OPEN TEXT CORPORATION WATERLOO, Ontario, Oct. 22, 2014 /PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX) (TSX: OTC) announced today its financial results for the first quarter ended September 30, 2014.
Financial Highlights for Q1 FY15 (1)
-- Total revenue was $453.8 million, up 40% Y/Y
-- License revenue was $58.6 million, up 6% Y/Y
-- Cloud services revenue was $150.0 million, up 260% Y/Y
-- Customer support revenue was $183.9 million, up 9% Y/Y
-- Non-GAAP-based EPS, diluted was $0.97 compared to $0.69 Y/Y, up 41%;
GAAP-based EPS, diluted was $0.53 compared to $0.26 Y/Y up 104%, on a
post stock-split basis.((2))
-- Non-GAAP-based income from operations was $155.7 million and 34% of
revenues, up 57% Y/Y; GAAP-based income from operations was $103.0
million and 23% of revenues, up 98% Y/Y.((2))
-- Operating cash flow was $138.5 million, up 73% Y/Y, with an ending cash
balance of $492.5 million.
"We delivered the strongest first quarter results in the history of OpenText, with total revenues of $453.8 million, up 40% year-over-year and non-GAAP-based operating income of $155.7 million, up 57% year-over-year, despite a toughening economy" said Mark J. Barrenechea OpenText CEO. "Our focus on enabling a digital-first world is resonating with customers as they deploy projects to reduce costs, grow revenues or scale with greater efficiency."
"In November we will be hosting our annual Enterprise World user conference where we will unveil important new innovations such as: Service Pack 1 (SP1) for our EIM suites, our next-generation cloud offerings and our future plans for project Blue Carbon."
Business Highlights
-- Services, technology and public sector industries saw the most demand
-- 3 license transactions over $1 million and 9 license transactions
between $500K and $1 million
-- On-premise customer successes in the quarter include Voith Turbo,
Government of Alberta (Canada) - Ministry of Justice, Salt River,
Goodman, Talisman Energy, Forest City Enterprises, Inc., Canadian
Mortgage and Housing Corporation and LUKOIL Overseas Holding
-- Cloud customer successes in the quarter include Toyota Digital,
Michelin, PNC Bank and Agavo Technologies
-- John Doolittle joins OpenText as its new chief financial officer
-- OpenText launches European data zone for on-demand cloud fax services
-- OpenText Content Suite was awarded SÄHKE2 certification for storage
and enterprise content management solutions
-- OpenText's 2014 Enterprise World user conference to be held November
9-14, 2014 at Walt Disney World Swan and Dolphin Resort in Lake Buena
Vista, FL, features exciting product announcements focused on the cloud,
highlighting customers' total cost of ownership
-- Comedian and actor Martin Short headlines OpenText's Enterprise World
2014
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 November 21, 2014 and the payment date is December 12, 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
----------------------------
Q1 FY15 Q4 FY14 Q1 FY14 % Change % Change
(Q/Q) (Y/Y)
Revenue
(million) $453.8 $494.0 $324.5 (8.1)% 39.9%
GAAP-based
gross margin 67.4% 69.1% 67.2 (170) bps 20 bps
GAAP-based
operating
margin 22.7% 21.8% 16.0 90 bps 670 bps
GAAP-based
EPS, diluted $0.53 $0.72 $0.26 (26.4)% 103.8%
Non-GAAP-
based gross
margin (2) 71.6% 72.9% 73.9 (130) bps (230) bps
Non-GAAP-
based
operating
margin (2) 34.3% 32.8% 30.6 150 bps 370 bps
Non-GAAP-
based EPS,
diluted (2) $0.97 $1.05 $0.69 (7.6)% 40.6%
------------ ----- ----- ----- ----- ----
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 1-800-319-4610 (toll-free) or +1-604-638-5340 (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.
A replay of the call will be available beginning October 22, 2014 at 7:00 p.m. ET through 11:59 p.m. on November 5, 2014 and can be accessed by dialing 1-800-319-6413 (toll-free) or +1-604-638-9010 (international) and using passcode 1469 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 2015 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
September 30, 2014 June 30, 2014
------------------ -------------
(unaudited)
ASSETS
Cash and cash equivalents $492,486 $427,890
Accounts receivable trade, net of
allowance for doubtful accounts
of $4,535 as of September 30,
2014 and $4,499 as of June 30,
2014 239,762 292,929
Income taxes recoverable 12,372 24,648
Prepaid expenses and other current
assets 47,498 42,053
Deferred tax assets 30,336 28,215
------ ------
Total current assets 822,454 815,735
Property and equipment 151,573 142,261
Goodwill 1,940,082 1,963,557
Acquired intangible assets 681,229 725,318
Deferred tax assets 159,424 156,712
Other assets 54,819 52,041
Deferred charges 48,598 52,376
Long-term income taxes recoverable 10,701 10,638
Total assets $3,868,880 $3,918,638
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $193,720 $231,954
Current portion of long-term debt 62,105 62,582
Deferred revenues 301,341 332,664
Income taxes payable 15,341 31,630
Deferred tax liabilities 944 1,053
--- -----
Total current liabilities 573,451 659,883
Long-term liabilities:
Accrued liabilities 39,126 41,999
Deferred credits 16,382 17,529
Pension liability 61,682 60,300
Long-term debt 1,243,500 1,256,750
Deferred revenues 18,646 17,248
Long-term income taxes payable 163,749 162,131
Deferred tax liabilities 57,371 60,631
------ ------
Total long-term liabilities 1,600,456 1,616,588
Shareholders' equity:
Share capital
122,034,461 and 121,758,432 Common
Shares issued and outstanding at
September 30, 2014 and June 30,
2014, respectively; Authorized
Common Shares: unlimited 800,422 792,834
Additional paid-in capital 117,242 112,398
Accumulated other comprehensive
income 36,216 39,449
Retained earnings 759,898 716,317
Treasury stock, at cost (763,278
shares at September 30, 2014 and
June 30, 2014, respectively) (19,132) (19,132)
------- -------
Total OpenText shareholders'
equity 1,694,646 1,641,866
Non-controlling interests 327 301
--- ---
Total shareholders' equity 1,694,973 1,642,167
Total liabilities and
shareholders' equity $3,868,880 $3,918,638
========== ==========
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share and per share data)
(unaudited)
Three Months Ended
September 30,
-------------
2014 2013
---- ----
Revenues:
License $58,615 $55,306
Cloud services 150,006 41,647
Customer support 183,906 168,440
Professional service and other 61,260 59,067
------ ------
Total revenues 453,787 324,460
------- -------
Cost of revenues:
License 3,088 3,036
Cloud services 57,996 14,265
Customer support 23,218 22,170
Professional service and other 45,361 45,435
Amortization of acquired technology-
based intangible assets 18,206 21,530
------ ------
Total cost of revenues 147,869 106,436
------- -------
Gross profit 305,918 218,024
------- -------
Operating expenses:
Research and development 44,742 40,216
Sales and marketing 80,099 69,413
General and administrative 35,756 28,886
Depreciation 12,242 6,458
Amortization of acquired customer-
based intangible assets 25,884 17,277
Special charges 4,169 3,731
----- -----
Total operating expenses 202,892 165,981
------- -------
Income from operations 103,026 52,043
------- ------
Other income (expense), net (9,873) 1,926
Interest and other related expense, net (11,099) (4,385)
------- ------
Income before income taxes 82,054 49,584
Provision for income taxes 17,402 18,954
------ ------
Net income for the period $64,652 $30,630
------- -------
Net (income) loss attributable to non-
controlling interests (26) -
Net income attributable to OpenText $64,626 $30,630
======= =======
Earnings per share-basic attributable
to OpenText $0.53 $0.26
===== =====
Earnings per share-diluted
attributable to OpenText $0.53 $0.26
===== =====
Weighted average number of Common
Shares outstanding-basic 121,918 118,126
======= =======
Weighted average number of Common
Shares outstanding-diluted 122,861 118,756
======= =======
Dividends declared per Common Share $0.1725 $0.15
======= =====
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
(unaudited)
Three Months Ended
September 30,
-------------
2014 2013
---- ----
Net income for
the period $64,652 $30,630
Other comprehensive income-
net of tax:
Net foreign
currency
translation
adjustments 3,105 241
Unrealized gain (loss) on
cash flow hedges:
Unrealized gain
(loss) (2,900) 1,520
Loss
reclassified
into net
income 53 584
Actuarial gain (loss)
relating to defined benefit
pension plans:
Actuarial gain
(loss) (3,118) 83
Amortization of
actuarial loss
into net
income 121 73
Unrealized loss
on marketable
securities (494) -
---- ---
Total other
comprehensive
income (loss),
net, for the
period (3,233) 2,501
------ -----
Total
comprehensive
income 61,419 33,131
Comprehensive
income
attributable
to non-
controlling
interests (26) -
--- ---
Total
comprehensive
income
attributable
to OpenText $61,393 $33,131
======= =======
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
Three Months Ended
September 30,
-------------
2014 2013
---- ----
Cash flows from operating
activities:
Net income
for the
period $64,652 $30,630
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation
and
amortization
of
intangible
assets 56,332 45,265
Share-
based
compensation
expense 4,449 4,612
Excess tax
benefits
on share-
based
compensation
expense (395) (73)
Pension
expense 1,220 353
Amortization
of debt
issuance
costs 1,143 525
Amortization
of
deferred
charges
and
credits 2,631 2,967
Loss on
sale and
write down
of
property
and
equipment - 21
Deferred
taxes (1,545) (1,869)
Changes in operating
assets and liabilities:
Accounts
receivable 55,543 28,778
Prepaid
expenses
and other
current
assets (149) (3,432)
Income
taxes 17,806 7,502
Deferred
charges
and
credits - 2,700
Accounts
payable
and
accrued
liabilities (34,139) (18,093)
Deferred
revenue (26,755) (18,560)
Other
assets (2,262) (1,402)
------ ------
Net cash
provided
by
operating
activities 138,531 79,924
------- ------
Cash flows from investing
activities:
Additions
of
property
and
equipment (30,235) (8,315)
Purchase of
Cordys
Holding
B.V., net
of cash
acquired - (30,588)
Purchase
consideration
for prior
period
acquisitions (222) (222)
Other
investing
activities (7,374) (1,500)
Net cash
used in
investing
activities (37,831) (40,625)
------- -------
Cash flows from financing
activities:
Excess tax
benefits
on share-
based
compensation
expense 395 73
Proceeds
from
issuance
of Common
Shares 7,099 1,823
Repayment
of long-
term debt (13,417) (7,668)
Debt
issuance
costs (183) -
Payments of
dividends
to
shareholders (21,045) (17,721)
Net cash
used in
financing
activities (27,151) (23,493)
------- -------
Foreign
exchange
gain
(loss) on
cash held
in foreign
currencies (8,953) 4,896
Increase in
cash and
cash
equivalents
during the
period 64,596 20,702
Cash and
cash
equivalents
at
beginning
of the
period 427,890 470,445
Cash and
cash
equivalents
at end of
the period $492,486 $491,147
======== ========
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
(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 September 30, 2014.
(In thousands except for per share amounts)
------------------------------------------
Three Months Ended
September 30, 2014
------------------
GAAP-based GAAP-based Adjustments Note Non-GAAP-based Non-GAAP-
Measures Measures Measures based Measures
% of Revenue % of Revenue
--- ------------
Cost of revenues
Cloud services $57,996 $(213) (1) $57,783
Customer support 23,218 (174) (1) 23,044
Professional
service and other 45,361 (263) (1) 45,098
Amortization of
acquired
technology-based
intangible assets 18,206 (18,206) (2) -
GAAP-based gross
profit and gross
margin (%) / 305,918 67.4% 18,856 (3) 324,774 71.6%
Non-GAAP-based gross profit and
gross margin (%)
Operating expenses
Research and
development 44,742 (563) (1) 44,179
Sales and marketing 80,099 (2,074) (1) 78,025
General and
administrative 35,756 (1,162) (1) 34,594
Amortization of
acquired customer-
based intangible
assets 25,884 (25,884) (2) -
Special charges 4,169 (4,169) (4) -
GAAP-based income
from operations
and operating
margin (%) /Non-
GAAP-based income
from operations
and operating
margin (%) 103,026 22.7% 52,708 (5) 155,734 34.3%
Other income
(expense), net (9,873) 9,873 (6) -
Provision for
(recovery of)
income taxes 17,402 8,606 (7) 26,008
GAAP-based net
income /Non-
GAAP-based net
income,
attributable to
OpenText 64,626 53,975 (8) 118,601
GAAP-based
earnings per share
/Non GAAP-based
earnings per
share-diluted,
attributable to
OpenText $0.53 $0.44 (8) $0.97
(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 18%; 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
September 30, 2014
------------------
Per share
diluted
----------
Non-GAAP-based net income,
attributable to OpenText $118,601 $0.97
Less:
Amortization 44,090 0.36
Share-based compensation 4,449 0.04
Special charges 4,169 0.03
Other (income) expense, net 9,873 0.08
GAAP-based provision for
(recovery of) income taxes 17,402 0.14
Non-GAAP-based provision for
income taxes (26,008) (0.21)
GAAP-based net income,
attributable to OpenText $64,626 $0.53
======= =====
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 Measures Measures based Measures
% of Revenue % 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
/Non GAAP-based
earnings per
share-diluted,
attributable to
OpenText $0.72 $0.33 (8) $1.05
(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 three months ended September 30, 2013.
(In thousands except for per share amounts)
------------------------------------------
Three Months Ended
September 30, 2013
------------------
GAAP-based GAAP-based Adjustments Note Non-GAAP-based Non-GAAP-
Measures Measures Measures based Measures
% of Revenue % of Revenue
--- ------------
Cost of revenues:
Cloud services $14,265 $(38) (1) $14,227
Customer support 22,170 (97) (1) 22,073
Professional
service and other 45,435 (170) (1) 45,265
Amortization of
acquired
technology-based
intangible assets 21,530 (21,530) (2) -
GAAP-based gross
profit and gross
margin (%) / 218,024 67.2% 21,835 (3) 239,859 73.9%
Non-GAAP-based gross profit and
gross margin (%)
Operating expenses
Research and
development 40,216 (728) (1) 39,488
Sales and marketing 69,413 (2,353) (1) 67,060
General and
administrative 28,886 (1,226) (1) 27,660
Amortization of
acquired customer-
based intangible
assets 17,277 (17,277) (2) -
Special charges 3,731 (3,731) (4) -
GAAP-based income
from operations
and operating
margin (%) /Non-
GAAP-based income
from operations
and operating
margin (%) 52,043 16.0% 47,150 (5) 99,193 30.6%
Other income
(expense), net 1,926 (1,926) (6) -
Provision for
(recovery of)
income taxes 18,954 (5,681) (7) 13,273
GAAP-based net
income /Non-
GAAP-based net
income,
attributable to
OpenText 30,630 50,905 (8) 81,535
GAAP-based
earnings per share
/Non GAAP-based
earnings per
share-diluted,
attributable to
OpenText $0.26 $0.43 (8) $0.69
(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 38%
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
September 30, 2013
------------------
Per share
diluted
----------
Non-GAAP-based net income,
attributable to OpenText $81,535 $0.69
Less:
Amortization 38,807 0.33
Share-based compensation 4,612 0.04
Special charges 3,731 0.03
Other (income) expense, net (1,926) (0.02)
GAAP-based provision for
(recovery of) income taxes 18,954 0.16
Non-GAAP-based provision for
income taxes (13,273) (0.11)
GAAP-based net income,
attributable to OpenText $30,630 $0.26
======= =====
(3) The following tables provide a
composition of our major
currencies for revenue and
expenses, expressed as a
percentage, for the three months
ended September 30, 2014 and 2013:
Three Months Ended Three Months Ended
September 30, 2014 September 30, 2013
------------------ ------------------
Currencies % of Revenue % of Expenses* % of Revenue % of Expenses*
EURO 25% 15% 27% 17%
GBP 9% 9% 8% 9%
CAD 5% 13% 5% 17%
USD 49% 45% 49% 42%
Other 12% 18% 11% 15%
--- --- --- ---
Total 100% 100% 100% 100%
=== === === ===
* Expenses include all cost of
revenues and operating expenses
included within the Condensed
Consolidated Statements of
Income, except for amortization
of intangible assets, share-
based compensation and special
charges.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/opentext-reports-first-quarter-fiscal-year-2015-financial-results-693897674.html
SOURCE Open Text Corporation
