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Open Text Reports First Quarter Fiscal 2010 Financial Results

^{Published on 2009-10-27 17:18:47 - Market Wire}
 

 Date: Tuesday, October 27, 2009 Time: 5:00 p.m. ET/2:00 p.m. PT Length: 60 minutes Where: 800-814-4861 

 Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 

 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 --------------------------------- ---------------------------------