CIMdata PLM Industry Summary Online Archive
29 April 2008
Financial News
Open Text Reports Third Quarter Fiscal 2008 Financial Results
Open Text™ Corporation announced unaudited financial results for its third quarter that ended March 31, 2008. (1)
Total revenue for the third quarter was $178.8 million, up 15% compared to $156.1 million for the same period in the prior fiscal year. License revenue in the third quarter was $51.5 million, up 20% compared to $43.0 million in the third quarter of the prior fiscal year.
Adjusted net income in the quarter was $25.4 million or $0.48 per share on a diluted basis, up 45% compared to $17.5 million or $0.34 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 $7.3 million or $0.14 per share on a diluted basis, up 87% compared to $3.9 million or $0.08 per share on a diluted basis for the same period in the prior fiscal year.(2)
Operating cash flow in the third quarter of fiscal 2008 was $50 million, up 22% compared to $41 million in the third quarter of the prior fiscal year and up 28% compared to $39 million in the previous quarter.
"I am very pleased with our performance in the quarter, generating strong cash flow from operations and meeting our profitability targets," said John Shackleton, President and CEO of Open Text. "We are experiencing continued strength in our European sales."
The cash, cash equivalents and short-term investments balance as of March 31, 2008 was $215.8 million compared to $150.0 million at June 30, 2007.
Accounts receivable as of March 31, 2008, totaled $135.7 million, compared to $128.8 million as of June 30, 2007, and Days Sales Outstanding (DSO) was 68 days at the end of the third quarter of fiscal 2008, compared to 66 days at June 30, 2007.
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.
"With the success of Hummingbird evident, we are focusing on new solutions like Enterprise Connect," said John Shackleton. "This enables workers to utilize their business environment to access content from across the enterprise including our competitor's repositories as well as from major enterprise ERP applications such as SAP."
Teleconference Call
Open Text will host a conference call on April 29, 2008 at 5:00 p.m. ET to discuss the final financial results for its third quarter.
A replay of the call will be available beginning April 29, 2008 at 7:00 p.m. ET through 11:59 p.m. on May 13, 2008 and can be accessed by dialing 416-640-1917 and using pass code 21268405 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/event.html?id=6712896.
(1) Based on comparison of historic 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 Non- US 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 unaudited condensed 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, other income (expense), share-based compensation 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.
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