The global logistics software provider is anticipating more acquisitions, but despite being very well capitalized and having a healthy balance sheet, it will continue to be “prudent” in its evaluations, CEO Edward Ryan said in a webcast.
Descartes Systems Group recorded strong financial results in fiscal year 2018, which ended Jan. 31, 2018, with substantial increases in net income and revenues from the prior fiscal year.
The publicly-traded global logistics software provider closed on several acquisitions during fiscal 2018, and apparently does not have any plans on letting up.
Edward Ryan, chief executive officer of Descartes, said in the earnings webcast that it will use capital for continued acquisitions, and that a lot of acquisition opportunities – both large and small – still remain.
However, Ryan made it very clear that although Descartes is very well capitalized and has a strong balance sheet, it will continue to be “prudent” in its evaluations of potential companies to acquire.
During fiscal 2018, Descartes recorded a net income of $26.9 million on revenues of $237.4 million, up 13 percent and 16 percent year-over-year, respectively. Diluted earnings per share stood at $0.35, compared to $0.31 the prior fiscal year.
Descartes’ most notable acquisition in fiscal 2018 was its $107 million purchase of MacroPoint in August 2017.
Descartes also snatched up PCSTrac in June 2017 and ShipRush in May 2017.
Looking at fiscal 2019, at the beginning of last month, Descartes acquired Aljex Software, using an existing line of credit to fund its $32.4 million purchase.
“Both MacroPoint and Aljex acquisitions illustrate our commitment to the freight broker community on our global logistics network,” Ryan said in the webcast. “Aljex helps freight brokers every day run their business and manage shipments, and MacroPoint is focused on giving those same brokers visibility to those shipments while in motion.”
Descartes Chief Financial Officer Allan Brett said in the webcast the company ended fiscal 2018 with $35.1 million in cash, and $37 million drawn on its credit facility, thus ending the year with a very small net debt position of $1.9 million.
The company drew $33 million on its credit facility just after the fiscal year ended to complete its Aljex acquisition, Brett said. As of Feb. 1, Descartes had about $70 million drawn against its $150 million credit facility.
However, Ryan explained that Descartes has the ability to expand the line of credit to about $225 million, and a shelf prospectus for up to $500 million if capital was needed to be raised by other mechanisms.
Descartes looks for more acquisitions amid strong balance sheet
