OpenText Reports Fourth Quarter and Fiscal Year 2013 Financial Results

WATERLOO, Ontario, July 31, 2013 /PRNewswire/ -- OpenText(TM) Corporation (NASDAQ: OTEX) (TSX: OTC), announced today its financial results for the fourth quarter and fiscal year ended June 30, 2013.

Financial Highlights for Q4 FY13 (1)

  • Total revenue for the period was $347.3 million, up 14% Y/Y
  • License revenue was $78.8 million, up 1% Y/Y
  • Cloud services revenue was $41.9 million
  • Non-GAAP-based EPS, diluted was $1.43 compared to $1.17 Y/Y, up 22% Y/Y; GAAP-based EPS, diluted was $0.71 compared to $0.14 Y/Y (2)
  • Non-GAAP-based income from operations was $102.4 million and 29% of revenues; GAAP-based income from operations was $49.5 million and 14% of revenues (2)
  • Operating cash flow was $65.2 million, inclusive of a $27.0 million litigation settlement primarily relating to a legacy EasyLink liability, compared to $79.8 million Y/Y, down 18%Y/Y, with an ending cash balance of $470.4 million.

Financial Highlights for FY13 (1)

  • Total revenue for the period was $1,363.3 million, up 13% Y/Y
  • License revenue was $279.6 million, down 5% Y/Y
  • Cloud services revenue was $173.8 million
  • Non-GAAP-based EPS, diluted was $5.57 compared to $4.60 Y/Y, up 21% Y/Y; GAAP-based EPS, diluted was $2.51 compared to $2.13 Y/Y (2)
  • Non-GAAP-based income from operations was $399.6 million and 29% of revenues; GAAP-based income from operations was $197.7 million and 15% of revenues (2)
  • Operating cash flow was $318.5 million, inclusive of a $27.0 million litigation settlement primarily relating to a legacy EasyLink liability, compared to $266.5 million Y/Y, up 20%Y/Y.

"We are pleased with our performance this year, delivering historical records in revenue, operating cash flow and non-GAAP earnings while making the strategic acquisition of Easylink and introducing a quarterly dividend program," said OpenText CEO Mark J. Barrenechea. "With our sales organization expanded and fully trained, and our leadership position established as a premiere EIM provider, we demonstrated 6% organic license growth in the second half of FY2013 over the same period last year."

"Our FY14 focus is intelligent growth, a commitment to growing earnings, cash flows and creating value for our stakeholders while investing in the markets where we can win. These investments include broader EIM capabilities, expanding our distribution, both direct and through partners, expanding our presence in the cloud and furthering our reach into fast growing markets."

Business Highlights

  • Services, public sector, financial and technology industries saw the most demand
  • 5 license transactions over $1 million and 15 license transactions between $500K and $1 million
  • Customer successes in the quarter include Apotex, CONSOL Energy, Daimler South East Asia Pte Ltd, Hasbro, MAN Diesel & Turbo, Marvel Entertainment, LLC, The U.S. Department of Education and Wellington City Council.
  • OpenText unveils responsive, intuitive web experience management solution for targeted, more interactive online customer experiences and extends partner ecosystem for web experience management
  • OpenText EIM products to support SAP HANA®, cloud and mobility offerings, and expands reach of its cloud-based solutions now included in SAP® Cloud for Travel solution
  • OpenText acquires long-standing partner ICCM Professional Services Limited (ICCM), on May 23, 2013.  Based in Malmesbury, United Kingdom, ICCM is focused on BPM Smart Process Applications.
  • OpenText named a leader in independent research firm's Smart Process Applications report
  • OpenText appoints Noriyuki Hayakawa as President, OpenText Japan

Dividend Program Highlights

Pursuant to the previously announced policy to declare non-cumulative quarterly dividends to holders of its common shares, the Board of Directors has declared a quarterly dividend of $0.30 per share with respect to outstanding common shares of the Company for the quarter ended June 30, 2013. The quarterly dividend is payable on September 20, 2013 to shareholders of record on August 30, 2013.

Summary of Quarterly Results


 

 

 

 

 

 

 

 

Q4 FY13

Q3 FY13

Q4 FY12

% Change 

(Q/Q)


 

% Change

(Y/Y)


 

Revenue (million)

$

347.3


 

$

337.7


 

$

305.6


 

2.8

%


 

13.6

%


 

GAAP-based gross margin

66.0

%

63.9

%

65.8

%

210


 

bps

20


 

bps

GAAP-based operating margin

14.2

%

12.1

%

13.0

%

210


 

bps

120


 

bps

GAAP-based EPS, diluted

$

0.71


 

$

0.44


 

$

0.14


 

61.4

%


 

407.1

%


 

Non-GAAP-based gross margin (2)

72.9

%

70.8

%

72.9

%

210


 

bps


 

bps

Non-GAAP-based operating margin (2)

29.5

%

26.8

%

27.7

%

270


 

bps

180


 

bps

Non-GAAP-based EPS, diluted (2)

$

1.43


 

$

1.26


 

$

1.17


 

13.5

%


 

22.2

%


 

 

Summary of Year to Date Results


 

 

 

 

 

 

 

FY13

Q3 YTD FY13

FY12


 

% Change

(Y/Y) (bps)


 

Revenue (million)

$

1,363.3


 

$

1,016.1


 

$

1,207.5


 

 

12.9

%


 

GAAP-based gross margin

64.4

%

63.8

%

65.4

%


 

(100)


 

bps

GAAP-based operating margin

14.5

%

14.6

%

12.4

%


 

210


 

bps

GAAP-based EPS, diluted

$

2.51


 

$

1.80


 

$

2.13


 

 

17.8

%


 

Non-GAAP-based gross margin (2)

71.3

%

70.8

%

72.5

%


 

(120)


 

bps

Non-GAAP-based operating margin (2)

29.3

%

29.2

%

27.3

%


 

200


 

bps

Non-GAAP-based EPS, diluted (2)

$

5.57


 

$

4.14


 

$

4.60


 

 

21.1

%


 

 

Conference Call Information

The public is invited to listen to the earnings conference call today at 5:00 p.m. ET (2:00 p.m. PT) by dialing 877-974-0445 (toll-free) or 416-644-3415 (international). Please dial-in 15 minutes ahead of time to ensure proper connection. Alternatively, a live webcast of the earnings conference call will be available on the Investor Relations section of the Company's website at http://www.opentext.com/2/global/ex_event.html?evtype=events&id=701D0000000W0eGIAS.

An audio replay of the conference call will also be made available approximately two hours after the conclusion of the call. The audio replay will remain available until 11:59 p.m. on August 7, 2013 and can be accessed by dialing 877-289-8525 (toll-free) or 416-640-1917 (international) and entering the confirmation code: 4626584 followed by the number sign.

Please see below note (2) for a reconciliation of non-U.S. GAAP-based financial measures used in this press release, to U.S. GAAP-based financial measures.

About OpenText

OpenText is the largest independent software provider of Enterprise Information Management (EIM). For more information please visit www.opentext.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release, including statements about the focus of Open Text Corporation ("OpenText" or "the Company") in fiscal 2014 on growth in earnings and cash flows, creating value through investments in broader EIM capabilities, distribution, the Company's presence in the cloud and in growth markets, its financial conditions, results of operations and earnings; declaration of quarterly dividends; and other matters, are considered forward-looking statements or information under applicable securities laws. Such forward-looking statements involve known and unknown risks, uncertainties and other factors and assumptions that may cause the actual results, performance or achievements to differ materially. Such factors include, but are not limited to, (i) the future performance, financial and otherwise, of OpenText; (ii) the ability of OpenText 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 EIM market; (vi) the Company's competitive position in the EIM 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; (viii) the demand for the Company's product and the extent of deployment of the Company's products in the EIM marketplace; and (ix) the Company's financial condition and capital requirements. 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. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Copyright ©2013 OpenText Corporation. OpenText is a trademark or registered trademark of Open Text SA and/or Open Text ULC. The list of trademarks is not exhaustive of other trademarks, registered trademarks, product names, company names, brands and service names mentioned herein are property of Open Text SA or other respective owners. All rights reserved. For more information, visit: http://www.opentext.com/2/global/site-copyright.html_SKU.

 


 

OPEN TEXT CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share data)


 

 

June 30, 2013


 

June 30, 2012


 

 

 

 

ASSETS


 

 

 

Cash and cash equivalents

$

470,445


 

 

$

559,747


 

Accounts receivable trade, net of allowance for doubtful accounts of $4,871 as of June 30, 2013 and $5,655 as of June 30, 2012

174,927


 

 

163,664


 

Income taxes recoverable

17,173


 

 

17,849


 

Prepaid expenses and other current assets

43,464


 

 

45,613


 

Deferred tax assets

11,082


 

 

4,003


 

Total current assets

717,091


 

 

790,876


 

Property and equipment

88,364


 

 

81,157


 

Goodwill

1,246,872


 

 

1,040,234


 

Acquired intangible assets

363,615


 

 

312,563


 

Deferred tax assets

135,695


 

 

115,128


 

Other assets

25,082


 

 

22,137


 

Deferred charges

67,633


 

 

68,653


 

Long-term income taxes recoverable

10,465


 

 

13,545


 

Total assets

$

2,654,817


 

 

$

2,444,293


 

LIABILITIES AND SHAREHOLDERS' EQUITY


 

 

 

Current liabilities:


 

 

 

Accounts payable and accrued liabilities

$

188,443


 

 

$

132,015


 

Current portion of long-term debt

51,742


 

 

41,374


 

Deferred revenues

282,387


 

 

273,987


 

Income taxes payable

4,184


 

 

27,806


 

Deferred tax liabilities

1,127


 

 

1,612


 

Total current liabilities

527,883


 

 

476,794


 

Long-term liabilities:


 

 

 

Accrued liabilities

17,849


 

 

13,966


 

Deferred credits

11,608


 

 

10,086


 

Pension liability

24,509


 

 

22,074


 

Long-term debt

513,750


 

 

555,000


 

Deferred revenues

11,830


 

 

12,653


 

Long-term income taxes payable

140,508


 

 

147,623


 

Deferred tax liabilities

69,672


 

 

26,705


 

Total long-term liabilities

789,726


 

 

788,107


 

Shareholders' equity:


 

 

 

Share capital


 

 

 

59,028,886 and 58,358,990 Common Shares issued and outstanding at June 30, 2013 and June 30, 2012, respectively; Authorized Common Shares: unlimited

651,642


 

 

635,321


 

Additional paid-in capital

101,865


 

 

95,026


 

Accumulated other comprehensive income

39,890


 

 

44,364


 

Retained earnings

572,885


 

 

442,068


 

Treasury stock, at cost (610,878 and 793,494 shares at June 30, 2013 and at June 30, 2012, respectively)

(29,074)


 

 

(37,387)


 

Total shareholders' equity

1,337,208


 

 

1,179,392


 

Total liabilities and shareholders' equity

$

2,654,817


 

 

$

2,444,293


 

 


 

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In thousands of U.S. dollars, except share and per share data)


 

 

 

Year Ended June 30,


 

 

2013


 

2012


 

2011

Revenues:


 

 

 

 

 

 

License


 

$

279,598


 

 

$

293,719


 

 

$

269,202


 

Cloud services


 

173,799


 

 


 

 


 

Customer support


 

658,216


 

 

656,568


 

 

560,541


 

Professional service and other


 

251,723


 

 

257,186


 

 

203,560


 

Total revenues


 

1,363,336


 

 

1,207,473


 

 

1,033,303


 

Cost of revenues:


 

 

 

 

 

 

License


 

16,107


 

 

18,033


 

 

18,284


 

Cloud services


 

72,365


 

 


 

 


 

Customer support


 

106,948


 

 

110,504


 

 

86,834


 

Professional service and other


 

196,874


 

 

204,909


 

 

167,854


 

Amortization of acquired technology-based intangible assets


 

93,610


 

 

84,572


 

 

68,048


 

Total cost of revenues


 

485,904


 

 

418,018


 

 

341,020


 

Gross profit


 

877,432


 

 

789,455


 

 

692,283


 

Operating expenses:


 

 

 

 

 

 

Research and development


 

164,010


 

 

169,043


 

 

145,992


 

Sales and marketing


 

289,157


 

 

274,544


 

 

232,332


 

General and administrative


 

109,325


 

 

97,072


 

 

86,696


 

Depreciation


 

24,496


 

 

21,587


 

 

22,116


 

Amortization of acquired customer-based intangible assets


 

68,745


 

 

53,326


 

 

38,966


 

Special charges


 

24,034


 

 

24,523


 

 

15,576


 

Total operating expenses


 

679,767


 

 

640,095


 

 

541,678


 

Income from operations


 

197,665


 

 

149,360


 

 

150,605


 

Other income (expense), net


 

(2,473)


 

 

3,549


 

 

(6,019)


 

Interest expense, net


 

(16,982)


 

 

(15,564)


 

 

(8,452)


 

Income before income taxes


 

178,210


 

 

137,345


 

 

136,134


 

Provision for (recovery of) income taxes


 

29,690


 

 

12,171


 

 

12,931


 

Net income for the period


 

$

148,520


 

 

$

125,174


 

 

$

123,203


 

Earnings per share—basic


 

$

2.53


 

 

$

2.16


 

 

$

2.16


 

Earnings per share—diluted


 

$

2.51


 

 

$

2.13


 

 

$

2.11


 

Weighted average number of Common Shares outstanding—basic


 

58,604


 

 

57,890


 

 

57,077


 

Weighted average number of Common Shares outstanding—diluted


 

59,062


 

 

58,734


 

 

58,260


 

Dividends declared per Common Share


 

$

0.30


 

 

$


 

 

$


 

 

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In thousands of U.S. dollars, except share and per share data)


 

 

 

Three Months Ended

June 30,


 

 

2013


 

2012

Revenues:


 

 

 

 

License


 

$

78,782


 

 

$

78,031


 

Cloud services


 

41,890


 

 


 

Customer support


 

164,889


 

 

163,128


 

Professional service and other


 

61,706


 

 

64,465


 

Total revenues


 

347,267


 

 

305,624


 

Cost of revenues:


 

 

 

 

License


 

3,529


 

 

4,116


 

Cloud services


 

17,696


 

 


 

Customer support


 

25,351


 

 

27,780


 

Professional service and other


 

47,879


 

 

51,358


 

Amortization of acquired technology-based intangible assets


 

23,579


 

 

21,265


 

Total cost of revenues


 

118,034


 

 

104,519


 

Gross profit


 

229,233


 

 

201,105


 

Operating expenses:


 

 

 

 

Research and development


 

42,383


 

 

41,195


 

Sales and marketing


 

79,338


 

 

71,641


 

General and administrative


 

27,857


 

 

24,186


 

Depreciation


 

6,218


 

 

5,268


 

Amortization of acquired customer-based intangible assets


 

17,197


 

 

13,378


 

Special charges


 

6,767


 

 

5,747


 

Total operating expenses


 

179,760


 

 

161,415


 

Income from operations


 

49,473


 

 

39,690


 

Other income (expense), net


 

(4,180)


 

 

(6,596)


 

Interest expense, net


 

(3,990)


 

 

(4,410)


 

Income before income taxes


 

41,303


 

 

28,684


 

Provision for (recovery of) income taxes


 

(869)


 

 

20,713


 

Net income for the period


 

$

42,172


 

 

$

7,971


 

Earnings per share—basic


 

$

0.72


 

 

$

0.14


 

Earnings per share—diluted


 

$

0.71


 

 

$

0.14


 

Weighted average number of Common Shares outstanding—basic


 

58,875


 

 

58,270


 

Weighted average number of Common Shares outstanding—diluted


 

59,238


 

 

58,847


 

Dividends declared per Common share


 

$

0.30


 

 

$


 

 

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of U.S. dollars)


 

 

Year Ended June 30,


 

2013


 

2012


 

2011

Net income for the period

$

148,520


 

 

$

125,174


 

 

$

123,203


 

Other comprehensive income—net of tax:


 

 

 

 

 

Net foreign currency translation adjustments

(1,879)


 

 

(9,197)


 

 

15,388


 

Net unrealized gain (loss) on cash flow hedges

(2,536)


 

 

(1,069)


 

 

1,275


 

Net actuarial gain (loss) relating to defined benefit pension plans

(59)


 

 

(5,840)


 

 

(214)


 

 

 

 

 

 

 

 

 

 

 

 

 

Total other comprehensive income (loss), net, for the period

$

(4,474)


 

 

$

(16,106)


 

 

$

16,449


 

 

Total comprehensive income

$

144,046


 

 

$

109,068


 

 

$

139,652


 

 

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of U.S. dollars)


 

 

Three Months Ended
June 30,


 

2013


 

2012

Net income for the period

$

42,172


 

 

$

7,971


 

Other comprehensive income—net of tax:


 

 

 

Net foreign currency translation adjustments

2,911


 

 

1,930


 

Net unrealized gain (loss) on cash flow hedges

(2,194)


 

 

(737)


 

Net actuarial gain (loss) relating to defined benefit pension plans

474


 

 

(2,318)


 

 

 

 

 

 

 

 

 

Total other comprehensive income (loss), net, for the period

$

1,191


 

 

$

(1,125)


 

 

 

 

 

 

 

 

 

Total comprehensive income

$

43,363


 

 

$

6,846


 

 

OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)


 

 

Year Ended June 30,


 

2013


 

2012


 

2011

Cash flows from operating activities:


 

 

 

 

 

Net income for the period

$

148,520


 

 

$

125,174


 

 

$

123,203


 

Adjustments to reconcile net income to net cash provided by operating activities:


 

 

 

 

 

Depreciation and amortization of intangible assets

186,851


 

 

159,485


 

 

129,130


 

Share-based compensation expense

15,575


 

 

18,097


 

 

11,308


 

Excess tax benefits on share-based compensation expense

(915)


 

 

(2,723)


 

 

(1,888)


 

Pension expense

910


 

 

543


 

 

552


 

Amortization of debt issuance costs

2,123


 

 

1,703


 

 

1,359


 

Amortization of deferred charges and credits

11,815


 

 

11,579


 

 

8,519


 

Loss on sale and write down of property and equipment

24


 

 

203


 

 

12


 

Deferred taxes

(5,796)


 

 

(78,792)


 

 

(17,779)


 

Impairment and other non cash charges


 

 

1,389


 

 

(482)


 

Changes in operating assets and liabilities:


 

 

 

 

 

 

 

Accounts receivable

17,965


 

 

5,319


 

 

200


 

Prepaid expenses and other current assets

4,242


 

 

(2,079)


 

 

1,833


 

Income taxes

(17,053)


 

 

68,601


 

 

9,444


 

Deferred charges and credits

(9,274)


 

 

(22,035)


 

 

(29,071)


 

Accounts payable and accrued liabilities

(41,409)


 

 

(17,812)


 

 

(21,197)


 

Deferred revenue

5,418


 

 

(4,581)


 

 

10,738


 

Other assets

(494)


 

 

2,419


 

 

(2,660)


 

Net cash provided by operating activities

318,502


 

 

266,490


 

 

223,221


 

Cash flows from investing activities:


 

 

 

 

 

Additions of property and equipment

(23,107)


 

 

(25,828)


 

 

(36,662)


 

Purchase of patents

(192)


 

 

(193)


 

 


 

Purchase of System Solutions Australia Pty Limited, net of cash acquired

(516)


 

 

(1,738)


 

 


 

Purchase of EasyLink Services International Corporation, net of cash acquired

(315,331)


 

 


 

 


 

Purchase of Resonate KT Limited, net of cash acquired

(19,366)


 

 


 

 


 

Purchase of ICCM Professional Services Limited, net of cash acquired

(11,257)


 

 


 

 


 

Purchase of Operitel Corporation, net of cash acquired


 

 

(7,014)


 

 


 

Purchase of Global 360 Holding Corp., net of cash acquired


 

 

(245,653)


 

 


 

Purchase of StreamServe Inc., net of cash acquired


 

 


 

 

(57,221)


 

Purchase of weComm Limited, net of cash acquired


 

 


 

 

(20,198)


 

Purchase of Metastorm Inc., net of cash acquired


 

 


 

 

(168,657)


 

Purchase of New Generation Consulting Inc


 

 


 

 

(471)


 

Purchase consideration for prior period acquisitions

(875)


 

 

(1,113)


 

 

(4,577)


 

Other investing activities

(3,750)


 

 


 

 

518


 

Net cash used in investing activities

(374,394)


 

 

(281,539)


 

 

(287,268)


 

Cash flows from financing activities:


 

 

 

 

 

Excess tax benefits on share-based compensation expense

915


 

 

2,723


 

 

1,888


 

Proceeds from issuance of Common Shares

16,347


 

 

21,270


 

 

11,512


 

Purchase of Treasury Stock


 

 

(10,888)


 

 

(12,499)


 

Proceeds from long-term debt and revolver


 

 

648,500


 

 


 

Repayment of long-term debt and revolver

(30,677)


 

 

(349,187)


 

 

(3,575)


 

Debt issuance costs


 

 

(9,834)


 

 

(29)


 

Payments of dividends to shareholders

(17,703)


 

 


 

 


 

Net cash provided by (used in) financing activities

(31,118)


 

 

302,584


 

 

(2,703)


 

Foreign exchange gain (loss) on cash held in foreign currencies

(2,292)


 

 

(11,928)


 

 

24,698


 

Increase (decrease) in cash and cash equivalents during the period

(89,302)


 

 

275,607


 

 

(42,052)


 

Cash and cash equivalents at beginning of the period

559,747


 

 

284,140


 

 

326,192


 

Cash and cash equivalents at end of the period

$

470,445


 

 

$

559,747


 

 

$

284,140


 

 


 

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)


 

 

Three Months Ended
June 30,


 

2013


 

2012

Cash flows from operating activities:


 

 

 

Net income for the period

$

42,172


 

 

$

7,971


 

Adjustments to reconcile net income to net cash provided by operating activities:


 

 

 

Depreciation and amortization of intangible assets

46,994


 

 

39,911


 

Share-based compensation expense

5,422


 

 

4,691


 

Excess tax benefits on share-based compensation expense

(303)


 

 

(13)


 

Pension expense

218


 

 

66


 

Amortization of debt issuance costs

532


 

 

537


 

Amortization of deferred charges and credits

3,195


 

 

3,122


 

Loss on sale and write down of property and equipment


 

 


 

Deferred taxes

1,566


 

 

(57,700)


 

Impairment and other non cash charges


 

 

44


 

Changes in operating assets and liabilities:


 

 

 

Accounts receivable

2,578


 

 

14,583


 

Prepaid expenses and other current assets

6,303


 

 

1,028


 

Income taxes

(2,146)


 

 

69,551


 

Deferred charges and credits

(12,854)


 

 

2,043


 

Accounts payable and accrued liabilities

(14,233)


 

 

3,540


 

Deferred revenue

(12,774)


 

 

(13,078)


 

Other assets

(1,453)


 

 

3,550


 

Net cash provided by operating activities

65,217


 

 

79,846


 

Cash flows from investing activities:


 

 

 

Additions of property and equipment

(7,315)


 

 

(4,447)


 

Purchase of patents

(192)


 

 


 

Purchase of System Solutions Australia Pty Limited, net of cash acquired


 

 


 

Purchase of EasyLink Services International Corporation, net of cash acquired


 

 


 

Purchase of Resonate KT Limited, net of cash acquired


 

 


 

Purchase of ICCM Professional Services Limited, net of cash acquired

(11,257)


 

 


 

Purchase of Operitel Corporation, net of cash acquired


 

 

(623)


 

Purchase of Global 360 Holding Corp., net of cash acquired


 

 


 

Purchase of StreamServe Inc., net of cash acquired


 

 


 

Purchase of weComm Limited, net of cash acquired


 

 


 

Purchase of Metastorm Inc., net of cash acquired


 

 


 

Purchase of New Generation Consulting Inc


 

 


 

Purchase consideration for prior period acquisitions

(222)


 

 

(187)


 

Other investing activities

(3,750)


 

 

 


 

Net cash used in investing activities

(22,736)


 

 

(5,257)


 

Cash flows from financing activities:


 

 

 

Excess tax benefits on share-based compensation expense

303


 

 

13


 

Proceeds from issuance of Common Shares

8,817


 

 

2,934


 

Purchase of Treasury Stock


 

 

(10,888)


 

Proceeds from long-term debt and revolver


 

 


 

Repayment of long-term debt and revolver

(7,669)


 

 

(7,667)


 

Debt issuance costs


 

 


 

Payments of dividends to shareholders

(17,703)


 

 


 

Net cash provided by (used in) financing activities

(16,252)


 

 

(15,608)


 

Foreign exchange gain (loss) on cash held in foreign currencies

(2,695)


 

 

(8,140)


 

Increase (decrease) in cash and cash equivalents during the period

23,534


 

 

50,841


 

Cash and cash equivalents at beginning of the period

446,911


 

 

508,906


 

Cash and cash equivalents at end of the period

$

470,445


 

 

$

559,747


 

 

Notes

(1)

All dollar amounts in this press release are in U.S. Dollars unless otherwise indicated.

(2)

Use of Non-GAAP Financial Measures: In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (non-GAAP).These non-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-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 these non-GAAP financial measures both in its reconciliation to the U.S. GAAP financial measures and its consolidated financial statements, all of which should be considered when evaluating the Company's results.

 


 

The Company uses these non-GAAP financial measures to supplement the information provided in its consolidated financial statements, which are presented in accordance with U.S. GAAP. The presentation of non-GAAP financial measures are not meant to be a substitute for financial measures 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. OpenText 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 U.S. GAAP measures with certain non-GAAP measures defined below.

 


 

Non-GAAP-based net income and non-GAAP-based EPS are calculated as net income or net income per share on a diluted basis, excluding, the amortization of acquired intangible assets, other income (expense), share-based compensation, and special charges, all net of tax. Non-GAAP-based gross profit is the arithmetical sum of GAAP-based gross profit and the amortization of acquired technology-based intangible assets. Non-GAAP-based gross margin is calculated as non-GAAP-based gross profit expressed as a percentage of revenue. Non-GAAP-based income from operations is calculated as income from operations, excluding, the amortization of acquired intangible assets, special charges, and share-based compensation. Non-GAAP-based operating margin is calculated as non-GAAP-based income from operations expressed as a percentage of revenue.

 


 

The Company's management believes that the presentation, of the above defined non-GAAP financial measures, provides useful information to investors because they portray the financial results of the Company before the impact of certain non-operational charges. The use of the term "non-operational charge" is defined for this purpose as an expense that does not impact the ongoing 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, including amortization of acquired intangible assets, 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 U.S. GAAP.

 


 

The Company believes the provision of supplemental non-GAAP measures allow 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 OpenText's performance or expected performance of future 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 U.S. GAAP measures, supplementary non-GAAP financial measures that exclude certain items from the presentation of its financial results in this press release.

 


 

The following charts provide (unaudited) reconciliations of U.S. GAAP-based financial measures to non-U.S. GAAP-based financial measures for the following periods presented:


 

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the three months ended June 30, 2013.

($ in thousands except for per share amounts)


 

 

Three Months Ended

June 30, 2013


 

 

GAAP-based

Measures

GAAP-based Measures  

% of Revenue

Adjustments

Note

Non-GAAP-based

Measures

Non-GAAP-based Measures    

% of Revenue

Cost of revenues


 

 

 

 

 

 

Cloud services

$

17,696


 

 

$

(48)


 

(1)


 

$

17,648


 

 

Customer Support

25,351


 

 

(159)


 

(1)


 

25,192


 

 

Professional Service and Other

47,879


 

 

(255)


 

(1)


 

47,624


 

 

Amortization of acquired technology-based intangible assets

23,579


 

 

(23,579)


 

(2)


 


 

 

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

229,233


 

66.0

%

24,041


 

(3)


 

253,274


 

72.9

%

Operating Expenses


 

 

 

 

 

 

Research and development

42,383


 

 

(526)


 

(1)


 

41,857


 

 

Sales and marketing

79,338


 

 

(2,476)


 

(1)


 

76,862


 

 

General and administrative

27,857


 

 

(1,958)


 

(1)


 

25,899


 

 

Amortization of acquired customer-based intangible assets

17,197


 

 

(17,197)


 

(2)


 


 

 

Special charges

6,767


 

 

(6,767)


 

(4)


 


 

 

GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)

49,473


 

14.2

%

52,965


 

(5)


 

102,438


 

29.5

%

Other income (expense), net

(4,180)


 

 

4,180


 

(6)


 


 

 

Provision for (recovery of) income taxes

(869)


 

 

14,652


 

(7)


 

13,783


 

 

GAAP-based net income / Non-GAAP-based net income

42,172


 

 

42,493


 

(8)


 

84,665


 

 

GAAP-based earnings per share /

Non-GAAP-based earnings per share-diluted

$

0.71


 

 

$

0.72


 

(8)


 

$

1.43


 

 

 

(1)

Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3)

GAAP-based and Non GAAP-based gross profit stated in dollars, and gross margin stated as a percentage of revenue.

(4)

Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(5)

GAAP-based and Non GAAP-based income from operations stated in dollars, and operating margin stated as a percentage of revenue.

(6)

Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(7)

Adjustment relates to differences between the GAAP-based tax recovery of approximately 2% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income.

(8)

Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:  


 

 

Three Months Ended
June 30, 2013


 

 

Per share  

Non-GAAP-based net income

$

84,665


 

$

1.43


 

Less:


 

 

Amortization

40,776


 

0.69


 

Share-based compensation

5,422


 

0.09


 

Special charges

6,767


 

0.11


 

Other (income) expense, net

4,180


 

0.07


 

GAAP-based provision for (recovery of) income taxes

(869)


 

(0.01)


 

Non-GAAP-based provision for income taxes

(13,783)


 

(0.23)


 

GAAP-based net income

$

42,172


 

$

0.71


 

 

 


 

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the year ended June 30, 2013.

($ in thousands except for per share amounts)


 

 

Year Ended

June 30, 2013


 

 

GAAP-based

Measures

GAAP-based Measures  

% of Revenue

Adjustments

Note

Non-GAAP-based

Measures

Non-GAAP-based Measures    

% of Revenue

Cost of revenues


 

 

 

 

 

 

Cloud services

$

72,365


 

 

$

(128)


 

(1)


 

$

72,237


 

 

Customer Support

106,948


 

 

(434)


 

(1)


 

106,514


 

 

Professional Service and Other

196,874


 

 

(915)


 

(1)


 

195,959


 

 

Amortization of acquired technology-based intangible assets

93,610


 

 

(93,610)


 

(2)


 


 

 

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

877,432


 

64.4

%

95,087


 

(3)


 

972,519


 

71.3

%

Operating Expenses


 

 

 

 

 

 

Research and development

164,010


 

 

(1,693)


 

(1)


 

162,317


 

 

Sales and marketing

289,157


 

 

(8,429)


 

(1)


 

280,728


 

 

General and administrative

109,325


 

 

(3,976)


 

(1)


 

105,349


 

 

Amortization of acquired customer-based intangible assets

68,745


 

 

(68,745)


 

(2)


 


 

 

Special charges

24,034


 

 

(24,034)


 

(4)


 


 

 

GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)

197,665


 

14.5

%

201,964


 

(5)


 

399,629


 

29.3

%

Other income (expense), net

(2,473)


 

 

2,473


 

(6)


 


 

 

Provision for (recovery of) income taxes

29,690


 

 

23,881


 

(7)


 

53,571


 

 

GAAP-based net income / Non-GAAP-based net income

148,520


 

 

180,556


 

(8)


 

329,076


 

 

GAAP-based earnings per share /

Non-GAAP-based earnings per share-diluted

$

2.51


 

 

$

3.06


 

(8)


 

$

5.57


 

 

 

(1)

Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3)

GAAP-based and Non GAAP-based gross profit stated in dollars, and gross margin stated as a percentage of revenue.

(4)

Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(5)

GAAP-based and Non GAAP-based income from operations stated in dollars, and operating margin stated as a percentage of revenue.

(6)

Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(7)

Adjustment relates to differences between the GAAP-based tax provision of approximately 17% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income.

(8)

Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:  


 

 

Year Ended

June 30, 2013


 

 

Per share  

Non-GAAP-based net income

$

329,076


 

$

5.57


 

Less:


 

 

Amortization

162,355


 

2.75


 

Share-based compensation

15,575


 

0.26


 

Special charges

24,034


 

0.41


 

Other (income) expense, net

2,473


 

0.04


 

GAAP-based provision for (recovery of) income taxes

29,690


 

0.50


 

Non-GAAP-based provision for income taxes

(53,571)


 

(0.90)


 

GAAP-based net income

$

148,520


 

$

2.51


 

 

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the three months ended March 31, 2013.

($ in thousands except for per share amounts)


 

 

Three Months Ended
March 31, 2013


 

 

GAAP-based

Measures

GAAP-based Measures  

% of Revenue

Adjustments

Note

Non-GAAP-based

Measures

Non-GAAP-based Measures    

% of Revenue

Cost of revenues


 

 

 

 

 

 

Cloud services

$

18,741


 

 

$

(50)


 

(1)


 

$

18,691


 

 

Customer Support

27,497


 

 

(130)


 

(1)


 

27,367


 

 

Professional Service and Other

49,701


 

 

(295)


 

(1)


 

49,406


 

 

Amortization of acquired technology-based intangible assets

23,058


 

 

(23,058)


 

(2)


 


 

 

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

215,619


 

63.9

%

23,533


 

(3)


 

239,152


 

70.8

%

Operating Expenses


 

 

 

 

 

 

Research and development

43,003


 

 

(498)


 

(1)


 

42,505


 

 

Sales and marketing

77,327


 

 

(2,634)


 

(1)


 

74,693


 

 

General and administrative

25,762


 

 

(270)


 

(1)


 

25,492


 

 

Amortization of acquired customer-based intangible assets

17,149


 

 

(17,149)


 

(2)


 


 

 

Special charges

5,444


 

 

(5,444)


 

(4)


 


 

 

GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)

40,870


 

12.1

%

49,528


 

(5)


 

90,398


 

26.8

%

Other income (expense), net

237


 

 

(237)


 

(6)


 


 

 

Provision for (recovery of) income taxes

11,187


 

 

893


 

(7)


 

12,080


 

 

GAAP-based net income / Non-GAAP-based net income

25,811


 

 

48,398


 

(8)


 

74,209


 

 

GAAP-based earnings per share /

Non-GAAP-based earnings per share-diluted

$

0.44


 

 

$

0.82


 

(8)


 

$

1.26


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3)

GAAP-based and Non GAAP-based gross profit stated in dollars, and gross margin stated as a percentage of revenue.

(4)

Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(5)

GAAP-based and Non GAAP-based income from operations stated in dollars, and operating margin stated as a percentage of revenue.

(6)

Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(7)

Adjustment relates to differences between the GAAP-based tax provision of approximately 30% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income.

(8)

Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:  


 

 

Three Months Ended
March 31, 2013


 

 

Per share  

Non-GAAP-based net income

$

74,209


 

$

1.26


 

Less:


 

 

Amortization

40,207


 

0.68


 

Share-based compensation

3,877


 

0.07


 

Special charges

5,444


 

0.09


 

Other (income) expense, net

(237)


 


 

GAAP-based provision for (recovery of) income taxes

11,187


 

0.19


 

Non-GAAP-based provision for income taxes

(12,080)


 

(0.21)


 

GAAP-based net income

$

25,811


 

$

0.44


 

 


 

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the nine months ended March 31, 2013.

($ in thousands except for per share amounts)


 

 

Nine Months Ended
March 31, 2013


 

 

GAAP-based

Measures

GAAP-based Measures  

% of Revenue

Adjustments

Note

Non-GAAP-based

Measures

Non-GAAP-based Measures    

% of Revenue

Cost of revenues


 

 

 

 

 

 

Cloud services

$

54,669


 

 

$

(80)


 

(1)


 

$

54,589


 

 

Customer Support

81,597


 

 

(275)


 

(1)


 

81,322


 

 

Professional Service and Other

148,995


 

 

(660)


 

(1)


 

148,335


 

 

Amortization of acquired technology-based intangible assets

70,031


 

 

(70,031)


 

(2)


 


 

 

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

648,199


 

63.8

%

71,046


 

(3)


 

719,245


 

70.8

%

Operating Expenses


 

 

 

 

 

 

Research and development

121,627


 

 

(1,167)


 

(1)


 

120,460


 

 

Sales and marketing

209,819


 

 

(5,953)


 

(1)


 

203,866


 

 

General and administrative

81,468


 

 

(2,018)


 

(1)


 

79,450


 

 

Amortization of acquired customer-based intangible assets

51,548


 

 

(51,548)


 

(2)


 


 

 

Special charges

17,267


 

 

(17,267)


 

(4)


 


 

 

GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)

148,192


 

14.6

%

148,999


 

(5)


 

297,191


 

29.2

%

Other income (expense), net

1,707


 

 

(1,707)


 

(6)


 


 

 

Provision for (recovery of) income taxes

30,559


 

 

9,229


 

(7)


 

39,788


 

 

GAAP-based net income / Non-GAAP-based net income

106,348


 

 

138,063


 

(8)


 

244,411


 

 

GAAP-based earnings per share /

Non-GAAP-based earnings per share-diluted

$

1.80


 

 

$

2.34


 

(8)


 

$

4.14


 

 

 

(1)

Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3)

GAAP-based and Non GAAP-based gross profit stated in dollars, and gross margin stated as a percentage of revenue.

(4)

Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(5)

GAAP-based and Non GAAP-based income from operations stated in dollars, and operating margin stated as a percentage of revenue.

(6)

Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(7)

Adjustment relates to differences between the GAAP-based tax provision of approximately 22% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income.

(8)

Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:  

 


 


 

Nine Months Ended
March 31, 2013


 

 

Per share  

Non-GAAP-based net income

$

244,411


 

$

4.14


 

Less:


 

 

Amortization

121,579


 

2.06


 

Share-based compensation

10,153


 

0.17


 

Special charges

17,267


 

0.29


 

Other (income) expense, net

(1,707)


 

(0.03)


 

GAAP-based provision for (recovery of) income taxes

30,559


 

0.52


 

Non-GAAP-based provision for income taxes

(39,788)


 

(0.67)


 

GAAP-based net income

$

106,348


 

$

1.80


 

    


 

Reconciliation of selected GAAP-based measures to Non GAAP-based measures for the three months ended June 30, 2012.

($ in thousands except for per share amounts)


 

 

Three Months Ended
June 30, 2012


 

 

GAAP-based

Measures

GAAP-based Measures  

% of Revenue

Adjustments

Note

Non-GAAP-based

Measures

Non-GAAP-based Measures    

% of Revenue

Cost of Revenues:


 

 

 

 

 

 

Customer Support

$

27,780


 

 

$

(58)


 

(1)


 

$

27,722


 

 

Professional Service and Other

51,358


 

 

(239)


 

(1)


 

51,119


 

 

Amortization of acquired technology-based intangible assets

21,265


 

 

(21,265)


 

(2)


 


 

 

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

201,105


 

65.8

%

21,562


 

(3)


 

222,667


 

72.9

%

Operating Expenses


 

 

 

 

 

 

Research and development

41,195


 

 

(1,066)


 

(1)


 

40,129


 

 

Sales and marketing

71,641


 

 

(2,771)


 

(1)


 

68,870


 

 

General and administrative

24,186


 

 

(557)


 

(1)


 

23,629


 

 

Amortization of acquired customer-based intangible assets

13,378


 

 

(13,378)


 

(2)


 


 

 

Special charges

5,747


 

 

(5,747)


 

(4)


 


 

 

GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)

39,690


 

13.0

%

45,081


 

(5)


 

84,771


 

27.7

%

Other income (expense), net

(6,596)


 

 

6,596


 

(6)


 


 

 

Provision for (recovery of) income taxes

20,713


 

 

(9,462)


 

(7)


 

11,251


 

 

GAAP-based net income / Non-GAAP-based net income

7,971


 

 

61,139


 

(8)


 

69,110


 

 

GAAP-based earnings per share /

Non-GAAP-based earnings per share-diluted

$

0.14


 

 

$

1.03


 

(8)


 

$

1.17


 

 

 

(1)

Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3)

GAAP-based and Non GAAP-based gross profit stated in dollars, and gross margin stated as a percentage of revenue.

(4)

Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(5)

GAAP-based and Non GAAP-based income from operations stated in dollars, and operating margin stated as a percentage of revenue.

(6)

Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(7)

Adjustment relates to differences between the GAAP-based tax provision of approximately 72% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income.

(8)

Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:  


 

 

 

Three Months Ended
June 30, 2012


 

 

Per share  

Non-GAAP-based net income

$

69,110


 

$

1.17


 

Less:


 

 

Amortization

34,643


 

0.59


 

Share-based compensation

4,691


 

0.08


 

Special charges

5,747


 

0.10


 

Other (income) expense, net

6,596


 

0.11


 

GAAP-based provision for (recovery of) income taxes

20,713


 

0.35


 

Non-GAAP-based provision for income taxes

(11,251)


 

(0.20)


 

GAAP-based net income

$

7,971


 

$

0.14


 

 

 


 


 

Reconciliation of selected GAAP-based measures to Non GAAP-based measures for year ended June 30, 2012.

($ in thousands except for per share amounts)


 

 

Year Ended
June 30, 2012


 

 

GAAP-based

Measures

GAAP-based Measures  

% of Revenue

Adjustments

Note

Non-GAAP-based

Measures

Non-GAAP-based Measures    

% of Revenue

Cost of Revenues:


 

 

 

 

 

 

Customer Support

$

110,504


 

 

$

(169)


 

(1)


 

$

110,335


 

 

Professional Service and Other

204,909


 

 

(647)


 

(1)


 

204,262


 

 

Amortization of acquired technology-based intangible assets

84,572


 

 

(84,572)


 

(2)


 


 

 

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

789,455


 

65.4

%

85,388


 

(3)


 

874,843


 

72.5

%

Operating Expenses


 

 

 

 

 

 

Research and development

169,043


 

 

(3,939)


 

(1)


 

165,104


 

 

Sales and marketing

274,544


 

 

(8,811)


 

(1)


 

265,733


 

 

General and administrative

97,072


 

 

(4,531)


 

(1)


 

92,541


 

 

Amortization of acquired customer-based intangible assets

53,326


 

 

(53,326)


 

(2)


 


 

 

Special charges

24,523


 

 

(24,523)


 

(4)


 


 

 

GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)

149,360


 

12.4

%

180,518


 

(5)


 

329,878


 

27.3

%

Other income (expense), net

3,549


 

 

(3,549)


 

(6)


 


 

 

Provision for (recovery of) income taxes

12,171


 

 

31,833


 

(7)


 

44,004


 

 

GAAP-based net income / Non-GAAP-based net income

125,174


 

 

145,136


 

(8)


 

270,310


 

 

GAAP-based earnings per share /

Non-GAAP-based earnings per share-diluted

$

2.13


 

 

$

2.47


 

(8)


 

$

4.60


 

 

 

(1)

Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3)

GAAP-based and Non GAAP-based gross profit stated in dollars, and gross margin stated as a percentage of revenue.

(4)

Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(5)

GAAP-based and Non GAAP-based income from operations stated in dollars, and operating margin stated as a percentage of revenue.

(6)

Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.

(7)

Adjustment relates to differences between the GAAP-based tax provision of approximately 9% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income.

(8)

Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:  


 

 

 

Year Ended
June 30, 2012


 

 

Per share  


 

Non-GAAP-based net income

$

270,310


 

$

4.60


 

Less:


 

 

Amortization

137,898


 

2.35


 

Share-based compensation

18,097


 

0.31


 

Special charges

24,523


 

0.42


 

Other (income) expense, net

(3,549)


 

(0.06)


 

GAAP-based provision for (recovery of) income taxes

12,171


 

0.21


 

Non-GAAP-based provision for income taxes

(44,004)


 

(0.76)


 

GAAP-based net income

$

125,174


 

$

2.13


 

 

(3)

The following tables provide a composition of our major currencies for revenue and expenses expressed as a percentage, for the three months and year ended June 30, 2013:


 

 

Three Months Ended
June 30, 2013


 

Currencies

 

% of Revenue

 

% of Expenses*

 

EURO

26

%

17

%

GBP

8

%

8

%

CAD

6

%

19

%

USD

49

%

42

%

Other

11

%

14

%

Total

100

%

100

%

 


 

Year Ended

June 30, 2013


 

Currencies

 

% of Revenue

 

% of Expenses*

 

EURO

26

%

17

%

GBP

8

%

8

%

CAD

6

%

18

%

USD

49

%

43

%

Other

11

%

14

%

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 and Special charges.

 

For more information, please contact:

United States:

Greg Secord
Vice President, Investor Relations
OpenText Corporation
San Francisco: 415-963-0825
gsecord@opentext.com

Canada:

Sonya Mehan
Senior Manager, Investor Relations
OpenText Corporation
Waterloo: 519-888-7111 ext. 2446
smehan@opentext.com

 

SOURCE OpenText Corporation



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