UNITED STATES
|
SECURITIES AND EXCHANGE COMMISSION
|
Washington, D.C. 20549
|
FORM 6-K
|
REPORT OF FOREIGN PRIVATE ISSUER
|
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
|
THE SECURITIES EXCHANGE ACT OF 1934
|
For the month of March 2019
|
Commission File Number: 000-29970
|
THE DESCARTES SYSTEMS GROUP INC.
|
(Translation of registrant’s name into English)
|
120 Randall Drive
|
Waterloo, Ontario
|
Canada N2V 1C6
|
(Address of principal executive office)
|
THE DESCARTES SYSTEMS GROUP INC.
|
|
(Registrant)
|
|
By:
|
/s/ Michael Verhoeve
|
Name:
|
Michael Verhoeve
|
Title:
|
General Counsel
|
Exhibit No.
|
Description
|
99.1 | Press Release issued
March 6, 2019 |
99.2 | Annual Report to Shareholders for the year ended January 31, 2019 |
● |
Revenues of $275.2 million, up 16% from $237.4 million in the same period a year ago (FY18);
|
● |
Revenues were comprised of services revenues of $241.5 million (88% of total revenues), professional services and other revenues of
$27.8 million (10% of total revenues) and license revenues of $5.9 million (2% of total revenues). Services revenues were up 18% from $204.4 million in FY18;
|
● |
Cash provided by operating activities of $78.1 million, up 8% from $72.1 million in FY18;
|
● |
Income from operations of $41.4 million, up 15% from $35.9 million in FY18;
|
● |
Net income of $31.3 million, up 16% from $26.9 million in FY18. Net income as a percentage of revenues was 11%,
compared to 11% in FY18;
|
● |
Earnings per share on a diluted basis of $0.40, up 14% from $0.35 in FY18; and
|
● |
Adjusted EBITDA of $93.9 million, up 16% from $80.8 million in FY18. Adjusted EBITDA as a percentage of revenues was 34%, compared
to 34% in FY18.
|
FY19
|
FY18
|
|
Revenues
|
275.2
|
237.4
|
Services revenues
|
241.5
|
204.4
|
Gross margin
|
73%
|
73%
|
Cash provided by operating activities
|
78.1
|
72.1
|
Income from operations
|
41.4
|
35.9
|
Net income
|
31.3
|
26.9
|
Net income as a % of revenues
|
11%
|
11%
|
Earnings per diluted share
|
0.40
|
0.35
|
Adjusted EBITDA
|
93.9
|
80.8
|
Adjusted EBITDA as a % of revenues
|
34%
|
34%
|
•
|
Revenues of $71.0 million, up 12% from $63.6 million in the fourth quarter of fiscal 2019 (Q4FY18) and up 1% from $70.0 million in the previous quarter (Q3FY19);
|
•
|
Revenues were comprised of services revenues of $62.9 million (89% of total revenues), professional services and other revenues of
$7.0 million (10% of total revenues) and license revenues of $1.1 million (1% of total revenues). Services revenues were up 14% from $55.0 million in Q4FY18 and up 3% from $61.1 million in Q3FY19;
|
•
|
Cash provided by operating activities of $21.8 million, up 11% from $19.6 million in Q4FY18 and up 14% from $19.2 million in Q3FY19;
|
•
|
Income from operations of $10.6 million, up 19% from $8.9 million in Q4FY18 and compared to $10.8 million in Q3FY19;
|
•
|
Net income of $7.9 million, up 18% from $6.7 million in Q4FY18 and compared to $7.9 million in Q3FY19. Net income as a percentage of
revenues was 11%, compared to 11% in Q4FY18 and 11% in Q3FY19;
|
•
|
Earnings per share on a diluted basis of $0.10, up 11% from $0.09 in Q4FY18 and compared to $0.10 in Q3FY19; and
|
•
|
Adjusted EBITDA of $25.0 million, up 17% from $21.4 million in Q4FY18 and up 4% from $24.0 million in Q3FY19. Adjusted EBITDA as a
percentage of revenues was 35%, compared to 34% in Q4FY18 and 34% in Q3FY19.
|
Q4
FY19
|
Q3
FY19
|
Q2
FY19
|
Q1
FY19
|
Q4
FY18
|
|
Revenues
|
71.0
|
70.0
|
67.1
|
67.0
|
63.6
|
Services revenues
|
62.9
|
61.1
|
59.7
|
57.8
|
55.0
|
Gross margin
|
73%
|
73%
|
73%
|
72%
|
73%
|
Cash provided by operating activities
|
21.8
|
19.2
|
18.2
|
18.9
|
19.6
|
Income from operations
|
10.6
|
10.8
|
10.1
|
9.8
|
8.9
|
Net income
|
7.9
|
7.9
|
8.5
|
7.0
|
6.7
|
Net income as a % of revenues
|
11%
|
11%
|
13%
|
10%
|
11%
|
Earnings per diluted share
|
0.10
|
0.10
|
0.11
|
0.09
|
0.09
|
Adjusted EBITDA
|
25.0
|
24.0
|
22.8
|
22.1
|
21.4
|
Adjusted EBITDA as a % of revenues
|
35%
|
34%
|
34%
|
33%
|
34%
|
Q4FY19
|
FY19
|
|||||||
Cash provided by operating activities
|
21.8
|
78.1
|
||||||
Additions to property and equipment
|
(2.2
|
)
|
(5.2
|
)
|
||||
Acquisitions of subsidiaries, net of cash acquired
|
-
|
(67.9
|
)
|
|||||
Proceeds from borrowing on credit facility
|
-
|
68.5
|
||||||
Credit facility repayments
|
(25.2
|
)
|
(78.7
|
)
|
||||
Issuances of common shares, net of issuance costs
|
-
|
0.3
|
||||||
Payment of contingent consideration
|
-
|
(1.5
|
)
|
|||||
Effect of foreign exchange rate on cash
|
0.1
|
(1.4
|
)
|
|||||
Net change in cash
|
(5.5
|
)
|
(7.8
|
)
|
||||
Cash, beginning of period
|
32.8
|
35.1
|
||||||
Cash, end of period
|
27.3
|
27.3
|
(US dollars in millions)
|
Q4FY19
|
Q3FY19
|
Q2FY19
|
Q1FY19
|
Q4FY18
|
|||||||||||||||
Net income, as reported on
Consolidated Statements of Operations
|
7.9
|
7.9
|
8.5
|
7.0
|
6.7
|
|||||||||||||||
Adjustments to reconcile to Adjusted EBITDA:
|
||||||||||||||||||||
Interest expense
|
0.5
|
0.6
|
0.5
|
0.6
|
0.4
|
|||||||||||||||
Investment income
|
(0.1
|
)
|
-
|
-
|
(0.1
|
)
|
(0.1
|
)
|
||||||||||||
Income tax expense
|
2.4
|
2.3
|
1.2
|
2.3
|
1.9
|
|||||||||||||||
Depreciation expense
|
1.5
|
1.1
|
1.0
|
0.9
|
1.3
|
|||||||||||||||
Amortization of intangible assets
|
10.3
|
10.4
|
10.0
|
9.5
|
9.1
|
|||||||||||||||
Stock-based compensation and related taxes
|
1.0
|
1.2
|
1.0
|
0.8
|
1.1
|
|||||||||||||||
Other charges
|
1.5
|
0.5
|
0.6
|
1.1
|
1.0
|
|||||||||||||||
Adjusted EBITDA
|
25.0
|
24.0
|
22.8
|
22.1
|
21.4
|
|||||||||||||||
Revenues
|
71.0
|
70.0
|
67.1
|
67.0
|
63.6
|
|||||||||||||||
Net income as % of revenues
|
11
|
%
|
11
|
%
|
13
|
%
|
10
|
%
|
11
|
%
|
||||||||||
Adjusted EBITDA as % of revenues
|
35
|
%
|
34
|
%
|
34
|
%
|
33
|
%
|
34
|
%
|
||||||||||
(US dollars in millions)
|
FY19
|
FY18
|
||||||
Net income, as reported on
Consolidated Statements of Operations
|
31.3
|
26.9
|
||||||
Adjustments to reconcile to Adjusted EBITDA:
|
||||||||
Interest expense
|
2.1
|
1.2
|
||||||
Investment income
|
(0.2
|
)
|
(0.2
|
)
|
||||
Income tax expense
|
8.2
|
7.9
|
||||||
Depreciation expense
|
4.5
|
4.1
|
||||||
Amortization of intangible assets
|
40.2
|
33.5
|
||||||
Stock-based compensation and related taxes
|
4.0
|
3.4
|
||||||
Other charges
|
3.8
|
4.0
|
||||||
Adjusted EBITDA
|
93.9
|
80.8
|
||||||
Revenues
|
275.1
|
237.4
|
||||||
Net income as % of revenues
|
11
|
%
|
11
|
%
|
||||
Adjusted EBITDA as % of revenues
|
34
|
%
|
34
|
%
|
January 31,
|
January 31,
|
|||||||
2019
|
2018
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
27,298
|
35,145
|
||||||
Accounts receivable (net)
|
||||||||
Trade
|
31,493
|
28,792
|
||||||
Other
|
4,331
|
3,171
|
||||||
Prepaid expenses and other
|
9,027
|
7,621
|
||||||
Inventory
|
95
|
123
|
||||||
72,244
|
74,852
|
|||||||
OTHER LONG-TERM ASSETS
|
10,510
|
3,966
|
||||||
PROPERTY AND EQUIPMENT, NET
|
12,612
|
12,798
|
||||||
DEFERRED INCOME TAXES
|
3,598
|
4,660
|
||||||
DEFERRED TAX CHARGE
|
-
|
453
|
||||||
INTANGIBLE ASSETS, NET
|
176,192
|
178,001
|
||||||
GOODWILL
|
378,178
|
350,148
|
||||||
653,334
|
624,878
|
|||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
5,147
|
7,897
|
||||||
Accrued liabilities
|
29,392
|
25,538
|
||||||
Income taxes payable
|
1,592
|
3,270
|
||||||
Deferred revenue
|
34,236
|
30,985
|
||||||
70,367
|
67,690
|
|||||||
LONG-TERM DEBT
|
25,464
|
37,000
|
||||||
LONG-TERM DEFERRED REVENUE
|
855
|
1,128
|
||||||
LONG-TERM INCOME TAXES PAYABLE
|
7,634
|
8,663
|
||||||
DEFERRED INCOME TAXES
|
15,507
|
11,585
|
||||||
119,827
|
126,066
|
|||||||
SHAREHOLDERS’ EQUITY
|
||||||||
Common shares – unlimited shares authorized; Shares issued and outstanding totaled 76,864,866
at January 31, 2019 (January 31, 2018 – 76,773,497)
|
276,753
|
274,536
|
||||||
Additional paid-in capital
|
454,722
|
451,151
|
||||||
Accumulated other comprehensive loss
|
(25,201
|
)
|
(15,252
|
)
|
||||
Accumulated deficit
|
(172,767
|
)
|
(211,623
|
)
|
||||
533,507
|
498,812
|
|||||||
653,334
|
624,878
|
January 31,
|
January 31,
|
January 31,
|
||||||||||
Year Ended
|
2019
|
2018
|
2017
|
|||||||||
REVENUES |
275,171
|
237,439
|
203,779
|
|||||||||
COST OF REVENUES
|
74,994
|
63,704
|
56,051
|
|||||||||
GROSS MARGIN
|
200,177
|
173,735
|
147,728
|
|||||||||
EXPENSES
|
||||||||||||
Sales and marketing
|
36,873
|
33,128
|
24,943
|
|||||||||
Research and development
|
47,872
|
41,804
|
35,556
|
|||||||||
General and administrative
|
30,012
|
25,448
|
23,077
|
|||||||||
Other charges
|
3,798
|
3,994
|
3,455
|
|||||||||
Amortization of intangible assets
|
40,179
|
33,477
|
30,001
|
|||||||||
158,734
|
137,851
|
117,032
|
||||||||||
INCOME FROM OPERATIONS
|
41,443
|
35,884
|
30,696
|
|||||||||
INTEREST EXPENSE
|
(2,128
|
)
|
(1,297
|
)
|
(611
|
)
|
||||||
INVESTMENT INCOME
|
195
|
161
|
1,415
|
|||||||||
INCOME BEFORE INCOME TAXES
|
39,510
|
34,748
|
31,500
|
|||||||||
INCOME TAX EXPENSE\
|
||||||||||||
Current
|
6,042
|
6,572
|
4,022
|
|||||||||
Deferred
|
2,191
|
1,297
|
3,640
|
|||||||||
8,233
|
7,869
|
7,662
|
||||||||||
NET INCOME
|
31,277
|
26,879
|
23,838
|
|||||||||
EARNINGS PER SHARE
|
||||||||||||
Basic
|
0.41
|
0.35
|
0.31
|
|||||||||
Diluted
|
0.40
|
0.35
|
0.31
|
|||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING (thousands)
|
||||||||||||
Basic
|
76,832
|
76,324
|
75,800
|
|||||||||
Diluted
|
77,791
|
77,112
|
76,515
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
|||||||||
2019
|
2018
|
2017
|
||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net income
|
31,277
|
26,879
|
23,838
|
|||||||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||||||
Depreciation
|
4,544
|
4,101
|
3,628
|
|||||||||
Amortization of intangible assets
|
40,179
|
33,477
|
30,001
|
|||||||||
Stock-based compensation expense (Note 16)
|
3,710
|
2,807
|
2,022
|
|||||||||
Other non-cash operating activities
|
71
|
(784
|
)
|
(1,028
|
)
|
|||||||
Deferred tax expense
|
2,191
|
1,297
|
3,640
|
|||||||||
Deferred tax charge
|
(49
|
)
|
(31
|
)
|
358
|
|||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
||||||||||||
Trade
|
(135
|
)
|
(1,963
|
)
|
2,727
|
|||||||
Other
|
(451
|
)
|
16
|
(212
|
)
|
|||||||
Prepaid expenses and other
|
(4,466
|
)
|
(1,772
|
)
|
(64
|
)
|
||||||
Inventory
|
74
|
52
|
2
|
|||||||||
Accounts payable
|
(1,065
|
)
|
1,428
|
(317
|
)
|
|||||||
Accrued liabilities
|
2,570
|
(592
|
)
|
3,674
|
||||||||
Income taxes payable
|
(2,423
|
)
|
6,326
|
1,431
|
||||||||
Deferred revenue
|
2,047
|
902
|
2,883
|
|||||||||
Cash provided by operating activities
|
78,074
|
72,143
|
72,583
|
|||||||||
INVESTING ACTIVITIES
|
||||||||||||
Purchase of marketable securities
|
-
|
-
|
(241
|
)
|
||||||||
Sale of marketable securities
|
-
|
-
|
6,140
|
|||||||||
Additions to property and equipment
|
(5,244
|
)
|
(5,086
|
)
|
(4,914
|
)
|
||||||
Acquisition of subsidiaries, net of cash acquired
|
(67,932
|
)
|
(111,867
|
)
|
(71,348
|
)
|
||||||
Cash used in investing activities
|
(73,176
|
)
|
(116,953
|
)
|
(70,363
|
)
|
||||||
FINANCING ACTIVITIES
|
||||||||||||
Proceeds from borrowing on the credit facility
|
68,468
|
80,000
|
10,801
|
|||||||||
Credit facility repayments
|
(78,659
|
)
|
(43,000
|
)
|
(10,200
|
)
|
||||||
Payment of debt issuance costs
|
-
|
-
|
(957
|
)
|
||||||||
Issuance of common shares for cash, net of issuance costs
|
345
|
1,003
|
145
|
|||||||||
Payment of contingent consideration
|
(1,531
|
)
|
-
|
-
|
||||||||
Cash (used in) provided by financing activities
|
(11,377
|
)
|
38,003
|
(211
|
)
|
|||||||
Effect of foreign exchange rate changes on cash
|
(1,368
|
)
|
3,817
|
(1,087
|
)
|
|||||||
(Decrease) increase in cash
|
(7,847
|
)
|
(2,990
|
)
|
922
|
|||||||
Cash, beginning of year
|
35,145
|
38,135
|
37,213
|
|||||||||
Cash, end of year
|
27,298
|
35,145
|
38,135
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
3
|
Overview
|
5
|
Consolidated Operations
|
9
|
Quarterly Operating Results
|
16
|
Liquidity and Capital Resources
|
19
|
Commitments, Contingencies and Guarantees
|
22
|
Outstanding Share Data
|
23
|
Application of Critical Accounting Policies
|
24
|
Change In / Initial Adoption of Accounting
Policies
|
28
|
Controls and Procedures
|
30
|
Trends / Business Outlook
|
31
|
Certain Factors That May Affect Future Results
|
34
|
Management’s Report on Financial Statements and
Internal Control Over Financial Reporting
|
46
|
Consolidated Balance Sheets
|
51
|
Consolidated Statements of Operations
|
52
|
Consolidated Statements of Comprehensive Income
|
53
|
Consolidated Statements of Shareholders’ Equity
|
54
|
Consolidated Statements of Cash Flows
|
55
|
Notes to Consolidated Financial Statements
|
56
|
Corporate Information
|
90
|
• |
Routing, Mobile and Telematics;
|
• |
Transportation Management and e-commerce enablement;
|
• |
Customs & Regulatory Compliance;
|
• |
Trade Data;
|
• |
Global Logistics Network Services; and
|
• |
Broker & Forwarder Enterprise Systems.
|
• |
Technology Partners – Complementary hardware, software, network, and embedded technology providers that extend the functional breadth of Descartes’ solution
capabilities;
|
• |
Consulting Partners - Large system integrators and enterprise resource planning system vendors through to vertically specialized or niche consulting organizations
that provide domain expertise and/or implementation services for Descartes’ solutions; and
|
• |
Channel Partners (Value-Added Resellers) – Organizations that market, sell, implement and support Descartes' solutions to extend access and expand market share
into territories and markets where Descartes might not have a focused direct sales presence.
|
Year ended
|
January 31,
|
January 31,
|
January 31,
|
|||||||||
2019
|
2018
|
2017
|
||||||||||
Total revenues
|
275.2
|
237.4
|
203.8
|
|||||||||
Cost of revenues
|
75.0
|
63.7
|
56.1
|
|||||||||
Gross margin
|
200.2
|
173.7
|
147.7
|
|||||||||
Operating expenses
|
114.8
|
100.3
|
83.6
|
|||||||||
Other charges
|
3.8
|
4.0
|
3.5
|
|||||||||
Amortization of intangible assets
|
40.2
|
33.5
|
30.0
|
|||||||||
Income from operations
|
41.4
|
35.9
|
30.6
|
|||||||||
Investment income
|
0.2
|
0.2
|
1.4
|
|||||||||
Interest expense
|
(2.1
|
)
|
(1.3
|
)
|
(0.6
|
)
|
||||||
Income before income taxes
|
39.5
|
34.8
|
31.4
|
|||||||||
Income tax expense
|
||||||||||||
Current
|
6.0
|
6.6
|
4.0
|
|||||||||
Deferred
|
2.2
|
1.3
|
3.6
|
|||||||||
Net income
|
31.3
|
26.9
|
23.8
|
|||||||||
EARNINGS PER SHARE
|
||||||||||||
BASIC
|
0.41
|
0.35
|
0.31
|
|||||||||
DILUTED
|
0.40
|
0.35
|
0.31
|
|||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING (thousands)
|
||||||||||||
BASIC
|
76,832
|
76,324
|
75,800
|
|||||||||
DILUTED
|
77,791
|
77,112
|
76,515
|
|||||||||
OTHER PERTINENT INFORMATION
|
||||||||||||
Total assets
|
653.3
|
624.9
|
500.5
|
|||||||||
Non-current financial liabilities
|
25.5
|
37.0
|
-
|
Year ended
|
January 31,
|
January 31,
|
January 31,
|
2019
|
2018
|
2017
|
|
License revenues
|
5.9
|
8.1
|
6.9
|
Percentage of total revenues
|
2%
|
3%
|
3%
|
Services revenues
|
241.5
|
204.4
|
173.0
|
Percentage of total revenues
|
88%
|
86%
|
85%
|
Professional services and other
|
27.8
|
24.9
|
23.9
|
Percentage of total revenues
|
10%
|
11%
|
12%
|
Total revenues
|
275.2
|
237.4
|
203.8
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
2019
|
2018
|
2017
|
|
United States
|
165.1
|
133.3
|
106.7
|
Percentage of total revenues
|
60%
|
56%
|
52%
|
Europe, Middle-East and Africa (“EMEA”)
|
80.1
|
77.6
|
75.2
|
Percentage of total revenues
|
29%
|
33%
|
37%
|
Canada
|
18.2
|
15.6
|
13.2
|
Percentage of total revenues
|
7%
|
6%
|
7%
|
Asia Pacific
|
11.8
|
10.9
|
8.7
|
Percentage of total revenues
|
4%
|
5%
|
4%
|
Total revenues
|
275.2
|
237.4
|
203.8
|
Year ended
|
January 31,
|
January 31,
|
January 31,
|
|||||||||
2019
|
2018
|
2017
|
||||||||||
License
|
||||||||||||
License revenues
|
5.9
|
8.1
|
6.9
|
|||||||||
Cost of license revenues
|
1.0
|
0.7
|
1.1
|
|||||||||
Gross margin
|
4.9
|
7.4
|
5.8
|
|||||||||
Gross margin percentage
|
83
|
%
|
91
|
%
|
84
|
%
|
||||||
Services
|
||||||||||||
Services revenues
|
241.5
|
204.4
|
173.0
|
|||||||||
Cost of services revenues
|
57.6
|
48.9
|
42.0
|
|||||||||
Gross margin
|
183.9
|
155.5
|
131.0
|
|||||||||
Gross margin percentage
|
76
|
%
|
76
|
%
|
76
|
%
|
||||||
Professional services and other
|
||||||||||||
Professional services and other revenues
|
27.8
|
24.9
|
23.9
|
|||||||||
Cost of professional services and other revenues
|
16.4
|
14.1
|
13.0
|
|||||||||
Gross margin
|
11.4
|
10.8
|
10.9
|
|||||||||
Gross margin percentage
|
41
|
%
|
43
|
%
|
46
|
%
|
||||||
Total
|
||||||||||||
Revenues
|
275.2
|
237.4
|
203.8
|
|||||||||
Cost of revenues
|
75.0
|
63.7
|
56.1
|
|||||||||
Gross margin
|
200.2
|
173.7
|
147.7
|
|||||||||
Gross margin percentage
|
73
|
%
|
73
|
%
|
72
|
%
|
Year ended
|
January 31,
|
January 31,
|
January 31,
|
2019
|
2018
|
2017
|
|
Total revenues
|
275.2
|
237.4
|
203.8
|
Sales and marketing expenses
|
36.9
|
33.1
|
24.9
|
Percentage of total revenues
|
13%
|
14%
|
12%
|
Research and development expenses
|
47.9
|
41.8
|
35.6
|
Percentage of total revenues
|
17%
|
18%
|
17%
|
General and administrative expenses
|
30.0
|
25.4
|
23.1
|
Percentage of total revenues
|
11%
|
11%
|
11%
|
Total operating expenses
|
114.8
|
100.3
|
83.6
|
Percentage of total revenues
|
42%
|
42%
|
41%
|
April 30,
|
July 31,
|
October 31,
|
January 31,
|
Total
|
|
2018
|
2018
|
2018
|
2019
|
||
2019
|
|||||
Revenues
|
67,018
|
67,115
|
70,008
|
71,030
|
275,171
|
Gross margin
|
48,434
|
49,154
|
50,858
|
51,731
|
200,177
|
Operating expenses
|
27,997
|
28,358
|
29,144
|
29,258
|
114,757
|
Net income
|
6,986
|
8,498
|
7,901
|
7,892
|
31,277
|
Basic earnings per share
|
0.09
|
0.11
|
0.10
|
0.10
|
0.41
|
Diluted earnings per share
|
0.09
|
0.11
|
0.10
|
0.10
|
0.40
|
Weighted average shares outstanding (thousands):
|
|||||
Basic
|
76,793
|
76,816
|
76,854
|
76,865
|
76,832
|
Diluted
|
77,650
|
77,781
|
77,863
|
77,842
|
77,791
|
April 30,
|
July 31,
|
October 31,
|
January 31,
|
Total
|
|
2017
|
2017
|
2017
|
2018
|
||
2018
|
|||||
Revenues
|
54,514
|
57,293
|
62,001
|
63,631
|
237,439
|
Gross margin
|
40,132
|
41,946
|
45,158
|
46,499
|
173,735
|
Operating expenses
|
22,505
|
23,942
|
26,450
|
27,483
|
100,380
|
Net income
|
6,885
|
7,159
|
6,170
|
6,665
|
26,879
|
Basic earnings per share
|
0.09
|
0.09
|
0.08
|
0.09
|
0.35
|
Diluted earnings per share
|
0.09
|
0.09
|
0.08
|
0.09
|
0.35
|
Weighted average shares outstanding (thousands):
|
|||||
Basic
|
75,912
|
75,969
|
76,630
|
76,773
|
76,324
|
Diluted
|
76,648
|
76,739
|
77,442
|
77,616
|
77,112
|
Year ended
|
January 31,
|
January 31,
|
January 31,
|
|||||||||
2019
|
2018
|
2017
|
||||||||||
Cash provided by operating activities
|
78.1
|
72.1
|
72.6
|
|||||||||
Purchase of marketable securities
|
-
|
-
|
(0.2
|
)
|
||||||||
Sale of marketable securities
|
-
|
-
|
6.1
|
|||||||||
Additions to property and equipment
|
(5.2
|
)
|
(5.1
|
)
|
(4.9
|
)
|
||||||
Acquisition of subsidiaries, net of cash acquired
|
(67.9
|
)
|
(111.9
|
)
|
(71.3
|
)
|
||||||
Proceeds from borrowing on credit facility
|
68.5
|
80.0
|
10.8
|
|||||||||
Credit facility repayments
|
(78.7
|
)
|
(43.0
|
)
|
(10.2
|
)
|
||||||
Payment of debt issuance costs
|
-
|
-
|
(1.0
|
)
|
||||||||
Issuance of common shares, net of issuance costs
|
0.3
|
1.0
|
0.1
|
|||||||||
Payment of contingent consideration
|
(1.5
|
)
|
-
|
-
|
||||||||
Effect of foreign exchange rate on cash
|
(1.4
|
)
|
3.9
|
(1.1
|
)
|
|||||||
Net change in cash
|
(7.8
|
)
|
(3.0
|
)
|
0.9
|
|||||||
Cash, beginning of period
|
35.1
|
38.1
|
37.2
|
|||||||||
Cash, end of period
|
27.3
|
35.1
|
38.1
|
Less than
1 year
|
1-3 years
|
4-5 years
|
More than
5 years
|
Total
|
|
Debt obligations
|
-
|
-
|
25.5
|
-
|
25.5
|
Operating lease obligations
|
4.6
|
5.0
|
2.5
|
1.7
|
13.8
|
Capital lease obligations
|
0.1
|
-
|
-
|
-
|
0.1
|
Total
|
4.7
|
5.0
|
28.0
|
1.7
|
39.4
|
• |
Challenges identifying suitable businesses to buy and negotiating the acquisition of those businesses on acceptable terms;
|
• |
Challenges completing the acquisitions within our expected time frames and budgets;
|
• |
Challenges in integrating acquired businesses with our business;
|
• |
Loss of customers of the acquired business;
|
• |
Loss of key personnel from the acquired business, such as former executive officers or key technical personnel;
|
• |
Non-compatible business cultures;
|
• |
For regulatory compliance businesses, changes in government regulations impacting electronic regulatory filings or import/export compliance, including changes in
which government agencies are responsible for gathering import and export information;
|
• |
Difficulties in gaining necessary approvals in international markets to expand acquired businesses as contemplated;
|
• |
Our inability to obtain or maintain necessary security clearances to provide international shipment management services;
|
• |
Our failure to make appropriate capital investments in infrastructure to facilitate growth; and
|
• |
Other risk factors identified in this report.
|
• |
System or network failure;
|
• |
Software errors, failures and crashes;
|
• |
Interruption in the supply of power;
|
• |
Virus proliferation or malware;
|
• |
Communications failures;
|
• |
Information or infrastructure security breaches;
|
• |
Insufficient investment in infrastructure;
|
• |
Earthquakes, fires, floods, natural disasters, or other force majeure events outside our control; and
|
• |
Acts of war, sabotage, cyber-attacks, denial-of-service attacks and/or terrorism.
|
• |
Established relationships with existing customers or prospects that we are targeting;
|
• |
Superior product functionality and industry-specific expertise;
|
• |
Broader range of products to offer and better product life cycle management;
|
• |
Larger installed base of customers;
|
• |
Greater financial, technical, marketing, sales, distribution and other resources;
|
• |
Better performance;
|
• |
Lower cost structure and more profitable operations;
|
• |
Greater investment in infrastructure;
|
• |
Greater worldwide presence;
|
• |
Early adoption of, or adaptation to changes in, technology; or
|
• |
Longer operating history; and/or greater name recognition.
|
• |
Impairment of goodwill or intangible assets;
|
• |
A reduction in the useful lives of intangible assets acquired;
|
• |
Identification of assumed contingent liabilities after we finalize the purchase price allocation period;
|
• |
Charges to our operating results to eliminate certain pre-merger activities that duplicate those of the acquired company or to reduce our cost structure; and
|
• |
Charges to our operating results resulting from revised estimates to restructure an acquired company’s operations after we finalize the purchase price allocation
period.
|
• |
Longer collection time from foreign clients, particularly in the EMEA region and the Asia Pacific region;
|
• |
Difficulty in repatriating cash from certain foreign jurisdictions;
|
• |
Language barriers, conflicting international business practices, and other difficulties related to the management and administration of a global business;
|
• |
Increased management, travel, infrastructure and legal compliance costs associated with having international operations;
|
• |
Difficulties and costs of staffing and managing geographically disparate direct and indirect operations;
|
• |
Volatility or fluctuations in foreign currency and tariff rates;
|
• |
Multiple, and possibly overlapping, tax structures;
|
• |
Complying with complicated and widely differing global laws and regulations in areas such as employment, tax, privacy and data protection;
|
• |
Trade restrictions;
|
• |
Enhanced security procedures and requirements relating to certain jurisdictions;
|
• |
The need to consider characteristics unique to technology systems used internationally;
|
• |
Economic or political instability in some markets; and
|
• |
Other risk factors set out herein.
|
• |
Volatility or fluctuations in foreign currency exchange rates;
|
• |
Volatility or fluctuations in interest rates;
|
• |
Timing of acquisitions and related costs;
|
• |
Timing of restructuring activities;
|
• |
The introduction of enhanced products and services from competitors;
|
• |
Our ability to introduce new products and updates to our existing products on a timely basis;
|
• |
The termination of any key customer contracts, whether by the customer or by us;
|
• |
Recognition and expensing of deferred tax assets;
|
• |
Legal costs incurred in bringing or defending any litigation with customers or third-party providers, and any corresponding judgments or awards;
|
• |
Legal and compliance costs incurred to comply with regulatory requirements;
|
• |
Fluctuations in the demand for our services and products;
|
• |
The impact of stock-based compensation expense;
|
• |
Price and functionality competition in our industry;
|
• |
Changes in legislation and accounting standards;
|
• |
Our ability to satisfy contractual obligations in customer contracts and deliver services and products to the satisfaction of our customers; and
|
• |
Other risk factors discussed in this report.
|
• |
Revenue or results of operations in any quarter failing to meet the expectations, published or otherwise, of the investment community;
|
• |
Changes in recommendations or financial estimates by industry or investment analysts;
|
• |
Changes in management or the composition of our board of directors;
|
• |
Outcomes of litigation or arbitration proceedings;
|
• |
Announcements of technological innovations or acquisitions by us or by our competitors;
|
• |
Introduction of new products or significant customer wins or losses by us or by our competitors;
|
• |
Developments with respect to our intellectual property rights or those of our competitors;
|
• |
Fluctuations in the share prices of other companies in the technology and emerging growth sectors;
|
• |
General market conditions; and
|
• |
Other risk factors set out in this report.
|
‘Edward J. Ryan’
Edward J. Ryan
|
‘Allan Brett’
Allan Brett
|
Chief Executive Officer
|
Chief Financial Officer
|
Waterloo, Ontario
|
Waterloo, Ontario
|
January 31,
|
January 31,
|
|||||||
2019
|
2018
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
27,298
|
35,145
|
||||||
Accounts receivable (net)
|
||||||||
Trade (Note 5)
|
31,493
|
28,792
|
||||||
Other (Note 6)
|
4,331
|
3,171
|
||||||
Prepaid expenses and other
|
9,027
|
7,621
|
||||||
Inventory (Note 7)
|
95
|
123
|
||||||
72,244
|
74,852
|
|||||||
OTHER LONG-TERM ASSETS (Note 18)
|
10,510
|
3,966
|
||||||
PROPERTY AND EQUIPMENT, NET (Note 8)
|
12,612
|
12,798
|
||||||
DEFERRED INCOME TAXES
|
3,598
|
4,660
|
||||||
DEFERRED TAX CHARGE
|
-
|
453
|
||||||
INTANGIBLE ASSETS, NET (Note 9)
|
176,192
|
178,001
|
||||||
GOODWILL (Note 10)
|
378,178
|
350,148
|
||||||
653,334
|
624,878
|
|||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
5,147
|
7,897
|
||||||
Accrued liabilities (Note 11)
|
29,392
|
25,538
|
||||||
Income taxes payable
|
1,592
|
3,270
|
||||||
Deferred revenue (Note 18)
|
34,236
|
30,985
|
||||||
70,367
|
67,690
|
|||||||
LONG-TERM DEBT (Note 12)
|
25,464
|
37,000
|
||||||
LONG-TERM DEFERRED REVENUE (Note 18)
|
855
|
1,128
|
||||||
LONG-TERM INCOME TAXES PAYABLE
|
7,634
|
8,663
|
||||||
DEFERRED INCOME TAXES
|
15,507
|
11,585
|
||||||
119,827
|
126,066
|
|||||||
COMMITMENTS, CONTINGENCIES AND GUARANTEES (Note 13)
|
||||||||
SHAREHOLDERS’ EQUITY (Note 14)
|
||||||||
Common shares – unlimited shares authorized; Shares issued and outstanding totaled 76,864,866 at
January 31, 2019 (January 31, 2018 – 76,773,497)
|
276,753
|
274,536
|
||||||
Additional paid-in capital
|
454,722
|
451,151
|
||||||
Accumulated other comprehensive loss
|
(25,201
|
)
|
(15,252
|
)
|
||||
Accumulated deficit
|
(172,767
|
)
|
(211,623
|
)
|
||||
533,507
|
498,812
|
|||||||
653,334
|
624,878
|
‘Eric A. Demirian’
|
‘Edward J. Ryan’
|
Eric A. Demirian
|
Edward J. Ryan
|
Chairman of the Board
|
Chief Executive Officer
|
January 31,
|
January 31,
|
January 31,
|
||||||||||
Year Ended
|
2019
|
2018
|
2017
|
|||||||||
REVENUES
|
275,171
|
237,439
|
203,779
|
|||||||||
COST OF REVENUES
|
74,994
|
63,704
|
56,051
|
|||||||||
GROSS MARGIN
|
200,177
|
173,735
|
147,728
|
|||||||||
EXPENSES
|
||||||||||||
Sales and marketing
|
36,873
|
33,128
|
24,943
|
|||||||||
Research and development
|
47,872
|
41,804
|
35,556
|
|||||||||
General and administrative
|
30,012
|
25,448
|
23,077
|
|||||||||
Other charges (Note 19)
|
3,798
|
3,994
|
3,455
|
|||||||||
Amortization of intangible assets
|
40,179
|
33,477
|
30,001
|
|||||||||
158,734
|
137,851
|
117,032
|
||||||||||
INCOME FROM OPERATIONS
|
41,443
|
35,884
|
30,696
|
|||||||||
INTEREST EXPENSE
|
(2,128
|
)
|
(1,297
|
)
|
(611
|
)
|
||||||
INVESTMENT INCOME
|
195
|
161
|
1,415
|
|||||||||
INCOME BEFORE INCOME TAXES
|
39,510
|
34,748
|
31,500
|
|||||||||
INCOME TAX EXPENSE (Note 17)
|
||||||||||||
Current
|
6,042
|
6,572
|
4,022
|
|||||||||
Deferred
|
2,191
|
1,297
|
3,640
|
|||||||||
8,233
|
7,869
|
7,662
|
||||||||||
NET INCOME
|
31,277
|
26,879
|
23,838
|
|||||||||
EARNINGS PER SHARE (Note 15)
|
||||||||||||
Basic
|
0.41
|
0.35
|
0.31
|
|||||||||
Diluted
|
0.40
|
0.35
|
0.31
|
|||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING (thousands)
|
||||||||||||
Basic
|
76,832
|
76,324
|
75,800
|
|||||||||
Diluted
|
77,791
|
77,112
|
76,515
|
January 31,
|
January 31,
|
January 31,
|
||||||||||
2019
|
2018
|
2017
|
||||||||||
Comprehensive income
|
||||||||||||
Net Income
|
31,277
|
26,879
|
23,838
|
|||||||||
Other comprehensive income (loss):
|
||||||||||||
Foreign currency translation adjustment, net of income tax
expense (recovery) of ($44) for the year ended January 31, 2019 (January 31, 2018 – $255; January
31, 2017 – ($143))
|
(9,949
|
)
|
17,527
|
2,084
|
||||||||
Unrealized gain (loss) on marketable securities, net of income tax expense of nil for the year ended
January 31, 2019 (January 31, 2018 - nil; January 31, 2017 - $11)
|
-
|
-
|
977
|
|||||||||
Gain on marketable securities reclassified into net income
|
-
|
-
|
(960
|
)
|
||||||||
Total other comprehensive income (loss)
|
(9,949
|
)
|
17,527
|
2,101
|
||||||||
COMPREHENSIVE INCOME
|
21,328
|
44,406
|
25,939
|
January 31,
|
January 31,
|
January 31,
|
||||||||||
2019
|
2018
|
2017
|
||||||||||
Common shares
|
||||||||||||
Balance, beginning of year
|
274,536
|
253,242
|
252,471
|
|||||||||
Stock options and share units exercised
|
681
|
1,294
|
771
|
|||||||||
Acquisitions (Note 3)
|
1,536
|
20,000
|
-
|
|||||||||
Balance, end of year
|
276,753
|
274,536
|
253,242
|
|||||||||
Additional paid-in capital
|
||||||||||||
Balance, beginning of year
|
451,151
|
448,597
|
446,747
|
|||||||||
Stock-based compensation expense (Note 16)
|
3,710
|
2,807
|
2,022
|
|||||||||
Stock options and share units exercised
|
(139
|
)
|
(290
|
)
|
(205
|
)
|
||||||
Stock option income tax benefits
|
-
|
-
|
33
|
|||||||||
Cumulative adjustment upon modified retrospective accounting policy adoption (Note 2)
|
-
|
37
|
-
|
|||||||||
Balance, end of year
|
454,722
|
451,151
|
448,597
|
|||||||||
Accumulated other comprehensive income (loss)
|
||||||||||||
Balance, beginning of year
|
(15,252
|
)
|
(32,779
|
)
|
(34,880
|
)
|
||||||
Other comprehensive income (loss), net of income taxes
|
(9,949
|
)
|
17,527
|
2,101
|
||||||||
Balance, end of year
|
(25,201
|
)
|
(15,252
|
)
|
(32,779
|
)
|
||||||
Accumulated deficit
|
||||||||||||
Balance, beginning of year
|
(211,623
|
)
|
(238,465
|
)
|
(262,303
|
)
|
||||||
Net income
|
31,277
|
26,879
|
23,838
|
|||||||||
Cumulative adjustment upon modified retrospective accounting policy adoption (Note 2)
|
7,579
|
(37
|
)
|
-
|
||||||||
Balance, end of year
|
(172,767
|
)
|
(211,623
|
)
|
(238,465
|
)
|
||||||
Total Shareholders’ Equity
|
533,507
|
498,812
|
430,595
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
|||||||||
2019
|
2018
|
2017
|
||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net income
|
31,277
|
26,879
|
23,838
|
|||||||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||||||
Depreciation
|
4,544
|
4,101
|
3,628
|
|||||||||
Amortization of intangible assets
|
40,179
|
33,477
|
30,001
|
|||||||||
Stock-based compensation expense (Note 16)
|
3,710
|
2,807
|
2,022
|
|||||||||
Other non-cash operating activities
|
71
|
(784
|
)
|
(1,028
|
)
|
|||||||
Deferred tax expense
|
2,191
|
1,297
|
3,640
|
|||||||||
Deferred tax charge
|
(49
|
)
|
(31
|
)
|
358
|
|||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
||||||||||||
Trade
|
(135
|
)
|
(1,963
|
)
|
2,727
|
|||||||
Other
|
(451
|
)
|
16
|
(212
|
)
|
|||||||
Prepaid expenses and other
|
(4,466
|
)
|
(1,772
|
)
|
(64
|
)
|
||||||
Inventory
|
74
|
52
|
2
|
|||||||||
Accounts payable
|
(1,065
|
)
|
1,428
|
(317
|
)
|
|||||||
Accrued liabilities
|
2,570
|
(592
|
)
|
3,674
|
||||||||
Income taxes payable
|
(2,423
|
)
|
6,326
|
1,431
|
||||||||
Deferred revenue
|
2,047
|
902
|
2,883
|
|||||||||
Cash provided by operating activities
|
78,074
|
72,143
|
72,583
|
|||||||||
INVESTING ACTIVITIES
|
||||||||||||
Purchase of marketable securities
|
-
|
-
|
(241
|
)
|
||||||||
Sale of marketable securities
|
-
|
-
|
6,140
|
|||||||||
Additions to property and equipment
|
(5,244
|
)
|
(5,086
|
)
|
(4,914
|
)
|
||||||
Acquisition of subsidiaries, net of cash acquired (Note 3)
|
(67,932
|
)
|
(111,867
|
)
|
(71,348
|
)
|
||||||
Cash used in investing activities
|
(73,176
|
)
|
(116,953
|
)
|
(70,363
|
)
|
||||||
FINANCING ACTIVITIES
|
||||||||||||
Proceeds from borrowing on the credit facility
|
68,468
|
80,000
|
10,801
|
|||||||||
Credit facility repayments
|
(78,659
|
)
|
(43,000
|
)
|
(10,200
|
)
|
||||||
Payment of debt issuance costs
|
-
|
-
|
(957
|
)
|
||||||||
Issuance of common shares for cash, net of issuance costs
|
345
|
1,003
|
145
|
|||||||||
Payment of contingent consideration
|
(1,531
|
)
|
-
|
-
|
||||||||
Cash (used in) provided by financing activities
|
(11,377
|
)
|
38,003
|
(211
|
)
|
|||||||
Effect of foreign exchange rate changes on cash
|
(1,368
|
)
|
3,817
|
(1,087
|
)
|
|||||||
(Decrease) increase in cash
|
(7,847
|
)
|
(2,990
|
)
|
922
|
|||||||
Cash, beginning of year
|
35,145
|
38,135
|
37,213
|
|||||||||
Cash, end of year
|
27,298
|
35,145
|
38,135
|
|||||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash paid during the year for interest
|
1,712
|
680
|
64
|
|||||||||
Cash paid during the year for income taxes
|
7,862
|
3,887
|
3,861
|
Customer agreements and relationships
|
Straight-line over three to twenty years
|
|
Existing technologies
|
Straight-line over two to twelve years
|
|
Trade names
|
Straight-line over one to fifteen years
|
|
Non-compete covenants
|
Straight-line over two to twelve years
|
Computer equipment and software
|
30% declining balance
|
|
Furniture and fixtures
|
20% declining balance
|
|
Leasehold improvements
|
Straight-line over lesser of useful life or term of lease
|
Aljex
|
Velocity Mail
|
PinPoint
|
Total
|
|||||||||||||
Purchase price consideration:
|
||||||||||||||||
Cash, less cash acquired related to Aljex ($193), Velocity Mail (nil) and PinPoint ($769)
|
32,382
|
26,107
|
9,443
|
67,932
|
||||||||||||
Common shares issued
|
-
|
-
|
1,536
|
1,536
|
||||||||||||
Contingent consideration
|
-
|
-
|
714
|
714
|
||||||||||||
Net working capital adjustments (receivable) / payable
|
(152
|
)
|
(102
|
)
|
84
|
(170
|
)
|
|||||||||
32,230
|
26,005
|
11,777
|
70,012
|
|||||||||||||
Allocated to:
|
||||||||||||||||
Current assets, excluding cash acquired
|
607
|
1,407
|
599
|
2,613
|
||||||||||||
Other long-term assets
|
-
|
501
|
-
|
501
|
||||||||||||
Current liabilities
|
(266
|
)
|
(81
|
)
|
(511
|
)
|
(858
|
)
|
||||||||
Deferred revenue
|
(1,024
|
)
|
(70
|
)
|
(574
|
)
|
(1,668
|
)
|
||||||||
Deferred income tax liability
|
(4,200
|
)
|
-
|
(2,077
|
)
|
(6,277
|
)
|
|||||||||
Net tangible (liabilities) assets assumed
|
(4,883
|
)
|
1,757
|
(2,563
|
)
|
(5,689
|
)
|
|||||||||
Finite life intangible assets acquired:
|
||||||||||||||||
Customer agreements and relationships
|
5,300
|
7,800
|
7,758
|
20,858
|
||||||||||||
Existing technology
|
12,400
|
7,600
|
-
|
20,000
|
||||||||||||
Tradenames
|
280
|
100
|
207
|
587
|
||||||||||||
Non-compete covenants
|
230
|
300
|
69
|
599
|
||||||||||||
Goodwill
|
18,903
|
8,448
|
6,306
|
33,657
|
||||||||||||
32,230
|
26,005
|
11,777
|
70,012
|
Aljex
|
Velocity Mail
|
PinPoint
|
|
Customer agreements and relationships
|
13 years
|
12 years
|
9 years
|
Existing technology
|
5 years
|
5 years
|
N/A
|
Trade names
|
8 years
|
4 years
|
8 years
|
Non-compete covenants
|
5 years
|
5 years
|
5 years
|
ShipRush
|
PCSTrac
|
MacroPoint
|
Total
|
|||||||||||||
Purchase price consideration:
|
||||||||||||||||
Cash, less cash acquired related to ShipRush ($253), PCSTrac (nil) and MacroPoint ($2,098)
|
14,198
|
11,492
|
86,177
|
111,867
|
||||||||||||
Common shares issued
|
-
|
-
|
20,000
|
20,000
|
||||||||||||
Contingent consideration
|
1,233
|
-
|
-
|
1,233
|
||||||||||||
Net working capital adjustments payable
|
88
|
40
|
163
|
291
|
||||||||||||
15,519
|
11,532
|
106,340
|
133,391
|
|||||||||||||
Allocated to:
|
||||||||||||||||
Current assets, excluding cash acquired
|
461
|
467
|
2,127
|
3,055
|
||||||||||||
Current liabilities
|
(266
|
)
|
(10
|
)
|
(1,693
|
)
|
(1,969
|
)
|
||||||||
Deferred revenue
|
(609
|
)
|
-
|
(5,787
|
)
|
(6,396
|
)
|
|||||||||
Net tangible (liabilities) assets assumed
|
(414
|
)
|
457
|
(5,353
|
)
|
(5,310
|
)
|
|||||||||
Finite life intangible assets acquired:
|
||||||||||||||||
Customer agreements and relationships
|
2,400
|
1,850
|
26,030
|
30,280
|
||||||||||||
Existing technology
|
4,710
|
3,270
|
17,170
|
25,150
|
||||||||||||
In-process research and development
|
-
|
-
|
290
|
290
|
||||||||||||
Tradenames
|
120
|
60
|
570
|
750
|
||||||||||||
Non-compete covenants
|
100
|
80
|
2,420
|
2,600
|
||||||||||||
Goodwill
|
8,603
|
5,815
|
65,213
|
79,631
|
||||||||||||
15,519
|
11,532
|
106,340
|
133,391
|
ShipRush
|
PCSTrac
|
MacroPoint
|
|
Customer agreements and relationships
|
9 years
|
13 years
|
12 years
|
Existing technology
|
5 years
|
5 years
|
5 years
|
Trade names
|
8 years
|
4 years
|
8 years
|
Non-compete covenants
|
5 years
|
5 years
|
5 years
|
Pixi
|
Appterra
|
4Solutions
|
Datamyne
|
Total
|
||||||||||||||||
Purchase price consideration:
|
||||||||||||||||||||
Cash, less cash acquired related to Pixi ($688), Appterra ($66), 4Solutions ($281) and Datamyne
($2,637)
|
10,648
|
5,703
|
2,456
|
52,541
|
71,348
|
|||||||||||||||
Contingent consideration
|
-
|
700
|
-
|
-
|
700
|
|||||||||||||||
Net working capital adjustments (receivable)
|
(26
|
)
|
(118
|
)
|
4
|
(567
|
)
|
(707
|
)
|
|||||||||||
10,622
|
6,285
|
2,460
|
51,974
|
71,341
|
||||||||||||||||
Allocated to:
|
||||||||||||||||||||
Current assets, excluding cash acquired
|
500
|
391
|
257
|
1,837
|
2,985
|
|||||||||||||||
Property and equipment
|
46
|
21
|
33
|
87
|
187
|
|||||||||||||||
Deferred income tax asset
|
-
|
18
|
-
|
3,281
|
3,299
|
|||||||||||||||
Current liabilities
|
(523
|
)
|
(328
|
)
|
(182
|
)
|
(1,263
|
)
|
(2,296
|
)
|
||||||||||
Deferred revenue
|
(78
|
)
|
(633
|
)
|
(164
|
)
|
(2,979
|
)
|
(3,854
|
)
|
||||||||||
Deferred income tax liability
|
(1,870
|
)
|
-
|
(443
|
)
|
(10,955
|
)
|
(13,268
|
)
|
|||||||||||
Income tax liability
|
-
|
-
|
-
|
(694
|
)
|
(694
|
)
|
|||||||||||||
Net tangible liabilities assumed
|
(1,925
|
)
|
(531
|
)
|
(499
|
)
|
(10,686
|
)
|
(13,641
|
)
|
||||||||||
Finite life intangible assets acquired:
|
||||||||||||||||||||
Customer agreements and relationships
|
1,375
|
1,840
|
910
|
13,300
|
17,425
|
|||||||||||||||
Existing technology
|
4,467
|
1,160
|
607
|
12,500
|
18,734
|
|||||||||||||||
Trade names
|
-
|
-
|
91
|
1,790
|
1,881
|
|||||||||||||||
Non-compete covenants
|
-
|
50
|
-
|
390
|
440
|
|||||||||||||||
Goodwill
|
6,705
|
3,766
|
1,351
|
34,680
|
46,502
|
|||||||||||||||
10,622
|
6,285
|
2,460
|
51,974
|
71,341
|
Pixi
|
Appterra
|
4Solutions
|
Datamyne
|
|
Customer agreements and relationships
|
9 years
|
11 years
|
8 years
|
9 years
|
Existing technology
|
5 years
|
5 years
|
2 years
|
6 years
|
Trade names
|
N/A
|
N/A
|
5 years
|
9 years
|
Non-compete covenants
|
N/A
|
5 years
|
N/A
|
5 years
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
||
2019
|
2018
|
2017
|
|||
Revenues
|
281,419
|
266,074
|
252,910
|
||
Net income
|
31,889
|
25,704
|
20,044
|
||
Earnings per share
|
|||||
Basic
|
0.42
|
0.34
|
0.26
|
||
Diluted
|
0.41
|
0.33
|
0.26
|
• |
Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
|
• |
Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not
active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
• |
Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or
liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.
|
Fair Value of Derivatives Designated as Hedge Instruments
|
Fair Value of Derivatives Not Designated As Hedge Instruments
|
Fair Value
|
|
Derivative assets:
|
|||
Equity contracts
|
-
|
2,794
|
2,794
|
January 31,
|
January 31,
|
|||||||
2019
|
2018
|
|||||||
Trade receivables
|
33,350
|
30,111
|
||||||
Less: Allowance for doubtful accounts
|
(1,857
|
)
|
(1,319
|
)
|
||||
31,493
|
28,792
|
January 31,
|
January 31,
|
|||||||
2019
|
2018
|
|||||||
Net working capital adjustments receivable from acquisitions
|
55
|
118
|
||||||
Other receivables
|
4,276
|
3,053
|
||||||
4,331
|
3,171
|
January 31,
|
January 31,
|
|
2019
|
2018
|
|
Cost
|
||
Computer equipment and software
|
34,870
|
36,374
|
Furniture and fixtures
|
1,262
|
1,296
|
Leasehold improvements
|
444
|
438
|
36,576
|
38,108
|
|
Accumulated amortization
|
||
Computer equipment and software
|
23,070
|
24,403
|
Furniture and fixtures
|
634
|
669
|
Leasehold improvements
|
260
|
238
|
23,964
|
25,310
|
|
Net
|
12,612
|
12,798
|
January 31,
|
January 31,
|
|
2019
|
2018
|
|
Cost
|
||
Customer agreements and relationships
|
177,224
|
162,772
|
Existing technology
|
184,641
|
174,506
|
Trade names
|
7,754
|
7,532
|
Non-compete covenants
|
6,173
|
5,980
|
375,792
|
350,790
|
|
Accumulated amortization
|
||
Customer agreements and relationships
|
82,028
|
73,621
|
Existing technology
|
110,051
|
92,304
|
Trade names
|
4,456
|
4,221
|
Non-compete covenants
|
3,065
|
2,643
|
199,600
|
172,789
|
|
Net
|
176,192
|
178,001
|
January 31,
|
January 31,
|
|||||||
2019
|
2018
|
|||||||
Balance at beginning of year
|
350,148
|
263,113
|
||||||
Acquisition of Datamyne
|
-
|
(435
|
)
|
|||||
Acquisition of ShipRush
|
-
|
8,603
|
||||||
Acquisition of PCSTrac
|
-
|
5,815
|
||||||
Acquisition of MacroPoint
|
-
|
65,213
|
||||||
Acquisition of Aljex
|
18,903
|
-
|
||||||
Acquisition of Velocity Mail
|
8,448
|
-
|
||||||
Acquisition of PinPoint
|
6,306
|
-
|
||||||
Adjustments on account of foreign exchange
|
(5,627
|
)
|
7,839
|
|||||
Balance at end of year
|
378,178
|
350,148
|
January 31,
|
January 31,
|
|||||||
2019
|
2018
|
|||||||
Accrued compensation and benefits
|
16,771
|
14,234
|
||||||
Accrued professional fees
|
1,137
|
1,107
|
||||||
Other accrued liabilities
|
11,484
|
10,197
|
||||||
29,392
|
25,538
|
January 31,
|
January 31,
|
|
2019
|
2018
|
|
Credit facility
|
25,464
|
37,000
|
Available for use
|
324,536
|
113,000
|
Years Ended January 31,
|
Operating Leases
|
Capital Leases
|
Total
|
2020
|
4,627
|
51
|
4,678
|
2021
|
3,046
|
2
|
3,048
|
2022
|
1,979
|
-
|
1,979
|
2023
|
1,470
|
-
|
1,470
|
2024
|
1,038
|
-
|
1,038
|
2025
|
737
|
-
|
737
|
2026
|
733
|
-
|
733
|
2027
|
271
|
-
|
271
|
13,901
|
53
|
13,954
|
January 31,
|
January 31,
|
January 31,
|
|
(thousands of shares)
|
2019
|
2018
|
2017
|
Balance, beginning of year
|
76,773
|
75,875
|
75,761
|
Shares issued:
|
|||
Stock options and share units exercised
|
46
|
141
|
114
|
Acquisitions (Note 3)
|
46
|
757
|
-
|
Balance, end of year
|
76,865
|
76,773
|
75,875
|
Year Ended
|
January 31, 2019
|
January 31, 2018
|
January 31, 2017
|
Net income for purposes of calculating basic and diluted earnings per share
|
31,277
|
26,879
|
23,838
|
Weighted average shares outstanding
|
76,832
|
76,324
|
75,800
|
Dilutive effect of employee stock options
|
205
|
167
|
230
|
Dilutive effect of restricted and performance share units
|
754
|
621
|
485
|
Weighted average common and common equivalent shares outstanding
|
77,791
|
77,112
|
76,515
|
Earnings per share
|
|||
Basic
|
0.41
|
0.35
|
0.31
|
Diluted
|
0.40
|
0.35
|
0.31
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
||
2019
|
2018
|
2017
|
|||
Cost of revenues
|
160
|
90
|
40
|
||
Sales and marketing
|
436
|
246
|
81
|
||
Research and development
|
184
|
85
|
14
|
||
General and administrative
|
2,930
|
2,386
|
1,887
|
||
Effect on net income
|
3,710
|
2,807
|
2,022
|
Year Ended
|
January 31, 2019
|
January 31, 2018
|
January 31, 2017
|
Expected dividend yield (%)
|
-
|
-
|
-
|
Expected volatility (%)
|
23.6
|
23.5
|
25.2
|
Risk-free rate (%)
|
2.0
|
1.0
|
0.6
|
Expected option life (years)
|
5
|
5
|
5
|
Number of Stock Options Outstanding
|
Weighted-
Average Exercise
Price
|
Weighted- Average Remaining Contractual Life (years)
|
Aggregate Intrinsic
Value
(in millions)
|
|||||||||||||
Balance at January 31, 2017
|
526,321
|
$
|
12.36
|
4.2
|
4.9
|
|||||||||||
Granted
|
274,500
|
$
|
23.18
|
|||||||||||||
Exercised
|
(142,112
|
)
|
$
|
6.98
|
||||||||||||
Forfeited
|
(1,500
|
)
|
$
|
23.14
|
||||||||||||
Balance at January 31, 2018
|
657,209
|
$
|
18.21
|
4.9
|
5.7
|
|||||||||||
Granted
|
272,144
|
$
|
27.96
|
|||||||||||||
Exercised
|
(46,065
|
)
|
$
|
11.75
|
||||||||||||
Forfeited
|
(3,950
|
)
|
$
|
26.43
|
||||||||||||
Balance at January 31, 2019
|
879,338
|
$
|
21.41
|
4.7
|
8.7
|
|||||||||||
Vested or expected to vest at January 31, 2019
|
879,338
|
$
|
21.41
|
4.7
|
8.7
|
|||||||||||
Exercisable at January 31, 2019
|
536,620
|
$
|
19.17
|
4.2
|
6.5
|
Options Outstanding
|
Options Exercisable
|
|||||
Range of Exercise Prices
|
Weighted
Average Exercise Price
|
Number of Stock Options
|
Weighted Average Remaining Contractual Life (years)
|
Weighted Average Exercise Price
|
Number of Stock Options
|
|
$6.87 – $6.87
|
$6.87
|
20,000
|
0.4
|
$6.87
|
20,000
|
|
$11.62 – $11.79
|
$11.77
|
159,500
|
2.4
|
$11.77
|
136,000
|
|
$19.02 - $22.94
|
$21.52
|
427,969
|
4.8
|
$21.05
|
302,504
|
|
$26.34 – $27.96
|
$27.95
|
271,869
|
6.2
|
$27.95
|
78,116
|
|
$21.41
|
879,338
|
4.7
|
$19.17
|
536,620
|
Number of Stock Options Outstanding
|
Weighted-
Average Grant-Date Fair Value per Share
|
|||||||
Balance at January 31, 2017
|
152,292
|
$
|
4.12
|
|||||
Granted
|
274,500
|
$
|
5.26
|
|||||
Vested
|
(149,225
|
)
|
$
|
4.70
|
||||
Forfeited
|
(1,500
|
)
|
$
|
5.25
|
||||
Balance at January 31, 2018
|
276,067
|
$
|
4.98
|
|||||
Granted
|
272,144
|
$
|
7.10
|
|||||
Vested
|
(219,043
|
)
|
$
|
5.56
|
||||
Forfeited
|
(3,950
|
)
|
$
|
6.41
|
||||
Balance at January 31, 2019
|
325,218
|
$
|
6.18
|
Number of PSUs Outstanding
|
Weighted-
Average Granted Date Fair Value
|
Weighted- Average Remaining Contractual Life (years)
|
Aggregate Intrinsic
Value
(in millions)
|
|||||||||||||
Balance at January 31, 2017
|
337,647
|
$
|
13.73
|
6.6
|
7.3
|
|||||||||||
Granted
|
51,121
|
$
|
30.13
|
|||||||||||||
Performance units issued
|
51,752
|
$
|
14.37
|
|||||||||||||
Balance at January 31, 2018
|
440,520
|
$
|
15.91
|
6.1
|
11.9
|
|||||||||||
Granted
|
54,351
|
$
|
35.23
|
|||||||||||||
Performance units issued
|
35,512
|
$
|
19.59
|
|||||||||||||
Balance at January 31, 2019
|
530,383
|
$
|
18.02
|
5.5
|
16.6
|
|||||||||||
Vested or expected to vest at January 31, 2019
|
530,383
|
$
|
18.02
|
5.5
|
16.6
|
|||||||||||
Exercisable at January 31, 2019
|
424,911
|
$
|
14.40
|
4.8
|
13.3
|
Number of RSUs Outstanding
|
Weighted-
Average Granted Date Fair Value
|
Weighted- Average Remaining Contractual Life (years)
|
Aggregate Intrinsic
Value
(in millions)
|
|||||||||||||
Balance at January 31, 2017
|
263,235
|
$
|
11.17
|
6.7
|
5.7
|
|||||||||||
Granted
|
35,785
|
$
|
23.14
|
|||||||||||||
Balance at January 31, 2018
|
299,020
|
$
|
12.80
|
6.1
|
8.1
|
|||||||||||
Granted
|
38,046
|
$
|
27.96
|
|||||||||||||
Balance at January 31, 2019
|
337,066
|
$
|
14.42
|
5.6
|
10.6
|
|||||||||||
Vested or expected to vest at January 31, 2019
|
337,066
|
$
|
14.42
|
5.6
|
10.6
|
|||||||||||
Exercisable at January 31, 2019
|
299,773
|
$
|
12.93
|
5.2
|
9.4
|
Number of CRSUs Outstanding
|
Weighted- Average Remaining Contractual Life (years)
|
|||||||
Balance at January 31, 2017
|
77,329
|
1.4
|
||||||
Granted
|
32,978
|
|||||||
Vested and settled in cash
|
(50,802
|
)
|
||||||
Forfeited
|
(1,334
|
)
|
||||||
Balance at January 31, 2018
|
58,171
|
1.5
|
||||||
Granted
|
32,261
|
|||||||
Vested and settled in cash
|
(45,369
|
)
|
||||||
Balance at January 31, 2019
|
45,063
|
1.6
|
||||||
Non-vested at January 31, 2019
|
45,063
|
1.6
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
2019
|
2018
|
2017
|
|
Canada
|
16,715
|
17,964
|
19,560
|
United States
|
11,077
|
6,203
|
2,670
|
Other countries
|
11,718
|
10,581
|
9,270
|
39,510
|
34,748
|
31,500
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
|||||||||
2019
|
2018
|
2017
|
||||||||||
Current income tax expense
|
||||||||||||
Canada
|
3,037
|
1,243
|
447
|
|||||||||
United States
|
1,298
|
494
|
873
|
|||||||||
Other countries
|
1,707
|
4,835
|
2,702
|
|||||||||
6,042
|
6,572
|
4,022
|
||||||||||
Deferred income tax expense (recovery)
|
||||||||||||
Canada
|
2,531
|
2,051
|
4,251
|
|||||||||
United States
|
67
|
1,876
|
1,272
|
|||||||||
Other countries
|
(407
|
)
|
(2,630
|
)
|
(1,883
|
)
|
||||||
2,191
|
1,297
|
3,640
|
||||||||||
8,233
|
7,869
|
7,662
|
January 31,
|
January 31,
|
|||||||
2019
|
2018
|
|||||||
Assets
|
||||||||
Accrued liabilities not currently deductible
|
11,483
|
9,060
|
||||||
Accumulated net operating losses
|
11,081
|
13,868
|
||||||
Research and development and other tax credits and expenses
|
911
|
1,580
|
||||||
Total deferred income tax assets
|
23,475
|
24,508
|
||||||
Liabilities
|
||||||||
Difference between tax and accounting basis of intangible assets
|
(23,974
|
)
|
(12,976
|
)
|
||||
Difference between tax and accounting basis of property and equipment
|
(909
|
)
|
(6,933
|
)
|
||||
Other timing differences
|
(574
|
)
|
(267
|
)
|
||||
Total deferred income tax liabilities
|
(25,457
|
)
|
(20,176
|
)
|
||||
Net deferred income taxes
|
(1,982
|
)
|
4,332
|
|||||
Valuation allowance
|
(9,927
|
)
|
(11,257
|
)
|
||||
Net deferred income taxes, net of valuation allowance
|
(11,909
|
)
|
(6,925
|
)
|
||||
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
|||||||||
2019
|
2018
|
2017
|
||||||||||
Income before income taxes
|
39,510
|
34,748
|
31,500
|
|||||||||
Combined basic Canadian statutory rates
|
26.5
|
%
|
26.5
|
%
|
26.5
|
%
|
||||||
Income tax expense based on the above rates
|
10,470
|
9,207
|
8,347
|
|||||||||
Increase (decrease) in income taxes resulting from:
|
||||||||||||
Permanent differences including amortization of intangible assets
|
(133
|
)
|
(1,870
|
)
|
(882
|
)
|
||||||
Effect of differences between Canadian and foreign tax rates
|
(172
|
)
|
595
|
213
|
||||||||
Effect of rate changes on current year timing differences
|
(245
|
)
|
(571
|
)
|
495
|
|||||||
Adjustments relating to previous periods
|
(973
|
)
|
(152
|
)
|
(431
|
)
|
||||||
Increase (decrease) in tax reserves
|
(515
|
)
|
1,954
|
492
|
||||||||
Valuation allowance
|
(344
|
)
|
(1,564
|
)
|
(1,580
|
)
|
||||||
Stock based compensation
|
231
|
(135
|
)
|
351
|
||||||||
Deferred tax charges
|
-
|
179
|
400
|
|||||||||
Other, including foreign exchange
|
(86
|
)
|
226
|
257
|
||||||||
Income tax expense
|
8,233
|
7,869
|
7,662
|
Expiry year
|
United States
|
EMEA
|
Asia Pacific
|
Total
|
|
2020
|
-
|
-
|
671
|
671
|
|
2021
|
-
|
-
|
273
|
273
|
|
2022
|
1
|
-
|
48
|
49
|
|
2023
|
12
|
1,162
|
-
|
1,174
|
|
2024
|
-
|
131
|
-
|
131
|
|
Thereafter
|
5,271
|
46,459
|
4,524
|
56,254
|
|
5,284
|
47,752
|
5,516
|
58,552
|
January 31,
|
January 31,
|
|||||||
2019
|
2018
|
|||||||
Liability, beginning of year
|
8,977
|
6,388
|
||||||
Gross increases – current period
|
493
|
3,368
|
||||||
Lapsing due to statutes of limitations
|
(1,646
|
)
|
(779
|
)
|
||||
Liability, end of year
|
7,824
|
8,977
|
Years No Longer Subject to Audit
|
|
Tax Jurisdiction
|
|
United States Federal
|
2015 and prior
|
Canada
|
2017 and prior
|
United Kingdom
|
2015 and prior
|
Sweden
|
2012 and prior
|
Norway
|
2017 and prior
|
Netherlands
|
2014 and prior
|
Belgium
|
2014 and prior
|
Deferred Revenue
|
||||
Balance at January 31, 2018
|
32,113
|
|||
Recognition of unearned revenue
|
(27,252
|
)
|
||
Deferral of revenue
|
29,423
|
|||
Increases from business combinations
|
1,789
|
|||
Effect of movements in foreign exchange
|
(982
|
)
|
||
Balance at January 31, 2019
|
35,091
|
|||
Current
|
34,236
|
|||
Long-term
|
855
|
Contract Assets
|
||||
Balance at January 31, 2018
|
-
|
|||
Adjustment for adoption of ASC 606
|
495
|
|||
Balance at February 1, 2018
|
495
|
|||
Transfers to trade receivables from contract assets
|
(266
|
)
|
||
Increases as a result of delivered term licenses recognized as revenue during the period, net of amounts transferred to
trade receivables
|
606
|
|||
Effect of movements in foreign exchange
|
(23
|
)
|
||
Balance at January 31, 2019
|
812
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
2019
|
2018
|
2017
|
|
Acquisition-related costs
|
3,778
|
3,471
|
3,019
|
Restructuring plans
|
20
|
523
|
436
|
3,798
|
3,994
|
3,455
|
Workforce
Reduction
|
||||
Balance at January 31, 2017
|
-
|
|||
Accruals and adjustments
|
456
|
|||
Cash draw downs
|
(211
|
)
|
||
Balance at January 31, 2018
|
245
|
|||
Accruals and adjustments
|
4
|
|||
Cash draw downs
|
(249
|
)
|
||
Balance at January 31, 2019
|
-
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
2019
|
2018
|
2017
|
|
Revenues
|
|||
United States
|
165,115
|
133,263
|
106,672
|
Europe, Middle-East and Africa
|
80,094
|
77,576
|
75,165
|
Canada
|
18,167
|
15,667
|
13,266
|
Asia Pacific
|
11,795
|
10,933
|
8,676
|
275,171
|
237,439
|
203,779
|
Year Ended
|
January 31,
|
January 31,
|
January 31,
|
2019
|
2018
|
2017
|
|
Revenues
|
|||
Services
|
241,543
|
204,376
|
172,950
|
Professional services and other
|
27,774
|
24,918
|
23,917
|
Licenses
|
5,854
|
8,145
|
6,912
|
275,171
|
237,439
|
203,779
|
January 31,
|
January 31,
|
|
2019
|
2018
|
|
Total long-lived assets
|
||
United States
|
119,958
|
108,077
|
Europe, Middle-East and Africa
|
28,433
|
37,857
|
Canada
|
40,413
|
44,865
|
188,804
|
190,799
|
Computershare Investor Services Inc.
|
Computershare Trust Company
|
100 University Avenue
|
12039 West Alameda Parkway
|
Toronto, Ontario M5J 2Y1
|
Suite Z-2 Lakewood, Colorado
|
North America: (800) 663-9097
|
80228 USA
|
Phone: (416) 263-9200
|
Phone: (303) 262-0600
|
Phone:
|
(519) 746-8110
|
(800) 419-8495
|
|
Fax:
|
(519) 747-0082
|
U04]RP(<[6FIT"=^[7 /9=D>T54\T2\^UAV$T63*
M,N..5N:^33M>X^G^"CQ@*GS-[D(^?'DP$)@P[Z\0!K)RV'PP$$R 0R2@!SO0
M[U0N$(%0V0/ !4,@\%33!@51!@ 51PBU=W:C;+7!\77X17;K2/;XT7%LY74M,5,YCV+
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M90"^8J+-8J#+
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MS 5\YB/7>:6*Y;9,%SMHYS_:=?:YG;_=YZ$37\(:/CN[_I*][
MZ8MN^KM33-2H4WKJ^<;TU?F==>1ZNNL"#SOL8X_!L5>J[*OFU'9/^.KO2ES6
M@($AW*,<5XW3E>-VY[5['P??D1NKY,LZ>4 W1^;#*KOP+W
3>4_0# #==5Q6/4B+H!:
M(QAZ@)@0&1 $??@B4= _G$A,X6-#(H$-[Z$%!:<0M46+MO@0?^%L.&,(!=@0
M<) '0U@P)E .H;B#5TB*<((!A.@B49 OHK6*:E%0"+:0!O9@
M!U*)#TJ0;$GV%P[8(R' !GMP!D=0")@0""^P(^\1!W^V$$FPC94SBFJ4#[<@
M/RLP5>7X:.!5!63@ EJIE5S9!+'4BQ_F#0>0!K8 #B!@+BYB!Z.$E"57)-7B
M"-;X9C 4*250D ]14@+3)F;D*0*Q"7SI+5ZH$)0AF-Q(:M[H(7'#0$12"VB%
M$32)$9(6*3P5$730,Z-""O-0=.TR*C+@!>FH:)$""/_FC,G07+8BDQO1!HG0
M,R[_\G@(40DPJ9OP09@*P0=J^"*&>(T-40F_)G\OLPP2@0%AX&")P@4QLQ+E
M9RN7 6^!)\*(0?;MRM_.!$9H L!U"8<< H;\1
*)+)\+%Y4:*0V[@=MO4G
MI7S?25S5LM]HY6E92=[6OKY/H=-#,_9J-X7<5:][:=FNMCU3X6R0P^!/%,MU
M;_:8$CW20[RGF*(VRNXE16OQ-N[$:
M&EK9!8M-MC;7$33;ENT.W.1M^7[O'7^8-<>,M)&B:IHZ:#/%8ZA