Good morning and welcome to the quarterly results call. My name is Brandon and I will be your operator for today. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions]. Please note that this conference is being recorded. I will now turn it over to Scott Pagan. You may begin, sir.

Thanks and good morning everyone. Joining me on the call today is Ed Ryan, CEO and Allan Brett, CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Portions of today's call other than historical performance include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the Safe Harbor provisions of those laws. These forward-looking statements include statements related to Descartes' operating performance, financial results and condition, cash flow and use of cash, business outlook, baseline revenues, baseline operating expenses and baseline calibration, anticipated and potential revenue losses and gains, anticipated recognition and expensing of specific revenues and expenses, potential acquisitions and acquisition strategy, cost reduction and integration initiatives and other matters that may constitute forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Descartes to differ materially from the anticipated results, performance or achievements implied by such forward-looking statements. These factors are outlined in the press release and in the section entitled "certain factors that may affect future results" and documents filed and furnished with the SEC, the OSC and other securities commissions across Canada including our Management's Discussion and Analysis filed today. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. You 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, assumptions or circumstances on which any such statements is based, except as required by law. With that, let me turn the call over to Ed.

Thanks Scott. Good morning everyone and thanks for joining the call. We finished FY15 strong and just like we said at the beginning of the year, we will continue to execute on our long-term strategy for growing our business profitably through a combination of organic and inorganic activities and we are doing so by expanding the breadth of solutions available on our logistics technology platform. Our global logistics network continues to grow. We have a healthy, well calibrated business that has delivered record results despite some pretty strong foreign exchange headwinds that have been hurting a lot of other companies. So otherwise, welcome to the call. We genuinely appreciate the opportunity to update you on our business and give you some insight into what's coming up next. On the call, I will start by talking about highlights from the business for this past quarter and fiscal year. I will then hand it over to Allan who will talk through our financial results in more detail. And I will finish up the call by talking about our business calibration and some of the initiatives we see in front of us for FY16. So let's start by going over some financial highlights for the past quarter and fiscal year. We pride ourselves on operating a strong and consistent business regardless of the FX environment and focus on growing our adjusted EBITDA first and foremost. This year and quarter, we had record high adjusted EBITDA levels. Our adjusted EBITDA in the quarter and for the year grew by 17% to $52 million for the year and $13.9 million for the quarter. The volatile foreign exchange environment had a slight negative impact on our business but nothing major as we are pretty naturally hedged. Where we do see FX impact our business is in…

Thanks Ed. As Ed mentioned, I am going to take you through a few financial highlights. As previously mentioned, we had record quarterly revenues this quarter at $44.3 million, up 10% from $40.3 million in Q4 of last year. As Ed also mentioned, this revenue growth was achieved despite some significant continued negative foreign exchange movements against us, as a result of a stronger U.S. dollar compared to most other currencies during the fourth quarter. As a result of FX, our revenues declined by approximately $2.5 million this quarter when compared to the fourth quarter of last year. Excluding the impact of FX, revenues would have been 16% higher in the quarter compared to the fourth quarter last year. In addition, we should note that license revenues were down about $900,000 this quarter compared to the same quarter last year, which is consistent with our continued focus on recurring revenue in our business. Gross margin continued to be strong at 69% of revenue for the quarter, an increase from 68% of revenue in the same quarter last year. With continued revenue growth, strong cost control and leverage from our recent acquisitions, we also continued to see solid adjusted EBITDA growth of 17% to $13.9 million or 31.4% of revenue this quarter compared to $11.9 million or 30.5% of revenue in the same period last year. Similar to last quarter, while FX had a significant negative impact on revenues, the impact from FX on our adjusted EBITDA was approximately $100,000 negative impact for the fourth quarter when can compared to the same quarter last year. As we mentioned in the past, the Canadian dollar declining to the U.S. dollar, it actually has a positive impact to our adjusted EBITDA and this is offset by a negative impact from FX as a…

Great. Thanks Allan. All right. So let's start with calibration for Q1. Similar to previous quarters, we don't provide guidance but we use baseline calibration as a key metric relating to the ongoing health and strength of our business. While we typically provide calibration for the first day of the quarter or from the first day of the quarter, this quarter we will provide it to you as of February 25 to capture more recent exchange rates, because as Allan mentioned, FX trends have an impact on what we are expecting this quarter. So our calibration for Q1 assumes exchange rates of CAD 0.80, €1.13 to U.S. dollar and GBP 1.54 to U.S. dollar. As of February 25, 2015 for Q1, we had $42 million in visible recurring contracted revenues, otherwise our baseline revenues. Our baseline revenues previously had been positively impacted by a full quarter of Airclic and the addition of e-customs and Pentant. On the flip side, our baseline revenue calibration includes decrease in baseline revenues from FX when compared to the previous quarter. I just want to pause here to emphasize what Allan said on this. While there is a big impact on our revenues in Q4 from foreign exchange, that was based on FX rates that were higher than where the current FX rates are. It has been falling precipitously. So if current FX rates stay the same, then our recurring revenues are going to be impacted in Q1 by another $1.2 million and this is baked into our calibration. Recurring revenues continue to be our focus. As Allan mentioned, recurring revenues were up in Q4 and license revenues were down by $900,000. This is consistent with our desire to drive predictability into our business. At the same time, there is always customers out there that…

[Operator Instructions]. From Barclays, we have Phillip Huang on the line. Please go ahead.

Yes. Thanks. Good morning. First question is just to clarify on the margin side. You just mentioned that you see, for the foreseeable future, 28% to 30% range. Is that like your new official guidance for margin now? Because, despite acquisitions, you once again come in well above the 25% to 30%. So I just wanted to get your thought on that.

Yes. I mean, as I mentioned a minute ago, FX certainly had an impact on this, as the revenues come down, but the EBITDA is growing. That certainly impacts the margin. Otherwise, we bought a bunch of business that we continue to operate more and more efficiently every day. And as I have probably said to most of you in the past, our core network continues to get more and more profitable as the process more transactions. And if you combine all those things together, we have an improving margin. Look, we started seven or eight years ago saying 15% to 20%. Then we went 20% to 25%. Then we went 25% to 30%. Now we are starting to see it creep up now and bump up against that 30% mark. We also know that we could buy businesses that are less profitable than ours in the future. So we thought, maybe rather than adjusting it up to 4% or 5%, lets take an interim step here and have it 28% to 33%.

Got it. That's helpful. Another question on the M&A side. I know you mentioned that obviously you guys are not in a rush to get deals done, just to make sure that the deals are right and got right valuation, just wondering if you could give us an update on what you are seeing in terms of valuation expectations? And do you think that is it the right way to think about how you have recent acquisitions, obviously, the last three that you talked about just now? Could we actually see a potential pause until these acquisitions are fully integrated? Or is that even just the right way to think about it is that that integration isn't really a consideration in terms of when you get deals done, it's just a matter of finding the right deals at this point?

Yes. Thanks. No, we bought 26 or 27 companies in the last seven years. We have gotten very good at integrating companies. It was nothing talking about the particular companies we bought last year that's going to slow us down at all in terms of integration. So that's not a consideration for us, at least the moment when we buy someone new. No, I am not expecting just a pause or anything like that. We are at full steam ahead. Now at same time, the acquisitions when they come, right. We negotiate with people. We don't buy something until we think we have a business that we want and that our customers want and we get a good price on and we can make our money back for our shareholders and in relatively short future. So there is always that consideration when we get a deal done. I guess your first point was about valuation. I mean you can see, there is lot of technology companies. Some of the guys that we might be compared against that we deal up in the last couple of quarters for whatever reason that usually takes a little while to flow into the private business market. I don't know that I have seen that yet, but we are certainly looking at it when we hear people talking what we perceive to be crazy numbers or metrics when they come to us talk about the revenue multiples. And we think, well that's not why we are buying something. So we continue to remain prudent about that and we will get deals done with the people that want to sell their company for a fair price. And the people that want someone to overpay for it, they are going to sell it to somebody else.

Right and then finally a question on the expansion of your content folio. It certainly has been a catalyst for increased partnership and you certainly have a headwind there, given roughly 5% of your revenue is from that. I was wondering if you could provide an update on the progress on extending your partnership pipeline as well as whether so far what are you seeing the addition content to your GLN has increased the stickiness and pricing power for your GLN.

Well, certainly that whole Customs Info acquisition and adding trade content to our network, we obviously see more opportunities to add other types of trade content to our network. But their partner ecosystem was very similar to ours. They made very strong relationship with people and it certainly helped us establish bigger relationships with the SAPs and Oracles and NetSuites and Infors of the world and we continue to get more traction there. A couple of years ago, you probably heard me say on some calls that it was more talk than action. It is starting to become more action than talk now. And I think that's great news for us and for our customers and we are excited about it. What we have done is, as we have gotten bigger and we have gotten bigger relationships with other big software providers that we partner with, software and let's say hardware providers as well. We got a lot of requests for partnerships and our partnership guys are now in a position where they are going, let's focus our efforts on the big guys where there is big opportunity for us and we will be real selective with who we partner in terms of smaller companies. Just because we think that's the best way for us to monetize what we have, doing something with SAP or Oracle are Infor, whatever is a great way to get access to a lot of companies and potential customers for our solutions. If we are doing that same thing with a $10 million company, the potential for that partnership is just not nearly as great. So we are a lot more cautious these days and as we add more people to our partnership teams, we are spending all of our effort on these big guys and we believe that's the best way to build our business.

Got it. Thanks very much.

Thank you, Phil. Talk to you soon.

From Morgan Stanley, we have Brian Essex on the line. Please go ahead.

Good morning and thanks for taking my questions.

Hi. A very good morning.

I was wondering if you could just touch on the M&A deals that you have done in the past year or so, particularly Customs Info and then the work that you have done in omni-channel retailing? And it seems as though you guys are, on a positive side, you are extremely consistent performers. I think there's a great quarter that illustrates the durability of the business. But I am wondering, if you look into what you have done in the past year and then what you have done in the pipeline, is there anything that's transformational that could accelerate some of the topline revenue growth or profitability? Some of these deals seem as though they could be pretty dynamic and I guess I am just trying to think about how, if I take a step back and I think about how you fold these into your install base of customers? Are there any that could accelerate adoption of your customer base and really boost either revenue growth or profitability?

Yes, sure. I mean I guess the biggest one that I see out there that's going to potentially create a sea of change in our businesses is this move towards export filings. And I mentioned a few minutes ago in the prepared remarks, the world has started to roll out import filings and you have seen what that's done to our business. That market was 0% of our business in 2003 and now it's 30% of our business and the company has tripled in size since then. That's just doing imports. Now all of these countries have said, we are going to do exports too and that's just getting underway and I go, that's it, I don't know about in the next year, but in the next several years, that's a big opportunity for our company. There is others, this omni-channel retailing thing is, I think, just starting, where you have every major retailer out there going, I have got to be just as good at delivering on my web store as I am on my retail store, if I am going to beat the Amazons and Googles of world. And you can see a bunch of big retailers out there that are starting to get a lot of traction in that environment and when they do that and they need to deliver a washing machine or a TV or whatever, they need to have a good home delivery solution that matches the experience you get on Amazon and maybe even beats it. They do have an opportunity to beat it because they already have a lot of trucks and have an installed network setup and you know they have the tech guys that can go out and turn that TV on or connect that washing machine up. The opportunity…

Got it and on that front, on a logistics and delivery side, is there a way to think about how you might fit in with others in that space that look at this space a little bit differently, maybe not from a large enterprise side but more from the smaller truck service side? Is there any overlap there? Or do you see those markets as completely separate? I guess I am really talking about like a TomToms or a Fleetmatics that may go for these smaller fleet sizes, but are starting to penetrate up-market a little bit?

Our bread and butter is in the big guys, guys who have 500 to 1,000, 2,000, 4,000, 6,000trucks. They have big complicated problems. If you look at our routing solutions compared to our competitors, we handle the most sophisticated problems that customers in this environment have and that's our bread and butter. And fortunately for us, that's a hot market right now. If you think of the Fleetmatics, whatever and the guys like them that are primarily focused on telematics solutions, by the way, not really routing and scheduling. They are going after electricians and plumbers and don't get me wrong, its a great market. There's lots of them but it's probably not the next place we are going to go because if you think of our advantage, it's because we have this great routing solution, this great mobile solution and a commodity telematics tool. And we have a big advantage when we are selling to some guy with 3,000 trucks. That advantage goes away when we are selling to some guy with 30. It's also expensive to sell it to a guy with 30 in a model that we are accustomed to selling. So I just look at it and go, I am sure we will drip down, but we are going to try and stay on our market because it's growing quickly. And the big guys have lots of money to solve big problems and that's what we are best at.

Great. Thank you.

Thank you Brian.

From William Blair, we have Bhavan Suri on the line. Please go ahead.

Hi guys. Can you hear me okay?

I can hear you fine. How are you?

Good. Hopefully you are going to carry on Art's gold sunglasses tradition at the user conference there, Ed.

Well, yes, normally I am used to being the one at an airport, not the other guy in the line.

That's right. Anyway, a couple of quick near-term questions and then a couple of more strategic ones. So the first, have you guys seen any impact from the port closings on the West Coast at all?

Minor. Yes, there's some, but I usually watch these port shutdown go on now for 25 years. What happens is, ships get stuck outside the port and as soon as they land, they drop off a whole bunch containers. It's a temporary blip. I think it's largely over now. I think the U.S. government has stepped in and largely fixed that problem. So we didn't see it, nothing worth talking about on our network.

Okay. Great. And then just turning to a couple more strategic questions. You have added a lot of content and this was touched on a little bit. But now you have the ability to optimize routing so you can, instead of just saying, hey, I am going to do the messaging, advance shipment notification, et cetera, you have some of the data that allows you to say, here's the optimal route. And as you think about sort of exploring the opportunities of selling that information and selling applications, maybe analytical or optimization around it, does that bring you into conflict with some of your 3PL customers who use you for messaging who are in the network but actually think they have something unique around that routing selection process?

I don't think they are going to beat us at routing and I don't think I am going to beat them at being a 3PL. I very clearly state that to them. I have no intention of being a 3PL. We are very cautious when we look at things. We look into opportunities about getting in between us and our customers or our customers and their customers. So no, I don't see us doing that. It's just the opposite. I feel like those are the guys with the most to gain from using our technology. When we think of the concept of, you hear people talk about this, but it's probably a pipe dream right now, but you hear about the discussion of Uber for transport, right, the concept of Uber, more than the actual company. When we talk about that, I go, geez, we have a lot technology that can help our customers all have an Uber like service for a much more complicated process of managing international shipments, which is a lot more complex than when we are in a cab. And we can give them tools that will help them make much better decisions and bring this technology to their customer base. And I think that's where we are headed. If I could put some Android app, with the addition of Airclic, we have all this ability to build our mobile applications for people, if I can put some Android based application in every truck driver's hand that let's the carrier say to them, go type in your pro bo [ph] number or your bill lading number and picked up the shipment in this free app that you download from Descartes on the Android web store and they can just tell us when they picked up a load and when they dropped it off. We have made a big, big change for our customers with something that's fairly simple for us, fairly inexpensive for them and gives them a whole bunch of information that they didn't have before so that they can better service their customers. And that's the kind of move I think you will see us making, is not so much saying, oh I am going to build an Uber like transportation management system that's going to dis-intermediate all these guys. It's just the opposite. I believe there is plenty of companies out there that are taking that approach. But we are just the opposite. We are going, let us bring that technology to all of our customers. It's kind of the provider that lets them white label that solution so that they can do that for their customers, which is how we think the world is going to work. I don't think there is going to be one company that's going to come in and put all the 3PLs in the world out of business and we are on the 3PL side.

Got it and then you touched on omni-channel a little bit and it's amazing if you were asked in 1999, if omni-channel would still be early-stage opportunity in 2015, we would have laughed at each other, but retailers investing [indiscernible].

Bhavan, we are losing audio.

I am sorry. Can you hear me okay?

I can hear you now, yes. Go ahead. But I missed the first part of your question. Did we lose you? All right. Operator, if we could just go on to the next one, maybe we will catch up with Bhavan in a minute.

Sure. From Raymond James, we have Steven Li on the line. Please go ahead.

Hi. Thanks. Ed, your comment about all your current customs and compliance business focus on imports today. Does that mean you could double your compliance business over, say, the next five years as ACE is implemented for exports?

I don't know exactly what it's going to be double, but there as many export shipments in the world as there are imports, by definition, right. Every import is an exports, every export is an import. I don't know what's going to happen in the next five years but I know the same that happened in imports back in 2004, 2005, 2006 is starting to happen in exports right now. And I think it's going to be a significant change in our business in the coming years.

Good. So the scope of ACE is going to be, for exports it's going to be pretty similar to imports?

Yes. It will be exactly the same. It will air, ocean, truck. There may do an air and ocean first because that's probably the most important piece, but just like ACE for imports seven, eight years ago, they started with air. They started with ocean actually, then went to air, then went truck. The rumor is right now they are going to air and ocean first and then go to truck, but I see it going similar enough. The good news for us is, every time any government's really announced one of these initiatives, they may delay it, they may take longer than they say they were going up front, whatever, but they always go through with it and yes, you are right. I don't know the timeframe but every import that on our network right now is also an export from some other country and those countries go and put regulations in place to require export filings as well, I think we are going to have a big opportunity in front of us.

Great and Ed, on that note, can you also give us an update on the timeline for ACAS? I think it's been in pilot for almost a year now.

It remains in pilot. That's good. The good news for us is we are able to go out and commit some more and more freight forwarders. As the government, because there was a big change in there, the pilot used to be five guys. Couple of those five guys were our customers. But six months ago they opened it up to a lot more people. Basically anyone that wanted to join. Over that period of time, we have a lot of customers who have realized that this isn't just a government requirement. They would actually have a benefit to their business if they did it and we are going in and arguing, hey guys, you are already me half balls of lading, those half bill of ladings are ACAS filings. I just got to change the data around a little bit and if you make that filing, you can get a free clearing from customs earlier than you might have if you relied on the carrier to handle this. And a lot of these freight forwarder are starting to buy into that. It takes them a little time to get ready on their own side to get ready to send us the information we need to make the filing and to receive back the information, make use of the information we give them back in response from the government, but a lot of the bigger guys now, independent of whether the U.S. government is still in pilot or its mandatory, are decided to it on their own, which is great. They haven't announced the final date yet for, let's say fines, to start if you don't do it.

Okay. Great. Thanks, Ed.

Thank you.

From GMP Securities, we have Michael Urlacher online. Please go ahead.

Thank you. Maybe I will allow you to follow up on the earlier question about omni-channel. And I guess if we look at it this way, I saw this as a boom for your business maybe 18 months ago. You were winning good accounts like John Lewis and Home Depot and Sleepy's. So I am a little bit surprised that it still seems to be early stages. Maybe if you could describe, Ed, what types of customers are now coming to you for this as opposed to a year-and-a-half ago, that would be helpful?

Well, it's just more name-brand retailers. There were a bunch talking to us back then but we see more and more bigger names, I shouldn't probably get into mentioning the names, that we are selling to right now. But our traction is as big as ever in that space and I see it continuing for some time because I don't see all the retailers doing it. I stay within United States, I order stuff for home delivery all the time and every time I do, the driver gets a full interrogation from me about how his process works and I listen to it and I go oh, that's like another lead for us, because this process isn't quite as smooth as I think we could make it. With the addition of Airclic, we bring a whole other set of capabilities to the table to help solve that problem and that's the handheld the driver puts, communicates back and forth with his company and I see really probably less than 10% of the retailers having bonded so far and I see that going on for sometime, as more and more retailers decide they have to do that.

Okay and would you say that the prospective customers all recognize a sense of urgency and a need to expedite this?

Let's say, we have got several leads on December 24 this year.

That's fantastic. Okay. Thanks. I appreciate the continuing strength of the business. It's all fairly straightforward. So I don't have any further questions. Thank you.

Great. Thanks, Mike.

From Canaccord, we have Richard Davis online. Please go ahead.

Hi, Ed. It's DJ. How are you?

Hi, DJ. How are you doing?

Good. So first, maybe on the export filings side. In terms of productizing that, is what you guys have in place on the import side largely transferable to exports? What needs to happen in terms of the product to capture that opportunity?

We built the product for U.S. export filings. We have done or handled export manifest filings for 10 years now, but in a way where it wasn't mandatory to do it in a system like ours, the government set up things for shippers to do it themselves. Now the carriers and freight forwarders are being told they are going to have to do the same thing. We made some modifications to that system and are preparing for the final ruling to make sure that we are capable of doing it. But I don't think the product is going to be a problem for us. For us, it's going after our customers and everybody who does import filings with us and everybody that processes bills of ladings on our network and getting them to do this with us. It's also going in fining. As with every new initiative, you are fining the carriers that previously decided to do this by themselves and you are saying to them now that there is this new initiative, are you sure you want to keep doing that? How many more countries are you going to do yourself before you realize this is not the right way to do it? And that someone like Descartes can do it better, faster and cheaper than you can do it for yourself. So that where our focus is right now. That and watching for a final ruling to come out. We need what's called a CFR posting from the government, which is basically the final rule on how export manifests are working. Right now, we are just working on advice from CBP about what things can happen. There are obviously heavily involved in writing the rule but they can't tell us what the final rule is going to say until it is published, which we expect some time in June or something like that.

And assuming that timeline sticks, is it something that you would expect initial buy-in from existing customers to happen pretty quickly? You guys have already proven that you can really help them on the import side. I would imagine they would say, you would be the natural vendor of choice on the export side. Could the adoption curve be steeper? Is that the right way to think about it, at least within your existing base?

I think once they are told, it's required, it will be steep. The issue for us is what they are going to be told right now as there is going to be a pilot. I don't know how long that pilot is going to be yet. I have heard anywhere from, on the long end two years, which sounds a little odd to me because I have never heard one be that long. It is usually more like six months or a year. And that's probably more of what I am expecting. What remains to be seen is, it's funny, we were just talking about this in the last couple of weeks internally, is just like I mentioned with the ACAS before, what are the advantages that the carrier will get from doing this right away. Hey, the government told you, you are going to have to do something later, but that you can start doing it right now. Are there business advantages to them doing it right now? We are looking at that at the moment so that the date that the pilot gets announced, we can go to some of our bigger customers and say, let's get started now instead of later because you are going to have to do it anyway and there is a business advantage to doing it now. So we are thinking about these types of things right now.

Yes. That makes sense. And then maybe on the M&A side, that was a good recap of what you guys accomplished this year. I am just curious. We saw one of your smaller logistics competitors acquire their way more into the supply chain planning and sourcing side of the world earlier this week. I am curious about your appetite in this space? Is it something that customers ask for? Is it logical that they would source that type of technology from their logistics vendor? Are there assets out there that would meet your M&A criteria? Any thoughts on expansion in that direction would be helpful.

I think we looked at the deal you are talking about and obviously passed. So that may be our best answer to it. That space in general and certainly supply chain's a big area for us and I don't if that was the type of company we thought we should get and the multiples involved and it certainly were outside of our bounds of what we want. So we look at supply chain companies all the time now and if we found the right one, we are interested, of course.

Yes. Got it. Okay. Thanks for the color.

From Scotia Capital, we have Paul Steep on the line. Please go ahead.

Great. Thanks. Ed, maybe just a couple of quick clarifications, one on Customs Info. Can you maybe talk about what you have seen so far now, you are not quite a year in, but in terms of customers adopting some of those products or starting to get your team to push it across the board there? And then a quick follow-up.

Customs Info, as I mentioned in the prepared comments, we are combining that with transactional side of our network to try and bring more advantages to our customers that are processing shipments on our network and need access to that tariff and duty information to help them make a better decision. I think you will see us continue to do more of that. In that specific business, one of the drivers in it lately has been a whole bunch of e-commerce companies. The Amazon like companies that are now saying, I need to do this as well. We do business with a lot of the big e-commerce retailers in that side where they want transactional rating or tariff and duty rating of particular shipments and that's been a big growth driver in that business and now we are seeing all the Amazon like companies come to us as well, right. It's smaller, maybe names you have heard of but not quite the name-brand that Amazon and Google are, come to us and say, I want to do the same thing. That's been a big opportunity for us there and then obviously the stuff that SAP and Oracle bring to the table, because they are bringing us leads for big retailers and manufacturers that want to do this. It's been good. And then also there is off-customs brokers and freight forwarders, who Customs Info didn't really focus on all that much, prior to the acquisition and we know all of them. We do business with all of them and now our sales reps are running around those guys saying, hey, how can we set up a relationship where I provide this information to you so you can better service your customers. And I think that's going pretty well.

Great. And then the one thing that's popping to mind here, I guess on the customs side, you mentioned an existing export business today. What's the size the size of that today in terms of usage base? And then a follow-up on that would be, since you have built some of the product in-house, is there a willingness or an eagerness to maybe consolidate since there are a number of other solutions around that area? Or is it you will work with your own solution and build from there? Thanks.

Thanks, Paul. No one's really in that export space yet because no government has told a carrier they have to do it yet. I can probably guess that we will have a few competitors there, but I like our chances coming out of the gate because we have the lion's share of the customers that do this globally. Will there be more opportunities for consolidation there? We will see. I don't know who is going to emerge in that space yet. It's probably little early days to be thinking too much about or talking too much about it. But yes, if there are other players there that emerge in certain countries that are real players in it, we will always take a look at businesses like that. People that process transactions for a living around logistics and supply chain are ideal acquisition targets for us. So we would always look at that.

Perfect. Thanks guys.

Thanks, Paul.

From CIBC, we have Stephanie Price on the line. Please go ahead.

Hi guys.

Hi Stephanie. How are you doing?

Good. You mentioned earlier to Paul's question around some cross-selling of Customs Info information. Could you just go into a little bit more detail about the cross-selling opportunities you see with some of these acquired businesses and what the biggest opportunities here are?

There are cross-selling opportunities on almost every deal we do. It's usually one of the drivers for the acquisition. It can range from, let's just go over some of the more recent ones, because they exist in almost every deal that we do. E-customs and Pentant, that's U.K. customs filing. They were stuck in the U.K. market. They only sold to people in the U.K. There are lots of people that aren't headquartered in the U.K. that need to do filings in the U.K. We know a lot of those people. And so when we buy something like Pentant, we run around all of our customers and say hey, I can now do U.K. customs filing. Would you like to do it with me? And a lot of the time it makes more sense to do it with us in the long run because they already do so much other stuff with us. Now it always takes them a little bit time to switch, right. No one likes to switch their customs filing provider, but there has to be a good reason, but we think an acquisitions like that can be a good reason and we are driving into that market. Take stuff that's a little different like the Airclic acquisition. We had this great routing solutions prior to Airclic and run-of-the-mill mobile solution. All of a sudden we buy Airclic and we have a highly customizable mobile solution that can really do almost anything that driver needs to do at the jobsite, which is a big improvement over what we had before. So we buy e-customs, we buy Airclic and we start going to their sales guys, hey, which of your customers needs routing and it's pretty much everyone of them. It doesn't mean they buy it on day one, but it certainly gives us a lot to talk to them about. And just the opposite, we look at our customer base and we go, I know they all need mobile, let's start going around our customers and saying, hey, remember that mobile solution you asked before and you had to settle for my run-of-the-mill mobile solution. I have one that's highly customizable now. It can meet all the requirements you had a couple of years ago when you first started talking to us about that. What if in the next year or two, you switched over to our mobile tools and a lot of them like that idea, because it's a big advantage to that customer to do mobile and routing with the same guy and as the premier provider in that routing space and now the premier provider in that mobile space for complex delivery situations, we like what that's brought to the table.

Okay. Great. And then on acquisitions, can you talk a bit about high-priority areas here? Is it customs or is it omni-channel? Where's the high-priority areas at this point?

It's probably customs or any type of network transaction businesses is always high on our list. The TMS phase, which is also a transaction environment, we see a lot of opportunity there and obviously we have mentioned now for the last couple of quarters, content, content, content. We see a big opportunity to add more and more content to our network and take advantage of all the people that are already on it to bring a better business benefit by bringing them more information, much like Bloomberg does so they can make better decisions on our network and a lot of it also depends on who is for sale and how much are they willing to sell for and things like that. So we are probably more mindful of those things. We keep the concepts that we just talked about in mind as we are looking for people, but then we have got a go see who is for sale and can we get a deal done with them and we look at each opportunity on its own merits at that point.

Okay. Great. And then, Allan, just one for you, on the tax rate for 2015. Should it be similar to 2014?

Yes. We came in at 30% last, in 2015 best guess 30% for next year, a percent or two either side of that is our thoughts.

Okay. Perfect. Thanks.

Okay.

Thank you, Stephanie.

From TD Securities, we have Doug Taylor online. Please go ahead.

Thanks for squeezing me in. First question for me, I mean given all the acquisitions and the currency machinations over the last year, maybe could you provide your view on what the organic growth was in the last quarter and maybe year?

I don't know if we break that out specifically. We talk growth in EBITDA and I think it was 17% for the year and 17% for the quarter. That's the number we focus on. We had organic growth in the quarter and in the year, rather it was significant, but that's the only way we look at it, right. We don't have a lot of people ask us that question. They are focused on revenue and we keep driving home, we are focused on growing our earnings and this quarter was probably the best example of why you should focus on that versus revenue because the revenue is significantly impacted with foreign exchange, especially in a business like ours, that is your by its nature more global than most businesses our size. The FX rates are always going up and down and different things are always happening in parts of the world. Well, we look at it and say, that shouldn't impact our ability to make money and make more money every quarter. And so when we think about growth, we think about growth in EBITDA. That was 17% for the last year with again probably a 50-50 mix, as is been consistent for the last several years, 50-50 mix of organic growth and acquisition growth.

Okay. Building on Stephanie's question, Airclic did about $2.7 million, if I am reading correctly, in revenue, which is a bit higher than you would put in your calibration. Does that reflect some early success with cross-selling that into your install base?

We are selling into our install base right now. I don't know that that happened that quickly but we see a lot of that potentially happen in the future. We were certainly conservative when we are looking at the Airclic business when bought it. We were looking and saying, they had some customers that we knew were go away eventually, because they had some legacy applications that just weren't going to last forever and we are trying to convince those customers to buy new stuff from us. But we knew that was going to be a tough haul. As a result, we were very quick, as I mentioned in the last call, about getting the cost in line in that company in trying to make it as profitable as we could right out of the gate so that if those things do happen in the future that we are prepared for it and we still make good money for our shareholders on the acquisition so we can pay it off quickly. Airclic did pretty well this past quarter. So it did as well as we would have expected it to do, maybe even a little better. So that's been good.

Fair enough. Last question from me for Allan, maybe. You guys have increased your bands for EBITDA margins. Is your gross margin structurally higher here with the increased scale that you have? What do you think for gross margin for the coming year?

We have seen increase, obviously this year in 2015 to 69%. Everything about our business is performing as we would expect and we see it stay at those kind of levels. The increased EBITDA bands, the 28% to 33%, is obviously heavily influenced by that revenue decrease that we are experiencing from FX, but everything about our business is performing as we expect. We see gross margin continue in that kind of range.

Thank you very much. I will pass the line.

Thank you, Doug.

From Cantor Fitzgerald, we have Ralph Garcea on the line. Please go ahead.

Hi guys.

Hi Ralph. How are you doing?

Not too bad. Just two quick questions. You guys have been disciplined buyers over the last nine years. You have walked away from several public company targets that you were looking at because of valuation. There is a lot of $50 million to $100 million revenue public guys out there. Would you rather just sort of cherry-pick there 1,000-plus truck customers versus overpaying? How do you value? Or how do you make that decision to walk away?

If that's the choice we are given, yes. When we see someone out there that's overpriced, I go lots of moment in time and I look at some of these businesses and we see the deals you are talking about and we look at them all and if they want to sell for a reasonable price and one where we think we can have a fair deal for them and a fair deal for us and a good deal for the customer and a good deal for the employees and get our money back for our shareholders over time, we are interested and we will make a fair bid. If someone wants to overpay for them and they want to do that right now and that company happens to be a private equity firm, I go, well that makes no sense to me, but if that's what they are going to do, that's fine. If all of our competitors were owned by private equity firms, I would be laughing. They cut the development, they cut the sales force and that usually ends up being a net benefit from us and the good news for us is, they are usually for sale a couple of years later. And so it's like the game is not over when a private equity firm buys them. And in the meantime, I get to compete against an owner who is just focused on his profits much more than he is focused on success of the customer and we are focused on both. And so we will pass at that point if that's the way it's going to go. Now, I also believe that in the long run that most of these companies, there will be a day when they are for sale for a reasonable price and when they are, we are interested.

And even in some of those bigger customers, you are probably getting pulled in there either by SAP or Oracle or NetSuite or Infor. Of those four, of the bigger ERP guys, where are you seeing the most traction? Sounds like you have been successful with Infor lately, but where are you seeing the partner pull?

SAP and Oracle are a lot bigger than Infor. So they drag more opportunities our way. But you are right, we have had a lot of luck in the last year with Infor and a lot of success with customers of their, especially over in Europe. SAP is probably the guy we have been dealing with the longest and so we have a lot going with them. They are the biggest relationship we have. They drive the most revenue of those three or four guys. But Oracle is catching up extremely quickly. If I look at the rates of the Oracle businesses, it is going much faster than any of the others.

Okay and then just lastly, on IATA, they came out Tuesday. U.K. data for January was up 3.2% year-over-year. They are talking about some macro headwinds out of Europe and China. Are you seeing any slowdown on the cargo side in your network?

I mean nothing that differs significantly from what we have seen over the last year. Europe is slow, because their economy is sluggish right now. Asia is not doing bad. Exports from Asia is driven by demand from North America. It's going okay. But I saw the IATA report too and I thought yes, it kind of feels that way to me too. It's not a big change.

Okay. Thank you.

Thank you, Ralph.

From BMO Capital Markets, we have Thanous Moshopolis. Please go ahead.

Hi. Good morning. Just another quick question about calibration. You guys mentioned that the calibration this time is as of one month into the quarter rather than at the end of the prior quarter. So just to be clear, does that mean that the margin by which you are likely to exceed that, will that be maybe a little less than typical, because we are one month in? Or is that not the case?

Sorry. The calibration, we did this last quarter too, because we bought some companies in the middle and wanted to give people an accurate reflection of what the calibration was. That's not to say that you are only seeing two quarters worth in there. It's still for a full quarter. It's just calculated on that day versus the first day of the quarter. And in this case, last quarter was done because we did a couple of acquisitions and we wanted to accurately reflect that in the calibration we were giving you since they were done already. In this case, with the FX dropping precipitously in Euro and the Canadian dollar, we thought, well, if I give it to you on February 1, it's not really going to be an accurate reflection of where things are now. So we gave it to you as of February 25, just to say that had the most recent FX rates in it. Nothing more. Not to express how much revenue is in that quarter based on the day, more just to express the FX change associated with it.

Got it. Thanks for clarifying that. And then Ed, you mentioned Asia' has been holding up okay. Maybe update us in terms of what you are seeing with your partners in that area?

Well, we continue to have some traction there. As you saw, in the last year, we got a number of good deals in Japanese and Chinese markets from partners. We saw it down in Australia. It continues to do very well and bring more deals to the table. And as our companies gets bigger and we buy more companies with more opportunities overseas, we start to pick up more and more from the Asian market. Still though we are largely, in terms of where our customers are headquartered, they are still largely North America and Europe. In terms where the shipments are on our network, it's still roughly a third, a third, a third, Asia, Europe, North America. And I suspect that will continue. If we ended up buying something over there, if we see something we like over there in Asia, that can start to change one day, but that's the way it works today.

Great. Thanks. I will pass the line.

Thank you, Thanous.

No further questions at this time. We will now turn it back to Scott Pagan for closing remarks.

Thanks everyone. We look forward to reporting back to you next quarter.