WATERLOO, ON, Oct. 27 /PRNewswire-FirstCall/ -- Open Text(TM)
Corporation (NASDAQ:OTEX) (TSX:OTC), a leading provider of
Enterprise Content Management (ECM) software, today announced
unaudited financial results for its first quarter ended September
30, 2009.(1) Total revenue for the first quarter was $211.4
million, up 16% compared to $182.6 million for the same period in
the prior fiscal year. License revenue in the first quarter was
$47.3 million, down 6% compared to $50.1 million in the first
quarter of the prior fiscal year. Adjusted net income in the
quarter was $32.8 million or $0.58 per share on a diluted basis, up
16% compared to $28.2 million or $0.53 per share on a diluted basis
for the same period in the prior fiscal year. Net income in
accordance with U.S. generally accepted accounting principles ("US
GAAP") was $1.7 million or $0.03 per share on a diluted basis,
compared to $14.7 million or $0.28 per share on a diluted basis for
the same period in the prior fiscal year.(2) The cash and cash
equivalents balance as of September 30, 2009 was $212.2 million.
Accounts receivable as of September 30, 2009, totaled $135.6
million, compared to $108.3 million as of September 30, 2008, and
Days Sales Outstanding (DSO) was 58 days in the first quarter of
fiscal 2010, compared to 53 days in the first quarter of fiscal
2009. "We met our profit and revenue goals in what has seasonally
been our toughest quarter. License revenue fell short of our
expectations, mainly due to deferred purchase decisions for our Web
Content Management (WCM) products," said John Shackleton, President
and Chief Executive Officer of Open Text. "We are seeing a
continued demand for compliance solutions, as well as companies
laying the groundwork for ECM 2.0 solutions. In the current
economic environment we remain committed to meeting our annual
profitability targets, while focusing on capturing market share by
leveraging our strategic partnerships." Please see note (2) below
for a reconciliation of non-US GAAP based financial measures used
in this press release, to US GAAP based financial measures. Open
Text Renews Normal Course Issuer Bid The Company also announced its
intention to renew its Normal Course Issuer Bid (the "Bid") through
the facilities of the NASDAQ Global Select Market ("NASDAQ").
Purchases over the NASDAQ could commence in November, 2009 if
desirable. As of October 26, 2009, Open Text had 56,380,735 issued
and outstanding common shares. The Bid will expire one year from
the commencement date. The maximum number of shares that may be
purchased is calculated as 5% of the outstanding common shares of
Open Text at the beginning of the Bid. Teleconference Call Open
Text will host a conference call on October 27, 2009 at 5:00 p.m.
ET to discuss the final financial results of its first quarter.
Date: Tuesday, October 27, 2009 Time: 5:00 p.m. ET/2:00 p.m. PT
Length: 60 minutes Where: 800-814-4861 Please dial-in approximately
10 minutes before the teleconference is scheduled to begin. A
replay of the call will be available beginning October 27, 2009 at
7:00 p.m. ET through 11:59 p.m. on November 10, 2009 and can be
accessed by dialing 416-640-1917 and using pass code 4169327
followed by the number sign. For more information or to listen to
the call via Web cast, please use the following link:
http://www.opentext.com/events/wa-event.html?id=7735475.
Supplemental materials regarding new accounting rules - Topic 805:
Business Combinations - which will be discussed on the call are
available for download on the Investor Relations section of the
Open Text web site at:
http://mimage.opentext.com/alt_content/binary/ot/investor/2010/fy2010q1.pdf.
About Open Text Open Text(TM) is the world's largest independent
provider of Enterprise Content Management software. The company's
solutions manage information for all types of business, compliance
and industry requirements in large companies, government agencies
and professional service firms. Open Text supports approximately
46,000 customers in 114 countries and 12 languages. For more
information about Open Text, visit http://www.opentext.com/. Safe
Harbor Statement under the Private Securities Litigation Reform Act
of 1995 This press release contains forward-looking statements,
including statements about the financial conditions, and results of
operations and earnings for Open Text Corporation ("Open Text" or
"the Company"). Forward-looking statements in this press release
are not promises or guarantees of future performance and are
subject to risks and uncertainties that could cause the Company's
actual results to differ materially from those anticipated. The
Company cautions not to place undue reliance upon any such
forward-looking statements, which speak only as of the date made.
The results included in this press release are unaudited and
therefore are deemed to be forward-looking statements. Factors that
may cause actual results or earnings to differ materially from such
forward-looking statements include, among others, the following:
(i) the future performance, financial and otherwise, of Open Text;
(ii) the ability of Open Text to bring new products to market and
to increase sales; (iii) the strength of the Company's product
development pipeline; (iv) the Company's growth and profitability
prospects; (v) the estimated size and growth prospects of the ECM
market; (vi) the Company's competitive position in the ECM market
and its ability to take advantage of future opportunities in this
market; (vii) the benefits of the Company's products to be realized
by customers; and (viii) the demand for the Company's product and
the extent of deployment of the company's products in the ECM
marketplace. Forward-looking statements may also include, without
limitation, any statement relating to future events, conditions or
circumstances. The risks and uncertainties that may affect
forward-looking statements include, but are not limited to: (i)
integration of acquisitions and related restructuring efforts,
including the quantum of restructuring charges and the timing
thereof; (ii) the possibility that the Company may be unable to
meet its future reporting requirements under the Securities
Exchange Act of 1934, as amended, and the rules promulgated
thereunder; (iii) the risks associated with bringing new products
to market; (iv) fluctuations in currency exchange rates; (v) delays
in the purchasing decisions of the Company's customers; (vi) the
competition the Company faces in its industry and/or marketplace;
(vii) the possibility of technical, logistical or planning issues
in connection with the deployment of the Company's products or
services; (viii) the continuous commitment of the Company's
customers; (ix) demand for the Company's products; and (10) other
risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission (SEC), including the Company's
Annual Report on Form 10-K for the year ended June 30, 2009.
Forward-looking statements are based on management's beliefs and
opinions at the time the statements are made, and the Company does
not undertake any obligation to update forward-looking statements
should circumstances or management's beliefs or opinions change.
Notes (1) Based on comparison of historical revenue figures
publicly disseminated by companies in the Enterprise Content
Management ("ECM") sector. All dollar amounts in this press release
are in US Dollars unless otherwise indicated. (2) Use of US
Non-GAAP financial measures In addition to reporting financial
results in accordance with US GAAP, the Company provides certain
non-US GAAP financial measures that are not in accordance with US
GAAP. These non-US GAAP financial measures have certain limitations
in that they do not have a standardized meaning and thus the
Company's definition may be different from similar non-US GAAP
financial measures used by other companies and/or analysts and may
differ from period to period. Thus it may be more difficult to
compare the Company's financial performance to that of other
companies. However, the Company's management compensates for these
limitations by providing the relevant disclosure of the items
excluded in the calculation of adjusted net income and adjusted EPS
both in its reconciliation to the US GAAP financial measures of net
income and EPS and its consolidated financial statements, all of
which should be considered when evaluating the Company's results.
The Company uses the financial measures adjusted EPS and adjusted
net income to supplement the information provided in its
consolidated financial statements, which are presented in
accordance with US GAAP. The presentation of adjusted net income
and adjusted EPS is not meant to be a substitute for net income or
net income per share presented in accordance with US GAAP, but
rather should be evaluated in conjunction with and as a supplement
to such US GAAP measures. Open Text strongly encourages investors
to review its financial information in its entirety and not to rely
on a single financial measure. The Company therefore believes that
despite these limitations, it is appropriate to supplement the
disclosure of the US GAAP measures with certain non-US GAAP
measures for the reasons set forth below. Adjusted net income and
adjusted EPS are calculated as net income or net income per share
on a diluted basis, excluding, where applicable, the amortization
of acquired intangible assets, other income (expense), share-based
compensation, and restructuring, all net of tax. The Company's
management believes that the presentation of adjusted net income
and adjusted EPS provides useful information to investors because
it excludes non-operational charges. The use of the term
"non-operational charge" is defined by the Company as those that do
not impact operating decisions taken by the Company's management
and is based upon the way the Company's management evaluates the
performance of the Company's business for use in the Company's
internal reports. In the course of such evaluation and for the
purpose of making operating decisions, the Company's management
excludes certain items from its analysis, such as amortization of
acquired intangibles, restructuring costs, share-based
compensation, other income (expense) and the taxation impact of
these items. These items are excluded based upon the manner in
which management evaluates the business of the Company and are not
excluded in the sense that they may be used under US GAAP. The
Company believes the provision of supplemental non-US GAAP measures
allows investors to evaluate the operational and financial
performance of the Company's core business using the same
evaluation measures that management uses, and is therefore a useful
indication of Open Text's performance or expected performance of
recurring operations and facilitates period-to-period comparison of
operating performance. As a result, the Company considers it
appropriate and reasonable to provide, in addition to US GAAP
measures, supplementary non-US GAAP financial measures that exclude
certain items from the presentation of its financial results in
this press release. The following charts provide reconciliation
(unaudited) of US GAAP based financial measures to non-US GAAP
based financial measures referred to in this press release:
Reconciliation (unaudited) of US GAAP based Net Income to Adjusted
Net
----------------------------------------------------------------------
Income (in millions of US dollars) for the quarters ended September
30,
-----------------------------------------------------------------------
2009 and 2008: -------------- Three months ended Three months ended
September 30, 2009 September 30, 2008 GAAP based "Net Income" $1.7
$14.7 Special Charges/(recovery) 18.6 - Amortization of intangibles
23.1 19.0 Other (Income)/Expense (3.4) (0.7) Share-based
compensation 1.5 1.4 Tax Impact on Above (8.7) (6.2)
-------------------------------------------------------------------------
Non-GAAP based "Adjusted Net Income" $32.8 $28.2
-------------------------------------------------------------------------
Reconciliation (unaudited) of US GAAP based EPS to non-US GAAP
based EPS
------------------------------------------------------------------------
(calculated on a diluted basis) for the quarters ended September
30, 2009
-------------------------------------------------------------------------
and 2008: --------- Three months ended Three months ended September
30, 2009 September 30, 2008 GAAP based "Net Income" $0.03 $0.28
Special Charges/(recovery) 0.33 - Amortization of intangibles 0.41
0.36 Other (Income)/Expense (0.06) (0.01) Share-based compensation
0.03 0.03 Tax Impact on Above (0.16) (0.13)
-------------------------------------------------------------------------
Non-GAAP based "Adjusted Net Income" $0.58 $0.53
-------------------------------------------------------------------------
(3) The following table provides a composition of our major
currencies for revenue and expenses, expressed as a percentage, for
the first quarter of Fiscal 2010: Currencies % of Revenue % of
Expenses* --------------------------------------- ----------------
---------------- EURO................................... 25% 23%
GBP.................................... 12% 9%
CHF.................................... 6% 4%
CAD.................................... 6% 23%
USD.................................... 44% 34%
Others................................. 7% 7% ----------------
---------------- Total.................................. 100% 100%
----------------------------------
---------------------------------- * Expenses include all cost of
revenues and operating expenses included within the Consolidated
Statements of Income, except for amortization of intangible assets,
depreciation, share-based compensation and special charges. OPEN
TEXT CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands of U.S.
dollars, except per share data) September 30 June 30 2009 2009
--------------- --------------- ASSETS Unaudited Audited Current
assets: Cash and cash equivalents $ 212,190 $ 275,819 Short-term
investments 19,768 - Accounts receivable trade, net of allowance
for doubtful accounts of $4,464 as of September 30, 2009 and $4,208
as of June 30, 2009 135,575 115,802 Income taxes recoverable 6,225
4,496 Prepaid expenses and other current assets 27,858 18,172
Deferred tax assets 22,185 20,621 --------------- ---------------
Total current assets 423,801 434,910 Investments in marketable
securities - 13,103 Capital assets 57,435 45,165 Goodwill 718,600
576,111 Acquired intangible assets 384,242 315,048 Deferred tax
assets 75,211 69,877 Other assets 18,871 13,064 Long-term Income
taxes recoverable 42,391 39,958 --------------- ---------------
Total assets $ 1,720,551 $ 1,507,236 ---------------
--------------- --------------- --------------- LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and
accrued liabilities $ 128,660 $ 115,018 Current portion of
long-term debt 3,489 3,449 Deferred revenues 205,998 189,397 Income
taxes payable 7,707 10,356 Deferred tax liabilities 2,083 508
--------------- --------------- Total current liabilities 347,937
318,728 Long-term liabilities: Accrued liabilities 21,506 23,073
Pension liability 16,510 15,803 Long-term debt 299,182 299,234
Deferred revenues 10,969 7,914 Long-term income taxes payable
53,465 47,131 Deferred tax liabilities 134,543 108,889
--------------- --------------- Total long-term liabilities 536,175
502,044 Shareholders' equity: Share capital: 56,373,651 and
52,716,751 Common Shares issued and outstanding at September 30,
2009 and June 30, 2009, respectively; Authorized Common Shares:
unlimited 588,871 457,982 Additional paid-in capital 55,307 52,152
Accumulated other comprehensive income 86,052 71,851 Retained
earnings 106,209 104,479 --------------- --------------- Total
shareholders' equity 836,439 686,464 ---------------
--------------- Total liabilities and shareholders' equity $
1,720,551 $ 1,507,236 --------------- ---------------
--------------- --------------- OPEN TEXT CORPORATION CONSOLIDATED
STATEMENTS OF INCOME (In thousands of U.S. dollars, except share
and per share data) (Unaudited) Three months ended September 30,
--------------------------------- 2009 2008
--------------------------------- Revenues: License $ 47,329 $
50,074 Customer support 123,649 98,429 Service and other 40,444
34,120 --------------------------------- Total revenues 211,422
182,623 --------------------------------- Cost of revenues: License
3,145 2,893 Customer support 20,939 15,567 Service and other 33,294
27,729 Amortization of acquired technology-based intangible assets
14,142 10,747 --------------------------------- Total cost of
revenues 71,520 56,936 --------------------------------- Gross
profit 139,902 125,687 --------------------------------- Operating
expenses: Research and development 31,542 28,578 Sales and
marketing 50,690 44,832 General and administrative 21,225 18,387
Depreciation 4,147 2,698 Amortization of acquired customer-based
intangible assets 8,917 8,215 Special charges 18,589 -
--------------------------------- Total operating expenses 135,110
102,710 --------------------------------- Income from operations
4,792 22,977 --------------------------------- Other income, net
3,440 729 Interest expense, net (3,046) (2,994)
--------------------------------- Income before income taxes 5,186
20,712 Provision for income taxes 3,456 5,932
--------------------------------- Net income before minority
interest 1,730 14,780 Minority interest - 119
--------------------------------- Net income for the period $ 1,730
$ 14,661 ---------------------------------
--------------------------------- Net income per share - basic $
0.03 $ 0.29 ---------------------------------
--------------------------------- Net income per share - diluted $
0.03 $ 0.28 ---------------------------------
--------------------------------- Weighted average number of Common
Shares outstanding - basic 55,388 51,298
--------------------------------- ---------------------------------
Weighted average number of Common Shares outstanding - diluted
56,469 52,990 ---------------------------------
--------------------------------- OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF CASHFLOWS (In thousands of U.S. Dollars)
Unaudited --------------------------------- Three months ended
September 30 --------------------------------- 2009 2008
--------------------------------- Cash flows from operating
activities: Net income for the period $ 1,730 $ 14,661 Adjustments
to reconcile net income to net cash provided by operating
activities: Depreciation and amortization 27,206 21,660 Share-based
compensation expense 3,506 1,423 Employee long-term incentive plan
2,675 1,059 Excess tax benefits on share-based compensation expense
(691) (6,629) Undistributed earnings related to minority interest -
119 Pension expense 192 - Amortization of debt issuance costs 266
224 Unrealized (gain) loss on financial instruments (2,390) (722)
Release of unrealized gain on marketable securities to income
(4,353) - Deferred taxes (2,957) (256) Changes in operating assets
and liabilities: Accounts receivable 7,928 27,946 Prepaid expenses
and other current assets (3,218) (1,926) Income taxes (4,787) 4,731
Accounts payable and accrued liabilities (9,343) (18,369) Deferred
revenue (12,437) (19,430) Other assets 1,175 322
--------------------------------- Net cash provided by operating
activities 4,502 24,813 Cash flows from investing activities:
Additions of capital assets, net (7,665) (3,887) Purchase of
Vignette Corporation, net of cash acquired (90,600) - Purchase of
eMotion LLC, net of cash acquired - (3,635) Purchase of a division
of Spicer Corporation - (10,836) Purchase consideration for prior
period acquisitions (4,801) (3,293) Investments in marketable
securities - (3,608) Maturity of short-term investments 27,171 -
--------------------------------- Net cash used in investing
activities (75,895) (25,259) Cash flows from financing activities:
Excess tax benefits on share-based compensation expense 691 6,629
Proceeds from issuance of Common shares 4,477 5,542 Repayment of
long-term debt (864) (867) Debt issuance costs (1,024) -
--------------------------------- Net cash provided by financing
activities 3,280 11,304 --------------------------------- Foreign
exchange gain (loss) on cash held in foreign currencies 4,484
(15,641) Decrease in cash and cash equivalents during the period
(63,629) (4,783) Cash and cash equivalents at beginning of the
period 275,819 254,916 --------------------------------- Cash and
cash equivalents at end of the period $ 212,190 $ 250,133
--------------------------------- ---------------------------------
DATASOURCE: Open Text Corporation CONTACT: Paul McFeeters, Chief
Financial Officer, Open Text Corporation, (905) 762-6121, ; Greg
Secord, Vice President, Investor Relations, Open Text Corporation,
(519) 888-7111 ext. 2408,
Copyright