  Elevon's e-business, collaborative commerce solutions and manufacturing customers were added to SSA GT's portfolio.

"We continue to expand our core ERP offerings through these acquisitions and attribute our success to the fact that we are solving customer problems," said Mike Greenough, president, chairman and CEO, SSA GT. "SSA GT is at the vanguard of industry consolidation with several successful acquisitions this fiscal year."