CIMdata PLM Industry Summary Online Archive
28 January 2009
Financial News
Open Text Reports Second Quarter Fiscal 2009 Financial Results
Open Text Corporation announced unaudited financial results for its second quarter, ending December 31, 2008. (1)
Total revenue for the second quarter was $207.7 million, up 14% compared to $182.5 million for the same period in the prior fiscal year. License revenue in the second quarter was $64.9 million, up 18% compared to $55.2 million for the same period in the prior fiscal year.
Adjusted net income for the second quarter was $34.0 million or $0.64 per share on a diluted basis, up 30% compared to $26.2 million or $0.50 per share on a diluted basis, for the same period in the prior fiscal year. Net income for the second quarter, in accordance with U.S. generally accepted accounting principles ( U.S. GAAP ), was $0.8 million or $0.01 per share on a diluted basis, compared to $10.7 million or $0.20 per share on a diluted basis, for the same period in the prior fiscal year. (3)
Total cash and cash equivalents, as of December 31, 2008 was $172.9 million compared to $254.9 million as of June 30, 2008. Accounts receivable as of December 31, 2008, totaled $126.8 million, compared to $134.4 million as of June 30, 2008, and Days Sales Outstanding (DSO) was 53 days at the end of the second quarter of Fiscal 2009, compared to 60 days at June 30, 2008.
"We are seeing consistent customer demand for compliance based solutions across all verticals, as well as demand for solutions that streamline customer functions," said John Shackleton, Chief Executive Officer of Open Text. "We are pleased with our progress this quarter, we’re executing well on a global basis, the Captaris integration is on schedule and our focus on the bottom line continues to drive our strong results.
Please see notes (2) and (3) below for a reconciliation of non-U.S. GAAP based financial measures used in this press release, to U.S. GAAP based financial measures.
Teleconference Call
Open Text will host a conference call on January 28, 2009 at 5:00 p.m. ET to discuss the financial results of its second quarter ending December 31, 2008.
A replay of the call will be available beginning January 28, 2009 at 7:00 p.m. ET through 11:59 p.m. on February 11, 2009 and can be accessed by dialing 416-640-1917 and using pass code 21293951followed 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=6814863
(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) In addition to these GAAP and adjusted results, the Company has provided financial information in the full press release that adds-back maintenance revenue eliminated due to the impact of purchase accounting entries on deferred revenue and the impact of interest expense. Management believes that the furnishing of these adjustments provides a consistent basis for comparison between quarters and helps to more accurately reflect Open Text s underlying operating results.
3) 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 expense, 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.
See the full press release 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:
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