Company News — Descartes Systems Group

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Descartes loss widens

By TERRY WEBER
Globe and Mail Update


Software maker Descartes Systems Group Inc. reported a wider second-quarter loss Thursday, hit by a $7.4-million (U.S.) restructuring charge stemming from its efforts to cut costs by reducing staffing and closing offices.

Waterloo, Ont.-based Descartes posted a loss of $22.7-million or 56 cents a share for the quarter ended July 31, compared with a loss in the same period a year earlier of $14.7-million or 29 cents.

Quarterly revenue was down 27 per cent to $11.1-million from last year's $15.2-million.

The latest results, the company said, were “significantly” affected costs related to restructuring efforts in May.

At that time, Descartes said it was cutting staffing levels by about 35 per cent — or about 130 employees — and close some offices as well as cancel certain leases and consulting and operating contracts.

In Thursday's statement, Descartes said during the process it cut an additional 35 jobs, bringing the total reduction to about 45 per cent of its work force. As a result, restructuring costs — originally estimated at between $5.5-million and $6.5-million — increased to $7.4-million.

The company now has a staff of about 215 workers.

“We have made significant progress in aligning our operating expenses with visible and recurring revenues and anticipate that our expense reduction initiatives will positively impact our financial performance going forward,” Art Mesher, one of two executives now sharing the role of chief executive officer, said in a statement.

Earlier in May, Descartes surprised the markets by announcing it was firing chief executive officer Manuel Pietra and warning that its first-quarter loss would me more than double previous estimates.

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