<SEC-DOCUMENT>0000929638-17-000534.txt : 20170601
<SEC-HEADER>0000929638-17-000534.hdr.sgml : 20170601
<ACCEPTANCE-DATETIME>20170601133446
ACCESSION NUMBER:		0000929638-17-000534
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20170601
FILED AS OF DATE:		20170601
DATE AS OF CHANGE:		20170601

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DESCARTES SYSTEMS GROUP INC
		CENTRAL INDEX KEY:			0001050140
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A6
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-29970
		FILM NUMBER:		17884201

	BUSINESS ADDRESS:	
		STREET 1:		120 RANDALL ST
		CITY:			WATERLOO
		STATE:			A6
		ZIP:			N2V 1C6
		BUSINESS PHONE:		519-746-8110

	MAIL ADDRESS:	
		STREET 1:		120 RANDALL DRIVE
		CITY:			WATERLOO, ONTARIO, CANADA
		STATE:			XX
		ZIP:			N2V 1C6
</SEC-HEADER>
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<TYPE>6-K
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">For the month of June 2017</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">Commission File Number:&#160;&#160;000-29970</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">(Translation of registrant&#8217;s name into English)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">(Address of principal executive office)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; DISPLAY: inline">Form 20-F [ ]</font><font style="DISPLAY: inline" face="Wingdings2">&#160;</font><font style="FONT-SIZE: 10pt; DISPLAY: inline">Form 40-F [x]</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-WEIGHT: bold; DISPLAY: inline">Note</font>: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-WEIGHT: bold; DISPLAY: inline">Note: </font>Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant&#8217;s &#8220;home country&#8221;), or under the rules of the home country exchange on which the registrant&#8217;s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant&#8217;s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; DISPLAY: inline">Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ]</font><font style="DISPLAY: inline" face="Wingdings2">&#160;</font><font style="FONT-SIZE: 10pt; DISPLAY: inline">No [x]</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">If &#8220;Yes&#8221; is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">82-_______________.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left; TEXT-INDENT: 36pt">The attached press release issued May 31, 2017 is furnished herewith as Exhibit 99.1.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-ALIGN: left; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">(Registrant)</div>
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<div style="TEXT-DECORATION: underline; TEXT-ALIGN: left; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">/s/ Michael Verhoeve&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </div>
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<div style="TEXT-ALIGN: left; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">Michael Verhoeve</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; TEXT-ALIGN: left; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt">Date:&#160;&#160;June 1, 2017</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; DISPLAY: block; TEXT-INDENT: 0pt">Press Release issued May 31, 2017</div>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit99-1.htm
<DESCRIPTION>PRESS RELEASE
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<div style="FONT-SIZE: 16pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: center"><a name="OLE_LINK1"><!--Anchor--></a><a name="OLE_LINK2"><!--Anchor--></a>DESCARTES REPORTS FISCAL 2018 FIRST QUARTER FINANCIAL RESULTS</div>

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<div style="FONT-SIZE: 14pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: center">Record Revenues and Income From Operations</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">WATERLOO, Ontario &#8212; May 31, 2017 </font>&#8212; The Descartes Systems Group Inc. (TSX:DSG) (Nasdaq:DSGX) announced its financial results for its fiscal 2018 first quarter (Q1FY18) ended April 30, 2017. All financial results referenced are in United States (US) currency and, unless otherwise indicated, are determined in accordance with US Generally Accepted Accounting Principles (GAAP).</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">&#8220;With evolving consumer buying patterns and a rapidly changing global trade landscape, our customers are increasingly looking to us to isolate them from complexity,&#8221; said Edward J. Ryan, Descartes&#8217; CEO. &#8220;We continue to add more solutions, content and capabilities to our Global Logistics Network (GLN) so that our customers can not only navigate this changing landscape, but thrive with a competitive advantage where others see challenges.&#160; We believe our continued strong financial performance reflects our customers&#8217; success in leveraging our investments to improve the security and efficiency of their operations.&#8221;</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Q1FY18 Financial Results</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">As described in more detail below, key financial highlights for Descartes&#8217; three-month period ended April 30, 2017 (Q1FY18) included:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif">Revenues of $54.5 million, up 11% from $48.9 million in the first quarter of fiscal 2017 (Q1FY17) and up 3% from $52.8 million in the previous quarter (Q4FY17);</div>
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<table id="z423a49d7939c4884b98116afd407d7d6" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif">Revenues were comprised of license revenues of $1.7 million (3% of total revenues) and services revenues (non-license) of $52.8 million (97% of total revenues). Services revenues were up 11% from $47.5 million in Q1FY17 and up 3% from $51.4 million in Q4FY17;</div>
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<table id="z1578991d0b424762ad5de472015fdfea" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif">Cash provided by operating activities of $16.5 million, up 4% from $15.9 million in Q1FY17 and down from $19.5 million in Q4FY17;</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif">Net income of $6.9 million, up 15% from $6.0 million in Q1FY17 and up 13% from $6.1 million in Q4FY17. Net income as a percentage of revenues was 13%, compared to 12% in Q1FY17 and 12% in Q4FY17;</div>
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<table id="z687de460f442484f81ebca6e8df26474" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif">Earnings per share on a diluted basis of $0.09, up 13% from $0.08 in Q1FY17 and up 13% from $0.08 in Q4FY17; and</div>
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<table id="z7fe3363f82774995a83e3537ad532164" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif">Adjusted EBITDA of $19.0 million, up 14% from $16.6 million in Q1FY17 and up 3% from $18.5 million in Q4FY17. Adjusted EBITDA as a percentage of revenues was 35%, compared to 34% in Q1FY17 and 35% in Q4FY17.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify; BACKGROUND-COLOR: #ffffff">Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues are non-GAAP financial measures provided as a complement to financial results presented in accordance with GAAP. We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, stock-based compensation (for which we include related fees and taxes) and other charges (for which we include restructuring charges and acquisition-related expenses). These items are considered by management to be outside Descartes' ongoing operational results. We</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify; BACKGROUND-COLOR: #ffffff">define Adjusted EBITDA as a percentage of revenues as the quotient, expressed as a percentage, from dividing Adjusted EBITDA for a period by revenues for the corresponding period. A reconciliation of Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues to net income determined in accordance with GAAP is provided later in this release.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">The following table summarizes Descartes' results in the categories specified below over the past 5 fiscal quarters (unaudited; dollar amounts, other than per share amounts, in millions):</div>

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<table id="ze446129b5ef94d07bef76d6d4eb714eb" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
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<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.84%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">Q1</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">FY18</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.84%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">Q4</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">FY17</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.84%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">Q3</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">FY17</div>
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<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.97%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">Q2</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">FY17</div>
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<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.97%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">Q1</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">FY17</div>
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<tr>
<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Revenues</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">54.5</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">52.8</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">51.5</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">50.5</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">48.9</div>
</td>
</tr>

<tr>
<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Services revenues</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">52.8</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">51.4</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">49.4</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">48.6</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">47.5</div>
</td>
</tr>

<tr>
<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Gross margin</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">74%</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">72%</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">73%</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">73%</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">72%</div>
</td>
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<tr>
<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Cash provided by operating activities</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">16.5</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">19.5</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">20.5</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">16.6</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">15.9</div>
</td>
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<tr>
<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Net income</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">6.9</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">6.1</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">5.9</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">5.8</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">6.0</div>
</td>
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<tr>
<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Net income as a % of revenues</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">13%</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">12%</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">11%</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">11%</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">12%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Earnings per diluted share</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">0.09</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">0.08</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">0.08</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">0.08</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">0.08</div>
</td>
</tr>

<tr>
<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Adjusted EBITDA</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">19.0</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">18.5</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">17.8</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">17.2</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">16.6</div>
</td>
</tr>

<tr>
<td style="WIDTH: 40.53%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Adjusted EBITDA as a % of revenues</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: right">35%</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">35%</div>
</td>
<td style="WIDTH: 11.84%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">35%</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">34%</div>
</td>
<td style="WIDTH: 11.97%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: right">34%</div>
</td>
</tr>
</table>
</div>

<div><br>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">Cash Position</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">At April 30, 2017, Descartes had $54.4 million in cash. Cash has increased $16.3 million in Q1FY18 primarily due to cash provided by operating activities.</div>

<div><br>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">The table set forth below provides a summary of cash flows for Q1FY18 in millions of dollars:</div>

<div><br>
</div>

<div>
<table id="zbe100e828df445b7a3871a8025aebefb" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 872px; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; PADDING-BOTTOM: 1px; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 7px; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">Q1FY18</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 88.26%; VERTICAL-ALIGN: top" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 7.5pt; TEXT-INDENT: -7.5pt">Cash provided by operating activities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">16.5</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 88.26%; VERTICAL-ALIGN: top" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 7.5pt; TEXT-INDENT: -7.5pt">Additions to property and equipment</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(0.8</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 7.5pt; TEXT-INDENT: -7.5pt">Issuance of common shares, net of issuance costs</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">0.5</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 7.5pt; TEXT-INDENT: -7.5pt">Effect of foreign exchange rate on cash</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">0.1</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 7.5pt; TEXT-INDENT: -7.5pt">Net change in cash</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">16.3</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 7.5pt; TEXT-INDENT: -7.5pt">Cash, beginning of period</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">38.1</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 7.5pt; TEXT-INDENT: -7.5pt">Cash, end of period</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">54.4</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; BACKGROUND-COLOR: #ffffff">Acquisition of ShipRush</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify; BACKGROUND-COLOR: #ffffff">On May 18, 2017, we acquired Z-Firm LLC (&#8220;ShipRush&#8221;), a US-based provider of e-commerce multi-carrier parcel shipping solutions for small-to medium-sized businesses (SMBs). The ShipRush platform helps customers to streamline their supply chain and reduce transportation costs by automatically importing orders, comparing carrier rates, printing shipping labels for all major carriers, and tracking through final delivery. The purchase price for the acquisition was approximately $14.0 million, net of cash acquired, which was funded with cash on hand. Additional contingent consideration of up to $3.0 million in cash is payable if certain revenue performance targets are met by ShipRush in the two years following the acquisition.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: justify">Conference Call</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">Members of Descartes' executive management team will host a conference call to discuss the company's financial results at 5:00 p.m. ET on Wednesday, May 31. Designated numbers are +1 888 465-5079 for North America and +1 416 216-4169 for international, using Passcode 9065832#.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">The company will simultaneously conduct an audio webcast on the Descartes Web site at <font style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; COLOR: #0000ff"><u>www.descartes.com/descartes/investor-relations</u></font>. Phone conference dial-in or webcast log-in is required approximately 10 minutes beforehand.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">Replays of the conference call will be available following the call from 8:00 p.m. ET, and until June 7, 2017, by dialing +1 888 843-7419 or +1 630 652-3042 followed by Passcode 9065832#. An archived replay of the webcast will be available at <font style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; COLOR: #0000ff"><u>www.descartes.com/descartes/investor-relations</u></font>.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">About Descartes</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">Descartes (Nasdaq:DSGX) (TSX:DSG) is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, performance and security of logistics-intensive businesses. Customers use our modular, software-as-a-service solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world's largest, collaborative multimodal logistics community. Our headquarters are in Waterloo, Ontario, Canada and we have offices and partners around the world. Learn more at <font style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; COLOR: #0000ff"><u>www.descartes.com</u></font>, and connect with us on LinkedIn and Twitter.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: center"># # #</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Descartes Investor Contact:</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Laurie McCauley +1-519-746-6114 x202358</div>

<div style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif"><u>investor@descartes.com</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif"><br>
</font></font><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Safe Harbor Statement</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">This release contains forward-looking information within the meaning of applicable securities laws ("forward-looking statements") that relates to Descartes' growth in margins; continued growth and acquisitions; rate of profitable growth; demand for Descartes' solutions; growth of Descartes' Global Logistics Network; customer buying patterns; customer expectations of Descartes; development of the GLN and the benefits thereof to customers; and other matters. These forward-looking statements are based on certain assumptions including the following: global shipment volumes continuing to increase at levels consistent with the average growth rates of the global economy; countries continuing to implement and enforce existing and additional customs and security regulations relating to the provision of electronic information for imports and exports; <font style="FONT-SIZE: 9.5pt; FONT-FAMILY: Verdana, sans-serif">countries continuing to implement and enforce existing and additional trade restrictions and sanctioned party lists with respect to doing business with certain countries, organizations, entities and individuals; </font>Descartes' continued operation of a secure and reliable business network; the stability of general economic and market conditions, currency</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">exchange rates, and interest rates; equity and debt markets continuing to provide Descartes with access to capital; Descartes' continued ability to identify and source attractive and executable business combination opportunities; Descartes' ability to develop solutions that keep pace with the continuing changes in technology, and our continued compliance with third party intellectual property rights. These assumptions may prove to be inaccurate. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Descartes, or developments in Descartes' business or industry, to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, Descartes' ability to successfully execute on acquisitions and to integrate acquired businesses and assets, and to predict expenses associated with and revenues from acquisitions; the ability to attract and retain key personnel and the ability to manage the departure of key personnel and the transition of our executive management team; changes in trade or transportation regulations that currently require customers to use services such as those offered by Descartes; the impact on Descartes' business of a global economic downturn; changes in customer behaviour and expectations; Descartes&#8217; ability to successfully design and develop enhancements to our products and solutions; departures of key customers; the impact of foreign currency exchange rates; Descartes' ability to retain or obtain sufficient capital in addition to its debt facility to execute on its business strategy, including its acquisition strategy; disruptions in the movement of freight; the potential for future goodwill or intangible asset impairment as a result of other-than-temporary decreases in Descartes' market capitalization; and other factors and assumptions discussed in the section entitled, "Certain Factors That May Affect Future Results" in documents filed with the Securities and Exchange Commission, the Ontario Securities Commission and other securities commissions across Canada, including Descartes' most recently filed Management's Discussion and Analysis. If any such risks actually occur, they could materially adversely affect our business, financial condition or results of operations. In that case, the trading price of our common shares could decline, perhaps materially. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues</div>

<div><br>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">We prepare and release quarterly unaudited and annual audited financial statements prepared in accordance with GAAP. We also disclose and discuss certain non-GAAP financial information, used to evaluate our performance, in this and other earnings releases and investor conference calls as a complement to results provided in accordance with GAAP. We believe that current shareholders and potential investors in our company use non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues, in making investment decisions about our company and measuring our operational results.</div>

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</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">The term &#8220;Adjusted EBITDA&#8221; refers to a financial measure that we define as earnings before certain charges that management considers to be non-operating expenses and which consist of interest, taxes, depreciation, amortization, stock-based compensation (for which we include related fees and taxes) and other charges (for which we include restructuring charges and acquisition-related expenses). Adjusted EBITDA as a percentage of revenues divides Adjusted</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">EBITDA for a period by the revenues for the corresponding period and expresses the quotient as a percentage.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">Management considers these non-operating expenses to be outside the scope of Descartes&#8217; ongoing operations and the related expenses are not used by management to measure operations. Accordingly, these expenses are excluded from Adjusted EBITDA, which we reference to both measure our operations and as a basis of comparison of our operations from period-to-period. Management believes that investors and financial analysts measure our business on the same basis, and we are providing the Adjusted EBITDA financial metric to assist in this evaluation and to provide a higher level of transparency into how we measure our own business. However, Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues are non-GAAP financial measures and may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues should not be construed as a substitute for net income determined in accordance with GAAP or other non-GAAP measures that may be used by other companies, such as EBITDA. The use of Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues does have limitations. In particular, we have completed seven acquisitions since the beginning of fiscal 2016, and may complete additional acquisitions in the future that will result in acquisition-related expenses and restructuring charges. As these acquisition-related expenses and restructuring charges may continue as we pursue our consolidation strategy, some investors may consider these charges and expenses as a recurring part of operations rather than expenses that are not part of operations.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">The table below reconciles Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues to net income reported in our unaudited Consolidated Statements of Operations for Q1FY18, Q4FY17, Q3FY17, Q2FY17 and Q1FY17, which we believe is the most directly comparable GAAP measure.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">&#160;</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify">
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; MARGIN-LEFT: 7.2pt">(US dollars in millions)</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; MARGIN-LEFT: 7.2pt">Q1FY18</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; MARGIN-LEFT: 7.2pt">Q4FY17</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; MARGIN-LEFT: 7.2pt">Q3FY17</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; MARGIN-LEFT: 7.2pt">Q2FY17</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; MARGIN-LEFT: 7.2pt">Q1FY17</div>

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<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">Net income</font>, as reported on Consolidated Statements of Operations</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">6.9</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">6.1</div>
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<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">5.9</div>
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<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">5.8</div>
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<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">6.0</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Adjustments to reconcile to Adjusted EBITDA:</div>
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<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">&#160;</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">&#160;</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">&#160;</td>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Interest expense</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">0.1</div>
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<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.1</div>
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<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.2</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.2</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.1</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Investment income</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">-</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">-</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">(0.1)</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">(0.8)</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">(0.5)</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Income tax expense</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">2.2</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">1.9</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">1.8</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">2.0</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">1.9</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify; MARGIN-LEFT: 9pt">Depreciation expense</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">0.8</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">1.1</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">1.0</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.9</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.7</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify; MARGIN-LEFT: 9pt">Amortization of intangible assets</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">7.7</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">7.8</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">7.5</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">7.6</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">7.2</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Stock-based compensation and related taxes</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">0.6</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.6</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.5</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.7</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.5</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify; MARGIN-LEFT: 9pt">Acquisition-related expenses</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">0.7</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.9</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.6</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.8</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.7</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: justify; MARGIN-LEFT: 9pt">Restructuring charges</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">-</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">-</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">0.4</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">-</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">-</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Adjusted EBITDA</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 13.04%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">19.0</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 13.04%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">18.5</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.6%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">17.8</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.6%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">17.2</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 11.6%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">16.6</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">&#160;</td>
<td style="BORDER-TOP: #000000 2px double; WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">&#160;</td>
<td style="BORDER-TOP: #000000 2px double; WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">&#160;</td>
<td style="BORDER-TOP: #000000 2px double; WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">&#160;</td>
<td style="BORDER-TOP: #000000 2px double; WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">&#160;</td>
<td style="BORDER-TOP: #000000 2px double; WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Revenues</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">54.5</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">52.8</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">51.5</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">50.5</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">48.9</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Net income as % of revenues</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">13%</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">12%</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">11%</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">11%</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">12%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 39.14%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Adjusted EBITDA as % of revenues</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">35%</div>
</td>
<td style="WIDTH: 13.04%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">35%</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">35%</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">34%</div>
</td>
<td style="WIDTH: 11.6%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right">
<div style="FONT-SIZE: 9pt; FONT-FAMILY: Verdana, sans-serif">34%</div>
</td>
</tr>
</table>
</div>

<div>&#160;</div>

<div>&#160;</div>

<div>&#160;</div>

<div>&#160;</div>

<div id="DSPFPageBreakArea" style="MARGIN-BOTTOM: 10pt; CLEAR: both; MARGIN-TOP: 10pt">
<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: Arial; FONT-WEIGHT: normal; COLOR: #000000; FONT-STYLE: normal">5</font></div>

<div id="DSPFPageBreak" style="PAGE-BREAK-AFTER: always">
<hr style="BORDER-LEFT-WIDTH: 0px; HEIGHT: 2px; BORDER-RIGHT-WIDTH: 0px; WIDTH: 100%; BORDER-BOTTOM-WIDTH: 0px; COLOR: #000000; CLEAR: both; MARGIN: 4px 0px; BORDER-TOP-WIDTH: 0px; BACKGROUND-COLOR: #000000" noshade="noshade">
</div>
</div>

<div><br>
</div>

<div style="FONT-SIZE: 11pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; FONT-WEIGHT: bold; TEXT-ALIGN: left">The Descartes Systems Group Inc.</div>

<div style="FONT-SIZE: 11pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; FONT-WEIGHT: bold; TEXT-ALIGN: left"><a name="_Toc396820869"><!--Anchor--></a><a name="_Toc427650875"><!--Anchor--></a>Condensed Consolidated Balance Sheets</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; TEXT-ALIGN: left">(US dollars in thousands; US GAAP; Unaudited)</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; TEXT-ALIGN: left">
<hr style="BORDER-TOP: medium none; HEIGHT: 2px; BORDER-RIGHT: medium none; BORDER-BOTTOM: medium none; COLOR: #000000; TEXT-ALIGN: center; MARGIN-LEFT: auto; BORDER-LEFT: medium none; BACKGROUND-COLOR: #000000; MARGIN-RIGHT: auto" align="center" noshade="noshade">
</div>

<div>&#160;</div>

<div>
<table id="z48371350de014027b0995f9364b7ce24" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-STYLE: italic; TEXT-ALIGN: left">Year Ended</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">April 30,</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 7px; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 102px; VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">January 31,</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top; PADDING-BOTTOM: 1px; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">2017</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 7px; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 102px; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">2017</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(Audited)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">ASSETS</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 7px; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 102px; VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">CURRENT ASSETS</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 7px; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 102px; VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Cash</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">54,371</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">38,135</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Accounts receivable (net)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 27pt">Trade</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">26,279</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">25,401</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 27pt">Other</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">4,474</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">3,709</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Prepaid expenses and other</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">5,728</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">5,149</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Inventory</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">169</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">167</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">91,021</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">72,561</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">OTHER LONG-TERM ASSETS</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">1,396</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">1,525</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">PROPERTY AND EQUIPMENT, NET</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">10,452</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">10,447</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">DEFERRED INCOME TAXES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">6,151</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">7,027</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">DEFERRED TAX CHARGE</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">380</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">422</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">INTANGIBLE ASSETS, NET</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">136,811</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">145,445</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">GOODWILL</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">263,393</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">263,113</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">509,604</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">500,540</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">LIABILITIES AND SHAREHOLDERS&#8217; EQUITY</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; COLOR: #000000; TEXT-ALIGN: left">CURRENT LIABILITIES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: ; PADDING-LEFT: 2%" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Accounts payable</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">6,024</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">4,679</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: ; PADDING-LEFT: 2%" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Accrued liabilities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">23,713</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">23,247</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: ; PADDING-LEFT: 2%" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Income taxes payable</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">1,152</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">2,170</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: ; PADDING-LEFT: 2%" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Deferred revenue</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">22,620</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">23,728</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">53,509</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">53,824</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">LONG-TERM DEFERRED REVENUE</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">1,341</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">421</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">LONG-TERM INCOME TAXES PAYABLE</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">7,247</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">5,725</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">DEFERRED INCOME TAXES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">9,314</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">9,975</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">71,411</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">69,945</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">SHAREHOLDERS&#8217; EQUITY</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 4.5pt; TEXT-INDENT: -4.5pt">Common shares &#8211; unlimited shares authorized; Shares issued and outstanding totaled 75,969,296 at April 30, 2017 (January 31, 2017 &#8211; 75,874,684)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">253,860</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">253,242</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Additional paid-in capital</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">448,994</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">448,597</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Accumulated other comprehensive loss</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(33,044</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(32,779</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 1px; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Accumulated deficit</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(231,617</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(238,465</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">438,193</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">430,595</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">509,604</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1.32%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">500,540</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>
</div>

<div>&#160;</div>

<div>&#160;</div>

<div><br>
</div>

<div><br>
</div>

<div id="DSPFPageBreakArea" style="MARGIN-BOTTOM: 10pt; CLEAR: both; MARGIN-TOP: 10pt">
<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: Arial; FONT-WEIGHT: normal; COLOR: #000000; FONT-STYLE: normal">6</font></div>

<div id="DSPFPageBreak" style="PAGE-BREAK-AFTER: always">
<hr style="BORDER-LEFT-WIDTH: 0px; HEIGHT: 2px; BORDER-RIGHT-WIDTH: 0px; WIDTH: 100%; BORDER-BOTTOM-WIDTH: 0px; COLOR: #000000; CLEAR: both; MARGIN: 4px 0px; BORDER-TOP-WIDTH: 0px; BACKGROUND-COLOR: #000000" noshade="noshade">
</div>
</div>

<div><br>
</div>

<div style="FONT-SIZE: 11pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; FONT-WEIGHT: bold; TEXT-ALIGN: left">The Descartes Systems Group Inc.</div>

<div style="FONT-SIZE: 11pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; FONT-WEIGHT: bold; TEXT-ALIGN: left"><a name="_Toc396820870"><!--Anchor--></a><a name="_Toc427650876"><!--Anchor--></a>Consolidated Statements of Operations</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; TEXT-ALIGN: left">(US dollars in thousands, except per share and weighted average share amounts; US GAAP; Unaudited)</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; TEXT-ALIGN: left">
<hr style="BORDER-TOP: medium none; HEIGHT: 2px; BORDER-RIGHT: medium none; BORDER-BOTTOM: medium none; COLOR: #000000; TEXT-ALIGN: center; MARGIN-LEFT: auto; BORDER-LEFT: medium none; BACKGROUND-COLOR: #000000; MARGIN-RIGHT: auto" align="center" noshade="noshade">
</div>

<div>&#160;</div>

<div>
<table id="ze951b90ba72944f0b3d202698996d38c" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 754px; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; WIDTH: 7px; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="6">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">Three Months Ended</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 754px; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 7px; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">April 30,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">April 30,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 754px; VERTICAL-ALIGN: top; PADDING-BOTTOM: 1px; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 7px; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">2017</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 754px; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 7px; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">REVENUES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">54,514</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">48,911</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 1px; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">COST OF REVENUES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">14,382</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">13,689</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 1px; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">GROSS MARGIN</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">40,132</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">35,222</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">EXPENSES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Sales and marketing</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">7,230</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">5,682</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Research and development</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">9,335</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">8,790</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">General and administrative</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">5,940</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">5,334</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Other charges</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">678</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">709</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Amortization of intangible assets</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">7,703</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">7,151</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="HEIGHT: 13px">
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">30,886</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">27,666</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">INCOME FROM OPERATIONS</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">9,246</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">7,556</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">INTEREST EXPENSE</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(195</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(129</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">INVESTMENT INCOME</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">34</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">513</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">INCOME BEFORE INCOME TAXES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">9,085</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">7,940</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">INCOME TAX EXPENSE</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Current</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">1,690</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">711</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Deferred</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">510</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">1,191</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 1px; BORDER-BOTTOM-COLOR: " valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">2,200</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">1,902</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">NET INCOME</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">6,885</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">6,038</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">EARNINGS&#160; PER SHARE</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Basic</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">0.09</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">0.08</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Diluted</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">0.09</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">0.08</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">WEIGHTED AVERAGE SHARES OUTSTANDING (thousands)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Basic</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">75,912</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">75,761</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76.32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-BOTTOM-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Diluted</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">76,648</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">76,419</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>
</div>

<div><br>
 &#160;</div>

<div id="DSPFPageBreakArea" style="MARGIN-BOTTOM: 10pt; CLEAR: both; MARGIN-TOP: 10pt">
<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: Arial; FONT-WEIGHT: normal; COLOR: #000000; FONT-STYLE: normal">7</font></div>

<div id="DSPFPageBreak" style="PAGE-BREAK-AFTER: always">
<hr style="BORDER-LEFT-WIDTH: 0px; HEIGHT: 2px; BORDER-RIGHT-WIDTH: 0px; WIDTH: 100%; BORDER-BOTTOM-WIDTH: 0px; COLOR: #000000; CLEAR: both; MARGIN: 4px 0px; BORDER-TOP-WIDTH: 0px; BACKGROUND-COLOR: #000000" noshade="noshade">
</div>
</div>

<div><br>
</div>

<div style="FONT-SIZE: 11pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; FONT-WEIGHT: bold; TEXT-ALIGN: left">The Descartes Systems Group Inc.</div>

<div style="FONT-SIZE: 11pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; FONT-WEIGHT: bold; TEXT-ALIGN: left"><a name="_Toc396820873"><!--Anchor--></a><a name="_Toc427650879"><!--Anchor--></a>Condensed Consolidated Statements of Cash Flows</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; TEXT-ALIGN: left">(US dollars in thousands; US GAAP; Unaudited)</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana, sans-serif; FONT-VARIANT: small-caps; TEXT-ALIGN: left">
<hr style="BORDER-TOP: medium none; HEIGHT: 2px; BORDER-RIGHT: medium none; BORDER-BOTTOM: medium none; COLOR: #000000; TEXT-ALIGN: center; MARGIN-LEFT: auto; BORDER-LEFT: medium none; BACKGROUND-COLOR: #000000; MARGIN-RIGHT: auto" align="center" noshade="noshade">
</div>

<div>&#160;</div>

<div>
<table id="z6ced660f5ab4405e8b2d60470717c226" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="BORDER-TOP-COLOR: ; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="6">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">Three Months Ended</div>
</td>
<td style="BORDER-TOP: #000000 1px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">April 30,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">April 30,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; PADDING-BOTTOM: 1px; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">2017</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">OPERATING ACTIVITIES</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right" valign="bottom" colspan="2">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Net income</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">6,885</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">6,038</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Adjustments to reconcile net income to cash provided by operating activities:</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Depreciation</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">812</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">748</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Amortization of intangible assets</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">7,703</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">7,151</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Stock-based compensation expense (Note 16)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">515</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">397</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Other non-cash operating activities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">21</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(505</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Deferred tax expense</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">510</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">1,191</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Deferred tax charge</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">42</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">100</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">&#160;&#160;&#160;&#160;&#160;Changes in operating assets and liabilities:</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">&#160;&#160;&#160;Accounts receivable</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 27pt">&#160;&#160;&#160;Trade</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(909</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(876</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 27pt">&#160;&#160;&#160;Other</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(763</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">44</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">&#160;&#160;&#160;Prepaid expenses and other</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(570</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(65</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">&#160;&#160;&#160;Inventory</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(1</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(12</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">&#160;&#160;&#160;Accounts payable</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">1,197</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">443</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">&#160;&#160;&#160;Accrued liabilities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">730</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(723</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">&#160;&#160;&#160;Income taxes payable</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">517</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">892</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">&#160;&#160;&#160;Deferred revenue</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(221</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">1,064</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Cash provided by operating activities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">16,468</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">15,887</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">INVESTING ACTIVITIES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Purchase of marketable securities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">-</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(241</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Sale of marketable securities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">-</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">2,778</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Additions to property and equipment</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(786</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(1,272</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt; TEXT-INDENT: -4.5pt">Acquisition of subsidiaries, net of cash acquired (Note 3)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">-</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(10,372</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Cash used in investing activities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">(786</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(9,107</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">FINANCING ACTIVITIES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Proceeds from borrowing on the credit facility</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">-</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">10,801</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Payment of debt issuance costs</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">-</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(639</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt">Issuance of common shares for cash, net of issuance costs</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">462</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">(73</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">)</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Cash provided by financing activities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">462</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">10,089</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; TEXT-ALIGN: left">Effect of foreign exchange rate changes on cash</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">92</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">1,481</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Increase in cash</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">16,236</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">18,350</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Cash, beginning of period</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">38,135</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">37,213</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-TOP-COLOR: ; WIDTH: 76%; VERTICAL-ALIGN: top; BORDER-LEFT-COLOR: ; BORDER-BOTTOM-COLOR: ; BORDER-RIGHT-COLOR: " valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Cash, end of period</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif; FONT-WEIGHT: bold">54,371</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: Verdana, sans-serif">55,563</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px double; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
