Open Text Reports Fourth Quarter and Fiscal Year 2010 Financial Results
WATERLOO, ON, Aug. 18 /PRNewswire-FirstCall/ - Open Text(TM) Corporation (NASDAQ:OTEX) (TSX:OTC), today announced financial results for its fourth quarter and fiscal year ended June 30, 2010.(1)
Total revenue for the fourth quarter of fiscal 2010 was $240.0 million, up 18% compared to $203.4 million for the same period in the prior fiscal year. License revenue in the fourth quarter of fiscal 2010 was $68.5 million, up 9% compared to $63.0 million for the same period in the prior fiscal year.
Adjusted net income in the fourth quarter of fiscal 2010 was $54.9 million, up 40 % compared to $39.2 million for the same period in the prior fiscal year. Adjusted earnings per share for the fourth quarter of fiscal 2010 was $0.95 per share on a diluted basis, up 30% compared to $0.73 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 $51.5 million or $0.89 per share on a diluted basis, compared to $19.5 million or $0.36 per share on a diluted basis for the same period in the prior fiscal year.(2)
Total revenue for fiscal 2010 was $912.0 million, up 16% compared to $785.7 million in the prior fiscal year. License revenue for fiscal 2010 was $238.1 million, up 4% compared to $229.8 million in the prior fiscal year.
Adjusted net income for fiscal 2010 was $178.0 million compared to $132.8 million in the prior fiscal year. Adjusted earnings per share for fiscal 2010 was $3.10 per share on a diluted basis, up 24% compared to $2.49 per share on a diluted basis, in the prior fiscal year. Net income for fiscal 2010 in accordance with US GAAP was $87.6 million, or $1.53 per share on a diluted basis, compared to $56.9 million, or $1.07 per share on a diluted basis, in the prior fiscal year.(2)
Operating cash flow in the fourth quarter of fiscal 2010 was $65.2 million, compared to $38.6 million for the same period in prior fiscal year. For the full 2010 fiscal year, Open Text generated $180.2 million in operating cash flow compared to $176.2 million in fiscal 2009.
The cash and cash equivalents balance as of June 30, 2010 was $326.2 million. Accounts receivable as of June 30, 2010, totaled $132.1 million, compared to $115.8 million as of June 30, 2009, and Days Sales Outstanding (DSO) was 50 days in the fourth quarter of fiscal 2010, compared to 51 days in the fourth quarter of fiscal 2009.
"Our focus for the year has been on profitability and I am pleased that in this difficult economic environment, we have exceeded our profitability targets with disciplined cost control," said John Shackleton, President and Chief Executive Officer of Open Text. "Demand for vertical solutions, as well as customer need for compliance and back office efficiencies, continue to contribute to our strong pipeline."
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.
Teleconference Call
Open Text will host a conference call on August 18, 2010 at 5:00 p.m. ET to discuss its final financial results.
Date: Wednesday, August 18, 2010
Time: 5:00 p.m. ET/2:00 p.m. PT
Length: 60 minutes
Where: 416-644-3414
800-814-4859 (Toll Free)
Investors should dial in approximately 10 minutes before the teleconference is scheduled to begin. A replay of the call will be available beginning August 18, 2010 at 7:00 p.m. ET through 11:59 p.m. on September 1, 2010 and can be accessed by dialing 416-640-1917 and using passcode 4325575 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/2/ex_event.html?evtype=events&id=701200000003lzHAAQ
About Open Text
Open Text(TM) is the world's largest independent provider of Enterprise Content Management (ECM) software. The Company's solutions manage information for all types of business, compliance and industry requirements in the world's largest companies, government agencies and professional service firms. Open Text supports approximately 46,000 customers and millions of users in 114 countries and 12 languages. For more information about Open Text, visit www.opentext.com.
Certain statements in this press release, including statements about the financial conditions, and results of operations and earnings for Open Text Corporation ("Open Text" or "the Company"), may contain words such as "could", "expects", "may", "should", "will", "anticipates", "believes", "intends", "estimates", "targets", "plans", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities laws. These statements are based on the Company's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which the Company operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. The Company's assumptions, although considered reasonable by the Company at the date of this press release, may provide to be inaccurate and consequently the Company's actual results could differ materially from the expectations set out herein.
Actual results or events could differ materially from those contemplated in forward-looking statements as a result of 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 there under; (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; and (ix) demand for the Company's products.
For additional information with respect to risks and other factors which could occur, see the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC and other securities regulators. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Copyright (C) 2010 by Open Text Corporation. "OPEN TEXT", "OPEN TEXT EVERYWHERE" and the "OPEN TEXT ECM SUITE" are trademarks or registered trademarks of Open Text Corporation in the United States of America, Canada, the European Union and/or other countries. This list of trademarks is not exhaustive. Other trademarks, registered trademarks, product names, company names, brands and service names mentioned herein are property of Open Text Corporation or other respective owners.
Notes
(1) 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 special charges, 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, special charges, 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 a reconciliation of (unaudited) US GAAP based financial measures to non-US GAAP based financial measures referred to in this press release:
The following tables present non GAAP-based measures, and their reconciliation to GAAP, for the three months and year ended June 30, 2010:
Non GAAP-based Adjusted Operating Margin and Adjusted Net income*:
--------------------------------------------------------------------
Three Open Text
months Year Fiscal
ended ended 2010
In millions June 30, Percent- June 30, Percent- Target
USD 2010 age 2010 age Model
-------------- ----------- ----------- ---------- ----------- -----------
Revenue:
License....... $ 68.5 28.5% $ 238.1 26.1% 25-30%
Customer
Support...... 129.1 53.8% 507.4 55.6% 50-55%
Service and
Other........ 42.4 17.7% 166.5 18.3% 20-25%
----------- -----------
Total Revenue. 240.0 912.0
Cost of
revenues
(excluding
amortization
of acquired
technology-
based in-
tangible
assets)...... 60.3 236.0
----------- -----------
Gross profit
excluding
amortization
of acquired
technology-
based in-
tangible
assets....... 179.7 74.9% 676.0 74.1% 72-75%
Operating
expenses:
Development... 31.8 13.3% 129.4 14.2% 14-16%
Sales &
Marketing.... 47.6 19.8% 198.2 21.7% 24-26%
General &
Admin-
istration.... 21.3 8.9% 83.3 9.1% 9-10%
Depreciation.. 4.4 1.8% 17.4 1.9% 2%
----------- -----------
105.1 428.3
Gross margin
less operat-
ing expenses. 74.6 247.7
Add: Share-
based comp-
ensation
expense...... 2.6 6.6
----------- -----------
Non GAAP-based
Adjusted
Operating
Margin....... 77.2 32.2% 254.3 27.9% 22-27%
Less: Interest
expense...... 2.0 10.4
----------- -----------
Sub-total..... 75.2 243.9
Less: tax
@ 27% .... 20.3 65.9
----------- -----------
Non GAAP-based
Adjusted Net
Income....... $ 54.9 $ 178.0
----------- -----------
----------- -----------
Non GAAP-based
Adjusted Net
Income per
share........ $ 0.95 $ 3.10
----------- -----------
----------- -----------
Reconciliation of Non GAAP-based Adjusted Operating Margin to GAAP-based
Net Income:
-------------------------------------------------------------------------
Non GAAP-based Adjusted Operating
Margin.......................................... $ 77.2 $ 254.3
Less:
Amortization..................................... 25.5 96.4
Share-based compensation expense................. 2.6 6.6**
Special charges.................................. 8.6 43.7
Other expense, net............................... 4.6 8.3
Interest expense, net............................ 2.0 10.4
GAAP-based provision for (recovery of) income
taxes........................................... (17.6) 1.3
----------- -----------
GAAP-based net income for the period............. $ 51.5 $ 87.6
----------- -----------
----------- -----------
Reconciliation of Non GAAP based Adjusted Net income to GAAP-based
Net Income:
-------------------------------------------------------------------------
per per
share share
Non GAAP-based
Adjusted Net
Income $ 54.9 $ 0.95 $ 178.0 $ 3.10
Less:
Amortization................... 25.5 0.44 96.4 1.68
Share-based compensation
expense....................... 2.6 0.04 6.6** 0.11
Special charges................ 8.6 0.15 43.7 0.76
Other expense, net............. 4.6 0.08 8.3 0.14
GAAP-based provision for (re-
covery of) income taxes....... (17.6) (0.30) 1.3 0.02
Tax on non GAAP-based adjusted
net income (per above) ....... (20.3) (0.35) (65.9) (1.14)
------------------------------------------
GAAP-based net income for the
period........................ $ 51.5 $ 0.89 $ 87.6 $ 1.53
------------------------------------------
------------------------------------------
* Amounts may differ from those shown on the face of the financial
statements due to non-material rounding adjustments.
** In addition $3.2 million of share-based compensation is included
within Special charges.
The following tables present non GAAP-based measures, and their reconciliation to GAAP, for the three months and year ended June 30, 2009:
Non GAAP-based Adjusted Operating Margin and Adjusted Net income*:
--------------------------------------------------------------------
Three Open Text
months Year Fiscal
ended ended 2009
In millions June 30, Percent- June 30, Percent- Target
USD 2009 age 2009 age Model
-------------- ----------- ----------- ---------- ----------- -----------
Revenue:
License....... $ 63.0 31.0% $ 229.8 29.3% 25-30%
Customer
Support...... 104.5 51.4% 405.4 51.6% 50-55%
Service and
Other........ 35.9 17.6% 150.5 19.2% 20-25%
----------- -----------
Total Revenue. 203.4 785.7
Cost of
revenues
(excluding
amortization
of acquired
technology-
based in-
tangible
assets)...... 51.3 204.2
----------- -----------
Gross profit
excluding
amortization
of acquired
technology-
based in-
tangible
assets....... 152.1 74.8% 581.5 74.0% 72-75%
Operating
expenses:
Development... 28.8 14.2% 116.2 14.8% 14-16%
Sales &
Marketing.... 47.9 23.5% 186.5 23.7% 24-26%
General &
Admin-
istration.... 19.2 9.4% 73.8 9.4% 9-10%
Depreciation.. 3.2 1.6% 12.0 1.5% 2%
----------- -----------
99.1 388.5
Gross margin
less operat-
ing expenses. 53.0 193.0
Add: Share-
based comp-
ensation
expense...... 1.1 5.0
----------- -----------
Non GAAP-based
Adjusted
Operating
Margin....... 54.1 26.6% 198.0 25.2% 22-27%
Less: Interest
expense...... 2.8 13.6
----------- -----------
Sub-total..... 51.3 184.4
Less: tax
@ 23.5%
and 28%,
respectively. 12.1 51.6
----------- -----------
Non GAAP-based
Adjusted Net
Income $ 39.2 $ 132.8
----------- -----------
----------- -----------
Non GAAP-based
Adjusted Net
Income per
share........ $ 0.73 $ 2.49
----------- -----------
----------- -----------
Reconciliation of Non GAAP-based Adjusted Operating Margin to GAAP-based
Net Income:
-------------------------------------------------------------------------
Non GAAP-based Adjusted Operating Margin......... $ 54.1 $ 198.0
Less:
Amortization..................................... 17.3 81.0
Share-based compensation expense................. 1.1 5.0
Special charges.................................. 1.2 14.4
Other expense, net............................... 3.0 3.2
Interest expense, net............................ 2.8 13.6
GAAP-based provision for income taxes............ 9.2 23.9
----------- -----------
GAAP-based net income for the period............. $ 19.5 $ 56.9
----------- -----------
----------- -----------
Reconciliation of Non GAAP based Adjusted Net income to GAAP-based
Net Income:
-------------------------------------------------------------------------
per per
share share
Non GAAP-based
Adjusted Net
Income $ 39.2 $ 0.73 $ 132.8 $ 2.49
Less:
Amortization................... 17.3 0.32 81.0 1.52
Share-based compensation
expense....................... 1.1 0.02 5.0 0.09
Special charges................ 1.2 0.02 14.4 0.27
Other expense, net............. 3.0 0.06 3.2 0.06
GAAP-based provision for income
taxes......................... 9.2 0.17 23.9 0.45
Tax on non GAAP-based adjusted
net income (per above)........ (12.1) (0.22) (51.6) (0.97)
-----------------------------------------
GAAP-based net income for the
period........................ $ 19.5 $ 0.36 $ 56.9 $ 1.07
-----------------------------------------
-----------------------------------------
* Amounts may differ from those shown on the face of the financial
statements due to non-material rounding adjustments.
(3) The following table provides a composition of our major currencies
for revenue under U.S. GAAP and expenses, expressed as a percentage,
for the fourth quarter and fiscal year ended June 30, 2010:
Fourth quarter
of fiscal 2010
--------------------
% of % of Ex-
Currencies Revenue penses*
---------------------------------------------------- --------- ----------
EURO................................................ 25% 20%
GBP................................................. 9% 8%
CHF................................................. 5% 2%
CAD................................................. 10% 31%
USD................................................. 44% 31%
Others.............................................. 7% 8%
--------- ----------
Total............................................... 100% 100%
--------- ----------
--------- ----------
Fiscal 2010
--------------------
% of % of Ex-
Currencies Revenue penses*
---------------------------------------------------- --------- ----------
EURO................................................ 25% 22%
GBP................................................. 10% 8%
CHF................................................. 5% 3%
CAD................................................. 8% 26%
USD................................................. 44% 33%
Others.............................................. 8% 8%
--------- ----------
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, share-based compensation expense and special
charges.
OPEN TEXT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
June 30, June 30,
2010 2009
------------ ------------
ASSETS
Cash and cash equivalents...................... $ 326,192 $ 275,819
Accounts receivable trade, net of allowance
for doubtful accounts of $4,868 as of June 30,
2010 and $4,208 as of June 30, 2009........... 132,143 115,802
Income taxes recoverable....................... 44,509 4,496
Prepaid expenses and other current assets...... 21,086 18,172
Deferred tax assets............................ 15,714 20,621
------------ ------------
Total current assets......................... 539,644 434,910
Investments in marketable securities........... - 13,103
Capital assets................................. 54,286 45,165
Goodwill....................................... 671,624 576,111
Acquired intangible assets..................... 328,193 315,048
Deferred tax assets............................ 27,405 69,877
Other assets................................... 44,454 13,064
Long-term income taxes recoverable............. 48,418 39,958
------------ ------------
Total assets $ 1,714,024 $ 1,507,236
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities..... $ 119,604 $ 116,992
Current portion of long-term debt............ 15,486 3,449
Deferred revenues............................ 219,752 189,397
Income taxes payable......................... 39,666 10,356
Deferred tax liabilities..................... 28,384 508
------------ ------------
Total current liabilities.................. 422,892 320,702
Long-term liabilities:
Accrued liabilities.......................... 15,755 21,099
Pension liability............................ 15,888 15,803
Long-term debt............................... 285,026 299,234
Deferred revenues............................ 10,085 7,914
Long-term income taxes payable............... 64,699 47,131
Deferred tax liabilities..................... 13,459 108,889
------------ ------------
Total long-term liabilities................ 404,912 500,070
Shareholders' equity:
Share capital
56,825,995 and 52,716,751 Common Shares
issued and outstanding at June 30, 2010
and June 30, 2009, respectively;
Authorized Common Shares: unlimited........ 602,868 457,982
Additional paid-in capital................... 61,298 52,152
Accumulated other comprehensive income....... 44,021 71,851
Retained earnings............................ 192,033 104,479
Treasury stock, at cost (307,579 and nil
shares, respectively at June 30, 2010 and
June 30, 2009).............................. (14,000) -
------------ ------------
Total shareholders' equity..................... 886,220 686,464
------------ ------------
Total liabilities and shareholders' equity..... $ 1,714,024 $ 1,507,236
------------ ------------
------------ ------------
OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except per share data)
Year ended June 30,
--------------------------------------
2010 2009 2008
------------ ------------ ------------
Revenues:
License......................... $ 238,074 $ 229,818 $ 219,103
Customer support................ 507,452 405,310 363,580
Service and other............... 166,497 150,537 142,849
------------ ------------ ------------
Total revenues................ 912,023 785,665 725,532
Cost of revenues:
License......................... 16,922 16,204 15,415
Customer support................ 83,741 68,902 58,764
Service and other............... 135,396 118,998 117,037
Amortization of acquired
technology-based intangible
assets......................... 60,472 47,733 41,515
------------ ------------ ------------
Total cost of revenues........ 296,531 251,837 232,731
------------ ------------ ------------
Gross profit...................... 615,492 533,828 492,801
------------ ------------ ------------
Operating expenses:
Research and development........ 129,378 116,164 107,206
Sales and marketing............. 198,208 186,533 172,873
General and administrative...... 83,295 73,842 69,985
Depreciation.................... 17,425 12,012 12,017
Amortization of acquired
customer-based intangible
assets......................... 35,940 33,259 30,759
Special charges (recoveries).... 43,666 14,434 (418)
------------ ------------ ------------
Total operating expenses...... 507,912 436,244 392,422
------------ ------------ ------------
Income from operations............ 107,580 97,584 100,379
------------ ------------ ------------
Other income (expense), net....... (8,349) (3,238) (1,521)
Interest expense, net............. (10,366) (13,620) (22,859)
------------ ------------ ------------
Income before income taxes........ 88,865 80,726 75,999
Provision for income taxes........ 1,311 23,788 22,993
------------ ------------ ------------
Net income for the year........... $ 87,554 $ 56,938 $ 53,006
------------ ------------ ------------
------------ ------------ ------------
Net income per share-basic........ $ 1.56 $ 1.09 $ 1.04
------------ ------------ ------------
------------ ------------ ------------
Net income per share-diluted...... $ 1.53 $ 1.07 $ 1.01
------------ ------------ ------------
------------ ------------ ------------
Weighted average number of Common
Shares outstanding-basic......... 56,280 52,030 50,780
------------ ------------ ------------
------------ ------------ ------------
Weighted average number of Common
Shares outstanding-diluted....... 57,385 53,271 52,604
------------ ------------ ------------
------------ ------------ ------------
OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
Year ended June 30,
--------------------------------------
2010 2009 2008
------------ ------------ ------------
Cash flows from operating
activities:
Net income for the year......... $ 87,554 $ 56,938 $ 53,006
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization. 113,837 93,004 84,291
In-process research and
development.................. - 121 500
Share-based compensation
expense...................... 9,765 5,032 3,789
Excess tax benefits from
share-based compensation..... (1,143) (8,631) (1,079)
Pension expense............... 211 1,377 -
Amortization of debt issuance
costs........................ 1,390 1,099 1,220
Unrealized (gain) loss on
financial instruments........ (878) (1,682) 3,178
Loss on sale and write down
of capital assets............ 136 130 -
Release of unrealized gain on
marketable securities to
income....................... (4,353) - -
Deferred taxes................ (24,219) (9,914) (24,326)
Impairment and Other non cash
charges...................... 577 223 -
Changes in operating assets and
liabilities:
Accounts receivable........... 24,521 43,761 (5,626)
Prepaid expenses and other
current assets............... (814) (3,080) (168)
Income taxes.................. 5,066 23,274 12,600
Accounts payable and accrued
liabilities.................. (11,340) (15,999) 3,566
Deferred revenue.............. 3,077 (6,861) 33,751
Other assets.................. (23,196) (2,622) 1,274
------------ ------------ ------------
Net cash provided by operating
activities....................... 180,191 176,170 165,976
Cash flows from investing
activities:
Additions of capital assets-net. (19,314) (12,150) (6,895)
Purchase of Burntsand Inc.,
net of cash acquired........... (8,163) - -
Purchase of Nstein Technologies
Inc., net of cash acquired..... (20,370) - -
Purchase of New Generation
Consulting Inc................. (3,500) - -
Purchase of Vignette
Corporation, net of cash
acquired....................... (90,600) - -
Purchase of Vizible Corporation. - (850) -
Purchase of Captaris Inc.,
net of cash acquired........... - (101,033) -
Purchase of eMotion LLC, net of
cash acquired.................. (556) (3,635) -
Purchase of a division of Spicer
Corporation.................... - (11,437) -
Purchase consideration for prior
period acquisitions............ (12,843) (22,794) (21,522)
Investments in marketable
securities..................... - (8,930) -
Maturity of short-term
investments.................... 45,525 - -
------------ ------------ ------------
Net cash used in investing
activities....................... (109,821) (160,829) (28,417)
Cash flow from financing
activities:
Excess tax benefits on share-
based compensation expense..... 1,143 8,631 1,079
Proceeds from issuance of Common
Shares......................... 9,971 19,593 12,272
Purchase of Treasury Stock...... (14,000) - -
Repayment of long-term debt..... (3,485) (3,426) (63,616)
Debt issuance costs............. (1,024) - (349)
------------ ------------ ------------
Net cash provided by (used in)
financing activities............. (7,395) 24,798 (50,614)
Foreign exchange gain (loss) on
cash held in foreign currencies.. (12,602) (19,236) 17,992
Increase in cash and cash
equivalents during the year...... 50,373 20,903 104,937
Cash and cash equivalents at
beginning of the year............ 275,819 254,916 149,979
------------ ------------ ------------
Cash and cash equivalents at end
of the year...................... $ 326,192 $ 275,819 $ 254,916
------------ ------------ ------------
------------ ------------ ------------
OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except per share data)
Three months ended
June 30,
-------------------------
2010 2009
------------ ------------
Revenues:
License...................................... $ 68,527 $ 62,973
Customer support............................. 129,077 104,494
Service and other............................ 42,430 35,889
------------ ------------
Total revenues 240,034 203,356
Cost of revenues:
License...................................... 5,400 3,534
Customer support............................. 20,532 18,675
Service and other............................ 34,360 29,100
Amortization of acquired technology-based
intangible assets........................... 16,134 13,562
------------ ------------
Total cost of revenues..................... 76,426 64,871
------------ ------------
Gross profit................................... 163,608 138,485
------------ ------------
Operating expenses:
Research and development..................... 31,835 28,829
Sales and marketing.......................... 47,644 47,928
General and administrative................... 21,288 19,238
Depreciation................................. 4,443 3,165
Amortization of acquired customer-based
intangible assets........................... 9,378 3,730
Special charges.............................. 8,571 1,200
------------ ------------
Total operating expenses................... 123,159 104,090
------------ ------------
Income from operations......................... 40,449 34,395
------------ ------------
Other expense, net............................. (4,564) (3,039)
Interest expense, net.......................... (1,979) (2,848)
------------ ------------
Income before income taxes..................... 33,906 28,508
Provision for (recovery of) income taxes....... (17,603) 9,027
------------ ------------
Net income for the period...................... $ 51,509 $ 19,481
------------ ------------
------------ ------------
Net income per share-basic..................... $ 0.91 $ 0.37
------------ ------------
------------ ------------
Net income per share-diluted................... $ 0.89 $ 0.36
------------ ------------
------------ ------------
Weighted average number of Common Shares
outstanding-basic............................. 56,802 52,648
------------ ------------
------------ ------------
Weighted average number of Common Shares
outstanding-diluted........................... 57,897 53,670
------------ ------------
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OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
Three months ended
June 30,
-------------------------
2010 2009
------------ ------------
Cash flows from operating activities:
Net income for the period.................... $ 51,509 $ 19,481
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization.............. 29,955 20,457
Share-based compensation expense........... 2,611 1,075
Excess tax benefits from share-based
compensation.............................. (239) (249)
Pension expense............................ (351) 253
Amortization of debt issuance costs........ 326 268
Unrealized (gain) loss on financial
instruments............................... - (1,548)
Deferred taxes............................. (20,505) (6,337)
Impairment and Other non cash charges...... (253) -
Changes in operating assets and liabilities:
Accounts receivable........................ 568 (4,136)
Prepaid expenses and other current assets.. 492 665
Income taxes............................... 23,304 13,618
Accounts payable and accrued liabilities... 126 2,731
Deferred revenue........................... 4,106 (5,557)
Other assets............................... (26,429) (2,094)
------------ ------------
Net cash provided by operating activities...... 65,220 38,627
Cash flows from investing activities:
Additions of capital assets-net.............. (4,045) (5,842)
Purchase of Burntsand Inc., net of cash
acquired.................................... (8,163) -
Purchase of Nstein Technologies Inc., net
of cash acquired............................ (20,370) -
Purchase of New Generation Consulting Inc,... (3,500) -
Purchase of Vizible Corporation.............. - (850)
Purchase consideration for prior period
acquisitions................................ (1,436) (5,604)
------------ ------------
Net cash used in investing activities.......... (37,514) (12,296)
Cash flow from financing activities:
Excess tax benefits on share-based
compensation expense........................ 239 249
Proceeds from issuance of Common Shares...... 1,034 1,919
Purchase of Treasury Stock................... (14,000) -
Repayment of long-term debt.................. (878) (856)
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Net cash provided by (used in) financing
activities.................................. (13,605) 1,312
Foreign exchange gain (loss) on cash held in
foreign currencies............................ (9,237) 11,128
Increase in cash and cash equivalents during
the period.................................... 4,864 38,771
Cash and cash equivalents at beginning of
the period.................................... 321,328 237,048
------------ ------------
Cash and cash equivalents at end of the period. $ 326,192 $ 275,819
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SOURCE Open Text Corporation
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