OPEN TEXT CORPORATION WATERLOO, Ontario, July 30, 2014 /PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX) (TSX: OTC) announced today its financial results for the fourth quarter and fiscal year ended June 30, 2014, and the appointment of John Doolittle as Chief Financial Officer.
Financial Highlights for Q4 FY14 (1)
-- Total revenue was $494.0 million, up 42% Y/Y
-- License revenue was $99.7 million, up 27% Y/Y
-- Cloud services revenue was $148.9 million, up 255% Y/Y
-- Customer support revenue was $183.9 million, up 12% Y/Y
-- Non-GAAP-based EPS, diluted was $1.05 compared to $0.72 Y/Y, up 48%;
GAAP-based EPS, diluted was $0.72 compared to $0.36 Y/Y up 100%, on a
post stock-split basis.((2))
-- Non-GAAP-based income from operations was $162.2 million and 33% of
revenues up 58% Y/Y; GAAP-based income from operations was $107.7
million and 22% of revenues, up 118% Y/Y.(2)
-- Operating cash flow was $134.9 million, up 107%Y/Y, with an ending cash
balance of $427.9 million.
Financial Highlights for FY14 (1)
-- Total revenue for the period was $1,624.7 million, up 19% Y/Y
-- License revenue was $309.2 million, up 11% Y/Y
-- Cloud services revenue was $361.1 million, up 108% Y/Y
-- Customer support revenue was $707.0 million, up 7% Y/Y
-- Non-GAAP-based EPS, diluted was $3.37 compared to $2.79 Y/Y, up 21%;
GAAP-based EPS, diluted was $1.81 compared to $1.26 Y/Y up 44%, on a
post stock-split basis.(2)
-- Non-GAAP-based income from operations was $502.7 million and 31% of
revenues, up 26% Y/Y; GAAP-based income from operations was $300.5
million and 18% of revenues, up 52% Y/Y.(2)
-- Operating cash flow was $417.1 million, up 31%Y/Y, with an ending cash
balance of $427.9 million.
"Our focus on Enterprise Information Management is well aligned to the strategic priorities of our customers. We delivered record quarterly and full fiscal year results, including full fiscal year total revenues of $1.625 billion, up 19%, license of $309 million, up 11%, and operating cash flows of $417 million, up 31% year over year," said Mark J. Barrenechea OpenText CEO. "For Fiscal 2015, we are committed to unlocking further value, growth and leadership for our customers, partners and shareholders through focused execution utilizing our Intelligent Growth Business System (OTIGS)."
Appoints John Doolittle as Chief Financial Officer
Mr. Doolittle is a senior executive with more than 20 years of financial experience, including most recently as Chief Financial Officer (CFO) of Mattamy Homes Limited, Canada's largest new home builder, and with Nortel Networks Corporation, where he held senior global finance roles.
"John brings tremendous experience as a seasoned global executive," said Mark J. Barrenechea OpenText CEO. "He has the breadth of financial skills, experience and leadership to take our finance organization and our company to the next level of scale, efficiency and growth."
Commenting on his appointment, Mr. Doolittle said, "OpenText's strategy of Enterprise Information Management is placing OpenText in a winning market position. I look forward to joining Mark's world-class executive team and contributing to the company's exciting next phase of growth and execution."
Effective September 8, 2014, Mr. Doolittle will replace Paul McFeeters who previously announced his intention to retire from his position as CFO by no later than September 30, 2014. Mr. Doolittle will work with Mr. McFeeters to ensure a seamless transition of financial leadership responsibilities.
Barrenechea further added, "I would like to take this opportunity again to thank Paul McFeeters. Paul has served as our CFO for 8 years, his career spans nearly 40 years and I thank him for his extraordinary service to the company. John and Paul will work together to ensure a textbook transition."
Business Highlights
-- Basic materials, technology, services and financial industries saw the
most demand
-- 16 license transactions over $1 million and 11 license transactions
between $500K and $1 million
-- Customer successes in the quarter include Banco Original, The City of
Calgary, FMC Technologies, Joy Global, Del Monte Foods Inc, Tata Motors
Limited, Superior Tribunal de Justica, AbbVie and Eisenmann AG
-- OpenText launches Discovery Suite to capture and create value in big
content
-- SAP and OpenText to accelerate global adoption of enterprise content
management
-- OpenText receives SAP® Pinnacle Award for the seventh consecutive year
-- OpenText announces free enterprise file synchronization and sharing for
content management customers
Dividend Program Highlights
Cash Dividend
As part of our quarterly, non cumulative cash dividend program the Board declared a quarterly cash dividend to holders of the Company's Common Shares of $0.1725. The record date for this dividend is August 29, 2014 and the payment date is September 19, 2014. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board of Directors.
Summary of Quarterly Results
----------------------------
Q4 FY14 Q3 FY14 Q4 FY13 % Change % Change
(Q/Q) (Y/Y)
Revenue
(million) $494.0 $442.8 $347.3 11.6% 42.2%
GAAP-
based
gross
margin 69.1% 67.3% 66.0% 180 bps 310 bps
GAAP-
based
operating
margin 21.8% 15.1% 14.2% 670 bps 760 bps
GAAP-
based
EPS,
diluted $0.72 $0.38 $0.36 89.5% 100.0%
Non-GAAP-
based
gross
margin
(2) 72.9% 71.3% 72.9% 160 bps - bps
Non-GAAP-
based
operating
margin
(2) 32.8% 29.1% 29.5% 370 bps 330 bps
Non-GAAP-
based
EPS,
diluted
(2) $1.05 $0.84 $0.72 25.0% 45.8%
--------- ----- ----- ----- ---- ----
Summary of Year to Date Results
-------------------------------
FY14 Q3 FY14 YTD FY13 % Change
(Y/Y)
Revenue
(million) $1,624.7 $1,130.7 $1,363.3 19.2%
GAAP-
based
gross
margin 68.5% 68.3% 64.4% 410 bps
GAAP-
based
operating
margin 18.5% 17.1% 14.5% 400 bps
GAAP-
based
EPS,
diluted $1.81 $1.08 $1.26 43.7%
Non-
GAAP-
based
gross
margin
(2) 72.9% 73.0% 71.3% 160 bps
Non-
GAAP-
based
operating
margin
(2) 30.9% 30.1% 29.3% 160 bps
Non-
GAAP-
based
EPS,
diluted
(2) $3.37 $2.32 $2.79 20.8%
-------- ----- ----- ----- ----
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 866-530-1553 (toll-free) or 416-847-6330 (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://investors.opentext.com/events.cfm .
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 8:00 p.m. on August 14, 2014 and can be accessed by dialing 888-203-1112 (toll-free) or 647-436-0148 (international) and entering the confirmation code: 6995981 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 Enterprise Information Management (EIM) capabilities, distribution, the Company's presence in the cloud and in growth markets, its financial condition, results of operations and earnings, declaration of quarterly dividends, and other matters, may contain words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "could", "would", "might", "will" and variations of these words or similar expressions are considered forward-looking statements or information under applicable securities laws. In addition, any information or statements that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking, and based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management's perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances, such as certain assumptions about the economy, as well as market, financial and operational assumptions. Management's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct. 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 and services 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 and services to be realized by customers; (viii) the demand for the Company's products and services and the extent of deployment of the Company's products and services 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 thereunder; (iii) the risks associated with bringing new products and services 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 final determination of litigation, tax audits and other legal proceedings; (viii) the possibility of technical, logistical or planning issues in connection with the deployment of the Company's products or services; (ix) the continuous commitment of the Company's customers; and (x) 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 Securities and Exchange Commission (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.
OTEX-F
For more information, please contact:
United States:
Greg Secord
Vice President, Investor Relations
Open Text Corporation
San Francisco: 415-963-0825
gsecord@opentext.com
Canada:
Sonya Mehan
Senior Manager, Investor Relations
Open Text Corporation
Waterloo: 519-888-7111 ext. 2446
smehan@opentext.com
Copyright ©2014 Open Text 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, 2014 June 30, 2013
------------- -------------
ASSETS
Cash and cash equivalents $427,890 $470,445
Accounts receivable trade, net of
allowance for doubtful accounts
of $4,499 as of June 30, 2014 and
$4,871 as of June 30, 2013 292,929 174,927
Income taxes recoverable 24,648 17,173
Prepaid expenses and other current
assets 42,053 43,464
Deferred tax assets 28,215 11,082
------ ------
Total current assets 815,735 717,091
Property and equipment 142,261 88,364
Goodwill 1,963,557 1,246,872
Acquired intangible assets 725,318 363,615
Deferred tax assets 156,712 135,695
Other assets 52,041 25,082
Deferred charges 52,376 67,633
Long-term income taxes recoverable 10,638 10,465
Total assets $3,918,638 $2,654,817
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $231,954 $188,443
Current portion of long-term debt 62,582 51,742
Deferred revenues 332,664 282,387
Income taxes payable 31,630 4,184
Deferred tax liabilities 1,053 1,127
----- -----
Total current liabilities 659,883 527,883
Long-term liabilities:
Accrued liabilities 41,999 17,849
Deferred credits 17,529 11,608
Pension liability 60,300 24,509
Long-term debt 1,256,750 513,750
Deferred revenues 17,248 11,830
Long-term income taxes payable 162,131 140,508
Deferred tax liabilities 60,631 69,672
------ ------
Total long-term liabilities 1,616,588 789,726
Shareholders' equity:
Share capital
121,758,432 and 118,057,772 Common
Shares issued and outstanding at
June 30, 2014 and June 30, 2013,
respectively; Authorized Common
Shares: unlimited 792,834 651,642
Additional paid-in capital 112,398 101,865
Accumulated other comprehensive
income 39,449 39,890
Retained earnings 716,317 572,885
Treasury stock, at cost (763,278
shares at June 30, 2014 and
1,221,756 at June 30, 2013,
respectively) (19,132) (29,074)
------- -------
Total OpenText shareholders'
equity 1,641,866 1,337,208
Non-controlling interests 301 -
--- ---
Total shareholders' equity 1,642,167 1,337,208
Total liabilities and
shareholders' equity $3,918,638 $2,654,817
========== ==========
OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share and per share data)
Year Ended June 30,
-------------------
2014 2013 2012
---- ---- ----
Revenues:
License $309,217 $279,598 293,719
Cloud services 361,069 173,799 -
Customer support 707,024 658,216 656,568
Professional service and other 247,389 251,723 257,186
------- -------
Total revenues 1,624,699 1,363,336 1,207,473
--------- --------- ---------
Cost of revenues:
License 13,362 16,107 18,033
Cloud services 135,472 72,365 -
Customer support 95,980 106,948 110,504
Professional service and other 196,939 196,874 204,909
Amortization of acquired technology-
based intangible assets 69,917 93,610 84,572
------ ------
Total cost of revenues 511,670 485,904 418,018
------- ------- -------
Gross profit 1,113,029 877,432 789,455
--------- ------- -------
Operating expenses:
Research and development 176,834 164,010 169,043
Sales and marketing 345,643 289,157 274,544
General and administrative 142,450 109,325 97,072
Depreciation 35,237 24,496 21,587
Amortization of acquired customer-
based intangible assets 81,023 68,745 53,326
Special charges 31,314 24,034 24,523
------ ------
Total operating expenses 812,501 679,767 640,095
------- ------- -------
Income from operations 300,528 197,665 149,360
------- ------- -------
Other income (expense), net 3,941 (2,473) 3,549
Interest and other related expense, net (27,934) (16,982) (15,564)
------- -------
Income before income taxes 276,535 178,210 137,345
Provision for income taxes 58,461 29,690 12,171
------ ------
Net income for the period $218,074 $148,520 $125,174
-------- -------- --------
Net loss attributable to non-
controlling interests 51 - $ -
Net income attributable to OpenText $218,125 $148,520 $125,174
======== ======== ========
Earnings per share-basic attributable
to OpenText $1.82 $1.27 $1.08
===== ===== =====
Earnings per share-diluted
attributable to OpenText $1.81 $1.26 $1.07
===== ===== =====
Weighted average number of Common
Shares outstanding-basic 119,674 117,208 115,780
======= ======= =======
Weighted average number of Common
Shares outstanding-diluted 120,576 118,124 117,468
======= ======= =======
Dividends declared per Common Share $0.6225 $0.15 $ -
======= ===== === ===
OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share and per share data)
Three Months Ended
June 30,
--------
2014 2013
---- ----
Revenues:
License $99,664 $78,782
Cloud services 148,891 41,890
Customer support 183,869 164,889
Professional service and other 61,554 61,706
------ ------
Total revenues 493,978 347,267
------- -------
Cost of revenues:
License 3,495 3,529
Cloud services 55,780 17,696
Customer support 24,195 25,351
Professional service and other 51,041 47,879
Amortization of acquired technology-
based intangible assets 18,205 23,579
------ ------
Total cost of revenues 152,716 118,034
------- -------
Gross profit 341,262 229,233
------- -------
Operating expenses:
Research and development 47,502 42,383
Sales and marketing 101,240 79,338
General and administrative 41,413 27,857
Depreciation 11,354 6,218
Amortization of acquired customer-
based intangible assets 26,635 17,197
Special charges 5,413 6,767
----- -----
Total operating expenses 233,557 179,760
------- -------
Income from operations 107,705 49,473
------- ------
Other income (expense), net 1,103 (4,180)
Interest and other related expense, net (10,775) (3,990)
------- ------
Income before income taxes 98,033 41,303
Provision for (recovery of) income
taxes 9,885 (869)
----- ----
Net income for the period $88,148 $42,172
------- -------
Net gain attributable to non-
controlling interests (37) -
Net income attributable to OpenText $88,111 $42,172
======= =======
Earnings per share-basic attributable
to OpenText $0.72 $0.36
===== =====
Earnings per share-diluted
attributable to OpenText $0.72 $0.36
===== =====
Weighted average number of Common
Shares outstanding-basic 121,692 117,750
======= =======
Weighted average number of Common
Shares outstanding-diluted 122,511 118,476
======= =======
Dividends declared per Common Share $0.1725 $0.15
======= =====
OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
Year Ended June 30,
-------------------
2014 2013 2012
---- ---- ----
Net income for the period $218,074 $148,520 $125,174
Other comprehensive income-net of tax:
Net foreign currency translation
adjustments (2,779) (1,879) (9,197)
Unrealized gain (loss) on cash flow hedges
Unrealized loss (357) (1,054) (1,403)
(Gain) loss reclassified into
net income 3,242 (1,482) 334
Actuarial gain (loss) relating to defined
benefit pension plans, net of tax
Actuarial loss (841) (351) (5,840)
Amortization of actuarial loss
into net income 294 292 -
--- ---
Total other comprehensive loss,
net, for the period (441) (4,474) (16,106)
---- ------ -------
Total comprehensive income 217,633 144,046 109,068
Comprehensive loss attributable
to non-controlling interests 51 - -
--- ---
Total comprehensive income
attributable to OpenText $217,684 $144,046 $109,068
======== ======== ========
Three Months Ended
June 30,
--------
2014 2013
---- ----
Net income for the period $88,148 $42,172
Other comprehensive income-
net of tax:
Net foreign currency
translation adjustments (2,046) 2,911
Unrealized gain (loss) on cash
flow hedges
Unrealized loss 1,160 (2,151)
(Gain) loss reclassified into
net income 832 (43)
Actuarial gain (loss) relating
to defined benefit pension
plans, net of tax
Actuarial loss (60) 401
Amortization of actuarial loss
into net income 74 73
--- ---
Total other comprehensive
loss, net, for the period (40) 1,191
--- -----
Total comprehensive income 88,108 43,363
Comprehensive gain
attributable to non-
controlling interests (37) -
--- ---
Total comprehensive income
attributable to OpenText $88,071 $43,363
======= =======
OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
Year Ended June 30,
-------------------
2014 2013 2012
---- ---- ----
Cash flows from operating activities:
Net income for the period $218,074 $148,520 $125,174
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of
intangible assets 186,177 186,851 159,485
Share-based compensation expense 19,906 15,575 18,097
Excess tax benefits on share-based
compensation expense (1,844) (915) (2,723)
Pension expense 3,232 1,448 1,125
Amortization of debt issuance costs 3,191 2,123 1,703
Amortization of deferred charges and
credits 11,307 11,815 11,579
Loss on sale and write down of property
and equipment 15 24 203
Deferred taxes (31,016) (5,796) (78,792)
Impairment and other non cash charges - - 1,389
Changes in operating assets and liabilities:
Accounts receivable (17,186) 17,965 5,319
Prepaid expenses and other current
assets 11,146 4,242 (2,079)
Income taxes 29,990 (17,053) 68,601
Deferred charges and credits 9,870 (9,274) (22,035)
Accounts payable and accrued liabilities (36,478) (41,947) (18,394)
Deferred revenue 16,601 5,418 (4,581)
Other assets (5,858) (494) 2,419
------ ----
Net cash provided by operating
activities 417,127 318,502 266,490
------- ------- -------
Cash flows from investing activities:
Additions of property and equipment (42,268) (23,107) (25,828)
Purchase of patents (192) (192) (193)
Purchase of GXS Group, Inc., net of cash
acquired (1,076,886) - -
Purchase of Cordys Holding B.V., net of
cash acquired (30,588) - -
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 System Solutions Australia
Pty Limited (MessageManager), net of
cash acquired - (516) (1,738)
Purchase of Global 360 Holding Corp.,
net of cash acquired - - (245,653)
Purchase of Operitel Corporation, net of
cash acquired - - (7,014)
Purchase consideration for prior period
acquisitions (887) (875) (1,113)
Other investing activities (2,547) (3,750) -
Net cash used in investing activities (1,153,368) (374,394) (281,539)
---------- -------- --------
Cash flows from financing activities:
Excess tax benefits on share-based
compensation expense 1,844 915 2,723
Proceeds from issuance of Common Shares 24,808 16,347 21,270
Equity issuance costs (144) - -
Purchase of Treasury Stock (1,275) - (10,888)
Proceeds from long-term debt and
revolver 800,000 - 648,500
Repayment of long-term debt (45,911) (30,677) (349,187)
Debt issuance costs (16,685) - (9,834)
Payments of dividends to shareholders (74,693) (17,703) -
Net cash provided by (used in) financing
activities 687,944 (31,118) 302,584
------- ------- -------
Foreign exchange gain (loss) on cash
held in foreign currencies 5,742 (2,292) (11,928)
Increase (decrease) in cash and cash
equivalents during the period (42,555) (89,302) 275,607
Cash and cash equivalents at beginning
of the period 470,445 559,747 284,140
Cash and cash equivalents at end of the
period $427,890 $470,445 $559,747
-------- -------- --------
OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
Three Months Ended
June 30,
--------
2014 2013
---- ----
Cash flows from operating activities:
Net income for the period $88,148 $42,172
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of
intangible assets 56,194 46,994
Share-based compensation expense 4,199 5,422
Excess tax benefits on share-based
compensation expense (169) (303)
Pension expense 1,268 339
Amortization of debt issuance costs 1,131 532
Amortization of deferred charges and
credits 2,667 3,195
Loss on sale and write down of property
and equipment - -
Deferred taxes (26,813) 1,566
Changes in operating assets and liabilities:
Accounts receivable (36,315) 2,578
Prepaid expenses and other current
assets 29,771 6,303
Income taxes 24,412 (2,146)
Deferred charges and credits - (12,854)
Accounts payable and accrued liabilities (3,600) (14,354)
Deferred revenue (3,421) (12,774)
Other assets (2,558) (1,453)
------ ------
Net cash provided by operating
activities 134,914 65,217
------- ------
Cash flows from investing activities:
Additions of property and equipment (13,825) (7,315)
Purchase of patents - (192)
Purchase of GXS Group, Inc., net of cash
acquired 785 -
Purchase of Cordys Holding B.V., 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 System Solutions Australia
Pty Limited (MessageManager), net of
cash acquired - -
Purchase consideration for prior period
acquisitions (222) (222)
Other investing activities - (3,750)
Net cash used in investing activities (13,262) (22,736)
------- -------
Cash flows from financing activities:
Excess tax benefits on share-based
compensation expense 169 303
Proceeds from issuance of Common Shares 5,090 8,817
Equity issuance costs - -
Purchase of Treasury Stock - -
Proceeds from long-term debt and
revolver - -
Repayment of long-term debt (13,412) (7,669)
Debt issuance costs (653) -
Payments of dividends to shareholders (21,001) (17,703)
Net cash provided by (used in) financing
activities (29,807) (16,252)
------- -------
Foreign exchange gain (loss) on cash
held in foreign currencies (26) (2,695)
Increase (decrease) in cash and cash
equivalents during the period 91,819 23,534
Cash and cash equivalents at beginning
of the period 336,071 446,911
Cash and cash equivalents at end of the
period $427,890 $470,445
======== ========
Notes
-----
(1) All dollar amounts in this press
release are in U.S. Dollars unless
otherwise indicated.
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
(2) 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
(although prior performance is not
necessarily indicative of future
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, 2014.
(In thousands except for per share amounts)
------------------------------------------
Three Months Ended
June 30, 2014
-------------
GAAP-based GAAP-based Adjustments Note Non-GAAP-based Non-GAAP-
Measures based
Measures
Measures % of Revenue Measures % of Revenue
-------- ------------ -------- ------------
Cost of revenues
Cloud services $55,780 $(197) (1) $55,583
Customer support 24,195 (207) (1) 23,988
Professional
service and other 51,041 (112) (1) 50,929
Amortization of
acquired
technology-based
intangible assets 18,205 (18,205) (2) -
GAAP-based gross
profit and gross
margin (%) / 341,262 69.1% 18,721 (3) 359,983 72.9%
Non-GAAP-based gross profit
and gross margin (%)
Operating expenses
Research and
development 47,502 (450) (1) 47,052
Sales and marketing 101,240 (1,112) (1) 100,128
General and
administrative 41,413 (2,121) (1) 39,292
Amortization of
acquired customer-
based intangible
assets 26,635 (26,635) (2) -
Special charges 5,413 (5,413) (4) -
GAAP-based income
from operations
and operating
margin (%) /Non-
GAAP-based income
from operations
and operating
margin (%) 107,705 21.8% 54,452 (5) 162,157 32.8%
Other income
(expense), net 1,103 (1,103) (6) -
Provision for
(recovery of)
income taxes 9,885 12,785 (7) 22,670
GAAP-based net
income /Non-
GAAP-based net
income,
attributable to
OpenText 88,111 40,564 (8) 128,675
GAAP-based
earnings per share
/ $0.72 $0.33 (8) $1.05
Non GAAP-based earnings per
share-diluted, attributable
to OpenText
(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 periods
following the relevant
acquisitions and are not
indicative or related to
continuing operations and are
therefore 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 is
generally not indicative or
related to continuing operations
and is therefore excluded from
our internal analysis of
operating results.
(7) Adjustment relates to differences
between the GAAP-based tax
provision of approximately 10%
and a Non-GAAP-based tax rate
of 15%; 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, 2014
-------------
Per share
diluted
----------
Non-GAAP-based net income,
attributable to OpenText $128,675 $1.05
Less:
Amortization 44,840 0.37
Share-based compensation 4,199 0.03
Special charges 5,413 0.04
Other (income) expense, net (1,103) (0.01)
GAAP-based provision for
(recovery of) income taxes 9,885 0.08
Non-GAAP-based provision for
income taxes (22,670) (0.18)
GAAP-based net income,
attributable to OpenText $88,111 $0.72
======= =====
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the year ended June 30, 2014.
(In thousands except for per share amounts)
------------------------------------------
Year Ended
June 30, 2014
-------------
GAAP-based GAAP-based Adjustments Note Non-GAAP-based Non-GAAP-
Measures based
Measures
Measures % of Revenue Measures % of Revenue
-------- ------------ -------- ------------
Cost of revenues
Cloud services $135,472 $(342) (1) $135,130
Customer support 95,980 (754) (1) 95,226
Professional
service and other 196,939 (855) (1) 196,084
Amortization of
acquired
technology-based
intangible assets 69,917 (69,917) (2) -
GAAP-based gross
profit and gross
margin (%) / 1,113,029 68.5% 71,868 (3) 1,184,897 72.9%
Non-GAAP-based gross profit and
gross margin (%)
Operating expenses
Research and
development 176,834 (2,356) (1) 174,478
Sales and marketing 345,643 (7,312) (1) 338,331
General and
administrative 142,450 (8,287) (1) 134,163
Amortization of
acquired customer-
based intangible
assets 81,023 (81,023) (2) -
Special charges 31,314 (31,314) (4) -
GAAP-based income
from operations
and operating
margin (%) /Non-
GAAP-based income
from operations
and operating
margin (%) 300,528 18.5% 202,160 (5) 502,688 30.9%
Other income
(expense), net 3,941 (3,941) (6) -
Provision for
(recovery of)
income taxes 58,461 9,569 (7) 68,030
GAAP-based net
income /Non-
GAAP-based net
income,
attributable to
OpenText 218,125 188,650 (8) 406,775
GAAP-based
earnings per share
/ $1.81 $1.56 (8) $3.37
Non GAAP-based earnings per
share-diluted, attributable
to OpenText
(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 periods
following the relevant
acquisitions and are not
indicative or related to
continuing operations and are
therefore 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 is
generally not indicative or
related to continuing operations
and is therefore excluded from
our internal analysis of
operating results.
(7) Adjustment relates to differences
between the GAAP-based tax
provision of approximately 21%
and a Non-GAAP-based tax rate
of 14.3%; 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, 2014
-------------
Per share
diluted
----------
Non-GAAP-based net income,
attributable to OpenText $406,775 $3.37
Less:
Amortization 150,940 1.25
Share-based compensation 19,906 0.17
Special charges 31,314 0.26
Other (income) expense, net (3,941) (0.03)
GAAP-based provision for
(recovery of) income taxes 58,461 0.48
Non-GAAP-based provision for
income taxes (68,030) (0.57)
GAAP-based net income,
attributable to OpenText $218,125 $1.81
======== =====
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the three months ended March 31, 2014.
(In thousands except for per share amounts)
------------------------------------------
Three Months Ended
March 31, 2014
--------------
GAAP-based GAAP-based Adjustments Note Non-GAAP-based Non-GAAP-
Measures based
Measures
Measures % of Revenue Measures % of Revenue
-------- ------------ -------- ------------
Cost of revenues
Cloud services $49,464 $(167) (1) $49,297
Customer support 25,206 (138) (1) 25,068
Professional
service and other 49,218 (245) (1) 48,973
Amortization of
acquired
technology-based
intangible assets 17,147 (17,147) (2) -
GAAP-based gross
profit and gross
margin (%) / 298,192 67.3% 17,697 (3) 315,889 71.3%
Non-GAAP-based gross profit
and gross margin (%)
Operating expenses
Research and
development 47,199 (384) (1) 46,815
Sales and marketing 93,700 (1,926) (1) 91,774
General and
administrative 39,336 (1,558) (1) 37,778
Amortization of
acquired customer-
based intangible
assets 24,679 (24,679) (2) -
Special charges 15,902 (15,902) (4) -
GAAP-based income
from operations
and operating
margin (%) /Non-
GAAP-based income
from operations
and operating
margin (%) 66,849 15.1% 62,146 (5) 128,995 29.1%
Other income
(expense), net 1,652 (1,652) (6) -
Provision for
(recovery of)
income taxes 12,971 3,814 (7) 16,785
GAAP-based net
income /Non-
GAAP-based net
income,
attributable to
OpenText 45,884 56,680 (8) 102,564
GAAP-based
earnings per share
/ $0.38 $0.46 (8) $0.84
Non GAAP-based earnings per
share-diluted, attributable
to OpenText
(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 periods
following the relevant
acquisitions and are not
indicative or related to
continuing operations and are
therefore 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 is
generally not indicative or
related to continuing operations
and is therefore 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:
Three Months Ended
March 31, 2014
--------------
Per share
diluted
----------
Non-GAAP-based net income,
attributable to OpenText $102,564 $0.84
Less:
Amortization 41,826 0.34
Share-based compensation 4,418 0.04
Special charges 15,902 0.13
Other (income) expense, net (1,652) (0.01)
GAAP-based provision for
(recovery of) income taxes 12,971 0.11
Non-GAAP-based provision for
income taxes (16,785) (0.15)
------- -----
GAAP-based net income,
attributable to OpenText $45,884 $0.38
======= =====
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the nine months ended March 31, 2014.
(In thousands except for per share amounts)
------------------------------------------
Nine Months Ended
March 31, 2014
--------------
GAAP-based GAAP-based Adjustments Note Non-GAAP-based Non-GAAP-
Measures based
Measures
Measures % of Revenue Measures % of Revenue
-------- ------------ -------- ------------
Cost of revenues
Cloud services $79,692 $(145) (1) $79,547
Customer support 71,785 (547) (1) 71,238
Professional
service and other 145,898 (743) (1) 145,155
Amortization of
acquired
technology-based
intangible assets 51,712 (51,712) (2) -
GAAP-based gross
profit and gross
margin (%) / 771,767 68.3% 53,147 (3) 824,914 73.0%
Non-GAAP-based gross profit
and gross margin (%)
Operating expenses
Research and
development 129,332 (1,906) (1) 127,426
Sales and marketing 244,403 (6,200) (1) 238,203
General and
administrative 101,037 (6,166) (1) 94,871
Amortization of
acquired customer-
based intangible
assets 54,388 (54,388) (2) -
Special charges 25,901 (25,901) (4) -
GAAP-based income
from operations
and operating
margin (%) /Non-
GAAP-based income
from operations
and operating
margin (%) 192,823 17.1% 147,708 (5) 340,531 30.1%
Other income
(expense), net 2,838 (2,838) (6) -
Provision for
(recovery of)
income taxes 48,576 (3,216) (7) 45,360
GAAP-based net
income /Non-
GAAP-based net
income,
attributable to
OpenText 130,014 148,086 (8) 278,100
GAAP-based
earnings per share
/ $1.08 $1.24 (8) $2.32
Non GAAP-based earnings per
share-diluted, attributable
to OpenText
(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 periods
following the relevant
acquisitions and are not
indicative or related to
continuing operations and are
therefore 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 is
generally not indicative or
related to continuing operations
and is therefore excluded from
our internal analysis of
operating results.
(7) Adjustment relates to differences
between the GAAP-based tax
provision of approximately 27%
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, 2014
--------------
Per share
diluted
----------
Non-GAAP-based net income,
attributable to OpenText $278,100 $2.32
Less:
Amortization 106,100 0.88
Share-based compensation 15,707 0.13
Special charges 25,901 0.22
Other (income) expense, net (2,838) (0.02)
GAAP-based provision for
(recovery of) income taxes 48,576 0.40
Non-GAAP-based provision for
income taxes (45,360) (0.37)
------- -----
GAAP-based net income,
attributable to OpenText $130,014 $1.08
======== =====
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 GAAP-based Adjustments Note Non-GAAP-based Non-GAAP-
Measures based
Measures
Measures % of Revenue 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 (%) / 229,233 66.0% 24,041 (3) 253,274 72.9%
Non-GAAP-based gross profit
and gross margin (%)
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,
attributable to
OpenText 42,172 42,493 (8) 84,665
GAAP-based
earnings per share
/ $0.36 $0.36 (8) $0.72
Non GAAP-based earnings per
share-diluted, attributable
to OpenText
(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 periods
following the relevant
acquisitions and are not
indicative or related to
continuing operations and are
therefore 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 is
generally not indicative or
related to continuing operations
and is therefore 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
diluted
----------
Non-GAAP-based net income,
attributable to OpenText $84,665 $0.72
Less:
Amortization 40,776 0.34
Share-based compensation 5,422 0.05
Special charges 6,767 0.06
Other (income) expense, net 4,180 0.04
GAAP-based provision for
(recovery of) income taxes (869) (0.01)
Non-GAAP-based provision for
income taxes (13,783) (0.12)
GAAP-based net income,
attributable to OpenText $42,172 $0.36
======= =====
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 GAAP-based Adjustments Note Non-GAAP-based Non-GAAP-
Measures based
Measures
Measures % of Revenue 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 (%) / 877,432 64.4% 95,087 (3) 972,519 71.3%
Non-GAAP-based gross profit
and gross margin (%)
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,
attributable to
OpenText 148,520 180,556 (8) 329,076
GAAP-based
earnings per share
/ $1.26 $1.53 (8) $2.79
Non GAAP-based earnings per
share-diluted, attributable
to OpenText
(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 periods
following the relevant
acquisitions and are not
indicative or related to
continuing operations and are
therefore 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 is
generally not indicative or
related to continuing operations
and is therefore 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
diluted
----------
Non-GAAP-based net income,
attributable to OpenText $329,076 $2.79
Less:
Amortization 162,355 1.37
Share-based compensation 15,575 0.13
Special charges 24,034 0.20
Other (income) expense, net 2,473 0.02
GAAP-based provision for
(recovery of) income taxes 29,690 0.25
Non-GAAP-based provision for
income taxes (53,571) (0.44)
GAAP-based net income,
attributable to OpenText $148,520 $1.26
======== =====
(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, 2014 and 2013:
Three Months Ended Three Months Ended
June 30, 2014 June 30, 2013
------------- -------------
Currencies % of Revenue % of Expenses* % of Revenue % of Expenses*
------------ ------------- ------------ -------------
EURO 25% 18% 26% 17%
GBP 9% 10% 8% 8%
CAD 5% 12% 6% 19%
USD 49% 42% 49% 42%
Other 12% 18% 11% 14%
--- --- --- ---
Total 100% 100% 100% 100%
=== === === ===
Year Ended Year Ended
June 30, 2014 June 30, 2013
------------- -------------
Currencies % of Revenue % of Expenses* % of Revenue % of Expenses*
------------ ------------- ------------ -------------
EURO 27% 18% 26% 17%
GBP 9% 9% 8% 8%
CAD 5% 15% 6% 18%
USD 48% 42% 49% 43%
Other 11% 16% 11% 14%
--- --- --- ---
Total 100% 100% 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.
SOURCE Open Text Corporation
