CIMdata PLM Industry Summary Online Archive

2 May 2007

Financial News

Open Text Reports Third Quarter 2007 Financial Results

Open TextT Corporation reported unaudited financial results for its third quarter that ended March 31, 2007.(1)

Total revenue for the third quarter was $156.1 million, compared to $100.9 million for the same period in the prior fiscal year. License revenue in the third quarter was $43.0 million, compared to $28.4 million for the same period in the prior fiscal year. (2)

Adjusted net income in the quarter was $17.5 million or $0.34 per share on a diluted basis, compared to $13.7 million or $0.27 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 $3.9 million or $0.08 per share on a diluted basis, compared to $7.3 million or $0.15 per share on a diluted basis for the same period in the prior fiscal year. (3)

Cash, cash equivalents and short-term investments as of March 31, 2007 was $159.7 million, compared to $124.4 million as of December 31, 2006. Accounts receivable at the end of the third quarter totaled $113.7 million, compared to $114.1 million in the prior quarter. Days Sales Outstanding (DSO) was 66 days at the end of the third quarter of fiscal 2007, compared to 67 days as of March 31, 2006.

Operating cash flow in the third quarter of fiscal 2007 was $41.3 million compared to $28.7 million in the third quarter of fiscal 2006.

"We met our operating goals and generated strong cash flow. The Hummingbird integration is for the most part complete, and I continue to be pleased with the positive response from our customers and the synergies we are realizing from our employees and products," said John Shackleton, President and Chief Executive Officer of Open Text.

"The Company plans to make an additional debt repayment of $30 million. Planning for future lump sum debt repayments will be reviewed on a periodic basis," said Paul McFeeters, Chief Financial Officer of Open Text.

SAP Resells Open Text's Livelink ECM

Earlier today SAP® and Open Text jointly announced that SAP is reselling solutions from Open Text. Based on Open Text's Livelink ECM solutions, SAP will resell applications marketed under the names "SAP Archiving by Open Text" and "SAP Document Access by Open Text." Adding powerful capabilities for secure, long-term archiving, Open Text's solutions complement the existing document management capabilities of SAP applications helping customers increase business process efficiency, reduce risks and ensure compliance with government regulations. Available today, the archiving and document access applications are targeted toward the financial services industry as well as public sector organizations, healthcare companies and other service organizations.

For more details, please see the press release at: http://www.opentext.com/news/ .

Share Buyback

Open Text also announced it has initiated a filing to potentially purchase Common Shares over the next 12 months. Open Text may choose to repurchase up to an aggregate of 2,494,053 Common Shares on the Nasdaq National Market, which represents 5% of the issued and outstanding shares, and has filed a notice of its intention to commence an open market repurchase program with applicable Canadian Securities Regulators. Purchases would occur on or after May 7, 2007. As of April 30, 2007, Open Text had 49,881,068 issued and outstanding Common Shares.

Teleconference Call

Open Text will host a conference call on May 2, 2007 at 5:00 p.m. ET to discuss the final financial results of its third quarter.

A replay of the call will be available beginning May 2, 2007 at 7:00 p.m. ET through 11:59 p.m. on May 16, 2007 and can be accessed by dialing 416-640-1917 and using pass code 21225309 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/investor/investor_events/index.html .

Notes

(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) In addition to these GAAP and adjusted results the Company has provided financial information 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 provide a consistent basis for comparison between quarters and help to more accurately reflect Open Text's underlying operating results.

(3) Use of US Non-GAAP financial measures

In addition to reporting financial results in accordance with US GAAP, the Company provides certain 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 as a result, 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 US GAAP net income and EPS and in 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

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