Company News — Descartes Systems Group Inc.

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Descartes Systems Group reduces Q4 revenue by $800,000 US after audit

Tuesday, May 25, 2004

WATERLOO, Ont. (CP) - Descartes Systems Group Inc., a troubled company that has cut more than a third of its workforce, has reduced its fourth-quarter revenue by about $800,000 US after an audit of its financial statements.

The logistics software company said Tuesday that the audit produced an $800,000 US reduction in quarterly revenues to $59.8 million US for the last quarter of the company's 2004 fiscal year. That quarter ended Jan. 31. No adjustments were required for any previous fiscal years or the first three quarters of fiscal 2004, the Waterloo-based company said in a release.

The company said it is also completing its financial results for the fiscal 2005 first quarter, ended April 30, and hopes to release the figures June 2.

Descartes, which fired its chief executive May 6, announced last week it is cutting 135 jobs, or about 35 per cent of its workforce, as the company attempts to recover from the revenue shortfall.

The moves came after Descartes failed to collect millions of dollars from overseas customers. Descartes' revenue has suffered because of the failure to collect payments, particularly from a major account in China.

Descartes, which reports in U.S. dollars, has estimated the loss in its first quarter at 27 to 25 cents a share - more than double the previous expectation of 13 to 11 cents a share.

Descartes has more than doubled its provision for doubtful accounts to $8 million from $3 million.

In trading on the Toronto Stock Exchange on Tuesday, Descartes shares (TSX:DSG) were unchanged at $1.45.

© Copyright 2004 The Canadian Press

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