CIMdata PLM Industry Summary Online Archive
3 November 2008
Financial News
Open Text Reports First Quarter Fiscal 2009 Financial Results
Open Text™ Corporation announced unaudited financial results for its first quarter, ended September 30, 2008. (1)
Total revenue for the first quarter was $182.6 million, up 11% compared to $164.0 million for the same period in the prior fiscal year. License revenue in the first quarter was $50.1 million, up 13% compared to $44.3 million for the same period in the prior fiscal year.
Adjusted net income for the first quarter was $28.2 million or $0.53 per share on a diluted basis, up 28% compared to $22.1 million or $0.43 per share on a diluted basis, for the same period in the prior fiscal year. Net income for the first quarter, in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), was $14.7 million or $0.28 per share on a diluted basis, compared to $7.8 million or $0.15 per share on a diluted basis, for the same period in the prior fiscal year.(2)
Total cash and cash equivalents as of September 30, 2008 was $250.1 million compared to $150.3 million as of September 30, 2007.
"We are pleased with our results this quarter, driven by demand for our compliance solutions," said John Shackleton, Chief Executive Officer of Open Text. "The business remains on-track, however, given the uncertainty in the global markets we feel it is important to act prudently and focus even more on our profit margins, so that we maintain our current earnings target for the year."
On Friday October 31st, Captaris shareholders voted in favor of the merger of Captaris with a wholly-owned subsidiary of Open Text.
"With the acquisition of Captaris and as part of our commitment to meet our profit goals, we have re-examined our operations to ensure we have the right infrastructure going forward," said Paul McFeeters, Chief Financial Officer of Open Text.
The combined company expects to reduce worldwide employment by approximately 10 percent. Functions impacted by the cuts include redundant positions or areas of the business that are not consistent with the company's strategic focus. These activities will be reflected in a restructuring charge of approximately $20 million.
Please see note (2) below for a reconciliation of non-U.S. GAAP based financial measures used in this press release, to U.S. GAAP based financial measures.
Open Text Announces Normal Course Issuer Bid
The Company also announced its intention to make a Normal Course Issuer Bid (the "Bid") through the facilities of the NASDAQ Global Select Market ("NASDAQ"). Pursuant to the Bid, Open Text proposes to repurchase, from time to time, until November 6, 2009, if considered advisable, up to an aggregate of 2,593,263 common shares.
Purchases over the NASDAQ could commence as early as November 10, 2008 if desirable. As of October 31, 2008, Open Text had 51,865,268 issued and outstanding common shares. The Board of Directors of Open Text believes that the proposed purchases are in the best interests of Open Text and are a desirable use of corporate funds. All common shares purchased by Open Text pursuant to the Bid will be cancelled. The Bid will expire on November 6, 2009. The 2,593,263 common shares purchasable by Open Text under the Bid represent the maximum number of shares permitted to be purchased under applicable laws. This maximum is calculated as 5% of the outstanding securities of a class of securities of Open Text at the beginning of the Bid.
Teleconference Call
Open Text will host a conference call on November 3, 2008 at 5:00 p.m. ET to discuss the financial results of its first quarter ending September 30, 2008.
A replay of the call will be available beginning November 3, 2008 at 7:00 p.m. ET through 11:59 p.m. on November 17, 2008 and can be accessed by dialing 416-640-1917 and using pass code 21285119 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=6810133.
Notes
(1) Based on comparison of historical revenue figures publicly disseminated by companies in the ECM sector. All dollar amounts in this press release are expressed in U.S. Dollars unless otherwise indicated
(2) Use of U.S. Non-GAAP financial measures In addition to reporting financial results in accordance with U.S. GAAP, the Company provides adjusted net income and adjusted earnings per share (EPS), which are non U.S. GAAP financial measures. The Company uses adjusted EPS and adjusted net income to supplement the information provided in its consolidated financial statements, which are presented in accordance with U.S. GAAP. The Company believes the provision of these non U.S. 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 for period-to-period comparison of operating performance.
The presentation of adjusted net income and adjusted EPS is not meant to be a substitute for net income or EPS presented in accordance with U.S. GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S. GAAP measures. These non U.S. 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 U.S. 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 attempts to compensate 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 U.S. 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. Open Text strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.
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 special charges (recoveries), 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 and is based on the way the Company's management evaluates the performance of the Company's business for use in the Company's internal reports and makes operating decisions. The term "non-operational charge" is defined by the Company as a charge that does not impact operating decisions taken by the Company's management and excludes certain items, such as amortization of acquired intangibles, other income (expense), share-based compensation expense, special charges (recoveries), and the taxation impact of these items.
The for unaudited charts that provide a reconciliation of U.S. GAAP based financial measures to non U.S. GAAP based financial measures referred to in this press release, visit http://www.opentext.com/news/pr.html?id=2134
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