Adjusted EPS Of $0.32 Exceeds Consensus Estimate, Company Raises Guidance
Waterloo, ONJanuary 23, 2003Open Text Corporation (Nasdaq: OTEX; TSX: OTC), provider of Livelink®, the leading collaboration and knowledge management software for the global enterprise, today announced financial results for its second quarter ended December 31, 2002.
Financial Highlights
Revenue, adjusted net income and cash flow from operations all represented the highest quarter results ever reported in the Company's history. Total revenue for the quarter was $43 million, an increase of 14% from the prior quarter and up 8% from the same quarter in the prior year. This increase was driven by strong license revenue of $17.4 million, up 12% from the previous quarter. Open Text reported adjusted net income(2) for the second quarter of $6.5 million. Adjusted earnings per share (EPS) of $0.32 (diluted) was up 33% from the second quarter a year ago. Cash flow from operations for the quarter was $11.7 million, the highest quarterly cash flow from operations in the Company's history. Net income (GAAP) for the quarter was $6.2 million.
"We are very pleased with Open Text's strong financial performance this quarter. Our commitment to profitable growth and cash flow from operations has resulted in record performance for the company," said Tom Jenkins, CEO of Open Text. "The Livelink product family continues to demonstrate a rapid return on investment for our global 2000 customers. Livelink maintains its leadership position in collaboration and knowledge management by successfully improving an organization's productivity and profitability."
During the second quarter there were 4 transactions over $1 million. The largest transaction in the quarter was with Pfizer. Open Text's largest customers also drove the financial results by continued enterprise-wide adoptions. Customers buying in the quarter included: Dunn & Bradstreet, Port Authority of New York and New Jersey, Strategic Rail Authority and Research in Motion. Revenue results for the quarter were broadly based globally. For the quarter, 62% of the Company's revenue originated from North America, 38% from Europe, the Middle East and Asia.
Deferred revenue of $30.2 million at quarter end was a historical record for the company, reflecting a strong maintenance renewal rate of 94%. Accounts receivable as of December 31, 2002 was $29.6 million, resulting in days sales outstanding (DSO) of 62 days, also a record and an improvement of 9 days over the previous quarter. As of December 31, 2002, cash was $102.3 million or $5.30 per share. Working capital was $83.1 million with no debt.
Guidance Increased
The Company is increasing guidance for fiscal 2003 to $170M of revenues with $1.25 adjusted EPS (taxed). Open Text will be taking a provision for taxes going forward and this is included in the guidance.
Share Repurchase Program
During the quarter, the Company renewed its Normal Course Issuer Bid program enabling the repurchase of up to 5% of the outstanding shares for cancellation. The Company repurchased a total of 43,500 common shares in the quarter, representing a total cost of $1.1 million.
Second Quarter in Review
1. Open Text Hosts Annual General Meeting Using MeetingZone
The Company held its Annual General Meeting (AGM) at the Toronto Stock Exchange (TSX) Conference Centre on Thursday, December 12th. The AGM was broadcast over the internet via Livelink MeetingZone. Open Text's senior management team presented an overview of corporate successes over the past year, and highlighted strategies for future growth and profitability.
More information can be found on the corporate Web site at:
http://www.opentext.com/investor/investor_events/
Annual_General_Meeting_Dec-12-2002.html
2. Open Text Named as One of the Fastest Growing Technology Companies
During the quarter Open Text announced it was ranked by Business 2.0 magazine as one of the 100 fastest growing technology companies worldwide. Starting with more than 2,000 publicly traded technology companies, the selection was narrowed to those with at least $50 million in revenues, and positive cash flow from operations in the most recently reported 12 months. All the companies included in the study were ranked on a combination of financial data: stock performance, growth in revenues, earnings and operating cash flow.
For more information please see the press release at:
http://www.opentext.com/news/pr.asp?id=1287
3. Siemens, Hewlett-Packard, General Dynamics, NAVSEA, IT Executives Keynote at Live LinkUp 2002 in Chicago
LiveLinkUp Chicago, the Company's annual North American User's Conference, was attended by more than 1,000 people and featured an outstanding line-up of keynote speakers, industry leaders and presenters. Through its annual LiveLinkUp Awards, Open Text showcased those customer organizations around the world that are dedicated to achieving real business value and competitive advantage through Open Text solutions and applications.
For more information please see the press release at:
http://www.opentext.com/news/pr.asp?id=1300
4. Financial Analyst Day
Open Text hosted its Financial Analyst Day on November 7, 2002 during LiveLinkUp. Open Text customers and partners highlighted successes in improving organizational productivity and profitability through the use of Livelink.
More information can be found on the corporate Web site at:
http://www.opentext.com/investor/investor_events/
Analyst_Day_Livelinkup_2002.html
5. Open Text and Centrinity Announce Completion of Acquisition
On November 1st, the Company announced the acquisition of all of the issued and outstanding shares of Centrinity (TSX: CTI) for cash consideration of CDN $1.26 per share had been completed. Centrinity's technology and expertise will enable Livelink customers to integrate the previously disparate worlds of e-mail, voicemail and other unstructured content, and provide organizations with the ability to apply retention rules and compliance policies to the entire collection of corporate knowledge.
For more information please see the press release at:
http://www.opentext.com/news/pr.asp?id=1288
6. Open Text And Eloquent Announce Acquisition Agreement
On January 9, 2003, Open Text and Eloquent, (Nasdaq: ELOQ) announced that they had entered into a definitive acquisition agreement in which a wholly owned subsidiary of Open Text will acquire all of the issued and outstanding shares of Eloquent for cash consideration of up to US $6,720,000, or approximately $0.34 per share, of which US $1,000,000 will be held in escrow to secure certain representations, warranties and covenants of Eloquent in the acquisition agreement. The purchase price is also subject to downward closing adjustment based on Eloquent's net cash at closing as described in the acquisition agreement. The companies expect the transaction to close in the next 90 days subject to certain conditions, including approval by Eloquent's stockholders.
For more information please see the press release at:
http://www.opentext.com/news/pr.asp?id=1314
7. Open Text introduces MeetingZone 2.0
At LiveLinkUp Chicago the Company unveiled Livelink MeetingZone 2.0. The updated product offers a more flexible platform for online team meetings and new features such as the ability to reconvene meetings with a click to carry over unfinished business. With globally dispersed teams becoming a fact of life in large organizations, MeetingZone 2.0 helps people around the world work together effectively without travel, and gives companies a fast ROI by preserving intellectual capital, improving productivity, saving time and reducing costs.
For more information please see the press release at:
http://www.opentext.com/news/pr.asp?id=1292
8. Open Text's Records Management Solutions First to Receive Key U.S. Federal Security Certification
During the quarter Open Text announced it was the first to receive a tough new security certification for its records management solutions. Open Text met the security requirements as part of its U.S. Department of Defense (DoD) 5015.2 certification, which is required for all records management solutions used by the Department of Defense and other U.S. Federal agencies. Both of Open Text's records management solutions, Livelink Records Management and iRIMS, received the Classified Records certification, along with the mandatory DoD 5015.2 certification.
For more information please see the press release at:
http://www.opentext.com/news/pr.asp?id=1310
9. Upcoming Investor Events
Open Text announced that it plans to participate in the following financial conferences hosted by the respective brokerage firm. Note that event dates and times are subject to change after the release of this announcement.
To confirm a date or learn about Web cast availability, visit the company's Web site closer to event date at:
http://www.opentext.com/investor/investor_events/.
February 5, 2003
Yorkton Technology Conference
Toronto, ON Canada
February 19, 2003
RBC Capital Markets Conference
Whistler, BC Canada
February 28, 2003
CIBC 2003 Whistler Institutional Investor Conference
Whistler, BC Canada
Teleconference Call
Open Text invites the public to listen to the company's teleconference call concerning financial results for the second quarter of fiscal 2003.
When: Thursday, January 23, 2003
5:00 p.m. ET / 2:00p.m. PT
Length: Approximately 60 minutes
Where: 416-640-1907
800-814-4861
Please dial the above number approximately 10 minutes before the teleconference is scheduled to begin. The operator will take your name and connect your line with the meeting. Replay will be available beginning January 23, from 7:00 p.m. ET thru midnight on February 06.
To listen to the call via Web cast, please use the following links:
When: Thursday, January 23, 2003
5:00 p.m. ET / 2:00p.m. PT.
Length: Approximately 60 minutes
English URL: www.newswire.ca/webcast/viewEventCNW.html?eventID=451660
French URL: www.cnw.ca/webcast/
viewEventCNW.html?eventID=451660
For more information and playback instructions: www.opentext.com/investor/investor_events/Q2-2003_Earnings.html.
About Livelink :
Livelink is the leader in collaboration and knowledge management for the global enterprise. Its richly-featured enterprise services include virtual team collaboration, business process automation, enterprise group scheduling and information retrieval services, all tightly integrated into a solution that is easily customized and extended. Livelink is essential to the effective management and development of communities of interest that span organizations and industries. For everything from the creation of complex e-community relationships to the automation of simple e-business processes, Livelink delivers true dynamic collaboration between individuals, organizations and large trading communities. Livelink servers are fully Web-based and open-architected to ensure rapid deployment and easy access to its full functionality through a standard Web browser. For more information, visit www.opentext.com/livelink/
About Open Text:
Since 1991, Open Text Corporation has delivered innovative software that brings people together to share knowledge, achieve excellence, deliver innovation, and enhance processes. Its legacy of innovation began with the successful deployment of the worlds first search engine technology for the Internet. Today, as the leading global supplier of collaboration and knowledge management software for the enterprise, Open Text supports 6 million seats across 4,500 corporations in 31 countries and 12 languages throughout the world. As a publicly traded company, Open Text manages and maximizes its resources and relationships to ensure the success of great minds working together. For more information, visit www.opentext.com.
Release Disclaimer:
This news release may contain forward-looking statements relating to the deployment of Livelink and Livelink MeetingZone by customers, and future performance of Open Text Corporation. Forward-looking statements are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties include, among others, risks involved in the completion and integration of acquisitions, the possibility of technical, logistical or planning issues in connection with deployments, the continuous commitment of the Company's customers and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission (SEC), including the final prospectus for the Company's initial public offering of common stock in January 1996, Form 10-K for the years ended June 30, 1996, June 30, 1997, June 30, 1998, June 30, 1999, June 30, 2000, June 30, 2001, and June 30, 2002, and 10-Q for the quarter ending September 30, 2002. Forward-looking statements are based on management's beliefs and opinions at the time the statements are made, and the Company does not undertake any obligations to update forward-looking statements should circumstances or management's beliefs or opinions change.
Trademark Information:
Copyright © 2003 by Open Text Corporation. LIVELINK, LIVELINK MEETINGZONE, and OPEN TEXT are trademarks or registered trademarks of Open Text Corporation in the United States of America, Canada, the European Union and/or other countries. This list of trademarks is not exhaustive. Other trademarks, registered trademarks, product names, company names, brands and service names mentioned herein are property of Open Text Corporation or other respective owners.
Reported under U.S. Generally Accepted Accounting Principles (GAAP). All amounts are in US Dollars.
Adjusted net income is calculated as net income, excluding the amortization of acquired intangible assets, other income, gain (loss) on investments and income tax on equity gain. Adjusted net income does not have a standardized meaning prescribed by GAAP, and therefore it is unlikely to be comparable to similar measures presented by other companies. Adjusted net income is presented in an effort to measure Open Text's profitability from recurring operations. The items excluded from the computation of adjusted net income, which are otherwise included in the determination of net income prepared in accordance with GAAP, are items that Open Text considers capable of potentially hindering a comparison of its period-to-period profitability.
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For more information, please contact:
Greg Secord
Director, Investor Relations
Open Text Corporation
+1-519-888-7111 ext.2408
gsecord@opentext.com
Alan Hoverd
Chief Financial Officer
Open Text Corporation
519 888-7111 x2480
519 888-0386
ahoverd@opentext.com
The press releases on this Web site are for historical purposes only; while information contained within the releases was believed to be accurate at the time of issue, Open Text specifically disclaims any duty to update this information.
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